I-NCUBATEA program for enabling ‘Lab to Market’ transformation

Updated: October 2019

Gopalakrishnan - Deshpande Centre for Innovation & Entrepreneurship

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

2 I-NCUBATE

GDC - Overview

LAUNCH

• An alumni-funded Centre for Innovation & Entrepreneurship at IIT Madras• Launched in Jan 2017; Commenced operations in Aug 2017• Funded by grants from three illustrious alumni: Dr. Gururaj Deshpande, Mrs.

Jaishree Deshpande and Mr. ‘Kris’ Gopalakrishnan

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CHARTER

To dramatically increase the positive impact of R&D spend of Indian academic universities, research organisations and companies by building capacity in faculty, scientists, researchers and students through a ‘Lab to Market’ mission• Commercialising research through robust start-ups• Building entrepreneurial thinking

I-NCUBATE

Why GDC?

• Most technology developed in the West (where per capita income > $40,000)

• At <$1000 per capita income, more than 1 billion Indians will not benefit from technology solutions of the West

• Inadequate capabilities and lack of R&D orientation in corporate India to develop technological solutions

• Under BAU conditions, India will be swamped with foreign technology; core problems in Healthcare, Energy, Education, Environment et al. for most Indians will not be addressed

• Role of Indian academic institutions changing: Teaching + Research + Entrepreneurship

• In the last few years, we have had some innovations in India in multiple sectors – e.g. Healthcare, Aviation, Payments, Mobile, E-commerce, EdTech - Low ticket size and scaling to hundreds of millions of users

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Can tech start-ups from India’s STEM colleges and scientific research institutions create positive impact at scale?

I-NCUBATE

Usual Start-up Process at Universities

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• Embryonic business idea• Options and possibilities• Idea development• Will it work? – Prototype

development• Is there a market?

• Start-up in early phase• Establish office, Expand staff• Product development• Customer acquisition• Scale operations

Pre – Incubation Stage Post – Incubation Stage

LAB INCUBATORIncorporation

IDEA

Ideation• Grant funding• Project budget• Own funds

Growth• Soft loans• Angels• Venture capital

Financing

hopefully…

I-NCUBATE

90% of Indian start-ups fail within 5 years The biggest reason is building something that

nobody wants

Have inadequately trained employees - no strong capability of their own

Lack of innovation - Indian start-ups do not have unique business models; they mostly copy Western business models

Failure in marketing

Lack of funding is not a big constraint for well-structured start-ups

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Customer Development: Vital for Start-ups

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• Embryonic business idea• Options and possibilities• Idea development• Will it work? – Prototype

development• Is there a market?

Pre – Incubation Stage

Post – Incubation Stage

IDEA

• Customer discovery• Customer validation• Business model• Entrepreneur team• MVP

• Start-up in early phase• Establish office, Expand staff• Product development• Customer acquisition• Scale operations

Incorporation

Ideation• Grant funding• Project budget• Own funds

Growth• Soft loans• Angels• Venture capital

Financing

Customer Development• Grants?• Seed capital• Anyone?

I-NCUBATE

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

8 I-NCUBATE

I-NCUBATE: Goals & Benefits• I-NCUBATE’s objective is to help academic research-based ideas achieve more

successful outcomes by building capacity in faculty-students-researchers

• The principal targeted outcomes of the I-NCUBATE program:

o To gain a deep understanding of customer needs based on first hand evidence

o To enable the team to arrive at a GO or No GO decision

o To obtain inputs for formulating a MVP, a Business Model, and a Product-Market Fit

o To enable faculty, researchers, students and entrepreneurs develop entrepreneurial skills and mind-set

• We achieve the above through this highly process-focused program, I-NCUBATE

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GDC: We’ve just started to scale…

Deshpande-Gopalakrishnan Symposium on Innovation and Entrepreneurship

• 1st Deshpande-Gopalakrishnan Symposium at IIT Madras in Jan 2018

• 2nd Deshpande-Gopalakrishnan Symposium at IIT Bombay in Jan 2019, co-hosted with IITB

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I-NCUBATE programs

• Cohort 1 at IIT Madras : 7 start-up teams; 35 entrepreneurs

• Cohort 2 at IIT Madras : 10 start-up teams; 66 entrepreneurs

• Cohort 3 at IIT Bombay : 10 start-up teams; 50 entrepreneurs

• Cohort 4 at IIT Madras : 13 start-up teams; 72 entrepreneurs

• Cohort 5 at IIT Bombay : 10 start-up teams; 53 entrepreneurs

• Cohort 6 at IISc Bengaluru : 8 start-up teams; 41 entrepreneurs

I-NCUBATE

No GO

Teams that are a ‘No GO’*26 (45%)*

Funding raised **~INR 10.7 crore; 23 teams

Start-ups incubated **25

GO

Teams that are a ‘GO’*32 (55%)

Entrepreneurs trained317

I-NCUBATE: Key Outcomes for Cohorts 1 to 6

I-NCUBATE11

Faculty first-time in start-ups37%

Faculty from8 institutions

* GO / No GO based on GDC view** GDC estimates

Start-up teams58

I-NCUBATE: Team Composition

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Faculty Mentor

Entrepreneur

I-NCUBATE Team

1-2 Faculty Leads(FL)

1 Business Mentor

3-4 Entrepreneurs(EL)

Around 10 teams per cohort

I-NCUBATE

I-NCUBATE: Programme Structure

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7 weeks

CUSTOMER DISCOVERY

• Teams ‘get out of the building’• Each team conducts 100 customer

interviews; analyses inputs, derives learning and insights

2 days

CLOSING WORKSHOP

• Teams consolidate their learning and outline next steps

• Classroom sessions

3 days

OPENING WORKSHOP

• Teams build commercial orientation

• Classroom sessions

2 days

PRE COURSE

• Teams are oriented to think ‘business’

• Classroom sessions

1 week

• Teams start with 10 to

15 customer interviews

8 Weeks

I-NCUBATE

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

14 I-NCUBATE

I-NCUBATE: Based on Lean Start-up Methodology

• Lean start-up management was introduced by Eric Ries in his book ‘’The Lean Start-up’’ in 2011

• Prof. Steve Blank of Stanford University came up with the Customer Development Methodology

• Alex Osterwalder developed the Value Proposition Canvas

• Steve Blank combined the three and came up with the I-Corps program of the National Science Foundation (NSF)

• I-NCUBATE is based on the I-Corps program

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I-Corps: Innovation Corps program of the NSF

• Founded in 2011 as a public/private partnership

• Founding members - NSF; Deshpande Foundation; Kauffmann Foundation

I-NCUBATE

I-Corps: Uses the Lean Methodology

Key Objectives

• Entrepreneurial training for researchers

• Orient researchers towards understanding and solving real-world problems

• Increase the impacts and the odds of success of commercialization activities

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Why the Lean Startup Changes Everything - HBR

I-NCUBATE

Lean Start-up : Key Elementso Technology is usually not the cause for failure of start-ups.

o Researchers are passionate about their technologies; however, customers do not buy technology – they are looking to satisfy their needs.

o Founders cannot understand customer needs by sitting inside their labs or offices; they must get out of the building and meet as many prospects as possible.

o A start-up is not a smaller version of a large organisation; instead, a large organisation executes a business plan, while a start-up is searching for a business model.

o A start-up is a temporary organisation in search of a repeatable and scalable business model; it goes from failure to failure until it finds something that works.

o Lean Start-up does not guarantee success; instead, it reduces the odds of failure.

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Lean Start-up Method

Customer Discovery

Search

Pivot

Customer Development Agile Product Development

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Customer Validation

I-NCUBATE

Who are your most important customers?

What are theirarchetypes?

What job do they want you to get done for them?

How will you get, keep and grow customers?

Who are your key partners?

Who are your key suppliers?

What are you getting from them and giving to them?

What key activitiesdo you require?Manufacturing?Softwaredevelopment?Research?

What are the most important costs inherent in your business model?

What is the mix of fixed and variable costs?

Business Model Canvas as a Tool

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What are the key features of your product/service that match customer problems/needs?

What customer problems are you helping to solve ?What customer needs are you satisfying?

Through which channels (sales, distribution,support) do your customers want to be reached?

How will you make money?

What is your revenue model? What are your pricing

tactics?

What KeyResources do you require?Financial? Physical? Human resources?IP?

The Customer Development Framework

Customer Discovery

Customer Validation

Customer Creation

Company Building

Search Execution

Pivot

P-S Fit? P-M Fit?Develop MVP Business Model Fit?

Scaling

4321

P-S Fit: Problem-Solution Fit P-M Fit: Product-Market Fit

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IDEA

I-NCUBATE

I-NCUBATE: Programme Structure

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7 weeks 2 days

CLOSING WORKSHOP

3 days

OPENING WORKSHOP

2 days

PRE COURSE

1 week

• Conduct 100 customer interviews

• Update business model canvas week-on-week based on customer interviews

• Attend weekly meetings/webinars to share learnings and insights

• Participate in OH (Office Hours) with instructors

• Use LaunchPad Central to track progress and engage with mentors, instructors and peers

8 Weeks

I-NCUBATE

I-NCUBATE: 3 Dimensions of Learning

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Entrepreneurial SkillsBusiness Tools & Techniques

Interviewing & Communication Skills

Building Commercial Orientation

• Value Proposition (Features vs. Benefits)

• Business Model Canvas• Industry/Market Analysis• Framing Hypotheses• Empathy Map

• Dealing with ambiguity• Creative thinking/Non-linear

thinking• Overcoming fear of failure• Persistence in the face of

failure• Working cohesively as a team• Reaching out to people

• Clarity of thought and precision• Framing hypotheses & questions

• Interviewing people/Connecting to people• Analysing customers inputs/feedback• Presentation skills

I-NCUBATE

Agenda

About GDC

About I-NCUBATE

Structure and Pedagogy of I-NCUBATE

Role of Key Participants in I-NCUBATE

23 I-NCUBATE

I-NCUBATE: Team Composition

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Faculty Mentor

Entrepreneur

I-NCUBATE Team

1-2 Faculty Leads(FL)

1 Business Mentor

3-4 Entrepreneurs(EL)

Around 10 teams per cohort

I-NCUBATE

I-NCUBATE: Role of Faculty Lead (FL)

• For each team, the FL is the main repository of the core science & technology underlying the idea

• Guiding their team on what works (and what will not) from an engineering or technology perspective

• Helping the Entrepreneur Leads (ELs) analyse and interpret the data/feedback received from customer interviews

• Motivating their team to follow the flipped classroom approach

• Boosting the morale of the ELs when contrarian findings emerge from customer interaction

• Encouraging their team to stay on course

• Commenting on technology aspects of other teams, where domain overlaps

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I-NCUBATE: What is expected of ELs

• Entrepreneur Leads (EL) understand how a flipped classroom works and follow it; Self-study is key as there is little teaching in the classroom

• Learning from peers; commenting on peers’ work - this needs conscious effort

• Leveraging the experience of Mentors and Instructors

• Framing hypotheses (about their business) and gathering evidence (for/against)

• ‘Get out of the Building’ and meet at least 100 customers; LISTEN, LISTEN, LISTEN

• Motivating the team to update LaunchPad Central continuously

• Staying on course

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Why Customer Development is Done by Founders – Steve Blank

I-NCUBATE

Role of Mentors

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I-NCUBATE Team

ROLE OF MENTORS

ROLE OF INSTRUCTORS

• Extension of instructors outside of the classroom

• Provide business mentorship to team

• Inspire and coach team

• Act as a sounding board for team

• Not offer solutions, but ask questions to direct thinking and enable clarity

• Instil discipline in the team to follow the process

• Boost team morale

• Help with contacts/network

I-NCUBATE

What happens post I-NCUBATE?• At the end of an I-NCUBATE program, each team has a clear ‘GO’ or ‘No GO’ decision

• Team has a good idea of their Minimum Viable Product (MVP) and Product-Market Fit

• At this stage, the team’s capabilities include:

o A good understanding of their business model

o They know how to continue to work on customer development and customer creation

o The team is aware of the key entrepreneurial skills that are required to succeed

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Thank you

Gopalakrishnan - Deshpande Centre for Innovation & Entrepreneurship

R. Raghuttama Rao Shiva SubramaniamCEO, GDC Chief Innovation Officer, GDCceogdc@iitm.ac.in cinogdc@iitm.ac.in