Commercializing Your Idea
January 29, 2014
© 2014 John Seiffer
The purpose of a The purpose of a business is to create business is to create __________________________________________
The Cruelest words ever
written:
Build a better mousetrap, and …
The purpose of a The purpose of a business is to create business is to create __________________________________________
There is only one valid There is only one valid definition of business definition of business purpose: purpose:
To create a To create a CUSTOMER.CUSTOMER.
- Peter Drucker
Definition of a Definition of a CUSTOMER?CUSTOMER?
WHY?
The Hard Part is…
Selling, not Creating Value
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Market RiskTechnology Risk
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Market RiskTechnology Risk
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Market RiskTechnology Risk
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Market RiskTechnology Risk
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Eric Ries tried the “Build First” approach.
6 months
40,000 lines of code
6 months
40,000 lines of code
6 months
40,000 lines of code
Nobody Cared
Did I waste 6 months?
Should I have
Did I provide any
6 months40,000 lines of code
3 months?20,000 lines of code?
6 months40,000 lines of code
3 months?20,000 lines of code?
1 month?0 lines of code?
Lean = No Waste
Lean = No Waste
Waste = Making Something People Don’t
Want to Buy
A startup is a temporary organization designed to search for a repeatable and scalable business model.”
- Steve Blank
• The purpose of a startup is to DISCOVER.
• Progress is measured by LEARNING – not sales.
Learning requires•Falsifiable Hypothesis •Experiment•Data•Defined level of success or failure
Hypothesis about what?
Who your customers are.
And what they want to pay for.
Who Decides what value is?
PainsGains& Jobs
Pains, Gains & Jobs
http://www.businessmodelgeneration.com/downloads/value_proposition_canvas.pdf
Search for a repeatable and scalable business model.”
- Steve Blank
Search For:
Search For: Someone
Search For: SomeoneWho has a problem
Search For: SomeoneWho has a problem
That they care enough to pay for
Search For: SomeoneWho has a problem
That they care enough to pay forThat you can solve
Search For: SomeoneWho has a problem
That they care enough to pay forThat you can solveProfitably
The Business Model Formula
(LTV – CA) *N = $$$$
(LTV – CA) *N = $$$$
Where are investors?
Funding is not the answer if the business model is not sound!
Real money comes from customers.
Vendor FundingSell your RightsLicenseJoint VentureSBIR
Customer FundingSikorsky ChallengeCrowd FundingDECD
www.ctinnovations.com/funding/sbirwww.sikorsky.com/EChallenge http://www.ct.gov/ecd/cwp/view.asp?a=3931&q=462616http://www.ct.gov/ecd/cwp/view.asp?a=1097&Q=253518 http://angelinvestorforum.com/submit_business_plan.html
