Diego Scataglini » Blog Archive » Start Lessons learned notes: Part#7

Start Lessons learned notes: Part#7

October13

3:00pm Keynote: Steve Blank
Most of the following is online @ http://www.slideshare.net/sblank/when-the-boardroom-is-bits-052111

#1 MBA is based on 300+ years of biz
#2 Tech Entrepreneurship + Venture capital ~ 50 years old
- Startup are smaller versions of large companies
  - oops, not true
#3 Large companies execute biz models, startup search for biz model
#4 a Startup is a temporary organization designed to search for a
#5 startups need their own tools, different from normal companies
#6 customer developement = process to search. Tool #1
#7 business model canvas = The scorecard – Tool #2
#8 Agile development is how we build startups
- startup genome projects max marmour, interview 860 startups
- about to reveal the facts
#9 startups that pivot 1 or 2 times
- raise 2.5x more money
- have 3.6x better user growth
- 52% less likely to scale prematurely
- than startups that pivot more than 2 times or not at all
- startup that have
  - helpful mentors
  - listen to customers
  - learn from startup thought leaders
- raise 7x more money and have 3.5x better user growth
10# we’ve cracked the code in teaching entrepreneurship
- 54 hours later – leanstartup machine
- startup weekend
- y combinator
- lean launchpad
What we learned in the past year?
- startup != MBA toolset
- startup toolset is growing
- we have real data that this works
- a better way to teach entrepreneurship
  - Tom Heizenber at harvard
  - Nathan Furz BYU
Hypothesis:
- experience advise matters
- you
  - 1 board at a time
- VC’s
  - 6-12 boards at a time
  - x avg 4 years per board
  - x 2 VC’s per board
  - ~ 50-100x more pattern recognition
The early stage – experience gap
Solving the early stage – experience gap
- venture funded companies have boards
- angel funded companies often do not
- experienced advice is sparse outside of tech cluster
- people tend to leave their home/cities to go to tech cluster to get advice
Why have a board meeting?
- investor
  - fiduciary responsability
    - company has asymmetric info
  - maximize investment potentials
    - board has asymmetric knowledge 50-100x experience
    - good board asks hard questions
- founder
  - board guidance
    - 50-100 more experience
    - multiple opinions across VC’s
  - board network
    - customers, partners, recruiting, financing
  - obligation
    - it came with the check
Board meetings are heavyweight processes
- antithesis of lean
- board meeting haven’t changed in over 100 years
- we act like it’s the 19th century
why do we need to get together in one room?
why do we need to wait a month to see progress?
common wisdom on how to run a board meeting
- logistics
  - send out board materials 2 days before, have board dinner
  - approve minutes, stock grants
- business
  - summaries of key events since last meeting
- financials
  - waterfall charts
- management asks the board to help
  - strategy, markets, key hires, introductions
- executive session
  - meet without management to discuss performance
- This was the list from andrew carnegie from 1860
What’s wrong with board meeting?
- too far apart
- diffuse board member attention
- it’s often a performance rather than a snapshot
Solution: make the boardroom bits
- We can do this via the net
- 24/7
- connecting advisors to investors
- Focus on what’s important
  - it’s about the search for the business model
    - for 20 years SB had to bring the income statement
    - first meeting brought it and it said 0
    - second said 0
    - but was formatted neatly and correctly
  - Not-income statement, cash flow
  - advice/guidance about metrics around the search
    - what are the business model hypotheses?
    - what are the most important hypotheses to test now?
    - progress of validating each hypotheses
    - what are the iterations and pivots – and why?
- Reinvent the board meeting Continous information access
  - Founders/mgmt team invest 1 hour a week
  - structure blog
    - with unstructured data
    - to provide a narrative of your business model search
  - formal business model canvas
  - real-time advisor/board feedback
- We made students blog their progress of customer development process with the business model canvas
- HOW?
  - customer development
    - the process
  - Narrative
    - interviews?
      - you did one? I want to see it
    - You did a survey?
      - I want to see it
    - Videos of customer interaction?
    - prototypes
  - Business model canvas updates
    - scorekeeping
  - realtime feedback
  - physical reality checks every once in a while
    - skype
    - face-to-face
- It changed everything
- Competitive analysis
  - key finding of the week
  - a/b testing
  - key questions
  - strategy
- how to keep progress we used the business model canvas every week
- How does this change for angel-funded startups?
  - angel funded startups can now get experienced advice
    - no longer requires board commitment for involvement
    - encourages investors who need visibility
    - ends repetition for you at each investor coffee
  - turns adhoc startups into strategy-driven startups
    - invites investor participation in the process
    - professionalize the ‘throw it against the wall and see if it sticks’
  - Highly time-efficient for investor and founders
  - eliminates geography as a barrier to investment