YBI Innovation Challenge: Introduction/Starting Your Journey

1. Welcome! Your guide to the YBI Innovation Challenge Session 1: Introduction/Starting Your Journey

2. Hello! I’m Bob… • A pleasure to work with many of you again • 7 startups since age 22…many good/bad angel investments • Nine years training startups…and leaders like you • co-Author with Steve Blank, “The Startup Owner’s Manual” • …and your Sherpa through the YBI Innovation Challenge! (with help from my longtime friend and colleague from Colombia for those who prefer to speak Spanish!)

3. How can we help you succeed? • Four quick “mini webinars” to help you plan your attack • Four one-hour “clinics” to help you along the way • Further coaching after the selection process, too!

4. How can we help you succeed? • Four quick video guides to help you plan your attack • Four one-hour “clinics” to help you along the way • Further coaching after the selection process, too! Our four-part introduction: • Introduction/Starting Your Journey • Defining the Problem You’re Solving…and for whom? • “Problem Discovery” Rules and Tools • Developing Your Roadmap to the Winner’s Circle

5. Let’s Get started… Part one: • A Brief History: Turning Innovation Upside-down • Design Thinking and Customer Development • “It’s all about the problem” • Thinking About Your Journey

6. 1. A Brief History: Turning Innovation Upside-down The “Old way” to innovate: “I know what the customer wants…” “I will build it and they will buy it!” …Business plans written in lead-lined rooms …”Waterfall” product development …Driven by a launch date/financial plan The result: Kodaks, Chryslers, Seas, line extensions… …and little disruptive innovation

7. The new way: circa 2000 Slow growth, Y2K drive a “new way” to innovate: “will airplanes fall from the sky at midnight?” • Too-frequent failures of high-flyer startups remember Webvan, Pets.com • April 2000 stock crash drives innovation renaissance • “Maybe we should ask customers what they want!!” • Start with the Problem, NOT the Solution

8. Solving Web Navigation, circa 1994…early Yahoo homepage

9. 2. HOW?? Design Thinking/Customer Development …traces its earliest roots to the 1960’s …acceleration began ~1990 at Stanford, founding of IDEO …exploded ~2000 with in from pure design to PRODUCTS!

10. 2. HOW?? Design Thinking/Customer Development …traces its earliest roots to the 1960’s …acceleration began ~1990 at Stanford, founding of IDEO …exploded ~2000 with in from pure design to PRODUCTS! core principles: • respond to external challenges, unmet human needs • a logical, step-by-step process for ideation, innovation • starts with the problem, not the solution • constant, empathy-based test-and-iterate cycles

11. 2. Customer Development is virtually identical • Pioneered by entrepreneur Steve Blank, beginning 2000 • Followed by his student, Eric Ries, “Lean Startup,” 2010 • Granular step-by-step methodology, Blank & Dorf, 2012

12. 2. Customer Development is virtually identical • Pioneered by entrepreneur Steve Blank, beginning 2000 • Followed by his student, Eric Ries, “Lean Startup,” 2010 • Granular step-by-step methodology, Blank & Dorf, 2012 core principles: • Find a vexing painful problem… • …bring an innovative elegant solution • The customer is the fountain of all knowledge • So “get out of the building!” • Experiment and fail “up” fast

13. 2. Ergo…guidelines for the YBI Challenge: • Solving a serious, vexing problem for young entrepreneurs? • Is the solution powerful, of interest to many? • Can it be built…can the organization drive success? • And can the innovation be sustained financially? …it all starts with the PROBLEM!

14. 3. Starting with Problems, not Products “Problem Discovery” is Step One of Customer Discovery • We don’t get to define it, only the customer does • Avoid “do you have a problem with…” suggestions • There are no ”bad” (or non-) problems…gather’em all • Look for patterns, repetition

15. 3. Starting with Problems, not Products “Problem Discovery” is Step One of Customer Discovery • We don’t get to define it, only the customer does • Avoid “do you have a problem with…” suggestions • There are no ”bad” (or non-) problems…gather’em all • Look for patterns, repetition the objective: • Find the nastiest, thorniest, most painful issues • Important to lots…or targetable groups of people • And causing the greatest possible “pain”

16. 3. Starting with Problems, not Products “Problem Discovery” is Step One of Customer Discovery • We don’t get to define it, only the customer does • Avoid “do you have a problem with…” suggestions • There are no ”bad” (or non-) problems…gather’em all • Look for patterns, repetition the objective: • Find the nastiest, thorniest, most painful issues • Important to lots…or targetable groups of people • And causing the greatest possible “pain”

17. 3. Starting with Problems, not Products What’s a problem, you ask?? • Does it cost you/entrepreneurs time, money, productivity • Does it impede a team’s success a little? a lot? toxic? Bankruptcy! • Frequent, recurring problem for organization or startup/s?

18. 3. Starting with Problems, not Products What’s a problem, you ask?? • Does it cost you/your startups time, money, productivity • Does it impede startup success a little? a lot? toxic? Bankruptcy! • Frequent, recurring problem for organization or startup/s? Measure the pain relative to other problems • Severity, failure risk • Frequency: per entrepreneur, per organization/ecosystem • …nudge the interviewee to define the severity/impact

19. 3. Starting with Problems, not Products Probing the problem…questions to ask: • How often do you see this problem • Is it always at the same intensity, or varied • Does it affect certain types of entrepreneur…at certain times? • How do you/startups solve the problem today • Challenges with current solutions • Ever “gone shopping” for a solution… result? • Where did you search • Maybe: “If you had a magic wand…” • In sum…keep digging. More on that in our next video!

20. 4. Thinking About Your Journey Identify the biggest problems vexing young entrepreneurs today • Caution: If you’re holding a hammer… …every problem looks like a nail • Translation: DON’T RUSH to the solution!

21. 4. Thinking About Your Journey • Identify the biggest problems vexing startups today • Caution: If you’re holding a hammer… …every problem looks like a nail • Translation: DON’T RUSH to the solution! • Identify areas with the greatest pain, need • “Nail the problem” and measure its magnitude first • Then…and only then…start to focus on the solution!

22. 4. Thinking About Your Journey • Remember: You’re Listening, Probing • “Tell me about your biggest challenges…” • Don’t point or drive the conversation • Try not to talk at all about YOUR solution idea • Always ask for referrals to others • …and be glad to return the ”discovery” favor soon

23. Part One: Quick Recap Focus on “nail the problem” first Avoid “I know what the user wants” at all costs Talk to varied people, startups, organizations Don’t bring a solution to your early conversations Look for frequent, painful, expensive, vexing problems! …and never stop asking “why!”

24. Next subject: Defining the Problem/What’s “Product/Market Fit?”