Archive for October, 2012

Steve Blank Wows the GCVA

Posted: October 29, 2012 by Bill Cunningham in Planning, Startup
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The New Normal for Startups

Posted: October 28, 2012 by Bill Cunningham in Innovation, Leadership, Planning, Startup

“No business plan survives first customer contact.” – Steve Blank

Steve Blank wowed the Greater Cincinnati Venture Association meeting this week by delivering a compacted presentation of his customer development process. Steve has launched 8 companies in Silicon Valley over the last 31 After a brief stint at retirement, he assembled his life’s lessons about startups into college course, which turned into a book, which has turned into a viral movement in the entrepreneurial world to increase a startup’s chances of success.

Steve BlankAnd to top it off, this is not a get rich quick scheme for the author, as he has published his work and shared his resources in a variety of locations such as the Stanford Entrepreneurial Corner, Udemy, SlideShare and others for free. He has assembled an incredible list of resources for startups on his website that covers everything from presentations to financing to finding customers. Yes, you have to buy the book, “The Startup Owner’s User Manual” – after all, products composed of atoms and require shipping do have production costs, a for $24 on Amazon, you can have the definitive bible and handbook to guide you on the path to building a successful company. Ask any MBA student who has taken a business plan course that required a $140 textbook if this is a great deal!

A Game Changer for Startups

The traditional path for startups goes something like this:  get an idea, develop a business plan, raise some money, work on completing the product, spend a lot to take it to market, and then watch customers flock to buy your wares. The rare instances of this happening in the past (like the infamous Pet Rock) are difficult to replicate.  What is missing from the traditional path is the customer and Steve’s approach involves agile customer development in parallel to software development (or product development) to find the right business model that will succeed.

In his view of the world, a “startup is a temporary organization designed to search for a repeatable and scalable business model.” The greatest ideas will never see the light of day unless you have customers. Finding customers who will buy and love your product as well as developing the right channels and message become far more important than the cool mySQL database searches or incredible user-created content. So instead of raising $1 million from angels or venture guys and work like madmen (and madwomen) to create a product in a secret lair, Steve suggests that you “validate your hypotheses with experiments.”  Separate the things your know (which he calls facts) from your faith-based ideas that you believe will work and test them with customers.

Talk to 100 Customers

Since “there are no facts in the office, get outside the building.” There is no substitute for eyeball to eyeball contact with real customers. There are also no shortcuts. Market research and focus groups are great for discovering what people thought in the past, but if you are to be successful, you have to skate to where the puck will be (ala Wayne Gretzky.) The founding team must do this – it can’t be outsourced to a consulting firm – the first hand learnings are most valuable to the founders.

So the Customer Development Process is sweeping the country. I know that Miami and Northern Kentucky Universities have started to integrated Steve’s thinking into their courses. Steve’s GCVA presentation is available on www.gcva.com as we as the links to resources mentioned above. Use these to find the right business model, and your startup will take off like a rocket!

Bill Cunningham is the CEO of OneMorePallet.com and shop foreman at the Greater Cincinnati Venture Association.

Teams, Leadership, and New Venture Creation

Posted: October 20, 2012 by Chuck Matthews in Leadership, People, Startup

“Talent wins games, but teamwork and intelligence wins championships.”

Michael Jordan

One of my favorite anecdotes about team building is attributed to the legendary football coach Vince Lombardi.  The story goes that when Coach Lombardi came to the Green Bay Packers, to put together his team, he built a large brick wall at the end of the field.  One by one, he would line up the players and have each player run full steam at the wall.  The ones who smacked into it and fell backwards, he made defensive lineman.  The ones who ran right through it, he made fullbacks.  The ones who ran up to the brick wall and walked around it, he made quarterbacks!

It is an interesting illustration of the importance of identifying skills needed to assemble a winning team. Every entrepreneur is faced with this same dilemma of building a team that is essential in the process of successfully launching and growing a new venture.  Building brick walls and having your prospective employees charge at it notwithstanding, what are the key elements of putting a winning team on the field for your new and growing business? Let’s take a look at why this is so important, determining the needed team resources, and as Michael Jordan knows so well, how talent, teamwork, and smart plays takes you beyond a win to championship status.

The Importance of Opportunity, Resources, and Team

As the lead entrepreneur of a new venture, you are constantly balancing your roles as innovator, leader, and communicator with a keen focus on your core product/services offerings, customers, and competition.  Of course, all this is unfolding in an uncertain and ambiguous environment with multiple external forces (e.g., legal, political, social, economic, technical, and more) complicating the process.  It is against this backdrop that you must clearly articulate how your product/service offering directly addresses a problem or “pain” point in the marketplace.  The resulting unserved and/or underserved market opportunity necessitates three types of capital: human (team), social (networking), and financial (money).

Determining Team Resources

In general, every entrepreneur faces gaps in his or her own capabilities.  Ask any successful entrepreneur the key to their success and one consistent answer you will hear in some form is, “I surrounded myself with people who are smarter than I am” or “My success is due to this incredible team pulling together.”  It is no accident that really great leaders recognize the extent and critical nature of these gaps.   As a result, they address these key team resources.

Identify the required know-how, skills and expertise.  Keep in mind, these critical elements will change over time.  It is important to make this assessment early and often.  Also, determine which skills, expertise, etc. are needed in-house versus acquired from external sources.  For example, book-keeping skills may be in-house, but accounting and legal expertise may be from members of your external team.

Outline the key tasks and action steps that need to be taken.  Tie this to your timeline and key milestones.  For example, do you need sophisticated order entry/ inventory management systems that require custom programming in the early stages of your product/service offering?

Empower your team for success.  Identify the requisites for success and provide the tools, time, and support for the mission.  For example, what training and/or tools are needed for your team?  How will this change over time?

Determine the financial requirements.  How much can the venture afford to pay?  It is tempting to look at team needs in a vacuum, but the wise entrepreneur links early rewards, performance, and outcomes with the growth of the venture.

Building a Value Proposition

To survive and thrive in an increasingly competitive marketplace, you need to build your team toward not just competency (something you do well), or a core competency (something you do well within your own value chain), but distinctive competency (something unique that sets you apart from the competition).  Championship teams have a buy-in and a tie-in to the big idea; are integral to the game/business plan; bring critical know-how, skills, and experience; and, guided by leadership, manage the risk and responsibility that ensures forward progress toward a common goal.

As innovative entrepreneur and team builder Henry Ford once said, “Coming together is a beginning. Keeping together is progress. Working together is success.”  Till next time, all the best for continued entrepreneurial success!

While the Brandery’s Demo Day served as an important launching pad for organizations from around the US, many players of the Cincinnati entrepreneurial ecosystem helped to accelerate entrepreneurship on the other side of the world in a region where entrepreneurship is not so common – Afghanistan. Over a five day period ending earlier this month, Miami University’s Institute for Entrepreneurship hosted over 60 post-graduate Fulbright students for a seminar on social entrepreneurship informally called Startup Afghanistan. The goal was to provide the best and the brightest from Afghanistan with the tools, experiences and knowledge to develop entrepreneurial solutions to some of the most pressing problems when they return back to their home country. The program was sponsored by the US Department of State’s Bureau of Educational and Cultural Affairs (ECA) and administered in cooperation with the Institute of International Education.

Startup Weekend Methodology

While the Fulbright Program – the flagship international educational exchange program of the US government – offers enrichment seminars for the visiting scholars, it generally does so through traditional workshops and experiences. However, given the focus on gaining entrepreneurial knowledge, Miami convinced the US Department of State to experiment with this seminar through the use of the Startup Weekend methodology. As such, 60 Fulbright students from Afghanistan engaged in a 54-hour immersion experience of moving from idea to prototype. The Startup methodology was directed primarily through Mark Lacker and Tony Alexander. Lacker is the Altman Clinical Professor of Entrepreneurship at Miami, who has become a national expert in Startup Weekends and recently ran one for the national kick-off of Venture for America.  Alexander is co-founder of three start-ups including Travelers Joy, Simple Registry and Smarty Tags and a mentor at the Brandery.

Local Knowledge to the Develop Local Solutions

Guided by Lacker and Alexander, the Fulbright students, ranging in age from 25 to 60, were encouraged to offer opening pitches to solve real problems in Afghanistan. As the US Department of State held their breath for fear that no one would pitch an idea, the students displayed incredible enthusiasm and courage by pitching 39 different ideas that were organized into nine different teams. Cutting across the sectors of healthcare, education, business and energy, the students worked tirelessly – guided by Lacker, Alexander, 2nd year mentors from Afghanistan, and peer mentors in Miami’s entrepreneurship program – to develop nine business models grounded in the day to day reality of Afghanistan. After two days, the nine teams made presentations to a panel of judges including a nonprofit university, a business research center, a manufacturing business producing saffron, a low-cost marriage business, a solar energy business, a community development bank, a plastic bottle recycling business, an Afghan consulting business, and a diabetes management business. In the end, the community development bank for farmers emerged as the winning business model.

Partnering with the Cincinnati Ecosystem

While the Institute for Entrepreneurship at the Farmer School of Business of Miami University was selected to host the Fulbright Program because of the international reputation of its work in social entrepreneurship, the success of the program was greatly enhanced because of several key players in the entrepreneurial ecosystem. In addition to Alexander, Mike Bott (General Manager, Brandery), Johnmark Oudersluys (Executive Director, CityLink), Joe Hansbauer (Executive Director, UGive) and Richard Palmer (President, Nehemiah Manufacturing Company) shared their time and experiences with the Fulbright students to greatly advance their ideas. The goals of the seminar were to advance mutual understanding of people from different countries / cultures, to build sustainable human networks, and to gain actionable knowledge of the entrepreneurial process. Given the startup weekend methodology, the local knowledge of students and the support of the Cincinnati entrepreneurial ecosystem, the Fulbright students have accelerated the rebuilding of their country and the changing of the world in Afghanistan through entrepreneurship.

What One Person Can Do!

Posted: October 7, 2012 by Bill Cunningham in Ecosystem, Innovation, Leadership, Non-Profit, People, Startup, Technology

The Greater Cincinnati Venture Association set a new record of over 200 attendees for the Cintrifuse presentation by Jeff Weedman. Hot topics always make for great crowds, but Cintrifuse drew over 60 non-members to the event highlighting the importance of entrepreneurial ecosystem to the regional economy. The GCVA also took the opportunity to recognize Laura Baverman, the Enquirer’s Innovation and Entrepreneurship reporter, for her contributions to the entrepreneurial community. As Jack Wyant, Blue Chip Venture Company’s founder and managing director, so eloquently delivered,

“You helped change an entire region in just one decade
For 1,875,000 words our thanks is hereby acknowledged and paid!”

 As part of the team of business school professors and entrepreneurs who pen this column, we applaud all the media that have curated our progress as growing startup community.   As Jeff Weedman stated at the GCVA, “We are fighting above our weight class!” That is the dream of every entrepreneur – to appear bigger and better in the eyes of the world. Thanks to Laura and all the media sources, we read about it, celebrate it and create a culture that appreciates it!

So thanks to Laura, there would be many successes missed in the journey without her reporting. And there are many other unrecognized leaders in building the community — people who do it for the “good of the order” and because it is the right thing to do. For example, you have no idea of the thousands of hours Rich Kiley logged back in the early 2000’s (at CincyTech then known as the Regional Technology Initiative) working on Senate Bill 180. SB180 created the Ohio Venture Capital Authority allowing many venture firms to leverage the Third Frontier and create new startups, technologies and jobs. Cincinnati was fortunate to borrow Rich as an on-loan executive from P&G — or SB180 would not have seen the light of day.

Many more “Wizards of Oz” work behind the curtains towards the success of our entrepreneurial community. If I try to name them all, I will miss most of them. They may not seem to be a part of the ecosystem, but they all are doing their best to support it. They include the volunteer (and tireless) organizers of events like TEDx, Continuous Web, the GCVA, the software interest groups, IEEE and the like. The programs at Cincinnati State that create new chefs and Springboard at ArtWorks that creates business-savvy artists and creatives – make up the fabric of our entrepreneurial community. The Venture for America program (recruited by a team led by Eric Avner of the Haile Foundation) is quietly building the next generation of entrepreneurs and building a network of high energy foot soldiers for startups.

Now it is your turn — what can you do to make a difference? No one can do it all, but all of us can do something that moves the needle. I truly believe Laura Baverman had no idea of the impact of her work on our efforts and how grateful we are that she communicated so well, and understood our mission, our challenges and our personalities that produced a vibrant economy. So find something you can do well to support entrepreneurship, whether it is starting a new business, or supporting the ones that are getting off the ground. One person makes a difference and we have a lot of “one persons” in Cincinnati doing just that. Be one!

Bill Cunningham is the CEO of OneMorePallet.com and shop foreman at the Greater Cincinnati Venture Association.