Welcome to Elevator Pitches, Business Plans & Investor Decks  Ent 526  Winter 2019  Week 5 Dr. Sean Wise, BA LLB MBA PhD TRSM 2-076 [email protected] 1 Last Week’s Concepts 21st Century Entrepreneurship The Lean Startup Methodology Customer Development Business Plans Business Model Canvas Lean Canvas Build/Measure/Learn The Lifecycle of a startup S curve Problem Solution Fit Product Market Fit Creating a Lean Canvas for: uber, amazon, google search, tinder, etc. Not yet covered: Hypothesis Design Hypothesis Testing A/B Testing 2 #1 Cause behind changes in Entrepreneurship? #1 Cause behind changes in Entrepreneusnhip? 5 The Changing Process20th Century21st CenturyBuild in SecretGo to customers early and oftenOnly focus group in SecretShare, share, shareOnly have 1 chance to make a first impression of customersName it BETA and let customers shape itEngineering DrivenCustomer Driven 21st Century Entrepreneurship 5 Keys to 21st Century Entrepreneurship Get out of the Building Done today, beats perfect tomorrow Build Measure Learn Share, Share, Share Launch early and iterate often Customers before Investors Show Don’t Tell 7 What’s a business model? A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. Business model = revenue model – cost model The revenue model breaks down all the sources of revenue that your business will generate. The cost model identifies how you are spending your resources to make money. It includes your cost of goods sold (COGS) and your operating expenses. Business Model has 9 components 7 8 9 Parts of a Business Model 8 Lean Canvas You need to be able to fill in a Lean Canvas for: Google Facebook Netflix Uber http://www.tomersagi.com/blog/2015/5/8/what-would-ubers-business-model-look Tinder Wikipedia Hypothesis Testing 12 Lean Startup Methodology 13 Lean Startup Methodology 15 Hypothesis Testing A hypothesis is a way of taking a scientific question and turning it into testable prediction. A good hypothesis is important because it leads to good experimental design. Good experimental design is important because you need it to properly validate or invalidate what you’re doing. “What is the simplest thing we could do here to prove our hypothesis?” The key outcome of an experimental approach is measurable evidence and learning. 16 Hypothesis Testing 17 Hypothesis Testing The basic structure is this: I believe [target market] will not [do this action / use this solution] for [this reason]. A good hypothesis must be: Written down in advance Be falsifiable Is there a test after which the hypothesis could turn out to be wrong? If not, it's not a falsifiable hypothesis or in other words: It's not really a hypothesis Be testable Be quantifiable 19 Hypothesis Testing Examples: I believe that East Coast U.S.-based investors will  ...

1. Welcome to
Elevator Pitches, Business Plans & Investor Decks
Dr. Sean Wise, BA LLB MBA PhD
TRSM 2-076
[email protected]
1
Last Week’s Concepts
21st Century Entrepreneurship
The Lean Startup Methodology
Customer Development
Business Plans
Business Model Canvas
Lean Canvas
Build/Measure/Learn
The Lifecycle of a startup
S curve
Problem
Solution
Fit
Product Market Fit

2. Creating a Lean Canvas for: uber, amazon, google search,
tinder, etc.
Not yet covered:
Hypothesis Design
Hypothesis Testing
A/B Testing
2
#1 Cause behind changes in Entrepreneurship?
#1 Cause behind changes in Entrepreneusnhip?

3. 5
The Changing Process20th Century21st CenturyBuild in
SecretGo to customers early and oftenOnly focus group in
SecretShare, share, shareOnly have 1 chance to make a first
impression of customersName it BETA and let customers shape
itEngineering DrivenCustomer Driven
21st Century
Entrepreneurship
5
Keys to 21st Century Entrepreneurship
Get out of the Building
Done today, beats perfect tomorrow
Build Measure Learn
Share, Share, Share
Launch early and iterate often
Customers before Investors
Show Don’t Tell

4. 7
What’s a business model?
A business model describes the rationale of how an organization
creates, delivers, and captures value, in economic, social,
cultural or other contexts.
Business model = revenue model – cost model
The revenue model breaks down all the sources of revenue that
your business will generate.
The cost model identifies how you are spending your resources
to make money. It includes your cost of goods sold (COGS) and
your operating expenses.
Business Model has 9 components
7
8
9 Parts of a Business Model

5. 8
Lean Canvas
You need to be able to fill in a Lean Canvas for:
Google
Facebook
Netflix
Uber http://www.tomersagi.com/blog/2015/5/8/what-would-
ubers-business-model-look
Tinder
Wikipedia
Hypothesis Testing

6. 12
Lean Startup Methodology
13
Lean Startup Methodology
15
Hypothesis Testing
A hypothesis is a way of taking a scientific question and turning
it into testable prediction.

7. A good hypothesis is important because it leads to good
experimental design. Good experimental design is important
because you need it to properly validate or invalidate what
you’re doing.
“What is the simplest thing we could do here to prove our
hypothesis?”
The key outcome of an experimental approach is measurable
evidence and learning.
16
Hypothesis Testing
17

8. Hypothesis Testing
The basic structure is this:
I believe [target market] will not [do this action / use this
solution] for [this reason].
A good hypothesis must be:
Written down in advance
Be falsifiable Is there a test after which the hypothesis could
turn out to be wrong? If not, it's not a falsifiable hypothesis or
in other words: It's not really a hypothesis
Be testable
Be quantifiable
19

9. Hypothesis Testing
Examples:
I believe that East Coast U.S.-based investors will read at least
one article per week on NextMontreal because they have a
growing interest in the Montreal startup ecosystem.
I believe that people will not want to download their content to
have a separate place in case of being audited or canceling an
online service.
More people would catch the train if they got an SMS message
15 minutes before they needed to leave.
If we add logos of our existing customers to our landing page, it
will convey trust as a key value proposition to Bernie, our
customer persona, and he will sign up.
Potential partners will not be willing to fill out a lead sheet
when they view a partner page explaining our 3 key value
propositions.
Customers are only willing to pay a max price for a hotel based
on the time of day they book.

10. 20
A/B Testing
21
The Startup Lifecycle
22

11. Key Inflection Points
24
Customer Discovery
Goal is to Achieve Problem/