Stages of Venture Development

============= The Fuzzy Front End ============
-1] Thoughts ... Challenges: SPLUCK!
-2] Idea ... Challenges: analysis; creativity ... plus 1, too!
-3] Concept ... Challenges: research; innovation ... plus 1 and 2, too!
-4] Venture Proposal ... Challenges: team; vision; mission; goals; strategies; value proposition; business model; prospective customers; legal strategies ... plus 1, 2, and 3, too!

============= The Big Chasm =============
-5] Practical Plan ... Challenges: reasonable financial objectives; pragmatic budgets; healthy margins; the right people, places, and things ... plus 1, 2, 3, and 4, too!
-6] Launch ... Challenges: favorable funding; the right time frame; the right timing ... plus 1, 2, 3, 4, and 5, too!
-7] Survive ... Challenges: customers; markets; competitive advantages; better value; meaningful brand ... plus 1, 2, 3, 4, 5, and 6, too!

============= The Grand Canyon =============
-8] Grow ... Challenges: efficiency; effectiveness ... plus 1, 2, 3, 4, 5, 6, and 7, too!
-9] Thrive ... Challenges: scale; scope; new competition from smart innovators and entrepreneurs ... plus 1, 2, 3, 4, 5, 6, 7, and 8, too!

============= Beware! The End of the World is Near! ===========
-10] Die ... Challenges: venture loses its mojo ... see all the above to course correct, it it's not already too late!

(c) 2015 Jim Jindrick. G0.33

Jim's Class Slides ... 2015 Oct 15

Click and enjoy!


Value Proposition

Value = Benefits / Price (Benefits divided by Price)
The greater the benefits for a given price, the greater the value.
The lower the price for a given set of benefits, the greater the value.
As benefits increase, value increases.
As price decreases, value increases.
If Value ratio >> 1 (Benefits much greater than the Price) ... Gonga deal!
If Value ratio > 1 (Benefits greater than the Price) ... Good deal!
If Value ratio = 1 (Benefits are about equal to the Price) ... Fair deal
If Value ratio < 1 (Benefits are less than the Price) ... Bad deal!
If Value ratio << 1 (Benefits are much less than the Price) ... Ripoff! Really bad deal!
To create a better value ...
1] Increase, improve our product, service, and/or process benefits
2] Decrease our product and/or service prices


Primary Research: Prospective Customers

  1. Observation ... what does it look like now?
  2. Casual conversations ... open ended discussions, usually one on one but could be in small groups
  3. Informal discussion groups ... open ended, perhaps focused on a particular topic (ie, new product concept)
  4. Focused conversations ... focused on a particular topic ... could use a "preliminary marketing brochure" as a focal point
  5. Formal interviews, one to one ... focused on a particular topic (ie, new product concept) ... could use a "preliminary marketing brochure" as a focal point
  6. Focus groups ... 4 to 6 people, focused on a particular topic (ie, new product concept) ... moderated (neutral party)
  7. Surveys ... target respondents can range from close-knit to broad, very focused responses, mostly multiple choice responses, limited open-ended questions ... could include a "preliminary marketing brochure" as a reference for responses ... quantitative information (methods 1 - 6 are qualitative)
  8. Alpha test group ... "friendly" prospective customers evaluating product prototype
  9. Beta test group ... close-knit prospective customers, but not necessarily "friendly", evaluating product prototype
  10. Version 0.01 test group ... formal product release, but limited distribution, first soft-release product
  11. Version 1.0 release ... general market release, feedback from "real" customers, first release product

  1. Always take notes!
  2. Remember, the purpose of this research is to refine your venture concepts (target markets, effective solutions, business model, et al).
  3. Gather data without prejudice. Then later, analyze the results and iterate, pivot, or start all over!
  4. Another good research tool ... be a customer of your closest competitors. Get first-hand knowledge of "how they do it"!
  5. "Product" is a generic term ... could be an actual gizmogadget product, or a service, a process, a method, or a business model ... generally, the "solution" to customer needs, wants, desires is a combination of these


Venture Operations ala Deming

Dr. W. Edwards Deming taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while increasing customer loyalty). The key is to practice continual improvement and think of [a company] as a system, not as bits and pieces.

William Edwards Deming was an American engineer, statistician, professor, author, lecturer, and management consultant. Educated initially as an electrical engineer and later specializing in mathematical physics, he helped develop the sampling techniques still used by the U.S. Department of the Census and the Bureau of Labor Statistics. Deming championed the work of Walter Shewhart, including Statistical Process Control, Operational Definitions, and PDSA (Plan-Do-Study-Act).

Deming is best known for his work in Japan after WWII, particularly his work with the leaders of Japanese industry. Deming is credited as the inspiration for what has become known as the Japanese post-war economic miracle of 1950 to 1960, when Japan rose from the ashes of war to become the second most powerful economy in the world in less than a decade founded on the ideas Deming taught:

... Better design of [products, processes, methods, and business models] to improve [customer] service
... Higher level of uniform product [service and method] quality
... Improvement of [product, service and method] testing in the workplace and in research centers
... Greater sales through [global] markets

[Jim's toosense: These are key principles for entrepreneurial and innovation success!]

[Source: Wikipedia with Jim revisions in brackets]


Basic Venture Executive Summary

1] Who are you?
Founders ... management team, roles, background
Extended team ... key advisors, contractors, et al

2] What are you doing?
Problems and opportunities (position on the pain to pleasure spectrum) ...
Solutions (answers to your customer needs, wants, desires) ...
Your "magic sauce" ...
Your innovations and intellectual property ...

3] Where are you doing this?
Your home base location ...
Your beta test market, initial target market, serviceable obtainable market, served available market, total available market ...

4] When are you doing what?
Time frame for planning, funding, launch, iterate, scale, scope ...

5] Why are you doing this?
Vision, mission ...
Goals, objectives ...

6] How are you going to do this?
Business model
Key strategies, tactics ...

7] Summary
Summary status of your venture ...
Contact information ...


The Beauty of Amazon's 6-Pager

Imagine for a moment that you could go into a meeting and everyone in the meeting would have very deep context on the topic you're going to discuss. They would be well-versed in the critical data for your business. Imagine if everyone understood the core tenets you operate by and internalized how you're applying them to your decisions.

How great would it be not to be constantly interrupted by clarifying questions? How great would it be not to have the decisions in the meeting based on the social networking advocacy that happened before the meeting? How great would it be if executives deeply understood your organization from your perspective before asserting they know better how to do it? How great would it be to be able to review the core data going into a decision rather than have someone summarize it and assert that correlation is causality without revealing their work?

This is what meetings are like at Amazon and it is magical.

At previous companies I was constantly frustrated when decisions were made off of partial context without an opportunity to properly present the data. I would see logical flaws and statistical flaws, but not have the opportunity to probe them because others in the room didn't have the same context or the same data. I would recognize that the team had flawed tenets, but couldn't get the team to articulate their core decision criteria.

I never have these challenges at Amazon.

In 2012, Conor Neill summarized Amazon's unique approach to running meetings by driving the meeting around the 6-page narrative. So I don't think I'm revealing Amazon secret sauce by describing the process. Where I run some risk of revealing too much is by telling you that Amazon absolutely runs better, makes better decisions, and scales better because of this particular innovation.

Quoting from Jeff Bezos: “The traditional kind of corporate meeting starts with a presentation. Somebody gets up in front of the room and presents with a powerpoint presentation, some type of slide show. In our view you get very little information, you get bullet points. This is easy for the presenter, but difficult for the audience. And so instead, all of our meetings are structured around a 6 page narrative memo.... If you have a traditional ppt presentation, executives interrupt. If you read the whole 6 page memo, on page 2 you have a question but on on page 4 that question is answered."

The down side to the 6-pager is that writing a good six-page evidence-based narrative is hard work. Precision counts and it can be hard to summarize a complex business in 6 pages, so teams work for hours preparing the document for these reviews. But that preparation does two things. First, it requires the team writing the document to really deeply understand their own space, gather their data, understand their operating tenets and be able to communicate them clearly. The second thing it does is a great document enables our senior executives to internalize a whole new space they may not be familiar with in 30 minutes of reading thus greatly optimizing how quickly and how many different initiatives these leaders can review.

Outsiders sometimes look at Amazon and wonder how Amazon can possibly focus on so many different businesses at once. The answer is that Amazon has fundamentally innovated in how to scale the process of bringing groups of people deeply up to speed in new spaces and making critical decisions based on that insight quickly. Speed and scale are weapons and Amazon has already told everyone its secret... if only they have the discipline to implement it.

[Brad Porter]

Survey Results: What is your favorite "disruptive innovation"?

Thanks to all who participated in my little mini-survey. We'll discuss more in class, but here are the results.

One Big Hmmm: 92% of all the respondents were male; 8% of the respondents were "anonymous" so don't know if they were male or female. There were no readily-identifiable female respondents. (That is assuming that no one "faked" a name!) So now I am curious ... why didn't the ladies participate in this survey? Just because it is a survey, or was it the subject matter? I might need to do another survey!

Here are the "raw" unedited, uncompiled results:

Q: What is your favorite "disruptive innovation" that seemed to have appeared since 2010?
3d Printing
Not sure.
My favorite "disruptive innovation" would be Venmo and other digital payment services.
3D printed items... it may not seem like a big deal, but they're 3D printing parts for health care. Whoa!
social media channel. This innovation in social space made huge impact at horizontal level and forced companies to accommodate it into their strategies
GMOs, and all realated technologies, Tissue culture and new ways to produce pharmaceuticlas that are cheap.
Technology in agriculture that improves yield!
Sometimes disruptive can be misleading.
Bigger cell phones can be disruptive but they are smart phones
My favorite disruptive innovation that I believe appeared around 5 years ago is Uber.
The New Normal Network, specifically The Tom Leykis Show ( Terrestrial Radio is controlled by advertisers, Wall Street conglomerates, and the FCC. "Internet Radio" is the future of radio, free of the tentacles of Wall Street and D.C. It's one of the last bastions of truly free speech, complete with profanity, controversial topics, and advertisers who share a close relationship with each other and the New Normal Network.
Laptop/tablet hybrids
Mobile payments and transactions. Eg - apple pay, google wallet, square cash etc.
Anonymity in surveys
Smart cars or self-driving cars.
Self-driving cars (at least partially self-driving)
One disruptive innovation that comes to mind is ride sharing.
I would have to say Uber is my favorite since 2010. It has captivated a market/industry and seems to be unstoppable.
My favorite disruptive innovation that has appeared recently is Apple's Cloud computing availability.

Q: What is your favorite "disruptive innovation" regardless of when it first appeared?
The internet
The personal computer, hands down.
Since I'm a car guy... I'd have to say the car. It changed the way of life for everyone.
INTERNET. It has made huge impact at social, political and business level.
Genetic Modified Organism!
Medical records
Apple's Iphone
3D Printing
Napster/Limewire/torrents...the computer programs that will allow me to bootleg media without having to pay legitimately for it or go downtown to buy bootleg DVDs or CDs with random quality
Smart Phones
The advancements in the field of mobile. The iphone in 2007 especially. Mobile phones are no longer just phones. They are powerful, handheld, portable computers.
The internet
Digital music streaming.
Personal computer
My favorite disruptive innovation would probably be the internet, as it has become the staple for just about everything.
That is a definite tie between the cell phone and computer. They are every bit a part of us as our arms and legs. And every bit unnappreciated as well. The world would literally cease to exist without them.
My favorite disruptive innovation may likely be my iPhone, given all of the capabilities it has.

Q: What "disruptive innovation" would you most like to see in the future?
anti-gravity automobiles
How we commute both land and air - faster, safer, more eco - friendly traveling
One that I own.... :)
Change in the retail industry.
Hmmmm. I'd really like to see an innovation in which Identification cards could be presented on your mobile phone. We already have the so many abilities on our phone through the numerous applications and mobile pay. It would be convenient to never have to carry around my wallet.
Well if the sky is the limit here... in the movie Elysium, they had a device that revolutionized health care, by restructuring the person's atoms. It could cure anything and was basically a fountain of youth. A lot of people would be out of jobs after that. But health care for all? Pretty amazing.
Artificial intelligence. Internet of everything is mostly depend on this thing. If human get good hold on A I, it can make huge impact
A smart lock!
drones, self driving cars, more GMOs
Rockets and drones
An inexpensive way generate all of your own electricity, (something cheaper than what solar panels cost at the moment)
Driverless cars
A service that can connect patients with the drugs or doctors they need instead of having to go through a "middle man" general-practitioner doctor to get a recommendation or prescription. If I need to go to the dermatologist, I shouldn't have to go to a g.p. for his blessing. Same thing with medicine. I know I need drug X to cure ails me. I don't need a g.p. to tell me I need X. I already know that. G.P.s are great for a reference if need be, but I'm a big boy and don't appreciate the additional levy the health industry puts on patients. This may have all changed after the new healthcare law was passed, I don't know for sure.
The rise of 'invisible app' market. These are apps that do not need an interface to get stuff done. (Egs - services through text messages, email etc). Im done having so many apps for so many things.
A good example of an invisible app - magic (
Use of the innovations in anonymous surveying and confidentiality
Improved/rapid space travel.
Don't know, but anything nontraditional.
I would like to see tech devices being able to display holograms that we could grab and literally drop to other devices, such as from phone to phone, phone to laptop, laptop to tablet and so on.
A medical device, such as a chip that could be integrated to a person, that takes real-time measurements of the most important chemical health indicators.
I'm not sure what disruptive innovation I would like to see, but in terms of helping the environment, I would like to see something that creates food sources that are not environmentally detrimental (e.g., something that solves over-fishing).
I would most like to see a disruptive innovation that allows local businesses to have more security/success than their big chain competitors of course. That is why I got behind an idea that does exactly that.
The disruptive innovation I would most like to see in the future would likely deal with efficiency and sustainability for instance renewable enerfy source based of kinetic and solar power.

Jim Jindrick

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