The Customer Development Model Presented by Bob Dorf
Successful entrepreneurs are the ones that seek to minimize risk and create organizations that can successfully scale into large enterprises. In order to do this, the startup must be sensitive to what its potential customers actually want, use a process of developing a hypothesis, testing it with a minimum viable product, and be willing to pivot quickly if it turns out that the proposed product is not wanted.
Bob Dorf, co-author of the hot-selling “The Startup Owner’s Manual” and incoming Columbia Business School professor of “Intro to Venturing,” will be presenting Customer Development and Agile Development in the search for a Business Model, and how to utilize the Business Model Canvas. The Customer Development process is taught at Stanford University’s Entrepreneurship Program, and is the basis of many successful Silicon Valley (and other) startups.
Bob’s presentation will include:
- How to incorporate the “Business Model Canvas” as the organizing principle for startup hypotheses
- Different paths and advice for web/mobile products versus physical products
- Principles of how to get, keep, and grow customers recognizing the different techniques for web and physical channels
- A “new math” for startups: “metrics that matter for fueling growth”
A copy of Bob’s book “The Startup Owner’s Manual” (a $40 value) is included for first 200 paid admissions. It’s the indispensable reference guide for any startup founder, entrepreneur, investor or educator.
Bob’s advice to entrepreneurs is “There are no facts in your building, so get the heck outside!” Our event is being held in a reserved area at Dave & Busters in Times Square – in the cauldron where New York’s legal, accounting, marketing, media, information and tourism industries collide in a maelstrom of bustling activity.
Our special thanks to Peter Leeds and Gabardine LLC for sponsoring our event. Learn more about Gabardine at www.gabardine.com
DATE
Tuesday, May 15, 2012
AGENDA
6:00 – 6:30 PM Networking and drinks reception
6:30 – 7:45 PM Program
7:45 – 8:30 PM Networking, book signing and reception
PLACE
Dave & Busters, 234 W 42nd St. 3rd Floor, New York, NY 10036
PRICE
$45 for CBSAC/NY Members, LBS NY Members, NYBSC Members, UltraLight Startups members and MCC Members (pre-registration is required)
$60 for non-members (pre-registration is required)
Includes networking reception with beer, wine and hors d’oeuvres
Pre-registration by May 8 is required. No walk-ins for this event.
To register for this very special event, follow this link to the Columbia Business School Alumni Club website.
Our Speaker’s Bio
Entrepreneurial from the age of 12, Bob received his last W-2 almost 40 years ago, when he left a great news editor’s job at WINS Radio in New York to launch his first major startup.
Since then, he has personally founded six companies, including—as he puts it—“two homeruns, two base hits, and two solid tax losses.” Dorf+Stanton Communications, founded at age 22 in his living room, grew from a staff of two—Bob and a St. Bernard—to more than 150, when Bob sold it in 1989. He has since invested in and/or advised more than a score of startups on Customer Development and “get customers” sales and marketing strategy. He’s Counseled dozens of nonprofits pro bono as well.
When Bob and Steve aren’t writing, Bob runs the Four Steps consultancy, helping major corporations and startups alike effectively deploy Customer Development process through workshops and hands-on consulting. Bob’s deep experience consulting to Fortune 500 companies and service, retail, and web businesses balances Steve’s VC and software-centric experience. This spring, Bob begins lecturing a full-semester course at Columbia Business School, “Introduction to Venturing,” on getting startups right.
Corporate Venture Capital – Risk or Opportunity?
The Columbia Business School Alumni Club of New York is presenting a panel discussion on the benefits and perils of corporate venture capital on March 6, 2012 at PNC Bank, 11 Penn Plaza (opposite Penn Station), New York, NY.
One of the fastest-growing sources of funding for startups is coming from the venture capital arms of large companies. For a startup, this corporate venture capital (also known as strategic venture capital) may be the break they need, by not only being a source of funds but also potential access to the resources of a large company.
In our discussion, we will cover such topics as:
- Are there some types of startups that are more attractive to CVC?
- What are the benefits of getting CVC funding?
- What are the risks of getting CVC funding?
- How does a startup approach a CVC?
- Is it harder, and does it take longer to obtain funding?
- How do the terms of CVC funding differ from other VCs?
Panelists:
Mike Brown, AOL Ventures
Mike Dunn – Hearst Interactive Media (VC arm)
Shon Glusky - Sheppard Mullin (VC)
Sarah Chubb Suavayre – Former president of CondeNet (Conde Nast Digital)
Moderator:
Joe Chin - CEO & Founder, SourcePad
Tickets:
CBSACNY members: $25.00
Manhattan Chamber of Commerce members: $25.00
Non-members: $40.00
Students: $15.00
Walk-ins: $60.00
Date: Tuesday, March 6, 2012
Time:
6:00 PM Reception and Networking
6:30-7:45 PM Program
Place:
PNC Bank
11 Penn Plaza
Seventh Ave & 32nd Street (opposite Penn Station)
New York, NY
To sign up: CSBACNY Event Page for Corporate Venture Capital
Speaker Bios
Mike Brown, AOL Ventures
Mike Brown Jr. is a Founder and Partner at AOL Ventures, the venture
capital arm of AOL. At AOL Ventures he focuses on investing in the
consumer internet space and works closely with portfolio companies’
betaworks, 20×200, bit.ly, Movie Pass, gdgt, Soundtracking, Sailthru,
Metamarkets, Impermium and Solve Media. In addition to his activities
at AOL Ventures, Mr. Brown is an angel investor in a variety of seed
stage companies including Qwiki, Codecademy, Voxy and Moat. In a prior
life, Mr. Brown worked for the investment arm and incubator of Richard
Branson’s Virgin Group and helped create new Virgin businesses and
invest capital in early stage startups on behalf of the British
entrepreneur. Earlier he co-founded the largest healthy vending
company in the US and began his career at Morgan Stanley. Mr. Brown
graduated with a B.A. in International Relations from Columbia
University.
Mike Dunn, Hearst Interactive Media
Michael S. Dunn has been CTO of Hearst Interactive Media since July of 2003. He is responsible for enterprise strategic and operational technology leadership, is actively involved in Hearst’s strategic investment activity, conducting technical due diligence on new investment opportunities as well as providing ongoing technical guidance to Hearst portfolio companies. He is also very involved in planning the transition from traditional to emerging media technology capabilities. He spent much of the last two decades in CTO roles including Encoda Systems, a product and service provider for the broadcast industry, Time Warner, where he was the Corporate CTO and also lead technologist for the Time Warner Digital Media Investment Fund, and was the founding CTO of Dell’s online division. Earlier he held senior technology-related positions at True North Communications, a global ad agency; Turner Broadcasting; Hanna-Barbera Studios; and Americast, a joint venture of Walt Disney Co. and four telephone companies focused on broadband. He oversees and coordinates Hearst’s sponsorship of the MIT Media LAB, and serves on the advisory boards of Brightcove, Gomez, Mochila, a media marketplace and EMC. He is the founding member of InfoWorld’s CTO Advisory Council and is a board member of Ballston Spa National Bank, a community bank servicing Saratoga County in New York. Dunn lives in Stamford, CT with his wife and two dogs. He spends winters snowboarding in Vermont and all other seasons’ mountainbiking in New England. http://about.me/glemak provides pointers to his online activities.
Shon Glusky - Sheppard Mullin (VC)
Mr. Glusky focuses his practice on venture capital, private equity, mergers
and acquisitions, and debt restructurings. He has represented clients in
transactions ranging from start-up financings to billion-dollar transactions
and has counseled companies in diverse industries such as software,
Internet infrastructure, applications and services, telecommunications,
wireless technologies, biotechnology, medical devices, healthcare, and
transportation.
Sarah Chubb Suavayre – Former president of CondeNet (Conde Nast Digital)
Sarah Chubb is a proven media executive with over 25 years of experience building strong and profitable businesses. She works currently as a consultant to companies ranging from established media entities to early-stage startups in media, tech, and B2C marketing. For the past year she has served as a consultant to Advance Publications, parent company of Conde Nast, in support of their M&A initiatives.
As the architect and director of Conde Nast’s digital strategy starting in 1996, Chubb was an early pioneer in digital media, and over 15 years created diverse, award-winning products that attracted large and engaged audiences.
Highlights of her tenure as president of CondeNet/Conde Nast Digital include:
Built and managed digital business from earliest “white space” web site days, growing the overall footprint to 26 discrete businesses, including digital-onlybrands such as epicurious.com, and an audience of 55MM+ uniques.
Developed and grew interdisciplinary digital product teams encompassing editorial, design, technology, marketing and revenue talent.
Early innovator in advertising and marketing integration
Oversaw acquisition and integration of new digital businesses, such as wired.com, reddit, and ars technica into CN Digital portfolio.
Founding board member, Online Publishers Association; served as first Secretary to the board (2001) and as Vice Chair (2010/2011). Executive Committee 2009-2011.
Board member and Executive Committee member, Interactive Advertising Bureau
Industry awards and recognition: MIN Digital Hall of Fame; ESPY Outstanding Achievement Award; Ad Age Media Maven; SAI 100. CND properties also won numerous industry awards, including 4 ASME and 16 Webby Awards.
Moderator, Joe Chin – Founder and CEO: SourcePad.com
Joe is a career Internet entrepreneur and CEO, having successfully founded companies over the past 15 years. Prior to SourcePad, Joe was the founding CEO of Guidester (now Searchandise Commerce), the largest ad network for eCommerce sites and product manufacturers. Joe was also the Managing Director of REOL, Internet Analyst at Laidlaw, founder/President of Diadem (a multi-player game company), and founder/principal of JEV (an import/export company). Joe started his career as an engineer, designing multi-million dollar satellites for Hughes Aircraft. Joeearned a Master of Science from the University of California at Berkeley and a Bachelor of Science from Columbia University.
World’s Top 10 Places to Launch a Tech Startup
The Factors for a city to make the list:
- Availability of talent ("it's all about the startup team")
- Availability of infrastructure
- Availability of capital ("yes, this minor factor")
- Legal environment (labor law, corporate law, tax)
- Entrepreneurship spirit ("Yes, people who are looked upon favorably to leave secure jobs and pursue an entrepreneurial journey)
The Top 10 Cities in the World to Launch a Tech Startup List
- Palo Alto (Silicon Valley)
- Los Angeles (Silicon Beach / SoCal)
- Boston (Route 128 corridor)
- London (Silicon Roundabout)
- New York (Silicon Alley)
- Dublin ("2012 City of Science")
- Munich
- Vancouver
- Paris
- Amman
There were 5 runner-up cities (making this really a top-15 list) as well:
- Madrid
- Buenos Aires
- Toronto
- Helsinki
- Dubai
Why Should You NOT Seek Venture Capital?
In a blog posting entitled “Companies that would do Best Without Venture Capital,” serial entrepreneur Dan Shapiro highlights the kinds of companies that should NOT seek venture capital, either because they will be rejected out of hand, or because the founder’s lives will become a living hell if they actually received VC investment.
VCs can be difficult people to find and to deal with. Like the general population, there are nice guys, mean guys, smart guys, not-so-smart guys, listeners, talkers and everything in between. If you take their money, they will be part of your business, and bring their expectations for you, your company and their level of involvement with them.
Venture capital is a source of funding that fuels rapid growth for startups. However, most new small businesses aren’t actually “startups,” and for these small businesses, seeking venture capital could end up being worse than going it alone or just getting investment money from bank loans, friends and family or even using credit cards.
If you decide to seek VC, you can expect it to take 6 to 12 months to get funding, assuming that you get a “yes” answer. During this time, the company’s management will be spending most of its time preparing for, or engaged in, pitches and presentations instead of actually producing product or managing the business. The rejection rate at a typical VC firm is over 99%, so it’s good not to let one’s hopes get too high at a presentation – it’s a tough racket to get into, and there is a lot of competition. On the VC’s side, there are plans flooding in all the time, most of which are not appropriate for any particular firm.
So, what are Dan’s reasons NOT to seek VC?
- If you think your new company will quickly be profitable. Well, if you can build a profitable business you probably don’t need VC money, and a VC already knows that you have a lot of leverage over him. With a lower rate of return on the investment, why bother?
- If your business expects “reasonable” margins and could double your investors’ money. A reasonable margin of 5% to 15% is not bad for a small business, especially in a tough economy, but for a startup it is not impressive at all. In order for the startup to cash out for 10 times the original investment (10x), the margins have to be fabulously high, like 50% t 90%. A great new disruptive product, or one that fills in a gap that the market previously didn’t know existed but now everyone wants, THIS produces the 10x that the VCs crave. Can your small business deliver this? Most likely no. If yes, then get your presentation ready and start dialing for dollars among the VCs. You must be a startup.
- VC’s are prejudiced against you, so you are wasting everyone’s time. Most everyone prefers people like themselves: after all, strangers are scary and unpredictable. VCs feel like this; they most of all prefer to invest in entrepreneurs that they have already funded. Much like any other exclusive club, once you are in it’s easy to stay in, even if it didn’t work out so well the first time. If you are an outsider, then the gates are closed to you unless you can either find a champion on the inside or you can prove beyond a shadow of a doubt that you belong inside.
- Odds, are, it is not the best use of your time. As discussed earlier, seeking funding takes 6 to 12 months, with no guarantee of success. In a small business environment, this is not only forever, the time can be better used to push the margin up over 10% and keep all the equity.
- Can you tolerate having a boss again? A startup with outside investors will have a board of directors overlooking the company’s management, and asking a lot of questions about how you are spending their money. Taking money out of the business for yourself is taking the investors’ money away, and you will have to justify it. You may also find yourself getting pushed to try things that you didn’t want to do, but when it is a big shareholder doing the pushing you may have no choice. Shareholders and board members also will put a lot of stress on you to perform, and to attend meetings that you may not like. They also have the power to fire you if they don’t like how you run things, or feel that someone they know can do a better job. In a small business you can be king, in a startup you can be rich.
If you are thinking of getting involved in a startup, it’s great to really be sure you can get past these issues. In fact, it is a rare person who can. If you are ready to make the jump, then it’s time to learn about your options and what your next step should be. Hint: you might want to check out our page on “Why Incorporate in Delaware?”
The Start-Up Skill Set
In an article in the Huffington Post, entrepreneur Daniel Tenner describes the workshop he ran at the LeanCamp London event recently, called the Startup Skill Set.
Whether you are an entrepreneur launching a new startup, or are looking to set up a small business with less lofty goals, David’s list of required skills is very useful:
- Client management and customer service
- Sales
- Making things
- Measuring things
- Communication
- Management
- Recruiting
- Marketing, Branding and PR
- Networking
- Research
- Financial control
- Fundraising
David is right: you don’t need to excel at all of these skills in order to survive and thrive as an entrepreneur, but you need to have a passing grade in each. The one skill that will buy you the most time to learn the other skills is certainly sales, since without sales there is no business and no business value, and furthermore constantly bringing in sales can help cover over problems with finances, communications and other skills. A hidden benefit of having a sales job before starting an entrepreneurial career is that it gets you used to having you and your ideas rejected over and over. When you start a business, you may think your idea is the best thing ever, but chances are the buying public is not so enamored of your product. It takes a while for a new idea to catch on, and during this period of time things may get very difficult. This leads to the next most-required skill: common sense financial calculation. How much do you have, what’s your burn rate, how much time do you have to learn to sell better and to develop your networking skills so that you can recruit others to sell what you produce.
New York moves up, Surpasses Boston as a Tech Startup Hub
A spate of news in the New York City area confirm the rebirth of the startup and tech sectors. The New York Times has reported that New York’s tech sector has grown, and now surpasses that of Boston, and second only to Silicon Valley in California. Betabeat reported a return of the tech diaspora to New York as well.
At first glance, the growth of New York’s tech sector flies in the face of logic. The cost of living and doing business, not to mention the combined federal, state and local taxes, would seem to discourage rather than encourage young entrepreneurs. Armed with high ambition but low bank balances, the city would appear to be a formidable place to start. However, this is New York City, and the collapse of the financial sector has not so much damaged the city as created more space for the other sectors of the city to bloom again. New York’s biggest advantage is its cultural and social resources, from Broadway and off-Broadway theaters to several club and bar areas that are each interesting in their own way.
The growth of the tech sector owes a lot to the growth of open source software and the lean development model. Keeping costs down and staffing levels low, a startup can get its products (usually at the minimum viable product stage) released and getting feedback from the market much sooner than was ever possible before.
The entrepreneurial ecosystem in New York has worked wonders for this growing community: the availability of large universities like Columbia and NYU, a substantial early-stage venture capital community, and access to media, entertainment and cultural institutions combines to allow startups to market their products, and obtain positive or negative feedback, more quickly than ever.
In spite of its bureaucracy, starting a business in New York is fast and straightforward. If the company is seeking venture capital, setting up a Delaware corporation only takes a day; registering this new corporation in New York only takes another day to two to accomplish.
For non-resident firms that are looking to access the US market, New York is an excellent gateway. The State of New York has programs to encourage new business startups, and provides limited incentives and help.
If you are interested in starting a business in New York, contact us today. Your new business can be up and going before you know it.
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