Steve Blank Startup Owners Manual Pptx

The  Startup  Owners  Manual   Steve  Blank   Stanford  -­‐  School  of  Engineering   U.C.  Berkeley  -­‐  Haas  School  Of    Business   www.steveblank.com   Twi9er:  @sgblank  

 

See  the  Animated  Version     of  this  PresentaCon  at:   h9p://www.slideshare.net/sblank/ the-­‐startup-­‐owners-­‐manual-­‐sxsw-­‐ the-­‐movie-­‐2  

This  Talk  is  Based  On   •  Business  Model  GeneraCon   •  The  Lean  Startup •  Four  Steps  to  the  Epiphany  

This  Talk  is  Based  On   •  Business  Model  GeneraCon   •  The  Lean  Startup •  The  Startup  Owners  Manual  

Not  all  those  who  wander  are  lost   Bilbo  Baggins  

The  Search  for  a  Path   1602  -­‐  1908  

©  2012  Steve  Blank  

The  Path  to  Business  ExecuCon   But  Startups  are  Not  Smaller  Versions   of  Larger  Companies  

©  2012  Steve  Blank  

From  Atoms  to  Bits  

©  2012  Steve  Blank  

The  Startup  Path   Search  Versus  ExecuCon  

©  2012  Steve  Blank  

What’s  a  Startup?  

©  2012  Steve  Blank  

What’s  a  Business  Model?  

©  2012  Steve  Blank  

Value  ProposiCon   What  Are  You  Building  and  For  Who?  

©  2012  Steve  Blank  

Customer  Segments   Who  Are  They?   Why  Would  They  Buy?  

©  2012  Steve  Blank  

Channels   How  does  your  Product     Get  to  Customers?  

©  2012  Steve  Blank  

Customer  RelaConships   How  do  you  Get,  Keep  and  Grow  Customers?  

©  2012  Steve  Blank  

Revenue  Streams   How  do  you  Make  Money?  

©  2012  Steve  Blank  

Key  Resources   What  are  your  most  important  Assets?  

©  2012  Steve  Blank  

Key  Partners   Who  are  your  Partners  and  Suppliers?  

©  2012  Steve  Blank  

Key  AcCviCes   What’s  Most  Important  for  the  Business?  

©  2012  Steve  Blank  

Cost  Structure   What  are  the  Costs  and  Expenses  

©  2012  Steve  Blank  

Turning  Hypotheses  Into  Facts  

©  2012  Steve  Blank  

The  Four  Steps  –  The  Startup  Path     Customer  Development  

©  2012  Steve  Blank  

Customer  Development   There  Are  No  Facts  Inside  The  Building,   So  Get  the  Heck  Outside  

©  2012  Steve  Blank  

Customer  Development   Test  the  Problem,  Then  the  SoluCon  

©  2012  Steve  Blank  

Customer  Development   The  Entrepreneurial  Journey  

©  2012  Steve  Blank  

Startup  Owners  Manual  

Startup  Owners  Manual  

NaConal  Science  FoundaCon  

Startup  Owners  Manual   •  Yes  there’s  an  E-­‐Book  version  coming   •  Free  autographed  copies  -­‐  Sunday   Startup  America  Salon  E  1:30  -­‐3pm  

Examples  from  the  Book  

Examples  from  the  Book  

Customer  RelaConships  

Customer  RelaConships    

Web/Mobile  Products–  Get  Customers  

©  2012  Steve  Blank  

Customer  RelaConships    

Web/Mobile  Products–  Keep  Customers  

©  2012  Steve  Blank  

Customer  RelaConships    

Web/Mobile  Products–  Grow  Customers  

©  2012  Steve  Blank  

Customer  RelaConships    

Web/Mobile  Products  Get/Keep/Grow  

©  2012  Steve  Blank  

Customer  RelaConships     Physical  &  Web  Mobile  Are  Different  

©  2012  Steve  Blank  

Customer  RelaConships     Physical  &  Web  Mobile  Are  Different  

©  2012  Steve  Blank  

How Does This Really Work?

Lean  LaunchPad  Class  

NaConal  Science  FoundaCon  

How  Does  This  Really  Work?   8  Weeks  from  an  Idea  to  a  Business  

Interviews: 252 Partner: 10 Survey: 76

Team Dynamo Final Presentation

THE TEAM

Megh Gautam MS&E MS PICTURE

§  BTech in IT

Al Hassan Hleileh MBA 2 PICTURE

Hung Le MS&E MS PICTURE

§  BS in EE/CS

§  MA in POL ECON SOC H

Elika Mahdavi MS&E MS PICTURE

§  BS in Indus.Eng.

TABLE OF CONTENTS 1.  Overview of our idea evolution 2.  Our journey from week 1 to week 8 3.  Current Idea § 

Archetype

§ 

Product vision

§ 

Partner

§ 

Channel & Demand Creation

§ 

Competitive Landscape

§ 

Market Sizing

4.  Lesson learned and what next

IDEA EVOLUTION THROUGH PIVOT

1 Travel booking portal for Middle Easterns

2 Social travel planning

3 Ex-pat travel portal to Middle East

4 Safe travel portal for US travelers to M.E.

5

6

7

Travel inspiration Social platform that nudges people to inspire and enrich their life

Focus Competition Market size Market Customer Customer size Insights Insights Research

8

Nudge to enrich life

Scalability Market size

Interviews: 20

1 Travel booking portal for Middle Easterns

Week 1

WEEK 1 – MAKE MY DREAM

New Remain Remove

Middle East focused Travel booking portal Product Development Lowest price §  Middle East focused platform A/B testing Best inventory

Hotels Airlines Events (Festivals) Car rentals Promotion companies Deal listings State Tourism Travel agents Conventions (CES) Business Schools (Study groups)

Relationship with hotels; airlines; car rentals Sourcing deals Acquisition, retain customers

Convenient Experiential UI Social Validation Create a Community Multiple options Best Actionable deals Relevant locations

Trusted relationships Successful partnerships Brand awareness/ identification Pilots Cross pollination Events (Parties!)

§  Offer a booking platform with group discounts and flash-sales §  Ramp up strategy through social conversations

§  Preserve memories of travel through photo sharing and quotes

Market understanding Best in class product Relationship with partners Human Capital

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Young families Best education for kids Cultural experience Trendy destinations

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 1

WEEK 1 – MAKE MY DREAM

Hotels Airlines Events (Festivals) Car rentals Promotion companies Deal listings State Tourism Travel agents Conventions (CES) Business Schools (Study groups)

Product Development A/B testing Relationship with hotels; airlines; car rentals Sourcing deals Acquisition, retain customers

Market understanding Best in class product Relationship with partners Human Capital

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Lowest price Best inventory Convenient Experiential UI Social Validation Create a Community Multiple options Best Actionable deals Relevant locations

Trusted relationships Successful partnerships Brand awareness/ identification Pilots Cross pollination Events (Parties!)

New Remain Remove

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior

Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines

Young families Best education for kids Cultural experience Trendy destinations

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 1

WEEK 1 – MAKE MY DREAM

Hotels Airlines Events (Festivals) Car rentals Promotion companies Deal listings State Tourism Travel agents Conventions (CES) Business Schools (Study groups)

Product Development A/B testing Relationship with hotels; airlines; car rentals Sourcing deals Acquisition, retain customers

Lowest price Best inventory Convenient Experiential UI Social Validation Create a Community Multiple options Best Actionable deals Relevant locations

Trusted relationships Successful partnerships Brand awareness/ identification Pilots Cross pollination Events (Parties!)

§  Too broad a platform §  Too many value propositions

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior

Web and mail Lack of focus in value propositions Market understanding Best in class product Relationship with partners Human Capital

New Remain Remove

Young families Best education for kids Cultural experience Trendy destinations

Advertising Social Media Word of Mouth Referrals Customer call centers Magazines

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 1

WEEK 1 – MAKE MY DREAM

Hotels Airlines Events (Festivals) Car rentals Promotion companies Deal listings State Tourism Travel agents Conventions (CES) Business Schools (Study groups)

Product Development A/B testing Relationship with hotels; airlines; car rentals Sourcing deals Acquisition, retain customers

Lowest price Best inventory Convenient Experiential UI Social Validation Create a Community Multiple options Best Actionable deals Relevant locations

Trusted relationships Successful partnerships Brand awareness/ identification Pilots Cross pollination Events (Parties!)

Market sizing problem

New Remain Remove

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior

§  The method we used was a top-down Young families approach Best education for kids Cultural experience Trendy destinations

§  We didn’t use net numbers (gross) Market understanding Best in class product Relationship with partners Human Capital

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines

§  The lesson here is that if we were to do it again we would use bottom up / net figures

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 1

WEEK 1 – MAKE MY DREAM

New Remain Remove

Lack of focus in customer segments Hotels Airlines Events (Festivals) Car rentals Promotion companies Deal listings State Tourism Travel agents Conventions (CES) Business Schools (Study groups)

Product Development A/B testing Relationship with hotels; airlines; car rentals Sourcing deals Acquisition, retain customers

Market understanding Best in class product Relationship with partners Human Capital

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Lowest price Best inventory Convenient Experiential UI Social Validation Create a Community Multiple options Best Actionable deals Relevant locations

Trusted relationships Successful partnerships Brand awareness/ identification Pilots Cross pollination Events (Parties!)

We were not focused on a specific customer segment – too broad.

Our interview base was biased towards our network – needed a better sample. Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Young families Best education for kids Cultural experience Trendy destinations

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 1

WEEK 1 – MAKE MY DREAM

Hotels Airlines Events (Festivals) Car rentals Promotion companies Deal listings State Tourism Travel agents Conventions (CES) Business Schools (Study groups)

Product Development A/B testing Relationship with hotels; airlines; car rentals Sourcing deals Acquisition, retain customers

Key learning

Lowest price Best inventory Convenient Experiential UI Social Validation Create a Community Multiple options Best Actionable deals Relevant locations

Trusted relationships Successful partnerships Brand awareness/ identification Pilots Cross pollination Events (Parties!)

New Remain Remove

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy

§  Focus is crucial – be it in your value proposition or in your customer segmentation §  Market sizing – Use bottom up whenever possible §  Get out of the building – in spirit and in action. Avoid bias Market understanding Best in class product Relationship with partners Human Capital

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines

Young couples Trendsetting behavior Young families Best education for kids Cultural experience Trendy destinations

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Interviews: 20

1 Travel booking portal for Middle Easterns

2 Social travel planning

Customer focus

Week 2

WEEK 2 – SOCIAL TRIP PLANNING

New Remain Remove

Pivot to social travel planning for group traveling Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings Car rentals Promotion companies State Tourism Conventions (CES)

Through our mentors, we dug intoTrusted our customers insights Customer Acquisition Easy andreally pleasurable relationships Young and the affluent Customer Retention Product Dev Relationship with key partners Sourcing deals

trip planning Best inventory

Successful partnerships Events (Parties!)

High disposable incomes Willing to explore

Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation

Pilots Cross pollination

Social media savvy

§  They were telling us that they didn’t just want to go to the Convenient Brand awareness/ Young and single middle east Experiential UI identification Divergent origins §  They wanted a seamless, social and enjoyable travel experience from A-Z

Young couples Trendsetting behavior Young families Best education for kids Cultural experience Trendy destinations

§  We pivoted to The Middle Easts travel booking portal with a ramp up focused on influential who want Word ofeasy Mouth and Social Media pleasurable trip planning Market understanding Human Capital Relationship with partners Best in class product

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Web and mail Advertising Referrals Customer call centers Magazines

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 2

WEEK 2 – SOCIAL TRIP PLANNING

Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

Car rentals Promotion companies State Tourism Conventions (CES)

Market understanding Human Capital Relationship with partners Best in class product

Human Capital Product Development Advertising costs Maintaining relationships Refunds

New Remain Remove

Easy and pleasurable trip planning Best inventory

Trusted relationships Successful partnerships Events (Parties!)

Young and the affluent High disposable incomes Willing to explore

Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation

Brand awareness/ identification Pilots Cross pollination

Young and single Divergent origins Social media savvy Young couples Trendsetting behavior

Word of Mouth Social Media

Young families Best education for kids Cultural experience Trendy destinations

Web and mail Advertising Referrals Customer call centers Magazines

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 2

WEEK 2 – SOCIAL TRIP PLANNING

Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

Car rentals Promotion companies State Tourism Conventions (CES)

Market understanding Human Capital Relationship with partners Best in class product Human Capital Product Development Advertising costs Maintaining relationships Refunds

New Remain Remove

Easy and pleasurable trip planning Best inventory

Trusted relationships Successful partnerships Events (Parties!)

Young and the affluent High disposable incomes Willing to explore

Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation

Brand awareness/ identification Pilots Cross pollination

Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Young families Best education for kids Cultural experience Trendy destinations

Word of Mouth Social Media Web and mail Advertising Referrals Customer call centers Magazines of booking costs Percentage Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 2

WEEK 2 – SOCIAL TRIP PLANNING

Social Networks Travel Publications

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

What was the problem?

Hotels Business Schools Travel agents Airlines Events Deal listings

New Remain Remove

Easy and pleasurable trip planning Best inventory

Trusted relationships Successful partnerships Events (Parties!)

Young and the affluent High disposable incomes Willing to explore

Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation

Brand awareness/ identification Pilots Cross pollination

Young and single Divergent origins Social media savvy

When research for potential partners, we learned of several existing competitors with similar product §  crowded

Car rentals Promotion companies State Tourism Conventions (CES)

§  hypercompetitive Market understanding Human Capital Relationship with partners Best in class product

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Young couples Trendsetting behavior

Word of Mouth Social Media

Young families Best education for kids Cultural experience Trendy destinations

Web and mail Advertising Referrals Customer call centers Magazines

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Week 2

WEEK 2 – SOCIAL TRIP PLANNING

Social Networks Travel Publications

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

New Remain Remove

Easy and pleasurable trip planning Best inventory

Trusted relationships Successful partnerships Events (Parties!)

Young and the affluent High disposable incomes Willing to explore

Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation

Brand awareness/ identification Pilots Cross pollination

§  We should have looked at the competitive landscape earlier

Young and single Divergent origins Social media savvy

§  We should have spoken to industry / domain experts earlier

Young couples Trendsetting behavior

Key learning

Hotels Business Schools Travel agents Airlines Events Deal listings

Car rentals Promotion companies State Tourism Conventions (CES)

Market understanding Human Capital Relationship with partners Best in class product

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Word of Mouth Social Media

Young families Best education for kids Cultural experience Trendy destinations

Web and mail Advertising Referrals Customer call centers Magazines

Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events

Interviews: 64

1 Travel booking portal for Middle Easterns

2 Social travel planning

3 Ex-pat travel portal to Middle East

Competition

Week 3

WEEK 3 – EX-PAT TRAVELING

New Remain Remove

Pivot to Ex-pat Community Travel Portal We pivoted back to the original idea with focus one customer Customer Acquisition Local knowhow and on Trusted relationships segment Young and the affluent

Social Networks Hotels Business Schools Travel agents

Customer Retention Product Dev Relationship with key partners Sourcing deals

content

Successful partnerships

High disposable incomes Willing to explore

§  A travel planner for Ex-Pat students who frequently visit the Middle-East & Easy and pleasurable Events (Parties!) trip planning Young and single other major cities. Travel Publications Best inventory Divergent origins Airlines Events Deal listings

Social media savvy

§  We want to capture & publish their travel experience.

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Word of Mouth Social Media

Percentage of booking costs

Young couples Trendsetting behavior

Week 3

WEEK 3 – EX-PAT TRAVELING

Social Networks Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

Local knowhow and content

Trusted relationships Successful partnerships

Easy and pleasurable trip planning Best inventory

Events (Parties!)

New Remain Remove

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Word of Mouth Social Media

Percentage of booking costs

Week 3

WEEK 3 – EX-PAT TRAVELING

Social Networks Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

What was the problem?

Local knowhow and content

Trusted relationships Successful partnerships

Easy and pleasurable trip planning Best inventory

Events (Parties!)

New Remain Remove

Young and the affluent High disposable incomes Willing to explore

We interviewed 64 people and found:

Young and single Divergent origins Social media savvy

§  The market was too small

Young couples Trendsetting behavior

Travel Publications Airlines Events Deal listings

§  There is little homogeneity in customer needs Word of Mouth

§  Too low frequency of travel to justify target Social market Media Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Percentage of booking costs

Week 3

WEEK 3 – EX-PAT TRAVELING

Social Networks Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals

Key learning

Travel Publications Airlines Events Deal listings

§  Market sizing is crucial

Local knowhow and content

Trusted relationships Successful partnerships

Easy and pleasurable trip planning Best inventory

Events (Parties!)

New Remain Remove

Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Word of Mouth Social Media

Percentage of booking costs

Interviews: 33 Survey: 46

1 Travel booking portal for Middle Easterns

2 Social travel planning

3

4

Ex-pat travel portal to Middle East

Safe travel portal for US travelers to M.E.

Market size

Week 4

WEEK 4 – US TRAVEL TO Middle East

New Remain Remove

Pivot to US Traveler Portal to Middle East Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings

WeCustomer expanded our market to entire US Acquisition Safety proposition Customer Retention Local knowhow and travel market Product Development content Relationship with key partners Sourcing deals

Trusted relationships Successful partnerships

Community/Group Travel

-MBA Students

§  Platform to facilitate Americans to Easy and pleasurable travel to the Middle-East trip planning Best inventory

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Young and the affluent High disposable incomes Willing to explore

Word of Mouth Social Media

Percentage of booking costs

Week 4

WEEK 4 – US TRAVEL TO Middle East

New Remain Remove

Young affluent market Social Networks Alumni Associations Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

Travel Publications Airlines Events Deal listings

Safety proposition 46 people Trustedand relationships We surveyed Local knowhow and Successful partnerships interview 33 more content Community/Group Travel

§  Young & Affluent Americans Easy and pleasurable to the Middle East triptraveling planning Best inventory need local insight. §  We’ll be the trusted source!

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Word of Mouth Social Media

Percentage of booking costs

MBA Students Young and the affluent High disposable incomes Willing to explore

Week 4

WEEK 4 – US TRAVEL TO Middle East

Social Networks Alumni Associations Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

Travel Publications Airlines Events Deal listings

Safety proposition Local knowhow and content Community/Group Travel

Trusted relationships Successful partnerships

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Young and the affluent High disposable incomes Willing to explore -MBA Students

Easy and pleasurable trip planning Best inventory

Word of Mouth Social Media

Percentage of booking costs

New Remain Remove

Week 4

WEEK 4 – US TRAVEL TO Middle East

New Remain Remove

Launched website with full basic booking functionalities Social Networks Alumni Associations Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

Ebtism.com went live

Safety proposition Local knowhow and content Community/Group Travel

Trusted relationships Successful partnerships

Young and the affluent High disposable incomes Willing to explore

§  Full basic functionalities (login, browse deals and book trips)

Travel Publications Airlines Events Deal listings

MBA Students

Easy and pleasurable trip planning Best inventory

§  4 sourced deals from agencies §  42 GSB students booked

Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertisinglogin costs Exclusive Maintaining relationships Refunds

Word of Mouth Social Media

Percentage of booking costs

Value proposition

Deals selection (real sourcing)

Ability to book trips

Week 4

WEEK 4 – US TRAVEL TO Middle East

Social Networks Alumni Associations Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

What was the problem?

Safety proposition Local knowhow and content Community/Group Travel

Trusted relationships Successful partnerships

MBA Students Young and the affluent High disposable incomes Willing to explore

We spoke to Christos Stergiou, founder of truegreece.com (Greece Easy and pleasurable trip planning Analogue)

Travel Publications Airlines Events Deal listings

Best inventory

§  10 years of development §  $5M idea Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

New Remain Remove

Word of Mouth Social Media

Percentage of booking costs

Week 4

WEEK 4 – US TRAVEL TO Middle East

Social Networks Alumni Associations Hotels Business Schools Travel agents

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

Key learning

Safety proposition Local knowhow and content Community/Group Travel

Trusted relationships Successful partnerships

trip planning Best inventory

We want to DISRUPT the Travel Space. Let’s Re-think the Entire Idea! Market understanding Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

MBA Students Young and the affluent High disposable incomes Willing to explore

Market size need to be VENTURE SCALE Easy and pleasurable

Travel Publications Airlines Events Deal listings

New Remain Remove

Word of Mouth Social Media

Percentage of booking costs

Interviews: 17 Survey: 10

1 Travel booking portal for Middle Easterns

2 Social travel planning

3 Ex-pat travel portal to Middle East

4

5

Safe travel portal for US travelers to M.E.

Social platform that nudges people to travel

Market size

Week 5

WEEK 5 – TRAVEL NUDGE

Paying partner side End-user side Remove

Pivot to travel inspiration Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels

WeCustomer pivot to a brand new market Acquisition Enrichment (Travel) Customer Retention Product Development Relationship with key partners

Leads

Sourcing deals

Community/Group Travel

Trusted relationships Successful partnerships

§  Inspire people to travel more Safety proposition Local knowhow and through recommendation content

MBA Students Young and the affluent High disposable incomes Willing to explore

§  Relevant based on social graph and travel history

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Online travelers Travel Websites

Word of Mouth Social Media

Leads Advertising Percentage of booking costs

Week 5

WEEK 5 – TRAVEL NUDGE

Paying partner side End-user side Remove

Inception of Nudge by looking at the competitive landscape Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel

Revised later User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Trusted relationships Successful partnerships

Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore

Word of Mouth Social Media

Leads Advertising Percentage of booking costs

Week 5

WEEK 5 – TRAVEL NUDGE

Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Enrichment (Travel) Leads

Trusted relationships Successful partnerships

Safety proposition Local knowhow and content Community/Group Travel

Paying partner side End-user side Remove

Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore

Word of Mouth Social Media

Leads Advertising Percentage of booking costs

Week 5

WEEK 5 – TRAVEL NUDGE

Paying partner side End-user side Remove

Sizeable potential market Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels

Customer Acquisition Enrichment (Travel) Customer Retention Leads Product Development Relationship with=key TAM $900MSafety proposition partners Local knowhow and content Sourcing deals Community/Group Travel

Trusted relationships

Successfulestimation partnerships Bottom-up

MBA Students

§  Market = population xYoung nudge and the affluent High disposable incomes frequency x CTR x CPC Willing to explore

SAM = $373M

SOM = $267M User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Online travelers Travel Websites

§  With leads revenue sharing model, TAM is based on assumptions of nudges frequency and conversion Word of Mouth Social Media

§  Target market is justifiable with an annual revenue of $267 million with 31% market penetration

Leads Advertising Percentage of booking costs

Week 5

WEEK 5 – TRAVEL NUDGE

Paying partner side End-user side Remove

Mock up of the product for customer interview Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels

Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Enrichment (Travel) Leads

Trusted relationships Successful partnerships

Safety proposition Local knowhow and content Community/Group Travel

Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore

Word of Mouth Social Media

Leads Advertising Percentage of booking costs

Interviews: 52 + 3 partners

1 Travel booking portal for Middle Easterns

2 Social travel planning

3 Ex-pat travel portal to Middle East

4 Safe travel portal for US travelers to M.E.

5

6

Travel inspiration Social platform that nudges people to inspire and enrich their life

Week 6

WEEK 6 – TRAVEL NUDGE

Social Networks Travel Websites

Customer Acquisition Customer Retention Product Development Relationship with key partners

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships

Enrichment (Travel) Customer Acquisition

Trusted relationships Successful partnerships

Leads

Word of Mouth Social Media

Cost per acquisition Leads Advertising

Paying partner side End-user side Remove

Online travelers Travel Websites

Week 6

WEEK 6 – TRAVEL NUDGE

Paying partner side End-user side Remove

Partner Social Networks Travel Websites

Customer Acquisition Customer Retention Product Development Relationship with key partners

Enrichment (Travel)

Trusted relationships

Customer Acquisition Successful partnerships Reach out to Travelocity (Jim Hornthal)

Online travelers Travel Websites

Leads

§  Customer insights differed §  Technological challenges (e.g. cookies) §  Revenue share instead of lead generating Reach out to Expedia and Bookingmarkets Word of Mouth

User data Human Capital Relationship with partners

Social Media

§  Confirm revenue share model (5% - 10%) and we even got a standard term

Human Capital Product Development Advertising costs Maintaining relationships

Cost per acquisition Leads Advertising

Week 6

WEEK 6 – TRAVEL NUDGE

Paying partner side End-user side Remove

The customers value relevance of nudges Social Networks Travel Websites

Customer Acquisition Enrichment (Travel) Trusted relationships Then we went out of the building to interview 50partnerships Customer Retention Customer Acquisition Successful Productat Development people Stanford Mall Relationship with key partners

Leads

§  What prevents people from traveling is time, not imagination or laziness (seasonal) §  People don’t want to be nudged too often (1 per month) Word of Mouth

§  Referrals from close friends more valuable Social Media User data than referrals from strangers Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships

Cost per acquisition Leads Advertising

Online travelers Travel Websites

Interviews: 16

1 Travel booking portal for Middle Easterns

2 Social travel planning

3 Ex-pat travel portal to Middle East

4 Safe travel portal for US travelers to M.E.

5

6

7

Travel inspiration Social platform that nudges people to inspire and enrich their life

Nudge to enrich life

Market size

Week 7

WEEK 7 - NUDGE Expand from travel to include activity nudges Social Networks Travel Websites Event Websites University Events Merchants

§  Customer We expanded nudges to include activities, events,Students Acquisition our Enrichment (Activities + Trusted relationships Customer Retention Travel)just travels Successful partnerships Graduates social reminders than Product Development Customer Acquisition Young Families Relationship with key partners

Enrichment (Travel) Travel Websites §  Keep user more engaged with relevant frequent nudges Online travelers

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships

Word of Mouth Social Media

Cost per acquisition

Week 7

WEEK 7 - NUDGE

Social Networks Travel Websites Event Websites University Events Merchants

Customer Acquisition Customer Retention Product Development Relationship with key partners

Enrichment (Activities + Travel) Customer Acquisition

Trusted relationships Successful partnerships

Enrichment (Travel)

Students Graduates Young Families Travel Websites Online travelers

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships

Word of Mouth Social Media

Cost per acquisition

Week 7

WEEK 7 - NUDGE

Social Networks Travel Websites Event Websites University Events Merchants

Customer Acquisition Customer Retention Product Development Relationship with key partners

Enrichment (Activities + Travel) Customer Acquisition

Trusted relationships Successful partnerships

Enrichment (Travel)

Students Graduates Young Families Travel Websites Online travelers

The customers want diverse nudges We went out of the building to interview 20 people Word of Mouth Social Media

§  People also want to be nudged in other things than just travel

User data Human Capital Relationship with partners

§  Mobile is the most effective medium to increase engagement

Human Capital Product Development Advertising costs Maintaining relationships

Cost per acquisition

Week 7

WEEK 7 - NUDGE

Social Networks Travel Websites Event Websites University Events Merchants

Customer Acquisition Customer Retention Product Development Relationship with key partners

Enrichment (Activities + Travel) Customer Acquisition

Trusted relationships Successful partnerships

Enrichment (Travel)

Students Graduates Young Families Travel Websites Online travelers

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships

Word of Mouth Social Media

Cost per acquisition

Interviews: 15 Partners: 7 Pilot nudges: 20

1 Travel booking portal for Middle Easterns

2 Social travel planning

3 Ex-pat travel portal to Middle East

4 Safe travel portal for US travelers to M.E.

5

6

Travel inspiration Social platform that nudges people to inspire and enrich their life

7

8

Nudge to enrich life

Week 5

NUDGE

Paying partner side End-user side Remove

Creating NUDGE Customer Acquisition nudge /nəәj/ Customer Retention

Social Networks Travel Websites

Alumni Associations Travel agents Business Schools Hotels

Enrichment (Travel) Leads

Trusted relationships Successful partnerships

Product Development Relationship with key partners

Online travelers Travel Websites

Safety proposition MBA Students verb: Local knowhow and content with the elbow, to get someone's Young and the affluent to push slightly or gently, especially Sourcing deals Community/Group High disposable incomes attention, prod someone into action, etc. Travel Willing to explore

noun: a slight or gentle push or jog, especially with the elbow.

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships Refunds

Word of Mouth Social Media

Leads Advertising Percentage of booking costs

Week 8

WEEK 8 (FINAL)

Social Networks Travel Websites Event Websites University Events Merchants

Customer Acquisition Customer Retention Product Development Relationship with key partners

User data Human Capital Relationship with partners

Human Capital Product Development Advertising costs Maintaining relationships

Enrichment (Activities + Travel) Customer Acquisition

Trusted relationships Successful partnerships

Paying partner side End-user side Remove

Students Graduates Young Families Travel Websites

Word of Mouth Social Media

Cost per acquisition

CUSTOMER ARCHETYPES

Ashley §  §  §  §  § 

Age: 26 Stanford Student Worked in Hollywood Loves Adventures Wants to be nudged relevantly, and inspired!

Clair

Alex

Age: 28 Works at mobile start-up in San Francisco, originally from Montana §  Single & dating §  Plays soccer, runs marathons §  Likes to cook/host dinner with friends when possible

§  §  § 

§  § 

Age: 38 Married, 1 child (4 y.o. Clay) Investment professional in New York §  Volunteer coach for son’s hockey team §  Commutes for work to Manhattan every day §  Goes out of town to the country for break once/ month with his family

NUDGE TYPES Nudges from friends as a social push

Discovering nudges OCCURING EVENTS (REALITY)

social push

EVENTS YOU ARE AWARE OF (CONSCIOUS)

serendipity

nudge

DESIRE (SUBCONSCIOUS)

Highest conversion rate nudges

SIMULATED NUDGE We did a pilot to test how many people sign up for nudge §  103 people try the product §  42 people left email (41% signup for service rate)

“ This is awesome! I love it!! Just told me to walk the dish today! phenomenal and stunning all in one shot!!

“ Love the product idea!

”

” “ As long as there is transparency between advertisers, the suggestion database and its users, this is an innovative idea. Otherwise, it is a rather subversive tool for consumer and social trends. An interesting concept either way!

”

SIMULATED NUDGE We carefully selected people we know to send them tailored nudges We sent tailored nudge to 25 people with 40% conversion rate §  10 people actually like the nudge and go §  4 people may take the trip in the future §  11 people didn’t respond NUDGE: "Visit the Rodin Sculpture Garden this week and get inspired. Located next to the Cantor Arts Center but accessible at all hours, the Rodin Sculpture Garden houses one of the largest collection of Rodin sculptures”

NUDGE: "it's 4 months till you graduate, take your best friend out for a coffee at Coupa, and share some of the good times you have had at GSB"

RECOMMENDING PLATFORM Input Crowd-sourced Social nudging Data mining Social networks

Model

Computational §  Matrix factorization §  Collaborative filtering

Past behaviors

Curated Geography Time Customized user preference

Context-based

PARTNERS Partner

Gifts

Event + Activities

University Events

Restaurants

Travel

Revenue sharing (CPA)

Week 7

DEMAND CREATION

Facebook Ad

Days

Views

Unique

Clicks

CTR

CPC

3

273,380

120,173

82

0.030%

$0.38

Engage

Like

CPC

46

83

Free

Facebook Fan Page

60

898

YouTube Video

7

370

Unique Avg time Website

30

900

430

2:22min

Bounce rate 62%

COMPETITIVE LANDSCAPE

Inspiration

Planning

Sharing

Q&A

Reminder

Community

Flash Deal

INCOME STATEMENT Local beta at Stanford

User growth projection

Total Revenue

Go global !

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

2,000

20,000

50,000

500,000

1,000,000

2,000,000

4,000,000

Q2 2012 Revenues Advertising Rev. Share *

California Universities

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

N/A $10,000

N/A $100,000

N/A $250,000

N/A $2,500,000

N/A $5,000,000

N/A $10,000,000

N/A $20,000,000

$10,000

$100,000

$250,000

$2,500,000

$5,000,000

$10,000,000

$20,000,000

Cost of Sales Customer Acquisition Advertising & Promotions

$60

$600

$1,500

$15,000

$30,000

$60,000

$120,000

$1,000

$1,000

$1,000

$3,000

$3,000

$3,000

$3,000

Total Cost of Sales

$1,060

$1,600

$2,500

$18,000

$33,000

$63,000

$123,000

$8,940

$98,400

$247,500 $2,482,000

$4,967,000

$9,937,000

$19,877,000

Expenses Development ** Hosting Other Wages *** Travel Office + Utilities

$645,000 $1,250 $100,000 $5,000 $12,000

$645,000 $1,250 $100,000 $5,000 $12,000

$645,000 $1,250 $100,000 $5,000 $12,000

$940,000 $1,250 $100,000 $10,000 $12,000

$1,115,000 $1,250 $100,000 $10,000 $12,000

$1,290,000 $1,250 $100,000 $15,000 $12,000

$1,465,000 $1,250 $100,000 $15,000 $12,000

Total Expenses

$763,250

$763,250

$763,250

$1,063,250

$1,238,250

$1,418,250

$1,593,250

($754,310) ($664,850) ($515,750) $1,418,750

$3,728,750

$8,518,750

$18,283,750

Gross Profit

Net Income

LESSON LEARNED §  Focus is key – segmentation is important §  Market sizing is crucial!!!! §  There is nothing more important than good team environment and culture §  Mentorship is hugely important, we couldn’t have got where we are without our Mentors help §  We should be open to pivot – even at an earlier stage and trade off: The need to be loyal to our old ideas vs. new innovations that could solve problems based on our customer insights §  Distilling insights and listening to experiments §  Looking past ourselves §  We have a heightened awareness of confirmation bias and try and assuage that in our different experiments

WHAT’S NEXT

Incubators

CRITICAL SUCCESS MILESTONES NEXT 6 MONTHS §  Initiate Cohort Analysis §  Expand Beta testing to entire Stanford Campus §  Test Gamification iteration and Badges §  Develop machine learning and curation technology and resources to enable scalability §  Hire key resources (software developer, data scientist, marketing, business development, social animal) and space

Why  Do  We  Do  This?  

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