BAEP 556 – Allen– Fall 2011 – Tues. 6:30
Fall 2011 BAEP 556: Technology Feasibility Analysis Lloyd Greif Center for Entrepreneurial Studies Marshall School of Business, Bridge Hall One (lower level) University of Southern California Los Angeles, CA 90089‐0801 Phone: 213‐740‐0641 Fax: 213‐740‐2976 www.marshall.usc.edu/entrepreneur www.marshall.usc.edu/ctc www.n2tec.org www.theventureedge.com
Teaching Team: Kathleen Allen Ph.D. Bio: http://www.marshall.usc.edu/greif/faculty.htm Ph 213‐740‐0659 Email: [email protected]
Scott Lenet, Founder and Managing Director, DFJ Frontier. Bio: http://www.dfjfrontier.com/scott.shtml [email protected]
TA: Jon Bassett, Associate, DFJ Frontier [email protected]
Course Section: 14418R Tuesdays 6:30‐9:30 p.m. ACC 236
Office hours: Mondays: 2:00–5:00 p.m. and Tuesdays 2:00‐5:00 p.m. and by appointment at other times and days. So that we are not interrupted during our visit and schedule enough time, I recommend that you make an appointment. Please e‐mail me with your appointment request. E‐mail also works for short questions, as I respond to e‐mail daily. Phone/SKYPE conferences are also encouraged. Prerequisite
To be successful in this course and enjoy the best experience, you should have a sincere interest or passion for learning and experiencing how an idea can become a real business. This is a hands‐on course that will require your active participation. It is not for those who simply want to listen and take notes. The rewards for your effort go well beyond the grade you will receive. The Teaching Team will treat your opportunity as a real business, so you should be prepared to take the assignments and field work seriously. Course Objectives
The big goal of this course is that you walk away with the skills and techniques to identify and design an opportunity and a business that meets real customer needs. The following objectives are also part of this course:
Gain experience in identifying an opportunity and developing a business concept Understand what a business model is Gain experience iterating a business model to meet a real need Develop hypotheses and tests for all the elements of the business model Gain experience iterating a product offering to meet real customer needs Communicate your business story effectively to others
BAEP 556 – Allen– Fall 2011 – Tues. 6:30 p.m.
Learn the tools needed to make a wise decision about whether to start a business or accept a job offer.
Course Description and Approach
This course provides a real experience in starting a technology company. It is NOT about writing a feasibility study or planning a new venture. Instead, you will experience the uncertainty, ambiguity, and chaos of giving birth to a new business as you talk to customers, potential partners, competitors, and other stakeholders in your business.
Teaching Team: Although Dr. Allen is the professor of record for the course, we wanted the teams to have the benefit of diverse experience and expertise and to receive sufficient coaching and support, so we have a Teaching Team comprised of Kathy Allen, Scott Lenet, and TA Jon Bassett. Their bios are linked on the first page.
Teams: You will be working and studying in teams of 3‐4. The best startups have been team efforts, so choosing your team members is the most important task you have in the first week or two of the semester. We will talk about the criteria to use when choosing team members. Each team should seek a mentor in your industry— generally an entrepreneur or investor type—to provide ongoing advice throughout the semester. We will talk about the appropriate use of mentors in class.
Weekly: Each week we will tackle a new element of the business model to prepare you for your next task. This will be accomplished through mini‐lectures, discussions, and experiential exercises. Each week your team will report to the Teaching Team and your classmates via your “dashboard” (this will be demonstrated in class) on your progress and the lessons learned that week. Field research is a key element of this course, so be prepared to get out of the building and talk to people. Each team will keep an online journal, blog, or wiki to capture their progress and lessons learned throughout the semester. Other students will have access to the journal as will the Teaching Team—it is part of your grade.
Business ideas: The business ideas you choose must be technology related but can be software, a physical product, or service, or some combination. In the past, our teams have done everything from life sciences to healthcare and the Internet. In Week 2 we will have several entrepreneurs pitch opportunities that you may choose as one of your concepts. The Internet is always a favorite choice by students, but the reality is that you should choose an idea in which you have some domain interest and expertise (for example, your graduate research). If you do choose a Web concept, understand that you will need to build it in a simple form to demonstrate the concept during the semester. All concepts will involve some physical demonstration. Other: We plan to bring in a few speakers this semester to give you different perspectives on some aspect of the business model. At the end of the semester your team will have the opportunity to tell your story to a panel of investors for feedback and to gauge the potential to secure capital should you need it. Required Materials
(Required) Launching New Ventures, 6th Edition, K Allen, Cengage, 2011. This book is available on Amazon, Barnes & Noble, or on the publisher’s web site. It will serve you for the business plan course as well. Students have said that it is an excellent reference and readable. It covers the fundamentals of the course, namely feasibility analysis in detail, so that we can focus on additional important material and use class time for discussion, feedback to your teams, and experientials. In the course plan you will notice that chapters from this book have been assigned. To save money, your team may decide to purchase one copy to share. We’re fine with that. Be sure you purchase the 6th edition, which just came out. It is quite a bit different from the 5th edition.
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(Recommended but optional) Business Model Generation, Osterwalder & Pigneur, 2011. This book is available online at the usual places. We will post a preview copy in Blackboard. If you like it, we encourage you to purchase it as we will be using a modified version of the framework and some of the exercises in class.
All other materials will be distributed free of charge. Attendance and Preparation Requirements: Attendance at all class sessions is critical to the participation component of the course and to learning in general as we will discuss material not found in the textbook; in addition, we will undertake a number of in‐class exercises and strategy‐building sessions that require your regular attendance. Entrepreneurship is inherently collaborative—a social process. Entrepreneurs find opportunities, adapt, change, and improve themselves by listening and learning from others. Please come to class prepared to participate in the day’s activities, which means having read the chapter(s) or assigned readings for that day and having prepared to discuss the progress on your opportunities. Please plan to arrive on time so as not to disturb the class, a guest speaker, or interrupt the teaching team. Evaluation
To achieve an A in this class, you will need to go well beyond the minimum requirements as stated in the syllabus in terms of the quality of your work and your involvement in and contribution to the class. An A is a sign of superior work and, much like the efforts of entrepreneurs, reflects the fact that you stood out from the crowd. Your final grade is based on an evaluation of the following activities:
Individual Assignments Percentage Points Participation, attendance, in‐class exercises peer 10 200 assessment, self assessment Team Assignments Team weekly Dashboard Summaries and Journal 50 1000 Posts (10 @ 100 pts each beginning Week 5)
Final “Lessons Learned” presentation 20 400
Pitch to investment panel & 3‐page Executive 20 400 Summary Total 100 2000
Note: If you do not inform us of missing or incorrect grades within two weeks of the grades being posted, the grades will be assumed correct. Do NOT wait until the end of the semester to check your grades or appeal a grade on any assignment.
Grading Standards
To avoid substantial disparities across courses, instructors in MBA courses are required to adhere to specific target grade point averages for each course they teach. This policy statement includes the standards, allowable deviations, and implementation details of MSB grading standards.
Elective Courses: regular sections 3.5 (targeted grade average)
Instructors are not permitted to have their average GPA in a single course deviate by more than 0.1 above the target.
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Pass/No Pass Students who are non‐business majors/minors taking the class for elective credit may elect the pass/no pass option. A pass/no pass class will NOT count towards a student’s major or minor requirements.
Guidelines for all Course Assignments (Please read carefully!)
The following guidelines apply to ALL assignments without exception. Specific instructions follow in the Description of Course Assignments section. All assignments must be posted to the Blackboard assignment page (NOT the Digital Drop Box) by the date and time due as posted in the Course Plan. No exceptions. If you will not be in class on the due date, your team’s assignment must still arrive by the time and date it is due. You are certainly encouraged to submit files before the deadline. Please keep copies of all your files and emails until the end of the semester. 1. Your SINGLE file must be labeled as follows: yourlastname_556_assignment name. Teams should always use the same last name on each assignment so as to not cause confusion. 2. You should put your name and your teammates’ names (if it is a team assignment) in alphabetical order at the top of the page of the actual assignment document. Assignments that do not follow these rules will be returned and considered late when resubmitted correctly if it is past the time it is due. These requirements are necessary to maintain order and to find files quickly.
Assignments will be accepted after the deadline with the following penalties: Assignments turned in after the required time on the due date and within 24 hours of the date due will lose 10% of the total points possible. Papers turned in 24 hours after the due‐date will lose 20% of the total points. No papers will be accepted 48 hours after the date due.
Description of Course Assignments
The following assignments will be posted to Blackboard via the Assignment Page.
Weekly Dashboard Summary: Beginning Week 5, your team will be submitting a Dashboard in the form of a PowerPoint slide (template with links will be provided) that gives the Teaching Team and your classmates a snapshot of what you accomplished that week toward your goals. It is the same type of Dashboard that many investors ask entrepreneurs to use during board meetings. Your weekly slide(s) may also include additional slides depicting details about something your team accomplished that week. You will submit your PowerPoint deck (ppt file) to the Assignment Page on Blackboard by 5:00 p.m. on the date due (always a Tuesday). Your team will have 5 minutes to present in class on the due date to receive feedback from the Teaching Team. The Teaching Team will grade each weekly presentation and your journal posts and post the results with any additional comments they might have in Blackboard. In general, we give 100 points for extraordinary effort and outstanding performance as a team. Most teams will not receive 100 points in the beginning. The goal is to improve each week in your ability to move your business idea forward. This will mean a well‐coordinated team effort.
Weekly Journal Post: Beginning Week 4, your team will launch its online journal as a way to track challenges and lessons learned (which will make your Lessons Learned presentation very easy). You are asked to post at least once a week. This is a way for the Teaching Team to keep up with how you’re doing and perhaps spot potential problems in the making. These posts will be accessible to your classmates and in assessing your posts (they are part of the weekly 100 points for the team), the Teaching Team will score your posts higher if they are engaging and get us into the mindset of the team as you work your way through the various tasks we’ve laid out. We look at the Dashboard and the Posts as your effort for the week.
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Lessons Learned Presentation: Your team will give a 10‐15 minute presentation on the evolution and development of your concept over the semester including the critical lessons learned that you will apply once you’ve left the course.
Investor Pitch and 3‐Page Executive Summary: Your team will do a 10‐minute pitch about your business to an investor panel for feedback. You will also submit a 3‐page, single‐spaced executive summary to Blackboard according to guidelines that will be presented in class.
Evaluation of classroom participation
The attendance, participation, and in‐class exercises portion of the grade is 200 points and is evaluated in a number of ways. Obviously, participation is correlated with attendance. It is impossible to earn a participation grade if you are not in class. Missing more than one class session (which is equal to two classes) during the semester will affect the participation grade.
In general, students fall into four participation categories that essentially correlate with grades of A, A minus, B+/B, B‐. They are: Outstanding Contribution: Your contributions reflect considerable preparation; they are substantive and supported by the readings. You are also able to relate your own experience to the topic. The class, in general, listens when you speak because they learn something. If you were not a member of class, the discussions would suffer. Excellent Contribution. You come prepared with substantiated comments. You demonstrate good insight and clear thinking. The class notices when you’re not part of the discussion. Average Contribution. Your preparation is satisfactory and achieves the minimum requirements. You rarely offer interesting insights into the discussion, but sometimes you present a compelling idea or take the discussion in a new direction. Alternatively your comments are often off‐point and do not provide any constructive direction to the discussion. No Contribution. You say little or nothing in class. If you were not in the class, the discussion would not suffer.
In the rare case where a student is unable to participate for language or other reasons, the professor should be consulted. You will have an opportunity to evaluate your own participation at the end of the semester. Miscellaneous (the legal stuff we have to include)
Confidentiality Policy Throughout the Entrepreneur Program's classes and events, students will be exposed to proprietary information from other students, guest lecturers, and faculty. It is the policy of the Entrepreneur Program that all such information is to be treated as confidential.
By enrolling in and taking part in the Entrepreneur Program's classes and activities, students agree not to disclose this information to any third parties without specific written permission from students, guest lecturers, or faculty, as applicable. Students further agree not to utilize any such proprietary information for their own personal commercial advantage or for the commercial advantage of any third party.
In addition, students agree that any legal or consulting advice provided without direct fee and in an academic setting will not be relied upon without the enlisted opinion of an outside attorney or consultant without affiliation to the Program.
Any breach of this policy may subject a student to academic integrity proceedings as described in the University of Southern California University Governance Policies and procedures as outlined in SCAMPUS, and to any remedies that may be available at law.
The Entrepreneur program, the Marshall School of Business, and the University of Southern California disclaim any BAEP 556‐5
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responsibility for the protection of intellectual property of students, guest lecturers or faculty who are involved in Entrepreneur Program classes or events. Receipt of this policy and registration in our classes is evidence that you understand this policy and will abide by it.
Academic integrity Please be familiar with the Grading Policy and Academic Standards section of the USC Catalogue and the information on University Governance in the SCAMPUS, particularly Appendix A: Academic Dishonesty Sanction Guidelines.
The use of unauthorized material, communication with fellow students during an in‐class examination, attempting to benefit from the work of another student, and similar behavior defeats the intent of an examination or other class work is unacceptable to the University. It is often difficult to distinguish between a culpable act and inadvertent behavior resulting from the nervous tensions accompanying examinations. Where a clear violation has occurred, however, the instructor may disqualify the student's work as unacceptable and assign a failing mark on the paper. Please be advised that your assignments will be randomly submitted to “TurnItIn” through the Blackboard system, which will generate an originality report on your paper. Bottom line: Your original thought in addition to carefully cited sources will insure that you don’t run into academic integrity issues that may affect your grade or your status at USC. Any material cited verbatim from its source should be in quotes and contain a reference to a full citation for that source. Paraphrased work should also contain a reference to the source citation.
FAQs (not covered above)
1. How important is class attendance and preparation? If you anticipating missing more than one week of class, you need to speak to us in advance to plead your case or consider taking another class. We love cold calling, so you must come to class prepared. If there is a serious reason [that does not include that you didn’t have time] why you are not prepared to be called on, please let one of us know in advance so we don’t embarrass you by calling on you. If you are answering email, texting, or browsing during lectures and presentations, we will ask you to leave the class. Please let us know if you’re a doctor on call.:) We start and end the class on time. If you’re a habitually late person, you probably shouldn’t take this class. 2. What kind of support will our team receive? Our Teaching Team includes one professor/entrepreneur, two experienced entrepreneurs/investors, and a TA. They have all volunteered to help you and your team because startups are their passion. One of their jobs will be to guide your efforts as you do your field work. You will receive feedback weekly. 3. I need help now! Your first stop is Dr. Allen. Email her with your request and schedule an appointment to meet in person or via SKYPE. Dr. Allen may refer you to another member of the Teaching Team. 4. What if my team becomes dysfunctional or someone is not pulling his or her weight? It’s your job to try to work through the issues, but if you need a mediator, approach the Teaching Team. Please do not wait more than a week to resolve these types of issues. 5. Will everyone on the team get the same grade? Not necessarily. Individually you each receive participation grades that include a peer assessment and a self assessment. 6. Who owns the intellectual property? Your team owns the product IP UNLESS you are working with a USC researcher who has pending patents. In any case, your team owns the copyrights on the work you produce this semester. Every team should discuss IP when the team is formed, especially if there are team members who will not continue with the business once the class ends. We do not do non‐disclosure agreements in this class. You must come prepared to share ideas openly so that you can discover and learn from your classmates and those who visit the class to help you.
IMPORTANT!!!! RECEIPT OF THIS SYLLABUS AND REGISTRATION IN THIS CLASS WILL SERVE AS EVIDENCE THAT YOU UNDERSTAND AND ACCEPT THE REQUIREMENTS OF THIS COURSE.
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Course Plan
Note: This plan is subject to change depending on the needs of the class.
Before the first class: Pre‐Deliverable Post a paragraph bio about yourself in BB under the link in the discussion forum. Put your name in the subject line.
1 August 23 Introduction to Business Model Design & Innovation
Lecture: Overview of the course, goals, expectations. What is a business model and how does design thinking apply to business model development in uncertain times? What is the business model framework? What are business model hypotheses and how do we test them? How do I choose the best team?
Read: LNV6, Chapters 1‐2 Business Model Generation (opt), pp. 1‐51
Deliverable for August 30: Network to begin to create a team and start brainstorming for potential opportunities. You will need to identify 3 independent ideas (they cannot be variations on an idea).
2 August 30 Opportunity, Visualization & the Journey
Lecture: What are the four design questions? What is the importance of story to the development of the business concept? Why do we need to start with reality with an industry? What do we need to know about an industry that will impact our business model? How does the value chain play into the concept development? What is a Back of the Envelope concept?
Read: LNV6, Chapter 3 and Chapter 5, pp. 92‐109 Business Model Generation (opt), pp. skim examples pp. 56‐117
Watch: “Design Thinking: An Overview” http://www.youtube.com/watch?v=4DElJsUkzZM
Guests: Tonight we will have several guests who will pitch the opportunities that were posted in BB for your consideration.
Action for the Week: Finalize your team structure and complete the partnership agreement, a sample of which is posted in BB. Finish brainstorming your 3 ideas. If your team has chosen one of the guest speaker concepts, notify Dr. Allen immediately.
Deliverable for September 6: BOE Pitch template and Partnership Agreement. Your team will present your members and the 3 concepts you are investigating. This will be the result of preliminary investigation to determine which concept to pursue in depth and to receive approval on the three ideas chosen.
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3 September 6 Formalizing the Project: The Design Brief & Back of the Envelope (BOE) Pitch
Lecture: What is the Business Model Framework? What are the parts of the business model? How do we develop hypotheses for each of the parts? How do we use it to organize our effort for the semester? What is the purpose of the journal and what should be included? How do we use the Feasibility Scorecard to evaluate our opportunities? How do we get to the opportunity we will focus on for the rest of the semester?
Read: LNV6: Chapter 4 Business Model Generation (opt), pp. Skim pp. 56‐117
Presentation: Teams will introduce themselves and present their 3 BOE concepts for feedback.
Action for the Week: Launch your online journal/blog/wiki. Conduct research as determined by your Feasibility Scorecard to reduce your 3 concepts to 1‐2. Decide on a name for the team.
Deliverable for September 13 Submit your team’s BOE template for 1‐2 concepts including any interview notes. If you have not yet chosen your final concept, tell us what needs to happen before you can do that.
4 September 13 Project Launch Pad: Refining the Final Concept
Lecture: What is the dashboard and how do we use it to communicate our weekly progress? What are the most effective ways to gather data and manage it? How do we use value and mind mapping to understand our customer? How do we design a customer interview and initiate a cold call?
Read: LNV6: no reading Business Model Generation (opt): no reading
Presentation: Teams announce 1‐2 concepts. If 2, what needs to happen to make the final choice?
Action for the Week: Launch your online journal/blog/wiki. Conduct research as determined by your Feasibility Scorecard to reduce your 3 concepts to 1‐2. Decide on a name for the team.
Deliverable for September 20: Submit your team’s Weekly Dashboard, questionaire, & Interview notes Current journal post
5 September 20 Value Proposition
Lecture: How do we create a story around our business? What is the value we are offering our customers? Who will appreciate that value? How can we tell a story about that? How do we visualize the customer’s needs? How do we journey map the customer experience? What is ethnography and how do we incorporate it to enhance our understanding of the customer? What is an empathy map and how do we use it? Is what we’re offering different from what’s out there? Are we serving an unmet need?
Read: LNV6: Chapter 5, 109‐124 Business Model Generation (opt), pp. 161‐168 and 226‐231
Action for the Week: Launch your online journal/blog/wiki. Conduct research as determined by your Feasibility Scorecard to reduce your 3 concepts to 1. Decide on a name for the team. BAEP 556‐8
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Deliverable for September 27 Weekly Dashboard Summary & interview notes Current journal post
6 September 27 Customer Segmentation Techniques and Tests
Lecture: We have lots of potential customers. How do we choose? How can we effectively employ customer segmentation and anthropological research techniques to get into the mind of the customer? How do we design a customer test?
Read: LNV6: no reading Business Model Generation (opt), pp. 127‐133
Watch: “Design Tool: Ethnography” with Patricia Swenton‐Wall
Action for the Week: Design a plan for doing field research with the customer. Get out in the field and test your techniques with at least 5 customers face to face. Did your initial hypotheses about the value proposition and the customer hold up? Why? Why not? For Web startups, you need to start coding the product and set up your Google or Amazon cloud infrastructure (unless you have your own server arrangement)
Deliverable for October 4 Weekly Dashboard Summary & Interview notes Current journal post
7 October 4 Demand Testing
Lecture: How do we figure out if there are enough customers to make this business worth doing? How can we test our assumptions for value, execution, scale, and defensibility? What is a low fidelity (2D) prototype of our solution that we could test with customers? What will it take to complete this prototype quickly? What is our WOW factor? (the intersection of customer, economics, and execution).
Read: LNV6: pp. 125‐135, 203‐207 Business Model Generation (opt): no reading Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment,” http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313
Action for the Week: Revise your plan for doing field research with the customer based on feedback from first attempts. Get out in the field and test your techniques with at least 5 customers face to face. Did your initial hypotheses about the value proposition and the customer hold up? Why? Why not? If your customer is part of a large company, who is the real decision maker and what kind of budget do they oversee? How is the buying decision made?
Web startups: Get something, however small, operational on the Web. Test customer acquisition cost by engaging in “search engine marketing” (SEM). Ask your users to take some kind of action such as signing up for a newsletter. Use Google Analytics to measure success. Begin to track your viral coefficient if you’re assuming your product is viral.
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Others: Begin to gather costs for prototype development and figure out a way to physically demonstrate your product.
Deliverable for October 11 Weekly Dashboard Summary & Interview notes plus Design Criteria Template Current journal post
8 October 11 Channel Testing
Lecture: How will we reach our customers? How are they currently receiving solutions? Which are the most effective channels? Which are cost efficient? How will our channel integrate with the customer’s current routine? Do we need to provide after sales support? How will that be accomplished?
Read: LNV6: no reading Business Model Generation (opt): no reading
Presentation: Teams present their dashboard and status
Action for the Week: Get out into the field and test your customer acquisition costs with at least 10 potential channel partners face to face. Did your initial hypotheses about the channel and the customer hold up? Why? Why not?
For Web startups: Your working site and analytics should be up and running. Track where your visitors are coming from and what they’re doing on the site. Are there any differences among visitors? Can you calculate the lifetime value of the customer?
For Others: Interview at least 5 people in your channel (sales, OEM’s, etc). Has what you learned changed your value proposition or customer? Can you calculate your customer’s lifetime value? What channel incentives are out there? What is the cost of your channel and its efficiency?
Deliverable for October 18 Weekly Dashboard Summary & Interview notes Current journal post
9 October 18 Revenue Model Testing
Lecture: What will our customers really pay for? What are they currently paying for and how? How do they prefer to pay? What does each revenue stream contribute to the overall revenue model? What is the difference between transaction and recurring revenue streams? How do fixed menu pricing and dynamic pricing play into your business model? What are the key financial metrics we need to focus on?
Read: LNV6, pp. 181‐184 Business Model Generation (opt): no reading
Action for the Week: Decide on your revenue model. How will you package your product into various offerings, assuming you have more than one. How will pricing differ? What are the key financial metrics for your business model? What are your competitors doing?
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Deliverable for October 25 Weekly Dashboard Summary & Interview notes Current journal post
10 October 25 Telling the Story
Lecture: How do we introduce something new and make it tangible? How do we tell a story that illustrates how our business model solves a real customer problem? How do we engage others in a compelling narrative? How does perspective help us tell the story? What techniques are available to help us tell the story?
Read: LNV6, pp. 210‐214 Business Model Generation (opt), pp. 171‐179
Watch: Annenberg Innovation Lab: News idea incubator Final Projects – examples of how to visualize the customer’s story. http://www.annenberglab.com/eventdetail/43
Action for the Week: Continue gathering cost estimates from experts in your industry and channel. Plan for how you will tell the story of your value proposition and your business model through something visual and/or physical. Develop your key financial metrics and critical success factors.
Deliverable for November 1 Weekly Dashboard Summary & Interview notes Current journal post
11 November 1 Key Activities & Resources
Lecture: What does the process flow of our business look like? What are the key activities from customer acquisition to after‐sales service? Do we have any IP to acquire? How many people? Any major equipment or other capital expenditure? What kind of access to resources do we have?
Read: LNV6, pp. 170‐181 Business Model Generation (opt). No reading
Presentation: Teams present their story and how you will physically demonstrate your value proposition.
Action for the Week: Prepare a process flow chart indicating activities, people, and major resources required. Show activities that are outsourced. Don’t forget support functions like payroll, etc. Prepare your key financial metrics and critical success factors
Deliverable for November 8 Weekly Dashboard Summary & Interview notes + Key Financial Metrics/Critical Success Factors Current journal post
12 November 8 Cost Structure
Lecture: What are the most important costs in our business model? How important are cash flows to our business model? When do we get paid and when do we have to pay others? What are our costs to fully develop the product,
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to launch versus ramp versus iterate on the product? Where is our cash flow break‐even point? Where is the best location for our business? Can we outsource to save on costs?
Read: LNV6, pp. 184‐196 Business Model Generation (opt): no reading
Action for the Week: Prepare your narrative financial assumptions. Explain how you arrived at your numbers. Develop a financial timeline to include points at which you need money and where you will be in the development of your business model at those points. Put this in a spreadsheet where you’ll also integrate all the costs from partners, resources, and activities.
Deliverable for November 15 Weekly Dashboard Summary & Interview notes + Financial Timeline/Assumptions spreadsheet Current journal post
13 November 15 Key Partnership Testing
Lecture: What types of partners can we engage with? What key partners do we need to have on board? How do we reach those partners? How will they contribute to our business model? Which key resources will they supply? Which key activities do they perform? What are the risks associated with these partners? What incentives will we need to supply?
Read: LNV6, pp. Chapter 7 and pp. 207‐209. Business Model Generation (opt): No reading
Action for the Week: Finish revising your financial model. Prepare your Lessons Learned deck. Begin organizing your final pitch deck and 3‐page executive summary about your business. Finish up your physical demonstration for the final pitch on November 29.
Deliverable for November 22 Lessons Learned deck
14 November 22 Team Lessons Learned
Team Presentations: Lessons Learned and Feedback from Instructor Team
Deliverable for November 29 Investor Pitch Deck Executive Summary (3 pages)
15 November 29 Investor Pitch and Feedback
Team Presentations: Investor Pitch and Feedback
Congratulations! You made it!
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