The Startup Owners Manual Stanford - School of Engineering U.C. Berkeley - Haas School Of Business Steve Blank.

1 The Startup Owners Manual Stanford - School of Engineer...

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

2 See the Animated Version of this Presentation at: http://www.slideshare.net/sblank/th e-startup-owners-manual-sxsw-the- movie-2

3 This Talk is Based On Business Model Generation The Lean Startup Four Steps to the Epiphany

4 This Talk is Based On Business Model Generation The Lean Startup The Startup Owners Manual

5 Not all those who wander are lost Bilbo Baggins

6 The Search for a Path 1602 - 1908

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

11 From Atoms to Bits

13 The Startup Path Search Versus Execution

15 What’s a Startup?

17 What’s a Business Model?

19 Value Proposition What Are You Building and For Who?

21 Customer Segments Who Are They? Why Would They Buy?

23 Channels How does your Product Get to Customers?

25 Customer Relationships How do you Get, Keep and Grow Customers?

27 Revenue Streams How do you Make Money?

29 Key Resources What are your most important Assets?

31 Key Partners Who are your Partners and Suppliers?

33 Key Activities What’s Most Important for the Business?

35 Cost Structure What are the Costs and Expenses

37 Turning Hypotheses Into Facts

39 The Four Steps – The Startup Path Customer Development

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

43 Customer Development Test the Problem, Then the Solution

45 Customer Development The Entrepreneurial Journey

47 Startup Owners Manual

48 National Science Foundation

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

50 Examples from the Book

51 Step-by-Step for both web/mobile and physical channels

52 Customer Relationships

59 How Does This Really Work? Lean LaunchPad Class National Science Foundation

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

61 Team Dynamo Final Presentation Interviews: 252 Partner: 10 Survey: 76

62 Al Hassan Hleileh MBA 2  MA in POL ECON SOC H Al Hassan Hleileh MBA 2  MA in POL ECON SOC H Elika Mahdavi MS&E MS  BS in Indus.Eng. Elika Mahdavi MS&E MS  BS in Indus.Eng. Megh Gautam MS&E MS  BTech in IT Megh Gautam MS&E MS  BTech in IT Hung Le MS&E MS  BS in EE/CS Hung Le MS&E MS  BS in EE/CS PICTURE THE TEAM

63 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

64 Travel booking portal for Middle Easterns Social travel planning Ex-pat travel portal to Middle East Travel inspiration - Social platform that nudges people to inspire and enrich their life 2135656 Safe travel portal for US travelers to M.E. 4 IDEA EVOLUTION THROUGH PIVOT 7878 Nudge to enrich life Focus Customer Insights CompetitionMarket size Customer Insights Market size Research Scalability Market size

65 Travel booking portal for Middle Easterns 1 Interviews: 20

66 Market understanding Best in class product Relationship with partners Human Capital 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 Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines 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!) 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 1 – MAKE MY DREAM New Remain Remove Week 1  Middle East focused platform  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 Middle East focused Travel booking portal

67 Market understanding Best in class product Relationship with partners Human Capital 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 Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines 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!) 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 1 – MAKE MY DREAM New Remain Remove Week 1

68 Market understanding Best in class product Relationship with partners Human Capital 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 Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines 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!) 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 1 – MAKE MY DREAM New Remain Remove Week 1  Too broad a platform  Too many value propositions Lack of focus in value propositions

69 Market understanding Best in class product Relationship with partners Human Capital 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 Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines 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!) 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 1 – MAKE MY DREAM New Remain Remove Week 1  The method we used was a top-down approach  We didn’t use net numbers (gross)  The lesson here is that if we were to do it again we would use bottom up / net figures Market sizing problem

70 Market understanding Best in class product Relationship with partners Human Capital 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 Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines 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!) 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 1 – MAKE MY DREAM New Remain Remove Week 1 We were not focused on a specific customer segment – too broad. Our interview base was biased towards our network – needed a better sample. Lack of focus in customer segments

71 Market understanding Best in class product Relationship with partners Human Capital 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 Web and mail Advertising Social Media Word of Mouth Referrals Customer call centers Magazines 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!) 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 1 – MAKE MY DREAM New Remain Remove Week 1  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 Key learning

72 Travel booking portal for Middle Easterns Social travel planning 1 Customer focus 2 Interviews: 20

73 Market understanding Human Capital Relationship with partners Best in class product Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings Car rentals Promotion companies State Tourism Conventions (CES) Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals Word of Mouth Social Media Web and mail Advertising Referrals Customer call centers Magazines Easy and pleasurable trip planning Best inventory Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation Trusted relationships Successful partnerships Events (Parties!) Brand awareness/ identification Pilots Cross pollination 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 2 – SOCIAL TRIP PLANNING New Remain Remove Week 2 Through our mentors, we really dug into our customers insights  They were telling us that they didn’t just want to go to the middle east  They wanted a seamless, social and enjoyable travel experience from A-Z  We pivoted to The Middle Easts travel booking portal with a ramp up focused on influential who want easy and pleasurable trip planning Pivot to social travel planning for group traveling

74 Market understanding Human Capital Relationship with partners Best in class product Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings Car rentals Promotion companies State Tourism Conventions (CES) Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals Word of Mouth Social Media Web and mail Advertising Referrals Customer call centers Magazines Easy and pleasurable trip planning Best inventory Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation Trusted relationships Successful partnerships Events (Parties!) Brand awareness/ identification Pilots Cross pollination 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events New Remain Remove Week 2 WEEK 2 – SOCIAL TRIP PLANNING

75 Market understanding Human Capital Relationship with partners Best in class product Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings Car rentals Promotion companies State Tourism Conventions (CES) Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals Word of Mouth Social Media Web and mail Advertising Referrals Customer call centers Magazines Easy and pleasurable trip planning Best inventory Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation Trusted relationships Successful partnerships Events (Parties!) Brand awareness/ identification Pilots Cross pollination 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 2 – SOCIAL TRIP PLANNING New Remain Remove Week 2

76 Market understanding Human Capital Relationship with partners Best in class product Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings Car rentals Promotion companies State Tourism Conventions (CES) Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals Word of Mouth Social Media Web and mail Advertising Referrals Customer call centers Magazines Easy and pleasurable trip planning Best inventory Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation Trusted relationships Successful partnerships Events (Parties!) Brand awareness/ identification Pilots Cross pollination 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 2 – SOCIAL TRIP PLANNING New Remain Remove Week 2 When research for potential partners, we learned of several existing competitors with similar product  crowded  hypercompetitive What was the problem?

77 Market understanding Human Capital Relationship with partners Best in class product Social Networks Travel Publications Hotels Business Schools Travel agents Airlines Events Deal listings Car rentals Promotion companies State Tourism Conventions (CES) Customer Acquisition Customer Retention Product Dev Relationship with key partners Sourcing deals Word of Mouth Social Media Web and mail Advertising Referrals Customer call centers Magazines Easy and pleasurable trip planning Best inventory Convenient Experiential UI Lowest price Multiple options Best Actionable deals Relevant locations Create a Community Social Validation Trusted relationships Successful partnerships Events (Parties!) Brand awareness/ identification Pilots Cross pollination 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 Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs Percentage of hotel/package (s) Advertising revenues Event of the month Exclusive partnership with events WEEK 2 – SOCIAL TRIP PLANNING New Remain Remove Week 2  We should have looked at the competitive landscape earlier  We should have spoken to industry / domain experts earlier Key learning

78 Social travel planning Ex-pat travel portal to Middle East 23 Competition Travel booking portal for Middle Easterns 1 Interviews: 64

79 Market understanding Human Capital Relationship with partners 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 Word of Mouth Social Media Local knowhow and content Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships Events (Parties!) Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 3 – EX-PAT TRAVELING New Remain Remove Week 3 Pivot to Ex-pat Community Travel Portal We pivoted back to the original idea with focus on one customer segment  A travel planner for Ex-Pat students who frequently visit the Middle-East & other major cities.  We want to capture & publish their travel experience.

80 Market understanding Human Capital Relationship with partners 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 Word of Mouth Social Media Local knowhow and content Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships Events (Parties!) Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 3 – EX-PAT TRAVELING New Remain Remove Week 3

81 Market understanding Human Capital Relationship with partners 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 Word of Mouth Social Media Local knowhow and content Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships Events (Parties!) Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 3 – EX-PAT TRAVELING New Remain Remove Week 3 We interviewed 64 people and found:  The market was too small  There is little homogeneity in customer needs  Too low frequency of travel to justify target market What was the problem?

82 Market understanding Human Capital Relationship with partners 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 Word of Mouth Social Media Local knowhow and content Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships Events (Parties!) Young and the affluent High disposable incomes Willing to explore Young and single Divergent origins Social media savvy Young couples Trendsetting behavior Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 3 – EX-PAT TRAVELING New Remain Remove Week 3  Market sizing is crucial Key learning

83 Ex-pat travel portal to Middle East 3 Safe travel portal for US travelers to M.E. 4 Market size Social travel planning 2 Travel booking portal for Middle Easterns 1 Interviews: 33 Survey: 46

84 Market understanding Human Capital Relationship with partners Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Safety proposition Local knowhow and content Community/Group Travel Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships Young and the affluent High disposable incomes Willing to explore -MBA Students Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 4 – US TRAVEL TO Middle East New Remain Remove Week 4 Pivot to US Traveler Portal to Middle East We expanded our market to entire US travel market  Platform to facilitate Americans to travel to the Middle-East

85 Market understanding Human Capital Relationship with partners Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Safety proposition Local knowhow and content Community/Group Travel Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 4 – US TRAVEL TO Middle East New Remain Remove Week 4 We surveyed 46 people and interview 33 more  Young & Affluent Americans traveling to the Middle East need local insight.  We’ll be the trusted source! Young affluent market

86 Market understanding Human Capital Relationship with partners Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Safety proposition Local knowhow and content Community/Group Travel Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships Young and the affluent High disposable incomes Willing to explore -MBA Students Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 4 – US TRAVEL TO Middle East New Remain Remove Week 4

87 Market understanding Human Capital Relationship with partners Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Safety proposition Local knowhow and content Community/Group Travel Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 4 – US TRAVEL TO Middle East New Remain Remove Week 4 Launched website with full basic booking functionalities Ebtism.com went live  Full basic functionalities (login, browse deals and book trips)  4 sourced deals from agencies  42 GSB students booked Exclusive login Deals selection (real sourcing) Value propositionAbility to book trips

88 Market understanding Human Capital Relationship with partners Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Safety proposition Local knowhow and content Community/Group Travel Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 4 – US TRAVEL TO Middle East New Remain Remove Week 4 We spoke to Christos Stergiou, founder of truegreece.com (Greece Analogue)  10 years of development  $5M idea What was the problem?

89 Market understanding Human Capital Relationship with partners Social Networks Alumni Associations Hotels Business Schools Travel agents Travel Publications Airlines Events Deal listings Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Safety proposition Local knowhow and content Community/Group Travel Easy and pleasurable trip planning Best inventory Trusted relationships Successful partnerships MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Percentage of booking costs WEEK 4 – US TRAVEL TO Middle East New Remain Remove Week 4 Market size need to be VENTURE SCALE We want to DISRUPT the Travel Space. Let’s Re-think the Entire Idea! Key learning

90 Ex-pat travel portal to Middle East 3 Safe travel portal for US travelers to M.E. 4 Social travel planning 2 Travel booking portal for Middle Easterns 1 Social platform that nudges people to travel 5 Market size Interviews: 17 Survey: 10

91 User data Human Capital Relationship with partners Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel Trusted relationships Successful partnerships Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Leads Advertising Percentage of booking costs WEEK 5 – TRAVEL NUDGE Paying partner side End-user side Remove Week 5 Pivot to travel inspiration We pivot to a brand new market  Inspire people to travel more through recommendation  Relevant based on social graph and travel history

92 User data Human Capital Relationship with partners Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel Trusted relationships Successful partnerships Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Leads Advertising Percentage of booking costs WEEK 5 – TRAVEL NUDGE Paying partner side End-user side Remove Week 5 Inception of Nudge by looking at the competitive landscape Revised later Revised later

93 User data Human Capital Relationship with partners Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel Trusted relationships Successful partnerships Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Leads Advertising Percentage of booking costs Paying partner side End-user side Remove Week 5 WEEK 5 – TRAVEL NUDGE

94 User data Human Capital Relationship with partners Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel Trusted relationships Successful partnerships Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Leads Advertising Percentage of booking costs Paying partner side End-user side Remove Week 5 Bottom-up estimation  Market = population x nudge frequency x CTR x CPC  With leads revenue sharing model, TAM is based on assumptions of nudges frequency and conversion  Target market is justifiable with an annual revenue of $267 million with 31% market penetration Sizeable potential market SOM = $267M SAM = $373M TAM = $900M WEEK 5 – TRAVEL NUDGE

95 User data Human Capital Relationship with partners Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel Trusted relationships Successful partnerships Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Leads Advertising Percentage of booking costs Paying partner side End-user side Remove Week 5 Mock up of the product for customer interview WEEK 5 – TRAVEL NUDGE

96 Ex-pat travel portal to Middle East 3 Safe travel portal for US travelers to M.E. 4 Social travel planning 2 Travel booking portal for Middle Easterns 1 Travel inspiration - Social platform that nudges people to inspire and enrich their life 5656 Interviews: 52 + 3 partners

97 User data Human Capital Relationship with partners Social Networks Travel Websites Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Travel) Customer Acquisition Leads Trusted relationships Successful partnerships Online travelers Travel Websites Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition Leads Advertising WEEK 6 – TRAVEL NUDGE Paying partner side End-user side Remove Week 6

98 User data Human Capital Relationship with partners Social Networks Travel Websites Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Travel) Customer Acquisition Leads Trusted relationships Successful partnerships Online travelers Travel Websites Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition Leads Advertising Paying partner side End-user side Remove Week 6 Partner Reach out to Travelocity (Jim Hornthal)  Customer insights differed  Technological challenges (e.g. cookies)  Revenue share instead of lead generating Reach out to Expedia and Bookingmarkets  Confirm revenue share model (5% - 10%) and we even got a standard term WEEK 6 – TRAVEL NUDGE

99 User data Human Capital Relationship with partners Social Networks Travel Websites Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Travel) Customer Acquisition Leads Trusted relationships Successful partnerships Online travelers Travel Websites Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition Leads Advertising Paying partner side End-user side Remove Week 6 Then we went out of the building to interview 50 people at Stanford Mall  What prevents people from traveling is time, not imagination or laziness (seasonal)  People don’t want to be nudged too often (1 per month)  Referrals from close friends more valuable than referrals from strangers The customers value relevance of nudges WEEK 6 – TRAVEL NUDGE

100 Ex-pat travel portal to Middle East 3 Safe travel portal for US travelers to M.E. 4 Social travel planning 2 Travel booking portal for Middle Easterns 1 Travel inspiration - Social platform that nudges people to inspire and enrich their life 56567 Nudge to enrich life Market size Interviews: 16

101 User data Human Capital Relationship with partners Social Networks Travel Websites Event Websites University Events Merchants Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Activities + Travel) Customer Acquisition Enrichment (Travel) Trusted relationships Successful partnerships Students Graduates Young Families Travel Websites Online travelers Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition WEEK 7 - NUDGE Week 7 Expand from travel to include activity nudges  We expanded our nudges to include activities, events, social reminders than just travels  Keep user more engaged with relevant frequent nudges

102 User data Human Capital Relationship with partners Social Networks Travel Websites Event Websites University Events Merchants Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Activities + Travel) Customer Acquisition Enrichment (Travel) Trusted relationships Successful partnerships Students Graduates Young Families Travel Websites Online travelers Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition WEEK 7 - NUDGE Week 7

103 User data Human Capital Relationship with partners Social Networks Travel Websites Event Websites University Events Merchants Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Activities + Travel) Customer Acquisition Enrichment (Travel) Trusted relationships Successful partnerships Students Graduates Young Families Travel Websites Online travelers Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition WEEK 7 - NUDGE Week 7 We went out of the building to interview 20 people  People also want to be nudged in other things than just travel  Mobile is the most effective medium to increase engagement The customers want diverse nudges

104 User data Human Capital Relationship with partners Social Networks Travel Websites Event Websites University Events Merchants Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Activities + Travel) Customer Acquisition Enrichment (Travel) Trusted relationships Successful partnerships Students Graduates Young Families Travel Websites Online travelers Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition WEEK 7 - NUDGE Week 7

105 Ex-pat travel portal to Middle East 3 Safe travel portal for US travelers to M.E. 4 Social travel planning 2 Travel booking portal for Middle Easterns 1 Travel inspiration - Social platform that nudges people to inspire and enrich their life 56567878 Nudge to enrich life Interviews: 15 Partners: 7 Pilot nudges: 20

106 User data Human Capital Relationship with partners Social Networks Travel Websites Alumni Associations Travel agents Business Schools Hotels Customer Acquisition Customer Retention Product Development Relationship with key partners Sourcing deals Word of Mouth Social Media Enrichment (Travel) Leads Safety proposition Local knowhow and content Community/Group Travel Trusted relationships Successful partnerships Online travelers Travel Websites MBA Students Young and the affluent High disposable incomes Willing to explore Human Capital Product Development Advertising costs Maintaining relationships Refunds Leads Advertising Percentage of booking costs NUDGE Paying partner side End-user side Remove Week 5 nudge /nəj/ verb: to push slightly or gently, especially with the elbow, to get someone's attention, prod someone into action, etc. noun: a slight or gentle push or jog, especially with the elbow. Creating NUDGE

107 User data Human Capital Relationship with partners Social Networks Travel Websites Event Websites University Events Merchants Customer Acquisition Customer Retention Product Development Relationship with key partners Word of Mouth Social Media Enrichment (Activities + Travel) Customer Acquisition Trusted relationships Successful partnerships Students Graduates Young Families Travel Websites Human Capital Product Development Advertising costs Maintaining relationships Cost per acquisition WEEK 8 (FINAL) Paying partner side End-user side Remove Week 8

108 CUSTOMER ARCHETYPES Ashley Clair Alex  Age: 26  Stanford Student  Worked in Hollywood  Loves Adventures  Wants to be nudged relevantly, and inspired!  Age: 26  Stanford Student  Worked in Hollywood  Loves Adventures  Wants to be nudged relevantly, and inspired!  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: 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  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

109 NUDGE TYPES social pushserendipity Nudges from friends as a social push OCCURING EVENTS (REALITY) EVENTS YOU ARE AWARE OF (CONSCIOUS) DESIRE (SUBCONSCIOUS) Discovering nudges Highest conversion rate nudges nudge

110 SIMULATED NUDGE “ 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! ” “ Love the product idea! ” “ This is awesome! I love it!! Just told me to walk the dish today! phenomenal and stunning all in one shot!! ” 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)

111 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" 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”

112 RECOMMENDING PLATFORM Computational  Matrix factorization  Collaborative filtering Computational  Matrix factorization  Collaborative filtering Crowd-sourced Social nudging Crowd-sourced Social nudging Curated Data mining Social networks Data mining Social networks Geography Context-based Customized user preference Time Past behaviors InputModel

113 Revenue sharing (CPA) PARTNERS Partner Gifts Event + Activities Event + Activities Travel University Events Restaurants

114 Facebook Ad Facebook Fan Page YouTube Video Views 273,380 Unique 120,17382 Clicks 0.030% CTR $0.38 CPC 83 Like Free CPCEngage 46 Website Unique 43062% Bounce rate 2:22min Avg time DEMAND CREATION Week 7 370 Days 900 89860 3 7 30

115 COMPETITIVE LANDSCAPE Inspiration Planning Sharing Q&A Flash Deal Community Reminder

116 INCOME STATEMENT Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013 User growth projection 2,00020,00050,000500,0001,000,0002,000,0004,000,000 Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013 Revenues AdvertisingN/A Rev. Share *$10,000$100,000$250,000$2,500,000$5,000,000$10,000,000$20,000,000 Total Revenue$10,000$100,000$250,000$2,500,000$5,000,000$10,000,000$20,000,000 Cost of Sales Customer Acquisition$60$600$1,500$15,000$30,000$60,000$120,000 Advertising & Promotions$1,000 $3,000 Total Cost of Sales$1,060$1,600$2,500$18,000$33,000$63,000$123,000 Gross Profit$8,940$98,400$247,500$2,482,000$4,967,000$9,937,000$19,877,000 Expenses Development **$645,000 $940,000$1,115,000$1,290,000$1,465,000 Hosting$1,250 Other Wages ***$100,000 Travel$5,000 $10,000 $15,000 Office + Utilities$12,000 Total Expenses$763,250 $1,063,250$1,238,250$1,418,250$1,593,250 Net Income($754,310)($664,850)($515,750)$1,418,750$3,728,750$8,518,750$18,283,750 California Universities Local beta at Stanford Go global !

117  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 LESSON LEARNED

118 WHAT’S NEXT Incubators

119 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

120 Why Do We Do This?

121

122

123 Make Your Lives Extraordinary

The Startup Owners Manual Stanford - School of Engineering U.C. Berkeley - Haas School Of Business Steve Blank.

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