Spring Cohort's Second Shark Tank!

Few things sharpen an innovator's mind as much as the prospect of standing in front of funders and having to pitch & answer questions.

Of course, it is also terrifying! 

That is why Shark Tanks - events where students present to panels of potential funers - are a central part of my curriculum. By presenting to potential funders who are (almost) always #LovinglyCritical, the innovators gain:

  1. Confidence - If you survive a Shark Tank it does wonders for your morale and ability to present in front of funders (and other audiences) in the future.
  2. Knowledge - Sharks will gladly tell students "This is what you need to do for me to fund you" - it is like cheating, but in a good way :). Along the way Sharks pass on other advice & ideas my students find invaluable.
  3. Connections - Sharks know a lot of people who can help innovators and gladly make introductions that would have taken months or years for the students to secure on their own.

Our July 23rd Shark Tank followed a new format borrowed from Valley Venture Mentor's Screening Parties. This format change allowed each innovation team an hour of direct, intense, supportive feedback from 10 Sharks! My thanks to Ethan Ferris for recommending the format change. And my thanks to the awesome Sharks who donated their time to help our innovators!

The Sharks were...

From foundations:

From for-profit investment funds, groups:

Wicked Smaht People :)

If you are interested in seeing if these kinds of events could help your nonprofit, please contact us to learn more.

KISS Canvas 9. Cost Structure

[This is a part of a series on the KISS Canvas] What are the major cost centers of your business? When do you have to pay? Do you have any options to pay differently? What costs can kill you? All of this is covered in the Cost Structure section of the KISS Canvas.

https://www.youtube.com/watch?v=YnuUTtM1AUg&list=PLdfQKNp8w2Qlgk_5iV0oYLN34_9BrQXQz

Here is each sub-lesson:

  1. Intro
  2. Capital costs
  3. Fixed  & Variable costs
  4. Example: a family
  5. Summary

Check out more KISS Canvas Content.

Entrepreneurs give me hope when I need it most

When I talk about politics I am filled with sadness and a sense of near powerlessness to make the world a better place. But when I talk to entrepreneurs, I am filled with hope. Where most of us see problems, they imagine solutions... and solutions that scale.

Here are just some of the companies blowing me away, all local/VVM companies making the world a better place!

  • Immigration
    • www.prosperitycandle.com - Providing fulfilling careers and a first rung on the economic ladder for refugees here and in war torn nations.
  • Health
    • www.newenglandbreath.com - Helping diabetics understand and adapt to their condition through superior, painless blood-glucose testing.
    • ernestpharma.com - Freaking (my words, not theirs) killing tumors with genetically engineered bacteria. No it isn't science fiction!
    • footcarebynurses.net - These traveling nurses make help the elderly stay on their feet and independent.
    • lumme-labs.com/ - Smoking cessation
  • Education
  • Inclusion
  • Environment
    • genoverde.com - Trees that grow much faster. Good for tree farmers. Great for the environment because trees are really good at sucking carbon dioxide out of the air!

I could go on for hours.

These people give me hope. That's why I love helping them. They are creating a brighter future.

Sermon over. :)

Calling Bold Nonprofit Leaders

If you...

  • Lead a nonprofit and...
  • See the funding landscape shifting under you and...
  • Know that insanity is defined as doing the same things over and over again but expecting different results...

Then I'd like to invite you to participate in the next Innovation Accelerator. In partnership with local foundations and donors dedicated to increasing nonprofit sustainability, we train nonprofit leaders to develop sources of unrestricted, recurring, and sustainable revenue. Leaders develop new revenue-generating ideas, build business models, gather evidence proving their assumptions, are guided by funders along the way, and at graduation pitch to a panel of funders who want to fund pilot initiatives.

Join us for part 1 of the Accelerator, the IdeaJam. In just a half-day you develop a catalog of your organization's super powers (AKA assets, skills, and connections) and their potential for unrestricted revenue. Sign up soon with the discount code "early77" and save 20%.

You can learn more about the Innovation Accelerator here.

What if you don't have an idea?

All innovation starts with The Idea. But what if you don't have an idea to start with? Or what if you have only an idea or two and are unsure if you have the right idea? Let's help you generate some of the right ideas :).

Step 1: Set the stage

  1. Put your mission on top of a whiteboard or spreadsheet. Please do the one-sentence version :).
  2. List out your assets. Some examples:
    1. Any spaces (classrooms, laboratories, dormitories, etc) that lie unused some of the time.
    2. The time that key employees have on their hands (due to working part-time, summers off, etc).
    3. Know-how your team has developed (excellent systems, processes, curriculum, etc.) to solve your own problems.
    4. Relationships with other people, organizations, government agencies, etc.
  3. List out any loud signals the market has given you lately, for instance:
    1. Long lines of people waiting to purchase/use something you, or someone similar, are currently offering.
    2. People signing up (or asking) for an offering that you haven't even marketed yet!

It should look something like this...

IdeaJam-Part 1-Set the stage-mission assets market

Step 2: Set the criteria

Identify the top five-ish criteria you want to score your ideas on. Jump to a new whiteboard and make some columns. Column 1 is "the idea". The other columns are the criteria. The first few criteria should be the three items we've already discussed: mission alignment, have-the-assets (AKA assets are ready-to-go), and evidence of market demand. Next, you'll need a few additional criteria relevant to your specific needs. Some examples being: easy-to-do, short-term-revenue, long-term-revenue, profitability, meets-strategic-priority-X, etc. Last, add a TOTAL column to the right.

Next, decide if any (1-3) of the criteria should be weighted more heavily. Mark them with a star.

It should look something like this...

IdeaJam-Part 2-Criteria

Step 3: Ideate

Gather some smart mentors with a diverse range of experience, both inside and outside your organization. Walk them through your notes on your mission, assets, proof of market demand, and then your criteria.

Next, have a free-ranging discussion walking through your various assets & market demand evidence to come up with new business ideas. Give each idea its own row.

IdeaJam-Part 3-Ideate

Part 4: Score

Give each person 10 sticky dots (votes) and instruct them to distribute the dots along column 2 (Mission Alignment). You'll notice some ideas score much higher than others.

3.1

Repeat for each of the remaining columns.

When you get to the TOTAL column, add up all the dots for an idea. If a column has a star, count those dots double.

3.3

Step 5:  Review

Look at the scores. If you have it in a spreadsheet, sort it. You'll most likely find a clear rank-ordering and one or two winners.

And now you have a long list of ideas, a rough sorting, and a clear methodology as to WHY :).

 

If you would like to go through a process like this with fantastic mentors, an experienced facilitator, and have a blast doing it, sign up for one of the Lean Innovation Institute's upcoming IdeaJams.

Hat tip to the great Stephen Brand, who taught me how to do this much better!

 

Time to revisit royalty financing?

Royalty financing is a relatively new concept that offers an alternative to regular debt financing (loans and trade credit) and equity financing (venture capital and stock sales). In a royalty financing arrangement, a business receives a specific amount of money from an investor or group of investors. The money might be put toward launching a new product or expanding the company's marketing efforts. In exchange, the investor receives a percentage of the company's future revenues over a certain period of time, up to a specific amount. -Source: Inc Magazine article

Some other interesting aspects of Royalty Financing - It doesn't require the sale of the company. This means:

  • Entrepreneurs retain control
  • Investors start generating returns without needing a sale
  • The company is more likely to stay in the region it was born in (vs being merged & moved to the acquiring entity)

This flavor of capital is less risky than equity, but riskier than debt. As such, it may be an attractive option for angel groups outside of major tech hubs (such as my own) to explore.  In fact, we're now actively looking to try out a few royalty deals. Stay tuned to see what we learn :)

Validating sales, marketing, and customer service hypotheses

When my students are working their way through a Lean Startup/Launchpad-style curriculum, the most important thing is to conduct great interviews. New folks smartly lean on a number of interview script templates (here are the ones my students use) to help them avoid many first-timer mistakes! However, the scripts I ran into tended to focus on customer pain & product validation - which is critical. However, I had a hard time finding scripts to help my students validate hypotheses around sales, marketing, and customer service (AKA Get/Keep/Grow in Lean Launchpad language). So my fellow mentor Rick Plaut and I put this Get/Keep/Grow script together. Please feel free to share, use, and/or suggest improvements.

Introduction to the KISS Canvas

[This is part of a series on the KISS Canvas] The KISS (Keep It Super Simple) Canvas (inspired by Alex Osterwalder's Business Model Canvas) is a 1-page (or 4x3 foot poster) to help you quickly document (and then test) the key hypothesis behind your business model.

If you like to read, keep scrolling. For video lovers, click below!

https://www.youtube.com/watch?v=563H3c3yl3M

OK, let's dive in. It looks like this...

KISS Canvas-Easy2Read

The KISS canvas tells a story in the way entrepreneurs should pitch, with the most important elements first (on the left).

  • The Customer - Who do you serve?
    • Segments - Who are all the groups of people you will serve? Buyers, users, referrers, etc.
    • Pains - What problems do they have? Which are most important?
  • Value Proposition - What do you offer?
    • Features - How will you solve your customers problems?
    • Benefits - What promises are you making to your customers?
    • Competitive Advantages - Who are your competitors and how are you better at solving your customers' Pains?
  • Marketing & Sales - What kind of relationships will you have with customers?
    • Get - How will you find and acquire customers?
    • Keep - How will you prove you kept your promises?
    • Grow - What new promises might you make?
  • Financial -
    • Value Model - What value do customers provide you in return for your product?
    • Cost Structure -  What are the costs associated with running your venture?
  • Beard of Learning - When you disprove a hypothesis, move it to the bottom. If you're using sticky notes they will eventually form chains and completely cover the bottom of your canvas. It kind of looks like your canvas grew a beard. Each sticky in that beard represents a hypothesis the student thought was true... and found out it was not! Thus the name my students gave it, the "Beard of Learning" :).

This Canvas is by no means a complete map but I have found it is the foundation of everything else that is to follow. To get a better feel...

Check out more KISS Canvas Content.

Nonprofit Innovation Accelerator 2.0

Innovation concept. Lightbulb in modern polygonal style with light effect After running the Nonprofit Accelerator for just under a year now I've learned a few important things about my customers. They had the pains I thought they did, but they had other pains that were really important also, such as:

  • I don't have any ideas to put into your accelerator OR...
  • I don't know which of my ideas I should pursue OR....
  • Six months is a long time commitment for key team members when I don't even know if the idea can work and yet...
  • At the end of the six months there is still a lot of polishing to do...

Meanwhile, I had greatly underappreciated just how much the nonprofits valued the sharks & mentors.

So, today I am proud to announce version 2.0 of the Nonprofit Accelerator that takes into account what my customers have taught me.  First of all, it splits the accelerator into parts:

Part 1: IdeaJam (1 half-day session)

Feeling light on innovative ideas? IdeaJam provides you a list of your organization's super powers (AKA assets, skills, and connections) and their potential for unrestricted revenue.

Part 2: HitMaker (2 full-day sessions)

Unsure which of your ideas to enroll in the Accelerator? Hitmaker gives you a rank ordering of all your ideas based on their potential and risks.

Part 3: Customer Discovery (Every other week for 4 months)

Before committing the significant resources to turn your idea into a full-fledged program you need to know there plenty of people ready to pay for the thing you wish to sell! The Customer Discovery training provides the tools, mentoring, and introductions you need to secure the evidence.

Part 4: Funder-Ready (Every other week for 4 months)

People want what you have to offer, but how do you cost effectively make your offering and find your customers? Who do you need to add to your team? How will you fund it?

Pilot Design students graduate with a fleshed out business model, a plan for their pilot, and get to pitch to a panel of funders who, if impressed, will provide you seed funding to launch.

 

The next IdeaJam is coming up in July, so if you know any nonprofits that are making the creation of unrestricted revenue a priority, please feel free to share the updated website: www.UnrestrictedRevenue.com. Thanks!

HatTip to Birton Cowdan for the great name for the IdeaJam events!

 

Why Creating a Business Plan Is a ‘Waste of Time’

When I started exploring entrepreneurship in college, I was exposed to the education paradigm - write a business plan. I was a good student. I wrote 9 business plans in 9 months for my first startup. It turns out, that was not the best way to spend my time. Yes, planning is essential. But it needs to be done in the right proportions. Less at the start. More as you mature.

Professor Carl Schramm recently wrote a carefully researched book called 'Burn the Business Plan.', listen / read to an interview about the book's highlights here.

Hat tip to Jim Geissman.

Nonprofit Accelerator Shark Tank!

Shark Tank 1 Slides - NONA 1 - LI2.png Friday was a big day for the students in my Nonprofit Accelerator's Spring Cohort. They spent from 9am to 3pm practicing and refining their pitches in preparation for the Shark Tank. My thanks to Kelly Minton, Jim Stanczak, and Bill Cole for helping me with the PitchCamp portion of the day!

At 3pm, the above-pictured group of amazing business and nonprofit leaders heard the pitches and gave #LovinglyCritical feedback. They filled in detailed scorecards so the students could see exactly where they were weak and strong. Several sharks offered to provide follow-up help and advice.  What a day!

My students did a great job upping their game and have learned a great deal about what they need to do to get their ideas ready for market. I can't wait to see how they do at the next one in July!

My thanks to our Sharks!

  1. Bill Grinnell - Angel investor, business owner
  2. Katie Zobel - Community Foundation of Western MA
  3. Mary Walachy - Davis Foundation
  4. Murdoc Khaleghi - Serial entrepreneur & angel investor
  5. Nancy Urbschat - Business owner, active nonprofit board member
  6. Philip Silva - Angel investor, social entrepreneur
  7. Randy Krotowski - Retired top-5-in-world CIO (Chief Information Officer) for a fortune 10 company.
  8. Ray Berry - Entrepreneur and former CFO of the United Way
  9. Rick Plaut - Angel investor, entrepreneur, educator
  10. Stephen Brand - Social Entrepreneur and educator
  11. And bonus Shark Sarah Carlan - Family Foundation executive

Announcing the Spring Nonprofit Accelerator Cohort

I am proud to announce the Lean Innovation Institute's Spring 2018 Nonprofit Accelerator Cohort. Classes began back in March and, wow, the energy and dedication in the room is almost identical to what I saw in the VVM Startup Accelerator! These are leaders boldly seeking new ways to create sustainable, unrestricted revenue that furthers their missions. I am privileged to have such great students. The organizations these students hail from are:

www.humanserviceforum.org

www.rise-at.com

www.rsi.org

www.thetechfoundry.org

www.viability.org

Yup, they have two teams in :).

$200k Raised by 1st Nonprofit Accelerator Grad

Last summer I ran a pilot Nonprofit Accelerator with one large local nonprofit (name withheld until they give permission to share :)). Their core business is not education. Yet, over the years they developed a powerful curriculum that worked. They came to me wondering "is this a A) nice program we can slowly expand here in the Valley, or B) something with the potential to impact hundreds of thousands of children around the country and bring in millions of dollars of unrestricted revenue for us?" That was a great question!

We spent six months working through the Lean Innovation curriculum. Their team knew a lot of things, but there was a lot they didn't know... like who was going to pay? How Why would they pay? How much would they pay?

I am proud to share that on graduation day they pitched to their board and a group of potential funders. By the end of the night they had commitments for over $200k to fuel a pilot.

I can't wait to see what our next Nonprofit Accelerator cohort will do!

KISS Canvas 8. Value Models

[This is a part of a series on the KISS Canvas] What price should you charge for your product? How should people pay you? What value do non-paying customers provide you? All of this is covered in the Value & Revenue model column of the KISS Canvas.

https://www.youtube.com/watch?v=-ybTYXi5aDY&list=PLdfQKNp8w2QnXP_JGRiKbpFGcU7qmphJU

Here is each sub-lesson:

  1. Intro
  2. Every customer segment pays
  3. Understand customer expectations
  4. Know your models
  5. Choose your pricing strategy carefully
  6. Discover your price point(s)
  7. Summary

Check out more KISS Canvas Content.

Best Practices for Customer Discovery

At the heart of lean innovation is "getting out of the building" to test your ideas on real live humans! The fastest, cheapest, and most effective way to experiment is with simple interviews. Getting, and then completing, those interviews can be scary as heck for a lot of first-time entrepreneurs. It need not. Here are some tools I use with all of my students to help them find people to interview, secure those interviews, and walk away with the most accurate data possible.

  1. Short lecture on best practices in customer development interviewing (note this is a playlist, so keep listening after the first one is done :))
  2. Scripts for Finding & Securing Interviews
  3. Script for Discovery Interviews (when you aren't really sure what your customer's pains are and want to cast a wide net)
  4. Script for Pain Interviews (when you are ready to test specific pain hypotheses)
  5. Script for Solution Interviews (when you are ready to put a minimum viable product / prototype in front of a customer for feedback on your value proposition)
  6. Script for Get/Keep/Grow (Marketing, sales, customer service) Interviews

KISS Canvas: 7. Grow (Research & Development)

[This is a part of a series on the KISS Canvas] If your flagship product is a success, what next? This section of the canvas helps you think through what new products you might offer and what new customer segments you might approach. This video explains some of the core concepts...

https://www.youtube.com/watch?v=jymJ22-jRuc&list=PLdfQKNp8w2QmhqRTnk0lDBeRuSSqagihV

Here is each sub-lesson:

  1. Intro
  2. Add “sizes”
  3. Solve your customer’s other problems
  4. Bring your existing product to new customer segments
  5. Summary

Check out more KISS Canvas Content.

KISS Canvas: 6. Keep (Customer Retention)

[This is a part of a series on the KISS Canvas] This section of the canvas helps you think through customer retention. Once you a customer purchases your product, how do you prove to them you have kept your promises?

https://www.youtube.com/watch?v=JDRApeFP-xc&list=PLdfQKNp8w2QnxBMFiuo3VottJLI0qP_9V

Here is each sub-lesson:

  1. Intro & Keeping your customers is the right and smart thing to do
  2. Make your benefits visible
  3. Scorecards make benefits visible
  4. Summary

Check out more KISS Canvas Content.

Western Mass Business Show Interview: Innovation in Western Massachusetts

My thanks to Ira Bryck for a wonderful interview on his Western Mass Business Show radio program on WHMP. We chatted about the various ventures I have had the joy of being a part of, especially the River Valley Investors, Valley Venture Mentors, and my new startups Launch413 & the Lean Innovation Institute. You can here the full interview here: Western Mass Business Show 3.31.18 | WHMP-AM – News – Information – The Arts

SaaS Best Practices

This article shows what you learn by reviewing the best practices of over 6,000 6,000 Software As A Service (SaaS) businesses. Highlights:

  1. You need to localize your pricing, because we’re in a globalized world
  2. Delinquent churn (AKA credit cards expiring and the like) is a tricky beast that must be slayed early
  3. You need to spend so much more time on your pricing
  4. Annual subscriptions are your friends. Get more friends.
  5. Expansion revenue (AKA more revenue from existing customers) is absolutely key

Want to know more? Read the full article.

Hat tip to my former student Daniel Nelson.