MGT 388

Image source and source of quote immediately below: BBVAopen4u.com

what

The purpose of this course is to teach skills and knowledge needed to build a startup from an idea into a promising early-stage venture in less than one semester of time by creating validated learning for all parts of a business model canvas and business plan.

Every student will participate on a team to develop business plans, go-to-market strategies, slide decks and all the other fun stuff that makes you a legit startup.

When and where

Lectures: 3:30 pm - 4:45 pm, TR, ~~Bidgood 219~~, ten Hoor 114, January 9 - April 2, 2019; Alston 155 April 4 - April 25, 2019

Office Hours: Wednesdays, 12:00 pm - 4:00 pm or by appointment, Alston 155

WHO

Craig E. Armstrong, Ph.D., Associate Professor of Entrepreneurship and Strategic Management.

Email address for all course correspondence: MGT388BAMA@gmail.com; for non-course correspondence: carmstro@cba.ua.edu

"A startup is a temporary organization searching for a repeatable and scalable business."

Steve Blank

"A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty."

Eric Ries, Lean Startup.

"Independent thinking combined with a relentless work ethic can outpace experience."

"Entrepreneurship is the liberal arts of the 21st century."

Steve Blank at the US Association for Small Business and Entrepreneurship (USASBE) annual conference, St Pete Beach, FL, January, 2019.

Quick links

Sorry, clicking on these links will open a new tab with the section at the top of the page. I'm still figuring out the coding to stay on the page. Google Sites got rid of most of the '90s HTML functions I learned in, well, the '90s... So I'm not sure if I can honestly call these "quick links."

syllabus

here

Assignments (near final)

Assignments and schedule on google doc Review this carefully.

Assignment themes:

Have you identified a real problem that people desperately want to solve?
Have you identified initial customers and the features and benefits they value most?
Do you have a customer? (customer discovery)
How will you prototype? (Note: if you’re not embarrassed by your first prototype or product release, you’ve released too late. But don't proceed recklessly or without a plan. Don't generate lawsuits, alienate customers, or burn through tons of cash.)
How will you scale?
What metrics will you use to make decisions in hypothesis testing?
How will you validate all of the previous questions?

Resources

You should take a close look at all of these student startups to help you to source and conceptualize your startup ideas. Look for patterns in the successful student businesses. One thing I want to emphasize: Do something that you can develop substantially in the time of one semester. I call this "bite-sized" ventures. Then see where you can take that startup if you want to continue after this course. Some students pursue ideas that will take years to develop fully and therefore rarely get the insights of significant post-milestone learnings.

Coolest College Startups (Inc.com)

Meet the coolest college startups of 2018 (Inc.com)

Meet the coolest college startup of 2017 (Inc.com). Carnegie Mellon's 101!

101's core creation was inspired by Weinberg's own experience as a STEM student. Not only did he learn the materials, but he went on to teach as both a student tutor and a teaching assistant at Carnegie Mellon. Along the way, Weinberg realized that STEM classes needed a fix.

"There's a larger problem at hand, which is the fact that STEM classrooms and lectures haven't fundamentally changed in centuries," Weinberg said. "The course involves sitting and listening to a professor who stands at podium for an hour straight." He added that the dropout rate for STEM classes is incredibly high.

The solution? To Weinberg, it's Chem101, an app specifically designed for the STEM field so that professors can actively engage their students during lectures (Inc.com).

9 Weird College Classes That Helped Prepare Top Student Founders for Entrepreneurship (Inc.com)

Sample: improvisation class; helping engineers develop so-called "soft skills"; cartoon theory (hint: create a founder's stake and cap table for Homer Simpson); taking personality tests and working in groups of opposing personalities to solve problems; paper-and-crayon drawings of your business.

How do the world's biggest companies deal with the startup revolution? Insead #500Corporations (Feb 2016 pdf)

Advice I Wish I’d Shared With My First Intern

Lessons from a manager who wants you to get the most out of your work placement (and frankly for any job you start). Careercake.com, 5/25/17. (CareerCake? Seriously?)

Some thoughts about apps

Do You Really Need an App for That? (Sitepoint.com, 2017)

Do we really want an app for everything? (Androidauthority.com, 2017)

DO YOU REALLY NEED AN APP? (Current360.com)

See any patterns here? I'm way more interested in what is coming after apps. The main course? (sorry...)

schedule

January 10

Read:

Inside the failure of a startup, (Medium.com, 12/9/18)
Entrepreneurial Skills that Prepare Students for the Future of Work (Entre-Ed.org, 11/1/18; spoiler alert: creativity, innovation, failing forward, drive, communication, empathy)
THIS ENTREPRENEUR JUST MADE BULLETPROOF PANTYHOSE (Gritdaily.com, 12/22/18)

In class

Review the resources section above
Review expectations for the course
Review assignments and deliverables for the course
The Mother of All Demos
This is happening now: WIred.com presents "ALL THE COOLEST STUFF WE'VE SEEN AT CES SO FAR"
Kickstarter project of the week: "Suitcase with shelf"
and this private equity investor wants this: Elevators — The Next Frontier of Mobility - Don’t give me an “Elevator Pitch”, Pitch me on elevators (Medium.com, 9/5/2018). The message is that re-imagining elevators can solve mobility problems you didn't know you had.

January 15

For the next week or so, simply refer to the assignments document I've posted above. I'll populate each of these dates with specific activities and links to supportive documents, etc.

Opener: Kickstarter project of the week: "Suitcase with shelf"

Opportunities

Slides: What are they and how to identify them

How to pitch (slides)

Supplemental files for in class:

January 17

In-Class Activity - Mashups and Hacks for getting startup ideas

Disruptus versus Connect-the-Dots

Complete Reflective Survey #1 by 11:59 pm, Friday, January 18.

SUPERDY DUPERDY BONUS READING: Help! I want to pitch VCs but don’t want anyone stealing my idea. (FastCompany.com, 1/16/19). Snippet: "Don’t worry about someone stealing your idea. Everyone thinks what they are doing is so important and big and special. But here’s the surprising part: That doesn’t mean other people will want to go do it. Companies and investors are busy and have hundreds of other existing priorities. This is your one priority, so just go do it."

January 22

PITCH IN CLASS

January 24

No lecture; I'll be at the US Association for Small Business and Entrepreneurship (USASBE) meeting in wintry St. Petersburg, FL.

January 29

~~PITCH IN CLASS (we need around 10 more pitches; are you up for it?). If you already pitched or are on a team, you are expected to attend class as a courtesy to those who are pitching on 1/29.~~

SNOW DAY!

January 31

In-class pitching workshop; materials: 3x5 cards and instructions.

SEC Entrepreneurship Research Meeting, February 1-2

February 5

PITCH IN CLASS (we need around 10 more pitches; are you up for it? Nope: we got five). If you already pitched or are on a team, you are expected to attend class as a courtesy to those who are pitching on 2/5.

February 7

Admin

New venture team agreement forms to sign during lecture:

Other relevant resources for student teams:

The Dos and Don'ts of Forming Student Business Teams (Kit Needham, www.cmu.edu/olympus)

Not on a team? Get on one today.

Lecture and Activities

Design sprint opener. Today's activity: Customer personas. Established businesses have market segments as customers; startups don't necessarily know who their first customers are. That's why you must focus on identifying the contexts, behaviors, demographics, and goals and needs of your likely first customers. ALL students show up to work on your new ventures (I'm taking attendance. If you were not in class on 2/7 you are still responsible for completing a customer persona on your own before the beginning of class on February 12).

February 12

Review customer personas

Team Map Activity

If you could not be in class on Tuesday, February 12, you are responsible for creating a map outlining how your initial customers (identified in customer personas) will begin and complete the journey to realizing the benefits of your value proposition (optimistic outcome). List (1) the characters who are most likely to be in need of your product or service, describing the situation they are in and the unmet / undermet needs or big pains they are having; (2) the optimistic outcome you expect your customers to experience as a result of using your value proposition; and (3) the sequence of events the characters need to go through in order to become aware of, evaluate, purchase, and use your value proposition. After you've identified the characters, optimistic outcome, and sequence of events, you need to identify potential problems associated with your assumptions. For example, if you are counting on people viewing a promotion for your VP offering on social media, how do you get them to visit a particular social media site? Will your customer engagement process involve multiple "touch points" before you fully deliver the VP? For example, a student cleaning business needs to get noticed by prospective customers, be asked to visit to perform an estimate of the cleaning tasks and prices, perform the estimate, and then return to do the cleaning. You'll need to identify as many of these potential issues for your own map activity. Bring your completed map to class for use on February 14.

How much value can you build into your startup while you are still a full-time student:

Here's a pre-money valuation worksheet using the step-up method of valuation for DoorDash; the founders created at least $1,000,000 of value by testing a hypothesis, launching fast, and doing things that don't scale.
In the news... DoorDash Said To Be Raising $500M At $6B+ Valuation (Crunchbase.com, 2/12/19)
Here's a video of DoorDash co-founder talking about doing things that don't scale. Focus on 0:00 to 12:00.

February 14

Organizing: Start with Aldag competition criteria, progress-tracking survey, and suggested hacks inventory by criteria... then show/discuss DoorDash pre-money valuation worksheet

More map activity followed by customer and market discovery activities

Complete Reflection Survey 05 by 11:59 pm, Friday, February 15.

How much value can you build into your startup while you are still a full-time student:

Here's a pre-money valuation worksheet using the step-up method of valuation for DoorDash; the founders created at least $1,000,000 of value by testing a hypothesis, launching fast, and doing things that don't scale.
In the news... DoorDash Said To Be Raising $500M At $6B+ Valuation (Crunchbase.com, 2/12/19)
Here's (above) a video of DoorDash co-founder talking about doing things that don't scale. Focus on 0:00 to 12:00.
Bonus reading time: DoorDash adds $500M to food delivery duel with Postmates; by Priyamvada Mathur, February 12, 2019. Noteworthy: "DoorDash was founded in 2013 by a group of Stanford University students, including current CEO Tony Xu. The company has quickly grabbed a sizable market share and delivers food from restaurants to customers in more than 1,000 cities across the US and Canada. In January, it became the first food delivery startup to operate in all 50 states, per TechCrunch."

Aldag Competition Criteria

Business Plan Presentation - Judge Evaluation Sheet

Mark your calendars: The competition will take place all day on March 27 at The Edge.

Here is a little Valentine's Day love for Team Tankr...

February 19

Building upon customer personas -> the value proposition canvas (slides). See also this page on value propositions for the notes on the Airbnb 11-star check-in experience with Brian Chesky.

and later this week you'll use results of the VP canvas to explore markets and product features

prove if it's sound...

How do entrepreneurs build value into their startups very early in the process? Value proposition canvas, business model canvas, design thinking, lean startup. Create a persona of one of your earliest customers. Identify key customer pains and possible gains and map them onto idea features and benefits for a unique value proposition. Work toward a minimum viable product. Dan Sullivan understands this. Few presentations articulate what I mean by validated learning and small experiments better than Dan's iLab presentation posted below.

Dan Sullivan of Crowdly: Fake it Till You Make it (Harvard iLab)

"Non-technical entrepreneurs, stop talking big and start building small. Bemoaning your inability to attract a technical co-founder to "just build it" is failure's waiting room. Hiring out an agency to build your grand vision now is a great way to lose quickly.

"I will focus on the very short term nuts and bolts. We'll talk through what exactly can you do in the next four weeks to substantially move your idea forward. In our conversation, I'll answer questions, share my ideology and process, tips, tools, and talk plainly about the ups and downs of my own experience.

How to scope your prototype, what to measure, what it is, and importantly, what it isn't (hint: a first version of your eventual product)
How I hack process to get real milestones really quickly that can gut check your assumptions, or make it more attractive to potential technical talent, partners, or investors.
Removing false positives from your prototypes, and determine true intention. (Don't ask people to say nice things about you and then take it as evidence).
Cheat sheet on the free or cheap tools that will be your best friend. Startup frenemies. How to get good help from good people, and what offers you should refuse.
Non-technical Founders can build great companies. So many fail by overestimating the first step. Think small, and start building something great. "

this is the world we live in

2/20/19: Phonster vegan leather holster for iphone, android, wallet, keys, everyday carry items reaches nearly $50,000 pledged of its $5,000 goal. Over 400 backers with 39 days to go. No word on the concealed-carry version yet...

February 21

Look at my page here on VALIDATION

and

Dan Sullivan at 21:45 - 32:08. "A prototype is really very much the least you can build. Ask 'what is the very least you can build?' then ask if you can do less. I've never seen a company fail because they did too little (of a prototype) for the first step." (Armstrong note: just don't make soooo little that you frustrate your prospective customers. Focus on mocked up features that promise to deliver benefits) MAKE SOMETHING AND PUT IT IN FRONT OF PROSPECTIVE CUSTOMERS. What can you do quickly that proves value? How can you "hack" your way to quick proof of value? Talk to people for useful feedback; what proves that your vision is right? Avoid the Hollywood facade; it's got to be valuable to you, something you can show someone but not something you can show someone for show. ...it's OK to be wrong about your execution (you'll figure it out), but not OK to be wrong about your vision (fix it now). Ask questions that capture intent. Go from interesting to imperative. Does it solve a problem? Is this something you can do? Does someone have a budget for your solution? Ask questions that force people to say "no." "Beneath the surface of every compliment is a reason they won't use it."

Lecture-time and/or out-of-class activities - Build from your customer personas and value proposition canvases to engage in...

Customer development: Read the information on "how to conduct customer discovery."

and view Dan Sullivan at 31:21 for useful questions during customer discovery.

You really, really should watch the "Get in the Van" video for starters. You absolutely must do these specific things (excerpted from the linked page):

Read "Why customer development is crucial to every business' success (Kayako.com; 5-minute read)
Open the google doc "Customer discovery interviews development activity," download the document and give a filename that includes your full name and "customer discovery," and follow the instructions. Starting on page 2 of the document:

write your learning goals for the interviews;
create some talking points and broad, open-ended questions designed to help you meet your learning goals;
conduct the interview using the questions you created above (conduct at least five - 10 interviews, ideally more); and
interpret your results, share with team members. (watch out for compliments: "beneath every compliment is a reason why they would never use your product." Ask questions that force them to say "no." That's how you can identify objections and figure out how to overcome them.)

"Sometimes shifting your perspective is more powerful than being smart."

Astro Teller

-----

Build a prototype: Make something to put in front of people; help your customer development people by translating their interview results into *something* that they can use to ask better questions. If you're tasked with this assignment, read "how to create a prototype" on this website. View the embedded slide shows; create a landing page, use google slides to build a low-res mock-up of an app, or simulate as closely as possible what your value proposition aspires to be.

From the way-back time machine: "Remember that activity you did in second grade called 'tell?' I don't either. It's called 'show and tell' for a reason."

-----

Market analysis

Use this worksheet to start your market analysis.

February 26

Landing pages: for many of you, your first MVP

My first cut at a presentation template

February 28

BUSINESS PLAN SLIDES

10-MINUTE PRESENTATION SHOULD INCLUDE:

Introduction or summary of the business
Description of the problem that the business is trying to solve
Details about the offering (product or service); include information about the current stage of development
Intellectual property status (e.g., patents, trademarks, etc.).
Market analysis (market size, potential market size, key customers, target market, competition)
Competitive differentiation – what makes your business / idea unique?
Sales and marketing plan - how will you get to your market and close sales?
Operating strategy – how will the offering be developed and delivered?
Management Team (bios, relevant experience)
Financial highlights – cash flow, income statement, balance sheet (summary data needed for presentation).
Offering of the company – investment needed, use of funds

March 1-2 Startup Weekend

March 5-7 Week before spring break

March 5

Sign up your teams TODAY for the Aldag competition. Here is the link to sign up your team.

Team valuations; pro forma financials; ops; whatevers; let me know what you need my help on.

Here is an application of the Step-Up Method for an early-stage Door Dash.

March 7

Presenter Talking Points for Aldag Competition by Topic. This is a list of talking points you can refer to for each of the sections of the business plan judging criteria. You should think especially about how you will address IP in your presentations; I suggest you focus on the proprietary knowledge you've gained by "doing things that don't scale," things potential competitors wouldn't do due to resource or interest issues.

Important date: March 8 (Friday and start of your spring break...)

Complete the intent to participate form on the AEI web site
Complete the summary of your business idea information sheet located on the AEI website.

Non-GAAP metrics reported in LYFT S-1 document dated 3/1/19

March 12-14 Spring Break

March 19-21

Important deadline: March 18 - this deadline has been moved to March 19 (not kidding)

Submit your draft presentation - I have asked the organizers *how* you submit your drafts... it looks like this! Note the button on the far right for uploading draft presentations! (and clicking on the image directly below will take you to the business plan competition site)

Meanwhile... Here's a slides template that reflects the judges' criteria for evaluating your presentations. Use this to develop your drafts or, if you already created a draft, to refine your final as you see fit (it's your competition). You should use the slide template in conjunction with this "talking points for Aldag" doc.

Word to the wise: I would submit my team's draft presentation by the end of March 14 or 15; it's just a draft!

and here are the rules and guidelines for the presentations

March 19

Pitch Deck Deck cards, refining and polishing your presentations; what do you need help on? One of your team's conversations should be how you will make sure you will have someone covering your team at the Bryant Center at all necessary times (Round 1 presentation, afternoon if you are selected, awards ceremony if you are finalists)

March 21

Pitch Deck Deck cards, refining and polishing your presentations; what do you need help on? Finishing strong for the March 24 (Sunday by 11:59 pm) submission of your final presentation files.

March 26-28 aldag competition

March 24 (Sunday)

Final presentation due. All presentations will be loaded on computers ahead of time. Since Aldag is part of your grade for this course, please make sure you get your final presentation submitted by midnight of March 24 (or sooner). Otherwise...

March 26

ALDAG ALL DAY. Tactical advice is that you have everyone there at the sign-in time, then rotate team members throughout the day based on who's available versus who absolutely needs to be in class for something else.

The tentative day's schedule is:

8:00 a.m. - 12:00 p.m: Round 1 competitions
Noon - 1:00 p.m: Lunch and presentation
1:00 p.m. - 5:00 p.m: Second round (for teams that advance beyond the morning Round 1)
5:00 p.m. - 7:00 p.m: Awards ceremony

March 27

Thought it was today. Another example of me being wrong. Blah.

March 28

No class - last reflection surveys due March 29

Mr. Edward K. Aldag, Jr. shares his opening remarks at the 2018 competition. <Browse Aldag Competition Judging Criteria page). The competition will take place all day on March 26.

Video source: AEI.CULVERHOUSE.UA.EDU

April 2-4 and rest of semester

April 2 - 4

April 2

Discuss housekeeping for syllabus activities (all remaining assignments due by midnight, April 25):

formalize and submit results of your customer discovery interviews (conduct them if you did not already do so); send a written summary of these discovery interviews to mgt388bama@gmail.com with a representative list of people whom you interviewed (in other words a subset sample of those you interviewed).
revise your Aldag business plan slides as you see fit based on judges' comments (note: some comments and feedback may be bull$#!t based on what you learned from your customer discovery and other market research, so use your own judgment); then see point #5.
build out a full business model canvas for your new venture concept (CA post link to BMC slides here)
create and/or revise prototypes of your VP - the syllabus says you need to create at least two MVPs; what do you have? Send a video of your MVP in use and any relevant images (more is better; evidence, evidence, evidence) to MGT388bama@gmail.com.
see point #2: finalize your Aldag slides and send them to mgt388bama@gmail.com.

Discuss housekeeping for grades on Blackboard:

I still need to add categories for extra credit points for those of you whose pitches led to new venture teams AND for those teams that won in any category of the Aldag.

Discuss impressions and experiences from Aldag competition; blunt feedback. THANK YOU, teams, for all of your work in this competition!

And a possible activity for today's (4/2) class... Design Sprint on how to develop an Summer Entrepreneurship Academy to be hosted at The Edge in Tuscaloosa (possibility of $5,000 stipends and housing being bantied about...)

April 4

Optional team mentoring meetings in Alston 155 during normally scheduled lecture hours

April 9-11

Optional team mentoring meetings in Alston 155 during normally scheduled lecture hours (3:30 - 4:45); I won't be in town on April 11.

April 16-18

Optional team mentoring meetings in Alston 155 during normally scheduled lecture hours (3:30 - 4:45)

april 23-25

we done!

Optional team mentoring meetings in Alston 155 during normally scheduled lecture hours (3:30 - 4:45)

BONUS MATERIALS AS TIME PERMITS

Topics and activities

Formalizing your ventures (charters, LLC or C Corp?, and so on)

Blitzscaling

The unending chasm, and how to survive it. Andreessen-Horowitz -->

Every new geography is a new (and often very different) market
Fighting market incumbents might mean staying in the chasm indefinitely
Markets aren’t always as large as anticipated
Some markets will never become pull-based
The buyer in your market is very difficult to sell to

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