LARGEST MVP IN HISTORY (I’m pretty sure) GENERATES OUTSIZE CUSTOMER REVENUE AND INVESTOR INTEREST

Almost without a doubt, it’s the largest MVP in recorded history: more than 20 feet long, 10’ high and 10’ wide—2,000 cubic feet and 5,000 pounds in all. What’s more, the huge MVP has already recorded some $305,000 in sales from its first user and half of the seed round for a terrific startup team at “Block Party Suites.”

I first met co-founder Steve Gilman in my full-semester Lean LaunchPad class at Columbia Business School, where his passion for entrepreneurship stood out quickly. I was impressed with his clever work on his startup, his energy, his dedication to entrepreneurship, and a unique item on his resume: a former professional baseball player who, when injured, swapped his cap for an MBA seat. His co-founders, Adam Ward and Cody Slape, are also driven MBAs with a passion for building big products for big businesses.

But what was even more fun was an “office hours” discussion where we reviewed

a rough business plan he and co-founders had developed to provide unique services to the exploding tailgating market, and rough sketches of the MVP itself: a 20’ ocean shipping container converted into a portable open-air party center, complete with luxury furniture, a rooftop deck, big screen tv’s, team logos, and lots more.

Steve and his team, experienced tailgaters themselves, had tested their hypotheses about what end-users needed (end-users = college football tailgaters).  Through surveys and talking to tailgaters, they found need for an enhanced experience in the form of a turnkey solution with amenities not commonly found at tailgating parties.  Using a shipping container as temporary infrastructure, the founders converted the huge steel box into an outdoor living room—and tested it at a November ’14 launch party at AT&T Stadium during a Dallas Cowboys game.

I always admire founders who self-fund, and this team’s limited capital (30K among three co-founders) had to go towards a base tailgating suite model that could be easily produced and scaled. They partnered with local Dallas venues to put the MVP to work, soliciting end-users for feedback and iterating along the way—just as I’d taught Steve in class: hypothesis/test/learn/iterate, of course. (He got an A).

The MVP taught the team quite a bit:

  • Sports properties needed upgraded accommodations outside of the stadium to grow with the popularity of pre-game tailgating
  • Sponsors needed lots of room and electricity for signage to further engage consumers
  • Stadiums weren’t the primary prospects at all; sports properties and event planners were, they control the “street to seat” experience on gameday
  • Nobody wanted to buy the unit; leasing the unit for multiple events was the key
  • And a huge incremental revenue opportunity: providing catering, beer, and staff

Sports properties and event promotors emerged as the clear client segment: their loyal high-end customersseek innovative platforms and they can deliver access to the tailgating venues through existing relationships with the school decision-makers providing access. The same businesses control the assets for sponsorships, which can help mitigate the cost of the luxury suites or drive revenue for the sponsor packages by delivering further brand exposure.

The team’s final challenge was self-funding a capital intensive product with zero upfront investment. They overcame this with a minimum purchase commitment (based on a leasing model) and multi-year contract to ensure break-even on the first transaction—leasing the first lot of Suites to a Dallas-based sports property for almost two dozen events at a pricetag in the low hundreds of thousands!

The rest, as they say, is history: a solid pipeline of prospects and contracts pending, and a seed round that’s half-filled in less than sixty days. The team is striving to go national, putting suites in several key cities to reduce transportation time and cost. And three talented guys with grad school loans to pay have passed on solid job offers to launch what could well be a success as big as the next block party suite!

For your own private tour in Dallas, TX, visit www.blockpartysuites.com or contact my star student @steven@blockpartysuites.com.block party

Latin Startup Wars: MEXICO VS COLOMBIA…HOLA a startup war both sides will clearly win!

MEXICO CITY, JUNE 22—The most constructive war in Latin American history erupted with guns blazing this month: a “battle” for startup supremacy between Mexico and Colombia, two fast-growing startup nations in a friendly fight to launch thousands of startups. The first “shot” was fired in Mexico City on June 1, with a long-planned response the following week in Bogota, Colombia, where the so-called battle began in 2012.

Three years ago, the Colombian Ministry of Technology and Innovation(MINTIC) launched “apps.co,” a massive, ten-week startup training program that has now trained 960 startups in seven cities throughout the nation. The eight-week “virtual incubator” blends training, mentorship, and skill-building for entrepreneurs who arrive with a business idea and—when successful—graduate with an operating startup. The program’s rigorous methodology is based on the “Lean LaunchPad” method pioneered by Silicon Valley serial entrepreneur-turned-educator Steve Blank.

A 2012 Colombian pilot program designed and taught by yours truly–Blank’s co-author, Bob Dorf, saw more than 500 Colombian startups apply for 30 team openings. Three years later, more than a dozen of those are successful, growing tech-enabled businesses, and scores more successes have emerged from the 960 teams trained since that first successful program.

Teams receive indepth training in Blank’s Customer Development methodology, adapted for the Latin market and taught by Dorf. Each team quickly develops a “business model canvas,” outlining all the elements they believe will make their businesses successful—not just the product and its features, but the customer targets, marketing, pricing and distribution strategies and more. Rapid-fire customer discovery activities infuse the startup with feedback that drives iteration of every aspect of the business, often leading quickly to product launch and customer acceptance.

Mexico launches “LeanStartupsMX”

Observing the Colombian success, Mexico’s INADEM, a unit of its Ministry of Economy(similar to the American SBA) felt its tech entrepreneurs needed a similarly structured, ambitious program. On June 1, 32 startup teams, chosen from 696 applicants, joined 50 mentors in their first full week of intensive training.

The “war” is brewing with Mexico striving to train more teams than Colombia—a noble competition that should serve both countries’ entrepreneurial goals well.

During their first week, Mexican startup teams were trained to develop their initial business model, and to validate that model using customer discovery, competitive analysis and other techniques. Experienced entrepreneurs and academics recruited as mentors guide the progress of each team, while the mentors themselves receive parallel training to help scale the program.

At the end of week one of ten, the huge conference center at Mexico’s Anahuac University was strewn with energized yet exhausted Mexican entrepreneurs who’d taken their first steps toward building their tech or tech-enabled startups.

Next steps in Colombia

June 8 saw Colombia launching “stage two” of their apps.co program, in the planning for nearly a year. Based on its initial success, the MINTIC program is now expanding to 20 Colombian cities and seeking to train at least 1,000 more startup teams in the year beginning September, launched with a four-day training program for nearly 100 mentors and coaches. Alex Osterwalder, father of the business model canvas, trained new and refreshed new mentors on business modeling. Dorf then trained the mentors on how to use Customer Development to test and iterate the business model and turn the startup into a repeatable, scalable, profitable business.

This war will be won by both sides, as two ambitious Latin governments implement a local program and build local talent pools of coaches and mentors to develop many more startup successes in their emerging economies.

Bob Dorf is an allegedly retired serial entrepreneur and co-author of the bestselling Startup Owner’s Manual, now in 15 languages. Reach him at www.bobdorf.nyc. Learn more about Colombia at www.apps.co and LeanStartupsMX at www.leanstartupsmx.com

McDONALD’s TESTING 7×24 BREAKFAST, BUT NOT BEING A STARTUP, IT TOOK A DECADE! …customers told’em “breakfast all day” 10 years ago

Coming to San Diego, round the clock after ten years of pondering!

We often wonder why startups consistently out-innovate large, established companies. And while McDonald’s announcement this week that it’s testing round-the-clock breakfast is somewhat innovative and encouraging, it’s yet another reminder why innovation most often comes from startups, not big companies.

In this case, terrific customer discovery uncovered significant customer enthusiasm for “breakfast 7×24” just about a decade ago, when a discovery-oriented market researcher probed individual customers’ reactions to a bunch of new menu items the chain was considering. Stamford CT-based discovery expert O B Gray of graymattersmarketing.com, conducted dozens of face-to-face conversations with heavy, light, and occasional Mac attackers just about a decade ago. His findings found lukewarm enthusiasm—or less–for the proposed new items, yet a notable roar of customer enthusiasm for round-the-clock breakfast service.

“I thought it was a loud, clear signal from customers,” says the ex-P&G brand marketer who now takes most of his cues from customers directly, rather than from quantitative research studies. “I put the idea forward as ambitiously as I could, and pushed it hard.” Voila, a decade later…

What happened?

Nobody will ever know how many folks have been in lead marketing roles at McD’s since Gray delivered his report—or in the CEO seat for that matter. Typically, that’s one of many big company challenges. Second, courage, most likely drove the delayed decisionmaking. It’s even harder where every decision first has to travel through many management layers and only then does it go to the toughest judges of all, the thousands of McD franchisees. That, too, demands management courage since franchisees are often conservative and brutal, particularly when topline growth is slow or declining, as it’s been for a while at Mickey D’s.

The human factor adds even greater challenge. It’s awfully hard for a career-minded marketer to go out on a limb and turn a “new hamburger” research project into breakfast, and harder still for a series of committees, strategic planners, directors and bigshots to coalesce and agree to all invest “career capital” in this bold, different menu move, especially when the job at hand was “new entrees.”

According to McDonald’s press releases on the breakfast test, “it’s hard to cook McMuffins and burgers on the same grill(don’t they have two??),” and they’ve only just now noticed the increased consumer enthusiasm. Had legendary McD founder Ray Kroc been at the grill—in the “startup” days of long ago—no doubt that test would’ve been launched in ten days, not ten years.

That’s why most of the disruptive innovation comes from startups these days. They have no choice but to take chances, make bold moves, and innovate, since without meaningful innovation and customer-driven, agile pivots, startups simply die. And while “breakfast 7×24” is hardly disruptive innovation, it’s great to see the new Mickey D’s CEO making so many bold, game-changing attempts in his first few weeks on the job. Personally, I prefer a burger after noon, but the “jury” will decide whether this innovation is disruptive—defined here as turning the McDonald’s average unit sales up instead of down for a change. And I hope somebody at HQ buys O B Gray an Egg McMuffin!

SIX STARTUP “MUST DO’S” FROM TWO FABULOUS FOUNDERS

Dorf on Startups

Nobody asked me to vote on “entrepreneur of the year, but I voted anyway….

I coach more than 500 entrepreneurs a year, all over the world, up close and personal. Every time I meet new ones, I compare them to two people I’ve coached intermittently for about 18 months now. While their current company won’t ever give Google or Amazon a scare, David and Charlotte Cho exemplify the spirit, tenacity and smarts of great entrepreneurs.

Those who dream of startup success can learn a great deal from this married Korean-American couple. ( I have a cardinal rule: never co-found a company with somebody you sleep with or hope to sleep with, since that makes decision-making a lot harder. The Chos have successfully defied this.)

David is a student at Columbia Business School and a West Point graduate who served a combat tour in Iraq and commanded a 120-man light infantry…

View original post 723 more words

SIX STARTUP “MUST DO’S” FROM TWO FABULOUS FOUNDERS

Nobody asked me to vote on “entrepreneur of the year, but I voted anyway….

I coach more than 500 entrepreneurs a year, all over the world, up close and personal. Every time I meet new ones, I compare them to two people I’ve coached intermittently for about 18 months now. While their current company won’t ever give Google or Amazon a scare, David and Charlotte Cho exemplify the spirit, tenacity and smarts of great entrepreneurs.

Those who dream of startup success can learn a great deal from this married Korean-American couple. ( I have a cardinal rule: never co-found a company with somebody you sleep with or hope to sleep with, since that makes decision-making a lot harder. The Chos have successfully defied this.)

David is a student at Columbia Business School and a West Point graduate who served a combat tour in Iraq and commanded a 120-man light infantry company. Charlotte spent five years doing international PR for Samsung.

The results speak for themselves – their company, Soko Glam, launched quietly in early 2013. That year’s revenues were a scant $50,000. Early 2014 revenues quickly eclipsed $50,000 per month, then doubled and sometimes tripled. 2014 delivered truly amazing growth rate, with huge potential in 2015. As impressive as these numbers may be, it’s not what makes this dynamic husband and wife team so special. The Chos’s path to standout startup offers a lesson for all entrepreneurs.

  1. Discover a distinct niche opportunity com sells Korean skincare and beauty products to American women. It’s a hot category Charlotte knew well, and through friends and referrals, the Chos were able to bring a diverse product line to the U.S. market at terrific gross margins. Over 40% of their fast-growing monthly revenues come from repeat customers—a powerful vote of confidence in their product and customer service.
  1. Use bootstrapping and reinvestment as financial fuel Started with credit card borrowings, savings and “on the cheap” to conserve precious cash, Soko Glam has grown by following customers’ response to prices, specials, etc. Customer feedback drives the bus so to speak, and nearly every dollar earned is reinvested in the business since day one. They didn’t waste time pitching to investors; instead they focused on building a terrific business.

Realistically speaking, few if any investors would have backed the Chos in the summer of 2013, no matter how impressive they are. Investors like proof, results and revenues, yet most entrepreneurs waste much time chasing venture or angel investments with no proof of success whatsoever. 

  1. Find the “magic key:” no-cost customer acquisition Charlotte is not just a PR pro, she’s also blessed with beauty. As the self-appointed spokeswoman for Korean beauty products, Charlotte has been featured in Allure, Lucky, Elle, Refinery29 – showcasing Soko Glam approved products and giving skincare advice to women. It’s one of dozens of PR homeruns that allow them to avoid expensive banners or Adwords.

 Too many entrepreneurs haven’t a clue of how they’ll do the startup’s toughest job of all — finding customers. Without a lowest-possible customer acquisition cost, most startups die at the starting line. 

  1. Channel entrepreneurial ingenuity The Chos started adding product lines as they saw their first successful months of sales. One day, a huge shipment arrived—larger than expected—at their one bedroom “world headquarters” where the warehouse was the living room and the office was the bedroom. The shipment just wouldn’t fit in the apartment. Most entrepreneurs facing that challenge would quickly rent a warehouse or a storage locker. But the Chos’ solution was to sell the furniture and make “couches” out of merchandise cases covered with bedspreads and the like.

They knew it was too early to declare victory, and that entrepreneurs always need to shepherd their most important asset of all — cash. Six months later, they’re optimizing cash and human resources by outsourcing their fulfillment operation.

  1. Possess boundless energy and determination When I first met David and Charlotte, they were going without sleep regularly, packing shipments until wee hours of the morning and then turning to the real work of building and managing a growing business. Over time I convinced them to outsource their shipping and use their far greater talents for more important, higher value tasks like sales, marketing and operations.

To learn more about social media, David took an internship at Facebook, on top of his massive to-do list as cofounder. The couple spent half of their four-day holiday vacation answering customer service questions in real time during the peak holiday season. It’s easy to say “entrepreneurship is hard,” but it’s always a pleasant surprise to see entrepreneurs who understand it and work tirelessly, relentlessly, day after day. That’s what makes great businesses.

  1. Love what you do Every time I see the Chos, they’re full of energy, ideas, optimism and more ideas, while also quite proud not only of their achievements, but of the exciting products they’re bringing to American women.

 

Entrepreneurs often forget there are many diverse ingredients to building a great, enduring and profitable business. While Soko Glam is barely 2 years old, David and Charlotte are on to something big. Soko Glam may never rival Estee Lauder or Revlon, but it offers its founders the greatest rewards of entrepreneurship: challenge, independence, excitement, fun, and…cash!

Is The Startup Bubble about to Burst? Too much “tameness, lameness, sameness”

by Bob Dorf(as published at cnn.com)

There’s a tech bubble and no one knows when exactly it will pop. We have sky-rocketing valuations like Airbnb ($13 billion), Uber ($41 billion), Snapchat ($10 billion), Dropbox ($10 billion) and so on.

College students think tech is sexy and just about everyone seems to want to be called an entrepreneur.

But there’s one problem: The startup world is cluttered with “wantrapreneurs” who fail to recognize that success demands a tenacity, resiliency and energy unlike any traditional job short of combat infantry soldier or SWAT team member.

Many enthusiastic founders who finish startup training and acceleration programs disappear quickly and quietly from the scene as customers yawn about their big bold ideas. These entrepreneurs aspire to be the next Mark Zuckerberg, and upon learning such a goal is as ephemeral as winning the lottery, their zeal wanes quickly.

One top venture capitalist remarked that we see only about a dozen great companies emerge every year in the U.S. Too often, they’re doing boring and un-techy things like preventing or curing diseases, or solving complex big data challenges that just aren’t as sexy or well-publicized as the next hot-or-not dating app.

As the job market recovers, hopefully, more of those wannabes turn to good old-fashioned W2 jobs, with predictability, stability and health insurance. It’s a place where 99% of people belong. The lesser entrepreneurs should go out and find regular jobs, clearing the clutter for those with the idea, drive and overwhelming ambition to build truly great companies. Because really, we don’t need more startups that are lame, same and tame.

 Read the entire article at cnn.com here: http://www.cnn.com/2015/01/14/opinion/dorf-startups-entrepreneurs/
EXPAND IMAGE

STARTUPS IN BULGARIA BULGING (sorry :) AT THE SEAMS

Yes, there are still more than a few places where startup ecosystems are in their infancy. But a few days in Sofia Bulgaria show that the Bulgarian baby is clearly growing up, healthy and fast. It’s got many but by no means all of the key ingredients: passionate, ambitious entrepreneurs and many richly talented engineers and developers. And it has the support of the EU, and of the turbulent Bulgarian and US governments. Both the US Ambassador to Bulgaria, Marcie Reis and the Secretary for Healthcare and Science with the Office of the President of Bulgaria, Anna-Marie Vilamovska, (two powerful women, I might add), attended, spoke, and promised their continued support to building the Bulgarian ecosystem faster and stronger.

Most important, speaking of babies, Bulgaria has its very first incubators, largest of which—called Eleven—I got to visit and meet up close. Lots of the usual smartphone apps and ordinary startups that’ll never be Google, especially in a country with a smaller population than New York City, not to mention a language spoken nowhere else. Using EU investment funds, the incubator has hosted and funded (with anywhere from 25,000 to a max of 200,000 Euros). The valley-like facility was electrifying and energetic. And a small cadre of its earliest startups have graduated to further funding rounds already.

Slightly later-stage funding is provided by another bold team at LauncHub, founded in 2012 by several of Bulgaria’s first successful exiting entrepreneurs (yes there have been a few lovely exits). Seven partners travel throughout the region, vetting startups, funding and then guiding startups from Serbia, Croatia, Greece, and half a dozen countries that are otherwise underserved by startup financing. They’re building bridges to Series A VCs in London and Moscow, and clearly have several candidates already worthy of serious consideration. LaunchHub was conceived by two such talents (Lyuben Belov and Todor Breshkov) who lead the shop.

Most impressive to me were the 3-minute pitches by four founders, each of whom was solving a serious “hard tech” problem ranging from serious, intriguing enterprise software to scalable signal compression and more.

Several startups were so clearly innovative in Eastern Europe, if not the Valley, that they’re already signing customers from far beyond Bulgaria’s borders—crucial for startup survival in such a small, cloistered market. And their investors are helping with the biggest obvious weakness in Bulgaria—the lack of strong sales and digital marketing skills, which are growing slowly and need to accelerate.

This emerging ecosystem is still missing a lot, not the least of which is a better Bulgarian economy. But at the ecosystem’s core I found a surprising organization: Junior Achievement. JA, as we know it in the US, seemed always rather benign to me and focused on junior and senior high school entrepreneurship like bake sales and cafeteria school supply tables.
In Bulgaria, Junior Achievement has grown up and immersed itself right in the middle of the startup community: offering training, community-building, and programming, and also leading the 500-person startup conference they brought me over to teach and lecture at. Headed by a driven, entrepreneurial wonder woman, Milena Stoycheva, and a team of a dozen, JA has multiple parallel entrepreneurial programs and projects under way all the time. They’re generously supported with cash and volunteers from HP, Citi, Microsoft, and more, and JA is as ambitious and entrepreneurial as any of the startups it serves. Five years ago it was as dormant as any JA I’d ever seen. Today it’s in the eye of the entrepreneurial storm.

While Silicon Valley has nothing to worry about, don’t be surprised if it has a small, strong Eastern European cousin that’s all grown up in another year or two! Wow!