Category Archives: Oregon State University

Restart – Both the Blog and our Program

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I’m back from a break in blogging with renewed optimism and an excellent new staff at the Advantage Accelerator. In reviewing our program over the past two years, I note we’ve had a number of successful ventures, but still find issues relying solely on Lean Launch Pad methodology.

The greatest issue is the time it takes entrepreneurs to acquire a product market fit. Product market fit is vital because it shows customer validation and the discovery of a repeatable sales process. In order to develop a successful fit, the entrepreneur must focus on finding a reasonably sized market for growth.

Our current Accelerator program runs five months and operates as an expanded version of the Lean Launch Pad. Many entrepreneurs successfully complete the Accelerator program in record pace; others struggle with product market fit that may cause a client to struggle. Finding the best response to the iteration or pivot while learning new skills can cause the most seasoned veterans of startup cultures to stumble.

The Lean Launch Pad model requires that product market fit must be validated. If product market fit is false, then the operational side of the startup is invalid. Moving forward into the execution side of the canvas would be wasteful based upon an invalid product market fit.

After considerable thought, we will now be dividing our current five-month accelerator program into two parts: “Accelerate” and “Launch!” These programs will be offered in addition to our existing pre-Accelerator program, “Iterate!”

Iterate is a pre-accelerator program that is focused on problem/solution fit. The program has four, 2-hour workshop sessions with outcomes based upon entrepreneurial thinking, value proposition, an introduction to the Business Model Canvas as a tool, a basic understanding of the customer discovery process, and an introduction to hypothesis testing and validation. These are all necessary tools designed to help understand the hard work in the process of becoming an entrepreneur.

The program homework is optional (hint: but it is a great screening tool for us) and all team members are strongly encouraged to attend all workshops. In order to move into the next phase, Accelerate, and gain acceptance into the Accelerator, there is an expectation of progress, hustle, and “grit.” These qualities are not the only qualifications for acceptance into the Accelerator, but they are helpful considerations in our decision-making.

Accelerate is focused on product/market fit. The objectives of the program are to confirm the entrepreneurial opportunity, define and build a minimal viable product, validate product market fit, complete a first sales call and develop a repeatable sales model, complete building the team, and to be ready to execute and build operations. The program is eight weeks and is backed with significant resources including our intern program, mentors, and first looks by our Executives in Residence and early investors.

Entrepreneurs may repeat the Accelerate program twice if an iteration or pivot is required. A major focus of this program is to reduce the uncertainty of the startup through validation of product/market fit. Successful clients may move forward to the Launch! Program.

Launch is a five-month program focused on taking the company to the build and sell level. There are two major goals: Fulfillment of build and execution on an operation growth plan, and realization of a repeatable sale process. Each month’s program is focused on a specific topic toward a deep dive into a milestone based growth plan. There is work for each week of the program that starts with the introduction of a topic, private coaching sessions, a cohort workshop and roundtable with the last session of each month being a formal Advisory Board session that consists of our senior programming staff, Executives in Residence and any mentor or advisor to the company.

Overall, we feel that separating the completion of product market fit until the concept is validated makes more sense than attempting to move on to build a company with less certainty of success.

Recognizing Opportunities

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The Oregon State Advantage Accelerator is not just an accelerator. We are not an incubator. We are a hybrid—a combination of both at the same time. Both accelerators and incubators provide important services, education and community to entrepreneurs. The major differences between the two is that incubators tend to provide office space and companies can stay there much longer than the typical three month accelerator stay. University research takes a significant investment of time, money and grit. Everyone dreams of the overnight success, but in fact original research takes years of hard work and persistence.

Working with our aspiring entrepreneurs—particularly those in the very early stages—requires patience. We must introduce key business components and enlighten scientists to the commercialization process. This is critical because almost all grants (federal, state or private) now require a commercialization plan that is focused on market-based application. Grant acceptance is determined by the marketability of the research.

We also accept later stage companies. These businesses are taken back to the beginning, to their roots. All clients must make certain that each opportunity is examined thoroughly. An opportunity has the qualities of being attractive, durable, and timely and is anchored in a product or service, which creates or adds value for its buyer or end user.

Opportunity is the basis for the company’s existence. At the OSU Advantage Accelerator, we have our entrepreneurs scrutinize as many possible opportunities as possible. With each potential opportunity we consider a number of variables, and for each variable we examine one set of opportunities for the business aspect and another for the technology itself.

For the business aspects, each opportunity is compared to:

Total market, addressable and reachable

The major benefits for each opportunity

Ease of entry

Cost of entry

Adoption rate and ease of customer reach

Key drivers of change

Channels, both physical and digital

Intellectual property or other market protection

Competitive response

Price/margins (price re-frames customers)

Potential early adopters

Strategic partners

Application platform, early features leading to a minimal viable product

Unique Value Proposition (What really does make you so special?)

List the unknowns, questions to explore, and the decision making process for the targeted customer in each opportunity.

On the technology side, the focus remains on commercialization but seeks the answer to other important questions:

Is the inventor or good substitute readily available to join the team?

What is the amount of the pain for our solution?

How far along is the technology? Is it prototype ready?

What are customers doing now? Are there other substitutes?

What is the industry’s infrastructure?

What is the regulatory environment?

Going back to the beginning helps to cut down on pivots during and after working through a business model canvas exercise. A pivot is a substantive change to one or more of the nine business model canvas components. Pivots may cost money.

Not pivoting when appropriate may also cost the business. Going through an opportunity recognition exercise before working on a business model canvas saves time and money. Is it possible to choose the better option earlier on? I know it is and our clients at the Advantage Accelerator know it as well.

We teach our clients to follow the three D rule: Be Daring, be Different and be Delightful (More on the three D’s in a future post). Test the opportunities as well as the nine elements of the canvas and the answers to each hypothesis will be found. These answers will eliminate and/or reduce the pivots when starting the new great entrepreneurial venture.

Start with the Business Model Canvas – Not Yet

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We at the Oregon State University Advantage Accelerator are big believers in the Business Model Canvas methodology. We use the Canvas, we also use software for the Canvas, and we make our clients read the books by Steve Blank and Alex Ostervalder. However, the fact is that Canvas may put a technology entrepreneur at a disadvantage before he or she gets out of the lab.

Our clients at the University tend to be in the early stages of their development. Most of our researchers are doing cutting edge research. The entire set of potential opportunities for these clients have not yet been examined. Under normal circumstances, using the Canvas, clients would start with one or two potential target markets then try to validate the opportunity.

I suggest that this may not be the best way to begin. One of the tools, we use at our Accelerator is the opportunity matrix. The founder or Principal Investigator (PI), my co-director, mentor(s), intern(s), and I brainstorm on the possibilities of applications and industries in which this innovation can be productized. We also look at the numerous variables that could affect market entry. This tool was originated by the strategist Igor Ansoff and there are many versions found online.

The matrix provides focus and guides decision making prior to a long course of validating tests as required by Canvas methodology. Along the y-axis, we list the potential products and/or industries in that the innovation may be successful. Along the x-axis, we list variables such as size of market, ease of entry, competitive response and so on. The list of variables can be quite large and is on my version. The purpose is to determine through online research, phone calls with industry experts, which industry or market should be the top areas of concentration, which then becomes the business focus. This leads to a much clearer start on the Canvas.

The technology also needs to be checked for the opportunity as well. We have a great spreadsheet that checks on the viability of commercialization for the technology. It is similar to the opportunity matrix in that the various markets or projects are listed on the y-axis and a number of strategic questions about commercialization of technology are listed with weighting scores along the x-axis. This is another easy way to envision the technology side of the opportunity. Send me a note and I will send you either matrix.

These pre-cursors to the validating steps in Canvas will shorten the steps from hypothesis to validation testing.

It is highly likely that an entrepreneur will save time and money by doing the secondary research up front. This also creates a more focused entrepreneur who can easily begin the primary research work on Canvas.

There are a number of other activities that we take our clients through before beginning to work on Canvas. But overall, in the early assessment stages, we are seeking feasibility. Is the technology feasible within the means of customer wants? Does the business proposition make sense both in terms of its ability to succeed and financial viability?

Overall the big questions in this stage are:

  • Do I have a technology that has potential applications in the commercial market?
  • Are there customers and a market of sufficient size to make the concept for this technology viable?
  • Based on estimates of sales and expenses, do the capital and other resource requirements to start make sense? And;
  • Can you create an appropriate start-up or management team to execute the concept?

Just like in the Canvas, the answer to all the above questions is not that you believe the response, but rather, I know my response is true and here is why.

This early work provides sufficient data to understand the industry, examine an early value chain and process flow, understand your potential first and/or second market, organize yourself for validation of market(s) and get an early justification of pricing.

As I stated above, the secondary research requirements will enhance the primary research efforts required by Canvas. Go in smarter and ask better questions in order to obtain better results.