Customer Discovery: The Search for Product/Market Fit. 2 Minutes to See Why

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I-Corps @ NIH – Pivoting the Curriculum

We’ve pivoted our Lean LaunchPad / I-Corps curriculum. We’re changing the order in which we teach the business model canvas and customer development to better-fit therapeutics, diagnostics and medical devices.Udacity canvas and value prop

Over the last three years the Lean LaunchPad class has started to replace the last century’s “how to write a business plan” classes as the foundation for entrepreneurial education. The Lean LaunchPad class uses the three “Lean Startup” principles:

  • Alexander Osterwalders “business model canvas” to frame hypotheses
  • “Customer Development” to test the hypotheses outside the building and
  • “Agile Engineering” to have teams prototype, test, and iterate their idea while discovering if they have a profitable business model.

Teams talk to 10-15 customers a week and make a minimum of 100 customer visits. The Lean LaunchPad is now being taught in over 100 universities. Three years ago the class was adopted by the National Science Foundation and has become their standard for commercializing science. Today the National Institutes of Health announced their I-Corps @ NIH program.

The one constant in all versions of the Lean LaunchPad / I-Corps class has been the order in which we teach the business model canvas.

Value Propositions and Customer Segments are covered in weeks 1 and 2, emphasizing the search for problem/solution and then product/market fit. Next we teach Distribution Channels (how are you going to sell the product) and Customer Relationships (how do you Get/Keep/Grow customers) and Revenue Streams (what’s the Revenue Model strategy and pricing tactics.) Finally we move to the left side of the canvas to teach the supporting elements of Resources, Partners, Activities and Costs.

current teaching order

Teaching the class lectures in this order worked great, it helped the teams understand that the right-side of the canvas was where the action was. The left- hand side had the supporting elements of the business that you needed to test and validate, but only after you made sure the hypotheses on the right were correct.

This lecture order was embedded in the Udacity Lectures, the syllabi and educators guide I open-sourced. Hundreds of teams in the NSF, and my Stanford, Berkeley, Columbia, and UCSF classes learned to search for a repeatable and scalable business model in this way.

It’s consistency was the reason that the NSF was able to scale the I-Corps from 15 to 30 University sites.

So why change something that worked so well?

Rationale
Last fall at UCSF we taught 125 researchers and clinicians in therapeutics, diagnostics, medical devices and digital health in a Lean LaunchPad for Life Sciences class. While the teaching team made heroic efforts to adapt their lectures to our “standard” canvas teaching order, it was clear that for therapeutics, diagnostics and medical devices the order was wrong. Hypotheses about Intellectual Property, Reimbursement, Regulation and Clinical Trials found on the left side of canvas are as, or more important than those on the right side of the canvas.

I realized we were trying to conform to a lecture order optimized for web, mobile, hardware. We needed to cover Intellectual Property, Reimbursement, Regulation and Clinical Trials a month earlier in the class than in the current format.

The National Institutes of Health has adopted our class for its I-Corps @ NIH program starting this October. Most teams will be in therapeutics, diagnostics and medical devices. Therefore we’re going to teach the class in the following order:

1) value proposition, 2) customer segments, 3) activities, 4) resources, 5) partners, 6) channel, 7) customer relationships, 8) revenue/costs

LS Suggested Order simple

I-Corps @ NIH Lecture Order Details
Customer Segments change over time.  CROs or Payers may ultimately be a resource, a partner or a revenue source, but until you get them signed up they’re first a customer. Your potential exit partners are also a customer. And most importantly, who reimburses you is a customer. (You get an introduction to reimbursement early here, while the details are described later in the “Revenue” lecture.)

Activities are the key things you need to do to make the rest of the business model (value proposition, distribution channel, revenue) work. Activities cover clinical trials, FDA approvals, Freedom to Operate (IP, Licenses) software development, drug or device design, etc.

Activities are not the product/service described in the value prop, they are the unique expertise that the company needs to deliver the value proposition.  In this week we generally describe the business rationale of why you need these. The specifics of who they are and how to work with them are covered in the “Resource” and “Partners” lectures.

Resources - Once you establish what activities you need to do, the next question is, “how do these activities get accomplished?” I.e. what resources do I need to make the activities happen. The answer is what goes in the Resources box (and if necessary, the Partners box.) Resources may be CRO’s, CPT consultants, IP, Financial or Human resources (regardless of whether they’re consultants or employees.)

Partners are external resources necessary to execute the Activities. You’ve identified the “class of partner” in the Resources box. This lecture talks about specifics – who are they, what deals work with them, how to get them, how to work with them.

Customer Relationships is what we think of as traditional sales and marketing; assembling a SAB, getting the KOL’s, conferences, articles, etc.  Customer Relationships answers the question, “How will we create demand and drive it to our channel?”

Suggested Order

We think we now have a syllabus that will better fit a Life Science audience. Once the syllabus stops moving around we’ll open source it along with the educators guide this fall.

Lessons Learned

  • The Lean LaunchPad class has started to replace the last century’s “how to write a business plan” classes
  • The lecture order emphasizes testing the right-side of the canvas first
  • That works for almost all markets
  • However, for life sciences hypotheses about Intellectual Property, Reimbursement, Regulation and Clinical Trials are critical to test early
  • Therefore we created a more effective lecture order for Life Sciences

Why Lean May Save Your Life – The I-Corps @ NIH

Today the National Institutes of Health announced they are offering my Lean LaunchPad class (I-Corps @ NIH ) to commercialize Life Science.

There may come a day that one of these teams makes a drug, diagnostic or medical device that saves your life.

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Over the last two and a half years the National Science Foundation I-Corps has taught over 300 teams of scientists how to commercialize their technology and how to fail less, increasing their odds for commercial success.

After seeing the process work so well for scientists and engineers in the NSF, we hypothesized that we could increase productivity and stave the capital flight by helping Life Sciences startups build their companies more efficiently.

So last fall we taught 26 life science and health care teams at UCSF in therapeutics, diagnostics and medical devices. 110 researchers and clinicians, and Principal Investigators got out of the lab and hospital, and talked to 2,355 customers, tested 947 hypotheses and invalidated 423 of them. The class had 1,145 engagements with instructors and mentors.NIH I Corps logo

The results from the UCSF Lean LaunchPad Life Science class showed us that the future of commercialization in Life Sciences is Lean – it’s fast, it works and it’s unlike anything else ever done. It’s going to get research from the lab to the bedside cheaper and faster.

Translational Medicine
In life sciences the process of moving commercializing research –moving it from the lab bench to the bedside – is called Translational Medicine.

The traditional model of how to turn scientific discovery into a business has been:
1) make a substantive discovery, 2) write a business plan/grant application, 3) raise funding, 4) execute the plan, 5) reap the financial reward.

For example, in therapeutics the implicit assumption has been that the primary focus of the venture was to validate the biological and clinical hypotheses(i.e. What buttons does this molecule push in target cells and what happens when these buttons are pushed? What biological pathways respond?) and then when these pathways are impacted, why do we believe it will matter to patients and physicians?

We assumed that for commercial hypotheses (clinical utility, who the customer is, data and quality of data, how reimbursement works, what parts of the product are valuable, roles of partners, etc.) if enough knowledge was gathered through proxies or research a positive outcome could be precomputed. And that with sufficient planning successful commercialization was simply an execution problem. This process built a false sense of certainty, in an environment that is fundamentally uncertain.Current tran med

We now know the traditional translational medicine model of commercialization is wrong.

The reality is that as you validate the commercial hypotheses (i.e. clinical utility, customer, quality of data, reimbursement, what parts of the product are valuable, roles of CRO’s, and partners, etc.,) you make substantive changes to one or more parts of your initial business model, and this new data affects your biological and clinical hypotheses.

We believe that a much more efficient commercialization process recognizes that 1) there needs to be a separate, parallel path to validate the commercial hypotheses and 2) the answers to the key commercialization questions are outside the lab and cannot be done by proxies. The key members of the team CEO, CTO, Principal investigator, need to be actively engaged talking to customers, partners, regulators, etc.

outward facing

And that’s just what we’re doing at the National Institutes of Health.

Join the I-Corps @ NIH
Today the National Institutes of Health announced the I-Corps at NIH.

It’s a collaboration with the National Science Foundation (NSF) to develop NIH-specific version of the Innovation-Corps. (Having these two federal research organizations working together is in itself a big deal.)  We’re taking the class we taught at UCSF and creating an even better version for the NIH.  (I’ll open source the syllabus and teaching guide later this year.)

The National Cancer Institute SBIR Development Center, is leading the pilot, with participation from the SBIR & STTR Programs at the National Heart, Lung and Blood Institute, the National Institute of Neurological Disorders and Stroke, and the National Center for Advancing Translational Sciences.

NIH Uncle Sam smallThe class provides real world, hands-on learning on how to reduce commercialization risk in early stage therapeutics, diagnostics and device ventures. We do this by helping teams rapidly:

  • define clinical utility now, before spending millions of dollars
  • understand the core customers and the sales and marketing process required for initial clinical sales and downstream commercialization
  • assess intellectual property and regulatory risk before they design and build
  • gather data essential to customer partnerships/collaboration/purchases before doing the science
  • identify financing vehicles before you need them

Like my Stanford/Berkeley and NSF classes, the I-Corps @ NIH  is a nine-week course. It’s open to NIH SBIR/STTR Phase 1 grantees.

The class is team based. To participate grantees assemble three-member teams that include:

  • C-Level Corporate Officer: A high-level company executive with decision-making authority;
  • Industry Expert: An individual with a prior business development background in the target industry; and
  • Program Director/Principal Investigator (PD/PI): The assigned PD/PI on the SBIR/STTR Phase I award.

Space is limited to 25 of the best teams with NIH Phase 1 grants. Application are due by August 7th (details are here.)

If you’re attending the BIO Conference join our teaching team (me, Karl Handelsman, Todd Morrill and Alan May) at the NIH Booth Wednesday June 25th at 2pm for more details. Or sign up for the webinar on July 2nd here.

This class takes a village: Michael Weingarten and Andrew Kurtz at the NIH, the teaching team: Karl Handelsman, Todd Morrill and Alan May, Babu DasGupat and Don Millard at the NSF, Erik Lium and Stephanie Marrus at UCSF, Jerry Engel and Abhas Gupta, Errol Arkilic at M34 Capital and our secret supporters; Congressman Dan Lipinski and Tom Kalil and Doug Rand at the OSTP and tons more.

Lessons Learned

  • There needs to be a separate, parallel path to validate the commercial hypotheses
  • The answers to commercialization questions are outside the lab
  • They cannot be done by proxies
  • Commercial validation affects biological and clinical hypotheses

Listen to the blog post here: 
Download the post here

Innovating Municipal Government Culture

D.R. Widder is the Vice President of Innovation and holds the Steve Blank Innovation Chair at Philadelphia University. He’s helping city government in Philadelphia become more innovative by applying Lean startup methods and Philadelphia University’s innovation curriculum. I asked him to share an update on his work on teaching lean techniques to local governments.

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This February Philadelphia University and the City of Philadelphia founded the Academy for Municipal Innovation (AMI). Our goal is to foster innovation principles and practice in local government by changing the way government employees think about innovation and act on their ideas. We just graduated the inaugural class.  Here’s the story of our journey.

Inaugural Class Academy of Innovation Management

The Academy for Municipal Innovation has come out of collaboration between Philadelphia University and the City of Philadelphia. Soon after I came to PhilaU as the chief innovation officer, I met Adel Ebeid, who was newly appointed as Chief Innovation Officer for the City of Philadelphia. We bonded over our similar challenges, as Adel was only the second chief innovation officer in city government and I was one of the first chief innovation officers in higher education.

Building a Government Innovation Curriculum
The Academy for Municipal Innovation curriculum is built on Philadelphia University’s distinctive approach to innovation education – it’s collaborative, multidisciplinary, and engaged in the real world. The curriculum draws from Philadelphia University’s design, engineering, and business disciplines, as all are needed to make innovation relevant in the government.

Philadelphia University Undergraduate Curriculum

Philadelphia University Undergraduate Curriculum

The program is built around five core innovation practices that we teach:

  1. Integrated Design Processes – The process of opportunity finding, innovation and problem solving
  2. Business and Operations Models – How to describe, design, challenge, and evaluate innovation
  3. Systems Thinking – Methods for gathering and mapping out all stakeholders and influences surrounding an issue and solution
  4. Research Methods – How to find actionable insights and ask the right questions.
  5. Innovation Leadership – How to develop innovative teams and culture.

We took this these core innovation practices in the form that has worked at the undergraduate level, and adapted the processes and content for the working professional in the government.

The Academy for Municipal Innovation (AMI) curriculum
We deliver the class to government employees in an Executive Ed format comprised of seven 4-hour sessions.

Each class is a mix of theory and practice. A key design principle is that each session includes at least one tool that participants can use the very next day at work, so they can make it real immediately. For example, simple brainstorming techniques like “Yes, And” and “Silent Brainstorming” were put to use the same week they learned them.

We select one common theme that runs through all the classes for continuity, and they build upon it as they go. The theme for the pilot class was “How can the city better communicate and advance innovative ideas”. We built on this theme teaching the students opportunity finding, concept development, stakeholder mapping, systems dynamics, research, and business models perspective, culminating with a capstone workshop where they bring it all together.

The strategy is to take participants from across the full range of city organization chart to seed the culture change. The pilot class (we call them the Pioneers) learned innovation principles and tools, and will bring them back to their groups and spread the word. For example, a subset of the class self organized around how to better service businesses starting and operating in the city. They used the capstone to pilot a process that they plan to take back to their organizations and implement at scale.

Scaling the Academy for Municipal Innovation
We see the Academy for Municipal Innovation scaling in three dimensions:

  1. Culture – graduates become change agents in their home groups, and change their group culture locally, amplifying the impact of each graduate
  2. Depth – The certificate program can be expanded into courses for credit, and ultimate a master’s degree in innovation in government.
  3. Reach – As we move out of pilot, we will offer this program to other city governments (and other levels of government). Success in Philadelphia will make us a flagship for innovation at the city level.

Academy for Innovation Management scaling strategy

Lessons Learned

  • The bar is low but the need, and receptiveness is high for government innovation. The students in the Pioneer class have actively challenged ideas and assumptions, and are already applying what they have learned in their work. Today.
  • Creativity, collaboration, and critical thinking skills transcend context, age, and pre-existing knowledge. These skills are teachable/learnable and no matter how good you are, you can get better.
  • Leadership buy-in to innovation is that much more critical to success in government contexts.
  • Government doesn’t get to ‘opt-in’ to problem solving or choose which problems it will tackle. The government innovates with the hand it is dealt to a greater extent than the private sector.
  • The scale of a city as a building block is compelling for change and social impact. It is less complicated and with less inertia than the state and federal level, making the prospect of change more manageable.
  • “Municipal Innovation” might be an oxymoron to the cynic, but cities have scope, and levers of influence, that industry does not. Changes in policy, regulations, civic engagement, unique partnerships, social programs, and different funding mechanisms are all tools available for the municipal innovator.
  • The ‘boot camp’ experience creates a new communication network. Our pioneer class formed strong bonds learning new things together, in a new and intense environment. In addition to traditional communication, the closely bonded students can reach across the silos directly to each other, built on the relationships formed in class.

Working with the City of Philadelphia on Academy for Municipal Innovation has left me exhilarated. The city leadership, and members of this pioneer class, are committed to real innovation in government. They are taking on systems highly resistant to change, with diverse stakeholders in intricate relationships, under public scrutiny and political complexities. The magnitude of the challenge and their commitment is inspiring.

If you would like to find out more, click here

Download the podcast here

New Lessons Learned from Berkeley & Stanford Lean LaunchPad Classes

Our Stanford and Berkeley Lean LaunchPad classes are over for this year, and as usual we learned as much from teaching the teams as the teams did from us.

Here are a few of the Lessons Learned from these two classes.

Have each team talk to 10 customers before the class starts
Each year we learn how to move more of the Lean LaunchPad class logistics outside our classroom so teams have more time for in-class learning.

A few years ago, we moved the formation of teams’ to before the class started and in doing so, saved a week of what normally be an in-class time activity. To make this happen, we hold three “information sessions” two weeks apart before the class starts. In these “info sessions” we describe the purpose of the class, and then let students mix, meet and form teams. During this pre-class time we share a Google doc where students who have ideas can find other team members, and students without an idea can find a team that matches their skills and interests. Application and admission to the class is by interview with a fully formed team.

Info session announcement

Info session announcement

The next thing we learned is to make applying to the class an integral part of the learning process. Teams apply by filling out both a business model canvas and a “competitive petal slide.” Having the teams do this accomplishes three things.  First it forces the students to read and understand “what’s a business model canvasbefore they even come to class.

Freewire application

Team Application: Business Model Canvas

Second, the competitive slide enforces a modicum of due diligence on the product and market. (We got tired of knowing more about each team’s market by doing a Google search as they presented. Now it’s their job.)

Farmsense competive slide

Team Application: Competitive “Petal” Slide

Finally, having teams spend time on the canvas and competition as part of the application process saves weeks of what would normally be an in-class activity (and as a bonus gives the team a heads-up about the difficulty of the class and shows whether they’re serious about the class or just shopping.)

This year we learned to raise the bar once again.  Could we get the teams to come into class having already talked to 10 customers? Instead of using the first class to have teams just present their business model canvas, this time the team’s first presentation would be about what they learned outside the building about their value proposition. (We pointed them to our tutorials on customer discovery and how to conduct customer interviews but didn’t expect them to be experts on week 1.)

SignUP week 1

1st week team title slide – 11 interviews before class started

We did an A/B test by requiring our teams in one school do this while not requiring it for the teams in the other school. The result?  Teams that had to talk to customers before the class hit the ground running. There was a substantive difference in team trajectory and velocity that continued throughout the quarter. The amount of learning between the two felt quite different. While there may have been other factors (team selection bias, team make up, etc.), we’ll now make this an integral part of all the classes.

Have each team put the number of Mentor interactions on their weekly title slide
The second innovation this year involved mentors. Each team is assigned a mentor as a coach. We’ve been trying to figure out how to make mentor engagements with their teams a regular rather an adhoc activity. While we have required the teams to add a summary of any mentor interaction to their LaunchPad Central narrative, we felt we didn’t have sufficient high-level visibility for these essential interactions.

GiveModo Class 8

But this year, a seemingly minor change to the teams’ weekly cover slide had an important impact. As teams present each week, their cover slides show the number of customers interviewed for that week (>10) along with the cumulative customers interviewed. This year we added one more metric for their cover slides– the number of mentor interactions for that week (>1) along with the cumulative number of mentor interactions.

This enhanced the visibility of the teams interaction (or lack of) with their mentors and allowed us to proactively intervene early if there wasn’t sufficient interaction.

Here are a few of the Final Presentations (see here for all of them)

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If you can’t see the presentation above, click here

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Listen to the blog post here

Download the podcast here

Get the Heck Out of the Building in Founder’s School: Part 2

With a ~$2 billion endowment the Kauffman Foundation is the largest non-profit focused on entrepreneurship in the world. Giving away $80 million to every year (~$25 million to entrepreneurial causes) makes Kauffman the dominant player in the entrepreneurship space.

Kauffman launched Founders School – a new education series to help entrepreneurs develop their businesses during the startup stage by highlighting how startups are different from big companies.

In January 2014 Part 1 of the “Startups” section of Founders School went online.

Now you can watch Part 2 “The Lean Approach“.

Founders School

This group of six videos provides an overview of how to successfully do Customer Discovery. You’ll learn how to:

  • get to know your customers
  • devise ways to test your hypotheses
  • glean insights from what you learn outside the building
  • get, keep and grow customers

As in the first part of this series, I’m in good company – I’m joined in Founders School by Noam Wasserman of Harvard teaching Founder’s Dilemmas, Craig Wortmann University of Chicago covering Entrepreneurial Selling, Peter McDermott helping understand Intellectual Property, and Nathan Gold offering how to give Powerful Presentations.

These videos are not only great tutorials for founders but also provide educators with another source of well produced and curated resources.

These “Startup and The Lean Approach” videos are a great general purpose companion to my “How to Build a Startup” lectures on Udacity.

And you get a tour of my living room and office…

Introduction, for Part 2 is here

Module 1, The Lean Method

  • 0:50: There are No Facts Inside Your Building — Get Outside
  • 1:28: Using the Business Model Canvas
  • 1:49: Use Customer Development to Test Your Hypotheses
  • 2:44: What is a Pivot?
  • 4:24: No Business Plan Survives First Contact with Customers

Module 2, Getting Out of the Building: Customer Development

  • 0:24: What is Customer Development?
  • 1:09: How Do You Start the Customer Development Process?
  • 1:36: Customer Discovery is a Series of Conversations
  • 2:05: The Founder and Customer Development
  • 3:16: Real World Example of Customer Development

Module 3, Customer Development Data

  • 0:31: Designing Experiments to Test Hypotheses
  • 0:48: Doing Customer Discovery Without Collecting Data is a Sin
  • 1:06: Insight is Key
  • 1:49: Why Accountants Don’t Run Startups

Module 4, Minimum Viable Products

  • 0:18: What is a Minimum Viable Product?
  • 0:38: What to Test, Why to Test and How to Test
  • 2:05: You’re Not Building a Product … You’re Getting Customer Feedback
  • 2:53: Use MVPs to Run Experiments
  • 4:15: Real World Example of an MVP

Module 5, Customer Acquisition and Archetypes

  • 0:47: Get, Keep and Grow Customers
  • 1:00: Create Customer Demand
  • 1:46: Customer Archetypes: Getting to Know Your Customers
  • 3:35: Matching Archetypes to Acquisition
  • 5:28: Growing Customers: The Lifetime Value
  • 7:35: The Biggest Mistake in Customer Acquisition

Listen to the blog post here

Download the podcast here

Is This Startup Ready For Investment?

Since 2005 startup accelerators have provided cohorts of startups with mentoring, pitch practice and product focus. However, accelerator Demo Days are a combination of graduation ceremony and pitch contest, with the uncomfortable feel of a swimsuit competition. Other than “I’ll know it when I see it”, there’s no formal way for an investor attending Demo Day to assess project maturity or quantify risks. Other than measuring engineering progress, there’s no standard language to communicate progress.

Corporations running internal incubators face many of the same selection issues as startup investors, plus they must grapple with the issues of integrating new ideas into existing P&L-driven functions or business units.

What’s been missing for everyone is:

  • a common language for investors to communicate objectives to startups
  • a language corporate innovation groups can use to communicate to business units and finance
  • data that investors, accelerators and incubators can use to inform selection

While it doesn’t eliminate great investor judgment, pattern recognition skills and mentoring, we’ve developed an Investment Readiness Level tool that fills in these missing pieces.

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Investment Readiness Level (IRL) for Corporations and Investors
The startups in our Lean LaunchPad classes and the NSF I-Corps incubator use LaunchPad Central to collect a continuous stream of data across all the teams. Over 10 weeks each team gets out of the building talking to 100 customers to test their hypotheses across all 9 boxes in the business model canvas.

We track each team’s progress as they test their business model hypotheses. We collect the complete narrative of what they discovered talking to customers as well as aggregate interviews, hypotheses to test, invalidated hypotheses and mentor and instructor engagements. This data gives innovation managers and investors a feel for the evidence and trajectory of the cohort as a whole and a top-level view of each teams progress. The software rolls all the data into an Investment Readiness Level score.

(Take a quick read of the post on the Investment Readiness Level – it’s short. Or watch the video here.)

The Power of the Investment Readiness Level: Different Metrics for Different Industry Segments
Recently we ran a Lean LaunchPad for Life Sciences class with 26 teams of clinicians and researchers at UCSF.  The teams developed businesses in 4 different areas– therapeutics, diagnostics, medical devices and digital health.  To understand the power of this tool, look at how the VC overseeing each market segment modified the Investment Readiness Level so that it reflected metrics relevant to their particular industry.

Medical Devices
Allan May of Life Science Angels modified the standard Investment Readiness Level to include metrics that were specific for medical device startups. These included; identification of a compelling clinical need, large enough market, intellectual property, regulatory issues, and reimbursement, and whether there was a plausible exit.

In the pictures below, note that all the thermometers are visual proxies for the more detailed evaluation criteria that lie behind them.

Device IRL

Investment Readiness Level for Medical Devices

You can watch the entire presentation here

Therapeutics
Karl Handelsman of CMEA Capital modified the standard Investment Readiness Level (IRL) for teams developing therapeutics to include identifying clinical problems, and agreeing on a timeline to pre-clinical and clinical data, cost and value of data points, what quality data to deliver to a company, and building a Key Opinion Leader (KOL) network. The heart of the therapeutics IRL also required “Proof of relevance” – was there a path to revenues fully articulated, an operational plan defined. Finally, did the team understand the key therapeutic liabilities, have data proving on-target activity and evidence of a therapeutic effect.

Therapeutics IRL

You can see the entire presentation here

Digital Health
For teams developing Digital Health solutions, Abhas Gupta of MDV noted that the Investment Readiness Level was closest to the standard web/mobile/cloud model with the addition of reimbursement and technical validation.

Digital Health

Diagnostics
Todd Morrill wanted teams developing Diagnostics to have a reimbursement strategy fully documented, the necessary IP in place, regulation and technical validation (clinical trial) regime understood and described and the cost structure and financing needs well documented.

Diagnostics IRL

You can see the entire presentation here

For their final presentations, each team explained how they tested and validated their business model (value proposition, customer segment, channel, customer relationships, revenue, costs, activities, resources and partners.) But they also scored themselves using the Investment Readiness Level criteria for their  market. After the teams reported the results of their self-evaluation, the  VC’s then told them how they actually scored.  We were fascinated to see that the team scores and the VC scores were almost the same.

Lessons Learned

  • The Investment Readiness Level provides a “how are we doing” set of metrics
  • It also creates a common language and metrics that investors, corporate innovation groups and entrepreneurs can share
  • It’s flexible enough to be modified for industry-specific business models
  • It’s part of a much larger suite of tools for those who manage corporate innovation, accelerators and incubators

Listen to the blog post here

Download the podcast here

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