5 themes to consider when you are starting your first company

from idea ! Y E L E N A K A D E Y K I N A

Boston, USA, April 11, 2016

© Y E L E N A K A D E Y K I N A

busine"

Perso nal introSerial entrepreneur

Specialty: entrepreneurial marketing, online and video marketing; business development

MIT Sloan Alumna

Community work: MIT Enterprise Forum & MassChallenge, etc


SMEvs.


IDEentreprene urs hip

Individual owner

Linear growth

Less investment required

Regional Markets

SME (Small Medium Enterprise)

Global Markets

Exponential growth

A lot of investment required

IDE (Innovation-Driven Enterprise)

5


YESbefo re the

la unch

,, ,,What can you really do for your customer?

Have you met the only minimum required condition?

Have you defined your business model?

Quality of ecosystem around you?

Network and personal brand?

1.

2.

3.4.5.

Whatproblemdo yo u solve?

Quantify your value proposition

Define your core

Chart your competitive position

1.2.3.


5© Y E L E N A K A D E Y K I N A

STEPSyo ur cus!mer! define

Market and market segmentation

Select a beachhead market

Build an end-user profile

Calculate TAM size for beachhead market

Profile persona for your market

1.

2.3.4.5.


MARKETsegmentatio n

End User Benefits Market Characteristics

Size of Market

Needs ApplicationPartners/Players Competition

CHARACTERISTICS:

6


YES! pick

BEACHHEAD

,, ,,

Is your customer a paying customer?

Is your sales force can access your customer?

Is it hard for your competitor to block you?

Are your ready to deliver a whole solution/product?

Can you leverage this segment to enter additional segments?

Is this market consistent with values and passion of your team?

1.2.3.4.5.market6.

End User & DMU

Decision making unit:

• Advocate (often an end user)

• Primary Economic Buyer

• Influencers

Customer = End User + Decision Making Unit (DMU)


UserProfilechara cteristics

• Gender, age, education

• Income range

• Geographic location

• What motivates them

• Early adopters vs. main stream

• Where they go on vacations?

• Where do they dine?

• What newspapers they read, websites, etc

• Main reason to buy product: image, peer pressure, saving?


CalculateTAM(TOTAL ADDRESSABLE MARKET)

• Top-down analysis – use market analysis reports, etc

• Bottom-up analysis=“counting noses” (use customer, lists, trade associations, groups)

TAM = number of customers x Price of product

$5M > TAM $5M < TAM < $100M $1B < TAM

NO YES! NO© Y E L E N A K A D E Y K I N A

Perso naMITCHEL(FACILITY MANAGER AT IBM)

• Personal Information: American, family (3 kids), 40 years old, college degree

• Career context: Mid-career (same place for 20 years), technical savvy, hopes for promotion, makes $65K/year

• Informational Sources: websites to make decisions, tried competitor product and is not impressed for A/B/Creasons

• Purchasing Criteria: Reliability (high), Growth (high), Costs (mid), Greenness (low)

• Others: listens to country, drives Ford, used to volunteer as a fireman


Typesbusine"

• One-time Up-front plus maintenance (applicable when you have high cost of capital)

• Upsell with High-Margin Products (i.e., consumer electronics, new car sales)

• Advertising (i.e., Goolge, more challenges for startups)

• Franchise (i.e., provide knowledge for knowledge/brand)

• Microtransactions (i.e., online games, other digital goods)

• Usage based (i.e, cloud based services)

• Access to data collected (re-sell or temporary access; i.e.,LinkedIn)

• Transaction fee (i.e., credit companies, online retailers)


mo dels of

StartupKillerLTV&COCA

Cost of Customer Acquisition(t) = Total Marketing & Sales Expenses(t)–

Install Base Support Expense(t)


LTV = Life Time ValueCOCA = Cost of Customer Acquisition

Your business will fail if your CoCA is higher

than your LTV!

Goal: Recover COCA in 12 months, LTV is higher than CoCA at least 3 times

(i.e Saas model)

Eco s ystem Netwo rkingBUILDING A TEAM


&

MITentreprene urial

• Strong entrepreneurial ecosystem. Solving real world problems

• 25,000+ companies founded by MIT alums (i.e., Akamai, Intel, HP, iRobot, Gillette, Dropbox)

• 3.3+ million jobs

• $2 trillion in annual world sales

• MIT Intellectual and Technology Powerhouse

• 72 MIT-related Nobel Prize winners (including 9 current faculty members)

• 5 schools, 33 departments/divisions/sections/other programs (57 interdisciplinary research units)


e co s ystem


BOSTONentreprene urial e co s ystem

• Cambridge innovation and intellectual capital: 74 colleges & universities, $1.5B spent on R&D annually

• $2.4B of VC investment second after Silicon Valley, highest investment/capita: $457/capital (source: Flybridge 2010)

• Innovation clusters: Cambridge, 128/495 clusters –benefits of high concentration

• Boston startup incubators & accelerators: CIC, Dogpatch, MassChallenge, TechStars

• Future IPO candidates: HubSpot, Brightcove, Kayak and Tech giants: Microsoft, Google

• Every night there is an entrepreneurial event!

Every startupne e ds a

How to choose a mentor:

• Experience

• Market understanding

• Few mentors

• Right match


Mentor’s motivation Desire to help and to give

MENTOR

funding• 3 Fs - Friends, Family

(and Fools)

• Angel Investors

• Venture Capitalists

• Other

• Government grants

• State and local programs

• Banks


optio ns

Angels' VCBACKGROUND


vs.

ANGEL VC

• Accredited

• Expertise and personal money

• Active

• Invest in entrepreneur

• Institutional money

• Venture capital firms are managed by a General Partner

• The General Partner invests funds from Limited Partners

• General Partners active

• Invest in company

• Large portfolio

• The General Partner receives is compensated by a management fee and carry

NETWORKINGis e"e ntialBuild access to talent, capital

Learn and grow as a professional

Build partnerships and acquire customers

Face to face is the strongest means of communication

1.2.3.


fo r succe"

4.

DO'


S netwo rking• Give before you ask. Always

be open to help people in your network

• Develop relationships, don’t just acquire a bunch of contacts

• Listen to people’s stories. Make it about them, not about you

• Follow up with people once you meet them

• Be genuine

• Be passionate about your ventures

• Be realistic about what you should expect and follow up on promises

• Stay professional and relevant (i.e. , no gossips)

• Do you homework

of


do yo ur HOMEWORK

• Prepare and practice your elevator pitch

• Prepare your presentation materials (i.e., business cards)

• Research the list of attendees

• Make a list of top 7-10 contacts

• Research their bios

DON'T


S netwo rking• Don’t’ brag about yourself

• Don’t exaggerate the truth

• Don’t try to discuss everything. Value other people’ time.

• Don’t ask personal questions

of

Follo w -up/sta y in !uch

• Follow up on the night you met

• Make it personal: include 2-3 points from the conversation

• Be brief and to the point

• For VIPs, handwritten notes are preferable

• Schedule another on-one-one conversation with the people you found some immediate common interests

• Stay in touch via events/social media (i.e., LinkedIn)



WHOWHEN

WHO:

Be open to meet people, yet prioritize!

Make a list of top people you want to

meet

WHEN:

Networking is a continuous life long process. Most networking starts with a casual routine

conversation Be proactive. Build it

before you need it

WHERE:

Offline: entrepreneurial events, workshops,

conferences, training programs

Online: LinkedIn, Twitter, Facebook, forums,

favorite blogs

& WHERE

What is yo ur

Personal brand – timeless. It is how we market ourselves to others.

We sell something every day.


BRAND?perso nal

Idea to your investor

Vacation trip to your spouse


WHYperso nal brand is impo rtant

• Speaking engagements

• Investors

• Clients

• The opportunity to make a difference!

Strong personal brand =

VISIBILITY

establis h

• Offline and online brand. Can you control the first impression people make about you?

• Your self-impression = How people perceive you

• Each detail matters:

• How you are dressed

• How you treat other people

• Your Social Media profiles

• Your resume

• How your write e-mails


yo urperso nalBRAND

• Friending and following everyone

• Using social media as a direct response vehicle

• Creating inconsistent profiles

• Taking the same approach to different networks (i.e., LinkedIn vs. Facebook)

• Failing to invest sufficient time and effort

• Focusing internally. Make it interesting to others

• Spamming© Y E L E N A K A D E Y K I N A

DO'S DON'TS&of perso nal brand

in so cial me dia

BuildWITH VIDEO


yo ur brand

https://www.youtube.com/watch?v=oL_kyz7zCVc&index=4&list=PLiDQ_dBL8XWM4Xo161devVOXF_W1aRx5v

Videothe mo st

• Reveals your passion and shows that you are genuine

• Establishes your unique identity

• Explains complex things

• Helps you clone yourself

• Builds trust

• Video is powerful:

• On YouTube alone over two billion videos are viewed every day

• Having video on your website makes you 53x more likely to appear on the front page of Google search results


so cial me dium

is

& the "mo st " so cial of all


4 STEPS! building yo ur brand with video

1. Create 2. Publish 3. Promote 4. Track


BRANDawarene"

How-to’s About you Testimonials Interviews

thank• E-mail: [email protected]

• Linkedin: www.linkedin.com/in/yelenakadeykina

• Facebook: www.facebook/yelena.kadeykina

• Twitter: @ykadeykina


YOU!

5 themes to consider when you are starting your first company

Small Business & Entrepreneurship