startup: motivation and scale
Post on 13-Apr-2017
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What Lean* is Great For:
Figuring out if you should pursue this path (or not) and under what conditions
Figuring out your path to growth
*Lean LaunchPad, Lean Startup, Agile, Move Fast/Break Things
What Lean* Doesn’t Cover
Why you are doing this?
What are the tradeoffs: investment vs. customer funded?
How to trade off competing values, particularly if you are primarily driven by impact and outcomes?
How do you form teams? Deal with team dynamics?
Why are you doing this?More time
More money
Can’t work for other people
Social impact
Huge financial returns
Control over my own destiny
I want to have CEO in my title
Control over product, autonomy
No one looking over my shoulder
Freedom
I see a huge opportunity
Hungry to learn
Uber feminism - defining my own rules
I’m not employable
It’s my family business, my legacy
Environmental impact
I want to be a founder
No one would hire me
I am creating art / culture / music
What else?________________________
What is a startup? (according to 3 w.m.)
“A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.” – Eric Ries
“A startup is a company designed to grow fast.” –Paul Graham. Y Combinator.
“A startup is a temporary organization designed formed to search for a scalable repeatable business model.” – Steve Blank.
“”Most startups change their business model multiple times. A scalable startup is a special class of startup – world class team, large vision, large target market, passionate belief and a reality distortion field.”
Motivation & Ambition
“The most important factor for business success was ambition with those firms starting out with high growth
expectations performing most strongly. Indeed, motivations influence business success mainly by driving differences in
growth expectations, which in turn drive success.”
Entrepreneurship Understanding Motivations
UK Survey 2015
Rich V. King Founders choices are straightforward: Do they want to be rich or king?
Few have been both. - Noam Wasserman
Fail Rich
King Exception
Well below potential Close to potentialLi
ttle
Com
plet
e
Con
trol
ove
r com
pany
Financial gains
The Founder’s Dilemma at HBR.org.
Forms of FundingAngel
Incubators
Venture
Customer-funded revenue
SBIR Grants
Prizes and Other Grants
Loans
Private Equity
Corporate VC
The Wonders of Customer Revenue
It’s revenue!
You need less capital!
You can hire a team, invest profits into
product
The Hidden Risks of Early Needy Customers
The best early customer is a risk taker, who is an early adopter, who others tend to follow.
A lighthouse customer.
A reference customer.
A slide full of logos.
“Oh if Target / GE / Red Bull use it, so should I”
And who defines the patterns for the industry.
The worst first customer: so need-specific, so custom, so high maintenance - nothing can be built that will serve more
customers, and serve your product plan
Key Partners Key Activities Value Propositions
Customer Relationships
Channels
Revenue StreamsCost Structures
Key Resources Key Channels
Customer Segments
You can’t aim at everyone, first
“Serve a unique customer segment”
“Target a specific niche”“Aim for your most profitable segment”
“It’s better to dominate a micro segment than to aim
for everyone and hit nobody”
“Define your Archetypes”
Use Personas to Find the Pain
From: Business Model Canvas, Value Proposition Design, Alexander Osterwalder, The Innovators’s Solution, Clay Christensen and Michael Raynor
Uncover the “job to be done”
Fast Food Milkshake
40% of milkshakes purchased by commuters
in the morning - to go
What job customers hire milkshakes to do: On a a long, boring commute, customers “needed something to keep that extra hand busy and to make the
commute more interesting.” - Clayton Christensen, HBR
http://hbswk.hbs.edu/item/clay-christensens-milkshake-marketing
Persona ToolContext:
#stillathome #notanadultyet
Name: Peyton
Age: 24
Living with Mom at home
Motivations/Goals: Independence Freedom Apartment Bike to work Pay off college loan
Interests: Roller derby Raising money for breast cancer Jewelry making
Pains: Can’t seem to save At breakeven/loss each month Bad credit rating
Fears + Secrets: Afraid of getting rejected for an apartment Really likes mom’s support
Persona ToolContext:
Name:
Age:
Living:
Motivations/Goals:
Interests:
Pains:
Fears + Secrets:
Draw pic
Tribes/Hashtags
Value Proposition Silicon Valley / Tech Version
“Who do you want to create value for and what jobs need to be done?”
Value proposition(s) outline how exactly your products and services create value for one or more of your customer segments.
- Alexander Osterwalder, Value Proposition Design.
Madison Avenue / Branding
“A statement of the benefits delivered by the brand that provide value to the customer.
Communicates the benefits that add value, why we are different, the brand-customer relationship, and gives customers an “RTB” - reason to buy (or believe).
-David Aacker, Building Strong Brands.
Value PropositionMy company __(company name)_______________________________
is developing _(defined offering)_______________________________
to help __(a target audience)___________________________________
_(solve this problem / pain) ____________________________________
(with this secret sauce)_______________________________________
(with this proof point to the customer)______________________
Jen van der Meer, Reason Street Revenue Steps
Let’s Commercialize!Researchers use chemicals to manipulate the behavior of mice
with effects that last up to an hour…
to control the hunger and activity levels of mice
The Scientist, 2015.
http://www.the-scientist.com/?articles.view/articleNo/42878/title/Mouse-Mind-Control/
Value PropositionMy company __MINDTETHER_________________
is developing _a mind tether spray_____________
to help __busy moms_________________________
_compel their children to complete homework____
with our proprietary mind control chemicals____
effects last up to an hour with minor side effects! Jen van der Meer, Reason Street Revenue Steps
Who + WhatCustom Offer Scalable Offer
Larg
e N
eed
Smal
l mar
ket
Cus
tom
er S
egm
ent
Value Proposition
Who + What
Eek High
potentialstartup
“Lifestyle”Begin here, cross the chasm
Custom Offer Scalable OfferLa
rge
Nee
dSm
all m
arke
t
Cus
tom
er S
egm
ent
Value Proposition
ScaleImpact. Scale. Envisioning Big Outcomes. If it is clear enough and compelling enough AND BIG ENOUGH it will attract the SCALE AND IMPACT-SEEKING people and resources (VCs, angels, future partners and team members)
What does it mean to seek a 10x return?
Unicorn question
How pissed would you be if some other company was anointed the chosen one? And blew you out of the water?
Yesterday news broke of General Motor’s acquisition of Sidecar assets. Why the sale? In short, we were forced to shut down operations and sell. We were unable to compete against Uber, a company that raised more capital than any other in history and is infamous for its anti-competitive behavior. The legacy of Sidecar is that we out-innovated Uber but still failed to win the market. We failed — for the most part — because Uber is willing to win at any cost and they have practically limitless capital to do it. Sunil Paul, Founder, Sidecar Jan 20, 2016 Medium (Post Mortem)
How fast?
My current user base of _______ would be on track to grow to ____________ in 5 years to be considered worthy of growth investment (VC, angel) today.
The AskMy company __(company name)_____________________________________
is developing _(defined offering)_____________________________________
to help __(a target audience)_________________________________________
_(solve this problem / pain) __________________________________________
(with this secret sauce)_____________________________________________
(we already experiencing this much traction)_____________________
(and we’ll seeking this much growth capital to get there faster__
Purpose of Why We Search While you are here…
Learning how helpful humans are when you ask them.
Run through the exercise of seeing how you could achieve scale.
Defining a hidden unmet need, and a scalable solution.
Uncover your blinders, limiting beliefs, and see how big you can think.
Realize you can’t really control for anything, so follow the water around the rock.
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