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    Acstttps Acstttps Presentation Transcript

    • Why Accountants Don’t Run Startups Steve Blank Stanford - School of Engineering U.C. Berkeley - Haas School Of Business www.steveblank.com Twitter: sgblank
    • News From Silicon Valley Source: Dave McClure 500hats.com Small VC Funds ($50-250M) Union Square Ventures First Round Capital Traditional VC Funds (>$250M) Benchmark Sequoia Angels & Incubators ($0-10M) Y-Combinator TechStars Seed Funds ($10-50M) SoftTech (Clavier) Maples Investments Felicis (Senkut) SV Angel (Conway)
    • News From Silicon Valley Small VC Funds ($50-250M) Traditional VC Funds (>$250M) Angels & Incubators ($0-10M) Seed Funds ($10-50M) Source: Dave McClure 500hats.com Innovation is happening here
    • News From Silicon Valley
      • Internet startups - $500K is the new $5M
        • Driven by the top of the pyramid
      • Seed Funds providing entrepreneurial education
        • Ycombinator, TechStars, SeedCamp, LaunchBox, etc
      • Customer Development/Lean Startup adoption
        • Methodology to test hypothesis and business model
    • Some Definitions
    • Small Business Startups Small Business Startup
    • Small Business Startups Small Business Startup
      • - Business Model found
      • - Profitable business
      • Existing team
      • < $10M in revenue
    • Small Business Startups
      • - Business Model found
      • - Profitable business
      • Existing team
      • < $10M in revenue
      • 5.7 million small businesses in the U.S. <500 employees
      • 99.7% of all companies
      • ~ 50% of total U.S. workers
      http://www.sba.gov/advo/stats/sbfaq.pdf Small Business Startup
    • Small Business Startup: Internet Edition Small Business Startup
      • - Business Model found
      • - Profitable business
      • Existing team
      • < $10M in revenue
      • The Internet allows a new class of Small Businesses
      • Not all businesses on the Internet are “ Scalable Startups”
    • Scalable Startup Scalable Startup Large Company >$100M/year
    • Scalable Startup Scalable Startup Large Company >$100M/year
      • Total Available Market > $500m
      • Company can grow to $100m/year
      • Business model found
      • Focused on execution and process
    • Scalable Startup Scalable Startup Large Company >$100M/year
      • Total Available Market > $500m
      • Company can grow to $100m/year
      • Business model found
      • Focused on execution and process
      • Typically requires “risk capital”
      • In contrast a scalable startup is designed to grow big
      • It typically needs risk capital
      • These are what Silicon Valley means when they say “Startup”
    • Very Different Startup Goals Small Business Startup
      • - Business Model found
      • - Profitable business
      • Existing team
      • < $10M
      Scalable Startup Large Company
      • Total Available Market > $500m
      • Company can grow to $100m/year
      • Business model found
      • Focused on execution and process
      • Typically requires “risk capital”
    • Silicon Valley Venture Firms Invest in Scalable Startups Small Business Startup Scalable Startup Large Company
    • What VC’s Don’t Tell You: The Transition Scalable Startup Large Company Transition Search Build Grow
    • What VC’s Don’t Tell You: The Transition Scalable Startup Large Company Transition
      • Founders depart
      • Professional Mgmt
      • Process
      • Beginning of scale
    • What’s A Startup? Scalable Startup Large Company Transition
      • Business Model found
      • Product/Market fit
      • - Repeatable sales model
      • - Managers hired
      A Startup is the organization used to search for a scalable business model
    • The Search for a Business Model
      • No Business Plan survives first contact with customers
      • A Business Model diagrams how a company creates, delivers and captures value
      • Or in English: How a company makes money
    • Emphasis On Hypotheses Testing
    • Startups Continually Pivot (Iterate)
    • Startups Search and Pivot Scalable Startup Large Company Transition
      • Business Model found
      • Product/Market fit
      • - Repeatable sales model
      • - Managers hired
      The Search for the Business Model
    • Startups Search, Companies Execute Scalable Startup Large Company Transition
      • Business Model found
      • Product/Market fit
      • - Repeatable sales model
      • - Managers hired
      - Cash-flow breakeven - Profitable - Rapid scale - New Senior Mgmt ~ 150 people The Search for the Business Model The Execution of the Business Model
    • Metrics Versus Accounting Scalable Startup Large Company Transition
      • Traditional Accounting
      • Balance Sheet
      • Cash Flow Statement
      • Income Statement
      The Execution of the Business Model
    • Metrics Versus Accounting Scalable Startup Large Company Transition
      • Startup Metrics
      • Customer Acquisition Cost
      • Viral coefficient
      • Customer Lifetime Value
      • Average Selling Price/Order Size
      • Monthly burn rate
      • etc.
      • Traditional Accounting
      • Balance Sheet
      • Cash Flow Statement
      • Income Statement
      The Search for the Business Model The Execution of the Business Model
    • Customer Development Versus Product Management Scalable Startup Large Company Transition
      • Product Management
      • Delivers MRD’s
      • Feature Spec’s
      • Competitive Analysis
      The Execution of the Business Model
    • Customer Development Versus Product Management Scalable Startup Large Company Transition
      • Customer Development
      • Hypothesis Testing
      • Minimum Feature Set
      • Pivots
      The Search for the Business Model The Execution of the Business Model
      • Product Management
      • Delivers MRD’s
      • Feature Spec’s
      • Competitive Analysis
    • Engineering Versus Agile Development Scalable Startup Large Company Transition The Search for the Business Model The Execution of the Business Model
      • Engineering
      • Requirements Docs.
      • Waterfall Development
      • QA
      • Tech Pubs
    • Engineering Versus Agile Development Scalable Startup Large Company Transition
      • Agile Development
      • Continuous Deployment
      • Continuous Learning
      • Self Organizing Teams
      • Minimum Feature Set
      • Pivots
      The Search for the Business Model The Execution of the Business Model
      • Engineering
      • Requirements Docs.
      • Waterfall Development
      • QA
      • Tech Pubs
    • How Do Startups Search For A Business Model?
      • The Search is called Customer Development
      • The Implementation is called Agile Development
    • The Lean Startup
      • The Search is called Customer Development
      • The Implementation is called Agile Development
    • Startups Don’t Last Forever Scalable Startup Large Company Transition
      • Business Model found
      • Product/Market fit
      • - Repeatable sales model
      • - Managers hired
      - Cash-flow breakeven - Profitable - Rapid scale - New Senior Mgmt ~ 150 people You fail if you remain a startup!
    • Why Startups Aren’t Run By Accountants
    • Leadership Versus Management Scalable Startup Large Company Transition
    • Leadership Versus Management Scalable Startup Large Company Transition
    • Leadership Versus Management Scalable Startup Large Company Transition Search
    • Leadership Versus Management Scalable Startup Large Company Transition Build Search
    • Leadership Versus Management Scalable Startup Large Company Transition Build Grow Search
    • E-School instead of B-School
    • Durant Versus Sloan Scalable Startup Large Company Transition
    • Business School Versus Entrepreneurship School Scalable Startup Large Company Transition
      • Execution
      • Accounting
      • Products
      • Engineering
      • Management
      • Administrative
      Business School
    • Entrepreneurship School Scalable Startup Large Company Transition Entrepreneurship School
      • Hypothesis testing
      • Business Model testing
      • Customer Development
      • Agile Development
      • Metrics
      • Venture Finance
      • Hands-on
      • Execution
      • Accounting
      • Products
      • Engineering
      • Management
      • Administrative
      Business School
    • Business School Versus Entrepreneurship School Scalable Startup Large Company Transition Business School
      • Courses
      • Managerial Finance/Accounting
      • Managing Groups and Teams
      • Financial Accounting
      • Operations
      • Modeling for Optimization
      • Global Value Chain Strategies
    • Business School Versus Entrepreneurship School Scalable Startup Large Company Transition
      • Courses
      • Entrepreneurial Management
      • Creativity and Innovation
      • Technology Entrepreneurship
      • Patent Law for Entrepreneurs
      • Global Entrepreneurial Marketing
      • Entrepreneurial Finance
      Business School Entrepreneurship School
      • Courses
      • Managerial Finance/Accounting
      • Managing Groups and Teams
      • Financial Accounting
      • Operations
      • Modeling for Optimization
      • Global Value Chain Strategies
    • Thanks www.steveblank.com