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Startup Business Models for Tech Startups - 2013
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Startup Business Models for Tech Startups - 2013

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Presented at Technopol May 2013 by @andrewjscott, discussing business models and the need to solve a BIG problem for your customer to succeed as a startup. Also covers lean methodology, business model ...

Presented at Technopol May 2013 by @andrewjscott, discussing business models and the need to solve a BIG problem for your customer to succeed as a startup. Also covers lean methodology, business model canvas, lean canvas and basic investment or venture and angel funding lessons.

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  • World full of ideas. Difference between wantreprenuerLess talk, more action.
  • Startup Genome report – 1 in 12 startups fail. UK government stats – 95% of all, 1 in 20.
  • One way is to study life.
  • In USA “FOMO” Easy TechcrunchStart following
  • Who What companyIn 2004
  • Todays wisdomLike bubbleEcho chamber.
  • Stimulate innovative thoughtChallenge existing authodoxiesStatus quoWhatever problem
  • Whatever problem
  • Bigger the problem solved, bigger the value
  • Ah, but what about Twitter I hear you say? What problem were they solving?
  • Ah, but what about Twitter I hear you say? What problem were they solving?
  • Don’t ask what can I sell? Ask what do my customers want to buy?Not what can I build, but what do they need?
  • 5 coreIf you go too far
  • Startup Genome says“.. the dominant reason for failure of startups is premature scaling of one or more of those dimensions.”
  • Early version of facebookShaggingAnd if you don’t know who it’s for and problem it solves..
  • My failed co
  • MoLoSocNec
  • Look at thisWhat are we?
  • What value does it create?
  • Be clear about your message to market.
  • I originally created…If the value in playtxt was finding the busy places…We should have said
  • If communicating clearly…
  • Who’s this guy?
  • Who’s read this?Eric says he wrote it after his first startup up failed because…
  • They won’t tell you what product or service they want, but they WILL tell you their problems, fears, and aspirations. Golden arrow – what they say will define market trends.
  • Put your hands up..
  • Spending – both time, and moneyIt’s really about testing your biz model. Discovering where value is,And changing your startup to deliver it, before you run out of money.
  • Find, talk to, and meet your customers.
  • Alexander Osterwalder – University of Lausanne in 2004 – PhD paper about ‘Business Design’
  • Only differences – Also probably the 4 most important things if you’re raising funding
  • Funny thing is
  • Only differences – Also probably the 4 most important things if you’re raising funding
  • It’s normal that your go-to-market strategy, and so your customer segment, will change over time. Overture in 2003 which became Adwords
  • Small enough to optimise your product for, to iterate the product, and talk to your customers. Walk before you can run.
  • Only differences – Also probably the 4 most important things if you’re raising funding
  • Pricing models affect different parts of your business model
  • Don’t run out of money.
  • Validated your ideaWant to raise fundingTwo minutes on presenting your business modelDon’t do this…
  • Nobody reads traditional business plans
  • Keynote or Powerpoint
  • My last three tipsGet asked anywayDon’t say 5% of a $2bn market

Startup Business Models for Tech Startups - 2013 Startup Business Models for Tech Startups - 2013 Presentation Transcript

  • Startup Business ModelsTartu, Estonia 15th May 2013with @andrewjscott
  • Are you awake?
  • Are you awake?
  • sorry. ma ei oska eesti keelt.
  • Who am I? @andrewjscott6 340+1 11startups failsinvestorsexit or..
  • Business Models
  • “A business model describes therationale of how an organisationcreates, delivers and captures value.”Wikipedia
  • idea.
  • Your idea should solve a problem.
  • fail.
  • How do I think of a good idea?(which solves a problem)
  • Rummble solved the problemof bad recommendations
  • How to be an idea genius• Study life• Stop focusing on competitors
  • How to be an idea genius• Study life• Stop focusing on competitors• Forget the past (and present!)
  • “The future of search isintelligent human edited databases.. the Google approach will not scale”David Seuss, CEO Northern Light Search
  • Beware the curse of knowledgeand being in a bubble
  • Ask what if..• pay to use any persons car?• check all airline prices instantly?• make free voice calls worldwide?
  • Solve a problem.BIG
  • Solving a problem generates the value
  • “A business model describes therationale of how an organisationcreates, delivers and captures value.”
  • BIGPROBLEMSOLVED=BIG VALUE
  • ..the exception to the rule.
  • Good idea,but problem not painful enough?> > > > >Direct to consumer Business tobusiness
  • Solve a problem.
  • Startup Lifecycle
  • ..what now?Great ideaBig market
  • Startup Lifecycle
  • Solve a problem really wellfor someone from day one
  • 5 core dimensions to a startupTeamProductFundingCustomersBusiness model
  • No.1 cause of startup failure:Survey of 3200 startups, by Startup GenomePREMATURE SCALING
  • Problem for someone Problem for everyone
  • Who is version one for?What problem does it solve for them?
  • Who is it for?What problem does it solve for them?
  • Communicate not what it doesbut the value it creates
  • Bad.Always know where the party is.Better.(but still not great)
  • Startup Lifecycle
  • *** Eric Ries
  • *** Lean Book
  • “..we did not understand the wants ofour target customers”Eric Ries on Catalyst Recruitment
  • “If I had asked my customers whatthey wanted, they would have saida faster horse”Henry Ford
  • LEAN =assumption testing
  • Proving as much as possibleby spending as little as possible.Lean methodology as defined by me.
  • Empathymap
  • Empathymap
  • Empathymap
  • Understanding your customeris everything.
  • BusinessModelCanvas
  • Example:AppleiPod
  • LeanCanvas
  • Separated at birth?
  • LeanCanvas
  • Who are you targeting?Segmented or NicheMass marketMulti-sided
  • Niche Mass Multi
  • Understandwhoyourfirstcustomersare
  • Have a realisticgo-to-market strategy
  • LeanCanvas
  • Revenue ModelsSelling Renting LicensingSubscription Consumption Commission
  • Pricing Models Price depends on…FIXEDVARIABLE• Value• Customer segment• Quantity• Negotiating skills• Real-time market• Auction
  • Be realisticabout the time it takes tomake money.
  • Startup LifecycleAdapted from ‘Why Startups Fail’
  • Not like this.
  • www.sequoiacap.com/ideas• COMPANY PURPOSE– in a single sentence• PROBLEM• SOLUTION• WHY NOW• MARKET SIZE• COMPETITION• PRODUCT• BUSINESS MODEL– Revenue model– Pricing– Average sale size or lifetime value– Sales & distribution model– Customer/pipeline list• TEAM• FINANCIALS• P&L AND CASHFLOW15-20 Slides max!
  • Do 5 year projectionsAlways calculate on a unit basisDon’t drown the reader with too much detail
  • Internal use External use
  • my definition:Your business model is the way you profitfrom the value you create for others.Andrew J Scott
  • Thank you for listeningfollow me @andrewjscott or visit andrewjscott.comuseful links:LeanCanvas.comStattys.comStrategyzer.comvisual.ly/why-startups-failSequoiaCap.com/ideas