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 canvas, lean canvas and basic investment or venture and angel funding lessons.
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Startup Business Models for Tech Startups - 2013
- 1. Startup Business Models Tartu, Estonia 15th May 2013 with @andrewjscott
- 4. sorry. ma ei oska eesti keelt.
- 5. Who am I? @andrewjscott 6 3 40+1 1 1 startups fails investorsexit or..
- 7. “A business model describes the rationale of how an organisation creates, delivers and captures value.” Wikipedia
- 8. idea.
- 9. Your idea should solve a problem.
- 10. fail.
- 11. How do I think of a good idea? (which solves a problem)
- 12. Rummble solved the problem of bad recommendations
- 13. How to be an idea genius • Study life • Stop focusing on competitors
- 16. How to be an idea genius • Study life • Stop focusing on competitors • Forget the past (and present!)
- 17. “The future of search is intelligent human edited databases .. the Google approach will not scale” David Seuss, CEO Northern Light Search
- 18. Beware the curse of knowledge and being in a bubble
- 19. Ask what if.. • pay to use any persons car? • check all airline prices instantly? • make free voice calls worldwide?
- 21. Solving a problem generates the value
- 22. “A business model describes the rationale of how an organisation creates, delivers and captures value.”
- 26. ..the exception to the rule.
- 27. Good idea, but problem not painful enough? > > > > > Direct to consumer Business to business
- 28. Solve a problem.
- 30. ..what now? Great idea Big market
- 32. Solve a problem really well for someone from day one
- 33. 5 core dimensions to a startup Team Product Funding Customers Business model
- 34. No.1 cause of startup failure: Survey of 3200 startups, by Startup Genome PREMATURE SCALING
- 35. Problem for someone Problem for everyone
- 36. Who is version one for? What problem does it solve for them?
- 41. Who is it for? What problem does it solve for them?
- 42. Communicate not what it does but the value it creates
- 43. Bad. Always know where the party is. Better. (but still not great)
- 45. *** Eric Ries
- 46. *** Lean Book
- 47. “..we did not understand the wants of our target customers” Eric Ries on Catalyst Recruitment
- 48. “If I had asked my customers what they wanted, they would have said a faster horse” Henry Ford
- 50. Proving as much as possible by spending as little as possible. Lean methodology as defined by me.
- 51. Empathymap
- 52. Empathymap
- 53. Empathymap
- 57. Understanding your customer is everything.
- 61. LeanCanvas
- 63. LeanCanvas
- 64. Who are you targeting? Segmented or Niche Mass market Multi-sided
- 65. Niche Mass Multi
- 67. Have a realistic go-to-market strategy
- 68. LeanCanvas
- 69. Revenue Models Selling Renting Licensing Subscription Consumption Commission
- 70. Pricing Models Price depends on… FIXED VARIABLE • Value • Customer segment • Quantity • Negotiating skills • Real-time market • Auction
- 71. Be realistic about the time it takes to make money.
- 72. Startup Lifecycle Adapted from ‘Why Startups Fail’
- 74. Not like this.
- 75. 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 CASHFLOW 15-20 Slides max!
- 76. Do 5 year projections Always calculate on a unit basis Don’t drown the reader with too much detail
- 77. Internal use External use
- 78. my definition: Your business model is the way you profit from the value you create for others. Andrew J Scott
- 79. Thank you for listening follow me @andrewjscott or visit andrewjscott.com useful links: LeanCanvas.com Stattys.com Strategyzer.com visual.ly/why-startups-fail SequoiaCap.com/ideas
Editor's Notes
- 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