Practical Steps to Launching a New Business.score

“Startups Fail from a Lack of Customersnot Product Development Failure”
Steven Blank 2008
Start-ups have to have a process to develop customers in parallel with product development processes.
Focus on Customers and Markets from Day One!
Mind2Net, Inc. © 2011 all rights reserved

The new start-up funding reality is you have to show TRACTION
TRACTION = SALES Revenue = INVESTOR interest = get the MONEY
Everybody has a product/service idea but most entrepreneurs focus on developing the product/service thinking “if we build it they will come” – NOT!

What Early Stage Investors Are Asking?
Are you going to:
Blow my initial investment?
Or are you going to make me a ton of money?
Are there customers?
How many? Now? Later?
Is there a profitable business model?
Can it scale?

Startup Checklist
Step 1
Opportunity Where does the idea come from?
Innovation Where is the innovation?
Customer Who is the User/Payer?
Competition Who is the competitor/complementor?
Sales What is the Channel to reach the customer?
Marketing: How do you create end user demand?
What does Biz Dev do? Deals? Partnerships? Sales?
Business/Revenue Model(s) How do we organize to make money?
IP/Patents Regulatory Issues? How and how long?
Time to Market How long does it take to get to market?
Product Development Model How to you engineer it?
Manufacturing What does it take to build it?
Seed Financing How much? When?
Follow-on Financing How much? When?
Liquidity How much? When?

Step 2
Is there an articulated customer need?
How do you know?
How big a market and when?
Are others trying to solve it? If so, why you?
Does it solve an existing customer problem?
Do you have a sales roadmap?
Org chart? Influence map?
Do you understand the sales cycle?
ASP, LTV, ROI, etc.
Do you have a set of orders ($’s) validating the roadmap?
Does the financial model make sense?

Concept/Bus. Plan
Launch/
1st Ship
Alpha/Beta Test
Product Dev.
Step 3
Parallel Development Tracks
Product Development Cycle
Feedback
Feedback
Company
Building
$$$$
Validation
CustomerDiscovery
Traction
Yes I’ll buy this
Validated
CustomerNeed
“chasm”
Customer Development Cycle

Step 4
Know Your Customer - Questions
What are your customers top problems?
Does your product concept solve them?
Do customers agree?
How much will they pay?
Draw a day-in-the-life of a customer before & after your product
Draw the org chart of users & buyers

Step 5
Iterate
Until you “cross the chasm” and validate market need.
Traction comes after proof of sales.
It is a strategy not a tactic.
Define the market landscape to represent reality.
Emphasis is on learning & discovery before execution (or it could be your execution).
Increasing population of affluent singles over 40
It’s hard work and usually you need outside help

Step 6
Where to get help?
Put an ad out for the talent you need to succeed - Offer equity
There are many organizations with talent that you can tap for free (Crunch Base, Score, SBA, Start-uppers, FB, LinkedIn, search)
Use online tools
Enlist a family members help
Crowd Source

Step 7
Funding
Develop your Pitch Deck
Summary with Ask, Market potential, Product Niche, Scale, …
8-10 other slides – market forces, customer need, product description, sales strategy, scale strategy, financials – 3 yrs proforma, exit strategy, team, supplemental slides (make it visual)
Make a video Pitch
Post/Pitch to Angellist, Keiretsu, Y-combinator, Crowd Funding, Golden Seeds, Fund Me, Band of Angels, Norcal Angels, Institutional investors, Private Placements, get out here…
Practice, Practice – Make a compelling business case
Traction will attract investment

Step 8
Due Diligence Binder
Be prepared – Put this together early – Accelerate the Funding Process
Due Diligence Binder Table of Contents
Executive Summary
Business presentation
Product/Brand definition
Monetization Model
Management team bios
Ownership structure – CAP sheet
2nd deck and process overview slides
Financials
3Year P&L summary, scaling, ROI, 3yr P&L worst case, and cap table
2011 financials
2012 financials
2013 financials
3 Year cash flow summary, worst case and expansion cost summaries
Market Research
Who is our customer?
Current market penetration and engagement summary
Competitive analysis
SWOT –TOWS analysis
Competitive landscape – Scatter diagram
Focus group research
Brand
Beta test interview notes
Partners
News articles
Marketing Plan
Advertising Plan
Business Operations Processes
Sales and engagement overview
Contract and payment terms
Business process flows
Expansion plan overview
Position descriptions and training overview
IP product application(s)
IP algorithm
Network architecture
Contingency planning
IP management and protection
Legal representation and trademark
Data Privacy Policy
Human Resources
Hiring profiles and policies
Compensation structure
Incentive Comp. structure
Benefits
Policies & procedures
Code of conduct
Records Privacy Policy
Investor Relations

Company Building
Step 9
Is your team right for the stage of company?
Does sales growth plan match market?
Who/How will drive innovation?
Does burn rate match revenue model?
Have we built a mission-oriented culture?
Can we own the market or are we threatened by stiff competition?
Are we listening to our customers?
Does the board agree?

From stealth start-ups to cloud commerce to going businesses - East Bay Score’s experienced counselors can add value in
Starting
Running
Growing
Your Business. Call us at (510)-273-6611 info@eastbayscore.org

Practical Steps to Launching a New Business.score

by FreshMonie on Aug 08, 2011

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Practical Steps to Launching a New Business.score — Presentation Transcript