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Practical Steps to Launch Your New Business

Practical Steps to Launch Your New Business

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  • 1. “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
  • 2. 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!
    Focus on Customers and Markets from Day One!
    Mind2Net, Inc. © 2011 all rights reserved
  • 3. What Early Stage Investors Are Asking?
    • Are you going to:
    • 4. Blow my initial investment?
    • 5. Or are you going to make me a ton of money?
    • 6. Are there customers?
    • 7. How many? Now? Later?
    • 8. Is there a profitable business model?
    • 9. Can it scale?
    Mind2Net, Inc. © 2011 all rights reserved
  • 10. Startup Checklist
    Step 1
    • Opportunity Where does the idea come from?
    • 11. Innovation Where is the innovation?
    • 12. Customer Who is the User/Payer?
    • 13. Competition Who is the competitor/complementor?
    • 14. Sales What is the Channel to reach the customer?
    • 15. Marketing: How do you create end user demand?
    • 16. What does Biz Dev do? Deals? Partnerships? Sales?
    • 17. Business/Revenue Model(s) How do we organize to make money?
    • 18. IP/Patents Regulatory Issues? How and how long?
    • 19. Time to Market How long does it take to get to market?
    • 20. Product Development Model How to you engineer it?
    • 21. Manufacturing What does it take to build it?
    • 22. Seed Financing How much? When?
    • 23. Follow-on Financing How much? When?
    • 24. Liquidity How much? When?
    Mind2Net, Inc. © 2011 all rights reserved
  • 25. Step 2
    Focus on Customers and Markets from Day One!
    • Is there an articulated customer need? 
    • 26. How do you know?
    • 27. How big a market and when?
    • 28. Are others trying to solve it?  If so, why you?
    • 29. Does it solve an existing customer problem?
    • 30. Do you have a sales roadmap?
    • 31. Org chart? Influence map?
    • 32. Do you understand the sales cycle?
    • 33. ASP, LTV, ROI, etc.
    • 34. Do you have a set of orders ($’s) validating the roadmap?
    • 35. Does the financial model make sense?
    Mind2Net, Inc. © 2011 all rights reserved
  • 36. 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
    Mind2Net, Inc. © 2011 all rights reserved
  • 37. Step 4
    Know Your Customer - Questions
    • What are your customers top problems?
    • 38. Does your product concept solve them?
    • 39. Do customers agree?
    • 40. How much will they pay?
    • 41. Draw a day-in-the-life of a customer before & after your product
    • 42. Draw the org chart of users & buyers
    Focus on Customers and Markets from Day One!
    Mind2Net, Inc. © 2011 all rights reserved
  • 43. Step 5
    Iterate
    • Until you “cross the chasm” and validate market need.
    • 44. Traction comes after proof of sales.
    • 45. It is a strategy not a tactic.
    • 46. Define the market landscape to represent reality.
    • 47. 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
    Mind2Net, Inc. © 2011 all rights reserved
  • 48. Step 6
    Where to get help?
    • Put an ad out for the talent you need to succeed - Offer equity
    • 49. There are many organizations with talent that you can tap for free (Crunch Base, Score, SBA, Start-uppers, FB, LinkedIn, search)
    • 50. Use online tools
    • 51. Enlist a family members help
    • 52. Crowd Source
    Mind2Net, Inc. © 2011 all rights reserved
  • 53. Step 7
    Funding
    • Develop your Pitch Deck
    • 54. Summary with Ask, Market potential, Product Niche, Scale, …
    • 55. 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)
    • 56. Make a video Pitch
    • 57. 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…
    • 58. Practice, Practice – Make a compelling business case
    • 59. Traction will attract investment
    Mind2Net, Inc. © 2011 all rights reserved
  • 60. 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
    • 61. Product/Brand definition
    • 62. Monetization Model
    • 63. Management team bios
    • 64. Ownership structure – CAP sheet
    • 65. 2nd deck and process overview slides
    Financials
    • 3Year P&L summary, scaling, ROI, 3yr P&L worst case, and cap table
    • 66. 2011 financials
    • 67. 2012 financials
    • 68. 2013 financials
    • 69. 3 Year cash flow summary, worst case and expansion cost summaries
    Market Research
    • Who is our customer?
    • 70. Current market penetration and engagement summary
    • 71. Competitive analysis
    • 72. SWOT –TOWS analysis
    • 73. Competitive landscape – Scatter diagram
    • 74. Focus group research
    • 75. Brand
    • 76. Beta test interview notes
    • 77. Partners
    • 78. News articles
    Marketing Plan
    Advertising Plan
    Business Operations Processes
    • Sales and engagement overview
    • 79. Contract and payment terms
    • 80. Business process flows
    • 81. Expansion plan overview
    • 82. Position descriptions and training overview
    • 83. IP product application(s)
    • 84. IP algorithm
    • 85. Network architecture
    • 86. Contingency planning
    • 87. IP management and protection
    • 88. Legal representation and trademark
    • 89. Data Privacy Policy
    Human Resources
    • Hiring profiles and policies
    • 90. Compensation structure
    • 91. Incentive Comp. structure
    • 92. Benefits
    • 93. Policies & procedures
    • 94. Code of conduct
    • 95. Records Privacy Policy
    Investor Relations
    Mind2Net, Inc. © 2011 all rights reserved
  • 96. Company Building
    Step 9
    • Is your team right for the stage of company?
    • 97. Does sales growth plan match market?
    • 98. Who/How will drive innovation?
    • 99. Does burn rate match revenue model?
    • 100. Have we built a mission-oriented culture?
    • 101. Can we own the market or are we threatened by stiff competition?
    • 102. Are we listening to our customers?
    • 103. Does the board agree?
    Mind2Net, Inc. © 2011 all rights reserved
  • 104. 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
    Mind2Net, Inc. © 2011 all rights reserved