From Invention To Startup Roadmap for the startup company

The Process Find some collaborators Noodle on your idea and refine it Figure out who the customer is and what problem you are solving for them Test your idea (talk to a half-dozen potential customers) Get serious: form a company and decide on ownership Write it down (customer, problem, solution, business structure) Re-test your idea (talk to a dozen or more potential customers) Find out if it is fundable (i.e., test it with potential investors) Build something you can demonstrate Test it with potential customers and investors Raise some money Develop the product Build a go-to-market plan Launch!

Find some collaborators

Noodle on your idea and refine it

Figure out who the customer is and what problem you are solving for them

Test your idea (talk to a half-dozen potential customers)

Get serious: form a company and decide on ownership

Write it down (customer, problem, solution, business structure)

Re-test your idea (talk to a dozen or more potential customers)

Find out if it is fundable (i.e., test it with potential investors)

Build something you can demonstrate

Test it with potential customers and investors

Raise some money

Develop the product

Build a go-to-market plan

Launch!

The scientific method

Ideas are cheap Executing on an idea is hard work Forming the team Raising the money Creating a good product Selling the product

Executing on an idea is hard work

Forming the team

Raising the money

Creating a good product

Selling the product

Who is the customer? How can you reach them? How do they purchase? How many of them exist?

How can you reach them?

How do they purchase?

How many of them exist?

What’s the category? What are the key attributes of the category? Which attribute is your specialty? Is it an existing one or one you invented? What attribute is most important to your prospective customers? What attributes do your competitors already claim?

What are the key attributes of the category?

Which attribute is your specialty?

Is it an existing one or one you invented?

What attribute is most important to your prospective customers?

What attributes do your competitors already claim?

Value Proposition What is the compelling reason your customers have to buy your product? Two fundamental reasons: Saves cost Makes money Figuring this out sets boundaries on your pricing structure

What is the compelling reason your customers have to buy your product?

Two fundamental reasons:

Saves cost

Makes money

Figuring this out sets boundaries on your pricing structure

Rate of Adoption of Innovation Perceived attributes Relative advantage Compatibility Complexity Trialability Observability Type of decision Optional Collective Authority Communication channel (interpersonal or mass) Nature of social system (norms, interconnectedness,…) Effort of change agent Perceived attributes account for half or more of the variance in adoption rate

Perceived attributes

Relative advantage

Compatibility

Complexity

Trialability

Observability

Type of decision

Optional

Collective

Authority

Communication channel (interpersonal or mass)

Nature of social system (norms, interconnectedness,…)

Effort of change agent

Perceived attributes account for half or more of the variance in adoption rate

Raising Money Plan for multiple rounds Each round should follow a decrease in: Product/technology risk Market risk People risk Understand VC investment sizing VC investment is a thin market that is highly subjective as to value

Plan for multiple rounds

Each round should follow a decrease in:

Product/technology risk

Market risk

People risk

Understand VC investment sizing

VC investment is a thin market that is highly subjective as to value

Building a Go-To Market Plan Target tightly within a bigger market Consider a sequenced approach to the broader market Develop a dominant selling idea

Target tightly within a bigger market

Consider a sequenced approach to the broader market

Develop a dominant selling idea

Target

Sequence

Dominant selling idea What will you be #1 at? Why is it important to prospective customers? Is your idea credible? Is it memorable? Can you show evidence that it really performs as promised?

What will you be #1 at?

Why is it important to prospective customers?

Is your idea credible?

Is it memorable?

Can you show evidence that it really performs as promised?

Example: Aldus Founded 1984 Four developers, one GM (with customer knowledge) DSI: desktop publishing The road to DTP Luck & timing: the Apple Laserwriter Financing Exit

Founded 1984

Four developers, one GM (with customer knowledge)

DSI: desktop publishing

The road to DTP

Luck & timing: the Apple Laserwriter

Financing

Exit

Example: Visio Founded in 1990 Three technically-trained founders, added four developers quickly DSI: Drag & Drop Drawing The impact of Windows 3.0—making the right bet Financing Exit

Founded in 1990

Three technically-trained founders, added four developers quickly

DSI: Drag & Drop Drawing

The impact of Windows 3.0—making the right bet

Financing

Exit

Example: Trumba Founded in 2003 Three founders, added four developers quickly DSI: Active Calendar Service Riding the “software as a service” wave and the move towards finding things online Financing

Founded in 2003

Three founders, added four developers quickly

DSI: Active Calendar Service

Riding the “software as a service” wave and the move towards finding things online

Financing

Bibliography Technology Ventures, Dorf & Byers, 2005 Diffusion of Innovation , Rogers, 1962--2003 Crossing the Chasm , Moore, 1991, 1999, 2002 Why Johnny Can’t Brand, Schley, 2005 Built To Last, Collins & Porras, 1997

Technology Ventures, Dorf & Byers, 2005

Diffusion of Innovation , Rogers, 1962--2003

Crossing the Chasm , Moore, 1991, 1999, 2002

Why Johnny Can’t Brand, Schley, 2005

Built To Last, Collins & Porras, 1997

Questions?