Startup Research<br />@ Founder Institute<br />March 8th, 2011<br />Spring 2011 San Francisco Semester<br />Simone Brunozz...
Quick intro<br />I'm Simone Brunozzi.<br />33, Italian. Singapore.<br />Amazon (Web Services).<br />Keywords: Public Speak...
What is special about Startups?<br />(Hi-Tech) startups have:<br />a) Lower bootstrapping costs<br />b) Higher risk<br />c...
Lean startups<br />Rapid prototypes<br />Designed to test market assumptions<br />Use customer feedback to evolve them <br...
What makes them "lean"?<br />FOSS + <br />Agile Dev + <br />Cloud Computing + <br />Mashups + <br />3rd party APIs + <br /...
This is what you will get from me<br />1. <br />2. <br />3. <br />6<br />
Example 1: DebianCE (2004)<br />1. Context<br />2. Idea<br />3. Startup research details<br />4. What happened<br />5. Res...
1. Context<br />Company: Wedoit (Me + my brother Marco)<br />Money: Self-funded <br />Where: Assisi (St. Francis of), Ital...
2. Idea<br />Passionate about Linux Debian<br />Debian is stable, secure, has a great community<br />Strong need for Profe...
3. Startup Research Details<br />Market: Linux certification<br />Size: (?) 1,000s in Italy<br />Growing: (?) yes because ...
4. What happened<br />1. Created the idea, business plan. Exciting!<br />2. Logo, website, brochures<br />3. Created V1 of...
5. Results<br />COSTS:<br />900 hours of work (27,000 euros?)<br />Other: 4,000 euros<br />REVENUES:<br />None.<br />12<br />
6. Back to startup research details<br />What was the mistake?<br />13<br />
6. Back to startup research details<br />Market: Linux certification<br />Size: (?) 1,000s in Italy<br />Growing: (?) yes ...
7. Other mistakes...<br />Vision and Values YES<br />Startup Research  NO (bad)<br />Naming and Branding YES<br />Mentor I...
8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found my girlfriend (2006-<br />16<br />
8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found my girlfriend (2006-2008)<br />BIG...
This is what you will get from me<br />1. One Failure<br />2. <br />3. <br />18<br />
Example 2: Second Life (2007)<br />1. Context<br />2. Idea<br />3. Startup research details<br />4. What happened<br />5. ...
1. Context<br />2007: I'm CTO in a University in Italy...<br />... But I have time for a cool side project<br />Second Lif...
2. Idea<br />I want to ride the Second Life Gold Rush<br />How? Build the Basilica of Saint Francis of Assisi<br />I want ...
3. Startup Research Details<br />Market: Second Life / Pilgrims / Education / Architects<br />Size: (?) 5M and growing<br ...
23<br />
24<br />
4. What happened<br />1. Found an investor.<br />2. Found a technical partner to build it (Spain)<br />3. Built the Basili...
26<br />
5. Results<br />COSTS: (total -45,000 Euros)<br />600 hours of my work (18,000 Euros?)<br />15,000 Euros from investor<br ...
6. Back to startup research details<br />What was the mistake?<br />28<br />
6. Back to startup research details<br />29<br />Market: Second Life / Pilgrims / Education / Architects<br />Size: (?) 5M...
7. Other mistakes<br />Vision and Values YES<br />Startup Research  NO (bad)<br />Naming and Branding NO<br />Mentor Idea ...
8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found another girlfriend (2008-<br />31<...
8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found another girlfriend (2008-  Just ki...
By the way, on Second Life...<br />Why my Startup failed?<br />Why most projects on Second Life failed as well?<br />Becau...
By the way, on Second Life...<br />Why my Startup failed?<br />Why most projects on Second Life failed as well?<br />Becau...
This is what you will get from me<br />1. One failure<br />2. Another failure<br />3. <br />35<br />
A proper Startup Research:multiple options<br />36<br />
1. Follow the manual<br />37<br />Market: <br />Size: <br />Growing: <br />Market attributes: <br />Why do I care: <br />F...
1B. Avoid common mistakes<br />38<br />Market: Identify the right market<br />Size: <br />Growing: <br />Market attributes...
Example: market attributes<br />39<br />1. Pure competition<br />2. Pure monopoly<br />3. Monopsony: Only one buyer<br />4...
Example: market attributes<br />40<br />1. Pure competition<br />2. Pure monopoly<br />3. Monopsony: Only one buyer<br />4...
How to avoid common mistakes?<br />41<br />UNDERSTAND what you are doing.<br />IF YOU DON'T, LIMIT the Damage.<br />
2. Test your * ASAP<br />Test your * <br />as soon as you can.<br />Period.<br />42<br />
2. Test your * ASAP<br />Think of an example<br />43<br />
2. Test your * ASAP<br />Ebay<br />Yahoo!<br />Facebook (kind of)<br />44<br />
3. Find what works/matters for you<br />45<br />Also called:<br />Customized Manual<br />Market:<br />Size: <br />Growing:...
4. Do it until you master it<br />Exercise:<br />Do your Startup Research in two of the following.<br />You are Sergey Bri...
1. Follow the manual2. Test your * ASAP3. Find what works for you4. Do it until you master it<br />47<br />
This is what you will get from me<br />1. One failure:<br />2. Another failure:<br />3. Some options:<br />48<br />
This is what you DID get from me<br />1. One failure: DebianCE<br />2. Another failure: Assisi in Second Life<br />3. Some...
Useful Advice, or Crap?<br />1) Limited Time<br />2) I'm not a Successful Entrepreneur<br />3) But, I'm a good observer<br...
Thanks!<br />Simone Brunozzi<br />Twitter: @[first name of the musician Garfunkel]<br />Blog: www.[my last name].com<br />...
Thanks!<br />Simone Brunozzi<br />Twitter: @simon<br />Blog: www.brunozzi.com<br />Email / Linkedin: You should be able to...
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Startup Research (Founder Institute, San Francisco, March 8th, 2011)

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This is the presentation I gave at the March 8th, 2011 session of the Founder Institute in San Francisco, a startup incubator.
The topic is: Startup Research.

What market are you pursuing? Is the target market big enough? Is it growing or shrinking? What are the other characteristics of your market, and why do you care? How do you find data on your market? How do you define your competitors? What are inexpensive tactics to do custom market research, such as surveys? How can you determine if you can win in your target market, and when do you decide to walk away?

Published in: Technology

Startup Research (Founder Institute, San Francisco, March 8th, 2011)

  1. 1. Startup Research<br />@ Founder Institute<br />March 8th, 2011<br />Spring 2011 San Francisco Semester<br />Simone Brunozzi<br />Amazon Web Services <br />Technology Evangelist, APAC<br />1<br />
  2. 2. Quick intro<br />I'm Simone Brunozzi.<br />33, Italian. Singapore.<br />Amazon (Web Services).<br />Keywords: Public Speaker, Technology, Cloud<br />I met 500 startups in 3 years.<br />We only have 20 minutes, so let's start.<br />2<br />
  3. 3. What is special about Startups?<br />(Hi-Tech) startups have:<br />a) Lower bootstrapping costs<br />b) Higher risk<br />c) Higher potential (more scalable)<br />"Lean" startup possible <br />(versus traditional "Waterfall" model)<br />3<br />
  4. 4. Lean startups<br />Rapid prototypes<br />Designed to test market assumptions<br />Use customer feedback to evolve them <br />(faster than traditional software practices)<br />(This will be important later)<br />4<br />
  5. 5. What makes them "lean"?<br />FOSS + <br />Agile Dev + <br />Cloud Computing + <br />Mashups + <br />3rd party APIs + <br />Collab tools<br />(e.g. Kickstarter, StackOverflow, Guru.com)<br />5<br />
  6. 6. This is what you will get from me<br />1. <br />2. <br />3. <br />6<br />
  7. 7. Example 1: DebianCE (2004)<br />1. Context<br />2. Idea<br />3. Startup research details<br />4. What happened<br />5. Results<br />6. Back to startup research details<br />7. Other mistakes<br />8. Conclusions<br />7<br />
  8. 8. 1. Context<br />Company: Wedoit (Me + my brother Marco)<br />Money: Self-funded <br />Where: Assisi (St. Francis of), Italy<br />Activity: Consulting (web, DB, Linux)<br />Startup project: <br />DebianCE (Debian Certified Engineer)<br />8<br />
  9. 9. 2. Idea<br />Passionate about Linux Debian<br />Debian is stable, secure, has a great community<br />Strong need for Professional Certification (???)<br />Let's do it!<br />9<br />
  10. 10. 3. Startup Research Details<br />Market: Linux certification<br />Size: (?) 1,000s in Italy<br />Growing: (?) yes because Linux is growing <br />Market attributes: new, fragmented<br />Why do I care: I love(d) Linux<br />Finding data: look at competitors, find number of clients<br />Competitors: LPI (Linux Professional Institute), Red Hat CP<br />Market research: ask friends/LUGs/online<br />Can you win: if I create something innovative, less boring<br />When do you walk away: if I cannot sell it in one year<br />10<br />
  11. 11. 4. What happened<br />1. Created the idea, business plan. Exciting!<br />2. Logo, website, brochures<br />3. Created V1 of the certification platform<br />4. Met with potential partners (ITHUM, Rome)<br />5. We went Live!<br />6. Waited<br />8. Total of 5 "interested" customers in 3 months<br />9. Waited ... zzz ...<br />11<br />
  12. 12. 5. Results<br />COSTS:<br />900 hours of work (27,000 euros?)<br />Other: 4,000 euros<br />REVENUES:<br />None.<br />12<br />
  13. 13. 6. Back to startup research details<br />What was the mistake?<br />13<br />
  14. 14. 6. Back to startup research details<br />Market: Linux certification<br />Size: (?) 1,000s in Italy<br />Growing: (?) yes because Linux is growing <br />Market attributes: new, fragmented<br />Why do I care: I love(d) Linux<br />Finding data: Competitors: find number of clients<br />Competitors: LPI, Red Hat CP<br />Market research: Ask friends/LUGs/online<br />Can you win: if I create something innovative/useful<br />When do you walk away: if I cannot sell it in one year<br />14<br />
  15. 15. 7. Other mistakes...<br />Vision and Values YES<br />Startup Research NO (bad)<br />Naming and Branding YES<br />Mentor Idea Review YES<br />Startup Legal and IP YES<br />Cofounders, Hiring and Firing NOT NEEDED (YES LATER)<br />Revenues, Costs and Profits YES<br />Product Development YES<br />Mentor Progress Review NO (bad)<br />Outsourcing, Partners and Suppliers YES<br />Marketing and Sales YES<br />Presentation and Publicity YES<br />Fundraising NOT NEEDED<br />Graduation FAIL!<br />15<br />
  16. 16. 8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found my girlfriend (2006-<br />16<br />
  17. 17. 8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found my girlfriend (2006-2008)<br />BIG MISTAKE! :)<br />Seriously, I'm kidding. I never regret it.<br />17<br />
  18. 18. This is what you will get from me<br />1. One Failure<br />2. <br />3. <br />18<br />
  19. 19. Example 2: Second Life (2007)<br />1. Context<br />2. Idea<br />3. Startup research details<br />4. What happened<br />5. Results<br />6. Back to startup research details<br />7. Other mistakes<br />8. Conclusions<br />19<br />
  20. 20. 1. Context<br />2007: I'm CTO in a University in Italy...<br />... But I have time for a cool side project<br />Second Life becomes very popular in 2007<br />I am an Expert<br />I am from Assisi<br />20<br />
  21. 21. 2. Idea<br />I want to ride the Second Life Gold Rush<br />How? Build the Basilica of Saint Francis of Assisi<br />I want to show it to the world<br />How to make money?<br />Use it as a marketing tool for Assisi<br />(pilgrims, church, schools, virtual visits, goods...)<br />I need funding? Yes.<br />21<br />
  22. 22. 3. Startup Research Details<br />Market: Second Life / Pilgrims / Education / Architects<br />Size: (?) 5M and growing<br />Growing: Hell yeah<br />Market attributes: New, fragmented<br />Why do I care: I love(d) Second Life<br />Finding data: (?) Difficult. Let's take risks.<br />Competitors: None<br />Market research: (?) Build it and they will come<br />Can you win: If I stand out<br />When do you walk away: After one year, if no results<br />22<br />
  23. 23. 23<br />
  24. 24. 24<br />
  25. 25. 4. What happened<br />1. Found an investor.<br />2. Found a technical partner to build it (Spain)<br />3. Built the Basilica: "Second Life Assisi"<br />4. July 2007: "The most beautiful building ever built in Second Life", Philip Rosedale (met in SF)<br />5. September 2007: Live!<br />6. Tried to sell<br />8. Tried to sell ... zzz ..<br />25<br />
  26. 26. 26<br />
  27. 27. 5. Results<br />COSTS: (total -45,000 Euros)<br />600 hours of my work (18,000 Euros?)<br />15,000 Euros from investor<br />Over time: 12,000 Euros from my own pocket<br />REVENUES: (total +16,000 Euros)<br />Consulting and building gigs<br />NET: -33,000 Euros<br />27<br />
  28. 28. 6. Back to startup research details<br />What was the mistake?<br />28<br />
  29. 29. 6. Back to startup research details<br />29<br />Market: Second Life / Pilgrims / Education / Architects<br />Size: (?) 5M and growing (WHO ARE THEY?)<br />Growing: Hell yeah (GOOD)<br />Market attributes: New, fragmented<br />Why do I care: I love(d) Second Life<br />Finding data: (?) Difficult. Let's take risks.<br />Competitors: None<br />Market research: (?) Build it and they will come<br />Can you win: If I stand out<br />When do you walk away: After one year, if no results<br />
  30. 30. 7. Other mistakes<br />Vision and Values YES<br />Startup Research NO (bad)<br />Naming and Branding NO<br />Mentor Idea Review NO<br />Startup Legal and IP NO<br />Cofounders, Hiring and Firing NOT NEEDED (SURE?)<br />Revenues, Costs and Profits NO<br />Product Development YES<br />Mentor Progress Review NO (bad)<br />Outsourcing, Partners and Suppliers YES<br />Marketing and Sales YES<br />Presentation and Publicity YES<br />Fundraising YES<br />Graduation FAIL!<br />30<br />
  31. 31. 8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found another girlfriend (2008-<br />31<br />
  32. 32. 8. Conclusions<br />Was this a mistake then?<br />1. I've learned a lot<br />2. I found another girlfriend (2008- Just kidding!<br />2. I found my job at Amazon.com !<br />http://bit.ly/how-i-got-hired-by-amazon<br />32<br />
  33. 33. By the way, on Second Life...<br />Why my Startup failed?<br />Why most projects on Second Life failed as well?<br />Because Second Life is essentially good...<br />33<br />
  34. 34. By the way, on Second Life...<br />Why my Startup failed?<br />Why most projects on Second Life failed as well?<br />Because Second Life is essentially good...<br />...FOR PORN :) <br />34<br />
  35. 35. This is what you will get from me<br />1. One failure<br />2. Another failure<br />3. <br />35<br />
  36. 36. A proper Startup Research:multiple options<br />36<br />
  37. 37. 1. Follow the manual<br />37<br />Market: <br />Size: <br />Growing: <br />Market attributes: <br />Why do I care: <br />Finding data: <br />Competitors: <br />Market research:<br />Can you win: <br />When do you walk away:<br />
  38. 38. 1B. Avoid common mistakes<br />38<br />Market: Identify the right market<br />Size: <br />Growing: <br />Market attributes: Do you really know what it means?<br />Why do I care: You should LOVE it (not just the $$$)<br />Finding data: Test your * as soon as you can<br />Competitors: <br />Market research:<br />Can you win: <br />When do you walk away: Minimize the cost of plan B<br />
  39. 39. Example: market attributes<br />39<br />1. Pure competition<br />2. Pure monopoly<br />3. Monopsony: Only one buyer<br />4. Monopolostic competition: Range of prices<br />5. Oligopoly: Few sellers<br />6. Oligopsony: (???)<br />7. Price discrimination: Emirates' "Honeymoon"<br />Does it matter to you? <br />
  40. 40. Example: market attributes<br />40<br />1. Pure competition<br />2. Pure monopoly<br />3. Monopsony: Only one buyer<br />4. Monopolostic competition: Range of prices<br />5. Oligopoly: Few sellers<br />6. Oligopsony: Few buyers<br />7. Price discrimination: Emirates' "Honeymoon"<br />Does it matter to you? <br />
  41. 41. How to avoid common mistakes?<br />41<br />UNDERSTAND what you are doing.<br />IF YOU DON'T, LIMIT the Damage.<br />
  42. 42. 2. Test your * ASAP<br />Test your * <br />as soon as you can.<br />Period.<br />42<br />
  43. 43. 2. Test your * ASAP<br />Think of an example<br />43<br />
  44. 44. 2. Test your * ASAP<br />Ebay<br />Yahoo!<br />Facebook (kind of)<br />44<br />
  45. 45. 3. Find what works/matters for you<br />45<br />Also called:<br />Customized Manual<br />Market:<br />Size: <br />Growing: <br />Market attributes: <br />Why do I care: <br />Finding data: learn / find a co-founder that can help<br />Competitors: <br />Market research:<br />Can you win: <br />When do you walk away:<br />
  46. 46. 4. Do it until you master it<br />Exercise:<br />Do your Startup Research in two of the following.<br />You are Sergey Brin OR Larry Page in 1996.<br />You are Mark Zuckerberg in 2003.<br />You are Dennis Crowley in 2009.<br />You are Craig Newmark in 1995.<br />You are Founder of * that failed.<br />You are Founder of * that was BIG then it failed.<br />46<br />
  47. 47. 1. Follow the manual2. Test your * ASAP3. Find what works for you4. Do it until you master it<br />47<br />
  48. 48. This is what you will get from me<br />1. One failure:<br />2. Another failure:<br />3. Some options:<br />48<br />
  49. 49. This is what you DID get from me<br />1. One failure: DebianCE<br />2. Another failure: Assisi in Second Life<br />3. Some options:<br />Follow the manual<br />Test your * ASAP (my favourite)<br /> Find what works for you<br /> Do it until you master it<br />49<br />
  50. 50. Useful Advice, or Crap?<br />1) Limited Time<br />2) I'm not a Successful Entrepreneur<br />3) But, I'm a good observer<br />4) I want to be different than the other Mentors<br />5) You should have Failure in mind<br />6) I still think that Lean/Simple wins more often<br />7) I hate numbered lists.<br />50<br />
  51. 51. Thanks!<br />Simone Brunozzi<br />Twitter: @[first name of the musician Garfunkel]<br />Blog: www.[my last name].com<br />Email / Linkedin: You should be able to find it<br />This presentation: bit.ly/2011-03-08<br />51<br />
  52. 52. Thanks!<br />Simone Brunozzi<br />Twitter: @simon<br />Blog: www.brunozzi.com<br />Email / Linkedin: You should be able to find it<br />This presentation: bit.ly/2011-03-08<br />52<br />
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