Evaluating a Startup's business model by "10x" technique

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Evaluating a Startup's business model by the "10x" technique

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Evaluating a Startup's business model by "10x" technique

  1. 1. <ul><li>Bryan Starbuck, CEO, [email_address] </li></ul>One Philosophy for running a Startup Company
  2. 2. <ul><li>Company Direction </li></ul><ul><li>Funding </li></ul><ul><li>Marketing </li></ul>Philosophy for Running a Startup Company “ 10x ”
  3. 3. <ul><li>achieving it will… </li></ul><ul><li>Easier to hire </li></ul><ul><li>Easier to receive funding </li></ul><ul><li>… </li></ul>Define a High Bar for your Startup
  4. 4. <ul><li>Your Grandma lives off of $1mil savings now in the Stock Market </li></ul><ul><li>Pick your Friend’s Startup </li></ul><ul><li>Would you advise her to invest $50k in your friends startup? </li></ul>The “ Grandma Test ”
  5. 5. <ul><li>10x Philosophy is: </li></ul><ul><li>10x Pain </li></ul><ul><li>10x Solution </li></ul><ul><li>Financial Transaction </li></ul><ul><li>Scale Transactions </li></ul>Definition of “ 10x ”: Ten Times Better
  6. 6. 10x Pain What is the large customer pain? Problem: Resumes are NOT ranked Only time to read 200 of 40,000 Job Boards return 40,000+ unranked resumes resumes
  7. 7. 10x Solution How is the problem Solved? Fixed: Resumes are ranked Immediate access to BEST from millions
  8. 8. Financial Transaction Show one financial transaction Customer Acquisition Cost: $x Price: $y Cost to Service: $z
  9. 9. Scale Transactions How Many Transactions until Max? Market Size 78 mil Transactions My Market Size 10% of market Total Revenue: $x mil
  10. 10. AoA Slides : Angel Check List With 10x, the other areas of your company need to be solid
  11. 11. The Marketing Beast
  12. 12. Conversion Rates Drop off rates RADICALLY drive up Customer-Acquisition-Costs Conversion Rate $1 per click (CPC) Create Account Create Account Free Account Create Account Task 2 Paid Account Landing Page $1.00 $4.00 Task 1 $8.00 $4.00 $20.00 $25.00
  13. 13. <ul><li>Not a Final Marketing Solution </li></ul><ul><li>Great for Beta 1 </li></ul><ul><ul><li>Iterate before you are perfected </li></ul></ul><ul><ul><li>WATCH OUT for VC Traction paradox </li></ul></ul><ul><li>Full Solution if… </li></ul><ul><ul><li>You can take 5+ years to grow & burn rate ~= $0 </li></ul></ul><ul><ul><li>First to market in new segment </li></ul></ul>Organic Growth
  14. 14. Organic Growth is being hopeful… … Hope is Not a Strategy … founder, “ I need Marketing for Customers ” Reply, “ Your problem is upstream ” Famous Quote: -vs- -Tony Wright or Mark Mauder (?)
  15. 15. Total Customer Acquisition Costs: $20/2 = $10 CAC Organic vs Paid Traffic $1 per click (CPC) Conversion Rate results in $20 CAC Organic Traffic 1-to-1 Word of Mouth
  16. 16. Creating Businesses Key Steps 10x Pain 10x Solution
  17. 17. Creating Businesses Key Steps 10x Pain 10x Solution Conversion Rates are Brutal Customer Acquisition Costs are often $20 to $100 Don’t under estimate this impact in your business model

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