Before Growth
…where things can go wrong :(
@MarcinSzelag
Startup Risk Model
• Startup is a temporary organisation focused on finding a
repeatable and scalable business model.
• To ...
Marcin Szeląg
• Partner @ Innovation Nest
• Investor @ notatek.pl
• Blogger @ ms.innovationnest.co
• Focus on Customer Acq...
Team Portfolio Tools
• ACCELERATE
• SPIN
• Startup Stage
• Office Hourse
FOCUS ON SAAS
Disclaimer
• There are many ways a startup can achieve success.
• Luck, defined as a set of favourable circumstances might ...
Why SAAS matters!
• 220M businesses worldwide
• $17B in current revenues
• 20% annual growth
• 6% of the software market (...
What risks lie ahead
• The decision
• The idea
• Founding team
• Market hypothesis
• First sale funding
• MVP
• First payi...
The decision
• I should have some level of experience
• I should have an extensive network of contacts
• I should have som...
The idea
• I have identified a market opportunity
• I know enough about the market I am about to enter
• My experience and ...
The founding team!
• I was able to convince others of my vision and milestones
• My cofounders bring complementary skillse...
Market hypothesis
• The Minimal Viable Segment is big enough to get your
company to ramen profitability
• The market you ar...
First sale funding
• You have created a budget which will bring you to your
first sale
• Your budget will give you enough t...
MVP
• You have clearly identified the minimum viable feature set
which delivers value to your customers
• If you are enteri...
First paying customers
• You know where your first sale will come from
• Your customers will be happy after buying your pro...
Customer acquisition !
($10k MRR)
• You have various customer acquisition hypotheses you
are able to test
• You are able t...
Seed funding
• You are able to pitch
• You have identified investors aligned with the vision and
business model of your sta...
Team building
• There is enough local talent!
• You have secured enough funding
• You have an appealing story and vision
Growth model!
(20% M/M)
• You have found a way to grow in a consistent way
• Your growth model has a significant organic co...
Round A
• Silicon Valley as the VC capital
• Series A crunch
It’s a long ride
2012
2011
2010
Need help?
marcin.szelag@innovationnest.co
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Before Growth - where things can go wrong. (Startup Risk Model)

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Before Growth - where things can go wrong. (Startup Risk Model)

  1. 1. Before Growth …where things can go wrong :( @MarcinSzelag
  2. 2. Startup Risk Model • Startup is a temporary organisation focused on finding a repeatable and scalable business model. • To achieve success, founders and investors have to take risk in order to capitalize on a market opportunity they have identified. • Turning a Startup into a sustainable and monumental company is a long term process. In this process there are several steps (areas of risk) a startup has to take. • There is no formula for achieving success, but there is a model for identifying and addressing areas of risk.
  3. 3. Marcin Szeląg • Partner @ Innovation Nest • Investor @ notatek.pl • Blogger @ ms.innovationnest.co • Focus on Customer Acquisition, Product Development • Interested in SaaS, Ecommerce
  4. 4. Team Portfolio Tools • ACCELERATE • SPIN • Startup Stage • Office Hourse FOCUS ON SAAS
  5. 5. Disclaimer • There are many ways a startup can achieve success. • Luck, defined as a set of favourable circumstances might be the sole reason we have monumental companies in the social and gaming space. • Counting only on luck, might significantly limit the chances of our startup achieving success. There are only that many Facebooks, Whatsups, Instagrams and Rovios of this world. • The probability of building a $100M company are much greater than chasing a $1B unicorn. • Business models focused on software are constantly producing sustainable companies which are growing as information technology expands to new industries and market segments.
  6. 6. Why SAAS matters! • 220M businesses worldwide • $17B in current revenues • 20% annual growth • 6% of the software market ($326B) • USA makes $10B of the total SaaS revenue • EU makes $3,5B of the total SaaS revenue
  7. 7. What risks lie ahead • The decision • The idea • Founding team • Market hypothesis • First sale funding • MVP • First paying customers • Customer acquisition • Seed funding • Team building • Growth model • Round A • Scaling • Profit
  8. 8. The decision • I should have some level of experience • I should have an extensive network of contacts • I should have some money I can invest • I should have the full support of my family • I should feel comfortable leading
  9. 9. The idea • I have identified a market opportunity • I know enough about the market I am about to enter • My experience and skillset is desired in this market • I know how I will make money in the short term • I will be happy working on this idea • I have prepared a compelling vision backed by solid milestones
  10. 10. The founding team! • I was able to convince others of my vision and milestones • My cofounders bring complementary skillsets to the table • My cofounders are A players • I like spending time with my cofounders • My cofounders have also made the decision they want to start a startup • My cofounders are equally motivated as I
  11. 11. Market hypothesis • The Minimal Viable Segment is big enough to get your company to ramen profitability • The market you are entering is big enough, so that each cofounder can earn a decent leaving • The market is big enough there is room for the company to grow • You have a strong hypothesis of a repeatable and sustainable business model which is plausible • You have researched the market in terms of competition, market trends, customer acquisition, customer budgets and the data you gathered supports your business model hypothesis
  12. 12. First sale funding • You have created a budget which will bring you to your first sale • Your budget will give you enough time to get to ramen profitability • You were able to convince outside investors (4F) • You managed to bring on board mentors or advisors
  13. 13. MVP • You have clearly identified the minimum viable feature set which delivers value to your customers • If you are entering a market with competitors - the differentiators of your product are distinct! • The time needed to build your MVP is well within your budget • Your team has the necessary skills to build what you have planned • The quality of your product is very high • You will be able to charge your customers for the value delivered by your MVP
  14. 14. First paying customers • You know where your first sale will come from • Your customers will be happy after buying your product • You will get repeated business from your first customers • You have a process in place to close the feedback loop • You know why your first customers are buying your product
  15. 15. Customer acquisition ! ($10k MRR) • You have various customer acquisition hypotheses you are able to test • You are able to build initial traction with early adopters of your product • You don’t have a churn problem • LTV>CAC! • Scalability of your customer acquisition model is plausible • You have reached ramen profitability
  16. 16. Seed funding • You are able to pitch • You have identified investors aligned with the vision and business model of your startup • You are not at a point where your are under financing pressure • You are able to show how this financing will help validate the growth model • You are somehow different or better than everyone else
  17. 17. Team building • There is enough local talent! • You have secured enough funding • You have an appealing story and vision
  18. 18. Growth model! (20% M/M) • You have found a way to grow in a consistent way • Your growth model has a significant organic component • You are growing your revenue, without increasing churn
  19. 19. Round A • Silicon Valley as the VC capital • Series A crunch
  20. 20. It’s a long ride 2012 2011 2010
  21. 21. Need help? marcin.szelag@innovationnest.co

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