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Replaced - Startups 101 - Replaced

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A 30-minute introductory discussion on what it is like starting a company that will go through the venture funding process.

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Replaced - Startups 101 - Replaced

  1. 1. Startups 101 Mark Hary - Executive in Residence Vonzo Partners (www.vonzos.com) https://slideshare.net/MarkHary https://linkedin.com/in/markhary/ https://medium.com/@mark.hary Twitter: @hary_mark
  2. 2. Overview How to eat an elephant... What to Expect Transforming Idea into an Asset Product Market Fit How to Acquire First Customers When/How to Approach Investors Growing/Scaling Your Business
  3. 3. My Journey to EIR @ Vonzos Partners BS Mechanical Engineering, Santa Clara University MS Aero/Astro, Stanford University 2000 - Co-founded Sensing Systems 2011 - 2d3 acquires Sensing 2015 - Boeing acquires 2d3 Sensing 2016 - Angel investor 2019 - EIR @ Vonzos
  4. 4. What to Expect (How to succeed) Buckets of blood, sweat, and tears Ability to argue passionately but commit to solidarity Make Your Own Luck Persistence and Determination Prioritization and Work/Life Balance “Everybody fights, no one quits” - Johnny Rico, Rico’s Roughnecks Starship Troopers
  5. 5. idea <<< product < business < asset Idea = $0.10 / 12 Product = Customers want it Business = Customers pay for it Asset = Your property that has value Transforming an Idea into an Asset Value Asset Business Product Idea $0
  6. 6. Product Market Fit 1. Establish Need, Schedule, Budget 2. SaaS Metrics 2.0 - David Skok https://www.forentrepreneurs.com/saas-metrics-2/ Terms You Should Know ● Monthly Recuring Revenue (MRR) ● Customer Acquisition Cost (CAC) CAC = ($ spend)/# customers ● Lifetime Value (LTV) LTV = MRR * months ● Months to Recover CAC (MtRC) MtRC = CAC / MRR ● LTV:CAC ● Churn = ΔCustomers/Customers Characteristics of strong PMF: ● # customers increases w/out increasing outbound spend ● CAC =~ $0 ● LTV = high ● MtRC << 12 ● LTV:CAC >> 3 ● Churn = 0 Need Schedule Budget
  7. 7. How to Acquire First Customers ● Product or service; Domain knowledge required (CTO, co-founder?) ○ Perhaps consulting to get domain expertise? ● How did you get idea that product was needed? ○ Former experience, employees, co-workers ● Develop a set of User Stories ○ What are they doing? ○ How do they do it now? ○ What is painful about it? ○ How does this alleviate pain? ● A customer has these three things ○ Need, Schedule, Budget ● Marketing to spread the word ○ Viral marketing is best ○ Early traction usually w/ word-of-mouth ○ AdWords/CPC expensive ● Pick right GTM strategy1 ○ Direct to consumer (Inbound vs Outbound) ○ Channel Sales ○ Enterprise Sales2 1https://www.advanceb2b.com/thegrowthhub/the-mission-matrix- saas-go-to-market-strategy
  8. 8. When to Approach Investors Don’t Forget Corporate Venture Capital Parul Singh. FounderCollective. Sep 25, 2018. “https://medium.com/swlh/raising-seed-capital-heres-your-2018-guide- on-how-to-do-it-successfully-c73c42530598”
  9. 9. How to Approach Investors Approach seeking funding the exact same way you approach building a sales pipeline: ● Warm >>> cold ● Research your targets (entity & individuals) by expertise, focus, and stage ● Get introduction through your networks, double opt-in best ● Have concise pitch ready (30-3-30 rule) w/ ask ● ⭐ Work w/ an EIR ⭐ Need network? Target incubators, accelerators, pitch days, labs, bootcamps, strategic investment arms/corporate VC, and trade shows. Investors are easily scared, do not stalk or surprise your prey.
  10. 10. How to Grow & Scale ● Asset = Func(Business(Product(idea))) ● Just do it. When in doubt, do. Fail fast. ● Data-driven decision making from inception ○ MAU/DAU, Churn, # customers, CAC, LTV:CAC ● Make decision to impact one of these at a time, in a very specific manner ● Grow sales: inbound, outbound, channel, enterprise ● Get to profitability ASAP1 ● Consider annual up-front payments for discount and reinvesting in sales to fuel growth Precision strikes, beware opportunity cost 1https://slidebean.com/blog/startups/slidebean-profitable
  11. 11. Thank You Questions?

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