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Succesful Entrepreneurship

Startup lean methodology for entrepreneurs by My SeedCap

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Succesful Entrepreneurship

  1. 1. Successful Entrepreneurship 05/2017
  2. 2. Summary Présentation My SeedCap– 05/2017 – Philippe Julien-Laferrière ; Alain Rousselin What defines a "Startup" and main steps1 Step 1: Setting a Solution for a given Problem2 Step 2: Finding the right product/ market fit3 Step 3: Managing Growth4 Key learnings: main success/ failure factors5
  3. 3. What defines a "Startup": temporary state before scaling Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin “A temporary organization designed to search for a repeatable and scalable business” – Steve Bank “Startups are companies that are still in the process of searching for a business model. Ventures that are further along and executing their business models are no longer startups; they are early-stage companies.” – Steve Bank A startup: • Is a specific temporary state of an organization and must be built consequently: the startup state should not last over 3 years • Ends by either a Scaleup organization or death • Is characterized by uncertainty (≠ risk) Startup ScaleupStartup Early-Stage Enterprise 1 Scalable : • Low variable costs • Small % of services • Platform / SaaS • Large market (world)
  4. 4. What defines a "Startup": temporary state before scaling Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin Search Market/Customers Optimize Channels Funnel & Pipeline Resources for Growth Time [Months] Growth[Sales] 12 - 246 - 12 36 - 60 Solution/ Problem fit Financial Round Phases Product situation Product/ Market fit Channel/ Market fit Maturity/ Early stagePre-seed Seed Serie A 1
  5. 5. Asking yourself the right questions Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 1
  6. 6. Summary Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière ; Alain Rousselin What defines a "Startup" and main steps1 Step 1: Setting a Solution for a given Problem2 Step 2: Finding the right product/ market fit3 Step 3: Managing Growth4 Key learnings: main success/ failure factors5
  7. 7. Step 1: Setting a Solution for a given Problem – An idea and some guesses… Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 2
  8. 8. Zoom on the 2 most important subjects: Value proposition and Customer segments Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin • What value do we deliver to the customer? • Which one of our customer’s problems are we helping to solve? • What bundles of products and services are we offering to each Customer Segment? • Which customer needs are we satisfying? Key questions Potential targets / differentiations • Newness • Performance • Customization • “Getting the Job Done” • Design • Brand status • Price • Cost Reduction • Risk Reduction • Accessibility • Convenience/ Usability • For whom are we creating value? • Who are our most important customers? VALUE PROPOSITION CUSTOMER SEGMENTS • Mass Market • Niche Market • Segmented • Diversified • Multi-sided Platform These two subjects are strongly related and are the first two questions you need to answer 2
  9. 9. You have to answer your questions on the field by getting insights from potential customers and market players Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin Meet/talk to the entire ecosystem • Users / Customers • Competitors • Suppliers • Channels Test, iterate, validate the Value Proposition • Solving a customer problem ? • Satisfying a customer need ? • What is the $$ value, test pricing ? • Why is the problem so hard to solve ? • How to reach the customers ? Market size ? 2 No facts inside your office ► Sell to the ecosystem ! Faster than market research
  10. 10. After getting your first insights, you progressively but still iteratively, build something real: from User Story to MVP Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 2 Proposal: a document describing the solution1 Smoke Test: Landing Page to test interest2 Fake demo of any kind3 Minimum viable product (MVP) – ‘a learning vehicle’: early version with minimal features that can be sold to early adopters 5 Market insight Product FAKE: Build to test the market before any major development is engaged FIRST PRODUCT to be sold and to confirm insights POC prototype4
  11. 11. The MVP must be a first step into customer intimacy and therefore can not be too deceptive Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 2 Minimal Viable Product (MVP) • It has enough value that people are willing to use it or buy it initially • It demonstrates enough future benefit to retain early adopters • It provides a feedback loop to guide future development
  12. 12. Once you went through all these steps: you are ready to launch! Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 2 You have: • identified a problem a customer wants to solve • built a product that can meet customers needs • defined a theoretically viable and profitable business model • learned enough to go out and sell
  13. 13. Summary Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière ; Alain Rousselin What defines a "Startup" and main steps1 Step 1: Setting a Solution for a given Problem2 Step 2: Finding the right product/ market fit3 Step 3: Managing Growth4 Key learnings: main success/ failure factors5
  14. 14. Step 2: Finding the right product/ market fit – From failures to success Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin “Success is the ability to go from one failure to another with no loss of enthusiasm.” - Winston Churchill Solution/Problem fit Product/Market fit Channel/Market fit Growth Despite all your cautiousness in Step 1, you might face market constraints such as: • Longer sales cycle than expected • Pricing/ rentability issues • Simultaneous new competitors or aggressive market player • Operational challenges or limits • MVP with not enough value ► Again you need to permanently question yourself and review your offer/product 3
  15. 15. Cherish your first customer, even if small, as they will guide you to the right product/ market fit Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin “The term product/market fit describes the moment when a startup finally finds a widespread set of customers that resonate with its product.” Eric Ries 3 Total Available Market (TAM): How big is the universe? Served Available Market (SAM): How many can I reach with my sales channel? Target Market – for a start-up: Who will be the most likely buyers? Target Market : • Vision (big and repeatable) vs execution (easiest and names) • Don’t try the “elephants” (public sectors, big corporates…) • Proximity of your office • Must be paying customers • Build pipeline of customers PRODUCT MARKET
  16. 16. Your startup is ready to enter the next phases: growth Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin You have: • Proven you found a customer problem • Found early customers that will pay you a good price • Found a repeatable and scalable sales process • Demonstrated a viable business model 3
  17. 17. Summary Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière ; Alain Rousselin What defines a "Startup" and main steps1 Step 1: Setting a Solution for a given Problem2 Step 2: Finding the right product/ market fit3 Step 3: Managing Growth4 Key learnings: main success/ failure factors5
  18. 18. Step 3: Managing growth – First step consists in structuring your company to handle the growth Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 4 • Operations : Customer services, Marketing and Sales • Product : Infrastructure, R&D • Admin : HR, Finance STRUCTURE YOUR ORGANIZATION • Recruits / Onboard • Culture BUILD YOUR TEAM TO SCALE • Business Plan • Key Performance Indicators (KPIs) DEFINE METRICS AND PROCESS Time [Months] Growth[Sales] 12 - 246 - 12 36 - 60 MVP Product/ Market fit Channel/ Market fit Searching for Problem – Solution fit Searching for Product- market fit and Language market fit Optimizing the funnel & searching for channel product fit Pour on the resources for growth Growth through acquisition and international expansion
  19. 19. Summary Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière ; Alain Rousselin What defines a "Startup" and main steps1 Step 1: Setting a Solution for a given Problem2 Step 2: Finding the right product/ market fit3 Step 3: Managing Growth4 Key learnings: main success/ failure factors5
  20. 20. It’s a long road full of pitfalls: only few businesses survive and very few become major successes Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 5 6 out of 1,000 are funded 60% fail, 30% flounder <10% + returns, <1% get big 0.01% “major success” Non-exhaustive list of potential failure reasons: • No market need • Ran out of cash • Not the right team • Not the right time • Got outcompeted • Pricing/cost issue • Poor product • Need/lack business model • Poor marketing • Ignore customers Source: Rishi Dean
  21. 21. 3 out of the 5 main failure reasons are related to product/ commercial performances Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 5 Market is always right “When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.” – Andy Rachleff “Product/market fit means being in a good market with a product that can satisfy that market.” – Marc Andreessen Business model is part of product definition “The same products, services or technologies can fail or succeed depending on the business model you choose. Exploring the possibilities is critical to finding a successful business model.” – Alexander Osterwalder Time is the enemy “ Startups have finite time and resources to find product/market fit before they run out of money. Therefore startups trade off certainty for speed, adopting 'good enough decision making' and iterating and pivoting as they fail, learn, and discover their business model.” - Steve Blank Source: Strategyzer Not having the right co-founder Chasing investors not customers Not making sure you have enough money Spending too much money
  22. 22. Some feedbacks from our own experiences on teams Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 5 First Round 10 year project: • Solo founders do much worse than teams • Technical co-founders are critical to enterprise, not so much for consumer • Female co-founders improve performance • Startup fortune favors the young • Where you went to school matters • The halo effect of former employers is real • Investors pay more for repeat founders Entrepreneurs required qualities: • Imagination & Creativity • Resilience & Courage • Adaptability & Flexibility • Rebel & Friendship • Long term vision & short term execution
  23. 23. Some feedbacks from our own experiences on execution Présentation My SeedCap – 05/2017 – Philippe Julien-Laferrière; Alain Rousselin 5 Founders use actively the Ecosystem • Share with other startups • Startup forums : Accelerators, Studios, Quora/ Product Hunt … • Advisory board / Shareholders • Engineering schools • Government supports JEI, CIR, BPI • Dedicated support (lawyers, insurance, accountants…) Speed of execution • Parallel tasks • Cloud / free tools, growth hacking • Co-developments • Quick launch of a few pilots • New model for recruitment (bachelors, masters, self employed,..) Obsessed by customers • Acquisition : SPANCO funnel Suspect, Prospect, Approach, Negotiation, Closing, Order • Retention : Learn form customer feedbacks

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