Startup Mindset 2011


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How do successful startups think and operate in 2011? They don't operate like small version of large companies anymore, but co-develop products with customers and operate lean by design, not crisis.

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  • Startups were small versions of a large company. Not anymore.\n
  • Market research, product planning, prepare materials, get teams ready, go to market!\nHiring, targets, objectives\n\nUnknowns, rather than knowns.\nNeeds rather than markets.\nLooking for metrics that indicate what goes well and what doesn’t.\n
  • Large companies know what they are after, startups don’t! Execute the plan.\n\nFind business model instead of generate revenue.\nWhich of the models are working? What else can I try? How do the metrics react?\n
  • Sell to early adopters\nEach deal is different, flexible pricing\nNot repeatable\nKnowledge is more important than revenue.\nFeedback is key.\n
  • 1. Where Are the Customers? Wrong focus. Most startups fail because they fail to develop customers\n2. The Focus on First Customer Ship Date. The product is not ready then. Development only really just started.\n3. An Emphasis on Execution Instead of Learning and Discovery. Pressure on the deadline...\n4. The Lack of Meaningful Milestones for Sales, Marketing and Business Development\n5. Death Spiral: The Cost of Getting Product Launch Wrong\n
  • * Great idea, social networks were very dominant then\n* Did a great job, almost 200.000 members\n* But business model didn’t work out - ad revenue dropping fast, 200.000 still too small\n* Needed new approach\n
  • * Had received some anecdotal feedback from large players\n* Decide to explore\n* The Pivot: Change directions, but stay grounded in what you learned.\n\n
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  • * Re-used existing social network technology\n* Built in about a week\n* Lots of custom reports\n* Proof of concept with customer\n* Not paid, but allowed to use as reference and much feedback\n
  • * Built using WIRED data and feedback\n* A few weeks\n* Pitched heavily\n
  • * Paying customer\n* Called pilot\n* Signed 3 customers rather quickly\n* All in Amsterdam and friendly early adopters\n* Worked together closely\n
  • * Half a year to version 1\n* But heavily validated: Countless demos, strong reference case, 3 paying customers\n* Now product development starts\n
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  • * Run on Amazon stack\n* Collaborative development with GitHub\n* Admin using MoneyBird\n* Inside (admin, dev) and outside (product)\n
  • Don’t invest in marketing and sales until you have figured out the product proposition.\n
  • * Individuals and interactions over processes and tools\n* Working software over comprehensive documentation\n* Customer collaboration over contract negotiation\n* Responding to change over following a plan\n\n
  • Successful Internet agency in Belgium\nMany Drupal projects\nNotice demand for Drupal skills and hosting\n
  • Hosted Drupal, plus support and services.\n
  • Inside and outside\n
  • * start extremely basic, sell project\n* add new features, first for customer, then for product\n* expand product, expand customer base\n
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  • Startup Mindset 2011

    1. 1. Startup Mindset 2011Customer DevelopmentCo-Development with Early AdoptersWakoopa’s PivotThe Lean StartupLow Burn by Design not by CrisisBootstrapping Conimbo
    2. 2. Large Companies Plan Startups Model
    3. 3. Large Companies Execute Startups Search
    4. 4. Large Companies SellStartups Validate Customers
    5. 5. his success? From Product Development become a catchall tool for HE FOUR STEPS TO THE EPIPHANY and budget. Investors use the T every startup executive’s schedule, plan,Most startups lack a process for discovering plan funding. Everyone their firstuses a road map that was product development diagram to set and their markets, locating involved customers, validating designed for a very different location, yet they are surprised when they end up lost.their assumptions, and growing their business. A few successful ones like Design Within Reach doall these things. The difference is that the ones that succeed invent a Customer Development model. The Customer Development model, depicted in Figure 2.1, is designed to solve the 10 problems ofthe Product Development model enumerated in Chapter 1. Its strength is itsLaunch/ Concept/ Product Alpha/Beta rigor and flexibility.The model separates out all the customer-related activities in the early stage of1st Ship Seed Development Test a company into theirown processes, designed as four easy-to-understand steps: Customer Discovery, CustomerValidation, Customer Creation, and Company Building. As you will see, these steps mesh seamlesslyand support a startup’s ongoing 1.1 The Product Development Diagramof them results in specific Figure product development activities. Eachdeliverables to be described in subsequent chapters. To see what’s wrong with using the product development model as a guide to building a startup, let’s first look at how the model is currently used to launch a new product. We’ll view the actions at each step in two ways: in general practice and in the specific example of Webvan, which managed to Customer Customer Company Customer million in 3 years. Then we will dissect the model’s toxic consequences for burn through $800 Discovery Validation Creation Building startups. What’s wrong with the old model in general, and how were those wrongs compounded in the billion-dollar Webvan implosion? Lets look at the model stage-by-stage. Concept and Seed Stage In the Concept and Seed Stage, founders capture Development and vision for the company and turn Figure 2.1 The Customer their passion Model them into a set of key ideas, which quickly becomes a business plan, sometimes on the back of the proverbial napkin. The first thing captured and wrestled to paper is the company’s vision. To Customer Development The Customer Development model is not need to be defined:the Product Development model, but Next, issues surrounding the product a replacement for What is the product or service concept?a companion. to build? Is further technical research needed focuses onthat the product can be built? Is it possible Broadly speaking, Customer Development to ensure understanding customerproblemsare the product features Validation on developing a sales model that can be replicated, What and needs, Customer and benefits?Customer Creationwill the customers bedriving end user demand, and Company market research Second, who on creating and and where will they be found? Statistical and Building on
    6. 6. Case: Wakoopa’s PivotWas Social Network for Apps
    7. 7. Case: Wakoopa’s PivotTo Market Research Technology
    8. 8. Case: Wakoopa’s Pivot Week 1: Slide deck
    9. 9. Case: Wakoopa’s PivotWeek 9: Custom for WIRED
    10. 10. Case: Wakoopa’s Pivot Week 14: First demo
    11. 11. Case: Wakoopa’s PivotWeek 22: First customers
    12. 12. Case: Wakoopa’s Pivot Week 30: Version 1
    13. 13. Startup Mindset 2011Customer DevelopmentCo-Development with Early AdoptersWakoopa’s PivotThe Lean StartupLow Burn by Design not by CrisisBootstrapping Conimbo
    14. 14. Use Commodity Technology For Community, not Cost
    15. 15. Operate on SaaSJust try, change if needed
    16. 16. Minimum viable productNo scaling until revenue
    17. 17. Agile developmentRelease weekly not yearly
    18. 18. Bootstrapping ConimboSpinoff from One Agency
    19. 19. Bootstrapping ConimboPower of Drupal, not the hassle.
    20. 20. Bootstrapping ConimboCloud and open source
    21. 21. Bootstrapping ConimboBuilt one customer at a time
    22. 22. The Four Steps to the Epiphany (Steve Blank) Lean Startup (Eric Ries) (Jason Fried & David Heinemeier Hansson)
    23. 23. Agilician Amsterdam