Startup Business Models for Tech Startups - 2013


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Presented at Technopol May 2013 by @andrewjscott, discussing business models and the need to solve a BIG problem for your customer to succeed as a startup. Also covers lean methodology, business model canvas, lean canvas and basic investment or venture and angel funding lessons.

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  • World full of ideas. Difference between wantreprenuerLess talk, more action.
  • Startup Genome report – 1 in 12 startups fail. UK government stats – 95% of all, 1 in 20.
  • One way is to study life.
  • In USA “FOMO” Easy TechcrunchStart following
  • Who What companyIn 2004
  • Todays wisdomLike bubbleEcho chamber.
  • Stimulate innovative thoughtChallenge existing authodoxiesStatus quoWhatever problem
  • Whatever problem
  • Bigger the problem solved, bigger the value
  • Ah, but what about Twitter I hear you say? What problem were they solving?
  • Ah, but what about Twitter I hear you say? What problem were they solving?
  • Don’t ask what can I sell? Ask what do my customers want to buy?Not what can I build, but what do they need?
  • 5 coreIf you go too far
  • Startup Genome says“.. the dominant reason for failure of startups is premature scaling of one or more of those dimensions.”
  • Early version of facebookShaggingAnd if you don’t know who it’s for and problem it solves..
  • My failed co
  • MoLoSocNec
  • Look at thisWhat are we?
  • What value does it create?
  • Be clear about your message to market.
  • I originally created…If the value in playtxt was finding the busy places…We should have said
  • If communicating clearly…
  • Who’s this guy?
  • Who’s read this?Eric says he wrote it after his first startup up failed because…
  • They won’t tell you what product or service they want, but they WILL tell you their problems, fears, and aspirations. Golden arrow – what they say will define market trends.
  • Put your hands up..
  • Spending – both time, and moneyIt’s really about testing your biz model. Discovering where value is,And changing your startup to deliver it, before you run out of money.
  • Find, talk to, and meet your customers.
  • Alexander Osterwalder – University of Lausanne in 2004 – PhD paper about ‘Business Design’
  • Only differences – Also probably the 4 most important things if you’re raising funding
  • Funny thing is
  • Only differences – Also probably the 4 most important things if you’re raising funding
  • It’s normal that your go-to-market strategy, and so your customer segment, will change over time. Overture in 2003 which became Adwords
  • Small enough to optimise your product for, to iterate the product, and talk to your customers. Walk before you can run.
  • Only differences – Also probably the 4 most important things if you’re raising funding
  • Pricing models affect different parts of your business model
  • Don’t run out of money.
  • Validated your ideaWant to raise fundingTwo minutes on presenting your business modelDon’t do this…
  • Nobody reads traditional business plans
  • Keynote or Powerpoint
  • My last three tipsGet asked anywayDon’t say 5% of a $2bn market
  • Startup Business Models for Tech Startups - 2013

    1. 1. Startup Business ModelsTartu, Estonia 15th May 2013with @andrewjscott
    2. 2. Are you awake?
    3. 3. Are you awake?
    4. 4. sorry. ma ei oska eesti keelt.
    5. 5. Who am I? @andrewjscott6 340+1 11startups failsinvestorsexit or..
    6. 6. Business Models
    7. 7. “A business model describes therationale of how an organisationcreates, delivers and captures value.”Wikipedia
    8. 8. idea.
    9. 9. Your idea should solve a problem.
    10. 10. fail.
    11. 11. How do I think of a good idea?(which solves a problem)
    12. 12. Rummble solved the problemof bad recommendations
    13. 13. How to be an idea genius• Study life• Stop focusing on competitors
    14. 14. How to be an idea genius• Study life• Stop focusing on competitors• Forget the past (and present!)
    15. 15. “The future of search isintelligent human edited databases.. the Google approach will not scale”David Seuss, CEO Northern Light Search
    16. 16. Beware the curse of knowledgeand being in a bubble
    17. 17. Ask what if..• pay to use any persons car?• check all airline prices instantly?• make free voice calls worldwide?
    18. 18. Solve a problem.BIG
    19. 19. Solving a problem generates the value
    20. 20. “A business model describes therationale of how an organisationcreates, delivers and captures value.”
    22. 22. ..the exception to the rule.
    23. 23. Good idea,but problem not painful enough?> > > > >Direct to consumer Business tobusiness
    24. 24. Solve a problem.
    25. 25. Startup Lifecycle
    26. 26. ..what now?Great ideaBig market
    27. 27. Startup Lifecycle
    28. 28. Solve a problem really wellfor someone from day one
    29. 29. 5 core dimensions to a startupTeamProductFundingCustomersBusiness model
    30. 30. No.1 cause of startup failure:Survey of 3200 startups, by Startup GenomePREMATURE SCALING
    31. 31. Problem for someone Problem for everyone
    32. 32. Who is version one for?What problem does it solve for them?
    33. 33. Who is it for?What problem does it solve for them?
    34. 34. Communicate not what it doesbut the value it creates
    35. 35. Bad.Always know where the party is.Better.(but still not great)
    36. 36. Startup Lifecycle
    37. 37. *** Eric Ries
    38. 38. *** Lean Book
    39. 39. “..we did not understand the wants ofour target customers”Eric Ries on Catalyst Recruitment
    40. 40. “If I had asked my customers whatthey wanted, they would have saida faster horse”Henry Ford
    41. 41. LEAN =assumption testing
    42. 42. Proving as much as possibleby spending as little as possible.Lean methodology as defined by me.
    43. 43. Empathymap
    44. 44. Empathymap
    45. 45. Empathymap
    46. 46. Understanding your customeris everything.
    47. 47. BusinessModelCanvas
    48. 48. Example:AppleiPod
    49. 49. LeanCanvas
    50. 50. Separated at birth?
    51. 51. LeanCanvas
    52. 52. Who are you targeting?Segmented or NicheMass marketMulti-sided
    53. 53. Niche Mass Multi
    54. 54. Understandwhoyourfirstcustomersare
    55. 55. Have a realisticgo-to-market strategy
    56. 56. LeanCanvas
    57. 57. Revenue ModelsSelling Renting LicensingSubscription Consumption Commission
    58. 58. Pricing Models Price depends on…FIXEDVARIABLE• Value• Customer segment• Quantity• Negotiating skills• Real-time market• Auction
    59. 59. Be realisticabout the time it takes tomake money.
    60. 60. Startup LifecycleAdapted from ‘Why Startups Fail’
    61. 61. Not like this.
    62. 62.• COMPANY PURPOSE– in a single sentence• PROBLEM• SOLUTION• WHY NOW• MARKET SIZE• COMPETITION• PRODUCT• BUSINESS MODEL– Revenue model– Pricing– Average sale size or lifetime value– Sales & distribution model– Customer/pipeline list• TEAM• FINANCIALS• P&L AND CASHFLOW15-20 Slides max!
    63. 63. Do 5 year projectionsAlways calculate on a unit basisDon’t drown the reader with too much detail
    64. 64. Internal use External use
    65. 65. my definition:Your business model is the way you profitfrom the value you create for others.Andrew J Scott
    66. 66. Thank you for listeningfollow me @andrewjscott or visit andrewjscott.comuseful