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How to Launch a Business in the 21st Century - A Guide For Startups

We live in a golden age for entrepreneurship. It's easier than ever to build and launch a business and scale incredibly quickly. In this guide, leading social enterprise consultant walks entrepreneurs and would-be entrepreneurs through the process of:

-discovering business opportunities
-developing a business model
-validating a business model
-testing a business model
-getting startup funds
-getting the word out/marketing
-getting customer feedback
-iterating the product

For more entrepreneurship tips and startup advice, check out The Social Entrepreneur blog: http://the-social-entrepreneur.com/blog

How to Launch a Business in the 21st Century - A Guide For Startups

  1. 1. STARTUP IN A BOX mikebrcic.com HOW TO LAUNCH A BUSINESS IN THE 21ST CENTURY
  2. 2. FOUNDED: 1908 2009 CURRENT ~ $46B ~$60B MARKET CAP: YEARS TO $1B 30 <3 MARKET CAP AN INCREDIBLE TIME FOR ENTREPRENEURS
  3. 3. BUILDING A COMPANY: THE OLD WAY
  4. 4. 1.  COME UP WITH AN IDEA 2.  SPEND 3-4 MONTHS WRITING A BUSINESS PLAN 3.  APPROACH BANK FOR FINANCING 4.  GET REJECTED BY BANK 5.  APPROACH NEXT BANK 6.  REPEAT STEPS 4 AND 5 SEVERAL TIMES 7.  GET FINANCING 8.  SPEND 6-12 MONTHS BUILDING A PROTOTYPE 9.  SPEND 6-12 MONTHS CUSTOMER TESTING 10.  BUILD PRODUCT 11.  APPROACH BANK FOR MARKETING $$$ 12.  REPEAT STEPS 4 AND 5 AGAIN 13.  GET MARKETING $$$ FROM BANK 14.  START MARKETING
  5. 5. READYTO GO!
  6. 6. TOTAL ELAPSED TIME TO MARKET: ~1-4 YEARS TOTAL COST: $50,000 to $500,000
  7. 7. BUILDING A COMPANY THE NEW WAY
  8. 8. A NEW COMPANY- BUILDING METHOD 1.  DISCOVER A PROBLEM 2.  BUILD A BUSINESS MODEL 3.  VALIDATE THE BUSINESS MODEL 4.  TESTTHE BUSINESS MODEL 5.  GET SOME STARTUP $$$ 6.  LAUNCH A MINIMUM VIABLE PROTOTYPE 7.  GETTHE WORD OUT 8.  GET CUSTOMER FEEDBACK 9.  IMPROVE THE PRODUCT
  9. 9. 1. DISCOVER A PROBLEM (AND A CUSTOMER)
  10. 10. WHAT CUSTOMERS HAVE A PROBLEM THAT NEEDS SOLVING? HOW CAN YOU SOLVE IT FOR THEM?
  11. 11. ONLINE VALIDATION ESTABLISH THAT PEOPLE HAVE A PROBLEM THAT NEEDS SOLVING. A FEW SOURCES TO START: •  Google search •  Amazon •  Youtube •  Quora.com •  Udemy •  Skillshare •  Google Adwords Keyword Planner LOOK FOR EVIDENCE THAT PEOPLE ARE SEARCHING FOR WAYS TO SOLVE A PROBLEM,AND ARE ALREADY PAYING TO SOLVE IT
  12. 12. CASE STUDY: ONLINE PUPPYTRAINING COURSES
  13. 13. I START WITH A HYPOTHESIS: There is a high demand for inexpensive at- home puppy training: Problem 1: people don’t have the budget to hire a trainer or go to courses (and are looking for something they can follow along and do themselves, with their puppy). Problem 2: most of the puppy training out there is general and not breed-specific.
  14. 14. Let’s start with a Google Keyword Planner search for ‘puppy training’
  15. 15. Let’s check Youtube now
  16. 16. Let’s check Udemy (online courses)
  17. 17. Back to Google Keyword Planner Search by breed + ‘training’
  18. 18. WE’VE GOT SOME INITIAL VALIDATION Let’s continue!
  19. 19. 2. BUILD A BUSINESS MODEL
  20. 20. THIS IS YOUR FIRST ATTEMPT ATTURNING YOUR IDEA INTO A BUSINESS MODEL. YOUR BUSINESS MODEL WILL CHANGE OVER TIME, DON’T FALL IN LOVE WITH IT.
  21. 21. USE A BUSINESS MODEL CANVAS THE IMPACT CANVASTHE LEAN CANVASBUSINESS MODEL CANVAS IDEA ---> BUSINESS MODEL
  22. 22. GETYOUR FREE IMPACT CANVAS AT BIT.LY/IMPACT-CANVAS
  23. 23. GO FROM THIS
  24. 24. COSTSTRUCTURE PROBLEM SOLUTION UNIQUEVALUEPROPOSITION SOCIALBENEFIT/IMPACT BENEFICIARY/IES REVENUESTREAMS CUSTOMERSEGMENTS/EARLYADOPTERSCHANNELS THEIMPACTCANVAS---AGUIDE COSTS/BARRIERSOFSOCIALBENEFIT existingalternatives USERS What is the end benefit that your customer is getting from using your product/service? What makes it unique? And does that difference really matter to your customers? Outline your UVP in 1 or 2 clear, compelling sentences, using language that will resonate with your customer and move him/her to action and out of their status quo (their Existing Alternative). Focus on the end result/benefit, not the actual product or service. How does your solution change your customers’lives for the better? What is your path to customers? How will they become aware of you? How will they evaluate your product/service? How will they purchase and receive it? Can you find scalable marketing channels (i.e. the cost of new customer acquisition < marginal profit for each new customer)? What are the top 1-3 problems you’re solving for your customer segment(s)? How serious are these problems for your customer segment(s)? Rank them 1 to 3 in order of severity (1= most severe problem) How are they solving those problems today? Are they using a DIY approach? Competitor’s solution? Ignoring the problem? How happy are they with their status quo? List your top 1-3 customer segments (customers are people who pay you $): a) startups should list early adopters, 1 or 2 customer segments to start b) mature businesses can list their most promising existing & potential segments Try to narrow down your customer segments using demographic/ psychographic characteristics, so that your target market is < 1,000,000 people. e.g. active, outdoorsy women aged 25-30 in the USA, with incomes >$80,000 How will you make money? List all of your potential revenue streams. Some examples of different revenue streams: -Asset sale: (the most common type) Selling ownership rights to a physical good. -Subscription Fees - Revenue generated by selling a continuous service. -Licensing: Revenue generated from charging for the use of a protected intellectual property -Usage fee: Money generated from the use of a particular service -Lending/Renting/Leasing: Giving exclusive right to an asset for a particular period of time. e.g. Leasing a Car -Advertising - Revenue generated from charging fees for product advertising. List all of your fixed and variable costs. Fixed costs are all costs that the business will incur regardless of how may customers you have in a given time period. For example, office rent, payroll (for non-sales-related staff), Variable costs are costs that increase with every additional product or service sold (also referred to as Cost of Goods Sold). For example, materials costs, manufacturing costs, support staff, etc... What is the social/environmental/cultural impact that your business will have? What is the longterm impact? Will your business create systematic change or will it simply provide temporary relief to a longterm problem? You should aim for creating systematic change that will change broken paradigms. Are there any costs associated with providing the social benefit? For example, is your social benefit expressed as a percentage of revenues? Or the cost of providing additional training for people who have traditionally faced barriers to employment? Are there barriers created by the social mandate of your business? For example, if your business is based on a social hiring mandate, does your customer segment hold any stigmas about your potential employees? Who (or what) will benefit from the‘social’aspect of your social enterprise? Describe your beneficiaries in detail, using the same demographic/ psychographic data you use for your customer segments. For many social enterprises, customers and beneficiaries are two different groups of people, however one of the best types of social enterprise - and often the most scalable - is one in which customers and beneficiaries are one and the same (e.g. Grameen Bank) What are the solutions you’re proposing for each of your customer’s problems? (i.e. describe your product/service) DIFFERENTIATORS How is your solution different from your competitors’solution (if you have competitors)? This is for your own purposes, whereas the Unique Value Proposition is a customer- facing statement to clarify why she/he should choose you over the status quo (their Existing Alternative) Some businesses rely on both a paying customer base and a non-paying user base that supports the revenue model. For example, Google relies on billions of people conducting free online searches (users), that advertisers (customers) will pay to reach. KPIs In addition to standard Key Performance Indicators such as revenue, profit, lead generation rate, conversion rate, etc..., what are the other KPIs unique to your business that you should be tracking? e.g. # of downloads, free version users, # of consultations scheduled, etc... ©Mike Brcic, 2014 TO THIS
  25. 25. DON’T SPEND TOO MUCH TIME ON THIS VALIDATE FURTHER AND TEST, THEN UPDATE YOUR MODEL
  26. 26. 3.VALIDATE THE MODEL: TALK TO CUSTOMERS
  27. 27. WHERE DO I FIND POTENTIAL CUSTOMERS? Meetups > go to relevant meetups and talk to people Quora > search relevant topics, post questions and answers Facebook > groups, friends, graph searches Craigslist > post an offer, look for wanted ads Linkedin > Use the contact export tool, then email them to let them know what you’re up to
  28. 28. TALK TO THEM!
  29. 29. GETTO KNOW YOUR CUSTOMERS 1.  WHAT ARE HIS/HER WANTS? NEEDS? FEARS? 2.  DO THEY HAVE A PROBLEM WORTH SOLVING? 3.  WHAT IS HIS/HER STATUS QUO – HOW DO THEY SOLVE THE PROBLEM NOW? 4.  WHAT PART OF THE STATUS QUO ISN’T WORKING FOR THEM? 5.  WHAT WOULD CONVINCE THEM TO SWITCH TO ANOTHER SOLUTION (YOURS)? WHAT WOULD HOLD THEM BACK? PRIORITIZE FACE-TO-FACE IF YOU CAN Use youcanbook.me to simplify meeting scheduling
  30. 30. 4.TESTTHE BUSINESS MODEL
  31. 31. TESTING YOUR BUSINESS MODEL – THE DIGITAL WAY 1.  SET UP AN EMAIL LIST 2.  SET UP A BASIC LANDING PAGE 3.  SEND TRAFFIC TO YOUR PAGE 4.  TEST AND MEASURE ASPECTS OF YOUR BIZ MODEL
  32. 32. SET UP AN EMAIL LISTTO CAPTURE EMAILS MAILCHIMP (mailchimp.com) - free up to 2,000 subscribers
  33. 33. SET UP A LANDING PAGE
  34. 34. SET UP A LANDING PAGE OPTIONS 1.  SQUARESPACE Cover Page (squarespace.com) - $8/mo 2.  SUMOME Welcome mat (sumome.com) - free, or $20/mo for premium (FOR AN EXISTING WEBSITE) 3.  UNBOUNCE (unbounce.com) - $49/mo, 30-day free trial (enough time to test) THEN CONNECTYOUR LANDING PAGE TO YOUR LIST (all offer easy integrations with Mailchimp)
  35. 35. SEND TRAFFIC TO YOUR PAGE FACEBOOK ADS (facebook.com) - .10 to $2.00 / click Hypertargeted! Also GOOGLE ADWORDS -target relevant searches
  36. 36. TEST AND MEASURE – A/B TESTING TESTTHE MOST IMPORTANT PARTS OF YOUR BUSINESS MODEL: 1.  CUSTOMERS: test out different customer segments in Facebook 2.  VALUE PROPOSITION: split test the headlines and copy on your landing pages 3.  PRICING: split test pricing on your landing pages
  37. 37. SPLITTESTING Variant 1: Off the beaten path value proposition
  38. 38. Variant 2: Active and fit value proposition SPLITTESTING
  39. 39. 5. GET SOME STARTUP $$$
  40. 40. CROWDFUNDING: A REVOLUTION IN BUSINESS FINANCING
  41. 41. NEW FUNDING OPTIONS For a comprehensive list of startup funding options, visit: http://bit.ly/startup-funding-guide •  TRADITIONAL CROWDFUNDING •  EQUITY CROWDFUNDING •  PEER-TO-PEER LENDING •  ALTERNATIVE LENDERS •  BUSINESS BARTERING A few alternatives to banks:
  42. 42. 6. LAUNCH A MVP (MINIMUM VIABLE PROTOTYPE)
  43. 43. LAUNCH A MINIMUM VIABLE PROTOTYPE WHAT IS THE MOST BASIC PRODUCT/ SERVICE THAT I CAN LAUNCH THAT WILL SOLVE MY CUSTOMER’S #1 PROBLEM BETTER THAN THEIR STATUS QUO?
  44. 44. BUILD A PROTOTYPE 3D PRINTING @ TORONTO PUBLIC LIBRARY ALIBABA.COMINVISIONAPP.COM BOOK PRINTING @ TPL
  45. 45. GET READYTO SELL 1.  GET A WEBSITE - $8/mo squarespace.com or bluehost.com/wordpress 2.  SET UP ECOMMERCE SYSTEM - $0 included with above options, or try shopify.com 3.  ACCEPT CREDIT CARDS stripe.com (no upfront costs, 2.9% + .30/ transaction) 4.  SET UP A BLOG - $0 included with squarespace or wordpress TOTAL OUTLAY: $8/mo
  46. 46. 7. GETTHE WORD OUT
  47. 47. START A BLOG
  48. 48. GET SUBSCRIBERS Make it easy for people to subscribe!
  49. 49. GET SUBSCRIBERS Rapidology.com: For a Wordpress website Sumome.com: all websites They make it easy to create ‘optins’ on your site (e.g. popups, inline forms, scroll boxes, etc.) and send subscribers to Mailchimp (or other newsletter software) Create a ‘lead magnet’ (e.g. a useful PDF) instead of just asking them to sign up for your mailing list (low conversion rate) – offer the lead magnet in your optin (e.g. ‘9 Poodle Puppy Training Tips)
  50. 50. GET CONTENT OUTTHERE
  51. 51. CONNECT WITH INFLUENCERS AND ASK THEM TO SHARE YOUR CONTENT
  52. 52. RESULTS!
  53. 53. GET IN THE CONVERSATION
  54. 54. GET IN THE CONVERSATION LinkedIn Pulse Medium.com Quora.com Stackexchange.com Facebook Groups And so many more… People are already talking about what you’re selling!
  55. 55. 8. GET CUSTOMER FEEDBACK
  56. 56. FEEDBACK TOOLS 1.  Surveymonkey.com 2.  Wufoo.com 3.  Google.ca/forms 4.  Email 5.  Talking to them ALL FREE!
  57. 57. 9. IMPROVE THE PRODUCT
  58. 58. MAKE IT BETTER
  59. 59. A NEW COMPANY- BUILDING METHOD 1.  DISCOVER A PROBLEM - $0 2.  BUILD A BUSINESS MODEL - $0 3.  VALIDATE THE BUSINESS MODEL - $0 4.  TESTTHE BUSINESS MODEL - $300-$1000 5.  GET SOME STARTUP $$$ - $0 -$1000 6.  LAUNCH A MINIMUM VIABLE PROTOTYPE - $0 - $2000 7.  GET CUSTOMER FEEDBACK - $0 8.  IMPROVE THE PRODUCT - $0 - $?? TOTAL OUTLAY: $0 - $4000
  60. 60. ALLTHAT’S MISSING IS YOU
  61. 61. GO DEEPER: SOCIAL ENTREPRENEUR BOOTCAMPS: http://bit.ly/se-bootcamps TRY OUT MY ONLINE ENTREPRENEURSHIP COURSE FOR JUST $1: http://bit.ly/tse-1-dollar-trial

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