What Startups Can Do To Succeed

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Often startups fail due to lack of understanding on how to manage the balance between innovation, product development and customer development. A recent study found the high-tech startup rate peaked in the U.S. in 1982 when it represented 60% of all new firms. Today that rate has dropped by half. While there’s still an explosion of startups spreading across the country because it’s cheaper, faster and easier than ever before to launch a new company, it’s also harder than ever before to succeed and grow, especially in a way that creates jobs and wealth for many people.

Learn what modern entrepreneurs and intrapreneurs can do to succeed. Here we share tips on how to overcome common pitfalls and how to use innovation to transform ideas and products into a great business.

Thanks to John Beveridge of Rapidan Strategies and Sam Aparacio of Ringio who shared their lessons learned.

Upcoming Learning Opportunity
In today's business environment, innovation is a key driver. Startups succeed by not only recognizing, but capitalizing on new opportunities that emerge from the evolution of markets, customers and technology. Businesses must constantly be looking at new ways of understanding the world around them.

Don’t miss an upcoming Certified Innovation Leader course in Tyson’s Corner on June 16-17. This will equip you with all the tools you need to turn ideas into products customer love. Learn more at http://bit.ly/CILCourse.

About the Speaker
Hector Del Castillo has over 15 years of experience transforming ideas to products, and products to wealth for technology-based companies by building and directing high performing product teams, improving core business processes and establishing strategic partnerships. He has launched several profitable technology-based products and solutions. He provides services as a consultant, contractor, coach, or trainer to companies that want to grow by strengthening their product portfolio and creating new revenue streams.

Hector is a Certified Product Manager (CPM®) and Certified Product Marketing Manager (CPMM®). He earned M.S. degrees in Electrical Engineering from the University of California at Santa Barbara and the University of Texas at El Paso and a Bachelor's Degree in Electrical Engineering from the University of Texas at El Paso.

Feel free to contact Hector at http://linkd.in/hdelcastillo if you have any comments or questions.

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What Startups Can Do To Succeed

  1. 1. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Hector Del Castillo linkd.in/hdelcastillo
  2. 2. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Special Thanks
  3. 3. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Target Audience • Founders • Entrepreneurs • Intrapreneurs • Makers • Inventors • Freelancers
  4. 4. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo What’s a Startup?
  5. 5. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo “A startup is an organization formed to search for a repeatable and scalable business model.” - Steve Blank
  6. 6. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Are you a Startup?
  7. 7. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Is your company less than 3 years old? Is your company dependent on investment to operate? Have you executed or are you planning a pivot? Is your company designed to grow fast?
  8. 8. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Learning Points 1. Understand why most startups fail 2. Discuss what entrepreneurs can do about it
  9. 9. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo What We Will Discuss 1. Why Most Startups Fail 2. What You Can Do About It 3. Lessons Learned 4. Open Discussion
  10. 10. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Current Situation
  11. 11. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Research from Harvard Business School’s Shikhar Ghosh shows, 75% of all start-ups fail. Source: “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail,” Deborah Gage, Wall Street Journal, Sep 20, 2012
  12. 12. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo If failure means liquidating all assets, with investors losing all their money, an estimated 30% to 40% of high potential U.S. startups fail. Source: “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail,” Deborah Gage, Wall Street Journal, Sep 20, 2012
  13. 13. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo If startup failure is defined as not delivering the projected return on investment, then 95% of startups are failures. Source: “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail,” Deborah Gage, Wall Street Journal, Sep 20, 2012
  14. 14. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Failure often is harder on entrepreneurs who lose money that they've borrowed on credit cards or from friends and relatives than it is on those who raised venture capital. Source: “The Venture Capital Secret: 3 Out of 4 Start-Ups Fail,” Deborah Gage, Wall Street Journal, Sep 20, 2012
  15. 15. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Why Most Startups Fail
  16. 16. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo The first problem is that most startups lack an effective approach to gain loyal customers.
  17. 17. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo The second problem is founders who think process and management are boring and dull and not essential to succeed. Source: Ries, Eric (2011-09-13). “The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses,” Crown Publishing Group.
  18. 18. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo The third problem is that most startups lack resources to deal with volatility, uncertainty, complexity, and/or ambiguity.
  19. 19. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Howwellcanyoupredictresults? + Complexity Situation has many interconnected parts. Some information is available or can be predicted, but the volume can be overwhelming to process. Volatility Situation is unexpected or unstable and may be of unknown duration, but it’s not necessarily hard to understand. Information is often readily available. - Ambiguity Causal relationships are completely unclear. No precedents exist; you face “unknown unknowns.” Uncertainty Despite a lack of some information, the situation’s cause and effect are known. Change is possible but not a given. - + How much do you know about the problem? Source: Nathan Bennett and G. James Lemoine “What VUCA Really Means For You,” Harvard Business Review, Jan 2014
  20. 20. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo What You Can Do About It
  21. 21. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  22. 22. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Define Your Value Proposition Which Customers? What Price? Which Needs?
  23. 23. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  24. 24. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  25. 25. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Adopt the right innovation framework DomainDefinition WellDefined Disruptive Innovation Incremental Innovation NotWellDefined Basic Research Breakthrough Innovation Not Well Defined Well Defined Problem Definition
  26. 26. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  27. 27. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo 2. Acquire customers
  28. 28. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Sharpen Your Value Proposition Source: Alexander Osterwalder, “Value Proposition Canvas”
  29. 29. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  30. 30. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  31. 31. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  32. 32. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  33. 33. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  34. 34. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  35. 35. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  36. 36. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  37. 37. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  38. 38. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  39. 39. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Key Takeaways • Set a compelling direction1 • Achieve a high product-market fit2 • Focus on acquiring customers3 • Use just-in-time scalability to grow4 • Use metrics to pivot as needed5
  40. 40. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Lessons Learned
  41. 41. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  42. 42. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo
  43. 43. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Q & A Hector Del Castillo, CPM, CPMM Product Innovation Consultant linkd.in/hdelcastillo @hmdelcastillo hmdelcastillo@aipmm.com
  44. 44. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Hector Del Castillo • Senior consultant with over 15 years of experience transforming products to wealth for technology companies • AIPMM Body of Knowledge (ProdBOK®) Contributor • Established companies – Jet Propulsion Laboratory, Lucent Technologies, MEI Technologies • Small companies and startups – Nextone Communications, Smith Micro Software • Launched 30+ Products for global deployment – HW/SW, Telecom, Enterprise Mobility, Information Security Services, Professional Development • Certified PMP®, CPM® and CPMM® • University of California at Santa Barbara, MS EE • University of Texas at El Paso, MS EE, BS EE 44
  45. 45. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Upcoming Learning Opportunity June 16-17 - McLean, VA AIPMM is offering several scholarships to these courses to reach those who are serious about learning these skills but have budget constraints. For more information visit: http://bit.ly/CILCourse.
  46. 46. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Need Assistance? Need help to transform your product idea into a great business? Set up a free initial 30-minute consultation appointment and let me know how I can help you. Learn more at http://bit.ly/1heVQiK
  47. 47. © 2014 Hector Del Castillo, All Rights Reserved http://linkd.in/hdelcastillo Please Join Us Again! Certified Innovation Leader (CIL®) Course Preview June 6th, 12 pm ET AIPMM Webinar Series: http://aipmm.com/aipmm_webinars Global Product Management Talk http://www.blogtalkradio.com/prodmgmttalk Call For Speakers: http://www.boldpm.com/call_for_speakers Topic Suggestions: support@aipmm.com Announcements: http://www.aipmm.com/subscribe LinkedIn: http://www.linkedin.com/company/aipmm Membership: http://www.aipmm.com/join.php Certification: http://aipmm.com/html/certification/

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