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Startup lessons: Pitching and continuation (Åbo Akademi)


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Lecture in Åbo Akademi's Project Management course. January 2015, Turku, Finland.

Topics: pitching, startup marketing

Published in: Business
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Startup lessons: Pitching and continuation (Åbo Akademi)

  1. 1. PITCHING & CONTINUATION Åbo Akademi, 16.1.2015 Joni Salminen, Ph.D.
  2. 2. PITCHING
  3. 3. BASICS OF MARKETING: STP • Segmentation: What are the possible customer groups the market can be divided into? (Age, gender, location, purchasing power; B2C vs. B2B) • Targeting: Which of those groups is our customers? (Not always can you tell; that’s why talk to many people.) • Positioning: How are we different from competition? (Always consider indirect competition & the simplest solution approach.)
  4. 4. BASICS OF STARTUP MARKETING: CPS • Customer: Whose problem we want to solve? • Problem: What is the problem we are solving? (Problem- solution fit) • Solution: What is our solution? (Product-market fit) • Questions to answer:  Is the problem we are solving REAL? (I.e., do potential customers really think it’s a problem for them.)  Is the problem we are solving WORTH solving? (From business perspective.)  Are the customers we think of the RIGHT people? (Maybe we are solving the right problem, but for the wrong people.)  Does our solution really solve the problem? (Think of pen and paper test, or NASA.)
  5. 5. FIVE TIPS FOR PITCHING 1. CPS: customer, problem, solution (every pitch has to have them) 2. Copy structure from good pitch decks (search in Slideshare!) 3. Time it (don’t exceed your given time) 4. Alternate pitches when talking to different people: see what USP’s most resonate (you can keep diary to do it systematically) 5. Simplify, simplify, simplify (instead of saying ”this could be used by x, y and z”, say: ”this will be used by x”).
  6. 6. BRANDING SUPPORTS YOUR PITCH • In marketing, appearances matter. Before you have a beautiful product, make it seem like you already have it. • Branding can give you… • credibility • more professional image • more interest from potential customers and investors • Potential ways to use branding: • brochure (b2b) • business cards • landing page • logo • mockups • slide deck • t-shirts.
  7. 7. PRACTICAL THINGS FOR PITCHING 1. Make a list of things you need (money, team- mates, mentors, introductions to useful contacts…) 2. Mention this in your pitch (if you don’t tell what you need, it’s harder to help you) 3. Make sure everyone agrees on the pitch and knows it by heart (everyone has to know how to pitch regardless of their role)
  9. 9. HERE ARE YOUR CHOICES… • ALWAYS, the choices are to scale, pivot, or kill • scale: turn it into a real company • pivot: change the idea, team, or market • kill: just do something else. • Remember, most ideas suck. (They don’t work as businesses.) • That’s why you have to fail a lot to make a real business. • It’s not for most people, and that’s fine. (However, startup mentality is useful in any organization.)
  10. 10. IDEA x EXCUTION = OUTCOME Idea Execution Good (+2) Bad (0) Good (+2) Amplified success Failure Bad (0) Failure Disaster • Bad idea, good team: 0x2=0 • Bad team, good idea: 0x2=0 • Bad team, bad idea: 0x0=0 • Good team, good idea: 2x2=4
  11. 11. TWO WAYS TO COME UP WITH A STARTUP IDEA • Deductive: spot a macro trend or a lucrative market from ”helicopter view”. (VCs care about this, since they think of market size and big changes.) • Inductive: spot a everyday problem of a customer and solve it. (Then later on you will find out how scalable business it is.)
  12. 12. WE ARE ALL BOUND TO OUR ENVIRONMENT Turku Finland Europe World Hence, our ability to come up with good business ideas is limited.
  13. 13. EXPERIENCE MATTERS As you gain more experience of a specific industry – which is often referred to as domain- specific expertise – you are able to recognize opportunities you never thought of. That is why many students learn about business development, work in the industry, and only then create their own business.
  14. 14. IS YOUR IDEAANY GOOD? • Vitamins vs. pain killers… • Vitamin syndrome: a nice-to-have product that no-one hates, but does not love either. This will most likely fail. • Pain killer: a must-have product the customer cannot live without. If your product would disappear tomorrow, the customer would be really sad. • Most startup ideas are nice-to-have. They will fail because of that.
  15. 15. IT’S MOSTLYABOUT VALIDATING BELIEFS • Some are right, some are wrong • Just aknowledge they are beliefs, not facts • Then get facts • This is called ”get out of the building” by Steve Blank
  16. 16. WHAT’S THE DIFFERENCE BETWEEN USERS AND CUSTOMERS? • Customers pay, users don’t. • The curse of indirect business model: ”We want to make something people use, but don’t have to pay for.” • Most startups using an indirect business model fail because they don’t have any money. • Because they are not selling anything, also investors don’t want to give them money. • Silicon Valley is an exception. Turku is not Silicon Valley (beware of the Valley Syndrome!)
  17. 17. TWO SCHOOLS OF THOUGHT • Paul Graham: “Make things people want.” • Joni: “Make things people want… to pay for.” The first one targets users by providing a useful service with the assumption that money can be generated later on in some way. The second one goes straight after business. Both can work, but the second one is easier!
  18. 18. IN STARTUPS, MARKETING AND CODE OVERLAP Customer development Product development You need to find a really good marketing guy that can translate customer needs into technical requirements.
  19. 19. STARTUPS OFTEN OVERLOOK THE IMPORTANCE OF… • selling: without money there is no business • distribution: you can find resellers who sell your product • advisors: people can really give you their time and help you grow through their network • you need a lot of help to grow a business – remember to look for help, be humble and appreciative.
  20. 20. PRODUCT-MARKET FIT (Marc Andreesen) • If the idea doesn’t work, change it • If the customer doesn’t work, change it • If the product doesn’t work, change it • If the team doesn’t work, change it • CHANGE everything to make a sellable thing. • A vital change is called pivot.
  21. 21. PIVOTS AND PATH DEPENDENCY • The end result is often different from what was initially thought of • However, the initial idea influences how the project will evolve • This is called path dependency • Therefore, startup parameters matter. Although a good team can improve, by choosing a bad idea it is worse off compared to another team choosing a good idea.
  22. 22. THE DANGER OF RUNWAY Time Chance of success …even if you bootstrap, life gets in the way!
  23. 23. SUNK CODE FALLACY (Ries, 2011) • Tendency of people sticking to bad choices because they have costed time and effort. • AVOID THIS: ”I have gone through so much effort to create this feature, so we’ll keep it.” • Rather than writing perfect code, hack things to work at minimum viable level • If the product has genuine demand* (small chance), you can restart and do it properly • If the product doesn’t work (big chance), you anyway have to forego your earlier work. • *Genuine demand: People are willing to PAY for the product. (In most cases, forget about indirect monetization – it is much harder.)
  24. 24. NEXT STEPS • Decide if you want to continue • Analyze if you need extra help (cf. Walkbase) • Consider applying for Startup Journey in Boost Turku. • You can have a good idea but not the team; don’t worry, new people are out there. • You can have a bad idea but a good team; don’t worry, new ideas are out there. • All you need is motivation; everything else can be figured out.
  25. 25. STARTING A COMPANY • Who can help: • Boost Turku (networking, advice) • other startups (advice) • Potkuri, Creve, Science Park (advice, office space) • When officially starting a company, most important thing is that you have a customer or a very certain way to get it/them. Until that you can stay non-incorporated. • Scaling: getting funding or turnover in order to grow a company – in other words, you hire sales people, marketers, developers, customer service, etc.
  26. 26. Some reading • Eric Ries: Lean Startup • Steve Blank: Four steps to Epiphany • Cindy Alvarez: Lean Customer Development • Alistair Croll: Lean Analytics • Joni Salminen: Startup dilemmas: Strategic problems of early-stage platforms on the Internet
  27. 27. THANK YOU & GOOD LUCK! Joni Salminen Ph.D., marketing Turku School of Economics