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Dare to do Legendary Things - from Mike Maples, Jr at Stanford Entrepreneurial Thought Leaders

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Dare to do Legendary Things - from Mike Maples, Jr at Stanford Entrepreneurial Thought Leaders

  1. 1. Mike Maples, Jr (@m2jr) Entrepreneurial Thought Leaders January 27, 2016
  2. 2. Thunder Lizards
  3. 3. What can we learn from the people who have built ThunderLizards?
  4. 4. Key Thought #1: 3 Exponential Laws of Entrepreneurship
  5. 5. Moore’s Law
  6. 6. Moore’s Law Performance of computing doubles every 18 months at a given price.
  7. 7. Metcalfe’s Law
  8. 8. Metcalfe’s Law The value of a network is a function of the square of its number of nodes.
  9. 9. The Power Law 97% of all exit profits come from <10 >10,000 startups a year
  10. 10. The Power Law 97% of all exit profits come from <10 >10,000 startups a year The Value of the best outcome exceeds all other outcomes combined; the second best outcome exceeds the value of subsequent outcomes and so-on.
  11. 11. The Goal of Tech Entrepeneurship Leverage the power of Moore’s Law and/or Metcalfe’s Law… To create… An extraordinary outcome
  12. 12. But How?
  13. 13. Key Thought #2: The Value Stack
  14. 14. The Value Stack Value creation Proprietary Power Product Power Company Power Category Power …avoids the need to compete …achieves product- market fit …prepares for rapid scaling …captures the value from changing spend
  15. 15. Proprietary Power Avoiding the need to compete Proprietary Power Product Power Company Power Category Power
  16. 16. Common View of Capitalism Capitalism is a system of perfect competition.
  17. 17. The Broader View of Capitalism “True” capitalism and competition are opposites
  18. 18. Fundamental Advantages are Fundamental • Perfect competition is not perfect • Mindless competition is pervasive in Silicon Valley • Can it be a monopoly if it works? • Is there a structural competitive advantage, not just a first-mover advantage?
  19. 19. Sources of Proprietary Power
  20. 20. Technology Advantage (usually harnessing Moore’s Law)
  21. 21. Network Effects (usually harnessing Metcalfe’s Law)
  22. 22. Suggested Reading
  23. 23. Product Power Achieving Product- Market Fit Proprietary Power Product Power Company Power Category Power
  24. 24. Common View of Products Company Market Product • Startup has product idea and builds it • Startup launches product • Then gets customers and iterates
  25. 25. Problems with this view “In a great market – a market with lots of real potential customers – the market pulls product out of the startup.” Conversely, in a terrible market, you can have the best product in the world and an absolutely killer team and it doesn’t matter – you’re going to fail.” “The #1 company-killer is lack of market.” Marc Andreessen
  26. 26. Product/Market Fit Product Market
  27. 27. Product/Market Fit Product Market Identify the market • Large • Strong customer desire • Right timing
  28. 28. Product/Market Fit Product Market Identify the market • Large • Strong customer desire • Right timing “Pulls” the product
  29. 29. Product/Market Fit Product Market Identify the market • Large • Strong customer desire • Right timing Pull the product Delights the customer
  30. 30. Delighting the customer requires a “WTF” Experience Lyft and Uber Tesla Autopilot
  31. 31. Suggested Reading
  32. 32. Company Power Preparing for rapid scaling Proprietary Power Product Power Company Power Category Power
  33. 33. Sources of Company Power • Scalable Business Model – Converts innovation to value • Scalable Management Systems – Avoids technical and management debt
  34. 34. Scalable Business Model • Always possible when Proprietary Power and Product Power are present • Increasing margins and pricing power are “proof” that the first two layers are strong
  35. 35. Suggested Reading Business Model Canvas By Alexander Osterwalder
  36. 36. Scalable Management Systems • Culture: Define it or let it happen? • Basic Management Systems: – 1:1s, Board Meetings, Team Meetings, Forecasting Frameworks • Compensation Strategy – Particularly important for recruiting and retention • Hot Teams
  37. 37. Suggested Reading
  38. 38. Category Power Capturing the value from changing spend Proprietary Power Product Power Company Power Category Power
  39. 39. Category Kings… • Category Kings don’t just make something to sell to people • Category Kings introduce the world to a new category of product or service. • Category Kings replace our current point of view with a new point of view. • And ultimately, they change how people and businesses decide to spend their money.
  40. 40. Examples
  41. 41. Category Kings usually capture 70-80% of the profit pool.
  42. 42. Suggested Reading www.playbigger.com
  43. 43. Funding your value stack
  44. 44. The Goal of Seed Rounds Value creation Proprietary Power Product Power Company Power Category Power …marry the first two layers …lay early groundwork
  45. 45. The Goal of “Execution” Rounds Value creation Proprietary Power Product Power Company Power Category Power …create the flywheel for blitz-scaling ...category design …invest to tighten fundamental advantages
  46. 46. The Goal of “Late Stage” Rounds Value creation Proprietary Power Product Power Company Power Category Power …relentless refinement ...capture the profit pool from emerging category
  47. 47. Final Thought
  48. 48. Never let go of being exceptional
  49. 49. THANKS!

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