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MBA Lessons for Hackers - Barcamp NYC Presentation by pledge4good
- 1. SAVE YOUR $100K: MBA LESSONS FOR HACKERS For more information, please contact Leonard Fishman at lenny@pledge4good.com or Vikram Bellapravalu at vik@pledge4good.com.
- 2. WALL STREET TO VIA AN MBA Tracer Capital Management 1
- 3. THE REALITY: MBAS CAN CREATE GREAT COMPANIES 2
- 4. #1: THE BEST WORKPLACES HAVE COMMON TRAITS Start-up / entrepreneurship implication: HR, culture Skill variety Meaningfulness Task significance Motivated Responsibility Autonomy Employees Knowledge of Results Feedback 3
- 5. #2: VIRALITY DOESN’T JUST HAPPEN Start-up / entrepreneurship implication: marketing Advertises Itself Social Practical Currency Value Emotion Common Ground Story Triggers Source: Jonah Berger. Wharton School. 4
- 6. #3: CONSUMERS AREN’T STRICTLY RATIONAL Start-up / entrepreneurship implication: pricing policy Prospect Theory Hyperbolic Discounting Mental Accounting Odd Number Pricing > AOV AOV Source: Wikipedia: http://en.wikipedia.org/wiki/Prospect_theory; http://en.wikipedia.org/wiki/ File:Hyperbolic_vs._exponential_discount_factors.svg 5
- 7. #4: FOCUS ON INDIVIDUAL DYNAMICS Start-up / entrepreneurship implication: marketing Aggregate retention rates typically …but generally see increasing observed as stable over time… retention amongst cohorts… …CLV calculation using aggregate measures underestimates badly Source: Peter Fader. Bruce Hardie. Available: http://www.brucehardie.com/talks/cba_workshop_paris_2007_handout.pdf 6
- 8. #5: THINK CRITICALLY ABOUT INVENTORY Start-up / entrepreneurship implication: server capacity, inventory management • Under- or over-capacity is a Cu business model flaw F(Q) = Cu + CO • Buy inventory up to X* = µ + σ * Q • Newsvendor Critical Ratio: € • CU – lost revenue from under- € ordering inventory • CO – cost of over-ordering inventory Source: http://members.pioneer.net/~mchumor/business_inventory_toons.html 7
- 9. #6: CONTRACTS DON’T HAVE TO BE WRITTEN Start-up / entrepreneurship implication: customer, employee, supplier management • Only require: • Mutual ascent – offer, acceptance • Consideration • Legality • Capacity Source: http://www.cartoonstock.com/directory/o/oral_contracts.asp 8
- 10. #7: LITIGATION IS A BUSINESS TACTIC AND A PRICEABLE RISK Start-up / entrepreneurship implication: legal Source: Wharton School. LGST621. Winter 2011. 9
- 11. #8: FUNDING CONVERTS YOUR EQUITY INTO A DEEPLY OUT OF THE MONEY OPTION Start-up / entrepreneurship implication: ownership Perceived - $100K Initial Capitalization Equity Ownership Equity Ownership $1MM “A” for 20%; 2x Pref. Invest ors 20% Found Found er er 80% 100% Actual - $100K Initial Capitalization Equity Ownership Equity Ownership Founder $1MM “A” for with 20%; 2x Pref. Invest Call ors 100% Option with Found er $2.0MM 100% Strike 10
- 12. APPENDIX For more information, please contact Leonard Fishman at lenny@pledge4good.com or Vikram Bellapravalu at vik@pledge4good.com.
- 13. PERSUASION CAN BE LEARNED Start-up / entrepreneurship implication: negotiations, email marketing, cold calling Persuasion Weapon Example Liking “We’re developers like you” Reciprocity “We’re offering a major discount, so prepay today” Social proof “We have 75% of the Fortune 100” Consistency “Commit to a monthly $10.00 donation today” Authority “Our team consists of 10 PHDs” Scarcity “Request a beta invite today” Source: Cialdini. “Harnessing the Science of Persuasion.” 12