Guidelines: Building A Successful Startup

Startup Failure
Agenda What is failure? What is success?
How can an entrepreneur enhace his
or her chances of success?
How to approach the market and get
the best out of your investment
DefiningFailure
Gotomarket
The importance of having the right
mindset, using the right frameworks,
and doing the right research
Ideation

Best practices to ensure that your
project makes it to the market with
the lowest technical debt possible
Outsourcing–The
Dilemma
How to set SMART KPIs and align
them to the outcome you committed
to your stakeholders while getting
your teams buy-in
SettingKPIs
The importance of having the right
mindset, using the right frameworks,
and doing the right research
Selling&Overselling
How to turn your failure into one big success
Making an ROF

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Eric T. Wagner, Forbes 2013
“8 OUT OF 10 STARTUPS FAIL”
Not having enough cash to launch the product in the
market or not being able to sustain the startup’s
operations
Runningout of cash
Not having a minimum year-on-year growth of 20% for
a minimum period of 3 years and a minimum baseline
of 1,000,000 USD
Notbecominga Gazelle
Not becoming a company with a minimum valuation
of 1 billion USD
Notbecominga unicorn

Eric T. Wagner, Forbes 2013
“8 OUT OF 10 STARTUPS FAIL”
• A startup that does not make it to market
• A startup that does not perform up to expectations
WHAT IS A FAILING STARTUP? 50% to 60% of startups have a 5
year survival rate
Runningout of cash
1.5%-3% of startups become a
gazelle
Notbecominga Gazelle
<1% of startups become unicorns
or decacorns
Notbecominga unicorn
• Your expectations
• Success and failure are concepts tied to ambitions
• Ambitions are tied to business expectations
WHAT DEFINES SUCCEESS?
• Success is a journey where expectations end up
materializing
• Failure is a journey where you end up unable to
commit to business expectations
WHAT DOES THAT MEAN?

6
The probability of success is irrelevant
What is relevant are the choices you make throughout the
journey. These choices end up putting you on either side of the
static.
What’stheprobabilityofsuccess?

Common pitfalls in ideation
Ideation

Ideation
Idea
• You have an idea, and you think it
makes sense
• Don’t assume, know
• Your idea is a hypothesis that needs
testing
• It is NOT a high demand product
until the market says so

Ideation
Research
• Invest in market research to validate
your thoughts – set a timeline and a
budget
• Analyse your hypothesis from a
product risk, customer risk, and
market risk perspective
• Learn and use the right financial
terms – if you don’t know how to
use them, hire someone to help you

Ideation
Research
Product Risk
• Is there an actual problem you’re
trying to solve?
• Does the ‘solution’ you’re offering
solve the problem you’re trying to
address?
• How does that translate into a value
proposition?
• What are the best metrics that allow
you to measure your performance?

Ideation
Research
Customer Risk
• Who are the people that need your
product?
• What are the characteristics of your
early adopters ?
• Where can you reach your clients in
the most efficient way?

Ideation
Research
Market Risk
• Who is your competition?
• What are the existing alternatives in
the market today?
• How does that affect your revenue
streams and cost structure?

Ideation
Research
Your Mindset
• To get the right outcome, have the
right mindset
• Ask the right questions
• Is my idea a successful
business?
• How can I turn my idea into a
successful business?
• Don’t succumb to your internal bias
• Accept the outcome of the research

Linkedin.com/in/marioramadan
DigitalCameras
Kodak decides to pick pennies while
standing in front of a pot of gold
14
Kodak was a leader in the film
photography industry.
Steven J. Sasson – A Kodak Engineer
developed the first digital camera in
1975.
“My prototype was big as a toaster,
but the technical people loved it”
“But it was filmless photography, so
management’s reaction was ‘that’s
cute, but don’t tell anyone about
it.’ ”
– Steven J. Sasson
Case–Pivoting

PicturePhone
The videophone that never sold
15
Don’t decide on the behalf of your
customers – Accept their feedback;
they are the market
Decision makers thought that being ‘prestigious’
was what mattered most and ‘being relaxed’ was of
lower importance
“PicturePhone had no analogue to the
mute button on a speakerphone; users
had no way unobtrusively to get off
camera. An interesting anecdote in this
regard is that the president of Bell Labs
kept a black cover over his
picturephone.”
– Bandwagon Effects in High-
technology Industries
Case–CustomerRisk

ZUNE
Microsoft develops more of the
same
16
Don’t approach pure competition
People will see you as ‘more of the same’
Microsoft’s product did not offer
anything different from Apple’s
iPod. This made ZUNE a copy
instead of a subsititute.
Case–MarketRisk

The do’s and don’ts that make or break your product
Go To Market
Entrepreneurs sometimes have products that aim
at a global market. If your product is fit to serve the
globe, make sure that it survives to serve the globe.
How to deliver your
solutionx%
y%
m%
z%
k%
n%
Develop a product that is enough to
satisfy your early adopters and capture
back some value.
Identify and engage your early adopters.
It is important that you engage these
individuals early on even if that means
not reaching all your customer
segments.

5 Vocal about being part of your solution
4 Excited to test and participate in your R&D
2 Are aware of the setbacks created by the problem
1 Have the problem you’re aiming to solve
3 Are in need of a solution
5 Interested in enhancing your solution
18
Why engage early adopters?
• Have the highest threshold to
accept mistakes
• Have the lowest bargaining
power. They need - not want - a
solution
• Perceive no substitutes that
solve their current problem to
switch
• Perceive a differential
advantage in your product that
currently available substitutes
fail to live up to
Early Adopters: Your guinea
pigs

If your product is global, make sure that it survives to serve the globe
Focus – Develop a beachhead strategy
19
Make sure that you exploit your value proposition in your
communication
Identifyyourcontentplatform
channels
Make sure that you have the essential resources to ensure
a successful product launch
Identifyyourkeyresources
Map down the activities that have to be done by every
member to achieve the planned strategy
Identifyyourkeyactivities
Rank & prioritize the segments you intend to serve
Identifyyourprimarycustomers

It’s more than a product, it’s a process that you should always use
DevelopingyourMVP
Has the minimum features that your
customer needs
Minimum
Is functional, reliable and idiot-proof
Viable
It’s ready to go to the market and
capture back some value
Product

The Entrepreneurs’ Dilemma – How to guarantee a successful delivery
Outsourcin
g
Guarantee your outcome
Cost is secondary to functionality. If you don’t
have the skills, hire a third party to follow up on
the development of the product.
Find the right supplier
Do your scoping, get an overall idea about the
suppliers in the market, and get multiple offers.
Inquire about their process
Understand the operational process they’ll use to
get your work done. Learn if they use traditional,
agile, or mixed methodologies to develop your
product.
Engage your supplier
Become closely related to their affairs – establish
a human relationship that transcends the dollar
value they’re aiming to make out of you.
Optimize the output
Make sure that the project includes seniors
overseeing the work of juniors developing your
project.
Draft the requirements
Be as specific and detailed in your requirements.
Explain your vision, and WHY things need to be
done in a specific manner or order.

The Entrepreneurs’ Dilemma – How to guarantee a successful delivery
Outsourcin
g
Communicate your expectations
Make sure that you are aligned in the timeline set
for deliverables
Maintain Full Visibility
Make sure that you have full visibility at all times
over the task being delivered and the tasks that
are in the pipeline – ask for regular demos
Bind payments to milestones
Make sure that you break down the project into
phases and bind the payment schedule to the
delivery of the phases set
Control your document repository
Make sure that the document repository is tracing
all check-ins and check-outs and that the platform
supports versioning
Document progress
Make sure that the progress is documented on
the go and that all stakeholders have access to the
documentations at all times

How to guarantee that your KPIs are SMART
Defining & Acheiving Your KPIs
Agree on the vision
Develop a common, clear, and assumption-free
target that is understood and agreed upon by all
stakeholders – including your board, investors,
key partners, and your team
Determine your goals
Map out and define the objectives
that need to be met in a year’s time
Perform
Work throughout the quarter to
achieve the KPIs that you have
committed yourself to
Set your target
To achieve your vision, set out a
long term target that aims for the
next 3-5 years. Be as specific as
possible from this point on
Identify your actions
Define the activities that need to be
done within the next quarter to
achieve the goals you committed
yourself to by the end of the year
Revise & Appraise
Revise the performance throughout
the quarter and appraise yourself
or the team.

Make your brand promise
clear, big, and emotionally
relatable
Brand Promise BrandGuarantee
Ensure that your customers’
satisfaction is managed in
case you fail to deliver
ResolveRootCause
Identify the cause of failure
and take corrective action so
that the error does not
reccur.
Are you selling or overselling your product?
“People want to buy, no one wants to be sold” is cliché, but it is also true. If
your startup is perceived as a company that wants to sell rather than fulfilling
clients’ needs, then it will be the company that no one wants to buy from.
Making sure that your client is in the heart of your actions
Howtoavoidoverselling

A list of guarantees that you can use to boost your users’ trust
Guarantee Types
25
Money Back Guarantee
Return the user’s payment within a
predetermined period of time
Risk-Free Guarantee
Ensure your user that his transaction
is safe and that your user will get the
worth that he or she has paid for.
100% Satisfaction
Guarantee
Return your customer the value he or
she has settled if your customer is
not satisfied
Lifetime Guarantee
Replace or repair the product your
customers purchase free of charge
Low Price Guarantee
Guarantee to your client that you can
match a price lower than yours in the
market
Free Trial Guarantee
Give your customer the chance to
experience your product before
conducting a purchase

How to use failure as a means to succeed
Maximize Your Returns Through Failure
Fail in novelty, not in certainty
Fail in what has not been done before
Don’t do the same mistake and expect a different
outcome.
• Avoid sunken cost bias
• Avoid survivorship bias
• Engage in ‘Productive Failure’ – Sort your
investments in small portions to pinpoint your
biggest ROI
• Don’t move before taking a step back to retrospect.
• Share your failure with your community and your
team, as this creates a multiplier effect

27
THANK YOU
FOR
FOLLOWING
Mario Ramadan
linkedin.com/in/marioramadan

Guidelines: Building A Successful Startup

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