MANAGEMENT MANUAL FOR START

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Management Manual for Start-up – Léa CARON

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TABLE OF CONTENT
I. Foreword ……………………………………………………………………………… 3
II. Difference between business model and business plan ……………………………..... 4
III. Tools to understand how to success with your start-up
a. Pivots: a learning process …………………………………………………….. 5
b. Cross the Chasm …………………………………………………………….... 6
c. Golden Circle ………………………………………………………………… 7
d. Value Proposition Canvas ……………………………………………………. 8
e. Business Model Canvas……………………………………………………... 11
IV. Start-up Lifecycle
a. Step 1: Discovery …………………………………………………………… 12
b. Step 2: Validation …………………………………………………………… 13
c. Step 3: Efficiency …………………………………………………………… 13
d. Step 4: Scale ………………………………………………………………… 14
e. Step 5: Profit maximization ………………………………………………… 14
f. Step 6: Renewal …………………………………………………………….. 14
V. Lean Start-up ………………………………………………………………………… 15
VI. 3 essentials for building a viable company ………………………………………….. 17
VII. References …………………………………………………………………………… 18

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I. FOREWORD
You woke up few weeks ago with an idea, a project, something revolutionary and
something innovative. On the contrary, you kept an idea in your mind since few years and you
think today it is time to realize your project.
In both case you did not think you could be an entrepreneur because you did not know how it
works. You never did it before and you are afraid.
Do not be afraid. Being an entrepreneur is accepting to take some risks, for sure.
By chance, you have between your hands a manual to help you to understand the different steps
in company creation, to give and explain you the tools you really need to use. This guideline
will be your best friend for the next few months.
Let your project start here.
Usually, you have to know that if you pass the first five years with your company, it means
your company will growing more and more. Indeed, five years is the symbolic barrier when we
know if a company will pass or fail.
Before to arrive at five years, you have few steps before. This is those steps and how to go
through it that this guide will give you.
In a first time, you have to define your business model. This is the heart of your project. Your
development will be based on this business model.
Be careful, do not get business model mixed up with business plan.
In a second time, you have to understand the different steps there are in a start-up lifecycle.
Be ambitious, be passionate, be entrepreneur.

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II. DIFFERENCE BETWEEN BUSINESS MODEL AND BUSINESS PLAN
The business model is the concept which allow a company to make money. It is a document
in which the entrepreneur explain the global logic of the company, how the company create
value, for whom (customers segment) and how it make money.
The business plan is a concrete, operational and numbered strategy to use your business model.
It is a formal document, which get a presentation of the company’s strategy, the future’s vision
of the CEO, how implement the business model, it future financial situation (balance sheet) and
the activity of the company.
First, you have to think, analyse and sum up your activity to create your business model. Then,
you can start create your business plan, which one valid or not your business model with figures.
You have to insert in your business plan your financial plan which demonstrate the viability of
your company. It include:
- A financial plan estimating over the next 3 years
- Income statement estimating over the next 3 years
- A cash flow plan over the next year
- A financing table
To sum up, your business model is the heart of your company, it answer to a simple question
“how do I make money?” whereas your business plan explain all the strategy we will use to
make is money.

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III. TOOLS TO UNDERSTAND HOW TO SUCCESS WITH YOUR STARTUP
Create the perfect company on the first try is not possible. You have to fall down,
understand and earn from your mistakes to go forward.
To create a successful company, you need to search for the repeatable and scalable business
model. To succeed in this search, you have to make and test predictions about what will work
in your business model. If an element works, then future iterations should retain that practice,
but if it does not work, you should “pivot” by changing one or more elements.
This drawing show you how pivot works:
You have two feet. One is your business model, the core of your company, and this foot is
fixed one the floor. The other foot is your business plan, when an element does not work, you
can move or “pivot” with your second foot, around your first feet. You keep your first idea,
but change some elements around to make your idea happen.
A pivot is not a failure, it is a learning process.

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Now that you know how pivot works, and you do not have to be afraid if one occurs, you
have to keep in mind that the road to success is more or less easy to drive, with some
obstacles to cross.
If you develop a new concept of something already existing (for example a new concept of
restaurant, whereas restaurant already existed), or a totally radical innovative product, your
major obstacle to cross will be the Chasm from the Technology Adoption Lifecycle curve
below.
This curve explain the process of adoption of a new product from the market/customers. As
you can see in step 2, there is a huge gap, called The Chasm.
When you arrive here, there is two options: either you pass the chasm or you fall down into. I
am pretty sure you are able to cross this chasm, but to do so, sometime you will need to ask
yourself if this strategy is good of not and if maybe you must pivot a little bit to change this
idea.
Finally, when you are in the bowling alley, you are is the “mass”, there is the main majority of
the market and you have to convince them more and more. It is like at the bowling, if you are
the only pin to stay up, you will be inside the tornado and jump up to the main street, and
when you are at the main street, guy, you are not too bad!
From this main street, you can target the early majority of customers and the late majority of
customer, you are in the game now.
Do not spend time to target the laggard, you will lose time, money and energy. There are
completely out of the game and really do not care about what product is new and can be better
or easier to use. They are afraid of innovation, of what they do not know and keep safe what
they know.
Early Adopters Early Majority Late Majority Laggards

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Now that you know you can pivots and you have to cross the Chasm, we can start to understand
how use different useful tools to cross this chasm and make intelligent pivots.
The first tools is this Golden Circle just below. The idea come from an English speaker, Simon
Sinek. He wrote a book call Start with why, which explain this idea of Golden Circle.
Simon Sinek explain how the greatest leaders and organizations of our world - Apple, Martin
Luther King or Wright’s brother - success better than anyone else: this is because they think
in a totally different way from others, and this way of thinking is explain with this Golden
Circle.
Every organizations of the planet knows WHAT they do, 100%.
Some of those organizations knows HOW they do.
And just a few knows WHY they do what they do.
This is the main difference, and the most important one. What is your purpose? What is your
cause? What is your belief? Why do your organization exist? Why everyone must care about
your organization?
A really simple example to understand is Apple.
If Apple where as everyone else, one of their marketing message would sound like this:
“We make great computers, they are beautifully design, simple to use and user-friendly”.
Do you want to buy one?
This is now how Apple actually communicate:
“Everything we do, we belief in challenging the status quo, we believe in thinking differently.
The way we challenging the status quo is by making our product beautifully design, simple to
use and user-friendly. Which just happen to make great computers.”
Do you want to buy one? It is totally different is not it?
You have to share your inspiration to inspire the customers. If the customers is inspired by
what you do, if he has the same belief of why you do this, he will buy your product.

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People do not buy what you do, they buy why you do it. This will make the difference
between you and the others.
The Value Proposition Canvas is another great tools to understand how your product will
match with your customers’ target. Let me explain the idea behind this drawing below:
In green you have your product, in red it is your customers’ segment. To use this drawing,
start by analysis your segment, the red part.
1. Customer jobs
 Describe your customers’ segment
2. Customer pains
 What makes your customer feel bad?
 What does your customer find too costly?
 What are the main difficulties and challenges your customer encounters?

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 What negative social consequences does your customer encounter or fear?
3. Customer gains
 Which savings would make your customer happy?
 What outcomes does your customer expect and what would go beyond his/her
expectations?
 What would make your customer’s job or life easier?
4. Products and Services
 What is the value proposition of your product/service?
 What is the core competency of your product/service?
 What is the difference between you and your competitors?
 What is your competitive advantage?

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5. Pains relievers
 Does your product produce savings?
 Does your product make your customer feel better?
 Does your product fix underperforming solutions?
6. Gain creators
 Does your product create saving that make your customer happy?
 Does your product produce outcomes your customer expects or that go beyond their
expectations?
 Does your product do something customers are looking for?

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The Business Model Canvas is popular with entrepreneurs for business model innovation.
Fundamentally, it delivers three things:
A. Focus: Stripping away the 40 pages of ‘stuff’ in a traditional business plan, users of
the BMC improve they clarify and focus on what’s driving the business (and what’s
non-core and getting in the way).
B. Flexibility: It is easier to tweak the model and try things (from a planning perspective)
with something that’s sitting on a single page.
C. Transparency: Your team will have an easier time understanding your business
model and be much more likely to buy into your vision when it is laid out on a single
page.
1. Customer Segments: Who are the customers? What do they think? See? Feel? Do?
2. Value Propositions: What’s compelling about the proposition? Why do customers buy, use?
3. Channels: How are these propositions promoted, sold and delivered? Why? Is it working?
4. Customer Relationships: How do you interact with the customer through their ‘journey’?
5. Revenue Streams: How does the business earn revenue from the value propositions?
6. Key Activities: What uniquely strategic things does the business do to deliver its
proposition?
7. Key Resources: What unique strategic assets must the business have to compete?
8. Key Partnerships: What can the company not do so it can focus on its Key Activities?
9. Cost Structure: What are the business’ major cost drivers? How are they linked to revenue?

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IV. STARTUP LIFECYCLE
The start-up lifecycle is made of 6 stages of development. We will focus on the first 4th
stages, because they are the most important, and because you almost know if your business
will keep growing or fall down around the fourth stage. We will still go through the last 2
stages, but very briefly.
Here a table overview of some figures compare to each fourth first stages:
Avg.
months
working
Avg.
funding
raised
Avg.
number of
employees
Avg. % user
growth in last
month
Top
competitive
advantages
Top challenges
1. Discovery 7 $227,000 1 6%
IP
Technology
Customer acquisition
Over capacity
2. Validation 11 $800,000 4 21%
Partners
Insider Info
Product Market Fit
Problem Solution Fit
3. Efficiency 17 $900,000 4 29%
Traction
IP
Insider Info
Team building
Fundraising
4. Scale 25 $ 3,000,000 17 43%
IP
Traction
Technology
Team building
1. Discovery
Your first task as an entrepreneur is to consider how you would like to change the world.
Identify a problem, come up with a solution and see if anyone – especially potential users and
clients – might be interested in your idea.
This stage takes almost 7 months and usually you raise between 10 and 50k.
During those 7 months your competitive advantages will be the Intellectual Property and the
Technology.
The importance of technology changes over time. Especially in the beginning, it is perceived
as more important than other competitive advantages.
Of course, if you are creating a start-up, it is because you have an idea, which is your Intellectual
Property. IP is protected in law by, for example, patents, copyright and trademarks, which
enable you to earn recognition or financial benefit from what you invented or created.
Your first challenges is to acquire your first customers, and this challenge is keeping all over
your growth.

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2. Validation
A start-up’s service or products go from being hypothetical solutions to a problem to hitting
the street and looking for the first clients ready to pay for it. At this stage, money will be the
only way to effectively measure whether the public validates your project.
This stage takes almost 5 months and usually you raise between 100k and 1.5M. You are now
almost to your first year of the creation of your start-up.
In this stage, your competitive advantages will be to find partners and the insider information.
Indeed, partners can be used to validate your concepts with little traction. Moreover, Insider
information is a non-public fact regarding the plans or condition of your publicly traded
company that could provide a financial advantage when used to buy or sell shares of your
company's stock.
Your challenges, other than customers’ acquisition, is the product market fit and the problem
solution fit. Product market fit is a key challenge is this stage, as much as problem solution fit.
Indeed, in this stage you valid your product/concept, so it must fit with the market in which you
are, and in order to gain customers, your product or service must be an answer to a problem of
your target segment.
3. Efficiency
In order to successfully overcome this third phase, the best allies will be market studies and,
more than ever, the advice of a good investor. Your need to be able to efficiently acquire
customers in order to avoid scaling with a leaky bucket.
This stage takes almost 6 months and usually you do not raise money. It is recommended to
wait until the next stage until raising.) You are now almost from one year and half of the creation
of your start-up.
In this stage, you competitive advantage is the Intellectual Property, Insider information and
Traction. For the first two advantages, it is the same as in stage one for IP and stage 2 for Insider
information.
Your important challenge is again customer acquisition, team building. Your team is growing
and you have to build it as more for this stage, but also in a purpose to prepare the next stage.
In the same idea, another challenge is fundraising, also to prepare the next stage.

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4. Scale
You step on the gas pedal and try to drive growth very aggressively. The start-up has to be
ready to fight in international markets and offer great margins of benefit. It is time for the
larger fundraising rounds.
This stage takes almost 8 months and usually you raise between 1.5M and 7M. You are now
over your second year of the creation of your start-up.
In this stage your competitive advantage is the Intellectual Property, traction and technology.
You keep the same challenge as the last stage, customer acquisition and team building.
During this step, if you can be helped by a mentors, it will be very useful and your start-up
will be more successful.
5. Profit maximization
Once the step has been taken to reach other markets with support of large fundraising rounds,
it is time to shore up the project’s bases so the structure that you have put so much effort into
building does not collapse.
Maximising benefits and facing problems derived from the global dimension that the start-up
has acquired are key in this phase. The greatest risk is taking for granted that, having reached
certain success, everything is done. Don’t stand by to admire your product; there are problems
that can put the longevity of your business project at risk.
6. Renewal
Your business model works, or is at least credible. You have the funding needed to
internationalise the company, and you have carried it out successfully. Now what? Experience
tells us that there are two ways: to sell the start-up to a giant (Google, Facebook, Apple…) or
to go public and try becoming one of the ‘unicorns’.
Only in this way you can acquire the huge resources that the brand will need to continue
growing, renewing its products, and reinventing itself constantly in order to confront a
dynamic market

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V. LEAN START-UP
Too many start-ups begin with an idea for a product that they think people want.
Then they spend months, sometimes years, perfecting that product without ever showing the
product, even in a very rudimentary form, to the prospective customer. When they fail to reach
broad uptake from customers, it is often because they never spoke to prospective customers and
determined whether or not the product was interesting. When customers ultimately
communicate, through their indifference, that they don't care about the idea, the start-up fails.
Recently an important countervailing force has emerged, one that can make the process of
starting a company less risky. It’s a methodology called the “lean start-up,” and it favours
experimentation over-elaborate planning, customer feedback over intuition, and iterative design
over traditional “big design up front” development. Although the methodology is just a few
years old, its concepts—such as “minimum viable product” and “pivoting”—have quickly
taken root in the start-up world, and business schools have already begun adapting their
curricula to teach them.

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The lean method has three key principles:
 First, rather than engaging in months of planning and research, entrepreneurs accept
that all they have on day one is a series of untested hypotheses—basically, good
guesses. So instead of writing an intricate business plan, founders summarize their
hypotheses in a framework called a business model canvas. Essentially, this is a
diagram of how a company creates value for itself and its customers.
 Second, lean start-ups use a “get out of the building” approach called customer
development to test their hypotheses. They go out and ask potential users, purchasers,
and partners for feedback on all elements of the business model, including product
features, pricing, distribution channels, and affordable customer acquisition strategies.
The emphasis is on nimbleness and speed: New ventures rapidly assemble minimum
viable products and immediately elicit customer feedback. Then, using customers’
input to revise your assumptions, you start the cycle over again, testing redesigned
offerings and making further small adjustments (iterations) or more substantive ones
(pivots) to ideas that aren’t working.
 Third, lean start-ups practice something called agile development, which originated in
the software industry. Agile development works hand-in-hand with customer
development. Unlike typical yearlong product development cycles that presuppose
knowledge of customers’ problems and product needs, agile development eliminates
wasted time and resources by developing the product iteratively and incrementally.
It’s the process by which start-ups create the minimum viable products they test.

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V. 3 ESSENTIALS TO BUILD A VIABLE START-UP
To sum up and finish with this manual to build your start-up let us remember the 3 following
points:
Hire for the company you want to have
All too often, start-up tap friends and family members to fill key positions in the company.
However, as your company grows, you are going to need people who have specific expertise
in management, operations, human resources, sales and other areas. As you being to add
people, hire them based on what they can contribute to the company’s long-term growth.
After all, you do not want to outgrow the skill set of your new hire in a year or two and have
to look for someone else to fill the job.
Ask for feedback
Collect as much input as you can from customers to gain insights into their changing needs, so
you can anticipate how your business will need to change next, she says. Similarly, you may
need to move your operations to a space where your company can grow or redistribute
responsibilities across personnel. If you’re staying informed and looking at the immediate and
long-term needs of your business, you will be able to anticipate important changes and
prepare to make them.
Build it as if you’re going to sell it
While business owners often don’t like to think about their exits, succession planning is a
great way to check scalability, Canfield says. When you examine the strengths and
weaknesses of your business as if you’re going to sell it, growth issues soon become clear. If
the business can’t function without you at the helm, it’s time to groom more candidates for
management roles. If there are problems in the company’s financials or operations, looking at
the company as if you’re preparing for exit will shine a spotlight on what needs to be
improved. That’s important if you want to attract investors, allow employee buy-in, or simply
want to have more free time eventually.
Take all the opportunities which come to you and enjoy this adventure.

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VI. REFERENCES
https://www.quora.com/How-do-you-define-a-pivot-in-Product-development
http://www.my-business-plan.fr/difference-business-model
http://ctinnovations.com/images/resources/Startup%20Owners%20Manual%20-
%20BlankDorf.pdf
https://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action?language=fr#t-
109707
http://businessmodelalchemist.com/blog/2012/08/achieve-product-market-fit-with-our-brand-
new-value-proposition-designer.html
http://www.inc.com/sagelive/6-Essentials-for-Building-a-Scalable-Business.html
https://hbr.org/2013/05/why-the-lean-start-up-changes-everything

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