Navigabiz - Strategies for startup success

MAY 15, 2017
BY JEFF SAFOVICH
Or How to Build a Billion Dollar Startup
Strategies for Startup Success

All Rights Reserved 2017 jeff@Navigabiz.com www.Navigabiz.com
How do these companies differ?
Since: 2009
$3.8B in 2016
Since: 2007
$31B in 2016
Since: 2010
$1B in 2012
Since: 2011
Shut down in 2013
Since: 2012
Shut down in 2014
Since: 2009
Shut down in 2013

Top 10 Reasons Startups Fail
https://www.cbinsights.com/blog/biggest-startup-failures/
“Startups fail when they are not solving a market problem.
We were not solving a large enough problem that we could
universally serve with a scalable solution.
We had great technology, great data on shopping behavior,
great reputation as a though leader, great expertise, great
advisors, etc, but what we didn’t have was technology or
business model that solved a pain point in a scalable way.”
- Treehouse Logic
Tackling problems that are
interesting to solve rather than
those that serve a market need.

What is Product Market Fit (PMF)?
“Product/market fit means being in a good market
with a product that can satisfy that market.”
Marc Andreessen
“Product/market fit is a precondition for effectively
scaling marketing for a company”
Sean Ellis
“Product/market fit is a step in between customer
validation and customer creation”
Steve Blank

Why PMF Methodology?
Fail fast: Inside Alphabet's 'Moonshot Factory,' Killing Projects Is Celebrated. Astro Teller
If things are not failing, you are not innovating enough Elon Musk
Be frank with yourself when you fail
Know where you are to choose your next step
Identify “the most promising” concept, Verify a concept potential
Avoid waste: greatest waste is doing efficiently what should not be done at all Peter Drucker
Identify the most important improvement to focus on
Speed up business evolution: most startups do not fail, they just run out of money
(*) PMF – Product Market Fit

Why our first product failed?

7 Key Steps to Build a Successful Business
2.
Concept
4.
Assessments
5.
Experiment
6.
Learn
1.
Dream
7.
Pivot?
3.
Plan

Step 1 - Dream
Vision
Goal
Mission
• What will change in the world?
• Strategic long-term goal
• What will your role be?
What need do you want to solve?

2.
Concept
5.
Experiment
6.
Learn
1.
Dream
7.
Pivot?
3.
Plan
4.
Assessments

Step 2 - Concept
Problem Solution Go-to-Market
Monetization
Promise
What is your unique value proposition?
Zero in on the heart of your service and highlight
what stands out about the solution you provide.
Product/Service
How do you do it?
How does your solution solve your audience's need?
List the major solution capabilities
Value
What values will your customers gain?
List specific advantages and benefits your customers
will gain by using your solution.
Audience
Who has the need?
What groups are you providing value for?
Groups of customers who rely on each other’s
recommendations when making usage or purchase
decisions
List a few sample clients.
Need
What’s the need?
What need are you going to solve?
What is the context in which the need manifests?
How painful the need is?
Growth
How do you reach them?
What’s your distribution method: Viral / Sticky / Paid?
Consider the most effective mediums to reach your
audience.
Business Model
How will you monetize?
How will you generate income?
Present a pricing model for your product or service.

Step 3 – Actionable Plan
Q1 Q2 Q3 Q4
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Week 1 Week 2 Week 3 Week 4
Goals (Learning/Customers/…)
Action Items – Product Market Fit
Action Items – Product
Action Items – Go to Market
Team
Resources
Costs

Step 4 – Assessments (cont.)
Assessments
Goals
KPI
• What do you need to know to predict success?
• What are target values for your KPI?
• Translate Assessments into Metrics
(*) KPI – Key Performance Indicator

Step 4 - Assessments
Problem Solution Go-to-Market
Monetization
Value
Do they appreciate
the value you provide?
.
Need
Do they really need
your solution?
Growth
Is your growth method working?
Business Model
Is your monetization effective?
.

KPI Goals
Need
Example: 3% Click-through-rate on invitation emails
Value
Example: 12% of users are active
Growth
Example: 2 Invitations are sent by each active user
Monetization
Example: 17% of users are paying
Step 4 – Assessments (cont.) (*) KPI – Key Performance Indicator

Step 5 - Experiment
MVP
Measure
Try
• Minimal possible scope to measure KPI
• Embed measurements into MVP
• Run your experiment
(*) MVP – Minimal Viable Product
(*) KPI – Key Performance Indicator

STEP 6 - Learn
Analyze
Compass
Progress / t
• Actual KPI results vs. your goals
• Focus improvements on highest gaps
• Did you improve?

STEP 7 – Pivot?
Goal
Goal
is KPI converging?
A
B

2.
Concept
5.
Experiment
6.
Learn
1.
Dream
7.
Pivot?
3.
Plan
4.
Assessments
• Get outside the building
• Experiment and learn fast
• Move the needle every day
• Pivot is an option

Do successful startups ever fail? Pivots…
+
Since: 2009
$3.8B in 2016
Since: 2007
$31B in 2016
Since: 2010
$1B in 2012

Fund Raising - 5 Key Ingredients
The right investors
Find investors that resonate with your
dream, your stage, the amount of
money you are raising
Personal relationship
Develop personal relationship with
investors
Business potential
Show there is a strong need in a big
market, and that you know this market
well
Balanced team
Have a balanced team, able to execute the plan.
Out of 4 skills: Business, Product, Technology, Marketing –
you should have at least 2 in the beginning
Solid plan
Present inspiring objectives you’ll reach with the money being
raised, and a clear plan executable by the team.
Base your story on experiential actionable insights

Fund Raising - Executive Summary
Impressive Intro
1. Vision, Mission
2. Market (Segment, Size)
3. Business Opportunity, Problem
4. Solution, Product
5. Customers Traction
6. Competitive Landscape
7. Business Model
8. Go-to-Market
9. Team
10. Financials – 3/5 years
11. How funds will be used
Impressive Summary

Points to remember
Make staff people need
Fail fast: Inside Alphabet's 'Moonshot Factory,' Killing Projects Is Celebrated.
Greatest waste is to do efficiently what should not be done at all.
Follow the trail wherever it leads… Most successful startups end up doing
something different than they originally intended
Enjoy along the way!
Paul Graham
Peter F. Drucker
Astro Teller

More to explore
Books
Lean startup, by Eric Ries
Toyota Production System: Beyond Large-Scale Production, by Taiichi Ohno (Kaizen)
Lean Thinking: Banish Waste and Create Wealth in Your Corporation, by James P. Womack and Daniel T. Jones
Crossing the Chasm, by Geoffrey A. Moore
The four steps to the Epiphany, by Steve Blank
Links
https://en.wikipedia.org/wiki/Product/market_fit
http://www.startup-marketing.com/the-startup-pyramid/
http://blog.pmarca.com/2010/03/20/the-revenge-of-the-fat-guy/
http://theleanstartup.com/
http://paulgraham.com/startupmistakes.html
Techniques
The 5 Why
Rapid prototyping
Continuous deployment
A/B Testing
Agile / SCRUM

Thank you for attention!
If you are wondering how to apply this to your own company,
I’ll be happy to meet for a coffee.
Jeff Safovich
jeff@navigabiz.com
www.Navigabiz.com

Navigabiz - Strategies for startup success

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