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![Proprietary and Confidential
Simple
Simplify to your C.O.R.E. value [link on startupsecrets.com]
• Create a whole product with partnerships
• And or Open Source etc
Capabilities
Of
Really
Exceptional
Value
Focus on it!
C.O.R.E.
Value
startupsecrets.comTurning Products Into Companies 55](https://image.slidesharecdn.com/ymsn9gas6okbh3zkb2p7-signature-50877fa3f9694dd041d4d01e2ef3d060f0a3661a690f931c30bc50a833847b63-poli-170223171938/75/Startup-Secrets-Turning-Products-into-Companies-53-2048.jpg)
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Startup Secrets - Turning Products into Companies
This document provides an overview of turning products into companies by closing the "product company GAP." It discusses designing products for market fit by focusing on a primary value proposition for a single audience. It introduces the concepts of minimum viable product, minimum viable segment, and minimum repeatable product to test market fit in smaller segments. The document also discusses architecting business models, including designing "slippery" products, and using Russian doll pricing and packaging strategies. The goal is to help startups transition from developing products to building successful companies by considering business model, go-to-market strategy, and how the product will influence these from the beginning.
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Startup Secrets - Turning Products into Companies
- 1. Proprietary and Confidential STARTUP SECRETS An insider’s guide to unfair competitive advantage Turning Products into Companies by Design & Architecture @underscorevc startupsecrets.com
- 2. Proprietary and Confidential Startup Secrets Series CompanyFormation Culture Hiring Value Proposition Go-To-Market Strategy Strategic (Brand, Positioning, Segmentation etc.) Tactical (Driving your Marketing and Sales Funnel) Business Model Turning Products into Companies Perfect Pitch Raising Funding
- 3. Proprietary and Confidential Theproblem… We get MVP We get product market fit YET We don’t get enough momentum… To build a company We have a product company GAP! startupsecrets.comTurning Products Into Companies 4
- 4. Proprietary and Confidential TheProduct Company GAP GAP Company startupsecrets.comTurning Products Into Companies 5
- 5. Proprietary and Confidential TheProduct Company GAP GAP Company startupsecrets.comTurning Products Into Companies Go to Market Business Model Execution 6
- 6. Proprietary and Confidential TheProduct Company GAP GAP startupsecrets.comTurning Products Into Companies Go to Market Business Model Execution GAP Solidworks 7
- 7. Proprietary and Confidential Yourproduct… startupsecrets.comTurning Products Into Companies 8
- 8. Proprietary and Confidential It’sall about the product right? startupsecrets.comTurning Products Into Companies 9
- 9. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Your expenses will flip From All R&D, engineering… Development STARTUP Sales & Marketing 10
- 10. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Your expenses will flip From All R&D, engineering… to prove market acceptance, gain, repeatability Development Market Acceptanc e Sales & Marketing 11
- 11. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Your expenses will flip From All R&D, engineering… to prove market acceptance, Then repeat & scale using Sales & Marketing Development Sales & Marketing SCALE 12
- 12. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Your expenses will flip From All R&D, engineering… to prove market acceptance, Then repeat & scale using Sales & Marketing Sales & Marketing = 2-3x (!) Development Development Sales & Marketing SCALE 14
- 13. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies So, why not plan where you want to be when you get there? EG look at CARC, your Business Model, GTM and how your PRODUCT will influence it? 15
- 14. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Software & Services Model 62% 61% 53% 43%48% 29% 21% 19% 43% 50% 45% 44% 19% 14% 11% 11% L/T Model based on profitable subscription based software company 62% 48% 43% 19% 51% 29% 65% 14% 11% 45% 21% 53% 44% 19% 44% 11% 10% 35% 15% 25% Sales & Marketing = 3x Development 16
- 15. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies What if… You thought about this upfront! LET’S DO IT! 17
- 16. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Closing the Product Company GAP: by Design & Architecture • Design • Product Go To Market Fit • PVP • MVP • MVS • MRP • Architecture • Business Model • SLIPPERY Products • Russian Doll Pricing and Packaging • Whole Product • Services 18
- 17. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Design for Go To Market fit PVP – Primary Value Proposition 19
- 18. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Value Proposition BEFORE you build -- What problem are you solving? -- Who are you solving it for? 20
- 19. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Focus your value prop! Find a PRIMARY value prop for a single audience Multi faceted are harder -- Chicken and Egg problems -- Serving too many masters 21
- 20. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies PRIOR to MVP Check, recheck and triple check your Value Prop -- If you’re not solving a valuable problem… -- YOU’RE NOT SOLVING A VALUABLE PROBLEM ! -- And unsurprisingly you won’t build any value -- VIABLE does not always mean VALUABLE !! 22
- 21. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Qualitative Evaluation Before After Acute Pain Absolute Joy Vitamin vs. Penicillin 23
- 22. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Value Prop: Recap & Intersection - 3D Solution • Discontinuous • Defensible • Disruptive - 4U Need • Unworkable • Unavoidable • Urgent • Underserved market(For targeting, Segmentation) Unique 24
- 23. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Qualify the need Is it “blac” & white? - (B)latant - (L)atent - (A)spirational - (C)ritical Blatant Latent Aspirational Critical White Space 25
- 24. Proprietary and Confidentialstartupsecrets.comTurningProducts Into Companies Qualify the need: B2B vs. B2C? Is it “blac” & white? - (B)latant - (L)atent - (A)spirational - (C)ritical Blatant Latent Aspirational Critical Blatant Critical B2C Best for B2B 26
- 25. Proprietary and Confidential It’sjust a big iPod… Is it “blac” or white? (L)atent (A)spirational Blatant Latent Aspirational Critical Blatant Critical iPa d vision execution startupsecrets.comTurning Products Into Companies 27
- 26. Proprietary and Confidential Example- Apperian • Increase revenue by 40% at counters • Saved $2.5M+ in direct IT costs • Roll out 17,000 iPads • Deliver worldwide no IT touch required startupsecrets.comTurning Products Into Companies 28
- 27. Proprietary and Confidential Example- Apperian • Increase revenue by 40% at counters • Saved $2.5M+ in direct IT costs • Roll out 17,000 iPads • Deliver worldwide no IT touch required GAIN PAIN startupsecrets.comTurning Products Into Companies 29
- 28. Proprietary and Confidential Designfor Product Go To Market fit MVP and introducing MVS, MRP startupsecrets.comTurning Products Into Companies 30
- 29. Proprietary and Confidential TheProduct Market Fit MarketProduct Fit startupsecrets.comTurning Products Into Companies 31
- 30. Proprietary and Confidential MarketMVP TheProduct Market Fit startupsecrets.comTurning Products Into Companies 32
- 31. Proprietary and Confidential Addingto Lean Startup thinking… Minimum Viable Product (MVP) MVP startupsecrets.comTurning Products Into Companies 33
- 32. Proprietary and Confidential TheProduct Market Fit Problem here? here? here? here? Fit ? Stretch ? MV P MVP ++ here? Market startupsecrets.comTurning Products Into Companies 34
- 33. Proprietary and Confidential TheProduct Market Fit Solution Market not here not here not here not here Fit MV P startupsecrets.comTurning Products Into Companies 35
- 34. Proprietary and Confidential MV S MVP Addingto Lean Startup thinking… Minimum Viable Product (MVP) + Minimum Viable Segment (MVS) Repeat? startupsecrets.comTurning Products Into Companies 36
- 35. Proprietary and Confidential MV S MVP Addingto Lean Startup thinking… Minimum Viable Product (MVP) + Minimum Viable Segment (MVS) Repeat for … = same NEEDS startupsecrets.comTurning Products Into Companies 37
- 36. Proprietary and Confidential MV S MV P Addingto Lean Startup thinking… Minimum Viable Product (MVP) + Minimum Viable Segment (MVS) = Minimum Repeatable Product (MRP) MR P Repeatable MR P = same NEEDS startupsecrets.comTurning Products Into Companies 38
- 37. Proprietary and Confidential MV S MV P Addingto Lean Startup thinking… Minimum Viable Product (MVP) + Minimum Viable Segment (MVS) = Minimum Repeatable Product (MRP) Smaller target to reference lead, dominate MR P Repeatable, Referenceable MR P = same NEEDS startupsecrets.comTurning Products Into Companies 39
- 38. Proprietary and Confidential MinimumViable Segment… Maintains MVProduct footprint • Same functionality needed by all customers People reference according to the same NEEDS • Customers can compare solutions Potential for leadership, domination • At least initial Beachhead Segment according to the same NEEDS MV S MV P = same NEEDSMR P MR P startupsecrets.comTurning Products Into Companies 40
- 39. Proprietary and Confidential vs.Office Worker vs. White Collar vs. Sales vs. Office Equipment vs. Medical Clinics vs. Diagnostics + Blatant Critical need if possible: Mobile Professionals Field Workers Services Hospitals Critical Care Medical Equipment Targeting, Segmentation startupsecrets.comTurning Products Into Companies 41
- 40. Proprietary and Confidential Nolonger just Product Market Fit It’s about Product Go To Market Fit • Narrow your target • Segment it by need • Focus your product Vital for • Positioning, Messaging, Communication • Packaging and Pricing • Channels & Distribution, Partner Alignment Enables • Reference selling, network effects, virality • Overall Business alignment startupsecrets.comTurning Products Into Companies 42
- 41. Proprietary and Confidential Narrow as possible to start! • Think small targets to dominate Which would you rather… • Expand on success? • Contract on failure? Balance Vision vs. Execution • See post on startupsecrets.com NUMBER ONE Startup Secret Don’t be afraid to FOCUS! #1 startupsecrets.comTurning Products Into Companies 43
- 42. Proprietary and Confidential Closingthe Product Company GAP: by Design & Architecture Design • Product Go To Market Fit PVP MVP MVS MRP Architecture • Business Model SLIPPERY Products Russian Doll Pricing and Packaging Whole Product Services startupsecrets.comTurning Products Into Companies 44
- 43. Proprietary and Confidential Architectingfor Business Model SLIPPERY Products startupsecrets.comTurning Products Into Companies 45
- 44. Proprietary and Confidential Gain/Painratio • Revenue • Cost savings • Time • People • Competitive advantage • Reputation • Etc.. • Inertia • Switching costs? • Default = do nothing • Alternatives? • Good enough = good enough! • RISK on a startup • Find (See) • Try • Buy • Implement • Deploy • Own – eg TCO Inertia, RISK Gain Pain >10 startupsecrets.comTurning Products Into Companies 46
- 45. Proprietary and Confidential Gain/Painratio • Revenue • Cost savings • Time • People • Competitive advantage • Reputation • Etc.. • Inertia • Switching costs? • Default = do nothing • Alternatives? • Good enough = good enough! • RISK on a startup • Find (See) • Try • Buy • Implement • Deploy • Own – eg TCO Inertia, RISK Gain Pain >10 Product Lifecycle startupsecrets.comTurning Products Into Companies 47
- 46. Proprietary and Confidential GetTo Market – product facilitation What if you could literally slip into the lead? startupsecrets.comTurning Products Into Companies 48
- 47. Proprietary and Confidential •Simple • Low to no initial cost • Installs easily • Proves value quickly • Plays well with others • Easy to use • ROI is obvious • Your customers can’t live without it – it’s stickY Friction Free, SLIPPERY products startupsecrets.comTurning Products Into Companies 49
- 48. Proprietary and Confidential Simple startupsecrets.comTurningProducts Into Companies 50
- 49. Proprietary and Confidential Simple Complexity Simplicity FIRSTPRINCIPLES Advantage Disadvantage startupsecrets.comTurning Products Into Companies 51
- 50. Proprietary and Confidential Simple Advantage= Innovation / Complexity Complexity # Simplicity Advantage = Innovation * Simplicity Advantage # Disadvantage Disadvantage = Innovation * Complexity startupsecrets.comTurning Products Into Companies 52
- 51. Proprietary and Confidential EvenSimpler = Less is More! Microsoft APPLE startupsecrets.comTurning Products Into Companies 53
- 52. Proprietary and Confidential Example KnowledgeManagement vs. Note Taking startupsecrets.comTurning Products Into Companies 54
- 53. Proprietary and Confidential Simple Simplify to your C.O.R.E. value [link on startupsecrets.com] • Create a whole product with partnerships • And or Open Source etc Capabilities Of Really Exceptional Value Focus on it! C.O.R.E. Value startupsecrets.comTurning Products Into Companies 55
- 54. Proprietary and Confidential Lowto no initial cost Potential for • Frictionless trials • Lower initial CARC • Self identifying Freemium prospects http://www.wired.com/techbiz/it/magazine/16-03/ff_free startupsecrets.comTurning Products Into Companies “Freeconomics" 56
- 55. Proprietary and Confidential Lowto no initial cost Potential for • Frictionless trials • Lower initial CARC • Self identifying Freemium prospects Free-fall, free-fail ? • It’s worth what people are paying for it = nothing = no proof of value • And perceived value can also be zero • Ultimately have to upsell startupsecrets.comTurning Products Into Companies 57
- 56. Proprietary and Confidential Lowto no initial cost • Value • Network • Monetization startupsecrets.comTurning Products Into Companies 58
- 57. Proprietary and Confidential Installseasily, integrates well Slippery not Trip-up-ery! startupsecrets.comTurning Products Into Companies 59
- 58. Proprietary and Confidential Installseasily, integrates well Reducing the Pain for customers to try, adopt, deploy Inertia, RISK Gain Pain >10 startupsecrets.comTurning Products Into Companies 60
- 59. Proprietary and Confidential •Integrates well – “Embrace & Extend” Open & Extensible… Installs easily, integrates well startupsecrets.comTurning Products Into Companies 61
- 60. Proprietary and Confidential •Integrates well – “Embrace & Extend” Open & Extensible… • Assume – Change = risky, painful, time consuming & costly Incumbents far and wide Applications Operating environments Business processes Human skills Installs easily, integrates well startupsecrets.comTurning Products Into Companies 62
- 61. Proprietary and Confidential Productsthat integrate, play well with others… Encourage others to play with them… ® LINK Technology Partners startupsecrets.comTurning Products Into Companies LINK program 63
- 62. Proprietary and Confidential Provesvalue quickly Consumer • Instant gratification Enterprise, • Rapid payback ≤3 months is great >12 months is bad startupsecrets.comTurning Products Into Companies 64
- 63. Proprietary and Confidential For example • If your product is about improving a process… Provide proof as part of the product! • Baseline current before the product usage • Provide key metrics, visibility into progress • Integrate analytics, dashboards • Clearly surface reports that prove the value Self proving value startupsecrets.comTurning Products Into Companies 65
- 64. Proprietary and Confidential Packageand progressively disclose value VS. startupsecrets.comTurning Products Into Companies 66
- 65. Proprietary and Confidential Packageand progressively disclose value Example: Acquia, Drupal Gardens startupsecrets.comTurning Products Into Companies 67
- 66. Proprietary and Confidential Packageand progressively disclose value Example: Acquia, Drupal Gardens – results… startupsecrets.comTurning Products Into Companies 68
- 67. Proprietary and Confidential Easyto use and apply “OOBE!” • Out Of the Box Experience • Delight & entrance users startupsecrets.comTurning Products Into Companies 69
- 68. Proprietary and Confidential Example Salesforce.com vs SIEBEL VS. Easy to use and apply startupsecrets.comTurning Products Into Companies 70
- 69. Proprietary and Confidential ROIis Obvious Quantifiable • Increase revenue • Reduce time, resources, costs Or • Reduce risk • Drives competitive advantage (ties to fast payback) startupsecrets.comTurning Products Into Companies 71
- 70. Proprietary and Confidential ROIis Obvious (Supported by Self Proving Value) Example: Unidesk startupsecrets.comTurning Products Into Companies 72
- 71. Proprietary and Confidential StickY Your customers can’t live without it! Fulfills a real need Leaves customers wanting more ! startupsecrets.comTurning Products Into Companies 73
- 72. Proprietary and Confidential FrictionFree, SLIPPERY products • Simple • Low to no initial cost • Installs easily • Proves value quickly • Plays well with others • Easy to use • ROI is obvious • Your customers can’t live without it – it’s stickY Think of how this improves the Gain/Pain Ratio in our Value Proposition Workshop Gain Pain startupsecrets.comTurning Products Into Companies 74
- 73. Proprietary and Confidential T617.303.0064 @underscorevc 53 State Street, 10th Fl Boston, MA 02109 75
Editor's Notes
- #2 Intelligent line art only Text in box resizable
- #32 Product shrinks
- #33 Product shrinks
- #41 a set of actual or potential customers for a given set of products or services who have a common set of needs or wants, and who reference each other when making a buying decision. Moore, Geoffrey A. (2009-03-17). Crossing the Chasm
- #57 By Chris Anderson 02.25.08
- #58 By Chris Anderson 02.25.08
- #65 “NPG!”
- #72 Fast path to value