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![How to Grow & Scale
● Asset = Func{Business[Product(Idea)]}
● Just do it. When in doubt, do. Fail fast.
● Data-driven decision making from inception
○ MAU/DAU, Churn, # customers, CAC,
LTV:CAC
○ Make decisions to impact metrics; do A/B
testing; figure out what works and adjust
quickly
● Grow revenue: inbound, outbound, channel,
enterprise sales
● Be profitable1
● Trade discount for cash up-front, invest back
in customer acquisition
Beware opportunity cost
1https://slidebean.com/blog/startups/slidebean-profitable
Organic Growth vs. Venture Growth
The Tradeoff is Who Gets a Vote](https://image.slidesharecdn.com/iatyuiwarhyt2w4czscn-signature-b27b342e370d4adf2a15976c16df6790ff57c8e892789a24257734207e96c7df-poli-190412180658/85/Startups-101-12-320.jpg)
Startups 101
- 1. Startups 101 Mark Hary- Executive in Residence Vonzos Partners (www.vonzos.com) https://slideshare.net/MarkHary https://linkedin.com/in/markhary https://medium.com/@mark.hary https://markhary.github.io Twitter: @hary_mark
- 2. Activity 1. Break intogroups of 5 where you know the least amount of people 2. Tell the group your name and birthday 3. Last person to have birthday in calendar year is spokesperson 4. Everybody state one thing that they hope to get out of this talk so that they consider it an excellent use of their time 5. Sit on it - at the end - we will go through what I did not address in round-robin/panel fashion
- 3. Overview How to eatan elephant... Starting a Company: What to Expect Transforming Idea into an Asset Product Market Go To Market Strategy Product Market Fit How to Acquire First Customers How to Grow & Scale When/How to Approach Investors
- 4. My Journey De AnzaCollege BS Mechanical Engineering, Santa Clara University MS Aero/Astro, Stanford University 2000 - Co-founded Sensing Systems 2011 - 2d3 acquires Sensing 2015 - Boeing acquires 2d3 Sensing 2016 - Angel investor 2019 - EIR @ Vonzos
- 5. Starting a Company: Whatto Expect “Everybody fights, no one quits” - Johnny Rico, Rico’s Roughnecks Starship Troopers Buckets of blood, sweat, and tears Ability to argue passionately but commit to solidarity Make your own luck Persistence and determination Prioritization and work/life balance
- 6. idea <<< product< business < asset Idea = $0.10 / 12 Product = Customers want it Business = Customers pay for it Asset = Your property that has value Transforming an Idea into an Asset1 Value Asset Business Product Idea $0 1https://medium.com/@mark.hary/transforming-an-idea-into-an-asset-d2facd7e24f5
- 7. Defensible IP ● Whatkeeps somebody else from copying you? ● Otherwise ○ First mover advantage ○ Fastest mover advantage ○ Technical superiority Innovative ● Why isn’t someone already doing this, or if so, who are your competitors, and what is your competitive advantage? ● Solve a real problem of real customers who are willing to spend real money for your solution. Product Muiderslot Castle in Holland
- 8. Market TAM: Total AvailableMarket SAM: Serviceable Available Market SOM: Serviceable and Obtainable Market Looking for $1B TAM minimum TAM SAM SOM Example: Restaurant (e.g. McDonald’s) TAM: People who eat SAM: People who have money SOM: People within driving distance
- 9. Go To MarketStrategy LTV CACt # Customers Enterprise Channel Inbound Outbound You told us about the market… You told us about the product… How will you connect them? The road to $100M ARR and your asset 100 → 1k → 10k → 100k → 1M
- 10. Product Market Fit 1.Establish Need, Schedule, Budget 2. SaaS Metrics 2.0 - David Skok1 Terms You Should Know ● Monthly Recurring Revenue (MRR) ● Customer Acquisition Cost (CAC) CAC = ($ spend)/# customers ● Lifetime Value (LTV) LTV = MRR * months ● Months to Recover CAC (MtRC) MtRC = CAC / MRR ● LTV:CAC ● Churn = ΔCustomers/Customers Characteristics of strong PMF: ● # customers increase w/out spend ● CAC =~ $0 ● LTV = high ● MtRC << 18 ● LTV:CAC >> 3 ● Churn = 0 Need Schedule Budget 1 https://www.forentrepreneurs.com/saas-metrics-2/
- 11. How to Acquire FirstCustomers Pro tips: ● Technical and business domain expertise is useful ○ How do you know product is needed? ○ How do you know how people spend money? ● Develop a set of user stories ○ What are they doing? ○ How do they do it now? ○ What is painful about it? ○ How does this alleviate pain? ● A customer has need, schedule, budget ● Spread the word ○ Viral marketing/word of mouth is free ○ CPC is expensive ● Pick right GTM strategy1,2 1https://www.advanceb2b.com/thegrowthhub/the-mission-matrix- saas-go-to-market-strategy 2https://medium.com/@mark.haryIt’s EASY!!! Do something!! South Park S02E17
- 12. How to Grow& Scale ● Asset = Func{Business[Product(Idea)]} ● Just do it. When in doubt, do. Fail fast. ● Data-driven decision making from inception ○ MAU/DAU, Churn, # customers, CAC, LTV:CAC ○ Make decisions to impact metrics; do A/B testing; figure out what works and adjust quickly ● Grow revenue: inbound, outbound, channel, enterprise sales ● Be profitable1 ● Trade discount for cash up-front, invest back in customer acquisition Beware opportunity cost 1https://slidebean.com/blog/startups/slidebean-profitable Organic Growth vs. Venture Growth The Tradeoff is Who Gets a Vote
- 13. When to Approach Investors Don’tForget Corporate Venture Capital (Strategic Investment Groups) Parul Singh. FounderCollective. Sep 25, 2018. “https://medium.com/swlh/raising-seed-capital-heres-your-2018-guide- on-how-to-do-it-successfully-c73c42530598”
- 14. How to ApproachInvestors Approach seeking funding the exact same way you approach building a sales pipeline: ● Warm >>> cold ● Research your targets (entity & individuals) by expertise, focus, and stage ● Get introduction through your networks, double opt-in best ● Have concise pitch ready (30-3-30 rule) w/ ask ● ⭐ Work w/ an EIR ⭐ Need network? Target incubators, accelerators, pitch days, labs, bootcamps, strategic investment arms/corporate VC, and trade shows. Investors frighten easily, do not stalk or surprise your prey.
- 15. Thank You 1. Reconvenegroups 2. Revise questions if you’d like Rapid fire - 1 min!