Startup: Motivation and Scale
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Jen van der Meer provides a document discussing key aspects of starting a startup, including why someone may want to start a startup, what lean startup principles are good for, motivation, defining a startup, funding philosophies, and envisioning scale and impact. The document provides questions to help the reader think through their motivation, target customers, value proposition, and how to achieve 10x growth. It encourages thinking big to attract investors and achieve outsized impact and scale.
Startup: Motivation and Scale
- 1. STARTUP: WHY? By Jen van der Meer
- 2. Hi I’m Jen.
- 3. What Lean* is Great For: Figuring out if you should pursue this path (or not) and under what conditions Figuring out your path to growth *Lean LaunchPad, Lean Startup, Agile, Move Fast/Break Things
- 4. What Lean* Doesn’t Cover Why you are doing this? What are the tradeoffs: investment vs. customer funded? How to trade off competing values, particularly if you are primarily driven by impact and outcomes? How do you form teams? Deal with team dynamics?
- 5. MOTIVATION Why are you doing this?
- 6. Why are you doing this?
- 7. Why are you doing this? More time More money Can’t work for other people Social impact Huge financial returns Control over my own destiny I want to have CEO in my title Control over product, autonomy No one looking over my shoulder Freedom I see a huge opportunity Hungry to learn Uber feminism - defining my own rules I’m not employable It’s my family business, my legacy Environmental impact I want to be a founder No one would hire me I am creating art / culture / music What else?________________________
- 8. What is a startup? (according to 3 w.m.) “A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.” – Eric Ries “A startup is a company designed to grow fast.” –Paul Graham. Y Combinator. “A startup is a temporary organization designed formed to search for a scalable repeatable business model.” – Steve Blank. “”Most startups change their business model multiple times. A scalable startup is a special class of startup – world class team, large vision, large target market, passionate belief and a reality distortion field.”
- 9. Motivation & Ambition “The most important factor for business success was ambition with those firms starting out with high growth expectations performing most strongly. Indeed, motivations influence business success mainly by driving differences in growth expectations, which in turn drive success.” Entrepreneurship Understanding Motivations UK Survey 2015
- 10. Rich V. King Founders choices are straightforward: Do they want to be rich or king? Few have been both. - Noam Wasserman Fail Rich King Exception Well below potential Close to potential LittleComplete Controlovercompany Financial gains The Founder’s Dilemma at HBR.org.
- 11. FUNDING PHILOSOPHY Not every dollar is the same
- 12. Forms of Funding Angel Incubators Venture Customer-funded revenue SBIR Grants Prizes and Other Grants Loans Private Equity Corporate VC
- 13. The Wonders of Customer Revenue It’s revenue! You need less capital! You can hire a team, invest profits into product
- 14. The Hidden Risks of Early Needy Customers The best early customer is a risk taker, who is an early adopter, who others tend to follow. A lighthouse customer. A reference customer. A slide full of logos. “Oh if Target / GE / Red Bull use it, so should I” And who defines the patterns for the industry. The worst first customer: so need-specific, so custom, so high maintenance - nothing can be built that will serve more customers, and serve your product plan
- 15. Let’s Sketch our First Canvas, Together
- 16. Key Partners Key Activities Value Propositions Customer Relationships Channels Revenue StreamsCost Structures Key Resources Key Channels Customer Segments
- 17. 2 simple warm up exercises: Who? What?
- 18. Who?
- 19. You can’t aim at everyone, first “Serve a unique customer segment” “Target a specific niche” “Aim for your most profitable segment” “It’s better to dominate a micro segment than to aim for everyone and hit nobody” “Define your Archetypes”
- 20. Use Personas to Find the Pain From: Business Model Canvas, Value Proposition Design, Alexander Osterwalder, The Innovators’s Solution, Clay Christensen and Michael Raynor
- 21. Uncover the “job to be done” Fast Food Milkshake 40% of milkshakes purchased by commuters in the morning - to go What job customers hire milkshakes to do: On a a long, boring commute, customers “needed something to keep that extra hand busy and to make the commute more interesting.” - Clayton Christensen, HBR http://hbswk.hbs.edu/item/clay-christensens-milkshake-marketing
- 22. Uncover the “job to be done” Soylent
- 23. Uncover the “job to be done” DIY Soylent
- 24. Discovering Pain: Plans Known needs Behavior
- 25. Values Norms Assumptions Taboo Beliefs Unknown Needs Go deeper to find unmet needs, hidden pains:
- 26. Persona Tool Context: #stillathome #notanadultyet Name: Peyton Age: 24 Living with Mom at home Motivations/Goals: Independence Freedom Apartment Bike to work Pay off college loan Interests: Roller derby Raising money for breast cancer Jewelry making Pains: Can’t seem to save At breakeven/loss each month Bad credit rating Fears + Secrets: Afraid of getting rejected for an apartment Really likes mom’s support
- 27. Persona Tool Context: Name: Age: Living: Motivations/Goals: Interests: Pains: Fears + Secrets: Draw pic Tribes/Hashtags
- 28. What?
- 29. Value Proposition Silicon Valley / Tech Version “Who do you want to create value for and what jobs need to be done?” Value proposition(s) outline how exactly your products and services create value for one or more of your customer segments. - Alexander Osterwalder, Value Proposition Design. Madison Avenue / Branding “A statement of the benefits delivered by the brand that provide value to the customer. Communicates the benefits that add value, why we are different, the brand-customer relationship, and gives customers an “RTB” - reason to buy (or believe). -David Aacker, Building Strong Brands.
- 30. Value Proposition My company __(company name)_______________________________ is developing _(defined offering)_______________________________ to help __(a target audience)___________________________________ _(solve this problem / pain) ____________________________________ (with this secret sauce)_______________________________________ (with this proof point to the customer)______________________ Jen van der Meer, Reason Street Revenue Steps
- 31. Let’s Commercialize! Researchers use chemicals to manipulate the behavior of mice with effects that last up to an hour… to control the hunger and activity levels of mice The Scientist, 2015. http://www.the-scientist.com/?articles.view/ articleNo/42878/title/Mouse-Mind-Control/
- 32. Value Proposition My company __MINDTETHER_________________ is developing _a mind tether spray_____________ to help __busy moms_________________________ _compel their children to complete homework____ with our proprietary mind control chemicals____ effects last up to an hour with minor side effects! Jen van der Meer, Reason Street Revenue Steps
- 33. Who + What Custom Offer Scalable Offer LargeNeedSmallmarket CustomerSegment Value Proposition
- 34. Who + What Eek High potential startup “Lifestyle” Begin here, cross the chasm Custom Offer Scalable Offer LargeNeedSmallmarket CustomerSegment Value Proposition
- 35. 10X
- 36. Scale Impact. Scale. Envisioning Big Outcomes. If it is clear enough and compelling enough AND BIG ENOUGH it will attract the SCALE AND IMPACT- SEEKING people and resources (VCs, angels, future partners and team members) What does it mean to seek a 10x return?
- 38. Unicorn question How pissed would you be if some other company was anointed the chosen one? And blew you out of the water?
- 39. Yesterday news broke of General Motor’s acquisition of Sidecar assets. Why the sale? In short, we were forced to shut down operations and sell. We were unable to compete against Uber, a company that raised more capital than any other in history and is infamous for its anti-competitive behavior. The legacy of Sidecar is that we out-innovated Uber but still failed to win the market. We failed — for the most part — because Uber is willing to win at any cost and they have practically limitless capital to do it. Sunil Paul, Founder, Sidecar Jan 20, 2016 Medium (Post Mortem)
- 40. How fast? My current user base of _______ would be on track to grow to ____________ in 5 years to be considered worthy of growth investment (VC, angel) today.
- 41. What kinds of returns?
- 42. The Ask My company __(company name)_____________________________________ is developing _(defined offering)_____________________________________ to help __(a target audience)_________________________________________ _(solve this problem / pain) __________________________________________ (with this secret sauce)_____________________________________________ (we already experiencing this much traction)_____________________ (and we’ll seeking this much growth capital to get there faster__
- 43. Now multiply by 10. (the impact you’ll achieve. the money you’ll need).
- 44. And again. x10.
- 46. Purpose of Why We Search While you are here… Learning how helpful humans are when you ask them. Run through the exercise of seeing how you could achieve scale. Defining a hidden unmet need, and a scalable solution. Uncover your blinders, limiting beliefs, and see how big you can think. Realize you can’t really control for anything, so follow the water around the rock.