2 Business plan + Strategy, Products & Markets Flashcards
Venture life cycle in 6 stages
+ pitfall
Idea > Start-up > Early Growth > Expansion > Maturity > Exit
–>I.SEgE.ME
Includes “valley of death” of accumulated negative cash flow before breakeven
The Fs of early startup financing
Family Friends Fools (LOL) Foundations Founders ? …
5 types of new ventures - by decreasing potential
- Gazelle = high growth n very high potential
- High potential venture
- Foundation Co
- Lifestyle Firm
- Living dead = too valuable to kill, not enough to invest more
–>GHipFoLifLiv
Hofstadter’s law
+ also what
It always takes longer than expected, even considering Hofstadter’s law.
+ also more cash!!!
Business Plan
- 3 elements
- Goal
- typical length
- 3 things it is not
- biz opportunity, strategy, detailed implementation
- –>OSdI*
- It forces you into honest, disciplined thinking
- 20 pages
- not alibi, beauty contest, bureaucracy –> ABB
BP Executive Summary
- length
- audience
- content
- 1-2 pages (first & most important 2 of the BP)
- 90% of people only read this
- brief Co description with unfair advantage
BP - Elevator pitch
- def
- goal
- freq f use
- 2 min summary f exec summary
- to awaken interest f potential investors
- used daily
Elevator pitch - structure 6 elements
- For [target customers]
- Who have [compelling reason to buy]
- Our product is a [new product category]
- That provides [key benefit (which solves problem)]
- Unlike [competitor in new product category]
- We have [key point of differentiation]
–>ForOurUnlike
Rel bw tech & ValueAdded
mediated by BizStrat & BizModel (=Co’s DNA)
BizModel: Claesson’s def w 3 els
- Co’s DNA
- delivers Value Added to clients
- entices clients into paying for VA
- transforms payments into profits
Lean startup methodology:
- mantra in 3 words
- goals
- key author
- build - measure - learn –>BmL
- fail fast & learn & pivot -->FfLoP
- Eric Ries
Startup pivot = avg Nr of pivots for a startup
= change of biz model avg = 2.3 !!!
Know your customers & markets
- how, across 2 dims
- what to be careful for
- market segmentation, horizontal & vertical
- advice from 1 segment could cause you to fail in others!
market S-curve =
+ “steepest” part of curve, aka…
+ conquering this can be more important than…
diffusion of innovation ~ contribution to profit curve = integral of bell-shaped adoption curve for new tech / prod: bell-shaped curve from innovators/visionaries, early adopters, early majority/pragmatists, laggards…
+ “steepest” part of curve is bw early adopters n early majority: called THE CHASM
+ …than being the first mover!
market strategy classification
dim1: red VS blue ocean strategies
dim2. horizontal VS vertical
- dim1: red ocean strat > beat competitors in existing market space VS blue ocean strat > create uncontested market space (prefer this!)
- dim2: platform/toolkit for wide array of biz problems VS focused strategy for specific problems (prefer this!)
“if you build it, they will come” is…
True only in films!
RECAP Q: BizPlan structure + why show the weaknesses in the SWOT analysis?
… study from slides + show weaknesses so as to prove that you have identified and solved them!
what is a “one-trick pony” startup? + what conseq?
it is a startup w only 1 prod it is worth much less than one w 2-3+ products
BP: 8 inputs & various outputs
inputs:
- financing sources
- products, markets, marketing
- team
- IP
(activities)
- strategy
- sales
- growth mgmt
- exit plan
outputs: formats & lengths vary dep. on occasion & targets
(ingredients)
Business strategy process
- cycle, w important condition
- heart
- define SMART strategic goals, do SWOT, iterate based on feedback or w new goals in case of SWOT failure
- A SWOT analysis is performed to determine and leverage strengths and opportunities, and take action on weaknesses and threats
biz model canvas: def & 9 els
template w 1+2+1+2+1 / 1+1 els:
- partners
- key activities & resources
- VP
- CR & channels
- customer segments
- cost & revenue structures
market analysis 3 objects
- industry (big players, trends, events, legislation)
- market (size, structure, growth in worst & best case)
- competitors (price, quality, perception)
Gartner new tech hype cycle: key 3 features
- first there’s fast growth to a peak of inflated expectations, then
- trough of disillusionment
- slope of enlightenment, till productivity plateaus
customer satisfaction
perceived value / expectation
4 strategy tradeoffs, 2 “unsolved” & 2 “solved”
- price skimming vs market penetration
- pioneers vs late entrants
- market risks vs tech risks –> never take both together!
- market needs beats product focus
