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!)
