7 Marketing, Sales & Exit

Question 1

RECAP study dilution & valuation

Answer 1

loans do not dilute you, even if they come from a VC

Question 2

RECAP

most common failure reason for new ventures

Answer 2

premature scaling
= try to grow faster than you have money for

=> balance is needed, even under pressure from investors

Question 3

RECAP

customers can kill you: how, why?

Answer 3

they don’t pay / pay late, and you have had to pay already what you sourced

Question 4

RECAP

4 growth strats over 2 dims + their assessments

Answer 4

market dev strats diversification strats

penetration strats product dev strats -> use first

Dims:
products (existing to new)

markets (existing to new)

Question 5

RECAP

growth strats: accumulated S curves: principle

Answer 5

try to start new one before the previous flattens out

Question 6

RECAP

internal vs external growth strats

Answer 6

internal = organic

external: from alliances to M&A (but about 5 choices)

Question 7

Entrepreneurial marketing & issues for small ventures

Answer 7

• strong influence by entrepreneur
• not much formalization
• market does not trust you yet

Question 8

Methods in entrepreneurial marketing

Answer 8

• Reverse graffiti
• Viral marketing
• Guerilla marketing

sometimes you need to use forbidden methods!

Question 9

guerilla marketing:

features

targets

Answer 9

features = invest time & smarts, based on human psy, rather than money

targets = individuals or small groups

Question 10

B2B sales process

4 stages + some advice

Answer 10

by increasing cost of sale & long-term reward:

• sell prod & forget
• sell solution –> a package deal
• sell against competition –> win over
• strategic sale –> symbiosis w client

advice: start with a small CRM SW, simpler than salesforce

Question 11

Exit strategies

• 6 possible why’s

Answer 11

situational:

• dire need = various problems
• preference = to get a normal life!

achievement level:

• biz plan = goals met
• investor driven = expectations NOT met

growth perspectives:

• growth induced = need resources to grow
• market driven = segment mature; competitors

–>DiMaGrI BpP

Question 12

7 possible exit paths

Answer 12

• no exit –> make it a lifestyle biz!
• close-down
  
  • ramp-down
  • bankruptcy

sell to someone else (in order of closeness from founders to market)

• buy-back –> other founders
• MBO –> managers
• secondary buy-out –> other investors
• M&A –> other Cos
• IPO –> market

Question 13

Critical Qs to validate a new idea

Answer 13

1. What exactly is innovative about the business idea?
2. How unique is the business idea? Can it be protected by a patent?
3. Who is the customer?
4. Why should a customer buy the product?! What need does it meet?
5. Why is the product better than comparable alternatives?
6. What are the competitive advantages of the new product, and why can a competitor not simply copy them?
7. How does the product reach the customer?
8. Can the product make money? What are the coats involved, and what price can be asked for it?

Question 14

key findings by analysis Co Startup Genome

Answer 14

• pivoting brings more profit
• frequent premature scaling
• hands-on investors bring no value
• financed startups overestimate value of IP by 250% and market size by 100x