Key Concepts & Best Practices for Entrepreneurs

transcript

Creating, Launching & Growing a Successful Technology Start-Up

Presentated to the Business & Technology Group

Rotman School of Business

at the University of Toronto

December 1, 2011

Creating, Launching & Growing a Successful Technology Start-Up

About me…

Seasoned technology entrepreneur, investor, biz consultant & advisor

75+ Fortune 1000 projects

25+ Start-ups

Noted expert in tech- enabled biz innovation

So, what is a start-up anyway?

A start-up is an idea

in search of a business model

” Steve Blank

The entrepreneur’s task is to find a successful business model as quickly & effectively as possible

A business model describes the rationale of how an organization creates, delivers, and captures value

w/thx to Alex Osterwalder and Yves Pigneur © Arnold Wytenburg & others

In traditional business, we create value by delivering products or services to customers

… But in a startup, the product and customer are unknowns

Priority #1 is to discover who is the customer and validate the product or service offering with them

w/thx to Steve Blank, Alex Osterwalder & Yves Pigneur © Arnold Wytenburg & others

More start-ups fail from a lack of

customers than a lack of

product development

” Steve Blank

Focus on customers for whom the need to solve a problem outweighs the risks of taking on a new product or vendor

w/thx to Geoffrey Moore

All my life, I wanted to be a somebody

- now I realize I needed to be more specific

” Lily Tomlin

Segment your target market into clusters of users who share common needs and interests, who have access to each other, and who reference one another *

HINT: a segment IS NOT a customer persona or industry vertical – think in terms of use cases *

The difference is in

the details

“ ”

Seek to position your product or service as “top of mind” with targeted audiences by uniquely tailoring the value and benefits of your offering to the needs of each segment

Product/market fit is the Holy Grail

of start-up success

“ ”

Aim for strong demand from a sizeable group of passionate users representing a viable market…

Real customers willing to pay you

Cost of acquiring those customers less than what customers will pay

Enough market potential to support your business objectives © Arnold Wytenburg & others

Nail it before you

scale it

“ ” Steve Blank

Produce only “the smallest feature set that customers will pay for” in your first release (aka “minimum viable product”)

w/thx to Steve Blank © Arnold Wytenburg & others

Combine iterative product development with customer development to maximize learning with the least effort and expense

w/thx to Steve Blank, Eric Reis, Brant Cooper, and Patrick Vlaskovits © Arnold Wytenburg & others

Keep the venture as a project for as long as you can before turning it into a business … you’re aiming for a “low burn”

Nothing is a complete failure

- it can always be used as a bad example

” © Arnold Wytenburg & others

Quickly “pivot” one or more parts of your customer-problem-solution hypothesis when failure strikes

Get out of the building “ ” Steve Blank

Speak with as many living, breathing customers as possible to test the validity of your assumptions

If youth is wasted on the young,

wisdom is wasted on the old

Where youth sees only chaos, experience can see pattern and meaning

find a mentor

set up a panel of advisors

expand your industry contacts

Capital is scarce and expensive, so look for creative ways to bootstrap your venture

= Capital

Sweat Equity

+ Revenues

+ Financing

+ Investment

Chaos is just order to which

we haven’t been properly introduced

The path forward is the one you lay down as you walk

Mobilize… Understand... Design... Implement... Manage...

Questions?

Future Research Directions

We need a “start-up friendly” definition of value that recognizes validated learning about customers 1 2 3 4

opportunity /

objectives

problem /

solution

product /

market

enterprise /

industry

? ? ? ?

arnold@arnoldwytenburg.com http://www.slideshare.net/arnold01 416-899-4620