Startups as endangered species

Startups

as Endangered Species?

By Tito Philips, Jnr.

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Some Stats

www.naijapreneur.com

3

Some Stats


Sub-industries with the most dead companies

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Why Startups Fail?


• The Mindset: how you think about entrepreneurship

• The Process: what you need to build a business that

will last

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The Mindset


• Survival Driven (Seeking Money before Adding Value)• I can do well all by myself (Insecurity)• Inadequate Knowledge (Low Business IQ)• Lack of Focus (Jack of all Trade) • Lack of Vision (Shortsightedness)• Fear of failure (Risk-Averse)

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The Process

• Business DNA: What KIND of company are you building?

1. Good Company: “Business as Usual”

2. Great Company: “Business NOT as Usual”


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The Process


1. Purpose: “Why do we exist as a business?”

“What need or needs are being met by this business?”


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The Process


2. Vision: “What do we want to achieve using this business

as a tool?”

“How far do we want to go in pursuit of our purpose as a business?”


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The Process


4. Values: “What principles, standards and tenets must we hold to

be true and never compromise as a business?”

“How must we collectively think and behave as a business in order to fulfill our purpose, achieve our vision and execute our mission?”


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The Process


5. Brand:“Who are we as a business to the general public?”“What is our promise to those we intend to serve?”“How do we want to be perceived by our target

customers?”“What do we want to be remembered, recognized or

respected for in the marketplace?”


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The Process

• People:who are your vision partners?


The Visionary/Dreamer

•The founder/leader

The Customer Champion

•The marketing person

The Innovation Architect

•The technical person

The Rainmaker

•The financial person

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The Process

• People:How do you know the right people?

• The right people fit with the company’s core values • The right people don’t need to be tightly managed• The right people understand that they do not have “jobs”; they

have responsibilities • The right people fulfill their commitments• The right people are passionate about the company and its work • The right people display “window and mirror” maturity


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The Process

• Product:How do you want to improve lives?

Uniqueness: the product/service your startup has created must be significant differently than all the

existing options currently in the market.

– Usefulness: the product/service your startup wants to offer her target customers must be capable of meeting their needs and solving their problems.


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The Process

• Business Model:how will you get the right things done in

the right way?


•Target Customer •Value Proposition•Channels•Customer Relationships •Revenue Streams

•Key Resources•Key Activities•Key Partners•Cost Structure

www.naijapreneur.com 15

The Business Model

• Target Customer : Market Size: what’s the total addressable market? That is; what’s the total

number of potential buyers/customers/users for your proposed product/service?

Growth Rate: how fast or slow is this market growing? Is there an opportunity for expansion?

Demography: how well do you understand who buys your product or service?

Psychography: how well do you understand why they buy your product or service?

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The Business Model

• Value Proposition:What value do we deliver to the customer? Which one of our customer’s problems are we

helping to solve? Which customer needs are we satisfying? What bundles of products and services are we

offering to each Customer Segment?


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The Business Model

• Channels: Through which Channels do our Customer Segments want to

be reached? How are we reaching them now? How are our Channels integrated? Which ones work best? Which ones are most cost-efficient? How are we integrating them with customer routines?


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The Business Model

• Customer Relationships:What type of relationship does each of our Customer

Segments expect us to establish and maintain with them?

Which ones have we established?How costly are they?How are they integrated with the rest of our business

model?


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The Business Model

• Revenue Streams:For what value are our customers really willing to

pay?For what do they currently pay?How are they currently paying?How would they prefer to pay?How much does each Revenue Stream contribute to

overall revenues?


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The Business Model

• Key Resources:What Key Resources do our Value Propositions

require?What Key Resources do our Distribution Channels

require?What Key Resources do our Customer Relationships

require?What Key Resources do our Revenue Streams

require?www.naijapreneur.com

21

The Business Model

• Key Activities:What Key Activities do our Value Propositions

require?What Key Activities do our Distribution Channels

require?What Key Activities do our Customer Relationships

require?What Key Activities do our Revenue Streams require?


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The Business Model

• Key Partnerships:Who are our Key Partners? Who are our key

suppliers?Which Key Resources are we acquiring from

partners?Which Key Activities do partners perform?


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The Business Model

• Cost Structures:What are the most important costs inherent in our

business model?

Which Key Resources are most expensive?

Which Key Activities are most expensive?


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The Process

• Capital:How do you want to fund your startup?

The 7Cs of Credit• Capacity• Cash flow• Capital• Collateral• Character• Conditions• Commitment


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The Process


Capacity• Do you have experience running a business? • Have you had this business for more than one year? • Do you know this industry well? • Do you have a good team working for you? • Is the business operating well?


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The Process


Cash flow• Is your business profitable? • Do you have a bookkeeping system that will allow you to

demonstrate this to the bank? • Can you produce financial statements from this data? • Is your cash flow sufficient to make the loan payments?


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The Process


Capital• Do you have sufficient reserves, or other people who could

invest in the business, should unexpected problems or hard times arise?


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The Process


Collateral• Do you have collateral (business and/or personal) which you

can offer? • Is the property you own yours, or do you share it with your

husband or family?


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The Process


Character• Can you show the bank that I am honest, and keep your

promises?• If I've had a loan or supplier credit before, did you always pay

on time? • Have you always paid your personal bills on time? • Can you prove this to the bank? • Do you have good references?


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The Process


Conditions• Is the industry that you are in a good one? • Do you have a unique product or service which makes you

different from your competitors? • Is there growing demand for my products? Does a loan make

sense for my business?


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The Process


Commitment• Are you committed to working hard so that your business will

succeed? • Do you really want it to grow? • Have you put your own money into the business?


Date post:	17-Jul-2015
Category:	Business
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