Ebn 2015 BIC essential Training BWA 1609 pdf

Pr Bruno Wattenbergh « Keynote BWA » 16 septembre 2015

EBN@ Brussels

« BIC Essen/al Training »


4 hours to spend together ? 1.  What are your

expecta/ons ? 2.  Who Am I ? 3.  Rules of the game ? 4.  What has changed ? 5.  What tools do you use ? 6.  Business Model

defini/on ?

7.  Business Model Canvas 8.  Value Proposi/on

Canvas 9.  Ideal Mindset ? 10.  The science of test ! 11. How to pitch a Business

project ? 12. Conclusions ?


1. WHAT DO YOU NEED / EXPECT TODAY ? BIC Essen/al – 16th September 2015


Who are you ?

This session will be a success …

if … ?


2. WHO AM I ? BIC Essen/al – 16th September 2015


100%

20%

30%

30%

20%

Manage

Create

Share

Learn

Watch


EUB -‐ BBA

ICHEC -‐ DSMA

ULB -‐ MLS

Tias -‐ MBI

MIT -‐ CS&I

HBS -‐ AMP

Pr Bruno M. WATTENBERGH [email protected] Skype : wattbru Assistant : Dominique Esther [email protected] Tel assistant : 02/800.00.55

Startup.be


2. RULES OF THE GAME TODAY ? BIC Essen/al – 16th September 2015


Rules of th

e

game today ?


ü  Slides tonight on slideshare (@wabenbergh) ü  Each of you has a business project (in mind) ü  As many interac/ons with me as possible ü  Debates with others à disagree J ü  Ques/on can be asked any/me J ü  Cold call or open call L ü  Some collec/ve exercises J ü  No wrong answers ! J ü  Eng – NL -‐ FR ü  Have fun J


Follow-‐up ? •  Strategyzer’s advisers & trainers all over Europe (world)

•  hbps://strategyzer.com/training/trainers


3. WHAT HAS CHANGED ? BIC Essen/al – 16th September 2015


Why are we here today ? •  What has changed those 20 last years impac/ng the economy and our lives ?

•  Discuss & List with your neighbor 5 key changes impac/ng the way we create business today …

Exercise 1

Collec/ve

Discussion

5’


10 Flabeners ?

1.  Fall of the Berlin Wall : New Age of Crea/vity

2.  New age of connec/vity 3.  Workflow Solware :

teleworking, … 4.  Networks : power of

communi/es 5.  Outsourcing (India)

6.  Off-‐shoring (China) 7.  Supply-‐chaining : Wal

Mart, … 8.  In-‐Sourcing (UPS) 9.  In-‐forming : Google, … 10.  Interoperability &

communica/on standards (XML, …)


Triple Convergence mul/ply the effects of the flabeners …

Convergence II

The second convergence is with the Business Model. With the flat world businesses needed to take a more horizontal approach and management model instead of the usual verUcal approach.

Convergence I Convergence III

The third and most important convergence in geopoliUcs is that more and more countries were now open to the global free market (China, BRICs and other emerging countries)

The first convergence is that all the flaZeners become complementary. This is when a document could be scanned, emailed, reprinted, etc. All flaZeners reinforced one another

2 1 3


Consequences of those rapid changes ?

Ø  Lower barriers to entry (internet + IT) Ø  Less (las/ng) compe//ve advantages Ø  Lifecycle of strategic decision Ø New ventures = less capital intensive Ø More interac/ons with partners Ø  Complexity


•  The world is changing … and those changes have never been so fast and radical …

•  Technologies are changing the rules of the game … •  But the way we use technology, services, products is also

changing the rules of the game … •  On the same <me barriers to entry have been lowered … •  Finally customers are over-‐informed and their loyalty has

evolved … (polariza<on) … •  The end of las<ng compe<<ve advantage … •  We can NOT create / assess companies like in the past !


5. WHAT KIND OF TOOL DO YOU USE ? BIC Essen/al – 16th September 2015


What do you use ? •  Discuss and list with your neighbor 5 common tools … used by entrepreneurs to create their business … or / and used by you to coach a business project Exercise 2

Collec/ve

Discussion

5’


Business plan is certainly the most common tool used to launch a company or

a project ?


Business Plan ? •  Discuss with your neighbor and list the pro’s & con’s of the Business Plan as a tool to create new companies

•  Do you think there are some limita/ons to the use of the business plan when coaching startups ?

Exercise 3

Collec/ve

Discussion

5’


OK Let’s debate together about the BP … J

What are the purposes of the BP

? 27


Purposes of a Business Plan ? (1)

To tell to some key-‐people …the story of your business !

The story ? – Demonstrate there is an opportunity worth exploi/ng – Explain how the opportunity will be captured – Explain who will capture this opportunity



To help entrepreneurs gain a deeper understanding of the business model !

Understanding process ?

–  Avoid entrepreneurs to pursue never profitable ideas !

–  To raise cri/cal ques/ons about the feasibility of the venture : answers will help the entrepreneur to shape his original vision into a beber opportunity !

–  Save /me & money ! 29



To allow the entrepreneur to ar<culate the business opportunity to various stakeholders in the most effec<ve manner !

A convic/on model ?

–  Provide background informa/on to communicate the measured upside poten/al of the venture to investors;

–  Provides the valida/on needed to convince poten/al employees to leave their current jobs for the uncertain future of your new venture;

–  Help secure a strategic partner, key customer or supplier.



Other key purposes :

–  Prove the quality of the business opportunity ... –  Explain the business strategy … (how) –  Define realis/c and measurable targets … + the main milestones …

–  Create a benchmark for the management team in charge of implemen/ng the plan …

–  Iden/fy the financial needs … à financing strategy

–  …


What is then the meta – purpose of the BP ?


What is then the meta – purpose of the BP ? Decrease the risk !

ü  From the idea to the opportunity à feasibility (T+B) !

ü  Shape the opportunity according to the exis/ng resources and a well iden/fied market interest à align

+ Communica3on (story telling)

+ Execu3on tool (Path & Metrics)


Let’s debate about the BP … J

What are the main weaknesses of the startup Business Plan ?

à  Killing crea<vity à LeO brain

à  Content = intellectual fantasy

à  Cogni<ve dissonances

à  Not ideal to start … great to communicate & execute


What about the Business Plan then ?

•  Steve Blank : “No business plan survives the first contact with customers !”

•  BPs are olen Intellectual fantasies (or worse) ! •  Why spend weeks and months on business plans in the beginning of the process ? Waste of /me and energy.

•  Don’t burn the BP : The BP is a tool to execute & communicate


When is it Ume to use the Business Plan ?

•  Good for a second step : – when Business models have been searched, analyzed, tested, shaped, designed, …

– when the business is designed and proved and you give place to ac/on …

•  BP is a too rigid and too basic tool to search and design


[Source: Damien Newman, Central]

search execution

design testing


“Take away”?

•  … ? •  … ? •  … ? •  … ? •  … ? •  … ?

Take Away 4


“Take away” ?

•  The Business Plan is not anymore the right methodology to craO a business opportunity ..

•  The BP is too rigid, but most of the <me it is mandatory to aUract finance an a good execu<on tool …

•  Finally the meta-‐objec<ve of the BP is to decrease the risk(s) of the new venture (technical & commercial) … as a real business opportunity is a tested and evaluated idea (risk & profitability) Ta

ke Away 4


6. BUSINESS MODEL DEFINITION BIC Essen/al – 16th September 2015


•  The world is changing … and those changes have never been so fast and radical …

•  Technologies are changing the rules of the game … •  But the way we use technology, services, products is also

changing the rules of the game … •  On the same <me barriers to entry have been lowered … •  Finally customers are over-‐informed and their loyalty has

evolved … (polariza<on) … •  The end of las<ng compe<<ve advantage … •  We can NOT create / assess companies like in the past !


What’s A Company ? A business organiza3on which sells a product or service in exchange for revenue and with the expecta3on of profit …

42

How are Companies organized ? Companies are organized around “Business Models” …


What does this mean ? •  Discuss with your neighbor what is this no/on of “Business model” … – What it is ? – What it is not ? – Where does this term comes from ? – Was it used 100 years ago ?

Exercise 4

Collec/ve

Discussion

5’


A business model describes the complex mechanic & all the parts of the company necessary

to create value & make money (valid also for non-‐profit organiza<ons … any kind of

ins<tu<on in fact and eventually … yourself )

45


•  Def … “Business Model”

– A business model describes the ra<onale of how

an organiza<on creates, delivers and captures

value.


Economic model à how you capture the value created and delivered … many innova/ons : Google, Ebay, Skype, Facebook, …

The basis of the BM is the crea/on of poten/al r e v enue , o r mo re concretely the « Value Crea/on » à concept of “Value Proposi/on”

Less evident à many innova/on in the channels to deliver the value : Internet, partnerships, …

Numerous opportuniUes of choice, paZern, … So many different combinaUons & opUons !

Partnerships

47


Innova/ve Business Model … ? 1950 … DC introduce locally in NY a new culture of payment with 200 restaurant (partnership) !

49


7. BUSINESS MODEL CANVAS BIC Essen/al – 16th September 2015


Ok … So … ? •  Business Model mabers …

•  You can innovate with the Business Model …

•  We need to “play” with the Business Model …

How to do it easily and quickly ?


May be we can use a modern tool to create modern companies facing modern

challenges …

… and try to talk the same language ?


Business Model Canevas of Dr Osterwalder

•  Phd à 2001 •  Management book of the decade ? •  Websites & Blogs •  Revolu/on à Mind mapping of the Business Model

Processing •  Propose a common culture and tools to innovate

through the BM •  Useful to understand the exis/ng BM and to challenge

them •  Useful to explore new paberns and configura/ons •  Adapted to the changing environment !

59


“You can’t write about business model innova<on … without an innova<ve business

model” Dr Alex Osterwalder


WHAT?

The bundle of products & services that create value

66


WHAT? WHO?

The different groups of people or organiza/ons your enterprise aims to reach

and serve, + the tac/c to reach & to develop rela/onships with them

67


WHAT? WHO? HOW ?

The configura/on of your resources, competences,

ac/vi/es and partnerships to create & deliver the value

68


WHAT ? WHO ? HOW ?

-‐ €? + €?

The cash your company generates from each Customer Segment

All costs incurred to operate your company

69


So let’s dig into the Business Model Canvas •  Please take your BM Canvas •  Use one BIC as integra/ve case •  Try to fill each of the block with post-‐its •  Look for the big picture @ this stage (avoid too many details)

•  Use your experience but think about the ideal BIC !


building blocks "9"

71


Customer Segment(s)"


Customer Segment(s)"For whom have you chosen to create value ?

Who is your typical customer ?

What is he looking for ?

Define one or more segments or individual exhibiting behaviors / needs / problems individuals you choose to solve …

Why ? Why ? Why ?

Use “persona” methodology ?


?



images by JAM"

Yes but … Customer or User ?

78



images by JAM"

Yes but … Customer or User ? Pla^orm business ? Franchise Business ? Customer + User ?

79


Value Proposition(s)"

What bundle of values do you bring to the customer you have selected ? What needs / desires / jobs you chose to address ? What problem do you help to resolve? Be careful : “the Words of the customer” ! Tangible / intangible ! Issue of setting combinations of values for each matched segment.



images by JAM"

The words of the customer / user Not "dry product" Product increased

Solu<on rather than product quan<fica<on

Adapted to the "problem customer”

Bundle of values …

What bundle of values do you bring to the customer you have selected ? What needs / desires / jobs you chose to address ? What problem do you help to resolve? Be careful : “the Words of the customer” ! Tangible / intangible ! Issue of setting combinations of values for each matched segment.



images by JAM"

The words of the customer / user Not "dry product" product increased

Solu<on rather than product quan<fica<on

Adapted to the "problem customer"

What values do we bring to the customer selected ? What needs / desires we chose to respond ? What problem do we help resolve? Words of the customer! Issue of setting combinations of values for each matched segment.



images by JAM"

Users & Customers ?



images by JAM"

Magic Duo ?



images by JAM"

Itera/ons

Magic Duo ? Searching the perfect match !


Channels "

images by JAM"


Channels "

images by JAM"

Which channels our customers prefer ? Which are the most effective and efficient ? How do we integrate the habits of customers ? → Define how the company communicates and engages with its customers.


Distribution Channels "

images by JAM"


B2C ? B2B ?

B2B2C ?


Distribution Channels "

images by JAM"


B2C or B2B or B2B2C ?

How does the customer know that your offer exists, how can he evaluate / test it, how can he purchase, how is delivered, what is the aOer sale rela<on ?


Distribution Channels"

images by JAM"

Magic Trio ?


Do you have a “Magic Trio” &

Can you pitch it in 1 minute ? &

Is your M3 tested or testable ?


Customer Relationship"

images by JAM"

What kind of relationship each of your segments want ? How can you create and capture value developi,g elations with your customers ? At what costs ? How articulates those relations with other blocks of the model ? → Set the type of relationship with the customers segments.


Customer Relationship"

images by JAM"

What kind of relationship each of our segments want ? What is their costs ? How articulates those relations with other blocks of the model ? → Set the type of relationship with the customers segments.

Purely transac<onal ? Sale "dry"?

Customer knowledge ? Maintenance of customer

rela<ons ? Privacy ? Trust ?

Sense of belonging ?


Revenue Streams"

images by JAM"

What do they currently pay for what kind of offers and how ? What is the from each source of income relative to total income ? → Assess the cash the company generates from each segment.


99

Value Side of the Canvas


Key Resources"

images by JAM"

Do we have the capacities ? What key resources are needed to achieve the value proposition ? What channels, customer relationship, revenue streams ? → Define the most important assets required to make the model work.

Capaci<es : Resource ?

Competence ? List & Assess


Key Activities"

images by JAM"

What key activities are necessary for the realization of the value proposition ? What channels, customer relationship, revenue streams ? → Describe the most important for the model to work actions.

List the key-‐ac<vi<es Value Chain DIY ? Or Not ?


Key Partners"

images by JAM"

Who are our key partners and suppliers ? What resources and activities are supported or created by them? → Describe its network of partners and suppliers to ensure that the model works.


Cost Structure "

images by JAM"

What are the most significative costs ? Those linked to the key activities and the key resources ? → Describe the most important costs of this specific model.


How is your BM ?


« Sources of the new venture ? »"Specific resources, some specific competences,

a license (IP), a specific know-‐how, …

A specific Value Proposi/on … a well-‐defined offer : you have a solu/on looking for a problem to solve, or a customer to sa/sfy.

A well-‐defined segment of customer having a problem you intend to sa/sfy

A low-‐cost model where more customer can access a product or a service


Innova/on par les ressources :

partenariats et infrastructures


Offre : nouvelle proposi/on de valeur ayant un impact sur les autres

blocs


Clients : basé sur les besoins des consommateurs (encore pas/peu

sa/sfaits)


Finances : Low cost, pricing dynamique, structure de coût innovante, yield

management, …


OK … debrief ! •  How was the exercise ? •  What have you learned ? •  How were the interac/ons with the others ? •  Do you see yourself using this with your customer ?


8. VALUE PROPOSITION CANVAS BIC Essen/al – 16th September 2015


The Business Model Canvas

Revenue Streams

Channels

Customer SegmentsValue PropositionsKey ActivitiesKey Partners

Key Resources

Cost Structure

Customer Relationships

Designed by: Date: Version:Designed for:

designed by: Business Model Foundry AGThe makers of Business Model Generation and Strategyzer

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com

strategyzer.com

Gain Creators

Pain Relievers Pains

Gains

Products& Services

CustomerJob(s)

The Value Proposition Canvas

Value Proposition Customer Segment

strategyzer.comThe makers of Business Model Generation and StrategyzerCopyright Business Model Foundry AG

3 tools for U to use …


The Business Model Canvas

Revenue Streams

Channels

Customer SegmentsValue PropositionsKey ActivitiesKey Partners

Key Resources

Cost Structure

Customer Relationships

Designed by: Date: Version:Designed for:

designed by: Business Model Foundry AGThe makers of Business Model Generation and Strategyzer

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com


strategyzer.com

Gain Creators

Pain Relievers Pains

Gains

Products& Services

CustomerJob(s)

The Value Proposition Canvas

Value Proposition Customer Segment

strategyzer.comThe makers of Business Model Generation and StrategyzerCopyright Business Model Foundry AG


this is one of your customer segments


this is what you’re offering your customers


put yourself into your customer’s

shoes


Value proposi/on language •  Customer Focus !

–  Value proposi/on à customer segment : which value are you offering to which customer ?

–  Value proposi/on without customer segment is just a product ! You need to know the target customer to evaluate the value !

–  Put yourself in your customer’s shoes ! à forget who you are !

–  Then adopt design prospec/ve à Philippe Starck video


we can understand

her better by describing

three things


1.

2.

3.


So what to do ? Ask yourself first : What do the customer try to get done as a job …

Job to be done concept to have a customer prospec<ve.

Clayton Christensen – Harvard : “We hire products to do things for us” à Job prospec/ve à why people hire milkshake !


Customer Canvas ? •  Let’s work on the Customer Canvas ?

•  Describe the jobs your customers are trying to do

Exercise 5

Collec/ve

Workshop

20’


9. IDEAL MINDSET BIC Essen/al – 16th September 2015


The ideal entrepreneur mindset ?

•  Architect

•  Researcher in a lab


10. THE SCIENCE OF TEST BIC Essen/al – 16th September 2015


Science of test ? •  The mindset of the researcher in a lab :

– Make serious cri/cal hypotheses

– Design test to infirm / confirm the hypotheses

– Learn from the test

– Decision to go ahead OR pivot – Repeat to decrease the risk


11. HOW TO PITCH A BUSINESS PROJECT ? BIC Essen/al – 16th September 2015


hbp://www.slideshare.net/Wabbru/cours-‐de-‐pitch-‐2015-‐pdf


12. CONCLUSIONS ? BIC Essen/al – 16th September 2015


Set of Advises 1 ü  Don’t overvalue your idea ! ü  Understand the opportunity principle ! ü  Make hypotheses and write them in a

specific colors ! ü  Design tests to validate your hypotheses ! ü  Understand the pivot principle !


Set of Advises 2 ü  Understand the interest & limita/ons of the

Business Plan ! ü  Use modern tools as : Customer Canvas,

Empathy Map, Business Model Canvas, Customer journey & touch point, …

ü  Go out of the building, talk to customers, …


Des ou/ls ? L’empathy map !


Des ou/ls ? Value Proposi/on Canvas !


Set of Advises 3 ü  Learn to describe the customer segment ü  Understand the Customer Pain principle ü  Quan/fy the Customer Pain

ü  Understand the mechanism of the Value Proposi/on (tangible / intangible) …

ü  Quan/fy the Value Proposi/on


Set of Advises 4 ü  Learn as soon as possible to pitch your

project … ü  Pitch once a week … ü  Pitch every morning in your bath room … J ü  Collect feed-‐back … ask the right ques/ons ü  Learn from your pitch


Set of Advises 5 ü  Don’t wait the final Business Model to assess

the finance side of the product … ü  Learn how to make a P&L on the back of an

envelope … ü  Understand the financial dynamic (costs &

revenues) of each Business Model ü  Determine CoCA & Elas/city demand / price


Set of Advises 6 ü  Dare to study compe//on … but also

subs/tutes ! ü  Don’t ever tell that you don’t have any

compe//on or that the compe//on is not relevant …

ü  Understand the compe//on & subs/tutes …


Set of Advises 7 ü  Imagine, design, conduct 2 types of tests to

validate your hypotheses : ü  Proof of Concept : I can deliver ! ü  Proof of Business : it sells !

ü  Be an anthropologist, a psychologist, a sociologist, … to learn from those tests


Set of Advises 8 ü  Don’t say your hypotheses are conserva/ve

… and so your financial forecasts … ü  Explain your forecast … describe the

hypotheses and the tests done … ü  Use some sensi/vity analysis …

ü  Test 1 or 2 alterna/ve configura/ons … (xls)


Set of Advises 9 ü  Plan some clear milestones … with clear

objec/ves to achieve … ü  Determine financing needs for each stage …

ü  Search for the right mix of financing : FFFs, BA, grants, … @ the right /me !

ü  Know exactly what you need & when !


don’t forget … !

ü  The defini/on of Enterprise … ? ü  The defini/on of startup (Steve Blanck) ?


And … don’t forget the first rule !

ü  Fail fast … ü  Fail rough … ü  Fail cheap …

And never do twice the same mistake !


EFFECTUAL ENTREPRENEURSHIP ? BIC Essen/al – 16th September 2015

Courtesy of Pr Olivier WITMEUR

Solvay Brussels School of Economics & Management

Solvay Entrepreneurs


Introducing “Effectua<on” : The logic of expert entrepreneurs

The word effectual (entrepreneurial approach) is the inverse of causal (managerial approach).

In general, in MBA programs across the world, students are taught causal or predic<ve reasoning in every func<onal area of business.

Saras Sarasvathy India


Causa/on vs. Effectua/on Causa/on Effectua/on (Cre-‐Ac/on)

•  Planned approach

•  Top-‐Down

•  Managerial logic

•  PredicUon based: To the extent we can predict the future, we can control it.

à For predictable situaUons

•  Emergent approach

•  Bobom-‐up

•  Entrepreneurial logic

•  Control based: To the extent we can control the future, we don’t need to predict it.

à For uncertain situaUons

Effects are predicted

Need to manage

the causes

Causes are given

Need to manage

the effects


Effectua/on principle #1 : Bird in Hand !

Start with who you are, what you know and whom you know … Not with pre-‐set/given goals (based on predic/on) •  Typical entrepreneurial resources:

–  Exper/ze, skills… –  Social capital –  Psychological capital: hope, op/mism, self efficacy and resilience


Effectua/on principle #2 : Affordable loss Invest what you can afford to lose (extreme case = 0€) … Not expected (risk adjusted) return


Effectua/on principle #3 : Crazy Quilt Build a network of self-‐selected stakeholders

… Not compe//ve analysis and transac/onal rela/onships with first-‐best partners.

Co-‐Crea/on

Customers Suppliers Channels

Financial partners Employees Sponsors

…

Commibed stakeholders network

Crazy quilt, not puzzle.


Effectua/on principle #4 : Lemonade principle Embrace and leverage surprises (they can present new opportuniUes)

… Not avoid them


About Nils Berqvist •  Swedish environmental engineer

•  Worked 8 years in the mining industry in Kiruna (in Northern Sweden)

•  Passion for wildlife and sports


Ice Hotel J


Effectua/on principle #5 : Pilot-‐in-‐the-‐plane

Give up the predicUon logic ! The future comes from what people do : let’s invent the world ! … No inevitable trends à Control vs Plan


The Dynamics of the Entrepreneurial Network

Who I am ? What I can do ? Whom I know ?

My affordable loss ?

Who may be involved?

Addi/onal resources

Itera/ve opportunity co-‐construcUon

New Goals The venture grows

step by step.

Dead end

My Goals ?

Mul/ple techniques help to deal with these cycles : Design Thinking, Lean Start-‐up, Business Model Genera/on, Staged Financing, … To be conUnued.


20 COMMON LIES OF ENTREPRENEURS ? STARTit@KBC – 15th September 2015


Lie n°1: “My idea is just fantasUc.”

•  Yes, so what? •  An idea has no or almost no value … •  Everyone has ideas all the /me … •  A valuable idea is an idea that is tested, validated, put into figures,

put into chronological perspec/ve, operable with a good chance of success… then we can speak of an “entrepreneurial opportunity”.

•  Un/l you have gone through the process of transforming the entrepreneurial idea into an entrepreneurial opportunity … this idea cannot be fantas/c… or in any case no one can shout it from the roolops!


Lie n°2 : “I can’t talk about my idea in case someone steals it.”

•  No problem … keep it to yourself J!

•  Once again, an idea has no value un/l it is “worked & shared/compared” (see previous lie).

•  If, simply by men/oning it, someone may copy it and make money from it, then anyone will be able to copy the idea ... tomorrow or the day aler tomorrow!

•  It also suggests that the aspiring entrepreneur is in love with his idea and will therefore find it difficult to accept posi/ve or nega/ve cri/cism.

•  A lot of people will then spend years with their idea without ever transforming it into a company or product.

•  Asking for an NDA from a coach/investor, how do you expect them to manage their ac/vi/es: they see dozens of projects a week and have without a doubt seen 5 ideas like yours over the past few months?


Lie n°3 : “I have the best product on the market.”

•  The “best product" is an expression that means NOTHING! •  The best product for what / who? Which customer segment? •  With what characteris/cs: performance, security, access, service, user

experience, personalised, ...? •  At what price? With which business model? •  With what related services: access, aler-‐sales service, related service, …?

•  There are hundreds of customer segments with different needs ... someone who says "I have the best product on the market" has probably not made strategic choices and/or does not know the market (entrepreneur’s homework not done?)!


Lie n°4 : “I don’t have any compeUtors: no one does what I do!”

•  More olen than not, these words reflect once again a love of the product that prevents them from seeing the compe//on.

•  99 /mes out of a 100 it means that the entrepreneur has not made its analysis and market segmenta/on homeworks.

•  Bad news, compe/tors are not the only problem, there are also alterna/ves that consume the budget of consumers who are poten/al customers!

•  If they are right, then it is probably in a niche market where they are on their own or almost, and the demand is probably low!

•  Finally, if this is true, it will prevent their investors (coach) from analysing and understanding the appeal of a market (size, growth, etc.), the posi/oning of the compe//on, from analysing the accounts of compe/tors.


Lie n°5: “I’ve conducted a market study: it confirms that my

company will be a success.” •  What market research? 95 /mes out of a 100, a costly and

uninteres/ng theore/cal – macro – study conducted exclusively on the internet and without any direct confronta/on with the customer!

•  In the best case, a quan/ta/ve study (ques/onnaire on the Internet), olen unsuitable for a startup with ques/ons asked without prior iden/fica/on of the assump/ons to deny / confirm.

•  An abempt to seduce and reassure ... not to challenge tes/ng the key assump/ons of the business plan → danger!

•  Becoming an entrepreneur is not a theore/cal disserta/on … it’s a contact sport à talk to customer ASAP !


Lie n°6: “This/my market is huge: I just need to take 1% of the

market share to hit the jackpot !” •  If the market is so large and growing:

-‐ It is automa/cally coveted by powerful and effec/ve exis/ng players! -‐ It abracts a large number of entrants! -‐ It is probably too late for a "small player" on a shoestring

→ look rather for a sub-‐segment that matches your skills and resources! •  If you say this, you probably have not done your homework by iden/fying

smaller markets with specific needs that you are able to sa/sfy: a niche that is small enough so that you do not have too much compe//on and large enough to be profitable, and if possible a niche with growth poten/al for you to grow along with the niche (Example of New Tree).


Lie n°7: “My turnover forecasts are conservaUve but very

promising.” •  It's a trap element of business plan: too low, these sales will not abract

enough investors and bankers, too high it will immediately be discounted by financiers. So "objec/fy" & "test"!

•  Why "conserva/ve"? Just tell me how you will generate sales, what are your assump/ons and how you tested / validated them?

•  Too olen we are faced with a "process of spontaneous genera/on of turnover" whose final amount is dictated by the Excel spreadsheet of the financial plan!

•  But where is the sales genera/on process? What is it? Can you describe it? How was it drawn up?

•  Was a test performed? If not, why?


Lie n°8 : “I’m protected because I’ve filed patents/licences”

•  Yeah, so? Patents are generally not yet validated and anyway, you don’t really have the money behind you to sue those who could possibly copy them!

•  If you insist too much on patents, it becomes suspicious: is that the only value of the company?

•  The value of a startup is not so much in the patents but in the capacity of a structure and a project to create value with and around these patents.

•  Rather explain how these patents would prevent compe/tors from selling to your customers


Lie n°9: “Major compeUtors are too slow or I have a first mover

advantage”. •  The "first mover advantage" is rarely tested in the real world:

-‐ Take a look at the "cross the chasm" and "S curve" concepts! •  Rarely a radical innova/on emerges from a market leader ... especially because of

the risks (you are the one who takes those!) ... But it is olen a major company that takes over the project when it becomes juicy and it has been validated!

•  If your project is not innova/ve ... and you are the first on this concept, ask yourself ques/ons honestly to understand why other companies have not ventured into this area!

•  Also ask yourself about the possible reac/ons of compe/tors ...

•  Do not forget the customer! ... … !


Lie n°10: “My financial plan is pessimisUc”

•  Oh, and why is that? •  No need to be pessimis/c! •  What the coach or investor is looking for is:

-‐ A detailed plan explaining to them in detail the dynamics of the costs and revenues -‐ The descrip/on of basic assump/ons, how they were fixed -‐ Plan B if they are not achieved -‐ Tests to confirm the basic assump/ons (a test is beber

than a business plan to assess the risk of an entrepreneurial project).


Lie n°11: “Analysts say that my market will take off seriously in 10

years’ Ume.” •  These projec/ons rarely turn out to be true! •  This /me horizon is of no interest to any of your stakeholders

•  Financiers (investors, business angels, banks) will focus not so much on the size of the market, but on the share of it that you are able to go capture.

•  Rather explain your strategy to gain market shares and quan/fy the cost of acquiring them.


Lie n°12 : “Our sales strategy is based on the use of Facebook and the

Internet”

•  As if there was a way of selling using Facebook & Internet ...! •  Of course, there are E-‐Commerce ac/vi/es, but for others, Facebook

& Internet do not magically solve all the business issues ... •  Reading this in a business plan is to think immediately that the

aspiring entrepreneur has not sought or found their distribu/on channel.

•  This does not mean that Facebook & Internet should not be used to back up the sales policy or to foster a useful interac/on with the consumer ...


Lie n°13: “There are plenty of customers interested in my product/

service and who are just waiUng for me to launch it” •  What does interested actually mean? •  Have you ever sold or tried to sell? •  Do you have lebers of intent? •  Have you ever talked price? •  Are these interested people:

-‐ Customers (paying) → B2C

-‐ Users -‐ Distributors → BEB

•  Which marke/ng tests have demonstrated the "Proof of Business“?


Lie n°14: “I prefer doing it myself rather than entrusUng it to someone

else”

•  Why doing it alone is suspicious: -‐ In a test phase why do it yourself and suffer the constraints of learning curves and fixed costs? -‐ During start-‐up, what are the reasons for doing things yourself as the risks and stakes are so high? Have you tried to build partnerships? -‐ If so, why did they fail to get off the ground? -‐ If not, are you a loner who wants to do everything alone?


Lie n°15: “I prefer starUng out on my own”

•  The "loners" never create nice big entrepreneurial adventures! •  Why do you prefer to start out on your own? Is this deliberate? ... •  Have you tried to build alliances? •  Do you talk about your project? •  If so, what conclusions do you draw on your leadership on the risks

associated with your project, your ability to iden/fy problems early enough and find solu/ons?

•  What are the impacts on you and your project from this go it alone strategy?


Lie n°16: “Our first customer will be profitable”

•  It is almost impossible for your first customer to be profitable ... and it is not even necessary! ...

•  If you say / think that this first customer is profitable, you probably have no idea of ��the cost of acquiring your first customers! ...

•  Your first customer is rather a test valida/ng a range of parameters and assump/ons of your business plan: /me and process of the sales cycle, customer feedback, use of the product /service, price sensi/vity, perceived value, delivery of value, payment term ...

•  You must study your first customer through the eyes of an anthropologist, a sociologist, a psychologist: act of purchase, use, comment, ... and adapt your offer!


You said “lies by omission”?

1.  The forma/on of turnover?

2.  The customer acquisi/on cost?

3.  The dura/on of the sales cycle?

4.  The person who will sign the contract (B2B) ?

5.  The capacity to produce – deliver?

6.  The quan/fica/on of the value proposi/on?


Lie by omission n°1: “The formaUon of the turnover”

•  Sales policy: –  vaguely described in the Business Plan ...! –  lible detail in the Financial Plan ...: a box in an Excel spreadsheet ...

olen without a formula ….! •  Absence or low sales, adver/sing and marke/ng costs in the Financial

Plan ...!

•  Linear growth in turnover in the Financial Plan without threshold effects and no increase in fixed or variable costs, and this as from the first day!

•  Process of spontaneous genera/on of revenue!


Lie by omission n°2: “The customer acquisiUon cost”

•  Already described above ... and in the "Lie by Omission No. 1" ... •  Process of spontaneous customer genera/on ... without necessarily a

strategy, marke/ng, adver/sing and sales force costs ... •  Determina/on of turnover as for "borrowing" to balance the income

statement!

•  While the determina/on of the acquisi/on price can prompt the aspiring entrepreneur to profoundly change its strategy: all strategic op/ons are not "assumable" financially. Aler a correct es/mate of the cost of acquiring the customer, an entrepreneur may decide to move from a B2C to a B2B strategy.


Lie by omission n°3: “The duraUon of the sales cycle”

•  Just as aspiring entrepreneurs are reluctant to talk to poten/al customers, they are even more reluctant to test their business process and simulate sales.

•  Results: -‐ They olen begin by selling to the wrong partner (B2B or B2C) ... -‐ They discover configura/on problems of their offer during selling ...: superfluous elements, lack of certain elements related service ... -‐ They underes/mate the length of the decision-‐making process ...!

•  This type of error has a significant impact on the financing needs of the company.


Lie by omission n°4: “The person who will sign the contract”

•  In B2B and even in B2C, the end user, even if he pays and may be called a consumer, is not necessarily the customer (the person who signs the order): -‐ Example of Pepsi-‐Cola -‐ Example of Cur/us. -‐ Example of Spo�ire.

•  Whoever signs the contract must be the one who has the power of decision and the one with the biggest problem (or unmet need).

•  The economic feasibility test makes it possible to confirm the iden/ty of the so-‐called DMU (Decision Unit Maker).


Lie by omission n°5: “The capacity to produce and deliver”

•  A business plan is not guaranteed to produce or deliver the product ... •  More so ... if you do everything yourself ... •  Making prototypes, pre-‐produc/on lines, makes it possible to test the

technical feasibility "Proof of Concept" ... •  ... but also to have a product to compare with poten/al customers to

make "Proof of Business!“ •  Based on the results, if they are not conclusive for example, the

op/on to outsource or conclude strategic partnerships can be a con/ngency strategy.


Lie by omission n°6: “QuanUfying the value proposiUon”

•  Saying "I am the best in this market," but being unable to prove it. •  If we iden/fy a specific market, with a corresponding offer, if we look

for compe/tors and alterna/ves, it is possible to iden/fy a set of criteria/values � �for each of the offers on the market. By weigh/ng each of these criteria it is possible to compare offers ... (graph) ... ... And possibly quan/fy the actual value for the customer!

•  Advantage: it facilitates the posi/oning and sale of the product → concept of return on investment!


hbp://media.100firsthits.com/2013/11/Startup-‐Mistakes-‐Infographics.png

Why startups fail, according to their founders by Erin Griffith @eringriffith SEPTEMBER 25,

2014, 3:00 PM EST hbp://for.tn/1vfKwW3

The top reason?

They make products no one wants.


The modern Startup rule ? •  Fail fast •  Fait cheap •  Fail rough

And never do twice the same mistakes : learn !

Ebn 2015 BIC essential Training BWA 1609 pdf

Business

Transcript of Ebn 2015 BIC essential Training BWA 1609 pdf