Practical Tips for Your First Startup
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Transcript of Practical Tips for Your First Startup
Practical Tips for Your First Startup
AARON WHITE@aaronwhite
Practical Tipsfor your first startup
@aaronwhite
It starts with an Idea
You need passion
and a CLEAR articulation
Evaluating Your Ideayou do vet them don’t you??
Demand
PositioningDistribution
Construction
First Experience
Value Capture
Demand
RisksPositioningDistribution
Construction
First Experience
Value Capture
Common MistakesI’ve made all of these once, twice, three, four times...
People want itMistake #1
Lots of people want itMistake #2
It’s easy to explainMistake #3
I built it, they will comeMistake #4
It’s obvious how to use itMistake #5
They’ll remember to use itMistake #6
Oh god, I’m doomed.well, not quite..
As with most things,start w/ a framework!
Just so happens I’ve got a few for you!
#1 Business HypothesisSpecify your dream
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
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?
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?
For whom are we creating value?Who are our most important customers?
What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
Day Month Year
No.
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#2 Enumerate RisksWhat should you be worried about... in order!
© 2012 Lean Startup Machine. You are free to use it and earn money with it as an entrepreneur, consultant, or executive, as long as you are not a software company (the latter need to license it from us).www.ValidationBoard.com
Validation Board
Track Pivots
1st Pivot 2nd Pivot 3rd Pivot 4th PivotStart
RiskiestAssumption
MethodCore AssumptionsAny assumption that, if invalidated, will break the business
Which Core Assumption has the highest level of uncertainty?
Solas Bar232 E. 9th Street
What is the lowest cost way to test the Riskiest Assumption?
Choose: Exploration, Pitch, or Concierge
Only put the Riskiest Assumption from an experiment in these boxes
Record data & learnings separately
If Invalidated, pivot at least one Core Hypothesis
If Validated, brainstorm and test the next Riskiet Assumption
What is the weakest outcome we will accept as validation?
MinimumSuccessCriterion
1
3
5
2
4
6
1
3
5
2
4
6
Project Name: Team Leader Name:
Customer Hypothesis
Problem Hypothesis
Solution Hypothesis
Design Experiment
Track Pivots
Tip: For two-sided markets, always validate the riskier side first
Tip: Clear all post-its from this area after each experiment is completed
Invalidated Validated
GETOUT
OF THEBLDG
Results
Tip: Do NOT define a solution until you’ve validated the problem
Remember:Limit one sticky-note per boxWrite in ALL CAPSDo not write more than 5 words on any sticky-note
Where will people find
me?
Typically, worry and build outside-in
What ad will pique their interest?
What value do I need to sell them on?
Can they get that value fast as possible?
Do I maintain a good
relationship?
Have I earned their dollar?
Founding a Company
Long-haul Mindset(this could take a while)
PEOPLE MATTER
You need a lawyerand want a good one
Co-FoundersIt’s like a performance-driven marriage
EmployeesThey’re going to the front-line with you
InvestorsCapital access, keep you honest, make connections
Hiring
What’s your Superpower?
Have a process
Trust your gut
Make a mistake? Fix it fast
Financing
Bootstrap?
VC?
If you go VC...
Invest in relationships way too early
You need a good story(remember that clear articulation thing?)
Outline of a (good) pitch
CoverHookTeamProblemOpportunitySolution
ProofUnfair advantageMarket sizeRoadmap with VCMs
THE ASK tie to VCMs
Appendix
PDF copy should speak for itself but not too much
Fundraise quickly
Create scarcity
Building it
Value Creation Milestones
Lean methodology
Measure everything
Brutal honesty
Celebrate the victories(even the small)
Keep Learning
Join a startup!Wait, you get paid to learn??
Follow the conversation.