7 step to a successful startup efactor

7 Steps to a 7 Steps to a Successful StartupSuccessful Startup

Lessons from Silicon ValleyNaeem Zafar

Haas B School at University of California BerkeleyTwitter: @naeem

www.NaeemZafar.com

Personal Background• Faculty member at Univ of Calif Berkeley Haas business school• Founder Concordia Ventures – advisory to entrepreneurs• CEO of three companies (semiconductor & software)• Worked in engineering, research, marketing & sales• Experience at one large multinational & 6 startups• One IPO (Initial Public Offering)• Four acquisitions, One merger, two “wind-down”, One “restart”• Raised over $70M in multiple ways (VC, asset sale, debt, angel)• Extensive experience in working with people from all cultures• Traveled to 73 countries, lived in 3• Brown University engineering 1981, Univ of Minnesota• Charter member of TiE Silicon Valley, President of OPEN SV• Advised or mentored over 1,000 entrepreneurs

Entrepreneurship

• Pursuit of business opportunity with the resources that you currently do not control

7-Step Process: Starting Your Business1. Are you really an entrepreneur?2. Identify a big unmet need3. Market research- validate assumptions4. Customer discovery: who needs me more?5. Define unique positioning6. Confirm scalable business model7. Assemble the right team

7 Steps Essential as Journey is Long

2-6 months 2 – 8 months 1-12 months 2 to 12 month

• Homework• Market

research• Customer

discovery

• Bootstrap• Fund raise• Team build

• Prod dev• Go-2-market

issues

• Go-2-market• Channel dev• Sales

automation

It takes ~6 months to 3 years to build a company – are you ready for the committment?

Steps for Starting Up

Find unmet needValidate need

Find team

Market research

Write Biz Plan

Create Investor Materials

1: Personal Clarity• Profile of an entrepreneur• Will you be a job taker or a job

giver?• You make the rules

Have clarity on why you want to be an entrepreneur!

Make up of an Entrepreneur• Resilience, determination, perseverance!• Creative & resourceful• Strong conviction but very flexible in

execution• Able to work in the “fog”

– Comfortable in 40-70 zone!• Knows how to network, communicate & sell

2: Identify Big Opportunity

• Is there an unmet need?– Most important homework – Not just a solution looking for a problem– Observe people who claim there is a need

How to Spot a Good Idea?

• Observe what can be done better• Deep domain knowledge• Imagine what may be possible• Then validate

– Validation is not selling!

Sizing the Opportunity

• Will this be worth your time?• Will this idea be easy to raise

money for?

• What is wrong with smaller markets?

Size The Opportunity

• Market size = # of people who can buy X price X # of times they will buy per

3: Market Research to Validate Assumptions

• How big is market if we can fulfill this need– Do bottom-up & top-down analysis– Both numbers should be consistent

• How big a market should there be to start?

Free Sizing Data• www.census.gov

Public Data

• http://www.google.com/Top/Business/Associations/By_Industry/

Free Data

Conducting Market Research

• Surveys, talk to people, group sessions to discover:– Who is interested in my product or service?– How many such people are there– Why do the need me – Why will they buy from me– How many can we reach easily– Where are they looking

4: Who Needs Me More?Market Segmentation

• Start by intense domain & customer knowledge

• Articulate pain users have • Who has more pain now!

Linked In Search

Results

Write & Ask

Questions• Is there a real unmet need in this area (where your products address the problem)?• How does he/she want to see this problem solved?• Why have they not solved this until now – what issues are preventing the problem

from being solved?• If a solution (or a product) existed, what would it look like?• Who will use this product (or service) – what are these users looking for? How badly

do they want it?• What is the buying process (in other words, who needs to approve this purchase)?• What are usually the selection criteria?• What price point will make this decision a no-brainer? At what price point are we

likely to find resistance?• What are the reasons somebody would decide not to buy?• Why hasn’t the customer bought this solution from someone else until now?• Who else may be interested in solving this problem?• Who in the organization is the most likely to champion solving this problem – can I

get an introduction to them?

Google Adwords

Analytics

Customer Discovery Process

• You must understand & be clear on who is your customer – Age– Gender– Title– Income level– Buying habits– Decision making process

• ALL this before you have a product!

Target Market

• Identify your target market

• Find a sliver who needs you more!

How to Pick Your 1st Customer?

• Look inside your chosen sliver

• Find a customer whose hair is on fire now!

Customer Discovery Method• Create a “product brochure”

– See what people’s reaction– Google Adwords to gauge customer interest– “write a press release”

• You should have an extremely good idea why your customers would buy your product before you even start the company

Doing Online Research

www.Zoomerang.comwww.SurveyMonkey.com

Drive traffic to landing page

Landing Page

Survey Online

Collect contact

www.constantContact.com www.aweber.com

Sites.Google.com

Tell them Value Prop & Link to take survey

• Google Adwords• Facebook Ads• Emails to targets

5:Creating Differentiated Positioning

• Positioning = “what do you do?”• Who else is doing anything close to what

you are trying to do and…• How do you appear different to

customers that they do?

Positioning• Positioning statement must be simple &

self explanatory• Make it specific

– Bad: “increase website security”– Good: “cuts fraud in online transactions for

commercial banks”• Must connect with core competency

How Will You Appear Different to Your Customers

6: Business Model

• How do you make money?–who pays you–what channels–what gross margins

Good Business Model

$0.50 $4.00

7: Why us: The Team

• Where not to find a team?• Who is on a team?

– Not just your founders!

What Makes a Good Team?

• What is a good team?– The only common thread among

successful teams: deep mutual respect– People who share your vision– People whom you have worked with– Complementary skills

What is Not a Good Team?

• Four goalies do not make a good team!

Team• Co-founders• Advisory board members• Strategic consultants• Professional service providers

– (Law firm, accounting firms, Professors)

Co-founder vs. Employees

• Owner mindset– Thought leader, do what it takes, risks & rewards

• Employee mindset is of entitlement– Salary, vacation, job description

Anatomy of Business Plan (I)Section # of pages

Executive summary 2-3The unmet need 2-3Market size 1-2Competitive landscape 1-2Your idea (with magic sauce!) 2-5 Positioning 1-4Business model 1-3

Anatomy of Business Plan (II)Section # of pages

Your Team 2-4Go-2-Market Strategy 3-6Key financial assumptions & KPI 1-2Financial projections 2-3Use of funds 1-2Status timeline and traction 1-4Supporting data, research, resume, proxies 5-15

23 to 58 Total number of pages

Summary: Essential Homework

Many ideas

Good ideas

Unmet need

Differentiated Positioning

Market size

Scalable Biz Model

Why us & why now

Startup Bootcamp IStartup Bootcamp ILearn all you need to get started in one day!

Friday November 5th

1-Day Startup Bootcamp Outline

1. The process of business startup2. Assembling a team & dividing equity3. Idea validation process4. Customer discovery: who needs you more?5. Conducting market research with no money6. Legal steps needed to get started7. What is ahead: the challenges

Format

• Lecture• Group discussion• Individual feedback

What Will You Learn?• How to ensure that your idea has traction• How to make assumptions that will drive your

business• How to validate these assumptions by asking

28 questions• How to attract a team with minimal resources• Gain clarity on the process & stop wasting

Advanced Startup Advanced Startup BootcampBootcamp

Learn all you need to raise money & finding customers in one day!

Saturday November 6th

1-Day Advanced Bootcamp

1. The process of getting funded2. Customer acquisition process3. Financial modeling4. Creating a compelling business plan5. How to launch product or service6. Using social media for startups7. What is ahead: the challenges

Format

• Lecture• Group discussion• Interactive Q&A• Mock presentations• Individual feedback

What Will You Learn• Learn your funding options• How to raise money efficiently• Who are angels & VCs & how do they operate• How to get initial sales and what type of

person you hire to build sales process• What are the components of a business plan• How to launch using social media for less• How to develop products while bootstrapping

www.FiveMountainPress.com

7 step to a successful startup efactor

Documents

successful startup 101: march 2014

build a successful startup! - day three

efactor - pitching and presentation

building a successful startup

how to create successful robotics startup

key elements of a successful startup

successful startup ceos

allmyapps - story of an almost successful startup

efactor - business plan writting

above the code - successful startup communications...

secret of being successful startup

efactor template

successful startup 101: june 2014

vision & ideas - making a successful startup

a guide to successful corporate–startup collaborations

what makes an amazing startup successful - growth engine

5 tips for a successful startup

build a successful startup! - day two

7 steps to a successful startup · 7 steps to a successful...

7-step to a successful startup zafar (berkeley)