the seven habits of highly effective startups seven habits for highly effective people 1. be...
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The Seven Habits of Highly Effective Startups
Errol Arkilic ([email protected])
Founding and Former Lead I-Corps Program Director
The views expressed in this material are those of the author and do not necessarily reflect the views of the National Science Foundation
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The Seven Habits for Highly Effective People
1. Be Proactive2. Begin with The End in Mind3. Put First Things First4. Think Win Win5. Seek First to Understand, then to be
Understood6. Synergize7. Sharpen the Saw
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The Seven Habits for Highly Effective Startups:
1. Be Evidence Based2. Know Thyself3. Obsess over Product-Market Fit4. Create Measurable Value5. Search Before You Execute6. Manage Third-Party Risk7. Master Get, Keep, Grow
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M34: What you need to reach escape velocity
1. Be Evidence-Based…It’s Harder Than It First Appears
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Entrepreneurship*
• Entrepreneurship is the process of starting a business or other organization. The entrepreneur chooses/develops a business model, acquires the human and other required resources and is fully responsible for it success or failure.
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*Wikipedia: July 2014
The design, invention, development and/orimplementation of new or altered products,services, processes, systems, organizationalstructures, or business models for thepurpose of creating new value for customersand financial returns for the firm
Innovation*
*Innovation MeasurementA Report to the Secretary of CommerceJanuary 2008
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NSF,DARPA,NIH, DOE
Academia
Small Business
Investors
Industry
Valley of Death
Res
ourc
es A
vaila
ble
($)
Discovery Development Commercialization
Level of DevelopmentFrom
Angus Kingon
Technology Innovation Spectrum(The Theory)
I-Corps
Taxes
STTRSBIR
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Academia
Small Business
Res
ourc
es A
vaila
ble
($)
Discovery Development Commercialization
Level of DevelopmentFrom
Angus Kingon
Technology Innovation Spectrum(The Reality)
?
How do we explore the unknown
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In general we look for a new law by following the following process:
Then, we compute the consequencesFirst, we guess it
Then, we compare the computation results to natureWe compare it directly to observationIf it disagrees with experiment, it’s wrongThat simple statement is the key to science
Or how smart you are, or who made the guessIt doesn’t make a difference how beautiful your guess is
If it disagrees with experiment, its wrongThat’s all there is to it
-Richard Feynman
2. Know Thyself
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…Painful Lessons
• It’s Harder Than it First Appears• The Knowledge Illusion• Cognitive Biases
– What Should We Remember– Too Much Information– Not Enough Meaning– Need to Act Fast
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…And The One That Rules Them All
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Identify customersegment
With current team?
HypothesesValidated?
MarketFlow
Team/Company
Flow
FinancingFlow
IdentifyPains/Gains
3. Obsess on Product Market Fit
DevelopMVP
Build outPOC
TechnologyFlow
SEARCH PROVE SCALE
Yes
ValidatedCustomerSegment?
CustomerCreation/
Scale SalesRepeatable/scalable sales model?
Founding Team –who?
Does team Match Activities?
Equity Split – how?
What?Early Exitor Build?
Acquisition
Build Advisory
Board
Raise Seed Round
No official board of directors Raise VC “A” Round
Build outProduct
Build CustomerSupport
Team
Raise 2nd Seed
RoundNeeded?
EarlyExit
FundedPOCs?
Round outTeam/CreateCulture
Build Company
Yes
LaterVC
Rounds
Yes
No
Round outTeam/CreateCulture
No
EXECUTE
EcoATM (V.3)
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EcoATM (V.0)
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Habit 4: Create Measureable Value
• Revenue >> Costs (should be)• Unit economics are real• Don’t compete on price• Costs are more than you initially think
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…and Track Your Creation
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Hint… You Usually Have Too Many Features
Keep it Simple…..
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5. Search Before You Execute
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Startups Fail because they ConfuseSearch with Execution
-Steve Blank
Where are You in the Life Cycle
Search
Execution
6. Manage Third-Party Risk
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Business Model Canvas
??
7. Make (current) Customers “Happy”, orMaster Get, Keep, Grow
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The 7 Habits… Redux
• Character vs Personality • Principles vs Values• Dependence-Independence-Interdependence
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Thank You,Questions?
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