How to Start a Startup Company | Startup ShowCase
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Transcript of How to Start a Startup Company | Startup ShowCase
How to Start a Start-Up Company
NASBEER AHAMMED
MANAGING DIRECTOR
STARTUP SHOWCASE VENTURES
Expibotz Technologies Pvt Ltd
GETTING STARTED
• People
• Idea
• Plan
• $$
• Turn idea into product
• Manage evolution
Building a Team• Smart, complementary skills
• Meeting around the kitchen table
• Domain expertise
• Investors are wary of non-business types
• Industry is different than University life
• Product development very different than research
Hire in Context
• Right person, wrong time
• Right kind of skills and experience
• Strategist vs. scrappy
• Big company vs. little company
• Personality or Culture Fit
Legal Stuff
• Referrals
• Interview for personality fit
• Plain vanilla is always better
• Simple, simple, simple
• IP important, but not panacea
Business Plan—Think Like an Investor• What’s the problem?
• What is solution?
• Will customers really care?
• Who is competition? Narrow vs. Broad
• Why win?
• Why should I believe these guys?
• Gross characteristics of financial forecast
• What is dream?
Depth of Critical Thought• Basic rules of business
• # of competitors• Depth of value-add• What are customer options?
• Know relevant models• What are competitive models?• What are historical models?• Why have predecessor technologies failed?
• Know your own model• What are you betting on?• How soon does it have to work?• What’s important to your success?
• Business plan is test of the people
Realism
“When a great executive meets up with a bad business, it is usually the business whose reputation remains intact.”
- Warren Buffett
Realism
• Hockey sticks are extremely rare outside the NHL
• Even if market is hockey stick, why are you?
• It always takes longer and costs more
• Plan for reality; be prepared to react to the dream
• Know what you are betting on
Raising Money
• Angels, Friends, and Family
• Govt grants of various kinds
• Venture Capital• Many different flavors and tastes
• Tradeoff between dilution and time
• How much do you need to get to the next milestone?
Where Do Ideas Come From?• Lab--Modumetal
• “There must be a better way”—Housevalues
• Previous job-Azaleos
• Enabling technology—Insitu
• Enabling legislation
• Enabling world events—Insitu
From R&D To Product
• Different discipline; often different teams
• Products evolve; but need to be “done” at different points in time
• “Better is the enemy of Good Enough”
• Completeness; providing real solution
• Customer feedback loop is critical
• V1, V2, V3
Get to Market Early
• Get revenue, “traction”, start selling
• Customer satisfaction more important that product and technology
• Build customer relationships and customer feedback loop
• Make mistakes early and cheaply
Low Hanging Fruit
• Who can make a decision?
• High value, low risk
• Big budget, already approved
• History of trying new stuff
• Other hurdles—Regulation, compatibility, etc.
Build domain expertise• Focus on success of customer—every decision should
be weighed against this
• Listen to customers—Fine line between vision and passion, and being stubborn
• All startups are in the service business
• More things liable to change than stay constant
• Everyone sells
• Be the voice of the customer
Falling in Love with First Plan
• Product is “done”; it’s just a sales/market problem
• “Great technology”• Customer don’t care; problem doesn’t exist
• Too complicated
• Who’s the customer?
• Agility is critical
Sell the Vision, Plan to Struggle
• 2X Rule: Everything takes twice as long and costs twice as much
• Sales learning curve
• Be realistic about valuation milestones
• Raise more money; relax about valuation
Focus• Rare to fail due to excessive focus
• Companies pulled in many directions• Lots of unexplored potential
• Lots of ideas; many of them bad
• Well-meaning board members
• Conventional wisdom is frequently inappropriate
• Focus on core value-add to highest priority customers, then expand
Getting Ahead of Yourself
• Do not confuse activity with revenue• Brother in law sales
• Great meetings
• Pipeline Value
• What would you do if you were the customer?
• Invest FOLLOWING growth
Be Cheap
• Good intentions…but it is a slippery slope
• It isn’t supposed to be comfortable
• What culture do you want to establish?
• It is okay to be small for awhile
• What do you really need?
• Minimum now vs. cash crunch
• Growth and progress are not linear
Invest in Culture Early
• Values are easier to establish than change
• Frugality, integrity, customer orientation, accountability, focus
• Invest in “team” values: balance, support, communication, shared values, collaborative, flexible job descriptions
• Consistent values + clear priorities simplifies management
Manage the Company, Even When It is Small
• Don’t assume everyone knows
• Communicate goals and objectives• Share successes and failures
• Enroll people; Encourage debate
• Communicate often; clearly; think about it• Think about cultural icons
Knowing What You are Good AtOr, Why “Founder” Becomes a Dirty Word
• Focus on your strengths
• Aggressively complement yourself
• Focus outward--make everyone else successful
• Ongoing conversation about yourself
Knowing What You are Good AtOr, Why “Founder” Becomes a Dirty Word
• Fixated on first vision
• Personal agenda—it’s not your company
• Over-rating your own capabilities
• Failure to delegate and micromanage
• Statistically, you’re eventually the wrong person
• You don’t know if you even want the job
Leadership
• Domain experience and customer advocacy
• Recruits great people
• Manageable ego
• Thoughtful about the business
• Thoughtful about company culture, and management
“It’s An Execution Play”• All businesses are execution plays
• Not about patents and secret sauce
• Not about being first
• First strategy is probably wrong
• Winners, especially today, are those who execute the best, and often changed strategy the best
• Winners are never satisfied
Building Great Companies
• Business is a journey of unknown duration and course
• It takes a fundamentally strong business idea
• More importantly, a talented team that has thought about and built what it takes to win
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