2. Startup Risk Model
• Startup is a temporary organisation focused on finding a
repeatable and scalable business model.
• To achieve success, founders and investors have to
take risk in order to capitalize on a market opportunity
they have identified.
• Turning a Startup into a sustainable and monumental
company is a long term process. In this process there are
several steps (areas of risk) a startup has to take.
• There is no formula for achieving success, but there is
a model for identifying and addressing areas of risk.
3. Marcin Szeląg
• Partner @ Innovation Nest
• Investor @ notatek.pl
• Blogger @ ms.innovationnest.co
• Focus on Customer Acquisition, Product Development
• Interested in SaaS, Ecommerce
5. Disclaimer
• There are many ways a startup can achieve success.
• Luck, defined as a set of favourable circumstances might be the
sole reason we have monumental companies in the social and
gaming space.
• Counting only on luck, might significantly limit the chances of our
startup achieving success. There are only that many Facebooks,
Whatsups, Instagrams and Rovios of this world.
• The probability of building a $100M company are much greater than
chasing a $1B unicorn.
• Business models focused on software are constantly producing
sustainable companies which are growing as information technology
expands to new industries and market segments.
6. Why SAAS matters!
• 220M businesses worldwide
• $17B in current revenues
• 20% annual growth
• 6% of the software market ($326B)
• USA makes $10B of the total SaaS revenue
• EU makes $3,5B of the total SaaS revenue
7. What risks lie ahead
• The decision
• The idea
• Founding team
• Market hypothesis
• First sale funding
• MVP
• First paying customers
• Customer acquisition
• Seed funding
• Team building
• Growth model
• Round A
• Scaling
• Profit
8. The decision
• I should have some level of experience
• I should have an extensive network of contacts
• I should have some money I can invest
• I should have the full support of my family
• I should feel comfortable leading
9. The idea
• I have identified a market opportunity
• I know enough about the market I am about to enter
• My experience and skillset is desired in this market
• I know how I will make money in the short term
• I will be happy working on this idea
• I have prepared a compelling vision backed by solid
milestones
10. The founding team!
• I was able to convince others of my vision and milestones
• My cofounders bring complementary skillsets to the table
• My cofounders are A players
• I like spending time with my cofounders
• My cofounders have also made the decision they want to
start a startup
• My cofounders are equally motivated as I
11. Market hypothesis
• The Minimal Viable Segment is big enough to get your
company to ramen profitability
• The market you are entering is big enough, so that each
cofounder can earn a decent leaving
• The market is big enough there is room for the company to
grow
• You have a strong hypothesis of a repeatable and sustainable
business model which is plausible
• You have researched the market in terms of competition,
market trends, customer acquisition, customer budgets and the
data you gathered supports your business model hypothesis
12. First sale funding
• You have created a budget which will bring you to your
first sale
• Your budget will give you enough time to get to ramen
profitability
• You were able to convince outside investors (4F)
• You managed to bring on board mentors or advisors
13. MVP
• You have clearly identified the minimum viable feature set
which delivers value to your customers
• If you are entering a market with competitors - the
differentiators of your product are distinct!
• The time needed to build your MVP is well within your budget
• Your team has the necessary skills to build what you have
planned
• The quality of your product is very high
• You will be able to charge your customers for the value delivered
by your MVP
14. First paying customers
• You know where your first sale will come from
• Your customers will be happy after buying your product
• You will get repeated business from your first customers
• You have a process in place to close the feedback loop
• You know why your first customers are buying your
product
15. Customer acquisition !
($10k MRR)
• You have various customer acquisition hypotheses you
are able to test
• You are able to build initial traction with early adopters of
your product
• You don’t have a churn problem
• LTV>CAC!
• Scalability of your customer acquisition model is plausible
• You have reached ramen profitability
16. Seed funding
• You are able to pitch
• You have identified investors aligned with the vision and
business model of your startup
• You are not at a point where your are under financing
pressure
• You are able to show how this financing will help validate the
growth model
• You are somehow different or better than everyone else
17. Team building
• There is enough local talent!
• You have secured enough funding
• You have an appealing story and vision
18. Growth model!
(20% M/M)
• You have found a way to grow in a consistent way
• Your growth model has a significant organic component
• You are growing your revenue, without increasing churn
