This presentation is about various types of startup companies, markets and core competencies.
In the presentation you will learn why market trends are important, why markets always win, how to calculate market size and why you have to start with the strong why.
You will also learn the fundamental difference between established companies and startups. Startups are designed to search and established companies to execute.
2. BLAZ KOS
• 10+ years working with start-ups
• Management of university incubator, technology park and business angel network
• Management of two start-up accelerators and co-working space
• PODIM Conference – one of the biggest conferences in Alps-Adriatic region
• 600+ lectures in CEE
• Mentored over 300 start-ups
• Two handbooks about startups, 1500+ pages on two blogs
I am on a life mission to make the world a more innovative, organized and transparent place to be by
helping individuals, organizations and communities achieve their peak potential and an entirely new level of
performance.
4. 6 TYPES OF START-UPS
• Lifestyle Start-up: Work to Live Your Passion
• Known customers and product
• Small Business Start-ups: Work to Feed the Family (99%)
• Known customers and product, challenge is business model and profit
• Internet Version of Small Business Start-ups
• Buyable start-ups: Acquisition Targets (5 – 50 mio €)
• Large Company Start-ups: Innovate or Evaporate
• Innovation: New markets, technology, customers or channels
• Social start-ups: Driven to make a difference
• Social Innovation, New strategies, profitable?
• Scalable start-ups: Born to be Big
• Venture capital, 300 mio € + markets, unknown customers and product
Source: Steve Blank
5. 4 TYPES OF MARKETS
•Existing market
•Resegmented market
• Low cost provider
• New niche
•Clone market
•New market
Source: Steve B
6. When a great team meets a lousy
market, market wins;
When a lousy team meets a
great market, market wins. Marc Andreessen
8. Value based economy
• The business that continuously create the most value
for a market wins. This is true for big, established
businesses, as well as start-ups.
• Producers: Those who build and create
• Consumers: Those who experience it
10. MARKET TYPE AFFECTS
CUSTOMERS
• Needs
• Adoption Rate
• Problem Recognition
• Positioning
MARKET
• Market Size
• Cost of entity
• Launch Type
• Competitive Barriers
SALES
• Distribution channels
• Margins
• Sales cycle
FINANCE
• On going capital
• Time to Profitability
Source: Steve Blank
12. Established companies usually win.
• Technology
• Tech usability
• Emotional innovation
Business model •
Communication •
Organization •
13. Emotional Innovation
We buy because of human weaknesses
• Pride - desire to be more important/attractive than others
• Envy - sorrow for another's good
• Gluttony - over-consumption of anything
• Lust - excessive thoughts or desires of a sexual nature
• Wrath – uncontrolled feelings of hatred and anger
• Greed - excess acquisition of wealth
• Sloth - (physical and mental) laziness and indifference
26. A temporary organization
designed to search for a
repeatable and scalable
business model.
• Business model
• Product/Market Fit
• Repeatable sales model
• Managers hired
FAILURE = LEARNINGSource: Steve Blank
27. Customer acquisition cost
Viral coefficient
Customer Lifetime Value
Average selling Price
Monthly burn rate
Balance Sheet
Income Statement
Cash Flow
START-UPS SEARCH
COMPANIES EXECUTE
Source: Steve Blank
28. Agile Development
Continuous Deployment
Continuous Learning
Self Organizing Teams
Minimum Feature Set
Pivots
Requirements Docs
Waterfall Development
QA
Tech Pubs
START-UPS SEARCH
COMPANIES EXECUTE
Source: Steve Blank
30. TAM
Total possible demand – if they all bought
SAM
Based on your BM – target segment
SOM
Based on limits – Targeted market
31. Total Addressable Market (TAM): Value of all of the
buyer/seller relationships participating in the market.
Served Addressable Market (SAM): The part of the
TAM for which your business model’s value proposition
is strongest.
Target Market: (Usually) demographic segment of the
SAM with the most direct path to success.
Source: UCSB
32. Total Addressable Market (TAM)
• Quantifies the entire chain of buyer/seller relationships in
your market.
• Only need to estimate the value of the relationships at point
of consumption (incorporates the value of all relationships in
the chain)
• Usually very broad.
• Easiest to estimate.
• Examples:
• Mobile apps
• Energy consumption
• Health & fitness
TAM
Source: UCSB
33. Served Addressable Market (SAM)
• A value proposition rarely applies to an entire TAM.
• Opportunity to sharpen your focus on a particular part of the
market.
• If TAM and SAM aren’t that different, just estimate an
addressable market.
• Examples:
• Mobile healthcare apps for seniors
• Self-generated renewable energy storage
• Health & fitness at work
SAM
Source: UCSB
34. Target Market
• Process not that different than for SAM.
• One more level of refinement.
• Often a demographic target.
• Examples:
• Mobile healthcare apps for seniors, targeting retirement homes
and large gerontology practices.
• Self-generated renewable energy storage, targeting the oilfield
services, food manufacturing and automotive industries.
• Health & fitness at work, targeting new male employees aged
25-40 in companies with annual sales of $500M or more.
Source: UCSB
SOM
35.
36.
37.
38. Quantifying Market Size
• If you’re lucky:
• Find an industry or market study that fits your business model
• If you’re not:
• Build a market model
• Important to differentiate:
• Facts
• Assumptions
• Extrapolation Algorithms
• Run multiple scenarios
• Two time frames:
• Now
• In 5 years (Market Growth)
43. WHY?
1. Why are we making this?
2. Why doesn’t this exist already?
3. Why us?
4. Why now?
5. Why do people need this product?
6. Why will people want this product?
7. Why will people pay for this?
8. Why will this make people do/feel/be, what they want to do/feel/be?
9. Why would people buy from our competitors?
10. Why will people cross the street to buy from us?
11. Why does this idea matter?
44. Sources and additional resources
• Paul Graham: Startup Ideas
• http://www.paulgraham.com/startupideas.html
• Eric Ries@Google : Lean Startup
• http://www.youtube.com/watch?v=fEvKo90qBns
• Steve Blank: Start-up Tools
• http://steveblank.com/tools-and-blogs-for-entrepreneurs/
• Simon Sinek: Start with Why?
• http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html
• Steve Blank: Market and start-up types
• http://blogs.wsj.com/accelerators/2012/12/04/4-types-of-markets-4-ways-to-gauge-them/
• http://blogs.wsj.com/accelerators/2013/06/24/steve-blank-the-6-types-of-startups-2/
• Kanban Board
• http://en.wikipedia.org/wiki/Kanban_board
• Landscape and competitors
• http://tomtunguz.com/ecosystem-vs-competition/
• http://women2.com/new-way-look-competitors/
46. Secondary Data Sources
• Google, Bing and other Search Engines
• NGOs
• OEDC, World Bank, Statistical Offices,…
• Data Compendia
• CIA World Factbook, Wikipedia
• Govenmnet
• Chamber of Commerce, Ministy of Economy, Ambassies
• Business
• Barrons, The Economist, Wall Street Journal
• Consultanices
• Accenture, Booz Allen, Deloitte, Forrester, IBM, McKinsey, PWC
• Universities and Industry Gorups
• Other
• Industry magazines, diplomas, Master and PhD thesis
• Company websites
47. (sources and references) Learn More
Steve Blank
@sgblank
http://steveblank.com/
Eric Ries
@EricRies
http://startuplessonslearned.com/
Ash Maurya
@ashmaurya
http://ashmaurya.com/
Dave McClure
@davemcclure
http://davemcclure.com/
Alex Osterwalder
@AlexOsterwalder
http://alexosterwalder.com
Brad Feld
@bfeld
http://feld.com/