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Milestones to Startup Success

Milestones to Startup Success
Update added to end of post When your startup accepts outside money (such as venture capital), you are obligated to focus on maximizing long-term shareholder value. For most startups this is directly based on your ability to grow (customers, revenue and eventually profit). Most entrepreneurs understand the importance of growth; the common mistake is trying to force growth prematurely. This is frustrating, expensive and unsustainable – killing many startups with otherwise strong potential. Most successful entrepreneurs have a good balance of execution intuition and luck. Several startups later I have a much better understanding of the key milestones needed for a startup to reach its full growth potential. Day 1: Validate Need for Minimum Viable Product (MVP) Before any coding begins it is important to validate that the problem/need you are trying to solve actually exists, is worth solving, and the proposed minimum feature set solves it. Where’s the Love? Metrics Start Charging Driving Growth Related:  Going to marketStartup

The marketing challenge for startups Watch this video with Indinero’s founder, Jessica Mah. She’s 20 years old. I’ve known her since she was 16 and she’s always been an aspiring entrepreneur. But look around the house that the co-founders all share. Five geeks sharing rent in Silicon Valley. Keeping expenses down. Why not stay in the small house? Well, the marketing challenge for a startup is to appear big. So, look at the other ways that Indinero appeared big in the past few weeks. 1. All this is covered on CrunchBase, too. How else can a small, scrappy, startup appear big? On the other hand, I love startups when they are small. Key Elements of a Massively Scalable Startup VC backed startups generally aspire to valuations in the hundreds of millions or even billions of dollars, but very few really consider all of the elements they’ll need to make it happen. After analyzing several startups I’ve worked with that have reached or are approaching these valuations I’ve boiled it down to four interdependent commonalities that always seem to exist. While they are easy to describe, they are of course very difficult to achieve. Still your best chance of achieving them is to know what they are. Element 1: Gratification engine Your gratification engine is the repeatable process of turning cold prospects into highly gratified customers. Element 2: Economic engine Once you have figured out how to gratify prospects, your next challenge is creating a viable economic engine. Element 3: Growth engine Your growth engine is very dependent on your economic engine. Element 4: Huge addressable market The best opportunities generally have the hardest markets to accurately size.

How to nail your product market fit and sales pitch with a value proposition diagram Products aren’t sold in isolation - they exist within ecosystems. Great product market fit and sales pitches hinge on understanding and serving all the members of an ecosystem. Should a product fail to meet the needs of any one member, company success and sales velocity will falter. One tool I use with portfolio companies is the Value Proposition Diagram (VPD) which shows why a product is compelling to every customer - and most products are sold to more than one customer at the same time. I’ll walk through three examples of the VPD: Google AdSense, Expensify and Axial Market. A VPD has three columns: the product, the customers and the value proposition for each customer. Google’s AdSense enables publishers to run ads on their websites to generate revenue. The user is the most important. The advertiser follows the user in importance. That’s the genius of AdSense: ad relevancy aligns the incentives of everyone in the ecosystem. Expensify builds expense management systems for SMBs.

Dave McClure: quotable PG @YCombinator "... The Startup Pyramid Every six months I rethink the optimal startup go to market approach based on new insights gained at recent startups. Lately I’ve been using a pyramid to represent the process I’m using. Startups require a solid foundation of product/market fit before progressing up the pyramid and scaling the business. Achieving Product/Market Fit Product/market fit has always been a fairly abstract concept making it difficult to know when you have actually achieved it. Paul Graham: The mantra at Paul’s successful startup incubator YCombinator is “make things people want.”Steve Blank: In Steve’s book Four Steps to the Epiphany he writes: “Customer Validation proves that you have found a set of customers and a market who react positively to the product: By relieving those customers of some of their money.”Marc Andreessen: A couple years ago Marc wrote the following on his blog: “…the life of any startup can be divided into two parts – before product/market fit and after product/market fit.”

Back to the Future: Intel will pour $100M into connected-car investments Intel Capital is announcing today a $100 million fund to invest in the future of car technology. The Intel Capital Connected Car Fund is aimed at turning the web-connected automobile into a reality. The investment arm of the world’s biggest chip maker will target funds at technologies such as in-vehicle infotainment systems (like the pictured system embedded in Tesla’s upcoming Model S electric car), seamless mobile connectivity between the car electronics and your mobile devices, compelling applications and advanced driver assistance systems. The fund marks a turning point for the once-staid electronics of cars, which are now being reimagined in the digital era. The fund will be invested over the next four to five years in hardware, software, and services companies developing new technologies. Arvind Sodhani, president of Intel Capital and Intel executive vice president, said that Intel is already collaborating with Toyota, Hyundai, Kia, and BMW.

Marketing and The Bubble Rand Fishkin has a good post in response to my marketing posts over the past two days. In it he makes this assertion: For the first few years that I was in the "web world," 1997-2001, there was a dangerous and obvious bias in startups toward sales and marketing – and branding in particular. But, in the past few years, that pendulum has swung to the equally dangerous paradigm that product is everything. And then he shows this great graphic: I totally agree with Rand that VCs and entrepreneurs learned the hard way in the last bubble that spending a ton of money on marketing didn't guarantee success. It may also be true that the same VCs and entrepreneurs have gone too far in our collective disdain for marketing. Another post written in response to my marketing post is this one by Alan Patrick. More shouting certainly isn't the kind of marketing I want to fund, and it is exactly the kind of marketing we all funded in the last bubble.

Where can I find examples of successful series-A pitch decks