Must-read for founders: A VC explains how to build a killer value proposition. On the surface, value propositions seem incredibly straightforward. I’d argue that this is why, in practice, they’re often given such short shrift. In reality, getting a value proposition right requires some focused thinking and structured analysis, some of which I’ll preview here. Given my particular background, much of what I recommend will have a bias to B2B startups — though, in many instances, I think that you’ll find applicability to virtually any endeavor.
I recently lectured to a group of students and aspiring entrepreneurs as part of my series of talks at the Harvard Innovation Lab (feel free to presentation slides). But before we dig in, let’s define a value proposition. In its simplest terms, a value proposition is a positioning statement that describes for whom you do what uniquely well. One of the classic mistakes of building a value proposition is diving headlong into the solution definition phase before really understanding the problem you’re looking to solve. Think of 3D. Instagram’s billion dollar idea wasn’t photos after all. I wasn’t alone in almost spilling my coffee mid-drink when I discovered Facebook purchased Instagram for $1 billion. A billion? As a startup CEO, it’s sometimes hard to grasp how these types of platforms, which openly opine they are not concerned with making money can end up in such a successful outcome.
[So to all the investors out there, I guess we shouldn't be focused on business models and making money, should we? I digress...] Yet the more I thought about the acquisition and the entire startup experience in general, a few lessons came to me that in hindsight are blindly obvious but bear repeating. As founders, we tend to get lost in our vision. What do I mean? Instagram didn’t do that. Here’s my view of how Instagram positioned their product for a massive acquisition from Facebook. Do One thing World Class Intagram has been referred to lately as a mobile social network, but in reality they are a much less than that since social networks just collect around specific things. [Excerpt] Fundraising: From $1,000 To $1,000,000. Editor’s Note: The following is an excerpt from Onswipe CEO Jason L. Baptiste’s new book The Ultralight Startup: Launching a Business Without Clout or Capital.
To coincide with giving the chapter away, Jason will be choosing one entrepreneur from the TechCrunch audience to meet four of the best venture capitalists today to pitch their idea, which include Andy Weissman, Partner at Union Square Ventures, Alex Finkelstein, Partner at Spark Capital, Brad Feld, Parter at Foundry Group, and David Tisch, Managing Director of TechStars NYC and angel investor. To enter, go here and fill out some simple information about your startup. The winner will be selected by April 20th, 2012. If you pay attention to the headlines about startups getting millions of dollars of funding from investors, venture capitalists, or partnerships, you might think the fund-raising process happens overnight. The reality is a little trickier. The Real Purpose Of Raising Money And Why it Might not Make Sense For You. Fall In Love With Your Business, Not Your Business Plan. Frighteningly Ambitious Startup Ideas. March 2012 One of the more surprising things I've noticed while working on Y Combinator is how frightening the most ambitious startup ideas are.
In this essay I'm going to demonstrate this phenomenon by describing some. Any one of them could make you a billionaire. That might sound like an attractive prospect, and yet when I describe these ideas you may notice you find yourself shrinking away from them. Don't worry, it's not a sign of weakness. Arguably it's a sign of sanity. The biggest startup ideas are terrifying. There's a scene in Being John Malkovich where the nerdy hero encounters a very attractive, sophisticated woman. Here's the thing: If you ever got me, you wouldn't have a clue what to do with me. That's what these ideas say to us. This phenomenon is one of the most important things you can understand about startups. [1] You'd expect big startup ideas to be attractive, but actually they tend to repel you. 1. The best ideas are just on the right side of impossible. 2. 3. 4. 5.
Angel investor Bill Bryant: Here’s what I look for in startup entrepreneurs. Seattle angel investor Bill Bryant Seattle angel investor and venture capitalist Bill Bryant has been around the block a few times in the tech industry, estimating that he’s met some 5,000 entrepreneurs in the past 25 years. So what does Bryant — an investor in companies such as Isilon Systems, Swype and Z2Live and an early employee at startup companies such as Visio, Qpass and Netbot — look for in the entrepreneurs he backs? That was one of the topics Bryant addressed Monday night at a Seattle angel investor and entrepreneurial meetup in Seattle. As you might imagine, it is more art than science trying to pick the winners from the losers. Bryant admits that angels must be prepared to lose all of their money, noting that the exit environment is especially challenging right now given how long it takes (an average of nine years) for companies to reach a sale or public offering.
“I’ve met, I am sure, like 5,000 entrepreneurs over the last 25 years, and have been pitched like 2,500 times. 10 powerful branding insights that will keep your business moving forward. Flickr photo via Woodleywonderworks Just because you’ve built a successful company doesn’t mean you can relax. Succeeding in this ever-changing business world demands that you constantly strive to get ahead…and stay ahead. Easier said than done, right? Well, the following branding insights I’m about to share with you will help you create a brand and business that grows year after year. 1. Sure, this seems obvious, but if you want to start taking some of your competitor’s market share, it all starts with a strong brand. Start with the why – Apple explains why they exist before they even get down to building products.
Knowing the basics isn’t enough to dominate your market. 2. Neil Patel Do not ask your customers want they want—just give it to them. That is nothing more than the same old thing with a little improvement. You can only create a strong brand and move your business forward when you create a product that breaks from the past and creates a new path on how we live. 3. 4. 5. 6. Wrong. Crowding out angels from startup financings? Photo via Bigstock As early as next week, we may know whether Congress will change US securities laws to permit startups to sell stock to the general public over the internet. You know how, today, companies raise money on Kickstarter by offering products, t-shirts, and other bennies? Imagine those same companies selling stock to investors over a Kickstarter-like platform. If the law changes – and this is something that one chamber of Congress has already passed and that President Obama supports - entrepreneurs seeking capital will have one more alternative to angel investors and venture capital firms.
Sound too good to be true? Where does this leave angel investing? To borrow from the vernacular of Occupy Wall Street, angels are part of the 1 percent. William Carleton Some angels like the idea of crowdfunding because they know it will be good for entreprenuers to have more financing alternatives. Let’s use a hypothetical to illustrate some of the potential problems. It’s a bit ironic. Angel groups in Seattle: How they’re doing, what they cost. Angel. Photo:Baldur McAqueen Over the past three days, GeekWire Chief Business Officer Rebecca Lovell and I both have moderated panels about the state of angel financing in Seattle.
The discussions have been lively, and fun. [Previously: Angel mind meld: What early-stage investors really want] But, at the end of the day, what entrepreneurs really want to know is where to go to raise cash. Well, look no further. In advance of the MIT Venture Lab’s annual “Meet the Angels” panel, Rebecca (GeekWire’s very own data hound and “mathlete”) compiled this super handy table showing details of the seven major angel groups in Seattle. Each has their own style and charter, so we hope this will serve as useful guide for those entrepreneurs thinking about hitting the angel financing trail. Madlibs for Pitching. David Feinleib: Why Startups Fail: And How Yours Can Succeed. The World’s 50 Most Innovative Companies 2012. For Some Internet Start-Ups, a Failure Is Just the Beginning. Inside the Recruiter's Head: What He's Really Asking You During the Interview.
Jayne Mattson is Senior Vice President at Keystone Associates, a leading career management and transition services consulting firm in Boston, Massachusetts. Mattson specializes in helping mid-to-senior level individuals in new career exploration, networking strategies and career decisions based on corporate culture fit. You applied for a new job, and you've been called in for an interview. During the interview process, there are three main questions that need to be answered to help the HR person determine if you're the right fit for the job: Can this person do the job?
Will he do the job? Will he fit in with the company culture? By asking what I call “the question behind the question,” hiring managers have a better chance to making the right hiring decision. 1. This question gets at the heart of why you're leaving the current job or, in the case of a reduction in workforce, it helps the interviewer understand what was missing. 2. 3. 4. 5. 6. 7. 8. 9. 10. Jayne Mattson. Mark Cuban on Why You Should Never Listen to Your Customers.
Image credit: ABC/Craig Sjodin. A great quote from technology luminary Alan Kay that every entrepreneur needs to remember: "The best way to predict the future is to invent it. " I'm working with a company that at one point had a product that was not only best in its class, but also technically far ahead of its competition. It created a better way of offering its service, and customers loved it and paid for it.
Then it made a fatal mistake. It asked its customers what features they wanted to see in the product, and they delivered on those features. Unfortunately for this company, its competitors didn't ask customers what they wanted. So what did "my" company do when it saw what its competitor had done? Related: How to Use Social Media for Research and Development The company didn't improve its competitive positioning. Entrepreneurs need to be reminded that it's not the job of their customers to know what they don't. Related: Seven Simple Tips to Get Honest Customer Feedback Online. Everything I need to know about startups, I learned from a crime boss.
The door opened and into the room walked the most dangerous person I’ve ever met. He reached towards his belt and slowly pulled out his .45 caliber handgun, raised it and paused to evaluate my expression. “No disrespect, but it’s been pressing into my hip all day.” He placed the gun on the coffee table, relaxed into the leather sofa and let his guard down for the first time in a very long while. This person, let’s call him Kobayashi (I’m a Usual Suspects fan), is one of the most interesting people I’ve ever met. He was a well-educated entrepreneur who ran a profitable business that employed dozens of people.
He lived in a swanky downtown Los Angeles penthouse. But Kobayashi ran an unusual business. Everything I need to know about startups, I learned from Kobayashi. Don’t sell rocks when you can sell mountains Kobayashi didn’t work with small packages. As founders and early stage employees, we go to great lengths to mitigate risk. Thinking small increases our risk. Cut out the middleman. Mark Cuban's 12 Rules for Startups. Anyone who has started a business has his or her own rules and guidelines, so I thought I would add to the memo with my own. My "rules" below aren't just for those founding the companies, but for those who are considering going to work for them, as well. 1. Don't start a company unless it's an obsession and something you love. 2. 3. 4. 5.
Related: Mark Cuban on Why You Should Never Listen to Your Customers 6. 7. 8. Related: Three Steps for Getting Started in Mobile Commerce 9. 10. 11. Related: Is Any Publicity Good Publicity? 12. This article is an edited excerpt from How to Win at the Sport of Business: If I Can Do It, You Can Do It (Diversion Books, 2011) by Mark Cuban (Available at Amazon and iTunes). Click to Enlarge+ Get Your Valuation Do you know what your business is worth? The truths of entrepreneurship. Pinocchio. Wikipedia image Ashkan Karbasfrooshan, founder and CEO of WatchMojo, recently wrote a guest post on TechCrunch about the Lies Entrepreneurs Tell. In the article he makes the point that entrepreneurs are “always in sell mode, but that doesn’t mean they need to be BS-artists.” Common lies include: “I have no regrets;” “If I had to do it again, I wouldn’t do it any differently;” “It’s not personal, it’s business;” “We’re not raising money;” “We’re not looking to sell;” and “I’m your biggest fan.”
Ashkan has an interesting point. This may be due to a few factors: We actually believe the words we are saying. Regardless, I agree with Ashkan. Build For Value Nick Hughes We are seeing a comeback in tech IPOs and this can have a negative side effect on the business world: young founders dream of (and build) new startups mainly for the ultimate payday. Making certain decisions to maximize revenue and profits to the detriment of users can be traced back to this unfortunate thinking. How to Write Taglines That Double Sales. Two Customer Types Taglines for products and brands are everywhere, but often they don’t get the attention they deserve. A variety of research shows that one phrase slogans can have a profound effect on how customers see the product. One key factor in crafting that phrase is matching its content to the customer’s mindset, and in particular to two important consumer motivations: prevention and promotion.
Promotion vs. Prevention Not long ago we looked at the power of marketing using “loss” as a motivator in How “Loss” Can Be a Winning Strategy. Highlighting risks your customer faces isn’t the only way to market, of course, and an interesting blog post at the Harvard Business Review focuses on the question of promotion vs. prevention. In my earlier post, some of the reader comments wondered how to frame a particular product or service in terms of a “loss.” The nuances in description can be subtle.
Which Approach is Best? Segmenting Your Customers Product Segmentation Match the Message. Fifty gems for entrepreneurs thinking about making the leap. Fifty tips for entrepreneurs. Photo: Wilhei55 One of my favorite things about covering the technology community is the ability to tell the stories of entrepreneurs — the little upstarts that are trying to change the world. On GeekWire, we make a regular habit of featuring these folks through our regular Startup Spotlight profiles. It’s a fun column to put together, and I often draw inspiration from the responses.
The final question I ask — What’s the one piece of advice you’d give to other entrepreneurs just starting out? Today, I am republishing responses from 50 entrepreneurs who we’ve featured over the past nine months. Well, as we all know, the true entrepreneurial die-hards are still sneaking in a little bit of work between family gatherings and holiday parties. Enjoy!! “Leave your assumptions at the door — assume nothing.”– Skylar Agnew, co-founder of Deals4Dreams.
Benelab's Jack Kim “Make it a priority to hire and retain the best talent. Ashutosh Tiwary BookieJar's Deyun Wu Nick Hughes. Happy New Year! Here Are Some Great One-Sentence Startup Pitches. Startups in 13 Sentences. A new approach to minimum viable product. 17 things I wish I’d known when starting my first business. Looking To Hire Top Talent For Your Startup? Here Are Five Things You Should Know. Seven critical factors to great business branding: A guide for startups.
Corporate matters. Literacy. Books / digital publishing.