Pre-startership slides

ALLAN GRAY ORBIS – STARTERSHIP PREPARATION

WHAT IS LAUNCHWEEKEND?
A workshop to help you start a
successful company
Very
Unlikely
Very
Likely
Even
chance

Inside the minds
of great company
builders

AT STARTERSHIP
1 PITCH
2 VOTE 3 TEAM

1 A NEW SEARCH ENGINE
2 REPLACE EMAIL
3 REPLACE UNIVERSITIES
4 HOLLYWOOD ON THE
INTERNET
5 BE THE NEXT
STEVE JOBS

WHO DOES THE IP &
PRODUCT BELONG?

IDEATION SESSION
10:10 TO 11:10

THE STORY OF TOPSY TAIL
Tomima Edmark
• Tospy Tail: $100 million sales in 1991
• Bowrette turns: ribbons into hair ornaments. Failure.
• Halo Hat: collapsible rain and sun hat. Failure.
• Kiss enhancing machine. Failure.
• 12 books. Moderately profitable.
• Women’s and men’s undergarments. Moderately profitable.

THE STORY OF TOPSY TAIL
Source: Shane (2009)

INDUSTRY INC 500
1 succeeds
582 succeed

NUMBER OF IDEAS EVALUATED BY ENTREPRENEURS
Source: Gruber, MacMillan and Thompson (2008)
5 or more opportunities
4%
4 opportunities
7%
3 opportunities
8%
2 Opportunities
6%
1 opportunity
72%
5 opportunities
2%

MORE IDEAS = BETTER IDEAS
Brokering “Medical Tourism” for semi-elective surgery
Source: Terwiesck & Ulrich (2009)
7.5
7
6.5
6
5.5
5
4.5
4
3.5
3
2.5
Terrible
Quality rating
234 opportunities
Generated identified
by 47 individuals
Revenge social network
Amazing

TOP ACCELERATORS & INVESTORS
100 business 1 major success

IMPACT ON NEW PRODUCT SALES
Idea management 7.9%
Technology & resource
management
Strategic planning
Product development
process
Market intelligence
6.7%
5.5%
4.8%
2.4%
Source: Arthur D. Little Innovation excellence study (2005)

HOW MANY IDEAS HAVE YOU
CONSIDERED?

“Creativity is connecting things”
- Steve Jobs

Online site for
gourmet foods

Source: Dyer, Gregersen & Christensen (2011)

What is?
(Who? Where?
When? Why)
What caused it?
(Why?)
What if?
(What if we added/
removed constraints?)
Why? Why not?
Questions to understand
the world as it is now
Questions to reinvent
the future
PRESENT FUTURE

What makes space
travel so expensive?
- Elon Musk
Fuel is only 2% of the
cost
What if we make a
rocket that was
reusable like a car?
Build a fully reusable
rocket
Questions to understand
the world as it is now
Questions to reinvent
the future
PRESENT FUTURE

Previous work
experience
20% Discovered
serendipitously
4% Systematic search
5% Other
71%

GENERATING IDEAS FROM INDUSTRY
What fields do I have expertise / deep knowledge in?
• What industries have you worked in?
• What industries do you know a lot about?
• What fields do you have deep expertise in?
• Where are your areas of expertise?
• What sports/hobbies do you have deep knowledge of?

% OF CHINESE VC BACKED COPY CATS
Source: Economist (2012)
50%
Other Copy Cats

% OF BRAZILIAN VC BACKED COPY CATS
Source: Economist (2012)
Copy Cats
Other
70%

HOW TO FIND THE BEST EMERGING BUSINESS IDEAS
1 VENTURE CAPITAL
2 ACCELERATORS
3 FAST GROW LISTS
4 CROWDFUNDING
5 INNOVATION COMPETITIONS

WHAT IS A LEAD USER?
1
2
User of a product/service
Develops prototypes to solve problems
before the rest of the market

% OF INNOVATIONS COMING FROM USERS
Computer innovations 25%
Chemical process
innovations
Scientific instrument
innovations
Semiconductor
innovations
Wire stripping
innovations
70%
63%
11%
82%

LEAD USER INNOVATIONS
Centre Pivot Irrigation
Kite surfing
Mountain Bike
The Internet

IDEA GENERATION SESSION – TO DO LIST
1. Pick 3 techniques you will use (2 minutes)
• Combing
• Questioning
• Industry knowledge
• Copy
• Lead users
2. Try each technique to generate at least 5 ideas (20 minutes)

BUSINESS MODEL CANVAS
11:10 TO 12:10

OBJECTIVE
Help you find a plan that will work
Average plan Awesome plan

WHAT’S WRONG WITH MY PLAN?
33% 66%
Source: Bhide (2000)
No!
Yes!

97%
entrepreneurs that attend our training significantly
changed their business model, for the better.

WHAT IS A GREAT PLAN?
The only thing that matters is product/market fit
- Marc Andreessen

You can always feel product-market fit
when it’s happening.
- Marc Andreessen
• The customers are buying the product just as fast as you can make it.
• Usage is growing just as fast as you can add more servers.
• Money from customers is piling up in your company checking account.

You can always feel when product-market
isn’t happening.
- Marc Andreessen
• The customers aren't quite getting value out of the product,
• Word of mouth isn't spreading,
• Usage isn't growing that fast,
• Press reviews are kind of "blah",
• The sales cycle takes too long,
• And lots of deals never close..

HOW DO YOU ENSURE YOUR PLAN WILL WORK?
vs.

HOW TO CREATE PLAN THAT WORKS?
1. Sketch your business model (Plan)
2. Identify key assumptions
3. Run experiments to test if it will work
4. Keep changing your plan until it is almost
guaranteed to work

How much did the price of coffee consumption
change in Swiss households over the last
couple of years?

What was Nesspro’s business model?

Households
(espresso fans)
Nespresso.com

Households
(espresso fans)
B2c
distribution
Nespresso.com

BUSINESS MODEL CANVAS – TO DO LIST
1. Sketch out your business model canvas (20 minutes)

HOW TO PITCH YOUR IDEA IN 30 SECONDS
12:10 TO 12:40

HOW TO PITCH
Hi my name is …………………………
(Your name)
I am starting a company......................................
(Company Name)
That............................................... .
(describe solution in simple language)
…............................................
(customer segment)
will buy from us because……………………………….
(describe value proposition)

Hi my name is ……Carlo Gonzaga
(Your name)
I am starting a company...Scooters Pizza
(Company Name)
We plan on selling...pizza via delivery and retail locations.
The mass market
(customer segment)
Will buy from us because………we deliver in 39 minutes or it is
free

Hi my name is ……Travis Kalanick
(Your name)
I am starting a company...Uber
(Company Name)
That...will create a mobile app that let’s you order a taxi with
your phone.
The high end mass market
(customer segment)
Will buy from us because…..you can order a ride at the tap of
a button and it is cheaper than a traditional taxi.

Hi my name is ……Steve Jobs
(Your name)
I am starting a company...Apple
(Company Name)
We plan on selling...portable media players.
The high end mass market
(customer segment)
Will buy from us because…you will be able to carry 1000
songs in your pocket.

Hi my name is ……Nick Woodman
(Your name)
I am starting a company...Go Pro
(Company Name)
We plan on selling...mounted video cameras.
Surfers
(customer segment)
will buy from us because……it is waterproof, almost
unbreakable and takes HD videos and photographs.

HOW TO PITCH – TO DO LIST
1. Create your business pitch using the template (5 minutes)
2. Pitch your business idea to a fellow (10 minutes)
• Ask them to describe what you do and how you can
improve your pitch.
• Have them pitch their business idea to you.
• Improve your pitch.
• Repeat x 2 (i.e. Pitch your idea to 3 people)
3. If you would like to pitch your idea to the room add your name
the list

CUSTOMER-PROBLEM FIT
12:50 TO 13:30

HOW TO GET A PRODUCT-MARKET FIT? (AKA THE WEEKEND PLAN)
1. A customer with problem!
2. A solution customers will buy!
3. Customers love using it!
4. Cost effective marketing!

CUSTOMER-PROBLEM FIT
You have found a customer segment that
has a problem they will pay to have solved

SUCCESSFUL BUSINESSES
BIG PROBLEM SIMPLE SOLUTION

CD PLAYER
JUMPS & IT IS A
MISSION TO
CARRY CDS!

OVERSEAS
CALLS ARE
EXPENSIVE!

IT IS A
HEADACHE
GETTING A
TAXI!

PIZZA TOOK
FOREVER TO
ARRIVE!

WARNING!!!
EXAMPLE: PUMODO. HOW NOT FIND A BIG PROBLEM!!!

HOW DO YOU FIND CUSTOMERS PROBLEMS?
BIG PROBLEM PROBLEM INTERVIEWS

CUSTOMER HYPOTHESIS
• Who is your customer?
• Be as specific as possible
• Target customers that are easy to reach

PROBLEM HYPOTHESIS
• It is the customers problem (not your problem)
• I believe the customer has a (insert problem) achieving
(insert task or goal)

LOCATION HYPOTHESIS: HOW TO FIND CUSTOMERS
1. Friends and family (Facebook, Linkedin, Email, Cell phone)
2. Shopping malls
3. Bored people (Waiting in lines, Gautrain, Bus stops, Taxi ranks)
4. Cold calling (LinkedIn, Facebook, Google)
5. Lead Generation (Landing Page, OLX, GumTree, Google Ads,
Facebook Ads)
6. Public spaces (Events, Parks, conferences)

HOW TO CONDUCT A PROBLEM INTERVIEW
INTRODUCE
INDICATORS
INTERVIEW
INTRODUCTIONS
Reminder: 4Is

HOW TO CONDUCT A PROBLEM INTERVIEW
(4I TECHNIQUE)
INTRODUCE yourself
i.e. Hi, my name is [name] I am doing market research for a startup and
want to help you solve your problems and make your life better.
Check customer INDICATORS
i.e. Ask questions to test if they are in your target market.
Conduct INTERVIEW
i.e. Ask Problem, Competition and Switch questions
Ask for INTRODUCTIONS
i.e. Ask for introductions to friends and colleagues.
Reminder: 4Is

WHAT QUESTIONS TO ASK?
PROBLEM
COMPETITION
SWITCH/SPEND
Reminder: PCS

WHAT QUESTIONS TO ASK?
PROBLEM
What problems did you encounter when (describe problem context)?
COMPETITION
How do you currently solve the problem? Likes? Dislikes?
SWITCH/SPEND
Would you switch/spend money if there was a product that solved this
problem?
Reminder: PCS

PROBLEM INTERVIEW PRACTICE (3 INTERVIEWS):
(40 MINS)
PROBLEM: What problems did you encounter when (describe problem context)?
COMPETITION: How do you currently solve the problem? Likes? Dislikes?
SWITCH/SPEND: Would you switch/spend money if there was a product that
solved [repeat back the problem discovered with the first question]?
INTRODUCE: i.e. My name is [name] I am doing market research for a startup
would it be okay if I asked you a few questions?
INDICATORS: i.e. Ask questions to test if they are in your target market
INTERVIEW: i.e. Ask Problem, Competition and Switch questions
INTRODUCTIONS: i.e. Do you have any other friends or colleagues that I could
interview?

HOMEWORK: HOW TO PREPARE FOR STARTERSHIP
15:00 TO 16:00

Will the business work? 2 stages of learning
1.
Discovery
2.
Validation
Search Build

1.
Research
2.
Test

1.
Ask
2.
Sell

1.
Learn
2.
Confirm

What question are we trying to answer?
Do they
want what
we are
making?
Will they
pay for it?

1.
Interviews
2.
MVP

Minimum variable product
A strategy used for fast and quantitative market
testing - Wikipedia

A version of a new product which allows a team to
collect the maximum amount of validated learning
about customers with the least effort.
- Eric Ries

The smallest solution you can build that captures
customer value [gets customers to pay].
- Ash Maurya

HOMEWORK: BEFORE STARTERSHIP
1. CONDUCT AT LEAST 20 PROBLEM INTERVIEWS
• Keep interviewing until you can predict their answers
• Collect email and cell number
• Get permission to phone them on Startership weekend
2. PLAN YOUR MVP
• Sketch a 1-page plan on how you will quickly test customer interest
using an MVP
3. EXTRA HOMEWORK (OVERACHIEVERS)
• Read Lean Startup & Running lean
• Do Udacity Startup 101 (Steve Blank’s course)
• Build and sell your MVP

EXERCISE: FINDING CUSTOMERS (30 MINS)
Put together a plan (Location and time) on how you will meet
with customers.
1. Friends and family (Facebook, Linkedin, Email, Cell phone)
2. Shopping malls
3. Bored people (Waiting in lines, Gautrain, Bus stops, Taxi ranks)
4. Cold calling (LinkedIn, Facebook, Google)
5. Lead Generation (Landing Page, OLX, GumTree, Google Ads,
Facebook Ads)
6. Public spaces (Events, Parks, conferences)

Pre-startership slides

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