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From Invention To Startup

From Invention To Startup. Roadmap for the startup company. The Process. Find some collaborators Noodle on your idea and refine it Figure out who the customer is and what problem you are solving for them Test your idea (talk to a half-dozen potential customers)

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From Invention To Startup

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  1. From Invention To Startup Roadmap for the startup company

  2. The Process • Find some collaborators • Noodle on your idea and refine it • Figure out who the customer is and what problem you are solving for them • Test your idea (talk to a half-dozen potential customers) • Get serious: form a company and decide on ownership • Write it down (customer, problem, solution, business structure) • Re-test your idea (talk to a dozen or more potential customers) • Find out if it is fundable (i.e., test it with potential investors) • Build something you can demonstrate • Test it with potential customers and investors • Raise some money • Develop the product • Build a go-to-market plan • Launch!

  3. The scientific method

  4. Ideas are cheap • Executing on an idea is hard work • Forming the team • Raising the money • Creating a good product • Selling the product

  5. Who is the customer? • How can you reach them? • How do they purchase? • How many of them exist?

  6. What’s the category? • What are the key attributes of the category? • Which attribute is your specialty? • Is it an existing one or one you invented? • What attribute is most important to your prospective customers? • What attributes do your competitors already claim?

  7. Value Proposition • What is the compelling reason your customers have to buy your product? • Two fundamental reasons: • Saves cost • Makes money • Figuring this out sets boundaries on your pricing structure

  8. Rate of Adoption of Innovation • Perceived attributes • Relative advantage • Compatibility • Complexity • Trialability • Observability • Type of decision • Optional • Collective • Authority • Communication channel (interpersonal or mass) • Nature of social system (norms, interconnectedness,…) • Effort of change agent • Perceived attributes account for half or more of the variance in adoption rate

  9. Raising Money • Plan for multiple rounds • Each round should follow a decrease in: • Product/technology risk • Market risk • People risk • Understand VC investment sizing • VC investment is a thin market that is highly subjective as to value

  10. Building a Go-To Market Plan • Target tightly within a bigger market • Consider a sequenced approach to the broader market • Develop a dominant selling idea

  11. Target

  12. Sequence

  13. Dominant selling idea • What will you be #1 at? • Why is it important to prospective customers? • Is your idea credible? • Is it memorable? • Can you show evidence that it really performs as promised?

  14. Example: Aldus • Founded 1984 • Four developers, one GM (with customer knowledge) • DSI: desktop publishing • The road to DTP • Luck & timing: the Apple Laserwriter • Financing • Exit

  15. Example: Visio • Founded in 1990 • Three technically-trained founders, added four developers quickly • DSI: Drag & Drop Drawing • The impact of Windows 3.0—making the right bet • Financing • Exit

  16. Example: Trumba • Founded in 2003 • Three founders, added four developers quickly • DSI: Active Calendar Service • Riding the “software as a service” wave and the move towards finding things online • Financing

  17. Bibliography • Technology Ventures, Dorf & Byers, 2005 • Diffusion of Innovation, Rogers, 1962--2003 • Crossing the Chasm, Moore, 1991, 1999, 2002 • Why Johnny Can’t Brand, Schley, 2005 • Built To Last, Collins & Porras, 1997

  18. Questions?

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