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Strategy and the

Entrepreneur

Key Ingredients for Success


Big

Idea
Sufficient

Money

Relentless

Execution

Competent

Team

Good

Plan
And a generous helping of luck

The Idea: 7 Tests for A Winner

Solve a real problem


Solve a focused problem
Solve a big problem
Solve a hard problem
Solve an obvious problem
Solve a complete problem
Solve a worsening problem
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The Idea: Create a Value Proposition


A concise statement of the compelling
promise that your product or company
makes to a set of target customers that
is differentiated from available
alternatives, and supported by reasons
to believe in the promise.

The Idea: Assessing the Balance


Whats in it for me?Why is yours better?

Promise

Is it worth it?

Differentiation

What are my costs


of making it useful?

Price

Effort
required

Support

Why should I
believe you?
Target Audience

Risk

Is this for me?

What might
Go wrong?

The Idea: Key Questions to Ask

Who are the audiences you are addressing with your idea?

What pain points you are addressing for these audiences?

What evidence do you have that these pain points are real?

What are the current solution approaches?

Whats lacking in these approaches?

How is your solution approach better?

How big is this difference and what is it worth to customers?

Whats in it for other stakeholders besides end-customers?

Why hasnt someone else thought of your idea yet?

Are you sure nobody has thought of your idea yet?

What is proprietary about your idea?

What makes your team uniquely qualified to implement your idea?

The Team: A Good Foundation is Key


The 7 Deadly Sins:
BUILD
STUFF
Engineering/
Technology

Hiring based on convenience


Hiring without due diligence
Hiring big-company stars
Hiring the wrong attitude
Hiring poor listeners
Hiring cheap onshore executives
Hiring VP of Sales with no product

RAISE MONEY,
HIRE TEAM,
PROVIDE DIRECTION
(CEO)
SELL
STUFF
Marketing/Sales

RUN
THE SHOW
Finance/
Administration

The Team: Questions Investors Ask

Is the team leader strong and passionate?

Will leader and team attract A players?

Is the team appropriate for the stage of the company?

Has the team worked together before?

What are the teams values and what type of culture will they create?

Is there a strong technical leader?

Is there a strong marketing leader?

Does the team have deep domain or technical expertise?

Does the team listen and take criticism in a positive way?

Does team have a good blend of thinkers and doers?

If current plan doesnt work out, will team adapt?

Will the founders give up control if that is what the venture demands?

The Plan: Why One is Needed

You need it as a roadmap


You need it to clarify priorities
You need it to attract funding
It is used as a guide when speed
bumps happen
It is your companys & your personal
scorecard
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The Plan: Some Truths


The planning process is more
important than the plan
The assumptions are more important
than the forecasts
Things will never turn out as planned
It should be short enough to be
readable, long enough to be rigorous
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The Plan: Tips for a Good One

Be brief and direct; get to the bottom line quickly

Identify what the business is immediately

Define the customers quickly and the customer problem clearly

Define whats compelling and unique

Describe how you will make money

Provide a phased snapshot of your company 12, 24 and 36 months out

Describe how you propose to take your product to market

Make bottom-up as well as top-down projections

Know what 4 to 5 assumptions your plan pivots on

Discuss the key risk factors

State how much money you will need and how you will use it

State your possible exit strategies

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The Money: A Typical Sequence


F&F (Friends and Family)
Angel Investors
Venture Investors (Series A and
onwards)
Strategic Investors
Late-Stage and Mezzanine Funds
Public Markets
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The Money: Important Considerations

Put some of your skin in the game

Size of the pie wins every time over share of the pie

Getting a high valuation early can be fatal

Dont value the company in the angel round

Make advisors into angel investors and vice versa

More startups die of indigestion than of starvation

Venture capital is like synthetic fertilizer use sparingly and with


caution

Raise money when you can, not when you need it

It will take twice as long and thrice as much work as you think to
raise money

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Final Thoughts.
Growth vs. Profit
Growth today is worth many times the profits tomorrow

Speed vs. Deliberation


Know your speed limit, and dont let VCs make you exceed it

Opportunism vs. Strategy


Start out being opportunistic, but quickly become strategic

Service vs. Product


Servicize to learn, then productize to earn

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