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Presentation given by pledge4good co-founder Vikram Bellapravalu at Barcamp NYC 7 on 6/9/2012. Vikram, a 2012 graduate of the Wharton MBA program, talked about a sample of the MBA lessons from the classroom he has applied in recent weeks to pledge4good.
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SAVE YOUR $100K: MBA LESSONS FOR HACKERS
For more information, please contact Leonard Fishman at [email protected] or Vikram Bellapravalu at [email protected].
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WALL STREET TO VIA AN MBA
Tracer Capital Management
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THE REALITY: MBAS CAN CREATE GREAT COMPANIES
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#1: THE BEST WORKPLACES HAVE COMMON TRAITS
Start-up / entrepreneurship implication: HR, culture
Meaningfulness
Responsibility
Knowledge of Results
Skill variety
Task significance
Autonomy
Feedback
Motivated Employees
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#2: VIRALITY DOESN’T JUST HAPPEN
Start-up / entrepreneurship implication: marketing
Source: Jonah Berger. Wharton School.
Advertises
Itself Social
Currency
Practical
Value Emotion
Common
Ground Triggers
Story
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#3: CONSUMERS AREN’T STRICTLY RATIONAL
Start-up / entrepreneurship implication: pricing policy
Prospect Theory Hyperbolic Discounting
Mental Accounting Odd Number Pricing
Source: Wikipedia: http://en.wikipedia.org/wiki/Prospect_theory; http://en.wikipedia.org/wiki/File:Hyperbolic_vs._exponential_discount_factors.svg
AOV >
AOV
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#4: FOCUS ON INDIVIDUAL DYNAMICS
Aggregate retention rates typically observed as stable over time…
Source: Peter Fader. Bruce Hardie. Available: http://www.brucehardie.com/talks/cba_workshop_paris_2007_handout.pdf
Start-up / entrepreneurship implication: marketing
…but generally see increasing retention amongst cohorts…
…CLV calculation using aggregate
measures underestimates badly
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• Under- or over-capacity is a
business model flaw
• Buy inventory up to
• Newsvendor Critical Ratio:
• CU – lost revenue from under-
ordering inventory
• CO – cost of over-ordering
inventory
#5: THINK CRITICALLY ABOUT INVENTORY
Start-up / entrepreneurship implication: server capacity, inventory management
€
F(Q) =Cu
Cu +CO
€
X* = µ +σ*Q
Source: http://members.pioneer.net/~mchumor/business_inventory_toons.html
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• Only require:
• Mutual ascent – offer,
acceptance
• Consideration
• Legality
• Capacity
#6: CONTRACTS DON’T HAVE TO BE WRITTEN
Start-up / entrepreneurship implication: customer, employee, supplier management
Source: http://www.cartoonstock.com/directory/o/oral_contracts.asp
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#7: LITIGATION IS A BUSINESS TACTIC AND A PRICEABLE RISK
Start-up / entrepreneurship implication: legal
Source: Wharton School. LGST621. Winter 2011.
Founder
100%
Equity Ownership
Founder
100%
Equity Ownership
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#8: FUNDING CONVERTS YOUR EQUITY INTO A DEEPLY OUT OF THE MONEY OPTION
Start-up / entrepreneurship implication: ownership
Perceived - $100K Initial Capitalization
Actual - $100K Initial Capitalization
Investors
100%
Equity Ownership
Founder 80%
Investors 20%
Equity Ownership $1MM “A” for 20%; 2x Pref.
$1MM “A” for 20%; 2x Pref.
Founder with Call
Option with
$2.0MM Strike
APPENDIX
For more information, please contact Leonard Fishman at [email protected] or Vikram Bellapravalu at [email protected].
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PERSUASION CAN BE LEARNED
Start-up / entrepreneurship implication: negotiations, email marketing, cold calling
Source: Cialdini. “Harnessing the Science of Persuasion.”
Persuasion Weapon Example
Liking “We’re developers like you”
Reciprocity “We’re offering a major discount, so prepay today”
Social proof “We have 75% of the Fortune 100”
Consistency “Commit to a monthly $10.00 donation today”
Authority “Our team consists of 10 PHDs”
Scarcity “Request a beta invite today”
CONTACT DETAILS
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www.pledge4good.com www.facebook.com/pledge4good @pledge4good
Vikram Bellapravalu [email protected] 646.238.5098