Practical Tips for Your First Startup

AARON WHITE@aaronwhite

Practical Tipsfor your first startup

@aaronwhite

It starts with an Idea

You need passion

and a CLEAR articulation

Evaluating Your Ideayou do vet them don’t you??

Demand

PositioningDistribution

Construction

First Experience

Value Capture

Demand

RisksPositioningDistribution

Construction

First Experience

Value Capture

Common MistakesI’ve made all of these once, twice, three, four times...

People want itMistake #1

Lots of people want itMistake #2

It’s easy to explainMistake #3

I built it, they will comeMistake #4

It’s obvious how to use itMistake #5

They’ll remember to use itMistake #6

Oh god, I’m doomed.well, not quite..

As with most things,start w/ a framework!

Just so happens I’ve got a few for you!

#1 Business HypothesisSpecify your dream

What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?

Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?

For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

For whom are we creating value?Who are our most important customers?

What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?

What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?

Day Month Year

No.

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-sa/3.0/

or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.

#2 Enumerate RisksWhat should you be worried about... in order!

© 2012 Lean Startup Machine. You are free to use it and earn money with it as an entrepreneur, consultant, or executive, as long as you are not a software company (the latter need to license it from us).www.ValidationBoard.com

Validation Board

Track Pivots

1st Pivot 2nd Pivot 3rd Pivot 4th PivotStart

RiskiestAssumption

MethodCore AssumptionsAny assumption that, if invalidated, will break the business

Which Core Assumption has the highest level of uncertainty?

Solas Bar232 E. 9th Street

What is the lowest cost way to test the Riskiest Assumption?

Choose: Exploration, Pitch, or Concierge

Only put the Riskiest Assumption from an experiment in these boxes

Record data & learnings separately

If Invalidated, pivot at least one Core Hypothesis

If Validated, brainstorm and test the next Riskiet Assumption

What is the weakest outcome we will accept as validation?

MinimumSuccessCriterion

1

3

5

2

4

6

1

3

5

2

4

6

Project Name: Team Leader Name:

Customer Hypothesis

Problem Hypothesis

Solution Hypothesis

Design Experiment

Track Pivots

Tip: For two-sided markets, always validate the riskier side first

Tip: Clear all post-its from this area after each experiment is completed

Invalidated Validated

GETOUT

OF THEBLDG

Results

Tip: Do NOT define a solution until you’ve validated the problem

Remember:Limit one sticky-note per boxWrite in ALL CAPSDo not write more than 5 words on any sticky-note

Where will people find

me?

Typically, worry and build outside-in

What ad will pique their interest?

What value do I need to sell them on?

Can they get that value fast as possible?

Do I maintain a good

relationship?

Have I earned their dollar?

Founding a Company

Long-haul Mindset(this could take a while)

PEOPLE MATTER

You need a lawyerand want a good one

Co-FoundersIt’s like a performance-driven marriage

EmployeesThey’re going to the front-line with you

InvestorsCapital access, keep you honest, make connections

Hiring

What’s your Superpower?

Have a process

Trust your gut

Make a mistake? Fix it fast

Financing

Bootstrap?

VC?

If you go VC...

Invest in relationships way too early

You need a good story(remember that clear articulation thing?)

Outline of a (good) pitch

CoverHookTeamProblemOpportunitySolution

ProofUnfair advantageMarket sizeRoadmap with VCMs

THE ASK tie to VCMs

Appendix

PDF copy should speak for itself but not too much

Fundraise quickly

Create scarcity

Building it

Value Creation Milestones

Lean methodology

Measure everything

Brutal honesty

Celebrate the victories(even the small)

Keep Learning

Join a startup!Wait, you get paid to learn??

Follow the conversation.

Course TitleCourse TitleINSTRUCTOR NAME