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Startups and Public Policy
Steve Blank
www.steveblank.com
Twitter: sgblank
Slides: www.slideshare.net/sblank
Corporate Lifecycle,
Innovation, Startups,
Founders, Ecosystem
Corporate Lifecycle,
Innovation, Startups,
Founders, Ecosystem
Why Should I Care?
Why Start New Companies in Finland?
Because Old Ones Die
Corporate Lifecyclesare Getting Shorter
Disruption
Technology, Globalization, Regulation, Consumer Taste
Disruption
Technology, Globalization, Regulation, Consumer Taste,
Competition, etc.
Job Growth From Existing Companies will decline
Job Growth Will Come From New Companies
Job Growth Will Come From New Companies
Startups
First -
What’s A Startup?
Six Types of Startups
Startup
Lifestyle Startups Work to Live their Passion
• Serve known customer with
known product
• Get paid for their passion
Small Business
Startup
Small Business StartupsWork to Feed the Family
• Serve known customer with
known product
• Feed the family
Small Business
Startup
Exit Criteria
- Business Model found
- Profitable business
- Existing team
< €100K in revenue
Small Business StartupsWork to Feed the Family
• known customer
known product
• Feed the family
Scalable
Startup
Large Company
Scalable StartupBorn to Be Big
Goal is to solve for:
unknown customer and
unknown features
Search
Scalable
Startup
Large Company
Exit Criteria
- Business model found
- Total Available Market > €300m
- Can grow to €50/year
Scalable StartupBorn to Be Big
Search Execute
Scalable
Startup
Large Company
Scalable StartupBorn to Be Big
• A scalable startup is designed to grow big
•Needs “Risk capital”
•What Silicon Valley means when they say “Startup”
Search Execute
Scalable
Startup
€3 to 30M Acquisition
Buyable StartupBorn to Be Sold
Goal is to solve for:
Internet, Mobile, Gaming Apps
Search Sell
Scalable
Startup
€3 to e0M Acquisition
Buyable Startup
Goal is to solve for:
Internet and Mobile Apps
Search Sell
Sell to larger company
TransitionLarge
Company
Scalable
Startup
Sustaining Innovation
• Existing Market / Known customer
•Known product feature needs
Large Company Sustaining InnovationInnovate or Evaporate
Large Company
Sustaining Innovation
Large Company Sustaining InnovationInnovate or Evaporate
•Build
•Partner
•Acquire
- IP
- Talent
- Product
- Customers
- Business
TransitionScalable
Startup
Large Company Disruptive Innovation
New Division
Large Company
Disruptive Innovation
•New Market
•New tech, customers, channels
Transition
Large Company Disruptive Innovation
New Division
Large Company
Disruptive Innovation•Build
•Partner
•Acquire
- IP
- Talent
- Product
- Customers
- Business
Transition
Large Non-Profit
Social Startup
Social Entrepreneurship Startups
• Solve pressing social problems
• Social Enterprise: Profitable
• Social Innovation: New Strategies
Each of these startups
require different skills
They Can Not Be Taught the Same Way
Each of these startups
require different
Government Policies
They Can Not Be Built the Same Way
Scalable Startups Will Provide the
Highest Job Growth
Scalable Startups Will Provide the
Highest Job Growth
They Require an Ecosystem You Do Not Have
Entrepreneurs
Scalable Startup Ecosystem
• Take risk
•No funding
• Building product
• Thinking through business model
Incubators
Entrepreneurs
Scalable Startup Ecosystem
• skills training
• mentoring = experience
• networking
• shared office
•small funding ~ €30K
•limited time ~ 6 months
Incubators
Angel Funds Entrepreneurs
Scalable Startup Ecosystem
• it’s now a company
•searching for a business model
•limited funding ~ €300K
•mentoring
Incubators
Venture
Capital Funds Entrepreneurs
Scalable Startup Ecosystem
• Large funding > €2000K
• Found a business Model
• Scale
• Multiple rounds of money
• Startup Experience outside of Finland
Scalable Startup Ecosystem
• Current policies in:
-Capital Gains
- Immigration
• Cultural view of Risk and Failure
All actively discourage Scalable
Startups
Each of These Steps
Must Require Risk
Each of These Steps
Must Require Risk
For the Entrepreneur and
For the Investor
Public Funding of Private Capital
Does Not Work
Public Funding of Private Capital
Does Not Work
Each Party Needs to Have
Equal Risk
The Goal of Public Funding Should be
to Create a Private Capital Ecosystem
The Goal of Public Funding Should be
to Create a Private Capital Ecosystem
Fund and attract experienced
Incubators & Venture Capital
And Put Yourself Out of Business
Thank You