RECAP study dilution & valuation
loans do not dilute you, even if they come from a VC
most common failure reason for new ventures
= try to grow faster than you have money for
=> balance is needed, even under pressure from investors
customers can kill you: how, why?
they don't pay / pay late, and you have had to pay already what you sourced
4 growth strats over 2 dims + their assessments
market dev strats diversification strats
penetration strats product dev strats -> use first
products (existing to new)
markets (existing to new)
growth strats: accumulated S curves: principle
try to start new one before the previous flattens out
internal vs external growth strats
internal = organic
external: from alliances to M&A (but about 5 choices)
Entrepreneurial marketing & issues for small ventures
- strong influence by entrepreneur
- not much formalization
- market does not trust you yet
Methods in entrepreneurial marketing
- Reverse graffiti
- Viral marketing
- Guerilla marketing
sometimes you need to use forbidden methods!
features = invest time & smarts, based on human psy, rather than money
targets = individuals or small groups
B2B sales process
4 stages + some advice
by increasing cost of sale & long-term reward:
- sell prod & forget
- sell solution --> a package deal
- sell against competition --> win over
- strategic sale --> symbiosis w client
advice: start with a small CRM SW, simpler than salesforce
- 6 possible why's
- dire need = various problems
- preference = to get a normal life!
- biz plan = goals met
- investor driven = expectations NOT met
- growth induced = need resources to grow
- market driven = segment mature; competitors
7 possible exit paths
- no exit --> make it a lifestyle biz!
sell to someone else (in order of closeness from founders to market)
- buy-back --> other founders
- MBO --> managers
- secondary buy-out --> other investors
- M&A --> other Cos
- IPO --> market
Critical Qs to validate a new idea
- What exactly is innovative about the business idea?
- How unique is the business idea? Can it be protected by a patent?
- Who is the customer?
- Why should a customer buy the product?! What need does it meet?
- Why is the product better than comparable alternatives?
- What are the competitive advantages of the new product, and why can a competitor not simply copy them?
- How does the product reach the customer?
- Can the product make money? What are the coats involved, and what price can be asked for it?
key findings by analysis Co Startup Genome