STARTUP, VENTURE CAPITAL, AND ENTREPRENEURSHIP

A founder’s guide to managing a venture capital-backed startup

An 11 pillar guide to discovering a startup idea, bringing it to life, managing it, raising capital, and potentially exiting as a unicorn

11 pillars to managing a venture capital-backed startup

Pillar 1: Finding and validating a startup idea

1.A. Startup: a definition

1.B. The four fundamental elements of a startup

Element 1: the problem

Typical categories of startup problems

Attributes of a good startup problem

Problem hypotheses need to be cross-checked

Build an issue tree for your problem, sense check the drivers, and see how determined and confident you are in solving the hypothetical problem
Build an issue tree for your problem, sense check the drivers, and see how determined and confident you are in solving the hypothetical problem
Build an issue tree for your problem, sense check the drivers, and see how determined and confident you are in solving the hypothetical problem

Problem hypotheses need to be validated

Element 2: the solution

Go vertical before horizontal

Uber’s strategy, from niche, vertical, focus to market expansion
Uber’s strategy, from niche, vertical, focus to market expansion
Uber’s strategy, from niche, vertical, focus to market expansion

Element 3: the ecosystem

The ecosystem landscape of potentially influential stakeholders other than customers
The ecosystem landscape of potentially influential stakeholders other than customers
The ecosystem landscape of potentially influential stakeholders other than customers

Element 4: the unfair advantage

1.C Validating your idea

The single biggest reason why start-ups succeed: Timing | Bill Gross | TED

Pillar 2: Solution building through ‘Desing Thinking’

Design thinking provides a non-linear and flexible human-centric approach to address problems worth solving | NNGroup

2. A The necessities for great Design Thinking

Significant innovations don’t come from incremental tweaks — Tim Brown on Design Thinking

2.B Desirability, viability, and feasibility

Design Thinking sits at the intersection of human desirability, economic viability, and technical feasibility
Design Thinking sits at the intersection of human desirability, economic viability, and technical feasibility
Design Thinking sits at the intersection of human desirability, economic viability, and technical feasibility

2.C Design Thinking is different from lean startup and agile concepts

Design Thinking is used at earlier stages of customer-solution discovery | Image by GARTNER

2.D Design Thinking is divergent and convergent processes

Design Thinking is divergent and convergent processes
Design Thinking is divergent and convergent processes | Medium of Benjamin Hunter Miller

2.E The ‘Empathize’ phase (divergent thinking)

Nir Eyal: Pain Killers & Vitamins | Product Design | Udacity

2.F The ‘Define’ or definition phase (convergent thinking)

Fall in love with the problem, not the solution — Uri Levin, Co-Founder Waze

2.G The ‘Ideate’ or ideation phase (divergent thinking)

2.H The ‘Prototyping’ phase (divergent thinking)

2.I The ‘Testing’ phase (divergent thinking)

2.J The ‘Implementation’ phase (divergent thinking)

Pillar 3: Setting up the strategic fundamentals for a venture capital-backed startup

1. The opportunity: the bigger, the better

Market size: the bigger, the better
Market size: the bigger, the better
AirBnB’s original pitch deck, addressing the TAM, SAM, and SOM market sizes
Airbnb's original pitch deck, addressing the TAM, SAM, and SOM market sizes

2. Competition — how will you compete?

Do not play to incumbents adjacent product extensions — Video: Defining adjacencies | Engine US

3. The business model: how will you monetize your offering?

4. The metrics

Anu Hariharan — Nine Business Models and the Metrics Investors Want

5. Go to market and execution plans

Pillar 4: the Team

In YC’s case, the number one cause of early death for startups is cofounder blowups. A lot of people treat choosing their cofounder with even less importance than they put on hiring. Don’t do this — Sam Altman, Y Combinator

The skillsets of co-founders

How many?

Source: Land of the “superfounders” | Ali Tamaseb

How cofounders find each other?

The traits of a successful co-founding team

Building a co-founding team

The ideal co-founder(s) will possess the skills you lack.
The ideal co-founder(s) will possess the skills you lack.

How to identify a fit co-founder(s)

Pillar 5: customer development and validation

Pillar 6: MVPs and product development

1. Finding the ‘right’ technical co-founder

1.A The traits and skillsets of a superior technical co-founder

1.B Evaluating the ‘right’ technical co-founder

2. Building the MVP in a rapid and agile fashion

Be scrappy, but be fast — fail fast, fail often, pivot — be razor sharp focsued on your goals from the MVP

Some typical forms and types of MVP

The product build cycle: what to expect

Michael Seibel — How to Plan an MVP | YCombinator

Pillar 7: Traction with early customers

A tactical action plan that outlines steps necessary to succeed with a new customer or in a new market. Here is a previous article I’ve written about this plan, which in itself can be a massive and time-consuming endeavor

Product A has product-market-fit, product B doesn't: when the retention curve flattens it shows that some cohort of users are finding enough value to stick around

Cold launch: very little number of customers

First 100–1000 customers

7 tactics that the big B2C/consumer startups got their first 1,000 users | Lenny Rachitsky
10 tactics that the big B2B startups got their first 10 clients | Lenny Rachitsky

Pillar 8: Commerical aptitude — sales

Hire a Head of Sales | Peter Levine | Andreessen Horowitz

Pillar 9: Early-stage marketing

Marketing efforts at an early stage startup

Public relations at startups

Positioning

FOR ((target customer)), WHO HAS ((need statement)), ((product/brand name)) IS A ((market category)) THAT ((key benefit statement/compelling reason to buy)). UNLIKE ((primary competitor alternatives)), THE PRODUCT ((unique differentiation statement)).

Startup’s marketing efforts focus: customer growth

A rule of thumb on ad spend: only pay for users if you are making money and have sustainable revenues

Pillar 10: Communication — the pitch deck

Pillar 11: Investors and fundraising

Venture capital financing options

Financing options for startups: what you can raise

Investor types: who to raise from?

When is the best time to raise?

How much to raise?

The valuation

Setting up meetings with investors

An 11 pillar guide to discovering a startup idea, bringing it to life, managing it, raising capital, and potentially exiting as a unicorn

Student of today, yesterday, and tomorrow: http://bit.ly/2TNZp6u

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