Category Archives: Lean Startup

Why Founding Team Diversity is Important

Business Model CanvasThere’s a very interesting blog post on Harvard Business Review site, Reversing the Decline in Big Ideas, that talks about why we don’t see more startups tackling the “I want to change the world” goal.

One argument the author makes is the lack of diversity in the founding team, more specifically the lack of subject matter experts.

“The missing piece from the DNA in the founding teams of transformational companies is now the domain expert, who has deep insight into the industry they are trying to disrupt.” – Max Marmer

It’s interesting and I have thought about it for a while, why two startups competing in the same industry, having the same technology can have so different results. The answer typically lies in the business side of the equation (how they market the product, distribution, etc.). At every event I go there’s inevitably a handful of companies that tell me they are doing something I have heard a couple times before from other startup founders. What will make them succeed or what will be their pitfall? How can you tell which one has better chances of succeeding?

Don’t Ignore the Business Guy

In a time where developers are the most sought-after talent, the composition of the team sometimes shows a gap. You have a very strong developer, a great UI person, but the business guy (or girl) is often neglected. Well, unless you can find a developer or UI person that has deep industry/market experience, you will need that business person to help out. Without them, it’s unlikely your startup will succeed.

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What Makes a Successful Startup?

An interesting post from Steve Blank talks about how he met the guy who went on to found The Startup Genome Project and just released their first report on what makes a startup successful.

Key findings are:

  1. Founders that learn are more successful
  2. Startups that pivot once or twice times raise 2.5x more money
  3. Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet
  4. Investors who provide hands-on help have little or no effect on the company’s operational performance
  5. Solo founders take 3.6x longer to reach scale stage
  6. Business-heavy founding teams are 6.2x more likely to successfully scale
  7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects
  8. Balanced teams with one technical founder and one business founder raise 30% more money
  9. Most successful founders are driven by impact
  10. Founders overestimate the value of IP before product market fit by 255%
  11. Startups need 2-3 times longer to validate their market than mostfounders expect
  12. Startups that haven’t raised money over-estimate their market size by 100x
  13. Premature scaling is the most common reason for startups to performworse
  14. B2C vs. B2B is not a meaningful segmentation of Internet startupsanymore because the Internet has changed the rules of business
It’s worth checking out. Get the Startup Genome report here.

Lean LaunchPad Presentations by Steve Blank

Steve Blank has made available his Lean Startup LaunchPad Course, the class he teaches at Stanford that is built around his customer development methodology, all accessible directly from his blog.

Business Model Generator

The classes are:

  1. Overview/Business Models/Customer Development
  2. Business Model Hypotheses
  3. Value Proposition Hypotheses
  4. Customer Hypotheses
  5. Customer Relationship Hypotheses
  6. Channel Hypotheses
  7. Revenue Model
  8. Key Resources, Activities, Expense Model
  9. Final Presentations
Although you don’t get to see Steve talk (there are no videos), the slides and notes are a great resource worth checking out. 

Lean Startup Challenge: Money+Mentors=Success!

First, Eric Ries decides to produce a free Lean Startup 101 online course. Now, together with AppSumo guys he is bundling cash, products, and access to mentors all in one package deal.

The Lean Startup Challenge

Here’s how it works. AppSumo has a bundle of solutions for only $99 that purchased individually would run over $6K. They include Twillio, Pivotal Tracker, Postmark, HipChat, Pandaform, Kissmetrics, crazyegg, Chargify, Backbook, WP Engine, Texting.ly, and more.

So after you pay $99 you get to use the apps and you can then submit an entry to the “lean startup challenge” saying how your startup is being “lean” and enter the contest. If your startup is selected as the winner, then you will win some really good prizes, including:

►$50,000 from “500 Startups
One $50,000 investment, access to the 500 Startups incubator program and Five $5,000 seed investments from the fine folks at 500 Startups.

► $50,000 & incubation from Band of Angels and Pivotal Labs
A $50,000 investment from BoA and office space, agile and lean development advice, a Pivotal Inception (two day deep dive on product planning) and help hiring from Pivotal Labs.

► $10,000 of testing services from uTest
$10,000 in functional, usability and/or load testing for your web or mobile apps.

► $8,000 Recurring Billing Services fromChargify
Two 12 month plans with Chargify that will allow you to automate billing and payments for up to 2000 users plus advice on subscription services from the industry experts behind Chargify

… And more. Check the whole list at: http://appsumo.com/leanchallenge/

  • The Lean Startup Challenge Starts: March 7th, 2011
  • The Lean Startup Challenge Ends: March 23rd, 2011

UPDATE: It seems the bundle from AppSumo has been sold out! Too bad…

Steve Blank: Entrepreneurship is Not a Job

Really interesting interview with Steve Blank about startups and entrepreneurship, is a good overview of Steve’s key beliefs. If you are new to his customer development methodology, is worth checking out.

A few interesting quotes from the video:

“A startup is an irrational passion”
“Entrepreneurship is a calling”
“Everything you think you know on day 1 is a hypothesis”

Watch the video below.
http://steveblank.com/2011/01/13/new-models-for-investing-in-innovation/

Free Lean Startup 101 Course

Eric Ries, the creator of the “Lean Startup” methodology for launching and running your startup has now made available a totally free online course teaching you the basics of his methodology, called “How to Build a Better Startup“.

Beautifully created on the SocratED platform, the course is a combination of short videos and text. Definitely worth checking out, and the link has just gone to my ‘favorite links’ on the home page of this blog.