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Slides from my lecture I hosted in October 2012 for students studying entrepreneurship in University of Ekaterinburg, Russia.
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STARTUP ENTREPENEURSHIP AND
VENTURE CAPITALVille SimolaM.Sc (Econ.)
About me
BUSINESS IDEAS AND BUSINESS MODELS
What is a startup?
Definition #1
“A startup company or startup is a company with a limited operating history. These companies, generally newly created, are in a phase of development and research for markets. “- Wikipedia
Definition #2
“A startup is NOT every new business venture (actually, it is but this is not the way we use the
term anymore). It is a new tech venture, internet related mostly, that has the potential of rapid growth through servicing new market segments and/or offering new product/services”- Quote taken from Quora.com
Definition #3
”A startup is the organization used to search for a scalable business model” – Steve Blank
How startups are different than
traditional businesses?
Comparison #1(Steve Blank)
Small businesses
• Business model found• Profitable business• Existing team• Not all the businesses
of internet age are ”scalable startups”
Scalable startup
• Designed to grow big• Huge uncertainty• Typically needs risk
capital• These companies are
the real startups
Comparison #2(Steve Blank)
Traditional accounting
• Balance sheet• Cash flow statement• Income statement
Startup metrics
• Customer acquisition costs
• Customer lifetime value• Monthly burn rate
Comparison #3(Steve Blank)
Business plan
• Static-document• ”No business plan
survises the first customer contact”
• Focus on planning not execution
Business model
• Can be iterated quickly• Shows how company
creates, delivers and captures value
• Focus on execution and how to make money
How to find a business idea?
Idea #1
Start solving a real problem
Idea #2
Problems can be found from everyday life, from hobbies or from work life
Idea #3
After finding the idea – sleep day or two to realize whether it’s really a good one
Facts about business ideas
Idea fact #1
Importance is usually overemphasized
Idea fact #2
Will pivot during the journey
Idea fact #3
Is something that should not be hidden
Facts about the founding team
Team #1
Is the most important asset you have
Team #2
Should combine a different skillset
Team #3
Needs to have high and passionate vision
What is a business model?
Business model #1
Might sound like a new concept but is actually not
Business model #2
Describes how organization creates, delivers and captures value
Business model #3
Business model is not just about how do you make money
Examples of business models
Business model example #1
Direct sales model: marketing and selling products to a customer directly
Business model example #2
Freemium model: Giving the basic version for free but charging for premium version
Business model example #3
Subscription model: selling periodic use or access to a product or a service
Business model example #4
Razorblade model: Item is sold cheap to increase sales of a complementary product
Business model canvas
Business model canvas: FIFA Soccer World Cup
Example
What it takes be a successful
entrepeneur?
Success #1
Technology is nice but it’s all about the value
Success #2
Planning is good but execution wins the war
Success #3
Great companies are not born they are built
Recommended readings
Recommended links
springwise.comsteveblank.combusinessmodelcreation.comleancanvas.comarcticstartup.com