Innovation Management Workshop - #2

How to start a scalable business

Transcript

1. HOW-TO START AND SCALE IMPACTFUL BUSINESS IDEAS Kuldip Chakraborty @cooldip Manish Chiniwalar @manishrc Karthik Gupta @karthikvgupta
2. WHY ARE WE HERE?
3. 1.8 MILLION BOOKS ON BUSINESS & MONEY
4. GOODKARMA • 4 Customers • 3 Pivots • 0 Lines of code “Help yoga practitioners grow with consistent and deliberate practice.”
5. GOODKARMA PIVOTS 1. Inconsistent Students → Consistent Students 2. Add Teachers 3. Teachers → Yoga Studio Founders “Help yoga practitioners grow with consistent and deliberate practice.”
6. CUSTOMER FACTORY LEAN CANVAS TRACTION MODEL
7. 1961 John F. Kennedy I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.
8. WHERE DO YOU WANT TO BE? “If you don’t know where you are going, any road will take you there.”
9. DO IT NOW 1. Write your Minimum Success Criteria in terms of revenue per year Is it $1k, $10k, $100k, $1M, $10M? 2. Write when do you want to reach there Anytime between 2-5 years is a good timeframe 5 MIN
10. “Don’t sell what you can build. Build what you can sell.” BUSINESS, NOT BUSYNESS.
11. CREATE VALUE
12. CREATE VALUE CAPTURE VALUE
13. CREATE VALUE CAPTURE VALUE AT FRACTION OF THE COST
14. CREATE VALUE CAPTURE VALUE AT FRACTION OF THE COST DO THIS WITH A LOT OF PEOPLE
15. “It's not about ideas. It's about making ideas happen.” - Scott Belsky THE LEAN CANVAS
16. ASH MAURYA’S LEAN CANVAS
17. CUSTOMER SEGMENT 1. Identify your key customer segment 2. Identify the roles that will interact with this customer 3. Identify early adopters #1
18. PROBLEM 1. List the top 3 problems 2. List existing alternatives #2
19. UVP 1. Single, clear, compelling message that states why you are different and worth paying attention. 2. Tips for UVP: - Be different, but make sure your difference matters - Target early adopters - Focus on finished story benefits - Pick your words carefully and own them - Answer: what, who, and why - Study other good UVPs. 3. Good Formula Instant Clarity Headline = End Result Customer Wants + Specific Period of Time + Address the Objections 4. Create a high-concept pitch. #3
20. SOLUTION Simply sketch out the simplest thing you could possibly build to address each problem. #4
21. CHANNELS 1. Failing to build a significant path to customers is among the top reasons why startups fail. 2. Write both inbound and outbound paths to your customers. #5
22. REVENUE STREAMS List your sources of revenue. Don’t let cost drive your price. Base it on the “Perceived Value” and existing alternatives. #6
23. Image credits: vox.com
24. “What we document is that price is not just about inferences of quality, but it can actually affect real quality,” BABA SHIV
25. “What we document is that price is not just about inferences of quality, but it can actually affect real quality,” “So, in essence, [price] is changing people's experiences with a product and, therefore, the outcomes from consuming this product.” BABA SHIV
26. REVENUE STREAMS List your sources of revenue. Don’t let cost drive your price. Base it on the “Perceived Value” and existing alternatives. #6
27. COST STRUCTURE List your fixed costs and variable costs #7
28. KEY METRICS What will tell you how your business is doing? #8
29. A B
30. UNFAIR ADVANTAGE Something that cannot be easily be copied What will prevent a big company ripping off your product? #9
31. “If you want to unleash more creativity in your company, you need to allow for a little contamination. It is the sand in the oyster that creates the pearl.” - Fred Wilson LOCAL MAXIMA
33. DO IT NOW 1. Copy the canvas & create more versions 2. Start with changing the Customer Segments 3. Rank and pick one, based on: - Customer Pain Level - Ease of Reach - Gross Margins - Market Size - Tech Feasibility 60 MIN
34. How many trees are left in Bangalore today? FERMI ESTIMATE
35. Enrico Fermi
36. REQUIRED CUSTOMERS = REVENUE/YEAR REVENUE/CUSTOMER/YEAR
37. REQUIRED CUSTOMERS = REVENUE/YEAR REVENUE/CUSTOMER/YEAR Minimum Success Criteria
38. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR (Number of Students/Studio) x (Price per Student)
39. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR = (STUDENTS/STUDIO) x (PRICE/STUDENT) x (12 MONTHS)
40. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR = (50 STUDENTS/STUDIO) x ($4/STUDENT) x (12 MONTHS)
41. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR $2,400
42. REQUIRED CUSTOMERS = 416 ACTIVE CUSTOMERS
43. REQUIRED CUSTOMERS = 500 ACTIVE CUSTOMERS Over 100,000 yoga studios in the world
44. CUSTOMER PRODUCTION RATE = REVENUE/YEAR $1,000,000 CUSTOMER LIFETIME VALUE = (REVENUE/CUSTOMER/YEAR) x (LIFETIME)
45. CUSTOMER PRODUCTION RATE = REVENUE/YEAR $1,000,000 CUSTOMER LIFETIME VALUE = ($2,400 REVENUE/CUSTOMER/YEAR) x (2 YEAR LIFETIME)
46. CUSTOMER PRODUCTION RATE = REVENUE/YEAR $1,000,000 CUSTOMER LIFETIME VALUE $4,800
47. REQUIRED CUSTOMERS = 208 ACTIVE CUSTOMERS
48. REQUIRED CUSTOMERS = 200 NEW CUSTOMERS/YEAR
49. REQUIRED LEADS = CUSTOMER PRODUCTION RATE CONVERSION RATE
50. REQUIRED LEADS = CUSTOMER PRODUCTION RATE 200 CONVERSION RATE
51. REQUIRED LEADS = CUSTOMER PRODUCTION RATE 200 CONVERSION RATE 1% OR 0.01 For SaaS Companies, It’s usually single digit
52. REQUIRED LEADS = 20,000 LEADS PER YEAR
53. 200 NEW CUSTOMERS EVERY YEAR 500 ACTIVE CUSTOMERS $1M REVENUE/YEAR 20,000 LEADS PER YEAR
54. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR = (50 STUDENTS/STUDIO) x ($4/STUDENT) x (12 MONTHS) $4 → $8
55. 200 100 NEW CUSTOMERS EVERY YEAR 500 250 ACTIVE CUSTOMERS $1M REVENUE/YEAR 20,000 10,000 LEADS PER YEAR
56. DO IT NOW 30 MIN 1. Determine time-boxed minimum success criteria Keep time box under 3 years Frame the outcome in terms of revenue (or throughput) goal 2. Estimate LTV 3. Calculate the required Throughput 4. Refine and adjust your model Can you Increase Pricing? 5. Eliminate any models that don’t work
57. To achieve a large fuzzy goal, it is best to break it down into smaller measurable steps STARTUP STAGES
60. PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE Understanding the value that can be delivered Delivered value > Captured value Delivering value to more and more customers
61. Lean Canvas : Business Plan :: Traction Model : Financial Model THE TRACTION MODEL
62. GROWTH (#Customers) TIME 3 months 1 year 2 years
63. GROWTH (#Customers) TIME 3 months 1 year 2 years
64. PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE
65. GROWTH TIME 3 months 1 year 2 years 10X PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE 100X MINIMUM SUCCESS CRITERIA RISK - CUSTOMERS RISK - TECH
66. WHY 10X WORKS
67. You have a single goal from ideation to scale The 10X model requires non-linear thinking The 10X model works to expose the riskiest parts of your business
68. GROWTH TIME 3 months 1 year 2 years 10X PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE GOODKARMA TRACTION MODEL 400 studios $1MM Revenue 40 studios 4 studios 7 months RISK - CUSTOMERS 100X RISK - TECH
69. PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE Don't have a product just yet! No product - No Customers.
70. 100 Leads 10 Trials 1 Customer
71. IN EVERY STAGE FOCUS ON REPEATABILITY GROWTH TIME 3 months 2 years 3 years 10X PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE 1 year 100X
72. GROWTH TIME 3 months 2 years 3 years 10X PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE 1 year 100X SINGLE BIGGEST THING TO BUILDING TRACTION GET OUT OF THE BUILDING
73. DO IT NOW 30 MIN Stage: PS Fit 1x PM Fit 10x Scale 100x Timebox 3 months 1 year 2 years Customer Throughput 30 300 3000 Timebox and customer throughput: Using the funnel, come up with the throughput for Problem-Solution Fit: Stage: Leads Trials Customers Conversion 10% 10% Numbers ??? ?? 30
74. “I’m Gonna Make Him An Offer He Can’t Refuse” -Don Corleone VALIDATE WITH AN “OFFER”
75. - UVP - Demo - https://invis.io/ME8GASP8N - Pricing - 5% of the fees collected from students through the app GOOD KARMA OFFER
76. DO IT NOW 15 MIN Create an OFFER
77. Now that you have defined a goal and a path, you now need a repeatable process to keep delivering value one customer at a time. THE CUSTOMER FACTORY
78. CUSTOMER FACTORY
79. ACQUISITION GoodKarma: Identify the yoga studio founder and set up a call to place the offer Disneyland: People queuing up outside Disneyland
80. ACQUISITION ACTIVATION GoodKarma: Install the Manager’s App at the studio and have the manager send an invite to enquiry Disneyland: After the visitor has taken the first ride
81. ACQUISITION ACTIVATION REVENUE GoodKarma: Student makes a payment to the studio through the app Disneyland: Visitor is happy and takes all the rides
82. ACQUISITION ACTIVATION REVENUE RETENTION GoodKarma: Student continues to use the app and maizntains the relationship with the studi Disneyland: Visitor takes more rides and spends more time
83. ACQUISITION ACTIVATION REVENUE REFERRAL RETENTION GoodKarma: Student talking to another student in another studio Disneyland: Visitor talks to her neighbours
84. AARRR!
85. DO IT NOW 1. Identify the events corresponding to each of the steps in the customer factory: - Acquisition - Activation - Retention - Revenue - Referral 2. If you already have paying customers, Add current numbers. 30 MIN
86. THEORY OF CONSTRAINTS
87. “The chain is as strong as the weakest link”
88. GOODKARMA’S CONSTRAINTS
89. GoodKarma: Install the Manager’s App at the studio and have the manager send an invite to enquiry ACQUISITION ACTIVATION REVENUE REFERRAL RETENTION GoodKarma: Identify the yoga studio founder and set up a call to place the offer
90. GoodKarma: Install the Manager’s App at the studio and have the manager send an invite to enquiry ACQUISITION ACTIVATION REVENUE REFERRAL RETENTION GoodKarma: Identify the yoga studio founder and set up a call to place the offer
91. Taiichi Ohno
92. You can contact any of us: • kuldip.c@multunus.com • manish.c@multnus.com • karthik.g@multunus.com Would you like to attend the follow-up workshop? WHAT’S NEXT?
93. “If I have seen further, it is by standing on the shoulders of giants.” - Isaac Newton THANKS TO...
94. ASH MAURYA #RunningLean, #ScalingLean ERIC RIES #TheLeanStartup JAKE KNAPP #GoogleDesignSprint
95. YOU GUYS :)
96. CREDITS Icons from TheNounProject - Factory by David - Graph by chance smith - Einstein by oksana latysheva - Dollar by thomas bruck