My notes on “Startup Communities – Building An Entrepreneurial Ecosystem In Your City” by Brad Feld
Give Before You Get
Boulder is an incredibly inclusive community. Although there is some competition between companies, especially over talent, the community is defined by a strong sense of collaboration and philosophy of “giving before you get.”
If you contribute, you are rewarded, often in unexpected ways.
At the same time especially since it’s a small community it’s particularly intolerant of bad actors. If you aren’t sincere, constructive, and collaborative, the community behaves accordingly
Well, the bad news is that “business plans never survive first contact with customers” – Steve Blank.
This means that you can plan all you like, but real customers with real money in their pockets will buy what they want to, not what you’re selling.
So you are going to create a “business model” instead.
A business model has some elements of a “business plan” and some elements of a “marketing plan” but it’s better because it starts with your customers. And their opinion is the only opinion that matters really.
4 Initial Questions You May Be Thinking Right Now:
Q: “What the heck is a ‘business model’?”
A business model is simply an understanding of how a business works. How it adds value, how it makes money
You can achieve that level of understanding by answering the 9 questions coming up soon.
Q: “Will doing this business model first help me win?”
Yes. Because if you sit down and work on this right now you get the first version of this business model finished in a couple of hours, then you’ll know what to build in Version 1.0 of your product
Then you can test Version 1.0 on real customers and use that feedback to build Version 2.0. If you have Version 3.0 and your competitors have Version 1.0, who will win? You will.
Q: “How long should it be?”
3-5 pages is about right
Q: “Do we write it once and forget it? Or, do we rewrite it several times?”
It can (and must) change and evolve
You might rewrite it once or twice or three times (or 10 times). It will keep improving every time you try and sell to real customers.
Let’s get started!
It’s as easy as answering the following 9 questions.
9 Questions To Get You Started When You’ve Got An Idea For A StartUp Business
1. “Who is our ideal customer?”
We’ve already got our product/service in mind, but we need to forget that for a moment because we need to think about our customers first. So our first question is “who is our ideal customer?”.
Describe them here using bullet points or a short paragraphs.
“Our ideal customer is…
2. “What problems do our ideal customers have?”
Customers will buy from us to solve a problem they have. What is that problem (or problems)? What is their pain?
List the top 1-3 problems they have.
2b How do they solve that problem without us at the moment? What are their alternatives until we’re ready to serve them?
3. “What’s the solution?”
For each problem we listed, we will outline a possible solutions here.
4. “What’s our sales pitch?”
Now we have a picture of our ideal customer, we have identified their problems, we’ve outlined a solution, now it’s time to craft our sales pitch.
Imagine we have just 30 seconds to turn a stranger into someone interested in buying from us. What would we say? What story would we tell? What are we offering? How are we different? What’s in it for them? If we’re offering something brand new we might need to use existing products to help people understand what it is we do. Eg “We are Flickr which is like YouTube for photos”
4b. “What headlines could use on our landing page?”
Now that you’ve got your sales pitch, write a shorter version of it that could be a headline on the landing page of your website. For example, if you want to capture their email address, what headline and bullet points are going to convince them they want what you’ve got?
Write several alternatives here.
5. “How do we get our message to our customers?”
What advertising will we do? Will we need to hire salespeople? How would they find customers? How will we build in viral elements to help our service spread to new customers? How will we incentivise our customers to get their friends/family to buy from us in a way that makes our product/service even better and more social?
6. “How will we make money?”
Will we charge per month? Per year? For life? Per use? Per user? Will we offer a “Freemium” version? A “Premium” version? Sell to corporates? Sell to the end user? Get sponsorship? Sell advertising space? Sell for $1.29 in the App store?
7. “What are our costs?”
What will it cost to stay in business? What are our “fixed” costs like building, salaries etc? What are our “variable” costs that increase as our sales increase? List them here and make guesses at the amounts. How much cash do we need to start for our start-up? How long will that cash last?
8. “What ‘key metrics’ will we use to measure success?”
What are the most importants numbers to us? Eg: How many subscribers we have? New users per month? Amount of data being processed per week? Web visitors? Web-visitor-to-Customer conversion rate?
9. “What’s our advantage?”
What is our “secret sauce”? What do we have that can’t be easily copied or bought? What will stop or slow down new competitors from taking customers from us?
Once you’ve gone through these questions for the first time, it’s time to start building version 1.0 of your product so you can get it infront of customers as quick as you can and get that feedback that you need.
Constantly revisit your answers to these questions and change your responses according to what real customers are telling you they will pay for.
Where did these questions come from?
These questions are based on the work of Ash Maurya who created a business model generator called “The Lean Canvas”. You can work through “The Lean Canvas” for free on his website http://leancanvas.com/. Ash Maurya’s model is actually an adaption of another model called “The Business Model Canvas” first created by Alex Osterwalder.
Universities take a really reallylong time to build (something like 4 years). They are huge. They need lots of buildings and lots of land. Actually, you never stop adding on to them
There is no university vacuum, because the Bay of Plenty Polytech & Waikato University partnership works quite well there isn’t a hurry to fix this problem
Did you know there has been just ONE new university in New Zealand built since 1965?
5 out of 8 were built between 1869 – 1897. That’s 140 to 116 years ago.
List of NZ University’s And When They Were Built
Full Time Students
University of Otago
University of Canterbury
University of Auckland
Victoria University of Wellington
University of Waikato
Auckland University of Technology
3 Options Left
There are just 3 options to choose from:
Ask each and every man, woman and child in Tauranga to contribute $2,000 each so we can build a couple of university buildings
Just forget about it. Write off the idea as too hard. Quitting is a valid decision. Don’t be embarrassed.
So let’s just work with what we have. My question for the Bay of Plenty Tertiary Education Partnership is this “What do you need?”
Put a virtual university together
What is a Virtual University?
Is it true that, today, if you choose a subject to master, that within 3 months from now, you could be the most knowledgeable person in your city (or country, or in the world) on that subject, and that all you need is internet access?
You don’t even need a classroom actually. Just a computer in a hole in a wall will do.
Watch this TED Talk by Sugata Mitra who shows how he enabled illiterate children in a remote village teach themselves Biology and English in 3 months with a single computer in a wall.
So the ice has been broken.
Do we really need huge buildings and desks and chairs and schedules and lecturers and tutors and fees and loans to pay for it all?
Sometimes we do.
But sometimes we don’t.
Imagine if we had both!
Imagine if people could choose!
In fact, we don’t have to imagine, because those are our choices already.
But sitting at home watching video after video is lonely.
Wouldn’t it be great if all the people in your area who were about to watch that video or learn that topic could come together and watch it together, and explain it to teach each other, and argue about it together?
Do you think you’d learn the content better if you could do that?
All we need is a courtyard in the middle of town that can hold about 100 people.
Tauranga’s got one. It’s called Red Square. (Which we could rename “TED Square” after TED.com).
Turn up there at lunchtime with your lunch and with your smart phone or tablet or laptop.
(Free high-speed WiFi would be handy too but 3G data is getting cheaper, so that will do for now.)
Choose a Khan video or TED video or any other YouTube video you want to watch and tweet your intention using the hashtag #RedSquareVideo and start a 2 minute countdown.
People can subscribe to be notified when that hashtag is used and they would have 2 minutes to come and join you.
They can load the video themselves (or cosy up next to you to watch it), and when it’s done you can have a chat about it so that knowledge really sinks in.
Or, if they want to watch another video, that can do so and others could join them.
The first day for this is 12noon Thursday 18 April 2013.
I had the honour of spending 60 seconds with John Key this morning.
I was 1 of 10 young professionals invited to tell him about what we’re up to here in Tauranga, the city I love.
Here’s my 60 second speech:
Hi, I’m Sheldon Nesdale and I’m helping to build a eco-system of entrepreneurship and innovation here in Tauranga. One of 6 ways I’m doing that is by organising an event that people can go to and learn about entrepreneurship and innovation in a hands on way. It’s called Tauranga StartUp Weekend and it’s happening July 5,6,7 this year. It’s like a cake. You throw in ingredients like mentors, prizes, judges, strangers, structure, and chaos, and you eat whatever you cook.
This guy runs a whole country so his perspective is mostly a macro sized one. (Although he has this talent of zooming down to the individual level too).
This means he sees the big picture, the big system and the big moving parts.
When he was talking about Fonterra and exports, 2 pictures formed in my head that I want to tell you about.
The first picture was one of a giant machine which needed cogs to work.
What are the cogs in this machine? People.
You and me.
You might be a big cog or you might be a small cog, but the machine wants to be able to replace you easily or work without you if it needs too.
For example your job might be to sit in a cubicle and answer phones. The machine wants you to stay there.
But even if you leave, it’ll very quickly fill that spot with someone else.
The second picture was one of a nanobot swarm.
What’s a nanobot?
It’s a tiny machine. So tiny a million of them can fit on the head of a pin.
This time the people are individual nanobots.
They are separate. They are autonomous. They make their own decisions. But the supercool thing is that they can swarm to problems that need solving.
For example, poverty needs solving. The people/nanobots that care about poverty will swarm to that problem and solve it together.
That’s the future of work I think.
So, are you a cog or a nanobot?
And if you want to change, when are you going to start?