*8 things to consider when launching a startup"

“Building a company: 8 themes & 3

“must”” Yelena Kadeykina

GITA, Tbilisi

September 2, 2015

©Yelena Kadeykina

Personal Intro Serial entrepreneur

Specialty: entrepreneurial marketing, online and video marketing; business development

MIT Sloan Alum

Community work: MIT Enterprise Forum & MassChallenge, etc

©Yelena Kadeykina

8 Themes to Consider When Launching a Company

Who is your customer

How do you make money = business model

Your team and company’s culture

How does your customer acquire your product

What can you do for your customer

How do you design and build your product

How do your scale your business

Quality of ecosystem ©Yelena Kadeykina

©Yelena Kadeykina

What’s is the only minimum required condition for any business to exist?

5 Steps to Define Your Customer

Market and market segmentation

Select a beachhead market

Build an end-user profile

Calculate TAM size for beachhead market

Profile persona for your market

©Yelena Kadeykina

Market segmentation

©Yelena Kadeykina

Characteristics: Characteristics:

End User Application

Benefits Partners/Players

Market Characteristics Competition

Size of Market

Needs

6 “yes” to pick beachhead market

Is your customer a paying customer

Is your sales force can access your customer

Is it hard for your competitor to block you

Are your ready to deliver a whole solution/product

Can you leverage this segment to enter additional segments

Is this market consistent with values and passion of your team

©Yelena Kadeykina

End User and DMU

Customer = End User + Decision Making Unit (DMU)

Decision making unit:

Advocate (often an end user)

Primary Economic Buyer

Influencers

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End user profile characteristics

Gender, age, education

Income range

Geographic location

What motivates them

Their fears &inspirations

Early adopters vs. main stream

Where they go on vacations

Where do they dine

What newspapers they read, websites, etc

Main reason to buy product: image, peer pressure, saving?

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Persona: Michael, Facility Manager at Cisco

Personal Information:

American, family (1 kid), 40 years old, college degree

Career context:

Mid-career (same place for 10 years), technical savvy, hopes for

promotion, makes $65K/year

Informational Sources:

Websites to make decisions, tried competitor product and is not

impressed for A/B/C reasons

Purchasing Criteria:

Reliability (high), Costs (mid)

Others:

Listens to country, drives Ford, used to volunteer as a fireman

©Yelena Kadeykina

Calculate TAM (total addressable market)

Top-down analysis – use market analysis reports, etc

Bottom-up analysis=“counting noses” (use customer, lists, trade associations, groups)

TAM = number of customers x Price of product

$5M>TAM - No

$5M<TAM<$100M – Yes $1B<TAM - No

©Yelena Kadeykina

©Yelena Kadeykina

What is more important then a good idea?

B = f(P,E)

Building team and culture: 4P framework

People

Process Patterns

Purpose

Purpose – your values and company’s values

Patterns – accepted behavior

People – whom do you hire

Process – operational processes in your company

Hard to build, easy to break

You will be challenged constantly

It is hard to find right people

Tough fires

Manage offshore team

Personal problems

Maintain processes

Celebrate small victories

©Yelena Kadeykina

Strong entrepreneurial ecosystem. Solving real world problems 25,000+ companies founded by MIT alums (i.e., Akamai, Intel, HP,

iRobot, Gillette, Dropbox)

3.3+ million jobs

$2 trillion in annual world sales (source: Kaufman Foundation 2009)

MIT Intellectual and Technology Powerhouse 72 MIT-related Nobel Prize winners (including 9 current faculty

members)

5 schools, 33 departments/divisions/sections/other programs (57 interdisciplinary research units)

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Why MIT

Cambridge innovation and intellectual capital: 74 colleges & universities, $1.5 billions spent on R&D annually

$2.4 Billions of VC investment second after Silicon Valley, highest investment/capita: $457/capital (source: Flybridge 2010)

Innovation clusters: Cambridge, 128/495 clusters –benefits of high concentration

Boston startup incubators&accelerators: CIC, Dogpatch, MassChallenge, TechStars

Future IPO candidates: HubSpot, Brightcove, Kayak and Tech giants: Microsoft, Google

Every night there is an entrepreneurial event!

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Why Boston

Motivation Desire to help and to give

How to choose a mentor

Experience

Few mentors

Right match

Advisors / Mentors

©Yelena Kadeykina

Give before you ask. Always be open to help people in your network

Develop relationships, don’t just acquire a bunch of contacts

Listen to people’s stories. Make it about them, not about you

Follow up with people once you meet them Be genuine Be passionate about your ventures Be realistic about what you should expect and follow up on

promises Stay professional and relevant (i.e. , no gossips) Do you homework

Do’s of networking

Prepare and practice your elevator pitch

Prepare your presentation materials (i.e., business cards)

Research the list of attendees Make a list of top 7-10 contacts Research their bios

Do you homework

Don’t’ brag about yourself Don’t exaggerate the truth Don’t try to discuss everything. Value

other people’ time. Don’t ask personal questions (i.e.,

questions about salary)

Don’ts of networking

Follow up on the night you met Make it personal: include 2-3 points from the

conversation Be brief and to the point For VIPs, handwritten notes are preferable Schedule another on-one-one conversation with

the people you found some immediate common interests

Stay in touch via events/social media (i.e., LinkedIn)

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Follow up/Stay in touch

Personal brand – timeless. It is how we market

ourselves to others. We sell something every day.

What is your personal brand

Idea

to your

investor

Vacation

trip to your

spouse

Strong personal brand = VISIBILITY

Speaking engagements

Investors

Clients

The opportunity to make a difference!

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Why your personal brand is important

Thank you!

Contact information:

E-mail: yelena@sloan.mit.edu

Linkedin: www.linkedin.com/in/yelenakadeykina

Facebook: www.facebook/yelena.kadeykina

Twitter: @ykadeykina

©Yelena Kadeykina