It is a SIMPLE Down-to-Earth Working manual for an entrepreneur-to-be – from foundation to expansion (maturity= business as usual) For different stages: Things and issues to be tackled, agreements, problem identification, critical capabilities needed in different stages, how to secure those capabilities are available, milestones and way of acting with them… KEEP the main focus on organisational development and management practices (our course topic) My own version of BRL (Business Readiness Level –”thermometer”) Like a good manual – it has a structure and content pages that lead quickly to the right topic area when your customer ”holder of the manual” has a problem in their hands

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April, 2015
Management Manual for a Start-up entrepreneur
POZZO DI BORGO Charles

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“A legendary hero is usually the founder of something—the founder of a new age, the founder of a
new religion, the founder of a new city, the founder of a new way of life. In order to found something
new, one has to leave the old and go on a quest of the seed idea, a germinal idea that will have the
potential of bringing forth that new thing.”
— Joseph Campbell, Hero with a Thousand Faces
Every entrepreneur is sure that his trip is unique. He is going to his start-up vision without a roadmap,
and think that none model can help him. When a start-up is succeeding whereas others are failing, we
could think that lucky is big part on this process. But it isn’t. As Campbell say above, the story’s frame
is always the same. The road to a succeed start-up is well established and understood. Reproducible
path to success does exist.1
1
From Steve Blank

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Table of Contents
I. The Idea..................................................................................................................... 3
A. Innovation & New Economy .............................................................................................. 3
B. Pivot................................................................................................................................. 4
II. The Team................................................................................................................... 6
III. Learning & Failures................................................................................................. 7
IV. Development by Customers.................................................................................... 7
V. Choose the Business Model........................................................................................ 8
A. Long Tail ........................................................................................................................... 9
B. Economic model of free..................................................................................................... 9
C. Economic model of “Freemium” ........................................................................................ 9
D. Economic model of “the Balt and the Hook” .................................................................... 10
E. The multi-sided platforms................................................................................................ 10
F. Open business models..................................................................................................... 10
VI. Protection ............................................................................................................ 11
A. IPR.................................................................................................................................. 11
B. Accounting...................................................................................................................... 12
VII. Funding ................................................................................................................ 12
A. Life Cycle & Venture Capital............................................................................................. 13
VIII. Business Readiness Level ...................................................................................... 14

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I. The Idea
“And what if we can create this?” The Idea is the easiest part. You must ask yourself two questions to
quickly validate your idea:
 Does it make a difference to your life?
 Do you will pay for it?
If you have not answered "yes" to both questions, put it in a trash can. This is not scientific, but it seems
pretty generally accepted: The best ideas fill a startup of our needs. Not the neighbor. Ours. If your
solution solves your problem and you'll be your own happy and satisfied customer, there is a good
chance that others are in the same situation.2
A. Innovation & New Economy
It is important to define the HT Business accorded to the start-up. We call that New Ventures. The
“New Economy” represents nowadays the “substitution of knowledge and information for physical
assets”. There are huge investments in the IT sector. Technology is changing all time, that’s why also
there are falling prices. (Lower inflation and faster growth both).
Innovation is the word you must learn. You must innovate to stay in the course, stay in the market.
With the technology, the market is uncertain, and there is competitive volatility.
As a future entrepreneur, you need to understand these terms. A market uncertainty means that
consumer fear, uncertainty and doubt (FUD). Customer needs change quickly, and they can buy
whenever they want. There is now an anxiety to stay with the technology from the customer.
3
2
From Stéphane Guerin
3
By newentreneurship.nl

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Technology is also very uncertain like I said before. We are not 100% sure that the new innovation will
function as promised, whereas the timetable of the new product development. Ries told us also that
there is an ambiguity with the supplier. He may not be able to fix customer problems with the
technology. Obsolescence is also a “master word” in this sector.
You need to know also that everyone can be your competitor in the next morning. There are not rules
in these type of sector. It’s opened to everyone. Competition between products classes and between
different brands focusing on the same product. (E.g Apple & Samsung).
Like Eric Ries say:” A start-up is a human institution designed to create a new product and/or service
(business) under conditions of extreme uncertainty.”
Market
Uncertainty
Technological
Uncertainty
Competitive
Volatility
Marketing of
High-Technology
Products &
Innovations
Figure 1 - High-Tech Environment, based on original ideas by J.Mohr & Eric Ries
B. Pivot
In the learning process iterations, a startup can be discovered by field returns with real customers that
the product is not suitable, it does not meet a need. However, during this learning process, it is possible
that the startup has identified another need (often related to the first product). When the startup
exchange product to meet the new needs identified, is said to have made a "Pivot".

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4
The "market pivots" are therefore to change the customer segment targeted after finding that initially
targeted segments do not bite the bait. There is also the "pivotal distribution models," where designers
will spend a direct distribution model to an indirect model, or vice versa. There is also the
"monetization model pivots" between indirect models (often advertising) and direct models freemium,
subscriptions).
Warning: the real pivot is not to simply change of activity. As the name suggests, it is simply "rotate"
around a core competence.
Note that a pivot can equally apply to a business model change. A startup can be rotated several times
during its existence.
Listening weak signals - remarks annodines appearance of customers - is necessary to know when to
engage in such a turning point. Another key to a successful transition: building on a cohesive
management team that does not fear change. Thus, Gilles Babinet, multientrepreneur, the current
"Digital Champion" with the European Commission states: To be successful a pivot, it is imperative to
rely on a strong management team that will lead the change as a pivotal leads to questioning the entire
operation of the business, and even its purpose.
5
Examples of famous pivots abound. Among them we can mention the IBM computer company that
has diversified its activities becoming an SII in the 1990 Marginal once, the service now accounts for
55% of its CA. More recently, the example of the most legendary pivot of social networks comes to
4
From techinasia.com
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By Eric Ries, The Lean Start-up
Product =>
Optimization
Strategy => Pivot
Vision

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Twitter. Originally a social network called Odeo where users can find and subscribe to podcasts,
become a micro-blogging platform with the idea of Jack Dorsey and Biz Stone.
II. The Team
Can I create a company? If I can succeed of my fails? Am I a good manager? An artist?
Launching your new team is also very important. Your new venture team is gonna help you to move
your new venture from an idea to a fully functioning firm. Notice that usually, the team doesn’t come
together in the same time. When your new firm can afford to hire additional personnel, your members
will come gradually. Do not forget that team involves more than paid employees.
Creating a new venture is dangerous. If you do not like failure, don’t create your start-up. Indeed, new
ventures especially have a high propensity to fail. This high failure rate is due in part to what
researchers call “the liability of newness”, which means that companies often falter because people
who start the start-up cannot adjust quickly to their new roles, and because the start-up lacks a “track
record” (good experience) with sellers and buyers. One of my good friend is creating a start-up on the
manufacturing dehydrated nuts. He is looking for the person who is going to associate with him : a
chef with stars? A food critic? A dietician? A Nutritionist? You must see what the person you want is,
and how she can grow up your start-up. Many people are focusing on their weaknesses, and hire
someone in this sector. Assembling a talented and experienced new venture team is one good path
that firms can take to overcome his weaknesses and limits.
Founding a start-up is an art. Founder(s) have a significant impact on the manner in which the new
venture team takes shape. Your start-up is the partition you compose. A majority of new venture are
started by more than one individual. So it is believed that new ventures started by a team rather than
a single entrepreneur have an advantage.
Team brings more ideas, resources, talents, psychological support and moreover, contacts. You must
have a lot of contacts before creating your company.6
The team is essential, as employees and Board of Directors (if the new venture organizes as a
corporation). Concerning the first employee, it vary in terms of how quickly startup need to add
personnel. The founder can work alone for a certain period of time, and need an employee after.
Employee are a huge expense, so be very careful and serious and you will hire. A bad expense for an
employee can destroy a start-up.
Finally, the board of member is here to well-managed the startup. (Typically made up of both inside
directors & outside directors). BM has two main functions: provided guidance (obtain input and advice
6
By Waseset Founding Team in Prentice Hall, 2006.

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for the founder(s) and CEO), and lend legitimacy (famous and well-known person give credibility to the
start-up).
By the way, a start-up can also have a board of advisors. They provide counsels and advice, but they
don’t have legal responsibility. An advisory board can be set up for a specific issues, or just for general
purposes.
III. Learning & Failures
It is essential to know how you failed, because you will, but most important, how these failure are good
for your start-up. Anticipation is the first thing before failing. Market, especially in new technologies,
is changing all the time. If you are not proactive, your startup will die in a few. Moreover, you have to
be reactive also. If you think that you failed and now it is too late, you’re wrong. You must respond
promptly when problems arrive. Jukka Muilu from Energia Kolmio say that if business plan doesn’t
work, you have to have a plan B, plan C…
Do not be optimistic as well, your road to create a startup is treacherous. You must be rational, and
show to your team that you have and you want a good rational behavior. Especially when the market
is plummeting, you have to have a good behavior.
The valor of Energia Kolmio are Passion, respect, equality and 100% Performance. And these valor
allows Energia Kolmio to reach a turnover of 22M$ in 2013 and to exist for 20 years.
IV. Development by Customers
A new venture has to be very carefully in its business model. Shareholders have to see which the best
system is, are they going to take the same business model as traditional companies, or a new model?
It really depends of the sector of the company, his culture and the leadership of the shareholder. Lots
of startup use “lean start-up”. This concept was created in the Silicon Valley during 2008, mostly by
high-tech startup. It is the validated learning, the experiment and the iterative design. Startup have to
do always innovation, in order to create radically successful business. Steve Blank’s theory of
“customer development” is one of the basement of the lean startup. We can degage 5 major points
on this:
1. Get out of your home! You cannot create a company only in your desk, you have to move, see,
and meet a lots of different environments.
2. You need to understand your market. The kind of market defines the kind of strategy you will
do. Challenges depend on market.
3. Entrepreneurships need find a market for the product, not the opposite. Stop seeing always
the stereotypes and meeting real customers.
4. A startup go within 4 steps of increasing: customers discover, customer’s validation, creation
of customers and finally, society creation.

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5. Startup success with learning and iteration! 7
V. Choose the Business Model
The world is changing, and our lifestyle too. Companies must adapt themselves to “stay in the sector”.
So BM are always changing too. If you don’t like changing, don’t create a company. If you don’t like
risks, don’t create a company. And change is risky of course.
7
From Eric Ries in the Lean Startup, from the ideas of Steve Blank

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A. Long Tail
The so-called economic models of "long tail" aim to "sell less more" offer a great number of niche
products, each of these products being sold relatively rarely. Aggregate sales of niche products can be
as lucrative as the traditional model where a small number of bestsellers is the essential income.
Economic models of "long tail" must be accompanied by low storage cost and efficient distribution
platforms ensuring good visibility for niche content.
Examples: Netflix, eBay, YouTube, Facebook, lulu.com...
For Anderson, three factors have enabled the emergence of this model:
 The democratization of production and the falling cost of technology tools to produce music,
short films or software
 The democratization of distribution of digital products via the web (reducing storage costs,
communication, transaction,)
 The lower research costs in linking supply and demand (via search engines, reviews, user
ratings,)
B. Economic model of free
In the economic model of free, a segment of important customers at least has the opportunity to
benefit continuously from a free offer
Different configurations make the free offer possible. The segment that does not pay is "subsidized"
by another component of the business model or another customer segment
Examples: Metro (free newspaper), Flickr, Skype, Google,...
Three distinct approaches make it possible to free a viable business model BM:
 Advertising in multifaceted platforms
 The freemium model (free basic services with premium services optional)
 The model of "bait and hook" that a free or inexpensive initial offer attracts consumers in
repeat purchases stitches.
C. Economic model of “Freemium”

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- The word "freemium" was invented by Jarid Lukin, and popularized by the investor Fred Wilson on
his blog.
- The economic model "freemium" is a hybrid model that combines free basic services and paid
premium services
- The basic premium customers is usually <10% of service users
- In a freemium model, key indicators are: the average cost of the service of free users and premium
conversion rate
D. Economic model of “the Balt and the Hook”
The model of the bait and the hook:
- This is a business model that includes an attractive initial offer inexpensive or free, encouraging future
repeat purchases of products or services
- Model also known under the names "loss leader" or "razor and blades" (cf. Gilette)
- Goal: Customer Captivity
- Examples: mobile phone subscription, razors and blades, printers and cartridges, coffee machines
and capsules...
E. The multi-sided platforms
- This is an economic model that connects at least two groups of distinct but interrelated clients.
- They only have value if the other client groups are also present because the platform enables
interactions between groups
- To grow in value, a multifaceted platform needs to attract more users, which is called the network
effect
- Examples: Visa, Google, eBay, Facebook, Microsoft, Windows...
F. Open business models
- Create and copy of the value by working systematically with external partners
- This collaboration can be exercised in the sense of "outside in" exploitation by the company to outside
ideas) or in the sense of "inside-out" to external partners bring ideas or unused assets by the
organization)
- See the work of Henry Chesbrough on Open Innovation
- Examples: Procter & Gamble, GlaxoSmithKline, InnoCentive ...
 Example of my own Business Canvas with Egamebling (the startup about Betting in Esport):

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8
VI. Protection
A. IPR
So you decided to continue? Wonderful, my book is not finished for you. Now that you are sure to
keep going and go furthermore, you have to protect your capabilities. Your IPR actions & strategies
have to be perfect, you know as much as me that there are every day lawsuits for plagiarism.
Don’t forget that your idea can be protected, once they have been materialized, as the result of a
human intellectual effort. The Intellectual Property Right are your foundation, and your protection.
In technology sector, patents are the strongest IPR. The holder can exploit the invention during 20
years, and prevent others to producing, exploiting this product or process who is now a patent. To
grant a patent, you must have 3 requirements: Novelty, Inventive step and an industrial application.
Notice that to apply for a patent, it takes time and money….so do an analysis first!
Few numbers:
8
From my personal Business Plan of “EgameBling” Startup

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 700 000 patent applications field per year world-wide
 4 000 000 patents in force world-wide
 55 000 000 patent documents available world-wide
 5%-10% of the knowledge which is written in the patent is containing in others sources as well9
Trademark can also protect your services/products. This is a marketing tool, consumers can identify
your start-up with this. (Colors as Orange of Hermès, drawings, designs, writing style…”. Copyright is
also another system which defends your start-up.
B. Accounting
The most important early activity and good command cash. This is also valid for both a startup, but
also for a traditional society. The accountant must provide reliable and timely information to
entrepreneurs. The first requirement is to perform a monthly analysis of their cash burn, neutral and
profitability, but also to help entrepreneurs in their cash flow forecasts to 3, 6 or 12 months.
The priority of the entrepreneur is to focus on its business (market, customers). But it must also be
involved in its management / accounting / paperwork to run his business and avoid big problems with
the sprawling administration. He has an interest in carefully selecting his accountant.
Jannifer Warawa explains us why every start-up must have an accountant. They can provide a new
perspective, a professional image of and for the startup. This guy will also give you a planning. They
understand tax as well and can analyze data for growth and profitability opportunities (if you are taking
an experienced one).
Indeed, 89% of business owners agreed that working with an accountant was a critical element of their
success.10
VII. Funding
Funding is essential to create a startup. Without money, no company of course. That doesn’t change,
however, the way we can have this money is changing. You can borrow from banks, from your love
funds (family, friends…), hedge funds, business angels and even with crowdfunding. Of course, the
market has to be good, with a great horizon. Lots of simulations are done to see that.
People are also always the central key in a company, people as shareholders, distributors, suppliers,
customers. It’s like a 360 vision, we have to be good everywhere and at every time.
Numbers concerning the Crowdfunding:11
 7B$ in 2012 on 308 Website
9
By Juha Saukkonen, IPR, slide 11
10
From a study conducted by Sage among U.S
11
By Similarweb.com

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 Growth of 81% compared to the last year (2012>2011)
 Forbes attends a market of 1000B$ in 2020
 Kickstarter the first with 32,4M visitors in October
A. Life Cycle & Venture Capital
The life cycle of a business is closely linked to its capital. Private equity is grouped into several types of
investments:
• Venture capital involved in the innovation and enterprise creation phase. We do not yet know if the
company will be profitable. This is the starting phase of a company. There may be several "venture
capital".
• The capital development comes just after the venture capital. The business needs to grow and
develop after the boot process. As for venture capital, there may be several "growth capital" for a
company.
• Then the capital transfer takes effect. It was at that time that the company will have a big choice (or
will not have it at all!). Either it is consolidating at further increasing its capital, or it retransmits the
capital. If it retransmits it happens then a reversal capital. Funds specializing in turnaround then
support them to allow companies in difficulty to recover by providing capital and human resources.
These two elements are essential in the recovery of a complex situation.
• Finally, there are several outlets in the company's life cycle.
12
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By Alberto Balatti, Board Member

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Venture-capital funding may be toxic for startup. It is dilutive, distracting, burdensome and doesn’t
help a lot. But, if you raise money at a somewhat later stage of your entrepreneurial journey, you will
see that a lots of inconvenient will disappear.
VIII. Business Readiness Level
1
•Find the Business Model
2
•Conduct a Market Study (Primary & Secondary Researchs)
3
•Be Sure that the solution solved the issue
4
•MVP Prototype
5
•Validation <=> Pivot
6
•Revenue Streams, Customer Segments, Channels & Relationships
7
•MVP Fidelity
8
•Qualificate the entire process
9
•Real business in an operationnal environment