Disciplined Entrepreneurship (24 Steps to a Successful Startup) - TUMS Entrepreneurship Olympiad 7th Workshop - 22 Dec 2019 هفتمین کارگاه از مجموعه کارگاه‌های کارآفرینی در سلامت، برای شرکت کنندگان دانشگاه علوم پزشکی تهران در حیطه‌ی کارآفرینی دوازدهمین دوره‌ی ا‌لمپیادهای علمی دانشجویان علوم پزشکی کشور درباره‌ی کارآفرینی اصولی در قالب 24 گام موفقیت کسب‌وکارهای نوپا در تالار عزلت دانشکده‌ی پزشکی در روز 1 دی‌ماه 1398 برگزار شد. در این کارگاه مراحل راه‌اندازی یک کسب‌وکار از یافتن ایده و اعتبار سنجی و تقسیم بازار تا برخی محاسبات مالی و رشد و مقیاس‌پذیری مورد بحث قرار گرفته است.

1. Disciplined Entrepreneurship
24 Steps to a Successful Startup
Sahand Samiei
Executive Coordinator & Content Provider @MedLean
Creativity & Innovation Secretary @TUMS Health Entrepreneurship Association
Entrepreneurship Olympiad Bronze Medalist
@shnd_s samieisahand@gmail.com

2. Reference
2

3. Introduction - Three Common Myths That Must Go
Gene vs. Skill
Individuals vs. Teams
Charismatic vs. Communicators
3

4. Introduction - Three Common Myths That Must Go
4

5. Introduction - What Explains MIT’s Success in Entrepreneurship?
Extremely intelligent students
Access to leading-edge technologies
Combination of spirit & skills
Entrepreneurship virus !
Social herding mentality
not-so-subtle competitiveness
Positive feedback loop
5

6. 6

7. Introduction - Distinguishing Two Distinct Types of Entrepreneurship
Small and Medium Enterprise (SME) Entrepreneurship
Innovation-Driven Enterprise (IDE) Entrepreneurship
7

8. Introduction - Distinguishing Two Distinct Types of Entrepreneurship
8

9. Introduction - Distinguishing Two Distinct Types of Entrepreneurship
9

10. Introduction - What Is Innovation?
Innovation = Invention x Commercialization
10

11. Six Themes of the 24 Steps
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12. Six Themes of the 24 Steps
12

13. Step 0 – Getting Started
13

14. Step 0 – Getting Started
• Knowledge
• Capability
• Connections
• Financial assets
• Name recognition
• Past work experience
• Passion for a particular market
• Commitment
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15. Step 0 – Getting Started
15

16. Step 0 – Getting Started
User Entrepreneurship
16

17. Step 1 – Market Segmentation
17

18. Step 1 – Market Segmentation
The single necessary and sufficient condition for a business
is
a paying customer
Create a new market that you will dominate
18

19. Step 1 – Market Segmentation
Two common pitfalls you may encounter if …
Selling to everyone The China syndrome
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20. Step 1 – Market Segmentation
How to do a market segmentation
1. Brainstorm
3. Primary Market Research
2. Narrow
20

21. Step 1 – Market Segmentation
1. Talk about their life instead of your idea.
3. Talk less and listen more.
2. Ask about some specifics from the past instead of
regarding about generics or opinions about the future.
21

22. Step 1 – Market Segmentation
Example:
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23. 23

24. Step 2 – Select a Beachhead Market
24

25. Step 2 – Select a Beachhead Market
Your beachhead market is where, once you gain a dominant market
share, you will have the strength to attack adjacent markets with
different offerings, building a larger company with each new following.
25

26. Step 2 – Select a Beachhead Market
Three conditions that define a market
Similar products Similar sales cycle WOM
26

27. Step 2 – Select a Beachhead Market
Example:
27

28. Step 2 – Select a Beachhead Market
Examples:
28

29. Step 3 – Build an End User Profile
29

30. Step 3 – Build an End User Profile
• Customer
• End User
• Decision-Making Unit
▪ Champion
▪ Primary Economic buyer
▪ Influencers, Veto Powers, Purchasing Department, and so on …
30

31. Step 3 – Build an End User Profile
Potential characteristics to include in your end user profile
31

32. What is their income range?
What is their geographic location?
What motivates them?
What do they fear most?
Who is their hero?
32

33. Step 3 – Build an End User Profile
Example:
33

34. Step 4 – Calculate the TAM Size for the Beachhead Market
34

35. Step 4 – Calculate the TAM Size for the Beachhead Market
TAM
SAM
SOM
Target
Market
35

36. Step 4 – Calculate the TAM Size for the Beachhead Market
Unit ??
Dollars per year
36
Range ??

37. Step 4 – Calculate the TAM Size for the Beachhead Market
Bottom-up analysis Top-down analysis
37

38. Step 4 – Calculate the TAM Size for the Beachhead Market
Compound Annual Growth Rate
38

39. Step 4 – Calculate the TAM Size for the Beachhead Market
Example:
39

40. Step 5 – Profile the Persona for the Beachhead Market
40

41. Step 5 – Profile the Persona for the Beachhead Market
The Persona is a person who best represents the
primary customer for the beachhead market
* The Persona should be a real person, not a composite !
* No one end user represents 100 percent of the characteristics
of every end user in your End User Profile !
* Multiple Personas …
41

42. Step 5 – Profile the Persona for the Beachhead Market
42

43. Step 6 – Full Life Cycle Use Case
43

44. Step 6 – Full Life Cycle Use Case
1. How end users will determine they have a need and/or opportunity to do
something different.
2. How they will find out about your product.
3. How they will analyze your product.
4. How they will acquire your product.
5. How they will install your product.
44

45. Step 6 – Full Life Cycle Use Case
6. How they will use your product.
7. How they will determine the value gained from your product.
8. How they will pay for your product.
9. How they will receive support for your product.
10. How they will buy more product and/or spread awareness (hopefully
positive) about your product.
45

46. Step 6 – Full Life Cycle Use Case
Example:
46

47. Step 7 – High-Level Product Specification
47

48. Step 7 – High-Level Product Specification
It is a drawing/visual representation of what your
product will be when it is finally developed based
on what you know at this point of the process
* The product should not have to be built !
48

49. Step 7 – High-Level Product Specification
Feature? Function? Benefit?Exercise:
a. Better security for the phone allows important data and information to
be stored with peace of mind, which improves your productivity.
b. Patented active capacitance sensing technology.
c. Fingerprint recognition is integrated into the phone.
49

50. Step 8 – Quantify the Value Proposition
50

51. Step 8 – Quantify the Value Proposition
Better, Faster, Cheaper & …
51

52. Step 8 – Quantify the Value Proposition
Example:
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53. Step 9 – Identify Your Next 10 Customers
53

54. Step 9 – Identify Your Next 10 Customers
1. List more than 10 potential customers (aside from your Persona).
2. Contact each of the potential customers on your list and present your Full Life Cycle Use
Case, High-Level Product Specification, and Quantified Value Proposition (Steps 6–8).
3. Ask the customer if they would consider providing a letter of intent to buy your solution.
4. If a customer’s feedback is not aligned exactly with your assumptions, take good notes
and think how this affects your analysis.
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55. Step 9 – Identify Your Next 10 Customers
5. Go back and modify your earlier assumptions and determine whether to contact
additional customers.
6. If you find that you cannot create a list of 10 customers, you may need to reconsider
your beachhead market.
7. Do not share this list of customers or the information you gather with others outside
your company.
55

56. Step 10 – Define Your Core
56

57. Step 10 – Define Your Core
The Core is something that allows you to deliver
the benefits your customers value with much
greater effectiveness than any other competitor.
• Network Effect (+Metcalfe’s Law ?(
• Customer Service
• Lowest Cost
• User Experience (+UI/UX ?)
• …
57

58. Step 10 – Define Your Core
* What about intellectual property? Or culture?
* Core vs. Competitive Position
* First-mover advantage is not a core !
* Locking up suppliers is typically not a core !
58

59. Step 10 – Define Your Core
Examples:
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60. Step 11 – Chart Your Competitive Position
60

61. Step 11 – Chart Your Competitive Position
The Competitive Position is the link between your Core
and your Persona’s priorities, and shows that they logically
make sense for the target market you have chosen.
61

62. Step 11 – Chart Your Competitive Position
Priority #2
Priority#1Bad
Bad
Good
Good
Competitive Positioning
62

63. Step 11 – Chart Your Competitive Position
63
Example:
Efficiency
Reliability
HighLow
W/BatteryNoBattery

64. Step 12 – Determine the Costumers DMU
64

65. Step 12 – Determine the Costumers DMU
* The DMU for each customer should be similar.
- If not,
1. Your customers do not match the Persona !
2. You have not segmented the market enough !
65

66. Step 13 – Map the Process to Acquire a Paying Customer
66

67. Step 13 – Map the Process to Acquire a Paying Customer
By creating a map of the Process to Acquire a Paying Customer, you will:
• Understand the length of the sales cycle
• Build the foundation for the COCA
• Identify hidden obstacles → Budgeting, purchasing authority, Time, B2C vs. B2B, …
• Be able to show that you understand the customer’s buying process
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68. Step 13 – Map the Process to Acquire a Paying Customer
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Examples:
for Kids

69. Step 14 – Calculate the TAM Size for Follow-on Markets
69

70. Step 14 – Calculate the TAM Size for Follow-on Markets
Similar markets that you will target once
you have dominated the beachhead market.
1. Selling the same customer additional products or applications (upselling).
2. Sell the same basic product to adjacent markets.
70

71. Step 14 – Calculate the TAM Size for Follow-on Markets
CurrentProductNewProduct
Current Market Segment New Market Segment
71

72. Step 14 – Calculate the TAM Size for Follow-on Markets
72

73. Step 14 – Calculate the TAM Size for Follow-on Markets
73
Example:

74. Step 15 – Design a Business Model
74

75. Step 15 – Design a Business Model
A business model describes the rationale of how an
organization creates, delivers, and captures value.
75

76. Key
Partners
Key
Activities
Key
Resources
Cost Structure Revenue Streams
Channels
Customer
Relationships
Customer
Segments
Value
Proposition
76

77. Problem Solution
Key Metrics
Cost Structure Revenue Streams
Channels
Unfair
Advantage
Customer
Segments
Unique Value
Proposition
Early
Adopters
Existing
Alternatives
77

78. Sales
Revenue
Profit Margin
Burn Rate
Runway
ARPU
LTV
CAC
MAU
DAU
Churn Rate
Repurchase Rate
NPS
Engagement
Virality Rate
Key Metrics Examples

79. Step 15 – Design a Business Model
1. Freemium
2. One-time Up-Front Charge plus Maintenance
3. Cost Plus
4. Hourly Rates
5. Subscription or Leasing Model
6. Licensing
7. Consumables
8. Upsell with High-Margin Products
9. Advertising
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80. Step 15 – Design a Business Model
10. Reselling the Data Collected—or Temporary Access to It
11. Transaction Fee
12. Usage-Based
13. “Cell Phone” Plan
14. Parking Meter or Penalty Charges
15. Microtransactions
16. Shared Savings
17. Franchise
18. Operating and Maintenance
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81. Step 15 – Design a Business Model
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@MedLeanMag

82. Step 16 – Set Your Pricing Framework
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83. Step 16 – Set Your Pricing Framework
Basic pricing concepts
1. Costs shouldn’t be a factor in deciding price.
2. Use the DMU and the process to acquire a paying customer to identify key price points.
3. Understand the prices of the customer’s alternatives.
4. Different types of customers will pay different prices.
5. Be flexible with pricing for early testers and “Lighthouse customers.”
6. It is always easier to drop the price than to raise the price.
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84. Step 16 – Set Your Pricing Framework
Moore breaks customers down into five waves:
1.Technological enthusiasts
2.Early adopters
3.The early majority (pragmatists)
4.The late majority (conservatives)
5.Laggards/skeptics
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85. Step 16 – Set Your Pricing Framework
Responsibility for Setting Pricing ??
a. Sales
b. Finance
c. Product Management
d. Engineering
85

86. Step 16 – Set Your Pricing Framework
1.99 $
2.99 $
3.99 $
86

87. Step 17 – Calculate the LTV of an Acquired Customer
87

88. Step 17 – Calculate the LTV of an Acquired Customer
Key inputs to calculate LTV
1. One-time Revenue Stream, If Any.
2. Recurring Revenue Streams, If Any.
3. Additional Revenue Opportunities.
4. Gross Margin for Each Of Your Revenue Streams.
5. Retention Rate.
6. Life of Product.
7. Next Product Purchase Rate.
8. Cost of Capital Rate For Your Business.
88

89. Step 17 – Calculate the LTV of an Acquired Customer
Present Value = Profit × (1 − Cost of Capital Rate)t
t = number of years after year 0
The LTV is the Net Present Value of your profits from year 0 through year 5.
LTV/COCA ≥ 3
89

90. Step 17 – Calculate the LTV of an Acquired Customer
Important considerations
• The business model decision is very important.
• LTV is about profit, not revenue.
• Overhead costs aren’t negligible.
• Gross margins make a big difference.
• Retention rates are very important as well.
• Finding additional real upselling opportunities can be very attractive.
90

91. Step 17 – Calculate the LTV of an Acquired Customer
91

92. Step 17 – Calculate the LTV of an Acquired Customer
Example:
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93. 93
‫سوال‬ ‫طراح‬:‫پور‬ ‫حاتم‬ ‫کسری‬ ‫دکتر‬

94. Step 17 – Calculate the LTV of an Acquired Customer
Exercise: Estimate the LTV :
a. Google
b. Bicycle shop
c. Used-car dealership
d. A new Lamborghini sales and service dealership
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X0 $
X00 $
X’000 $
X00’000 $

95. Step 18 – Map the Sales Process to Acquire a Customer
95

96. Step 18 – Map the Sales Process to Acquire a Customer
Four factors entrepreneurs often overlook about CAC
1. The cost behind all of the sales and marketing efforts required to reach their prospects.
2. Long sales cycles that cost a lot of money.
3. All the customers who did not buy their product, and the sales and marketing costs
associated with reaching those customers.
4. Corporate shake-ups that affect the customer’s Decision-Making Unit.
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97. Step 18 – Map the Sales Process to Acquire a Customer
Short Term Medium Term Long Term
97

98. Step 18 – Map the Sales Process to Acquire a Customer
Examples:
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99. Step 19 – Calculate the COCA
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100. Step 19 – Calculate the COCA
* Your COCA does not include any fixed production costs or expenses outside
of the sales and marketing department, such as research and development,
finance and administration, or overhead.
In determining the COCA, you must quantify all the sales and marketing
costs involved in acquiring a single average customer in steady state.
100

101. Step 19 – Calculate the COCA
LTV
101

102. Step 19 – Calculate the COCA
Bottom-up analysis
How not to calculate COCA
102

103. Step 19 – Calculate the COCA
A top-down perspective
The right way to calculate COCA
103

104. Step 19 – Calculate the COCA
104

105. Step 19 – Calculate the COCA
How to reduce COCA
1. While very powerful, use direct sales judiciously as it is very expensive
2. Automate as much as possible
3. Improve conversion rates in sales
4. Decrease the cost of leads and improve the quality of leads
5. Speed through the sales funnel
6. Choose your business model with COCA in mind
7. Word of mouth
8. Stay focused on the target market 105

106. Step 19 – Calculate the COCA
106

107. Step 19 – Calculate the COCA
107

108. Step 20 – Identify Key Assumptions
108

109. Step 21 – Test Key Assumptions
109

110. Step 21 – Test Key Assumptions
❖Prepay for your solution (best)
❖Put down a deposit (good)
❖Provide a letter of intent (okay)
❖Agree to a pilot (acceptable)
❖Express a strong interest in purchasing if certain conditions are met
(not too reassuring but may be acceptable)
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111. Step 21 – Test Key Assumptions
Examples of easily testable assumptions
111
✓ Smartphone users aged 25–34 access weather forecasts on their phone to decide what
to wear.
✓ “Neohippies” aged 25–35 use their smartphones to help them shop in the grocery store.
✓ Conducting opinion polls is much better on facebook than with traditional telephone-
based methods.
✓ People will be inspired to contribute to chalkboards that have writing prompts on them.

112. Step 22 – Define the MVBP
112

113. Step 22 – Define the MVBP
Three conditions of a MVBP
1. The customer gets value out of use of the product.
2. The customer pays for the product.
3. The product is sufficient to start the customer feedback loop, where the
customer can help you iterate toward an increasingly better product.
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114. Step 22 – Define the MVBP
114
Example: StyleUp
Beta

115. Step 23 – Show that “The Dogs Will Eat The Dog Food”
115

116. Step 24 – Develop a Product Plan
116

117. Step 24 – Develop a Product Plan
Example:
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118. What Is Missing in the 24 Steps?
o Building a company culture
o Selecting a founding team
o Growing and building the team (HR processes)
o Developing the product
o Selling and sales execution
o Servicing the customer and building customer service processes
o Building your financials and managing cash flow
o Raising money to scale the business
o Entrepreneurial leadership and scaling the business
o Building and utilizing good company governance
o And much more … 118

119. “Everything should be made as simple as possible, but not simpler!”
Albert Einstein
119

120. @MedLeanMag @shnd_s
info@medlean.ir
www.MedLean.ir
samieisahand@gmail.com
(‫اندازی‬‫راه‬ ‫حال‬ ‫در‬)
@sahandsamiei
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