Startup strategy

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Lecture series “Science-major Person‘s Career and Potentials in the Global Technology Era“
(2) Startup Strategy
Kazuaki Oda
Nagoya University Mathematics School, 23 April (Fri), 2021

＜2021年度名古屋大学多元数理科学科講義予定（織田）＞
『グローバルなテクノロジー時代の理系のキャリアと可能性について』
(1) 4/16（金）グローバルなテクノロジー時代をどのように読み解くか？
(2) 4/23（金）新規事業（スタートアップ）の戦略論
(3) 4/28（水）科学やテクノロジーが変える未来
(4) 4/30（金）理系を生かすキャリアとビジネススキル
(5) 5/7（金）社会課題とイノベーションの生まれる仕組み
"Science-major Person's Career and Potentials
in the Global Technology Era“
(1) How to understand a global technology era
(2) Startup Strategy
(3) Science and technologies can change the future
(4) How to use science-talents in their careers and business skills
(5) Social issues and the process of innovation

<Today’s Topics>
(1)Why did they succeed?
(2)Environmental Analysis
(Macro Economics)
(3)Corporate Strategy by a “phase”
(4)Market Size and Finance
“Startup Strategy”
Nagoya University Mathematics School
(2021)
Kazuaki ODA

Many companies failed every year.
But some of them succeeded.
Why did they succeed?

?

They were lucky!

“They were lucky!” means
They were
in a good PLACE in good TIME.

Every business has its own life cycle
Company
Scale
Time Scale
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）

（Ⅱ）（Ⅲ）（Ⅳ）
Business
Size
Creation
Every “market” has its own life cycle and
a company’s growth heavily depends on it!
Time Scale
Growth Mature Declining
（Ⅰ）

The growth curve of Internet market
Business
Size （Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale
1990 1998 2015
(Example)

(Question)
Which Country Do You Want to Invest?
(1) China
(2) India
(3) Indonesia
(4) Japan
(5) USA

14
GDP ranking (bil. USD)（2019, IMF）
1 USA 21,433
3 Japan 5,080
4 Germany 3,862
6 UK 2,831
2 China 14,732
7 France 2,716
8 Italy 2,001
9 Brazil 1,839
10 Canada 1,736
5 India 2,869

GDP Projections by country(2050) bil. USD
Goldman Sachs(2007) PwC(2017) The Economist (2015)
China 70,710 China 49,853 China 105,916
USA 38,514 USA 34,102 USA 70,913
India 37,668 India 28,021 India 63,842
Brazil 11,366 Indonesia 7,275 Indonesia 15,432
Mexico 9,340 Japan 6,779 Japan 11,367
Russia 8,580 Brazil 6,532 Germany 11,334
Indonesia 7,010 Germany 6,138 Brazil 10,334
Japan 6,677 Mexico 5,563 Mexico 9,826
UK 5,133 UK 5,369 UK 9,812
Germany 5,024 Russia 5,127 France 9,671

World Population Ranking（2019 => 2050）
1 China 1,434
2 India 1,366
4 Indonesia 271
6 Brazil 211
3 USA 329
7 Nigeria 201
8 Bangladesh 163
9 Russia 146
10 Mexico 128
5 Pakistan 217
1 India 1,639
2 China 1,402
4 USA 379
6 Indonesia 331
3 Nigeria 401
7 Brazil 229
8 Ethiopia 205
9 DR Congo 194
10 Bangladesh 193
5 Pakistan 338
United Nation “World Population Prospects 2019 （million）
<2019> <2050>

（2000-2023:IMF, 2018, 2050estimates:PwC 2017）
GDP(PPP) of Japan, Indonesia, China, India, US

（2000-2023:IMF, 2018, 2050estimates:PwC 2017）
Japan
US
China
India
Indonesia
GDP(PPP) of
Japan, Indonesia, China, India, US

19
Nominal GDP per capita ranking (USD)（2019, IMF）
1 Luxembourg 115,839
11 Australia 54,348
18 Germany 46,473
30 Korea 31,846
7 USA 65,254
65 Russia 11,601
69 China 10,522
129 Vietnam 3,416
142 India 2,098
25 Japan 40,256

20
(Ex. Price comparison)
It’s 5 USD to have those in Bandung (Indonesia)

21
(Ex. Price comparison)
It’s 4 USD to have those in Da Nang (Vietnam)

Company’s Business Life Cycle
Company
Value
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale

What the Market Growth Curve means?
Market
Scale
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale

What happens during Phase Ⅰ?
Market
Scale
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale

・Process of creating ”0 to 1”
・Can’t figure out what would happen
・Believe your future to survive
・Based on creativity
・Some criticism from your family and friends
・Creating new service or product.
・HARD work during this phase!
Features of Phase Ⅰ

What happens during Phase Ⅱ?
Market
Scale
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale

・Process of developing “1 to 10”
・Demand ＞ Supply（certain price）
・You can figure out your company’s future
・Others start to realize the attractive market
・In the hard competition for share
・Being well organized and systemized is the key to grow
・Speed and marketing are the keys of success
Features of Phase Ⅱ

What happens during Phase Ⅲ?
Market
Scale
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale

・Process of developing “10 to 20”
・Demand＝Supply（equilibrium price ）
・Attractiveness of the market is apparent
・Hard competition with competitors for price and quality
・Being well organized is getting more important
・Profit rate is decreasing
・Some companies go bankrupt
Features of Phase Ⅲ

What happens during Phase Ⅳ?
Market
Scale
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time Scale

・Process of declining from 20 to 15
・Matured market
・Supply ＞＞ Demand（Price decreasing）
・Peak for M&A（magical number “3”)
・Profit rate is the lowest
Features of Phase Ⅳ

(Question)
The odds of winning a lottery is 10%
You draw 10% lotteries 10 times.
Then what is the probability
that you win at least once till the end?
(1) 25%
(2) 45%
(3) 65%
(4) 85%

(1) 25%
(2) 45%
(3) 65%
(4) 85%
(Question)
You draw the lotteries 10 times.
Then what is the probability
that you win at least once till the end?

Mathematics tells us…
0
20
40
60
80
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Probability(%) of winning in
1/10 lottery with N times trial
Trial(N) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Probability(%) 10 19 27 34 41 47 52 57 61 65 69 72 75 77 79 81 83 85 86 88

Where Is It in Company Growth Curve?
Company
Value
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time
Potential Size
Present Size
Present Stage Matured Point

Where Is It in Company Growth Curve?
Company
Value
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time
Potential Size
Present Size
Present Stage Matured Point
<=Market Size * Company’s Share

What is your TARGET market?

・Can You See the Market?
－Size Is Big Enough?
－Know How to Win?
－Qualified to Be A Winner?
・You Have A Good Team?
* Impossible to Have All Functions in YOU
Points!

・Can You See the Market?
－Size Is Big Enough?
－Know How to Win?
－Qualified to Be A Winner?
・You Have A Good Team?
* Impossible to Have All Functions in YOU
Important Points of STRATEGY

Time
Company
Value
$50M
$10M
$1B
$300M
Series A
Series C、D、、
IPO (Initial Public Offering )
Secondary Public Offering
Series B
Fund Raising ( by Issuing Stocks)
Pre IPO Growth Post IPO Growth

Time
$50M
$10M
$1B
$300M
Series A
Series C、D、、
IPO (Initial Public Offering )
Secondary Public Offerin
Series B
Fund Raising ( by Issuing Stocks)
IRR(Internal Rate of Return, 内部収益率)
Company
Value

Time
Cash Position
“Cash Flow Management” is important!
＜Key!(重要)＞
* Burn Rate(現金の減る速度)
Fundraising

Time
Cash Position
Typical “Cash Position” of Growing Company
Series A
Series B
Series C
Fundraising

Only one KPI to survive is
“CASH POSITION”
(現預金残高)
≠Current Floating Asset(流動資産)

<facebook>
http://facebook.com/kazuaki.oda (follow)
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<Linkedin>
https://www.linkedin.com/in/kazuaki-oda
Kazuaki ODA（織田一彰）
facebook Linkedin

Startup strategy

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