3 Phases of a Startup -Standup -Startup -Scale Up Mannheim university Fundraising, How to find a business angel Hype Cycle & Geoffrey Moore Crossing the Chasm From Ideation to MVP and First real product Team Building Fundraising Startup Books

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HOWTO START A START-UP?
MICHAEL ALTENDORF, MANNHEIM MBA SCHOOL
JANUARY 2021

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TABLE OF CONTENTS
• About Adtelligence
• StandUp
• Why do you want to start?
• How to create a team
• How to find your first angel investor
• How to build a minimum viable product
• Define your business model
• StartUp
• Go to market & customer development
• Create a unique product
• Verticalize and position right
• ScaleUp
• Raise Venture Capital
• How to scale
• Company Stages
• Exit
• Recommended Readings

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ABOUT US
 Adtelligence provides high-end software
solutions for analytics, personalization and
automation in marketing and sales
 Adtelligence was founded in Germany in 2009
by former SAP executives together with
investors
 Over 100 projects implemented withAI, Big
Data, PredictiveAnalytics and personalization
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AWARDS PARTNER
 All solutions are
GDPR/DSGVO compliant
and are regularly tested
for data protection and
security

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GERMAN SAVING
BANK GROUP
COOPERATIVE
FINANCIAL GROUP
RETAIL BANKS
ACROSS EUROPE
INSURANCES &
FINANCIAL SERVICES
TELCO
REFERENCES

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SALES & CUSTOMER INTELLIGENCE
AUTOMATE PROCESSES, IMPROVE CUSTOMER
ACTIVATIONCROSS- & UPSELL
with the Customer Data Platform
and Marketing Automation solution
SOFTWARE PLATFORM
PERSONALIZATION
GENERATE LEADS AND
WIN NEW CUSTOMERS
through intelligent websites
that learn what the customer likes and optimizes for the best
conversion rates
CUSTOMER EXPERIENCE MGMT
& PERSONALISIERUNG
MASTERMIND AI
FRAMEWORK

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BUSINESSCASESWEADDRESS
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CONTRACT
RENEWALS
ACTIVATE
YOURCUSTOMERS
BOOST
CUSTOMERACQUISITION
UP- & CROSSSELL
THE NEXT BEST PRODUCT
INCREASE
CALLCENTER EFFICIENCY
PREDICT FUTURESALES &
OPTIMIZE SUPPLYCHAIN

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STAND UP
FROM IDEA TO MINIMAL VIABLE PRODUCT

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FROM IDEATO PRODUCT
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NO…
…BETTER…
…MAYBE…
…YES

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IDEA - IT ALL STARTSWITHTHE IDEA
• Do I have a good idea?
• What is my vision the world in ~25 years?
• Can I make an impact?
• Am I good enough to be an entrepreneur?
• I have an idea but can not build not sell the product, what should I
do?
• How can I find a technical founder or a real team?
• You can I survive without salary?
• Why should somebody invest in my idea?
• Where do I get the money for my company from?
• Who gives me the money?
• How do I get to know angel investors?
• What kind of questions do the investors ask?
• What is a “good” idea and business plan?
• (…)
 WHAT QUESTIONS DOYOU HAVE?
Source: Computer History Museum, <1980
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YOU STARTWITH MANY OPEN QUESTIONS

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YOUR BUSINESS IS
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SOURCE: http://www.businessinsider.com/fatal-assumptions-about-startups-that-can-kill-your-small-business-2010-11?IR=T

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THE MINIMUMVIABLE PRODUCT
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SOURCE: http://blog.deming.org/2014/11/minimal-viable-product/
CONCEPT BY STEVE BLANK / ERIC RIES (The Lean Startup)

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THE BUSINESS MODEL
CREATE A BUSINESS IN 10 MINUTES AND START IMPROVING IT!
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Source: A. Osterwalder Business Model Design Template

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BUSINESS PLAN – AREYOUVENTURE READY?
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• Create a financial plan in two ways in excel
• Bottom Up – how to get the first 10 clients
• Top Down – how much money do we make with
1000+ clients
• From where to you get the market size and figures?
• From market analysts
• From your own analysis
• Take pricing data from competitors or similar
companies
• Calculate 3 Scenarios (+/+/=)
 if you have a negative outcome think about your
business model
• Find out if you can raise money with such a plan?
(reach 10M+ revenues in 3-5 years)

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“No Business Plan Survives First
Contact With Customers!
Start with a business model,
not with a plan!”
Source: http://blogs.wsj.com/accelerators/2012/11/26/start-with-a-business-model-not-a-business-plan/
STEVE BLANK SEES IT DIFFERENT
THE STARTUP GURU THINKS THAT YOU DO NOT NEED A BUSINESS PLAN? NO!

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TEAM - HOWTO BUILD A KILLERTEAM?
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 Go to all startup events and many conferences to get how it works
and build a network
 Tell everybody that you have an idea and want to start a business
 In emergency case start alone, people will follow along the way if
your idea is good (this can take years)
 Experienced people help, but smart & fast executers and learners
help more in a startup team
 Combination of experience and fresh minds who can work 100h a
week
 You do not need an MBA to start a company
 Minimum 2 people for the start: One who builds the product, one
who sells the product
 3-4 founders are better but hard to find 4 equally strong founders
who also stay 5 years, often one leaves after one year or needs to
leave
The ideal team

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FUNDING - WHERE DO I GET THE MONEY TO START?
TYPICAL SOURCES FOR FIRST ANGEL MONEY:
 Own Money
 Family, Friends & Fools
 Business Angel (Network)
 Incubator, Accelerator programs
 Bank Loan
 Seed Funds
 PREFER SMART MONEY INTHE BEGINNING!
 Venture Capitalists most times didn't had an own company with
problems you will get
 Prefer Business Angels with experience and a lot of spare time
 If you can not raise money with a business plan find some mentors to
understand how to reach the next level
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How can I raise 100.000€ with a ugly website like this?
 The investor (Andy von Bechtholsheim) understood the potential!

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FROM CONCEPTTO A SOLUTIONTAKESTIME
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Idea 2010 V1 2012 V2 2016/2017

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THE NEXT LEVEL – STARTUP
FROM THE MVP TO THE FIRST 10 CUSTOMERS AND 6 DIGIT REVENUES

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ITERATEYOUR MODEL UNTILYOU REACH PRODUCT MARKET FIT
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…and go to market with the minimum viable product!

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SALES IS PURE EXECUTION & REPETITION
• Week 1
Define a beachhead where to enter the market
Ping 200 people on Linkedin and Xing
and get 10 meetings! (5% CTR)
• Week 2
Define a new target customer
Define a better package and better pricing
• Week 3
Start again…
Define the pricing again and check value based pricing
for the first clients
Hint: the first 5 clients you have to buy = no money or
huge discounts  that is why a freemium model may work first in early markets
• After one year
Market clearer but iterations every - 4 weeks to improve pitch and feature set
• After 5 years: Every 3-6 months iteration cycles
HOWTO FINDYOUR FIRST CUSTOMERS
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FROMTHE MVPTO A REAL PRODUCT
SOURCE: http://www.theinnovativemanager.com/wp-content/uploads/2014/10/whole-product-planning-crossing-the-chasm.jpg?a4c06d
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THE MARKET - NEW MARKETSARE DIFFERENT
You need to decide for a market! Existing markets are easier to start with but harder to reach monopoly
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 Do not burn the money through before the market starts taking off!
TIMING, timing, timing
… and if you are too early enough funding and paitence to wait

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CHECK OUTTECHTRENDS
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Each newTechnology
is just technology but not a product
–
Essential is to find the right use cases and
product market fit

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CROSSINGTHE CHASM
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GEOFFREYA. MOORE
Crossing the Chasm / Crossing the Chasm: Marketing and Selling Disruptive
Products to Mainstream Customers

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THE MARKET –THETECHNOLOGYADOPTION LIFECYCLE MODEL
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NEW MARKETSCANTAKE FOREVERTOTAKE OFF
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THE BOWLING ALLEY
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FOCUSONTHE RIGHTVERTICALAND CUSTOMERWHO CAN PAY FORTHE PRODUCT!

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TALC vs HYPE CYCLE
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IFYOU HAVE 2BN MARKETING BUDGET –YOU SKIPTHE CHASM
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SOURCE: http://de.slideshare.net/misteroo/apple-study-8-easy-steps-to-beat-microsoft-and-google

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SCALE UP
HOW TO REACH 7-8 DIGIT REVENUES
SCALE UP
FROM GROWTH TO EXIT OR IPO

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RAISINGVENTURE CAPITAL
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Phase Who invests? €€€ Volume How much % do you
give a way
Success Factors
IDEA
HYPTOTHESIS
Nobody 0 0 Experience and Background
ORIENTATION Fools 0 0 Meet the right People
PLANNING Fools or apply for an accelerator 25.000 € 5-10% Background - Who can write a clean plan and
make a good calculation - only serial
entrepreneurs in Silicon Valley are getting
money for Ideas
FOUNDING /
BUSINESS PLAN
Family & Friends, BA with Experience in
this Segment
0 - 1 Mio. 10-50%, avg 25.1% Own funds, persuasive power, can you get VC
with your Plan and your Idea, can you realize
your Plan
SEED / MVP Business Angel - prefer smart Money
with people from the industry
Up to 1M, but 50k -500k
average
25% How good is the Team and the prototype
STARTUP Business Angel or public seed funds Up to 1 M depending on
segment
10-20% Development, Financial Plan
EARLY STAGE HNWI, Business Angel with big money,
VC
Up to 10M € US funds, 1-5
M German
10-30% The right Contacts, Potential and Team
EXPANSION Top Tier VC’s & Corporate Investor 5-25 M € 25+% over 1-2 rounds Growth in Sales, Business Model (reoccurring
revenues)
LATE STAGE IPO, VC, PE, Buy Out funds,
Hedgefonds, etc.
Unlimited 25-75% (secondary for
early investors and
founders normal)
Growth in Sales, EBIT, Market Share

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WHAT KIND OF QUESTIONS DOTHE INVESTORSASK?
PRODUCT
• What is the Product Roadmap?
• What are you developing next, how
long will it take, and who are your
hires to develop it?
• How did you make the decisions
regarding the direction the product
is right now?
We want to understand your
decision making process and your
vision of the company.
This last point is extremely important.
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MARKET
• How big is the market and how will
it grow?
• What are the trends in the market
that make now the right time for
your product?
• If you're in a big enough market,
you can afford to make some
mistakes (which as startups you will
always do!).
• Who are your first customers? Are
they referenceable? What does your
pipeline look like?
COMPETITION
• Who are the competitors?
• What is your competitive advantage
and is it sustainable?
Hint: IP patents are not enough.

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WHAT KIND OF QUESTIONS DOTHE INVESTORSASK?
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TEAM
• What are your backgrounds, where
did you meet, and why are you the
right team to execute on this plan?
•
Who does what, and who else do
you need to hire to build out the
right team? Be lean with your costs.
•
No VC likes to see a company that is
spending extraneous money.
SCALABILITY
What are the barriers to growth?
There will always be some; be aware of
what they are. This could be from the
business model side or the technical
product side.
Within this there is also the issue of
customer acquisition strategy and cost.
 Finally, although we do not ask the
founder this question, we ask
ourselves:
In what ways doWE
as theVC investor provide
value to this particular
entrepreneur / team /
startup?

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HOWTO SCALE UP
Verne Harnish divides the topic in four key areas:
 PEOPLE - Attracting and keeping the right People
 Define your Core Values
 Act to those rules
 STRATEGY & VISION - Creating a truly differentiated Strategy
 Is your strategy good enough to attract many customers and
differentiates your from the competition
 EXECUTION - Driving flawless Execution
 Setting priorities and action plans
 Set KPI’s and measure
 Review and keep everybody in the loop
 Check the “Rockefeller Habits”
 CASH - Having plenty of Cash to weather the storms.
 Cash (-flow) is king
 Every decision affects revenue and profit
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Source: http://scaling4growth.com/wp-content/uploads/2015/10/Scaling-Up.pdf

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EXAMPLE: FACEBOOK INVESTMENT ROUNDS
90% of the value is created after the IPO! (PeterThiel)
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PRE-SEED SEED
EARLY
STAGE
GROWTH
LATE
STAGE
PRIVATE
EQUITY IPO

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THE EXIT
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• What is my company value?
• Revenues x Market Hype x Growth Rate x Competition = Exit
Value
• Ask an expert first before you sell and take an M&A advisors
in London, NY or silicon valley ion a later stage or a German
one in an earlier stage
• IPO IS NOT AN EXIT STRATEGY!
…as you stay with the company and you have a lock-up period
• Different exit options:
• Selling to a major corporate is best, but there are many other
which are ready to buy
• No need to sell all at once to make money: Private Equity is a
new key element in the chain. You raise further money and
already sell some shares (“secondary”)
• Stay with your company and somebody else becomes CEO
and your are in the advisory board (SAP…)
• Merger with competitor or US vendor to create a bigger
company

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RECOMMENDED READING
&VIDEO LECTURES

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INSIGHTS FROM REID HOFFMAN (Greylock, Linkedin)
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Rule #1: Look for disruptive change.
Rule #2: Aim big.
Rule #3: Build a network to magnify your company.
Rule #4: Plan for good luck and bad luck.
Rule #5: Maintain flexible persistence.
Rule #6: Launch early enough that you are embarrassed by your first product release with
the minimum viable product
Rule #7: Aspire, but don’t drink your own Kool-Aid (Very sweet US lemonade/sugar drink).
Rule #8: Having a great product is important but having great product
distribution is more important.
Rule #9: Pay close attention to culture and hires from the very beginning.
Rule #10: Rules of entrepreneurship are guidelines, not laws of nature

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RECOMMENDED READINGS
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Eric Ries
The Lean Startup
(how to bootstrap as long as
possible)
Guy Kawasaki
The Art of the Start
Randy Komisar
The Monk and the Riddle
(how to come from a rough idea to a real
business & first product

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RECOMMENDED READINGS
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Alexander Osterwalder
(Create a Business Model)
Business Model Generation -
David S Kidder
The Startup Playbook
How to Start a Startup
startupclass.samaltman.com/
(15 lectures from Stanford)
Videos of the lecture
http://www.youtube.com/channel/UCxIJaCM
EptJjxmmQgGFsnCg

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RECOMMENDED READINGS
Marc Benioff
Behind the Cloud
The Challenger Sale: How To Take Control
of the Customer Conversation
The Challenger Sale: How To Take Control
of the Customer Conversation

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RECOMMENDED READINGS
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On entrepreneurship,
how to take risks
On how to change the world Principles: Life and Work

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RECOMMENDED READINGS
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On company culture How to grow a cloud
business
On how to start

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RECOMMENDED READINGS
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Peter Thiel
From Zero to One
Steve Blank
The Startup Manual &
4 steps to epiphany
(Go to market and Productization)
Ben Horowitz
The hard thing about
hard things
(more for existing
companies)

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ONLINE MATERIAL
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The comprehensive List
http://steveblank.com/tools-and-blogs-for-entrepreneurs/
Mark Suster’s famous blog
on entrepreneurship and
VC
https://bothsidesofthetable.com

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RECOMMENDED READINGS
 How to pitch to a VC - Reid Hofmann, founder of Linkedin and
Managing partner of Greylock describes his own pitch, how he
framed the business to have a real competitive edge and a
unique selling proposition
 How to define your market right and how to show to investors
that you are NOW a good investment
 Timing is everything!
 A night long reading:
http://reidhoffman.org/linkedin-pitch-to-greylock/
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Source: http://reidhoffman.org/linkedin-pitch-to-greylock/

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FORTHE START: BWCON BUSINESS PLAN HANDBOOK
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Download:
http://www.cyberone.de/cms/fileadmin/download_files/Businesspla
nhandbuch.pdf

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MOORE‘S MODEL FOR HIGHTECH MARKETING
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YOURTARGET –THETORNADO
 WORLDWIDE SALES AND EXPANSION + NETWORK EFFECT
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SOURCE: Christensen, Clayton. The Innovator’s Dilemma.
Harvard, MA: Harvard Business School Publishing Corporation, 1997

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4 STEPSTO EPIPHANY &THE BUSINESS MODEL CANVAS
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THANKYOU!
MICHAEL ALTENDORF
CEO & CO-FOUNDER
ma@adtellligence.com
www.adtelligence.com
ADTELLIGENCE GMBH
Philosophenplatz 1
68165 Mannheim
Germany
www.adtelligence.com