Startup

Startup roadmap
Why? How? What?
Prof. János Vecsenyi

Janos.vecsenyi@uni-corvinus.hu
Contents
1. Why do you want to start a business?

2. Idea generation
3. The buinsess concept
4. The viability test
5. Risk management
6. Building your entrepereneurial team
7. Product development
8. Financing and Pitching
9. Business Plan
10. Foundation
11. Lean startup: Accelerating market entry
12. Market launch
13. Closing remarks
14. References
Startup Roadmap © J. Vecsenyi, 2014. 2

Even though you may be a born
entrepreneur, you can still learn about
entrepreneurship.
Even though you may not be a born

entrepreneur, you can still learn to become
one…. If you want.
Even if you don’t want to become an

entrepreneur now, you can still be a good
person.
If you want to cook, all you have to do is read
cookbooks and practice cooking.
The same can be said for starting a new
venture.
Having instincts is simply a plus.
INGREDIENTS

The driving forces of a new business
Competency, Opportunity
technology driven
driven
Entrepreneurial Market
team opportunity
External / Internal
resources
Source: Timmons (1990) New

venture creation (3rd edition)

A startup roadmap
Idea Business Product

Entrepreneurial Company Market
generation concept development & Financing
team formation foundation entry
definition design
Lean
startup

Why?
WHY DO YOU WANT TO START A
BUSINESS?
Why does anyone want to start a business?
Opportunity Independence Unemployement Fame

It is better to be a job creator than a job seeker
Generation change To become rich To make a living

What kind of business would I like to have?
Scalable &
Provides a sellable Temporary
Living Project
A business built on
A business that satisfies innovation based A temporary business to
local needs with typically products for global utilize a relatively short
traditional products and markets with scalablility window of opportunity
provides a moderate and high financing needs. with traditional or
living for its founder and Once turned into a innovative products to
its employees. It has structured company, it gain short term profit as
moderate growth can function without its soon as possible.
potential and cannot founder and can be sold E.g,. selling an invention
operate without its off, like most Innovation or a seasonal service
founder in the long run, Driven Entreprises
like most SMEs. (IDEs). Source: Timmons (2003)
E.g., Pop&Mom’s E.g., Prezi, Solvo, Ustream
Kitchen, T.J. The Indextools
plumber Startup Roadmap © J. Vecsenyi, 2014.
9
What kind of business do we want to create?
SME Entrepreneurship IDE Entrepreneurship
• Initial focus on addressing local markets • Focus on global/regional markets.
only. • The company is based on some sort of
• Innovation is not necessary to SME innovation (tech, business process,
establishment and growth, nor is model) where they can go global or across
competitive advantage . regions.
• “Non-tradable jobs”—jobs that must be • “Tradable jobs”—jobs that do not have to
performed locally (e.g. restaurants, dry be performed locally.
cleaners, and service industry). • More diverse ownership base as the focus
• Most often family businesses or of founders is on high growth and creating
businesses with very little external company market value.
capital. • The company starts by losing money, but if
• People who start them seek to maintain successful will have exponential growth.
control, not to create high growth. The Requires investment.
company typically grows at a linear rate. • When you put money into the company,
• When you put money into the company, the revenue/cash flow/jobs numbers do
the system (revenue, cash flow, jobs, not respond quickly.
etc.) will respond quickly in a positive
Source: Aulet (2013)
manner.

Where do your venture want to fit?
High
Gazelles Tigers
entrepreneurship and change
Ability and attitude to
Fast growing. high Dynamic, large,

potential new ventures expanding ventures
Ants Dinosaurs
Traditional Traditional, large,

small ventures bureaucratic ventures
Low Business and operational experience High
Source: Vecsenyi (1995)

A startup is a human institution designed
to deliver a new product or service under
conditions of extreme uncertainty.
(Ries, 2010)
A startup enterprise is a baby gazelle

venture with scalable market potential
combined with growth ambition and
global vision of the entrepreneur(s).
(Vecsenyi, 2013)

Do I want to be an entrepreneur?
Aspirations, motivations
Why do I want to become
an entrepreneur?
Commitment Lifestyle/ attitude

How much I want, How would
dare? ? I like to live?
Connections Abilities
Whom do I know, Who am I?
who knows Competenecies
me? What do I know?
Before you start your business, make your list….
What can I gain if I What would I regret

start... if I don’t start …
What would I lose,
Which is stronger? if I start…
Pros Cons

What did I find?
THE IDEA GENERATION

The business idea
The great match

Market fit
Product fit
From an idea to a business opportunity
(unique, new) product/service for a

The idea certain or potential need, if
+
Market + there is repeatable, growing buying
opportunity potential and
+
+ capable to create profit
Business
+ socially acceptable
opportunity
+ worth to start a new venture on it

Is your VP fit and sexy?
VALUE
PROPOSITION
NEED
Is your offer relevant, unique, credible?

Value proposition: what do I want to offer?
Product Service Agency

Resource driven entrepreneurship
Invention/ competence look for market opportunity
Inventing heath Covering
protection household
material appliances
WHERE
can it be used?
Invention
Idea
WHO
could use it?
Competence
WHY
Would anyone
Accountancy use it? Accounting
competence services
Opportunity driven entrepreneurship
Recognized need looks for solution
Unsatisfaction
Frames for the paintings
Shortage, Invention
idea
problem
New need
Competence
Hidden need
Cordon for the qeue
The innovative idea
• New combination (different, better, different way on
the target market)
• Innovation= invention * commercialization
5 + 1 forms of innovation of
1. new goods
2. new methods of production
3. the opening of new markets
4. the conquest of new sources of
supply
5. the carrying out of a new
organization of any industry
( Joseph Schumpeter)
6. New business model (making

money in a different way)

What kind of idea?

In which industry is it worth starting your startup?
Traditional industries Creative industries
• Established ground rules • No ground rules
• Well known products, • New, mostly knowledge
services based creative products
• Existing business model • Mostly new business model
• Low groth potential • High growth potential
• Forseeable market • Very uncertain market
• Market niche for new • The industry niche
innovations
Startups can be
launched in all
industries
Sources of ideas for new ventures:
• Determine customer wants/needs

• Follow previous job(s) experience
• Improve products and services already on
the market
• Be open on foreign trips
• Elicit suggestions from channel members
• Check the Patent Office files
• Conduct your own research & development
• Surf on internet

Idea-generation tools
1. Searching for shortage, dissatisfaction
 Observing domestic and foreign markets (open eyes)
 Idea notebook
 Brain storming
 Read newspapers, leaflets, brochures
 Internet surfing
2. Recognizing mistakes, failures
 From failure to the solution
 Penicillin, Teflon, Viagra
3. Finding market niche, blue ocean
 Where is a need for new invention with low
competition
 iPod, iPhone, Body Shop
4. Studying trends
 Political, economic, social, ecological, legal trends
 Industry reports, trends

Can we make business out of it?
THE BUSINESS CONCEPT

Conscious preparation for starting a new venture
www.startmybusiness123.com
Value
Market need
proposition
Risk and Decision on

Entrepreneurial Strategy and
Operation strength the start
team action plan
management
Business model Financial model
Defining Testing Deciding

the business the viability of on starting the
concept the business new venture
concept

Startup Business Concept Map
FOR WHOM?
Market need
Solution, offer
WHY?
WHAT?
Market Value
needs proposition
Entrepreneurial
WITH WHOM?
Opereations
Entrepreneurial
HOW?
team
Operations
team
Business model
FROM WHAT?
HOW MUCH?
Financial model
HOW MUCH?
FOR WHAT?
Business model Financial model

Startup Business Concept Map
Customer Market size and Competitive Positioning,
FOR WHOM?
Market need
segments scalability advantage, pricing
Solution,
WHY?
WHAT?
offer
Uniquness
THE NEED, PROBLEM VALUE PROPOSITION

OF THE CUSTOMERS (PRODUCT/SERVICE )
Distinctive Basic Key internal External
Entrepreneurial
WITH WHOM?
competencies conditions people partners,
Operations
HOW?
CSFs suppliers
team
CORE FUNCTIONS, FOUNDERS/OWNERS/
COMPETENCIES OWNER MANAGERS
Business model
Mission, Sales strategy Financing

FROM WHAT?
Financing
HOW MUCH?
Financial model
HOW MUCH?
vision and channels needs sources and
FOR WHAT?
values methods
REVENUE STREAMS COST STRUCTURE

Road on the Startup Business Concept Map
Recognized Recognized
need Will we have solution
market?
Will we have
product?
Will we have revenue?
3. OPERATION 4.TEAM
Will we have
the right
people?
How much will it
cost?
You may want to repeat

Will the revenue be the circle whenever you
enough? have new data
On-line support software

1. Why is there a need and by whom?
Market need
WHY?
FOR WHOM?
Customer Market size and
segments scalability
THE NEED, PROBLEM

OF THE CUSTOMERS
a) What is the need, the problem and

why does this need exist?
b) Who are our customers and what are
their specific needs?
c) What is the size of the market and its
growth potential?
The need, the problem
Dissatisfaction with current Traditional bakery, fast
Dissatisfaction offers regarding quality, style, food, mobile application
price, availability, assortment
Locally not available or Drinking water, tapwater,

Shortage, achievable offer, solution alternative energy
problem
Unmet need Mobile phone, alternative

New need energy
These are issues and problems Smart phone, Rubik’s cube

Hidden need that customers face but have
not yet realised

Hierarchy of Your Customers’Needs
Psycho-social benefits
Customers’ sought from any
Emotional
Values benefits company
Functional benefits
Functional benefits sought from any
company
Product attributes What we build

into the offer
To look for functional and emotional benefits vs. just product

attributes or features
Copyright © 2007 Impact Planning Group LLC.
What do your customers need?
Granma’s telephone example
Why is it important? Granma’s
Family ties telephone?
Why whould she like it?

Customers’ Easy to use and pleasant
Values Emotional experience
benefits
How can we make it
for her?
• Big, sharp screen How?
Functional benefits
• Big keyboard
• Fast dialing
• Big icons
Product attributes • Few functions
• High voice
Copyright © 2007 Impact Planning Group LLC.
• Wireless
Who would be our customers?
According to B2C
decison making
B2B
B2A
According to Segments:
Groups with
behavior Which is the
similar behavior ideal spaghetti
sauce?
pattern
According to Target group:
desirability the desirable and
reachable segments
Who would be our customers?
Buyer (Distributor) Customer Consumer / end user
who purchases it who buys it who eats it
Seller (Factory) who

manufactures the chocolate
Paying customer
Free user
Primary income sources Secondary income sources
Seller
Getting to know your customer
Who would make purchase decision? Focus on target market,
Who: segments: the industry, location, buying behavior, direct and
indirect competitors, customer profile
From the customer’s perspective, the specific reasons the customer

Why: purchases your product. Understand primary reason or create a
reason
Exactly what are you selling from your perspective? Factors that
What:
you try to sell and you should emphasize
Time of the day, seasonality, frequency. Adjust to existing habits

When:
Location, location, location. Focus on habits of your customer, offer

Where:
your product that is convenient to the customer
Purchasing for cash, credit, barter? Customer’s preferred

How:
purchasing method, technology.
Source: E. Solymossy, 2007 Startup Roadmap © J. Vecsenyi, 2014. 40
Market size
Total
Available TAM: population of 30-
Market 50 age group
Served SAM: Population of 30-50

Available age group with diabetes 2
Market
IAM: Population of 30-50 age
Ideal group with diabetes 2 and
smart phone
Available
Market SOM: Population of 30-50 age
group with diabetes 2 and
smart phone,
ready to change lifestyle
Serviceable
Obtainable
Market

Scalability potential
Window of opportunity Window of expansion

• Growing market need • Expanding market reach

2. What do you want to sell, what is unique in it?
“People don’t buy what you do; people buy why you do it.” Simon Sinek
a) What is your value proposition product/

service you offer?
b) What is unique about your product, the
competitive advantage your customers
would buy?
c) Where will you position your offer on
the value-price range?
What do you want to offer?
Same
WHAT?
New Special
UNIQUENESS & COMPETIVE ADVANTAGES

perceived by customers

Who would be your competitors and how can you have
competitive advantage?
Direct Indirect Substitute

ACTUAL
POTENTIAL
What and how do they offer?

Where do we want to be better, different?
© 2007 Impact Planning Group LLC.

Positioning
Price/
Price value
High
end
Low
end Mass Medium Premium
Quality/
Value
3. What are the preconditions and what would be your core and
distinctive competencies to start and operate?
a) What core competencies do you have to have to provide your

Value Proposition?What do you want to do on your own and
what will be outsourced?
b) What are your distinctive competencies and Critical Success
Factors (CSFs) which enable you to provide competitive
advantages?
c) What are the basic legal, official, physical, human conditions to
start your operation?
How do you want to create value?
SAME
AS OTHERS
COMPETETIVE COMPETENCIES to
provide competetive advantages
HOW? BETTER,
THAN OTHERS
DIFFERENT
THAN OTHERS

Operational competencies
Creating Value Conditions to start Creating competitive

proposition and operate advantage
Core Basic Distinctive

competencies conditions competencies
• Development • Legal condition • Human
• „Core activity” • Official licences • Phisical
• Marketing and sales • Phisical and • Economic
• Finance equipment • Technological
• Leadership and conditions • Marketing
management • Legal

Core functions, core competencies
Core functions and competencies to create and capture

value
 Development
 Production / operations
 Marketing and sales
 Financial management
 Leadership and business administration
 Info-communication management

Critical Success Factors(CSFs)
CSFs are those factors which enables a business to be successful in a
particular industry and make the business capable to win the
competition. These are:
• Human CSFs: special knowledge or skills (e.g., an outstanding chef, PhD,
world class designer, a great team)
• Phisical CSFs: manufacturing, logistical capacity, machines, equipments,
location, sourcing reach, distribution channel (e.g., special, unique machine,
equipment, facility, App store, iTunes)
• Business CSFs: access to resources, economy of sale, economy of
distribution
• Technological CSFs: unique or proprietary technology, special method,
process, IT system
• Marketing CSFs: Innovation, customer intimacy, operational excellence
• Legal CSFs: patents, copyrights, franchises

Essential conditions
Essential conditions are those conditions which

are required by law or basics for operations
 Legal condition: Corporation, operational
licenses, opening a bank account
 Official authorization: marketing authorization,

operating permit, education, degree
 Technical, personal, physical, conditions:

facilities, tools and equipment (owned, rent)

4. Who would make it happen?
Key internal External partners,
people suppliers
FOUNDERS/OWNERS/
OWNER MANAGERS
a) Who are and will be the owners?

b) Who would we work with in the business,
who would be the key managers and
associates?
c) Who will be the external partners and
suppliers?
Startup Roadmap © J. Vecsenyi, 2014.
53
Creating an entrepreneurial team
Self anaysis Corporations Team

• Purposes • Owner, co- building
• Abilities owners • Goals
• Competencies • Key associates • Roles
• Connections • External • Processes
• Experiences partners, • Interpersonal
suppliers relationship

Roles and responsibilities in the new venture
Required, but
outsourceable
Suppliers competencies e.g.,
accountant, lawyer,
External patent agent, designer,
programmer
contributors
Subcontractors Advisory board
Employees
Key managers Key personnel
Owners Providing core

competencies
Board of
directors
Complementary
competencies,
Founder resources
personalities

5. What would be the sources of revenue and
how would we get it?
a) What will be the sources of revenue,

what is the way of creating and
capturing value (the business model)?
b) Why do we want run the business?
c) How would we want to acquire revenue
by marketing and sales?

Sources of revenue
Asset sale Usage fee Renting fee
Leasing fee License fee Lending fee
Advertising Subscription Brokerage

The business model
Creating and capturing value
1. The story: For whom,
why, how do you create
value with what?
2. The value chain: How do
you create, capture
value?
3. The money making: The
revenue stream, the cost
structure, the profit, the
financing need, return?

The business model
The story
What are we doing for whom and why would anyone pay?
Printing and Collection and User-friendly,

copying distribution of personalized,
services for job offers via beautiful
customers and the Internet everyday IC
businesses objects
Copy General Profession.hu Apple

Sample revenue generation/business models
• Asset sale • Online auction business model
• Auction business model • Online content
• All-in-one business model • Premium business model
• Brick & click
• Professional open-source
• Collective business model
• Cutting out middleman • Retailer
• Direct sale • Pyramid scheme business
• Distribution model
• Franchise • Razor & blades
• Freemium • Servitization of products
• Low-cost carrier business model business model
• Loyalty business models
• Subscription business model
• Monopolistic business model
• Multi-level marketing • Premium
• Network effects business model • Wholesale

Mission, vison, values: your story.
Mission, reason for VISION, the state your
your busines exists business wants to reach
VALUES which govern your VALUE PROP, the product

business life you provide
STP marketing strategy
Evaluate
S Define market Create market
segments on set
Segmenting for the business segments
criteria
Evaluate the
T Selecting target
attractiveness of
Construct
market segment profile
Targeting the segments
P Develop
positioning
Develop and
implement
Review
Positioning performance
strategy marketing mix

6. How will the venture be profitable and how much money
do you need for start and where do you want to get it from?
Financing Financing
needs sources and
methods
COST STRUCTURE
a) What will be your costs and how much

profit you can make?
b) How much money do you need and for
what to start your business?
c) Where do you get financing for starting
your business?
How will you make money?
1. Who would pay, why, when and how
much? What would be the primary,
Revenues secondary sources of your income? How
much revenue will you calculate?
– Costs 2. For what, how much, when do you

need to spend?
3. How much profit can you make? When will

= Profit you break even?
Equity 4. How much capital do you need?
Return 5. When will your investment come back?

What dou you need money for?
• Seed money
• Operational expenses
• Personal expenses
• Safety reserve

Sources of entrepreneurial financing
Founder 3Fs
(Family, Fiends,
Bootstrapping Fools)
Private Business
investors Angels
Venture
Crowdfunding
Capital
Governamental
Bank loan
support

Are you sure it’s a good idea?
VIABILITY TEST

5+2 initial questions before starting a new
venture
1. Is there a real need/demand?
– Finding, creating, fulfilling market niche with the right product/service
(Marketable)
2. Can we win it with a competitive value proposition?
– Utilizing distinct competencies (better, special, different) (Competitive)
3. Can we do it?
– Launching, managing the new venture with the right people, technology
(method) and organization (Operational)
4. Is it worth doing?
– Making it profitable (Profitable)
5. Do I (we) really want it?
– Mobilizing competence and commitment of a socially responsible
private individual (Commitment and competence)
6. How much money do we need to start?
– Funds required to start the venture (Seed capital)
7. Do we have money for it?
– Getting the seed capital for launching and starting (Capitalization)
Is your business idea viable?
1. Would it be marketable?
2. Would it be competitive?
3. Would it be feasible?
4. Would it be profitable?
5. Would you and your team be
competent and committed?

A viable business concept
Marketable Comptetitive
with a competent and

committed team
Technically feasible Profitable

How can you improve your chances?
RISK MANAGEMENT
Startup decision analysis
Risk and Decision on

Strategy and
strength the start
action plan
management

Startup decision
Why will it be fine to start?
Later Why do we wait to start?
Why do we not start?

With whom do we want to make it?
ENTREPRENURIAL TEAM FORMATION

Creating the entrepreneurial team
Self Partners Team

assessment • Owner(s) • Goals
• Attitudes • Employees • Roles
• Abilities • Partners • Processes
• Competencies • Supplyers • Interpersonal
• Network relationship
• Experience

‘Must haves’ to become an entrepreneur?
Personality Competencies Network Experience

sense … knowledge
Whom we know
abilities skills Who knows me
motivations attitude
What I was What I learned, Those who What I

born with am able and can add consciously
want to apply value utilize
1. 2. 3. 4.
Know yourself and Strengthen your Cooperate with Learn from your
build on that strengths others! past!

Where is your strength?
Entrepreneur-entrepreneur Entrepreneur-manager
– Working on her/his business – Working in her/his business
– Oversees chaos – Makes order in chaos
– Likes to create business – Likes to operate business
Entrepreneur- expert
– Working in her/his business
– Executes things
Source: M. E. Gerber:
– Likes to deliver product The E Myth Revisited.
1995 78
Whom do you need for your technology start-up?
Hackers
(experts in
technology)
Business is not a one man show!
Hustlers Hipsters
(great in sales and (good in business
marketing) and management)

Early stage personal decisions
Startup is teamwork!
• Alone or with others?

Founder • With family, friends, associates?
• Investors?
• Employee, subcontractor, or owner?

Associates • Quality or availability and compensation?
• Individual contributor or manager?
• Whom I know, who knows me?

Partners • Who would be the right external partners?
• Who would be the right supplyers, subcontractors?

Key roles at the beginning
- Staffing, motivating,
accessing people - Product and technology
- Managing Finances development
- Executing business - Building knowledge
strategy management system
- Networking, PR CEO
COO CTO
CMO - Marketing
- Organization design
management
- IT systems
- Design
- Sourcing
- Sales management
- Logistics
The role of the board of directors
• Involvement of external people

• Mentoring
• Review operating and capital
budgets
• Develop longer-term strategic
plans for growth
• Support day-to-day activities
• Resolve conflicts
• Ensure proper use of assets
• Networking

What do you need to clarify with co-owners and
employees?
What are the key results, short, medium,

long term goals and the reasons for
Goals existance?
Conflict resolution
Planning
Roles & Who does what?

responsibilities
What are the core processes,
systems, action plans with
Processes deadlines?
What are the core values

Interpersonal relationship and grand rules?
Source: Beckhard, 1975

What the product will be like?
PRODUCT DEVELOPMENT & DESIGN

How to create product from the idea?
Source: http://www.innecs.com/html/Product%20development.html
How can we create value faster and better?
LEAN STARTUP
ACCELERATING MARKET PENETRATION
The lean startup methodology for product
development
• Learn from users • Coding
• Find conclusions • Designing
• Generate new Ideas • Prototype /
ideas Product building
Learn Build
Data Product
Measure • Check Quality

• Test with users
Source: www.kickstarter.com • Collect evaluations
• Raise statistics
Minimal viable product (MVP)
1. Helps entrepreneurs start the process of learning as quickly
as possible
2. The goal is to test fundamental business hypotheses
3. Only one hypothesis at a time
4. One total circle of Define, Measure, Learn at a time
5. Do not push perfection just show the prototype,

or the concept to the customer

Source: http://huitale.blogspot.hu/2010/12/

More startup failed because of
lack of customers than failures
of product development
Steve Blank

For what, how much, from where?
FINANCING

• Entrepreneurship:
Pursuing an opportunity beyond the
resources currently controlled / Howard
Stevenson
• Financing
Obtaining the missing resources

Why
For what
From where
How
When
you need
How much
money
at the early phase of your new business?

Financing categories
Equity financing Debt financing
Investing Crediting
• Creates ownership  No ownership but collateral
and/or tangible asset (property)
• Provides control and insight is required
• Equity increase expectations  Pre-defined time frame
• Occasionally dividend/ROI  Interest bearing
expectations  Payback obligation, requires
profit from operation (positive
• Net loss in case of insolvency EBITDA)
• Obtained from capital markets  Usually provided by banks, but
• Investor sometimes provides due to high associated risks is not
a preferred financing tool by
expertise too in startup phase commercial banks in startup
phase

What financing do you need for?
Growth capital
for expansion
Startup capital
for quick start
Seed capital
for development

What does the venture need the money for?
1. How much money do you have and how

much will you need for personal use?
2. How much money will you need to start your

business (start-up cost) ?
3. How much money will you need to stay in

business (operational expenses) ?

What does the venture need the money for?
Development, startup costs Operational expenses
Research and development cost, Licenses, Employee wages, Your living expenses,
permits, Fixtures, equipment, Installing Rent, Supplies, Utilities, Advertising,
insurance, Taxes, Maintenance,Delivery
fixtures, equipment, Beginning inventory / Transportation, Accounting fee,
costs, Rent deposit, Insurance fee, Membership fee,
Advertising for opening, Legal, professional Miscellaneous
fees, Unanticipated expenses
Living costs Reserve needs

Food, clothing, utilities, insurance, rent, Be more realistic with the projections
entertaintment, transportation, health Minimum of 3-6 months operative
care, etc. expenses or 10-30%

The Business model: Making money
Revenue 1. Who will pay for what, how

much, when?
– Cost 2. Spending on what, how much,

when?
3. How much, when will break-

Profit even be reached, positive cash
flow?
4. How much investment is

Investment needed?
Return
5. When will the investment return?

Break-even analysis
Money Realistic?
Enough? Profit
Minimum Price
Variable
cost
Fix cost
Fix
cost
Break- even point Volume/Time

Minimum volume

Sources of entrepreneurial financing
Founder(s) 3F
(Family,
Bootstrapping Fiends, Fools)
Private Business
investors Angels
Venture
Crowdfunding
Capital
Governmental
Bank loan
support

How can we get out from the Valley of Death?
Valley of Source:
Death
Return
1. When will the operation become profitable?

– Operating break-even
2. When will the return on investment reach its
break-even point?
– Duration of the Return on investment
3. What is the rate of investment compared to
other investments?
– ROI

Two pitches for two kinds of audience
• Investment pitch wants to

convince investors to give
money to your business
• Sales pitch wants to convince

customers to buy your
product/service

Elevator pitch for investors
5. What we offer to,
what we request
• 2-5 minutes pitch from the investor?
• Raises investor’s attention to
the new venture 4. Who are the
members of the
winning team?
3. What is the value

1. No nonsense for the market and
for the investor?
2. Easy to understand
3. Greed inducing 2. What is the
4. Irresistable solution/value
proposition?
1. What is the
problem/ need?
Preparation for the elevator pitch
1. Define your business concept

2. Define why do you want to pitch, what do you want to
accomplish
3. Formulate what do you want to tell and how
4. PRACTICE, PRACTICE, PRACTICE
5. Ask for feedback
6. Tell your pitch to the investors
10
7. Listen to the questions
8. Give brief answers to the questions. Be prepared for
expected questions
9. Be calm in taking the results
10. Assess your performance and be prepared for the next
pitch

How can you convince the investors?
CREATING YOUR BUSINESS PLAN

Why do you need a business plan?
WHY? FOR WHOM? HOW? WHAT?
Convincing For the Systematic Viable

profound founders, for thinking using STARTUP BUSINESS
arguments 3F investors Self confident
CONCEPT
and business www.startmybusines Profound
s123.com
angels Concious
Execution
Idea
Self confident
Planned
Concious
Convincing, For the founders, Execution
Detailed
Detailed
credible investors planning with
document Business plan BUSINESS PLAN
toolkit
109
A business plan for a new venture is
… a convincing and credible document for starting and financing
a new venture to prove that in the next 2-3 years the new venture
 with its products and services
 on the target market
 with the entrepreneurial team
 can make profit
 and manage risk
…prepared
 for and by the founders to make a conscious decision on
starting a new venture
 for the investor to convince financing institutions or
private investors

A business plan is…
Convincing Credible
when it proves when the founder
 to the founder that to  Analyzed the market and
start the business is industry
rewarding and possible  Planned actions to market
entry
 to the investor that  Defined and designed products
financing the new and services
business is rewarding  Designed operational
and safe conditions of the business
 Identified the necessary staff
 Calculated the profit making
potential
 Calculated risks and risk
management tools
Content of a business plan
1. Cover sheet
2. Executive summary
3. Introducing the business
4. Industry, market, competitor analysis
5. Product /service
6. Marketing plan
7. Operational plan
8. People and organization
9. Financial and financing plan
10. Risks and risk management
11. Attachments

Analyzing business environment
Industry Competitors
Industry trends Competitive value
Growth potential props
Market segments and Industry value chain
groups
Industry success Labor market

factors Networks
Official regulations Legal system
Technology trends
Preferred purchasing Investors’ ecosystem

and payment methods Accounting Act
Purchasing power Tax Act
Payment moral

How much money will your startup make?
Financial statements for entrepreneurial answers
Would it be Would it be Would it be
profitable? liquid? thriving?
Income statement Cash-Flow statement Balance sheet
Sales Cash in Debt
- Costs - Cash out Assets
Net income Equity
Cash Flow
Financing
Income statement
Beginning Closing
balance Balance
sheet Sheet

114
How to start?
FOUNDATION STEPS

Basic conditions for launching a new venture?
Legal conditions
Name
Licences
selection
Legal Technical, organizational, human
form Patents
Core activities Sales strategy
and products and force
Business conditions People Investment
Tax Organization Site, office
Insurance
regulations
Bank Accounting
selection Accountant
Experts
Advisors
116
How do we start selling?
MARKET ENTRY

Steps to the market
Market Market Market

research entry retention
1. Who would be our 1. What do we sell, to 1. How do we get feedback
customers, what do whom, satisfying from our customers?
we know about their what needs? (Correction needs)
buying behavior? (Positioning) 2. How will we react to
(Segmenting) 2. How do we price? correction needs, short
2. What are the needs (Pricing) term? (Reactive
of our targeted 3. How will we customer service,
segments? (Needs communicate to the
analysis) complaint management)
market?
3. What do our (Promotion) 3. How will we react to
competitors offer? 4. Where and how will correction needs, long
(Competitive we sell? (Sales term? (Proactive
analysis) channels, strategies actions, product
execution) development)

Do you still want to start a business?
CLOSING REMARKS

Instinct can never replace knowledge,
but perfectly complement it.
Kristina Ohlsson, 2012
It is not enough to invent it…

You should make it…
You should sell it…
You should make money out of it

Staircase of entrepreneurial success
Personal You are happy

success
Social It is useful, not harmful
success to society
Business
You can make money out of it
success
Sales
You can sell it
success
Technical
success You can make it

Enjoy the journey
not just the
destination!

Sources
1. Aulet (2013) Disciplined Entrepreneurship Videos

2. Blank, Steve (2013) The Four Steps to the 1. http://www.ted.com/talks/lang/eng/simon_sinek_
Epiphany how_great_leaders_inspire_action.html
3. Béza és társai (2013) Kisvállalkozások 2. 8 secrets of success
finanszírozása. Perfekt 3. If You Don’t Understand People, You Don’t
4. Gerber Michael E. (2001) The E-Myth Revisited Understand Business
5. Ries Eric (2011) Lean startup 4. http://www.ted.com/talks/malcolm_gladwell_on_
6. Szirmai P.-Klein S. Üzleti tervezés kívül és belül. spaghetti_sauce.htm
Induló vállalkozások tervezése. EDGE 2000 Kiadó, 5. Marketing Strategy
Budapest 6. http://www.youtube.com/watch?v=Tq0tan49rmc
7. Timmons, J. (2003) New venture creation. 7. On pitching to VCs
Entrepreneurship for the 21st century. Irwine 8. The era of open innovation
8. Vecsenyi János: (2012) Kisvállalkozások indítása és 9. Before Avatar ... a curious boy
működtetése. 72h
9. Wasserman, Noam (2012) The Founder’s dilemmas

Startup

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Startup

Uploaded by

Copyright:

Available Formats

Startup roadmap

Why? How? What?

Prof. János Vecsenyi

1. Why do you want to start a business?

Startup Roadmap © J. Vecsenyi, 2014. 2

Even though you may not be a born

Even if you don’t want to become an

Startup Roadmap © J. Vecsenyi, 2014. 4

Source: Timmons (1990) New

Startup Roadmap © J. Vecsenyi, 2014. 5

Idea Business Product

Startup Roadmap © J. Vecsenyi, 2014. 6

Opportunity Independence Unemployement Fame

Generation change To become rich To make a living

Startup Roadmap © J. Vecsenyi, 2014. 10

Fast growing. high Dynamic, large,

Traditional Traditional, large,

Low Business and operational experience High

Source: Vecsenyi (1995)

A startup enterprise is a baby gazelle

Startup Roadmap © J. Vecsenyi, 2014. 12

Commitment Lifestyle/ attitude

What can I gain if I What would I regret

Startup Roadmap © J. Vecsenyi, 2014. 14

Startup Roadmap © J. Vecsenyi, 2014. 15

The great match

(unique, new) product/service for a

Startup Roadmap © J. Vecsenyi, 2014. 17

Is your offer relevant, unique, credible?

Product Service Agency

Startup Roadmap © J. Vecsenyi, 2014. 19

6. New business model (making

Startup Roadmap © J. Vecsenyi, 2014. 22

Startup Roadmap © J. Vecsenyi, 2014. 23

• Determine customer wants/needs

Startup Roadmap © J. Vecsenyi, 2014. 25

Startup Roadmap © J. Vecsenyi, 2014. 26

Startup Roadmap © J. Vecsenyi, 2014. 27

Risk and Decision on

Business model Financial model

Defining Testing Deciding

Startup Roadmap © J. Vecsenyi, 2014. 28

Startup Roadmap © J. Vecsenyi, 2014. 29

segments scalability advantage, pricing

THE NEED, PROBLEM VALUE PROPOSITION

Distinctive Basic Key internal External

Mission, Sales strategy Financing

REVENUE STREAMS COST STRUCTURE

Startup Roadmap © J. Vecsenyi, 2014. 30

You may want to repeat

Startup Roadmap © J. Vecsenyi, 2014. 33

THE NEED, PROBLEM

a) What is the need, the problem and

Locally not available or Drinking water, tapwater,

Unmet need Mobile phone, alternative

These are issues and problems Smart phone, Rubik’s cube

Startup Roadmap © J. Vecsenyi, 2014. 35

Product attributes What we build

To look for functional and emotional benefits vs. just product

Why whould she like it?

Seller (Factory) who

Primary income sources Secondary income sources

From the customer’s perspective, the specific reasons the customer