‘About half of all new businesses will survive for just five years’, according to the US Small Business Administration. However, even during those first five years the waters are choppy. Even if you manage to stick it out longer than five years, you will still experience plenty of growing pains.
Fail Fast… Fail Forward
Despite the well known mantra ‘Fail Fast & Fail Forward’, you may very well be fooled into thinking that things are going well, even during those first five years.
According to recent research, ‘The Rise and Fall of Startups: Creation and Destruction of Revenue and Jobs by Young Companies’, George Foster and Carlos Shimizu of (Stanford), the rocky road to failure or success is often unpredictable. Source: L. Dishman, Fast Company
First Five Years
- Only 7.5% of startups add jobs for three years in a row.
- Most startups cut employee numbers during their fourth, and their fifth year.
- 34% of fifth-year revenues were pulled away from competing businesses (not created from new markets).
- 50% of startups saw their revenues grow in year three…but!
- 50% experienced revenue setbacks in the fourth, and the fifth year of business.
- 50% were unable to post revenue increases for three years in a row.
The reality; expect that nothing will run smoothly!
Fail Fast (2:30)
Jagi Gill (Tenex Health)
The challenge is that you are faced with a lot of headwind.
NOTE: video starts & stops at pre-assigned times
“There is no such thing as failure… there is only learning”
Learning From Failure
Learning from failure is important, according to Prof. Rita McGrath (Columbia Business School). Prof. McGrath has some tips on failure, which can be enlightening to all of us.
Don’t run from your emotions, but remind yourself that failing at a business is different from failing at life. ‘You are valuable, you have a lot to offer, who knows what you will do next, but you’ll do something good’, are things struggling entrepreneurs don’t hear enough.” ~ D. Mendell
- Some Failures Are More Useful: Understand the cause and context (preventable, complexity-related, and intelligent).
- Define What Success/Failure Look Like: Before you start, consider why you are doing a startup; solve a business problems, innovate to attract customers, expand markets, gaining access to new capabilities or channels. Consider also; what does a successful startup look like, compared with an unsuccessful one?
- Convert Assumptions Into Knowledge: Document your assumptions down and share them with the team. Everyone should seek out information which might indicate that those assumptions are incorrect. Also consider potential barriers: internal (culture and process), relational (alignment of goals and trust), and environmental (legislation and geography).
- Fail Fast: Develop key performance indicators (KPIs) to measure progress. Continuously capture data and feedback. If your current model isn’t working, iterate FAST.
- Cheap Failure: Begin by deciding on a realistic budget, and adhere to that budget. To be ‘thrifty’, also minimize resources by partnering with others.
- Limit Uncertainty: Make the startup process seamless and structured. Set expectations about startup culture with colleagues, be clear on the process and timing. Be crystal clear about technical, legal (IP) matters.
- Celebrate Intelligent Failure: According to Facebook’s CIO Tim Campos, “Move fast, and break things!” Facebook embrace failure, and strongly encourage it, ‘a license to fail’. Being tolerant to failure, helps people do things differently.
- Psychological Safety: Embrace messengers of bad news, celebrates intelligent failure, rewarded those who intelligently fail (vs. punishment). Learn from the failure.
- Document and Share What You Learn: If you don’t document the failures, and you make the same mistakes again, again, and again, your organization will not learn to practice intelligent failure.
Fear being left behind, but not failure itself!
Source: Kati Holland, RocketSpace
Prof. N. Wasserman
What is the big mistake entrepreneurs can make in the founding and early execution? Ignore people problems (your own and those of your team), at your peril.
NOTE: video starts & stops at pre-assigned times
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Question 1 of 46
The six startup development phases discussed in this course were (Startup Commons): Ideation, Commitment, Validation, Scaling, Growth, and Establishing?CorrectIncorrect
Question 2 of 46
According to Steve Blank: A startup is an organization formed to search for a repeatable and scalable business model?CorrectIncorrect
Question 3 of 46
Which of the following was not one of the six items in the startup scorecard?CorrectIncorrect
Question 4 of 46
According to Paul Graham (Y Combinator), ‘Expertise is not what you need to succeed in a startup. What you should really do is get to know the domain (industry structure, market space, business processes and use cases)’?CorrectIncorrect
Question 5 of 46
The Stanford Decision Chain allows you to: Gaining an in-depth understanding of the systems, processes and conditions of a problem, where ever it may have occurred?CorrectIncorrect
Question 6 of 46
Which of the following was raked lowest by Bill Gross (Idea Lab), in terms of the Top 10 reasons for startup failure?CorrectIncorrect
Question 7 of 46
One crucial distinction to be made at the startup ideation stage is trying to understand: ‘Is my hypothesis valid — and if it’s not valid – why is it not valid?’CorrectIncorrect
Question 8 of 46
The Seven Business Model Archetypes discussed in session were: Ecosystems, Marketplace, Subscription, Brokerage, Trade, Service, and Product?CorrectIncorrect
Question 9 of 46
The Opportunity Evaluation Framework contained six idea viability criteria, which of the following was not one of those?CorrectIncorrect
Question 10 of 46
Prof. A. Ducksworth Success Formula was 2XG+TS=SUCCESS. TS is equal to Talent and Skill?CorrectIncorrect
Question 11 of 46
Which of the following is NOT one of the three elements often found in the value proposition?CorrectIncorrect
Question 12 of 46
The BMC helps you design your business model, and the important underlying assumptions (resources, activities etc.)?CorrectIncorrect
Question 13 of 46
Which of the following is not one of the 5 elements listed in the Concept Plan?CorrectIncorrect
Question 14 of 46
Customer Journey Mapping explores user’s feelings, motivations and questions for each touch-point?CorrectIncorrect
Question 15 of 46
The PMF Checklist explores: Customer Segments and Product & Service Attributes?CorrectIncorrect
Question 16 of 46
Mission is; An aspiration the organization holds for its future (although difficult to achieve), which provides direction (Collins & Porras)?CorrectIncorrect
Question 17 of 46
According to Collins & Porras:
Guiding Philosophy = Core Beliefs and Values + Purpose
Tangible Image = Mission + Vivid DescriptionCorrectIncorrect
Question 18 of 46
Which of the following is NOT one of the 6 Startup Vision Definition Components (Cabage & Zhang)?CorrectIncorrect
Question 19 of 46
One of the 11 Lessons Learned (The Psychology of Startup Teams, Lindred Greer) was:
Too many optimists can be bad for startup performance. Having a contrarian can be a great thing?CorrectIncorrect
Question 20 of 46
According to Matt Blomberg: 50%+ of a startup CEO’s time should be spent on Internal Tasks (1-in-1, Team meetings etc.)?CorrectIncorrect
Question 21 of 46
Execution can be divided into two critical elements; #1 Figuring out what to do. #2 Asking: are you – the startup – capable of getting that job done? ~ Sam Altman (Y Combinator)CorrectIncorrect
Question 22 of 46
The main purpose of the MVP is to see whether you can build it, and if it is solving a problem you feel is important?CorrectIncorrect
Question 23 of 46
Pre-Seed = Signs of Product/Market Fit and traction. Angel investors and VC funds (some startup accelerators). Sizes range from +- $150,000, to $1.5 million. Average funding $1.7 million, and valuation: $3-6 million (Source: cobloom.com)?CorrectIncorrect
Question 24 of 46
A really successful elevator pitch first begins by defining the user problem, and only after that (if at all), a solution to that problem (Dave McClure)?CorrectIncorrect
Question 25 of 46
Steve Blank’s Investment Readiness Level 1-2 is: Have we discovered (validated) the problem/solution? Do we have a low-fidelity minimal viable product (MVP), and is it available and ready to test?CorrectIncorrect
Question 26 of 46
The ‘North Star’ for a startup: unites everyone under one common goal, which is supported by meaningful guidance (Source: My Say)?CorrectIncorrect
Question 27 of 46
Les McKeown’s Stage #4 of growth is characterized by: Visionary mode & Operator mode can no longer improvise in what they are doing. The degree of complexity required reaches a tipping point. A Processor mentality is needed (Les McKeown, Predictable Success)?CorrectIncorrect
Question 28 of 46
What is the top section of the Validation Board used for?CorrectIncorrect
Question 29 of 46
Which of the following are correctly stated Problem Hypotheses?CorrectIncorrect
Question 30 of 46
What is the definition of a Minimum Viable Product?CorrectIncorrect
Question 31 of 46
in ‘Crossing the Chasm’, G. Moore Moore argued that there is a chasm between the early major of a product and the late adapters (the pragmatists)?CorrectIncorrect
Question 32 of 46
KPI’s must be ones that are most relevant for a specific startups individual business conditions?CorrectIncorrect
Question 33 of 46
According to Richard Harroch; Angel Investors want to see market opportunity (growth, scale), and early adopters?CorrectIncorrect
Question 34 of 46
According to Jim Collins (What it takes to be a Great Company); Level 5 Leaders are ones who build enduring greatness through a blend of ‘one great purpose’ & ‘solid rational for making money’?CorrectIncorrect
Question 35 of 46
If you want your company to truly scale, you first have to do things that don’t scale (~Brian Chesky)?CorrectIncorrect
Question 36 of 46
Phil Fernandez says that ‘Personas’ see very different things and should be approached in individual ways?CorrectIncorrect
Question 37 of 46
Raising venture capital is the easiest thing a startup founder is ever going to do (Marc Andreessen)?CorrectIncorrect
Question 38 of 46
The first step in completing the Experiment Herder Template is: Hypothesis (falsifiable, specific, causal, and relevant)?CorrectIncorrect
Question 39 of 46
Bill Reichert says; the Cash Flow Statement starts with Net Income (extracted from bottom line of income statement)?CorrectIncorrect
Question 40 of 46
Generic Long Term Financial Forecast templates (widely available), should be used to complete your forecast for a period of five years?CorrectIncorrect
Question 41 of 46
Onboarding refers to; weekly meeting where founders ‘stir genuine emotion into their employees, and speak about the current and future state of the company’?CorrectIncorrect
Question 42 of 46
To create a High-Performance Machine, during the establishing stage; you want to focus on output or progress (not input), and avoid ‘measuring motion & confusing progress’?CorrectIncorrect
Question 43 of 46
During the Establishing Stage, large equal’s more complexity and bureaucracy. Which of the following actions does James Allen (Bain & Co.) recommend in this stage?,CorrectIncorrect
Question 44 of 46
According to Bain & Co., the three primary Founders Mentality traits include; sense of insurgent mission, an obsession with the front line, and successfully battling external factors (competitors, regulations, and technology)?CorrectIncorrect
Question 45 of 46
James Allen recommended that; To avoid the debilitating impact of the 20% Rule, Black Sheep, and Heroes, the founder should: Link all efforts (administration, hiring etc.), to a well defined core strategy?CorrectIncorrect
Question 46 of 46
The ‘Curse of The Matrix’ according to J. Allen (Bain & Co.) refers to the fragmentation of customer experiences?CorrectIncorrect