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E140A, Slide #1 MFP Housekeeping Models and Frameworks E140A, Slide #2 Vision Strategy ExecutionE140A, Slide #3 Managing Growth And Change Reference: Collins and Lazier IDEAS: Product and Market Strategy TALENT: Team and Culture CAPITAL: Cash Flow and Venture Finance First Things First: Assess the Venture’s Vision, Internal and External (VIE) Characteristics E140A, Slide #4 “Built to Last” Ventures “Built to Flip” Ventures Objective Create lasting value Short-term cash out How to Retain Employees? Create a great culture & shared vision Give them lots of equity Commitment to Innovation Pursuit of long-term, Big Hairy Audacious Goals (BHAGs) Market-driven initiatives How to Survive Setbacks? Preserve core values while stimulating progress No core values to rely on, so company is at risk Source: Fast Company, Jim CollinsE140A, Slide #5 Vision: Strategy: Execution: Reference: Dorf and Byers (Figure 7.1) E140A, Slide #6 The Startup!Game:!A race against time to create value and reduce risk !(1) Founding:!An entrepreneur begins with a vision and shares of stock in the new venture.!Entrepreneur trades stock for ideas, money, and people!(2) Seed Stage:!• Venture capitalists provide money in return for stock!• Employees join via friends & associates in return for cash salary and stock options!• Ideas become intellectual property which represents the initial value in the company!Further growth is delayed until milestones are reached and risk of failure is reduced!(3) Growth Stage:!More money, ideas, and people are obtained, but for much less stock than in the earlier stage due to lower risk!Company balances earning cash, taking investment, and spending cash to create value!(4) Exit Stage:!• IPO or M&A!• Entrepreneur, investors, and employees can cash in stock for money !• A viable public company has been created (if IPO).!• Each party continues to build the company, retires, or starts the game again!Value has been successfully created.!Reference: Start-Up by Jerry KaplanE140A, Slide #7 Reconsider Customer Start Iterate Iterate Iterate Iterate Customer Development • Customer needs and problems identified Customer Validation • Verify customers • Create a sales plan Customer Creation • Develop user demand Company Building • Create an operational sales and marketing plan Reference: Blank, Four Steps to the Epiphany E140A, Slide #8 Bowling Alley Main Street Tornado Source: Moore (1995), Inside the TornadoE140A, Slide #9 PEOPLE & RESOURCES Experiences, Skill, Contacts, Attitude, Knowledge CONTEXT Macroeconomy, Tax, Regulatory, Socio-political DEAL Allocation of Risk and Reward, Incentives, Signals, Sorting, Consequences OPPORTUNITY Entry Barriers, Customers, Suppliers, Substitutes, Rivalry, Economics Project-Appropriate Financing Option Preservation Opportunity-Appropriate Knowing and Being Known Appropriate Risk / Reward Allocation and Incentives Investor Value Added Favorable Technology Macroeconomy Favorable Rules of the Game Favorable Sociological Factors Reference: Sahlman, HBR E140A, Slide #10 1. Amount of Cash Needed and Purpose 2. Sources of Capital 3. Deal StructureE140A, Slide #11 Managing Growth And Change IDEAS: Product and Market Strategy TALENT: Team and Culture (Leadership) CAPITAL: Cash Flow and Venture Finance V-I-E!Blank’s Customer Development and Moore’s Chasm!MFP Workshop and Sahlman’s Concept of Fit!Cialdini’s Forces of Influence and Leadership Sessions !Kaplan’s Startup Game!Models!E140A, Slide #12 Managing Growth And Change IDEAS: Product and Market Strategy TALENT: Team and Culture (Leadership) CAPITAL: Cash Flow and Venture Finance V-I-E!Documentum, IMVU, CVT, "Trexel, Genomic Health!Yahoo, Juniper Networks!Cooliris, Wily Tech, Hess !Cases!E140A, Slide #13 1. Vision  Strategy  Execution 2. Positioning  Marketing Decisions: Product/Place/Price/Promotion 3. Opportunity/People/Context  Deals 4. Cash Needed & Purpose  Sources of Capital  Valuation & Terms E140A, Slide


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Stanford E 140 - Lecture Notes

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