Успешный IT start up тяжело создать без хорошего бизнес-плана д-р Дженнифер Трелевич Директор по разработкам Google-Россия This presentation does not necessarily reflect the intentions or opinions of ООО «Гугл» or of Google, Inc. Copyright 2009, all rights reserved.

We have developed a great technology. Let’s make a business and get rich! The concept that “great products sell themselves” is limited. How are you going to bring your product to customers? How are you going to convince customers to give you money? How are you going to keep someone else from doing the same?

We hired a sales person. Now we are ready! You still need to convince customers of the value of your product. A lot of bad products make big profits, a lot of good products do not sell – why? “Attention span” of potential customers is short – you need to convince them fast. What is your brand?

We hired a marketing person to build the brand and promote. Now we are ready! What is your business model? Which customers do you pursue? Which customers do you not pursue? In what directions do you develop? What do you do with your profits? What is your strategy?

What is strategy? What is not strategy? Strategy is not a list of tasks, that you plan to execute. Strategy is not an expensive consultant in an Italian suit. Strategy is roughly a summary of your model and “big picture” for the business.

A simple, 3-step approach to strategy, for engineers

№0: Objective of the business What is our objective? Concretely, what do we want to achieve? “Get rich” is not a strategy, since it is too ambiguous, and does not guide actions. “Win in database systems” is not an objective: what means “win”? How is it measurable? “Become №1 among Russian users of database systems for medium business” is an objective.

№1: Content of the strategy You should be able to answer with sentences the following questions: What is the value proposition? Why should our customers give us their business? What do we give them in return for it, that makes it worth it to them? Who are our target segments of customers? What are our long-term differentiators? This is a good time to enumerate your core competencies and strengths.

Common errors in step №1: defocused on segmentation Forgetting to determine who are not part of our target segments: Pursuing too many customer segments defocuses our work, and can damage our brand Implementing every feature request can make the product too complicated or too difficult to maintain Some customers will make us lose money. Lose them instead.

Common errors in step №1: lack of attention to differentiation Why do we believe that competitor could not copy our value proposition and target segments tomorrow and put us out of business?

№2: “Лакмусовый тест” стратегии You should be able to answer these questions with yes: Can you prioritize your resources (people, budget, hardware, etc.) based on the content of №1? Can you devise tactics from contents of №1? Does the content of №1 support pursuit (not necessarily achievement) of our strategy?

Common errors in step №2: defocused on execution Forgetting to determine what activities not to do Develop, purchase, or partner to acquire a component for the product? Skip analysis or development for market segments that we do not want to acquire? Outsource some part of the business? Work alone or together with a partner?

Common errors in step №2: defocused on priorities There will always be unforeseen challenges during execution. Do our priorities help us to understand what changes to make to achieve our goals? Do our priorities help us to understand where to invest?

№3: “Лакмусовый тест” хорошей стратегии You should be able to answer these questions with yes: Does the strategy leverage our strengths or our core competencies? Does the strategy support achievement of our objective? Are we (and investors) willing to commit resources (people, budget, hardware, etc.) to the strategy?

“Modeling business”  Business Model …or, “Every business presentation must have a 2- dimensional chart”

Methods for diagramming have their place… Diagrams can help you to communicate your ideas. Diagrams can help you to organize your thoughts. A diagram will not inform you whether your business plan is solid or not. But “telling the story” is critical, to you and to others

Business process diagrams are popular Write down the steps of doing all tasks in your business Iterate at lower levels of abstraction Load the information into an expensive diagramming tool Print in full-colour on large-format paper Hang lovely, custom wallpaper in your conference room

Business process diagrams are useful To document a particular task For training people For communicating interdependencies (e.g., who receives input from whom) To demonstrate compliance with a method or framework (e.g., SEI, ISO) …but not to give you a big picture of your business.

SWOT analysis can be useful for collecting thoughts StrengthsWeaknesses OpportunitiesThreats

“Horizon” model can help to communicate “Horizon 1” Use profit to fund other areas, exit when becomes Horizon 0 “Horizon 3” Investment for potential long-term growth “Horizon 0” Exit this business “Horizon 2” Opportunity for short-term growth Growth potential Potential for profit Developed by Boston Consulting Group

Focus on a few important concepts Brand Differentiation Customer segmentation Partnering

What is “Brand”? Brand is not your advertising budget. Brand is how people think about your product. Sometimes strong Brand can even support product promotion without direct marketing. Bad Brand can hurt your sales, independently of the quality of the product.

What is Differentiation? What keeps your competitors from copying what you do, or doing it better? Patent is not enough – patents can be “avoided”.

What is Differentiation? What keeps your competitors from copying what you do, or doing it better? Patent is not enough – patents can be “avoided”. High “cost of entry” to copy or better us?

What is Differentiation? What keeps your competitors from copying what you do, or doing it better? Patent is not enough – patents can be “avoided”. High “cost of entry” to copy or better us? Great customer service and warranty?

What is Differentiation? What keeps your competitors from copying what you do, or doing it better? Patent is not enough – patents can be “avoided”. High “cost of entry” to copy or better us? Great customer service and warranty? Customers “locked in”?

What is Differentiation? What keeps your competitors from copying what you do, or doing it better? Different time scales may require different approaches Short term differentiation Long term differentiation

“Customer segmentation” is how you approach the market Segmentation reflects customer behavior. How you segment the market depends on your product area Age Style preference Size of business etc. It is important to understand which segments you will not pursue.

You are not alone – you can partner! A business partner can help in many ways Complement: Perform an activity that is not a “core competency” for you. +

You are not alone – you can partner! A business partner can help in many ways Complement: Perform an activity that is not a “core competency” for you. Broaden: Use their distribution channels with your product, their sales with your technology, etc.

You are not alone – you can partner! A business partner can help in many ways Complement: Perform an activity that is not a “core competency” for you. Broaden: Use their distribution channels with your product, their sales with your technology, etc. Support: Join their strong relationships with your brand, “open doors”.

You are not alone – you can partner! A business partner can help in many ways Complement: Perform an activity that is not a “core competency” for you. Broaden: Use their distribution channels with your product, their sales with your technology, etc. Support: Join their strong relationships with your brand, “open doors”. An established business partner can improve trust in your business among investors. Вместе – мы сила!

№3: “Лакмусовый тест” хорошей стратегии №2: “Лакмусовый тест” стратегии №1: Content of the strategy №0: Objective of the business