derisking a business venture - techaviv - january 2009
DESCRIPTION
Short presentation on the techniques of "de-risking" a business model / idea. How do you turn assumptions into knowledge with the lowest amount of capital and as quickly as possible? Learn more here. Summary presentation for 15 minute talk with 10 min of Q&A. Presented at the TechAviv meetup in New York City January 7, 2009.TRANSCRIPT
Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
De-Risking A Business VentureIncreasing Value by Decreasing
Assumptions
Steve Barshstevebarsh.com [email protected] +1.215.888.2101 twitter: sbarsh
Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
3 – 7 Key Assumptions
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Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
Common Assumptions
Demand (huge problem)
Market size Feature set Positioning /
differentiation Product
development Pricing Sales cycle stevebarsh.com3
Competition Team Execution Marketing Financials &
forecasts Capital Exit value
Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
Stop Waving, Start Pointing!
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Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
De-Risking
Identify risks & assumptions Before or while
developing product
Before pitching De-risk the risks
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Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
De-Risking Goals
Convert assumptions into knowledge At the lowest cost As quickly as possible
Consume intellectual capitalbefore venture capital
Decrease assumptionsto increase value
stevebarsh.com6
Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
Experiment / Test & Research!
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•Hypotheses to prove• Valid experiments toprove or disprove• Release early, measure, learn, iterate• Research• Valid proxies you can use• So, it’s / were just like ____• Be ready to defend
Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
3 Main Takeaways
1. Key assumptions
2. “Experiments” to test
3. Convert assumptions into knowledge Low capital Increase value
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Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
See Also
Redeye VC Blog: Failing Cheaper by Josh Kopelman, First Round Capital.
Common Mistakes Made by Entrepreneurs by Mark Henricks.
How To: Raise Money in a Down Economy by Eric Ries at KPCB.
stevebarsh.com9
Copyright © 2008-2009 by Steve Barsh. All Rights Reserved.
De-Risking A Business VentureIncreasing Value by Decreasing
Assumptions
Steve Barshstevebarsh.com [email protected] +1.215.888.2101 twitter: sbarsh