CONCEPT TO
COMMERCIALIZATION
CONSIDERATIONS FOR FOUNDERS
CHRISTINE MCCAULL
@XTINEM
MILSAL & MCCAULL
WWW.MILSAL.COM
“If you want to do something that noone has done
before, you must be comfortable with frustration, and
failure, and confusion… and get used to being
bewildered by why something that appeared so straight
forward and simple turned out to be not that… then you
[have the makings of a founder]”Dean Kamen
Why?
.32
6 million!
1.6%
THE COMMITMENT
Startups need 2-3 times longer to validate their market then
founders expect.
• StartupGenome study
5 years from founding to monetization for venture backed
startups, if they succeed
• Kaplan study
9 years for non-venture backed startups, if they succeed
5+ YEARS FROM
FORMATION
350
Median Based on Stage
300
250
200
150
Revenue ($M)
Employees
100
Founder Equity %
50
0
Formation
23
Funding
34
IPO
63 months to founder monetization
Annual Report
35
KAPLAN STUDY
FINDINGS:
FOCUS: The concept and intention stay the same from BP to AR--- Stay the
same or broaden, very very few narrow- none change
GREAT TEAMS, SERIALLY: People are dispensable after formation stage• Product/tech/solution matter more- patents/IP than management and
leadership
• Mgmt change with stage, more often w/VC- expertise only emphasized in
beginning
EXPECT TO HAND IT OVER: Founders move from operating to board to no
involvement, venture funded founders stake moves from 32% to 3.2%
SERIAL ENTREPRENEURS ARE THE OUTLIERS: Once non-human capital is
established, few are serial entrepreneurs- may play operating role in other
early stage companies- demoralization theory.
“The market…does not value – and does not need to value – every good
idea.”
MISCONCEPTIONS OF
1ST TIME FOUNDERS
Overestimate IP value by 255%
Overestimate market size by 100x
Underestimate investment
Underestimate talent & importance
of those with complementary skills
(bidirectional!)
DISSECTING EARLY
STAGE VENTURE
Milestone based thinking- what are your trying to show
Common milestones
• Proof of Concept/Product
• Market Validation
• Sales operations/economics- Get the model right
• Scale Up
Granularity: The Art of Getting Things Done
FOCUSED TIME AND
ATTENTION DRIVE
SUCCESS
Get the idea right- Learn fast/pivot no more than once (revisit
Kaplan)
Connect- Build advisors, follow people
Engage!
TEAM
Have 1 or 2 cofounders.
• Solo founders take 3.6x longer to reach scale stage
compared to a founding team of 2
• Fit, and intention- pre-canaa for founders!
Balance your team
• Development, Design, Marketing/Sales, Operations
Balanced teams drive results (Startup Genome)
• 30% more money
• 2.9x User growth
• 19% less likely to scale prematurely
COMMERCIALIZING
Strategy
Brand
Reachable Market
Value Proposition
Socializing: Messaging/Communication
Process – Understanding a funnel
THINK ABOUT MARKETS
FROM THE OUTSET
Who needs you and why?
Build a viable path to market
“Don’t be in a rush to get big, be in a rush to have a great
product” – Ries
Shift funds from R&D into sales
Sales and marketing united for efficiency
As creative as….
ATTRIBUTES/BELIEFS
Personal Responsibility: Locus of Control
Massively curious: Humble, Learning
Execution: Work ethic & Showing Up
Positivity: More Carrot
CORE BELIEFS OF EXTRAORDINARY
LEADERS
Business is an ecosystem, not a battlefield.
A company is a community, not a machine.
Management is service, not control.
Employees are peers, not children.
Motivation comes from vision, not from fear.
Change equals growth, not pain.
Technology offers empowerment, not automation.
Work should be fun, not mere toil.
Source: Geoffrey James
RESOURCES:
Wasserman- new book
Kaplan- IU of C
StartupGenome Project
Kauffmann Foundation
NVCA
Milsal.com for reading list and links.