I would like to thank Mr. Suresh Samandan (CEO of Kissflow & OrangeScape) for compiling his 18 years of learning building a startup into 3 hrs knowledge session. Below information was gathered during his session at Idea Pattarai - Vellore Workshop. Content Credits: Mr. Suresh Samandan | DreamTN
How to name a Startup (Brand) and its importance
Choosing a brand name plays a vital role in helping customers to remember the brand. No company can afford to spend a huge amount of money on brand awareness, The brand name itself should be a conversation starter and easy to remember.
Points to remember when naming:
Short
Unique
Relatable
Conversation Starter (Kissflow - kiss? flow?)
List of businesses old & current name:
- Tokyo Tsushin Kogyo -> Sony
- Pete's Super Submarines -> Subway
- Brad's Drink -> Pepsi Cola
[19 famous companies that originally had different names (cnbc.com)]
The Idea
A startup is a new venture which is in search of a business & revenue model, Which later transforms into business. A startup is a problem solver, not a money maker. People/ customers tend to pay you money for providing a solution for solving their problems.
A problem can be anything which you go through every day or every week, Which frustrates you.
[Ex:] Connecting toilets on the highways.
Ideal Customer Profile (ICP) [B2B, B2C, D2C, G2C, G2G]
For which set of people you are building the product or trying to solve the problem. Finding the right audience will help the business to grow multi-fold without wasting time & money in reaching uninterested people.
We can classify a customer as Buyer, User & Influencer
Buyer: One who purchases the product/service
User: One who uses the product/service
Influencer: One who influenced the purchase of product/service
A Few examples explaining the difference between buyer, user & influencer
[B2B Small Scale] When a small-sized company tries to buy a CRM, the user will be the customer support team, whereas the buyer will be the founder or co-founder. The influencer will be the technical support team.
[B2B Large Scale] When a large-sized company tries to buy a CRM product, the User will be the customer support team, whereas the buyer will be the finance head or finance team. The influencer will be the technical support team
[B2C 1] When an under 18 student requires a laptop, The buyer will be his parent, The user is the student himself and the influencer can be his college professor or geeky techie relative.
[B2C 2] When a person tries to purchase a laptop, The buyer and user is the same person, whereas the influencer could be Sharukh Khan or some celebrities who appear in ads to promote the product/service.
Your product/service needs to address/satisfy all three in order to enable the customer to make the purchase.
Problem
Identifying whether the problem you are solving is a Need (Utility) or Want (Aspirational).
NEED - Utility products like pain killer
WANT - Aspirational products like a vitamin tablet
People buy Aspirational products to showcase their status or to stand out from the crowd.
Few Examples explain the difference between utility & aspirational products
Apple iPhone / Apple Watch is an aspirational product in India, as the product is not affordable by a major set of people. Apple products in India are considered a status symbol. If in case apple watch is priced affordable, the aspirational product buyers (Rich people) would purchase a Rado Watch which is priced at a Lakh or above. In the US apple products are not considered as aspirational products as everyone owns one or purchases one bundled with the telecom service plans. Aspirational products are mostly luxury products (Zara, Louis Vuitton, Gucci, Chanel).
In order to sell aspiration products that are in less demand, the product must be priced higher to meet the operational expenses with a huge profit margin.
Is it safe to discuss my idea?
Sharing a product/service idea will not help someone to come up with a new startup, As he/she will lack the problem insights that you have. That doesn't mean you can let out your trade secret, Trade secret is different from the idea (Pepsi's trade secret). The idea is just 2%, whereas the execution is rest.
Your Unique Solution:
Current Approach - It's important to know how people are solving the problem
Competitor - Who is trying to solve the same problem
Alternative - the problem can be avoided using some other alternatives
Example explaining the difference between competitor & alternative
A domestic airline let's say named BIBO provides air transport between Chennai to Bangalore at a lower cost compared to rivals like GIGO. Then GIGO is the (Direct) Competitor. If you are going to travel to Bangalore, compare the transit time between Bangalore to Chennai through air and road transport. The air transport has a 2hrs waiting period in the airport and transit time is 1hr. And later you need a car to travel from the airport to the reserved hotel. Instead of opting for air transport, if you consider going by car which would eventually take same amount of time and you can use your own car to commute in the city which is an added advantage. Travel by car is the alternative.
Revenue model
Recurring (subscription)
One time fee
Usage-based fee
Advertisement (earning through showing ads - TV)
Unit Economics
Simple addition & subtraction to identify gross (direct cost) & net margin (revenue) per-unit basis. Unit economics are vital when opting for funding as investor usually likes to know the net margin (revenue).
Profit margin decreases as the business scales, a grown business usually has a profit margin of 20% and some businesses profit margin narrowed down to 3%
Positioning
People/Human Brain categorize brands based on the nature of the product and remember it.
Example:
When asked to list toothpaste brands. we may list Colgate, Pepsodent, etc.
When asked to list herbal toothpaste brands. we may list Dabur, Himalaya, etc.
Our brain remembers the brands by their category or nature of the product. It's difficult to create a new category in people's minds than positioning a brand.
- Law of two's
- Brain Ladder
Reference Book: Positioning the battle for your mind by Al Ries & Jack Trout
It's important to under the customer want instead of assuming something to be true. Providing what the customer wants rather than providing what you have.
Market
What is the market?
A market is a group of people with a common set of needs & wants
Group of people
A common set of needs and wants
Referenceable to each other
People come across many such words (market) without knowing the exact meaning of what the word really means. For instance the word brief, In schools and college exams 5 and 10 mark questions usually contain the word brief for which we assume that we have written a lengthy answer. But the word brief means short & quick.
Market Size
TAM - Total addressable market
SAM - Serviceable market
SOM - Market share
Example defining TAM & SAM
Let's assume you have invented a scanner for the first time in human history, You take the scanner to the airport and showcase your product to the airport authority to use your scanner to scan bags instead of the traditional way of opening the bags and examining them. The airport authority might find it useful and implement your product in the Chennai airport. The authorities may refer you to the other airports. If in case you visit a doctor to showcase your product saying you can scan the broken bone with your scanner and find the severity of the injury. He might ask where you have implemented it earlier, Here if you say your scanner is been used in the airport, the doctor will not be interested in the product. Understanding what a market is essential and focusing on a common set of people as a serviceable market is important. As it will help in the growth of the business through references.
Example explaining the need to narrow down the target audience
A CRM can't fit into all types of businesses, you need to tweak some features for different types of businesses. In that case, you need to market it as CRM for pharma, CRM for the textile industry, etc.
Size of Business
It doesn't matter what size of business you are building, Even if it is 1Cr business go for it. Its better to do something rather than nothing
MOAT
Ways to safeguard your business
Patents
Purchasing Power
Huge Customer
Switching Cost
Large Capital Requirement
Operational Efficiency
Brand Identity
Technology
Why now?
Why you?
Progress till now?
Wonderful key-note
ReplyDeleteThanks for sharing this
ReplyDelete