Ÿ Are you clear of your reasons for becoming an entrepreneur?
Ÿ Are you willing to live in an environment of extreme uncertainty?
Ÿ Are you willing to accept the high reward/risk ratio of a new enterprise?
If you answered most of the above as YES, then please proceed to the next section, else refer to page #339.
Ÿ Have you identified a problem that many people would like to see solved?
Ÿ Have you identified an opportunity that not many have explored?
Ÿ Do you have time, skills and money to pursue the idea? If you answered most of the above as YES, then please proceed to the next section, else refer to page #5.
Ÿ Do you have a balanced founding team to implement the idea?
Ÿ Are the conditions and timing right for launching the startup?
Ÿ Do you know your current and potential competitors?
Ÿ Have you identified who will benefit the most from your solution?
Ÿ Have you engaged with adequate potential customers to understand their needs?
If you answered most of the above as YES, then please proceed to the next section, else refer to page #89.
Ÿ Have you tested a prototype of your product/service with potential customers?
Ÿ Do you know your product’s or service’s value proposition?
Ÿ Do you know how to reach your target customers?
Ÿ Have you developed a viable business model for your venture?
If you answered most of the above as YES, then please proceed to the next section, else refer to page #194.
Ÿ Do you have adequate people in various roles to launch the startup?
Ÿ Have you completed all legal and statutory requirements for your startup?
Ÿ Is your venture ready to scale?
Ÿ Is your venture ready to raise funds?
For help in answering these questions, please refer to page #292
Ÿ Do you have a functional product/service?
Ÿ Have you piloted it with select customers?
Ÿ
Do you have a robust go-to-market strategy?
Ÿ Have you defined critical metrics that will determine the success of your launch?
If you answered most of the above as YES, then please proceed to the next section, else refer to page #250.
Several roads lead to the launch of high-performance startups, each offering a unique advantage. Some paths emphasize product design; others focus on Design Thinking; many insist on understanding customers; others in engaging the hearts and minds of employees; a large number believe in business modeling and still others in Lean Startups. My experience with startups across geographies, technologies, and industries has shown that while each of these approaches brings useful lessons and perspectives, it only offers a partial picture of how successful startups are launched. In the absence of a holistic blueprint, many startup founders either lose focus or pick somewhat random strategies for increasing their chances of success. As a result, they get lost in the din of operations and drown in an avalanche of cash burn whileshowinglittleornoimprovementininternalefficienciesormarketeffectiveness.
The need of the hour is a clear roadmap that serves as a guiding light in a startup’s journey one that provides an outside-in view of the © venture while keeping a sharp focus on essential milestones. This book introduces the STARTUP MATURITY MODEL (SMM), a global-first maturity framework that balances the art, science, and practice of launching exceptional startups. SMM’s unique five-level architecture allows founders to take the guessing game out of the equation as they follow a tried-and-tested approach for building innovative and scalablestartups.Progressively,SMMdrawsattentiontoareasthatfoundersmustprioritizeatvariousstagesoftheirlaunchjourney.
The purpose of The Startup Launchbook is to help new ventures succeed, either as independent startups or as innovation projects within corporations. In a volatile business environment marked with hypercompetition, learn how select startups like Zomato, Airbnb, and OLA become dominating forces, while others like PepperTap, Stayzilla, and eToys fade into oblivion. Also, discover the foundational elements that enable yesterday’s startups like Google and Amazon to innovate continuouslyandgrowsteadily.
A breakthrough product or marketing brilliance does not govern the lasting success of a startup. Contrary to what is conveyed by popular media, high valuations and charismatic leaders are also not enough. Instead, wholesome success is achieved by following a disciplined approach that promotes customer-centricity, financial prudence, continuous innovation, and talent engagement. Orienting founding teams towards such an approach, and hand-holding them through their journey, isthecoremissionofthisbook.ftheirlaunchjourney.
Societal acceptance of entrepreneurship is on the rise. With a supportive ecosystem of peers, investors, mentors, incubators, governments, and corporates, there has never been a better time to be a startup founder. World over, young and not-so-young entrepreneurs are inventing technologies, transforming family businesses, disrupting established enterprises and developing solutions with far-reaching socio-economic impact. To extend views shared in my previous book, Startups and Beyond: Building Enduring Organizations, our focus on startups as essential catalysts of economic and socialtransformationisnaturalandnecessary.
Startups bring a promise of innovative solutions to the world’s pressing problems in education, health, agriculture, ecology, transportation, and other areas. Usually aided by technology, startups offer agile and cost-effective solutions - creating jobs and spurring healthy competition in the marketplace. FromSiliconValleytoNewYork,fromFrankfurttoTelAviv,andfromBangalore to Beijing, global interest in entrepreneurship continues to grow. Global venturecapitalinvestmentsinstartupshitarecordhighin2018,withover$255 Billion worth of investments. Startup ecosystems continue to mature and thrive all over the world, with countries like Australia, China, and Germany startingtoflextheirmuscles.
In Startupblink’s latest report, India was ranked 17th and has climbed 20 spots from its previous ranking. In recent times, marquee investments made in Flipkart, PaytmMall, PolicyBazaar, Swiggy, and Byju’s, have propelled the startup environment in India where technology startups raised over $14 Bn in 2019 -a jump of 300% over 2016 and about 40% more than in 2018. Indian government’s focus on innovation and entrepreneurship is fuelling ambitions andcreatingnewgenerationsofpassionatejob-creators.Agrowingnumberof academic and private incubators and accelerators, many supported by NITI Aayog’s Atal Innovation Mission and the Department of Science and Technology,areservingascatalystsinthismovement.
However, for sustained results, startup support ecosystems need to mature further, as do the founders themselves. Studies have shown that nine out of ten startups eventually fail, and eighty percent of startups crash within the first eighteen months as entrepreneurs often tend to underestimate the effort required to nurture their ventures while they are in their early, and most vulnerable,phases.Manyfoundersareconvincedthattheirpathtosuccessneeds them to merely develop a new and brilliant technology, which when introduced to the world, will open floodgates of money and customers. To make matters worse, these founders are reluctant to show their product to anyone, including potential customers, until it is flawlessly finished. This product-first and “build it and they will come” approach to entrepreneurship creates enormous risks for startups.
Surely, all journeys have a starting point, but the spotlight on starting-up is perhaps overemphasized in many entrepreneurial conversations. Media reports that glorify fundraise often do not convey the hard-work and heartbreaks that precede such events. Many starry-eyed youngsters romanticize about merely launching their services or products without the forethought of what awaits them post the launch. As a result, these startups scramble to acquire and retain mainstreamcustomersandstruggletoservethemafterenteringthemarket.
Leadershipcapabilitiesneeded tolaunchastartuparesignificantlydifferentfrom those required to scale the venture into a successful business with more moving parts, greater operating autonomy, and larger team size. But founders are often uncomfortable with letting go and empowering others, as their identity evolves from a comfortably-chaotic startup to an effective organization. Economic volatility, high startup mortality rates and challenges in the availability of risk capital have reinforced that startups need game-changing vision, deep customer insights,andsoundbusinessmodelsforlong-termsustenance.
Numerousstudiesacrossgeographiesandindustriesshowthatthereasonsforstartupfailurearereasonablycommon makingsomethingthat nobody wants, mismatches within the founding team, lack of focus, unclear market differentiation and weak business models. Given the long historyofsuccessfulandfailedstartups,onewouldexpecttoseeasubstantialbodyofknowledgeforavoidingtheserisks.Unfortunately,thatis not seen as there is a shortage of codified learnings that are essential to initiate and succeed as a startup. But for a few evangelists like Steve Blank, Eric Reis, Bill Aulet, and Peter Thiel, useful guidance is hard to come by. Moreover, there is a sheer lack of processes and practical tools (withthenotableexceptionofAlexanderOsterwalder’sandAshMaurya’swork)thatstartupscanreferto,toavoidpastmistakesofothers.
©
This vacuum of ‘best practices’ is addressed in this book through the Startup Maturity Model (SMM) which offers a practical pathway for a startup’s success. It does so by seamlessly integrating concepts from Design Thinking, Entrepreneurship, Strategy, Operations, and Human Capital Management. Amongst all disciplines, Design Thinking, with its emphasis on human-centricity, creativity, collaboration, and iterative learning has influenced the book’s approach and structure the most. Basic tenets of Design Thinking find their presence throughout the text in theformofexamples,practices,tools,andmethods.
The Startup Launchbook blends best practices from the fields of Lean Startups, Design Thinking, Human Capital Management, and Operations. Amongst these, Design Thinking has been most instrumental in taking an action© oriented and customer-centric approach within the Startup Maturity Model. The author has modified components of the traditional Design Thinking approach to offer a more relevant framework for startups.
FINANCES TEAM PRODUCT
SWEET SPOT FOR LAUNCHING GREAT STARTUPS
Will the solution address customers needs and wants? ’
©
The Startup Maturity Model(SMM) is a framework of practices that contribute to launching customercentric startups.
©
These practices are arranged in a staged architecture consisting of Five Maturity Levels that offer a clear and actionable roadmap for startup founders. SMM seamlessly integrates concepts from the domains of Design Thinking, Lean Startups, Strategy, Operations and Human Capital Management.
At its highest level of abstraction, the SMM consists of five Maturity Levels; each startup can thus be characterized to belong tooneofthesefivelevels.
Amaturitylevelisdefinedasanevolutionaryplateauinthejourney to a successful launch the word ‘evolutionary’ implies that each levelisattainedbychangingcertainpracticesatthepreviouslevel. ‘Plateau’impliessomesteadyingintherateofchangeofpractices. In other words, the intent is to not jump hastily from one maturity level to the other in a mindless pursuit of levels. Instead, once a change in practices has been introduced, it must seep deep into the startup’s culture. Each plateau helps a startup genuinely understand if the implemented practices are relevant to its needs andifthedesiredimpacthasbeencreated.
Once the practices are adequately stabilized then the startup may contemplate transitioning to the next level of maturity. Care must be taken to avoid the other extreme, that is, staying at the plateau for too long as it will result in stagnancy and possible resistance to change. The laddered nature of the SMM may indicate a linear approachtolaunchingstartups,butnothingcouldbefurtheraway from the truth. The reality is that while each maturity level providesthemuch-neededanchoringforthemoment,thestartup mayhavetoiteratebetweenmovingaheadandcomingbackafew times,beforetrulymovingon.
This cyclical behavior is fundamental to the tenets of Design Thinking and the discovery mode in which most startups operate. Alogicalcuriosityatthisstageisaboutsimilarities,anddifferences, © between the SMMand MMEO, Maturity Model for Building © Enduring Organizations , which was introduced in Startups and Beyond: Building Enduring Organizations. Both are conceptual frameworks with five Maturity Levels each, and both contain best
practices that need to be interpreted and implemented by organizations. However, they differ dramatically in their scope:
© SMMisasubsetofMMEO,asitisonlyapplicabletostartups,while
©MMEO can be used by any organization to guide its journey of growth and innovation. In its entirety, SMM can be subsumed
© under Level 1 of MMEO! The SMM’s identity as a field-guide is also oneofitsdifferentiatingattributes.
While many startups have successfully deployed SMM’s practices in the past, we recognize that each venture’s working conditions are unique. Hence it is essential to interpret SMM’s practices consideringone’sbusinessandculturalcontext.
For example, a solo founder may have to project the many teamrelated practices of Level 1 onto herself. Similarly, a well-funded startup that can hire team members early-on will need to add essential talent recruitment/selection activities at Level 1 itself. As abroadframeworkofaction,SMMcan’tpossiblyaddressallneeds of a startup; some practices of SMMwill offer detailed or in-depth perspectives, while others may not. SMM owes its origin to the ® ® much-acclaimed family of Capability Maturity Models (CMMs) from the Software Engineering Institute at the Carnegie Mellon University. SMMshares many of its principles and architectural ® elements with the family of CMMs. However, it differs ® significantly from CMMs in ways such as the presence of processes/practices at Level 1 and lack of formal Key Process Areas, Measurement and Verifying Implementation sections at all levels.
©
PleasenotethattheStartupMaturityModel andMaturityModelfor © Building Enduring Organizations are neither endorsed nor reviewed by Carnegie Mellon University or Software Engineering Institute.
® ® ® Capability Maturity Model, CMM, and CMMI are registered in the U.S.PatentandTrademarkOfficebyCarnegieMellonUniversity.
A 5-LEVEL APPROACH FOR LAUNCHING GREAT STARTUPS
LEVEL5:LAUNCHMANAGEMENT
Ensure that adequate resources, customer-facing processes and organizational systems are in place to supporttheproduct/servicelaunch.Closelymonitorthefeedbackofvariousstakeholdersafterthelaunch and make refinements to sustain and grow the venture. This Maturity Level fuels growth, enhances customerimpact,anddrivesprofitabilityofthenewventure.
LEVEL4:SOLUTIONDEVELOPMENT
Launch,sustainandscaletheventure. Createproducts/servicesthatwilldelightcustomers.
Develop product/ service functionality in alignment with customer needs, desired differentiation and business viability. Align solution development with other organizational activities like operations, marketingandsales.ThisMaturityLevelenablesthestartuptodeveloprelevantofferingswhile preparingtheorganizationforthelaunch.
LEVEL3:VIABILITYANALYSIS
Prototypesolutions.Evolverobustbusinessmodels.
Discover product and service features that address customer needs and wants. Uncover innovative ways of acquiring customers, generating revenues, managing competition and increasing profits through business modeling and the Startup OperatingCanvas.ThisMaturityLevelprovidesinsightsoncreatinganddelivering sustainablevaluetocustomers.
LEVEL2:OPPORTUNITYANALYSIS
Understandmarketdynamics.Knowyourpotentialcustomers.
Situate the startup within the broader socio-economic and competitive environment. Analyze categories and segments of customers/users who will be served, and empathize with potential customers to learn about their life context, needs, problems and wants. This Maturity Level is critical for instillinganoutside-inandcustomer-centricmindsetinthefoundingteam.
LEVEL1:IDEATIONANDTEAMFORMATION
Buildacohesivefoundingteam.Discoverexcitingstartupideas.
Identify startup ideas that tap market opportunities and appeal to the founding team’s passion. Build a founding team that is balanced in their skills, resources, knowledge, and experience. This Maturity Level providesaculturalfoundationoftransparency,empowermentandcontinuouslearningtotheventure.
The SMM enables founding teams to become customer-centric in their thinking and more agile in their actions. Additionally, practices at each level enable them to view themselves, and their venture's mission, with a greater degree of objectivity. In the spirit of how great startups are built, SMM prepares entrepreneurs for a journey that is more iterative than linear.
FROM Technology Products
Founder-driven
Un-differentiated
Cash burn
TO Problems worth solving Customer empathy
Unique benefits
Economically viable
Empowered teams
– Starting-up is a marathon, and not a sprint
– Help your customers delight their customers
– Work “on” your business
– Observe. Make. Test. Improve
– Planning is more important than plans
– Ideas don’t change the world. Action does.
– Focus and learn to say “no”
– If you just build it, they may not come
– Build great work culture from Day One
For more about building an entrepreneurial mindset please refer to page 339
Identify launch phases
Define and track success metrics
Stabilize the new venture
Prepare to scale-up
Build market-ready product
Prepare GTM plans
Build resource/financial plans
Develop execution-ready team
Build MVP
Validate MVP
Develop Business Models
Identify and manage risks
Identify target segments
Empathize with customers/users
Analyze competition
Determine opportunity potential
Find problems worth solving
Analyze root causes
Brainstorm initial ideas
Personal and team readiness
Customers & Market
Product / Service
Team & Culture
Finance & Resources
LEVEL 5
Customer delight metrics
Scale-up plans
LEVEL 4
GTM Plans
Customer experience map
Product metrics
Product innovations
LEVEL 3
Unique value proposition
Customer engagement map
Market-ready product
Product roadmap
LEVEL 2
Customer/user personas
Competition
Opportunity size
LEVEL 1
Problem statement
Root-cause analysis
Prototypes
Validated MVP
Recruitment processes
Onboarding approach
OKRs
Marketing/Sales team
Organization structure
Roles and responsibilities
Purpose & values
Partners
Financial dashboard
Funding plans
Legal compliances
Financial plans
Revenue streams
Pricing models
Key costs
Idea Statement
Proof of Concept
Founder agreement
Capability gaps
Mentoring needs
Refined resource needs
First-cut idea statement
Personal motivators
Co-founders
Initial team members
Initial resource needs
Ÿ Developanentrepreneurialmindsetofcuriosity,actionandreflection
Ÿ Savetimeandmoneybyfollowingaroadmapwithclearmilestones
Ÿ Evaluatebusinessopportunitiesfromcustomers’perspective
Ÿ Situatethestartupobjectivelywiththebroadercompetitivelandscape
Ÿ Buildproductsorservicesthataddressvalidatedcustomerneeds
Ÿ Discoverrobustbusinessmodelsfortheventure
Ÿ Buildacohesiveanddedicatedinitialteam
Ÿ Launchwithlimitedresources
Ÿ Focusnotjustonstarting-up,butonachievinglastingsuccess
Ÿ Focusonintrinsicrobustnessthatnaturallyattractsfundingattention
Ÿ Empowertheteamtomanagescaleandcomplexity
AVOID:
Ÿ Havingasolution-looking-for-a-problemapproach
Ÿ Thefrustrationofnotunderstandingcustomerneedswell
Ÿ Theconfusionofstarting-upwithmanyuntestedassumptionsabouttheproduct,customersorpartners
Ÿ Frictionbetweenco-founders
Ÿ Cashburnwhiletryingtojugglethemanytasksrelatedtostartingup
Ÿ Theanxietyassociatedwithpursuingideaswithweakrevenueandgrowthpotential
Ÿ Reluctanceofthefoundersto“letgo”
Ÿ Eithertakingtoolongtolaunchorlaunchinginhastewithoutadequatepreparations
Ÿ Over-focusingontheproductorservicedevelopment,atthecostofmarketdevelopment
Ÿ Chasingexternalfundswithoutclarityonthestartup’spurposeandstrengths.
* What is in it for me?
Ÿ Understandfactorsthathelpcreatehigh-performingstartups
Ÿ Advisefoundersonmindsetandstrategiesneededtobuildrobuststartups
Ÿ Assessstartup’scurrentmaturity
Ÿ Supportstartupsinimplementingpracticesthatdeliverdesiredoutcomes
Ÿ Helpstartupsavoidtypicalpitfallsandmistakes
Ÿ Trackstartup’sprogresstowardsasuccessfullaunch
Ÿ Provideobjectivefeedbackonstartupsstrengthsandareasofimprovements
Ÿ Determineinvestmentrisksandopportunities
Ÿ Mentoreachportfoliostartupwithaclearanduniqueroadmap
Ÿ Develop deeper insights into founding team’s alignment and capabilities for buildingalong-termbusiness
Ÿ Evaluatetheventure’sreadinesstoscale
Ÿ Complement existing curriculum on management and entrepreneurship with ©SMM ’spracticalofferings
Ÿ Educate students about the virtue of thinking beyond starting-up to build longtermenduringorganizations
Ÿ Mentorandguidestudentstartups
Ÿ Buildexperientiallearningopportunities
