[eBook Code] Startup Opportunities (eBook Code, 2nd)

Foreword xiii

Preface xvii

Trust Me, Your Idea Is Worthless 1
by Tim Ferris

Chapter 1 What Is a Startup? 3

How to Use This Book 5

Who This Book Is For 5

Notes 6

Chapter 2 The Democratization of Startups 7

The Cost to Launch Is Approaching Zero 7

The World Is Flat 8

The Path Is Known 9

Access to Capital 10

Chapter 3 Opportunities 13

The Four Criteria for an Opportunity 13

What Is Opportunity Evaluation? 14

What Is the Cost of Poor Opportunity Evaluation? 16

Execution Trumps Opportunity 19

Risk, Uncertainty, and Ambiguity 21

The Issue of Bias 23

Notes 27

Chapter 4 Approaches to Opportunity Evaluation 29

Where Does Opportunity Evaluation Fit into the Overall Startup Process? 29

Overview of Business Model Generation 31

Overview of Customer Development and Lean Startup 33

Overview of the Disciplined Entrepreneur 35

A Modern Version of the Scientific Method 36

Notes 40

Chapter 5 People 43

Team 43

Working Full Time 47

Been There, Done That 47

Passion 48

Coachability 50

Ability to Attract Talent 53

Business Acumen 53

Domain Knowledge 55

Operational Experience 55

Mentors 56

Board of Directors/Advisors 57

Customers 58

Social Capital 59

Notes 60

Chapter 6 Pain 63

Compelling Unmet Need 65

Size 65

Durability and Timeliness 68

Notes 71

Chapter 7 Product 73

The 10× Rule 73

Rate of Adoption 75

Rogers’ (1976) Diffusion of Innovations Theory 75

Intellectual Property 76

Key Asset Access 77

Proof of Concept—Selling Your Product in Advance of Making It 78

Gross Margins 79

Contents ix

Scalability 81

Notes 81

Chapter 8 Market 83

Market Stage 84

Product/Market Fit 87

Disruptive Innovation 90

Industry CAGR 90

Distribution Strength 91

Customer Acquisition Costs 93

Viral Marketing 93

Competition 94

The Goliath Paradox 96

Barriers to Entry 97

Government Regulations 98

Partnership Status 99

Knowing Why You Need to Raise Money 99

Notes 102

Chapter 9 Plan 105

Time to Launch 106

Plan to Scale 107

Reasonable Not Right 108

Get Out of the Building 111

Plan B 112

Notes 115

Chapter 10 Pitch 117

Short Form (Under 10 Minutes) 118

Long Form (30 Minutes) 118

Business Plan—or Not 119

Executive Summary 121

Q&A 121

Notes 124

Chapter 11 Raising Money 125

Building a Relationship with a Potential Investor 126

Who Makes the Ask? 127

Use of Proceeds 127

Raise the Least Amount of Money to Get to the Next Level 128

Ask for Money from the Right Kind of Investor 129

Raise Money When It’s Available 131

You Aren’t an Exception 132

Why Anything Other Than a Yes Is a No 134

Be Realistic about Your Valuation 136

Even Angels Have Investment Committees 137

Notes 141

Chapter 12 Pitfalls 143

Showstoppers and Red Herrings 143

Excessive Valuation 144

Taboo Businesses 145

No Skin in the Game 146

The No Asshole Rule 146

The Key Person Dependency 147

Drinking Your Own Kool-Aid 147

Notes 150

Chapter 13 Don’t Quit Your Day Job If You Aren’t 151

Passionate about the Space 151

Able to Execute the Solution 151

Certain That the Problem Is a Need (as Opposed to a Want) 151

Certain That the Problem Is Shared by a Large (and Growing) Market 151

Able to Offer a Solution That Is 10× Better Than Anything Else

in the Market 152

Ready to “Burn the Ships” 152

Able to Access Potential Customers 152

Able to Spend Six Months without Personal Income 152

Able to Garner Enough People, Users, and Money to Create a

Minimum Viable Product 152

Prepared to Get into the Weeds and Do the Grunt Work 152

Glossary 153

Acknowledgments 159

About the Authors 163

Index 165

Excerpt from Brad Feld’s

Venture Deals, Third Edition 173