INTRODUCTION VIDEO:

2 types of entrepreneurship:
1. SME (Small and medium business
driven)
a. Revenue first
2. IDE (innovation driven)
a. Innovation first
Graph that distinguishes both is on your
screen now:
1. IDE creates more jobs and wealth
distribution overtime

In this course you will go through 24

steps that have been curated to be like a
journey. You cannot skip 1 step and
move to 3rd, because you will lose the
context.
1. Market segmentation
2. Beachhead market
3. End user profile
4. Beachhead TAM
5. Persona
6. Life cycle use case
7. Higher level specs
8. Quantify value proposition
9. Next 10 customers
10. Define core
11. Chart competitive position
12. Determine DMU
13. Map customer acquisition process
14. Follow-on TAM
15. Design business model
16. Pricing framework
17. LTV
18. Map sales process
19. COCA
 20. Identify key assumptions
21. Test key assumptions
22. Define MVBP
23. Show the dogs will eat the dog food
24. Develop product plan
There are 3 ways to start a new venture:
1. Idea
a. I have idea
2. Technology
a. I have technology
3. Passion
a. I have passion
Generally it is said that you must not
become an entrepreneur before you
know a clear pain point of the customer.
This discourages people from starting
up,.
The intent of this course is to inspire
people to start-up. To create something.
To establish the foundation for aatm
nirbhar bharat.

How to go from passion to I have idea /

technology:
1. Knowledge
2. Capability
3. Network
4. Financial assets
5. Established brand
6. Past work experience
7. Commitment
8. Find a founding team – remember
entrepreneurship is not a solo sport
Summary Video
In this course you went through a deeply
enriching journey that gave you 24
sequential steps to start a startup.
95% of the startups fail, purely because
they fail to act upon 1 of these steps.
Lets quickly revise what we learnt in this
course. Below is a list of 12 topics that I’d
suggest that you watch again:
1. The difference between being
entrepreneurial and
entrepreneurship
2. Focus on customer is the key to
success
3. Primary research is critical.
Whatever it takes.
4. How to write product specifications
to transform an idea into a product?
5. How to quantify value proposition
for the customer and the investor?
6. How to define your core?
7. How to design a sales process?
8. How to design a business model?
9. How to set a pricing framework?
10. How to calculate COCA?
11. How to test assumptions and build a
MVP?
12. Finally the introduction of your
product.
Video #1: Market Segmentation
What will you achieve?
1. Brainstorm a wide array of potential
customers and markets for your
business.
2. Narrow your list down to your top 6–
12 markets.
3. Gather primary market research on
your top 6–12 markets
Golden statement: startup success
happens when you see through the eyes
of the customer and not through the
perspective of the company.
You must ask the question : WHAT IS THE
SINGLE NECESSARY AND SUFFICIENT
CONDITION FOR A BUSINESS?
It is not a product, a technology, a customer need,
a business plan, a vision, a strong team, a CEO,
money, investors, competitive advantage, or
company values. While all those are great things
for a business to have, none of them is the right
answer.

The single necessary and sufficient

condition for a business is a paying
customer.
GOLDEN STATEMENT : Now, just because
you have a paying customer does not mean
you have a good business.
A STARTUP DOES NOT BEGIN BY HIRING
PEOPLE, BUILDING A PRODUCT OR
HIRING DEVELOPERS. IT BEGINS BY
FINDING AND FULFILLING AN UNMET
NEED.

STEP #1 OF MARKET SEGMENTATION:

1. CREATE A NEW MARKET THAT YOU
CAN DOMINATE WITH YOUR
INNOVATION
A NEW MARKET MEANS – DEFINING A
TARGET CUSTOMER THAT WILL PAY
FOR FULFILLING A NEED THAT WAS
UNMET BEFORE

REMEMBER : TARGET MARKETS CANNOT

BE DEFINED BY EDUCATED
ASSUMPTIONS. INSTEAD YOU GET TO
THE RIGHT MARKET BY PRIMARY
RESEARCH.
AN IMPORTANT PITFALL TO SAVE YOUR
STARTUP FROM: SOMETIMES PAYING
CUSTOMERS MAKE YOU BLIND TO
OBVIOUS FAILURES LATER IN THE
BUSINESS.
THE 2 COMMON PITFALLS ARE:
1. SELLING TO EVERYONE
2. THE CHINA SYNDROME (CHINESE
MATHEMATICS)
SOMETIMES EXCEL SHEETS ARE FUN TO
PLAY WITH. BUT FUN IS NOT BUSINESS.
INSTEAD OF FINDING A NEW MARKET,
YOU TEND TO BE EXCITED WITH AN
EXISTING MARKET SIZE AND YOU RUN
FOR IT. YOU LOSE SIGHT OF LONG TERM
SUSTAINABILITY OF YOUR BUSINESS.
EXAMPLE : PATANJALI (FORM 11SKU’S
TO 800)
SOME MARKETS ARE TWO SIDED OR
MULTI SIDED. INDIAMART / EBAY ARE
GREAT EXAMPLES.
TILL NOW YOU HAVE UNDERSTOOD
MARKET SEGMENTATION AS A CONCEPT.
ITS TIME TO UNDERSTAND HOW TO DO
MARKET SEGMENTATION?
1. BRAINSTORM
a. NARROW
i. To a list of 5-6 key markets
segments
b. PRIMARY RESEARCH
i. Is the target customer well
funded?
ii. Is the target customer readily
accessible to your salesforce?
 iii. Does the target customer have
a compelling reason to buy?
iv. Can you today with help of
partners deliver a whole
product?
v. Is there competition that can
block you?
vi. If you win this segment, can
you use your success to get into
other segments too?
vii. Is the market consistent with
the goals and passions of the
founding team?
How long should you spend on market
segmentation?
1. Give your full attention for at least
4-6 weeks
 2. But do not fall into analysis –
paralysis.
MAP:
1. IDENTIFY MULTIPLE POTENTIAL
MARKET OPPORTUNITIES
2. USE PRIMARY RESEARCH TO
FURTHER NARROW DOWN TO 5-6
KEY SEGMENTS
3. BE READY WITH THE MARKET
SEGMENTATION
VIDEO #2: HOW TO SELECT A BEACHHEAD
MARKET?
What will you achieve?
1. Analyze your top 6–12 market
opportunities and choose one to
pursue.
2. Further segment that market to
determine your beachhead market.
Selecting a beachhead market is part of
the critical process of narrowing your
focus and attention to one critical area of
attack
Out of the 5 – 6 markets that you chose
in step 1, choose the most promising
market segment and leave the rest. This
is your beachhead market.
Golden statement: ignoring market
segments increases focus on value
creation and the customer.
>> How to choose your beachhead
market?
1. Army – beachhead strategy. Land
your force on a beach in the enemy
territory.
2. Beachhead market is where you
have a dominant market share. It
gives you access to other adjacent
markets that you then attack.
The 7 points that we discussed in step 1
are valid in finding a beachhead market.
1. Is the target customer well-funded?
2. 2. Is the target customer readily
accessible to your sales force?
 3. 3. Does the target customer have a
compelling reason to buy?
4. 4. Can you today, with the help of
partners, deliver a whole product?
5. 5. Is there entrenched competition
that could block you?
6. 6. If you win this segment, can you
leverage it to enter additional
segments?
7. 7. Is the market consistent with the
values, passions, and goals of the
founding team?
GOLDEN STATEMENT: Choose a smaller
beachhead market initially. Because you
will experiment early on and hence
Do not worry too much on the size of the
beach head market. Infact the smaller
and the more focused it is, the better.
Q. till when should you keep segmenting
the beachhead market?
You must keep segmenting your market,
till it fulfils the 3 conditions:
1. The customers within the market all
buy similar products.
2. 2. The customers within the market
have a similar sales cycle and expect
products to provide value in similar
ways. Your salespeople can shift from
selling to one customer to selling to a
different customer and still be very
effective with little or no loss of
productivity.
3. 3. There is “word of mouth” between
customers in the market, meaning
they can serve as compelling and
high-value references for each other
 in making purchases. For example,
they may belong to the same
professional organizations or operate
in the same region.
Example: facebook – college students
from ivy leagues were a beachhead
market.
MAP:
1. DEFINE YOUR BEACH HEAD MARKET
2. FURTHER DRILL IT DOWN TO A
SMALLER SIZE
3. REMEMBER THE 3 IMPORTANT
CONDITIONS OF A PERFECT BEACH
HEAD MARKET
VIDEO #3: How to build an end user
profile?
What will you achieve: Use primary
market research to flesh out a detailed
description of the typical end user within
your market segment.
After step 1 & 2 – now that your
beachhead market is ready, its time to
learn about your target customer.
Golden statement: if you don’t serve the
customer, you will become a push sales
business and will be replaced very soon.
The customer is made up of 2 parts:
1. The end user
2. The decision making unit
a. Champion
b. Primary economic buyer
 c.Influencers, Purchasing
department etc.
Q. After creating a beachhead market,
why is end user profile creation so
important? – 2 points.
A.
1. even though Beach head market is
narrow, the end users in the market may
still be of different varities.
As a startup your goal is to serve as many
homogenous (similar) set of people as
possible within the end user base.
2.Your end users define your sales
strategy and the features in your
products / services.
Q. The template / format of an end user
profile: - 11 points
1. What is their gender?
2. What is their age range?
3. What is their income range?
4. What is their geographic location?
5. What motivates them?
6. What do they fear most?
7. Who is their hero?
8. Where do they go for vacation?
9. What newspapers do they read? Websites?
What TV shows do they watch?
10. What is the general reason they are
buying this product? Savings? Image? Peer
pressure?
11. What makes them special and
identifiable? What is their story?
MAP:
1. Use the 11 points to build the end user
profile
2. Go back to the beachhead market and
see how many end users actually exist
there?
3. In the next video we will learn about
TAM – total addressable market
Video 4: How to calculate the TAM for
the beachhead market?
What will you achieve in this video?

1. determine quantitatively

how large your beachhead market is.

2. Use this market size

number to determine whether you

 need to further segment the market
to have a more appropriately sized
beachhead market.

3. Arrive at TAM

TAM = no. of end user profiles in the

beachhead market X annual revenue that
you can make per user
TAM is critical to understand because it
shows your understanding of the market
and your potential revenue. This tells
investors whether to invest or not also it
tells you whether to move forward or not?
1. Bottom up analysis – primary
research (eg: high end coffee
powder)
2. Top down analysis – secondary
research
Once you have the TAM – its time to get
the money – how much revenue can you
make? What’s the business potential of
your TAM?

The assumption you make here is : you

define an X number as potential annual
revenue per user.

What should be the ideal TAM?

$20M - $100M. anything over $1B raises
red flags.
Chances are high that you will revisit this
calculation as you go further in this
course and before you start your startup.
Example : facebook and quora.
How facebook started only with colleges
(TAM). Quora started only for intellectual
Q&A thinkers.
Video #5: How to build the customer
profile for the beachhead market?
What will you achieve?
You will learn how to build a customer
persona.
1. Choose one end user from one
potential customer to be your
Persona.
2. Build a detailed description of that
real person. Make the Persona visible
to all in the new venture so that it
gets referenced on an ongoing basis.
The Persona ensures that everyone is
unambiguously focused on the same
target.
Q. what is the difference between end
user profile and customer persona?
 End user profile is the profile of the
customer that represents your target
customer.
Persona is of the primary customer for
the beachhead market.
Q. Why is making a personal so
important?
The process of defining a Persona for
your beachhead market makes your
target customer tangible so that all
members of the founding team, and all
employees, have absolute clarity and
focus on the same goal of making your
target customer successful and happy

Q. HOW TO CHOOSE AND PROFILE YOUR

PERSONA
1. You and your team should take the
primary market research you have on
some of these customers, as well as the
End User Profile, and discuss the pros and
cons of making each customer the
Persona.
2. Don’t spend too much time worrying
whether you have the perfect Persona;
just make your best guess and get the
process started.
3. All information that you enter about a
customer must be specific and not just a
range / figure.
4. Primary research is the most effective
way to build customer persona.
On your screen is a sample persona
template.
The pitfall in building a customer persona
is building a persona on secondary
research. You must use primary research.

Q. Why is persona creation important? –

6 points
1. Persona defines what features must
your product have?
2. What team should you hire to sell your
product?
3. What marketing messages should you
create to engage your customers?
4. Who should you partner with?
5. Who influences your customers?
6. Personas help you decide what to do
and what not to do?

EXAMPLE:
JABONG.COM
VIDEO #10: DEFINE YOUR CORE
In this step you will Explain why your
business can provide customers with a
solution that other businesses cannot
nearly as well. This is your secret sauce.

You need to figure out something that

you do that will make you better than
anyone else at producing a solution for
your customers. This will be the new
venture’s eventual crown jewels.
The Core is something that allows you to
deliver the benefits your customers value
with much greater effectiveness than any
other competitor.
What is it that you do better than anyone
else?
The core is your protection against
competition and changing market
dynamics. What is it that others can’t
duplicate?
Examples of core:
1. Network effects
2. Customer service
3. Technology
4. Big Data
5. Always the least cost
6. Unique user experience
7. Patent
You cannot change your core everytime.
It is not like a pivot of the business.
Q. Is core the same as your competitive
advantage?
The Core is how you are building a
capability to differentiate yourself from
your competitors, and it cannot be easily
replicated by others. It is the most
concentrated way to gain differentiation
from your current and potential
competitors so you can really focus your
small amount of resources to gain
maximum value for your new venture.
Q. Is first mover advantage a core?
No. First-mover advantage can help a
company with a well-defined Core, but it
cannot win the market by simply by being
first;
Q. How do you build the core?
Answer the following questions: - 3
questions
 1. What is so unique about your idea /
venture that nobody else can
replicate easily?
2. What is highly valuable for your
customers?
3. Do you have some IP or patent?
MAP:
Build your core. Define it.
Video #11: How to chart your
competitive position?
IN THIS STEP, YOU WILL: Show how well
your product meets the Persona’s top
two priorities?

Show how well the Persona’s priorities

are met by existing products in
comparison to your product. Analyze
whether the market opportunity you
have chosen fits well with both your Core
and your Persona’s priorities.
When you build your competitive
position, you translate your core into
something genuinely valuable for the
customer.
Golden statement: customers make
purchasing decisions basis comparisons.
The human brain works in comparisons.

The competitive positioning chart:

You show visually how well you fulfill
your Persona’s top two priorities versus
how well your competition does so.
The Competitive Position is the link
between your Core and your Persona’s
priorities, and shows that they logically
make sense for the target market you
have chosen.
Q. Why is the competitive position so
important?
A: it tells the gap between your product /
service / solution and the actual need of
your persona’s priorities.

Q. how to chart your competitive

position? – 6 steps:
Primary research is your most valuable
tool in competitive research. It will
actually help you go back to the customer
to re-assess and ensure that your
assumptions are correct.
1. identify 2 top priorities of your
persona
2. create a simple graph / matrix as
follows:
a. 1. Divide both the x-axis and y-

axis into two halves.

b. 2. On the x-axis, write the

number-one priority of your Persona.

c. 3. On the half of the x-axis

closer to the origin, write the “bad

state” of this priority (e.g., if the
priority is “reliability” then write “low”
here).
d. 4. On the other half of the x-

axis, write the “good” state of this

priority (e.g., “high” for “reliability”).

e. 5. On the y-axis, place the

number-two priority of your Persona.

Write the “bad state” on the half of
the y-axis closer to the origin, and the
“good state” on the other half of the
y-axis.

f. 6. Plot your business on the

graph, along with those of your

competitors (current and future). Also
 include the customer’s “do nothing”
or “status quo” option.

Example: Reliance Jio – it exists on top

right of this graph

If you have done good primary market

research, your business should be
positioned in the top-right quadrant of
this graph, at the high end of the “good”
states of each priority. The bottom-left
quadrant is where you absolutely do not
want to be.
You must keep refining this chart with
your customer feedback till you reach a
stage when your product / service
matches exactly the value that the
customer seeks and pays for.
MAP: Design your competitive position
and with the primary research – confirm
if your competitive position fits in with
what your beachhead paying customer
needs.

Video 12: How to determine customer’s

decision making unit?
What will you achieve in this video?

1. Learn who makes the ultimate

decision to purchase your product,

and who will be advocating for
purchasing it.

2. Meet the influencers who have

sway over the purchasing decision.

Your target customer almost surely has a
decision-making group of more than one
person.
Understanding this group and explicitly
mapping out each person’s role and
interest is of critical importance not just
for the sale, but also much earlier in the
process when you are developing the
product and all of its attributes.
To sell your product successfully, you will
need to identify all the people who will
be involved in the decision to acquire the
product for the end user. Some people
will actively approve or block acquisition,
while others will present opinions that can
sway the acquisition process.

PRIMARY ROLES IN THE DECISION

MAKING UNIT
1. Champion
2. End user
3. Primary economic buyer
Champion: The champion is the person
who wants the customer to purchase the
product, typically but not necessarily your
end user.
End User: This is the person who will
actually use the product to create the
value that is described in Step 8,
Quantified Value Proposition.
Primary Economic Buyer: This is the
primary decision maker, as everyone else
looks to this person to sign off on
spending money to purchase your
product. Most often, this person controls
the budget.

ADDITIONAL ROLES IN THE DECISION

MAKING UNIT (DMU)
1. Primary and secondary influencers
2. Person with veto power
3. Purchasing department

1. Primary and Secondary Influencers

 a. SMEs that can influence rest of
DMU. Generally individuals – they
can also be the media, friends and
family, industry groups, websites,
blogs,
2. Person with veto power
a. They have the ability to reject a
purchase for any reason. Most
often they are in a B2B
environment. Eg: the IT
department has the veto power in
IT purchases. Unions are veto
players too.
3. Purchasing department
a. They handle logistics of
purchase. They often look to drive
prices down. Understanding this
department increases your odds of
success.
HOW TO DETERMINE THE
DECISIONMAKING UNIT??
B2B / B2C:
POSist
Patanjali
- Primary economic buyer
- End user
- Champion
MAP: define your DMU well
Video #13: MAP THE PROCESS TO
ACQUIRE A PAYING CUSTOMER.
What will you achieve?
1. Map out the process by which a
customer decides to purchase your
product.
2. Estimate the sales cycle for your
product.
3. Identify any budgetary, regulatory, or
compliance hurdles that would slow
down your ability to sell your
product.
This step comes after the Decision
Making Unit. This is where you decide
‘how to get the product in the customer’s
hands’ and money in yours?
This is a process of converting a
prospective customer into a paying
customer.

What are the advantages of creating a

paying customer process map? – 4 points
1. Understand the length of the sales
cycle.
2. Build the foundation for the Cost of
Customer Acquisition calculation.
3. Identify hidden obstacles that will
inhibit your ability to sell your
product and get paid
4. Be able to show your potential
lenders and/or investors that you
understand the customer’s buying
process
The process MAP – full life cycle of
converting a prospect into a paying
customer:

1. How customers will determine

they have a need and/or opportunity

to move away from their status quo
and how to activate customers to
feel they have to do something
different (purchasing your product).

2. How customers will find out

about your product.

3. How customers will analyze

your product.

4. How customers will acquire

your product.

5. How customers will install your

product.

6. How customers will pay for your

product.
After this 6 step process, in each of these
steps, add these 5 sub-steps:
1. Who are the key players from the
DMU that will be involved?
2. What is their influence on the
process? Again, this is hopefully
information you have already
obtained in Step 12 when you built
the DMU;
3. What is their budget authority
(amount and type)?
4. How long will it take to complete
each component you identify? List
them in temporal sequence noting
any that can run in parallel. (Be
diligent. You need to have at least 80
percent certainty in each step. Make
 conservative estimates because
entrepreneurs almost always
underestimate the time to complete
each step.)
5. What are the inputs and outputs of
this step?
How will this map differ if you are
starting a B2B company?
Remember – everyone in a company has
a certain limited financial decision
making ability. There is always a higher
decision maker / approval involved.
When you know the right person, your
sales cycle is dramatically reduced.

Example : POSist Technologies

Video # 18: How to map the sales process
to acquire a customer?
Solving the riddle of the COCA

What will you achieve?

1. Develop short-term, medium-term,
and long-term sales strategies for
your product.
2. Understanding the details of
customer acquisition will make clear
to you the drivers of costs so that
you will know over time how to make
the sales process shorter and more
cost-effective.
Mostly entrepreneurs feel that
calculating the LTV is difficult, but most
entrepreneurs grossly miscalculate COCA
– what does it take to get a paying
customer in the system?
The COCA, in combination with the LTV,
helps you understand the dynamics of
your business and gives you enough data
to make a meaningful first-pass analysis
on the sustainability and profitability of
your business.
The 4 factors of COCA that entrepreneurs
generally tend to overlook:
1. The cost behind all of the sales and
marketing efforts required to reach
their prospects.
2. Long sales cycles that cost a lot of
money
3. All the customers who did not buy
their product, and the sales and
 marketing costs associated with
reaching those customers.
4. Corporate shake-ups that affect the
customer’s Decision-Making Unit.

Generally COCA starts very high and

reduces overtime.
The sales process for a startup is
generally mapped into 3 types basis time:
1. Short term
a. Direct sales
b. Web-based sales
2. Medium term
a. Here focus shifts more on
demand creation.
b. Distributors / channel partners
are often used here
 c.Here your profit margin might
reduce as you are sharing with the
channel, but reduced COCA usually
makes up for it
3. Long term
a. This is where you focus more
on client management. Internet
and tele-marketing services are
usually employed at this stage.

How to design a fool proof sales process

map? – 5 key questions:
1. How does your target customer
become aware that they have a
problem or an opportunity?
2. How will the target customer learn
that there is a solution to this
problem they have, or learn there is
 the opportunity they did not
previously know about?
3. Once the target customer knows
about your business, what is the
education process that allows them
to make a well-informed analysis
about whether to purchase your
product?
4. How do you make the sale?
5. How do you collect the money?

Example:
Linkedin.com – perfect example of
decision making unit + sales process
mapping