Module 4

Cyberpark
Cyberpark, Kozhikode has been envisioned and conceptualized as a major
IT hub catering to the northern part of Kerala towards promoting IT/ITeS
sector by Government of Kerala, after a trail-blazing performance with the
success of Technopark, Trivandrum and Infopark, Kochi. Cyberpark,
Kozhikode was established under Cyberparks Kozhikode an autonomous
society registered under the Society Registration Act 1860, on 28th January
2009. The ultimate objective was to facilitate state of the art IT
infrastructure space with all supporting facilities whereby creating an IT
ecosystem which would enhance the development of Information &
communication Technology & contribute significantly in direct/Indirect
employment opportunities and to GDP in the state.
Technopark
Technopark in Thiruvananthapuram is one of the largest technological
parks in the world. It was established by the Government of Kerala in 1990
as an autonomous organization to meet the infrastructure needs of
emerging electronics and Information Technology industry. The Technopark
has now expanded to accommodate more than 200 companies that
employ a large portion of the IT workforce in Kerala. Besides, Technopark
also helps the budding entrepreneurs through its state-of-the-art
Technopark Technology Business Incubator (T-TBI) which provides
economical plug and play facilities to start-ups in IT/ITeS sectors and
support them throughout the gestation period. Characteristic features of
Technopark contribute significantly toward developing an enabling
ecosystem for the entrepreneurs within the campus. This article provides
an insightful account of how the Technopark is changing the
entrepreneurial landscape in Kerala and creating opportunities for the
young to innovate, grow and become successful in all their ventures. True,
Technopark is a success story of a government organization turning the
tide towards entrepreneurship development in an unconventional manner.
 Infopark

Infopark Kochi, a perfect destination to house your IT/ITES Business in

Kochi, features all world class infrastructures for an IT Park. Started in
2004, the Park owned by the Government of Kerala, is the single window for
setting up your IT/ITES Business. Formed with the objective of creating
Infrastructure facilities for IT/ITES Companies in the Central Kerala Region,
Kochi. Located towards the eastern side of Kochi, at Kakkanad, the Park
sprawls over 260 acres of land in this main hub. Two satellite campuses- at
Koratty in Thrissur district and Cherthala in Alappuzha district, are also
operational within a reach of 45 minutes from the main hub. With over 9.2
million sq.ft of Built-up area, the park created all the infrastructure settings
needed for a balanced work place. Over 540 companies includes major
MNC’s like like Tata Consultancy Services, WIPRO, Xerox, KPMG, EY,
Cognizant Technology Solutions, EXL Service, UST Global, IBS Software
Services, ZELLIS HR India, Hubbel, Mari Apps, Fragomen Immigration
Services, RCG Global Services, INSPIRED Software Development, HCL
Technologies, BYJU’s, IBM India Software Labs, etc. form the clientele. The
campus is a workplace of over 63000 IT professionals.
Notified as IT/ITES Sector Specific Special Economic Zone (SEZ), the
campus offers host of benefits for the companies functioning here. Apart
from the IT/ITES Office buildings, the park offers all the complementing
services needed for the Business community and Working Professionals
includes a five star hotel property by Sheraton, Cyber Police Station, Food
Courts and Restaurants, Banks and ATMs, Kids Day Care Centre, CBSE
School, Health Care Clinics, Gym and Health Club etc.

Incubators in kerala
Start-ups have got a vital role to play in the future of India by creating
innovative solutions to country’s challenging issues and also by
generating large-scale job opportunities for upcoming workforce. The
government has recognised the importance of start-ups in the
economic development of the country, and therefore they have come
with various revolutionary measures to create a conducive ecosystem
for start-ups. Along with union government, various state governments
also have made their state-level policies to support the start-ups in
their respective states. Apart from the government, there are many
other institutions and ecosystem enablers in a start-up ecosystem who
support start-up units, namely incubators, accelerators, educational
institutions, research institutions, investors, mentors, NGOs etc. The
purpose of this study is to explore how technology business incubation
centre in Kerala are performing their role as a facilitator among start-
ups in the state and also to evaluate their impact on functioning of
start-ups units.

Startups business model

We’ve compiled a collection of the most popular business model types we see in the
current marketplace. This is by no means a comprehensive list—there are outliers and
unique models that diverge from most traditional definitions.

Use these business models as a template for operating your startup, but don’t feel like
you have to commit to every aspect. Take the parts you like and ditch the ones you
don’t. You might adopt a business model’s revenue-making strategy but opt for a new
cost structure. Or you may want to take one business model and apply it to a different
industry.

1. Freemium business model

The freemium model lets users access the base application or service for “free” before
enticing them to upgrade to a “premium” license to unlock advanced (often necessary)
features. You likely recognize this model through your company’s use of startup
marketing tools and software. The basic features work as a standalone product, but the
user interface (UI) constantly reminds users what they could utilize if they upgraded.

Upgrades could require a monthly subscription or a one-time payment. For example,

Ubersuggest lets users upgrade to a $29/month plan or a lifetime business plan for
$290.
Examples of the freemium business model:
• Asana
• Google Drive
• Slack
• Zoom
• Canva
• Mailchimp
2. Subscription business model
The subscription model requires users to pay a monthly (or annual) subscription to
access your products and services. Some businesses use a combination of freemium
and subscription models to bait and hook customers, while others make themselves
more premium by offering no free alternatives.

The trick with a subscription-based business model is to provide continual value. You
can’t just earn a customer one month and lose them the next—you need to keep them
satisfied and paying for your service.

Examples of the subscription business model:

• Netflix
• HelloFresh
• Stitch Fix
• Strava
• Amazon Prime
•
3. Pay-as-you-go business model

The pay-as-you-go business model has users pay based on their consumption. You
could consider your electricity and water bills as pay-as-you-go models—the more you
use, the more you pay.

With pay-as-you-go pricing, consumers pay for what they get. There’s no _wasted
_subscription they might forget about—they trade value for value. That’s why we use
subscriptions and pay-as-you-go for DigitalOcean’s mix of cloud solutions.

Examples of the pay-as-you-go business model:

• DigitalOcean
• Twilio
• Amazon Web Service (AWS)
• Audible
• Stripe
4. Ad-based business model
Advertising business models offer free services in exchange for ad views. Consumers
get to use the product for free as much as they want, but the more they use it, the more
ads they’ll see (which is a win-win for businesses).
This business model works perfectly for services that customers might not be willing to
pay to use, but they’d be happy to consume ads. Businesses collect behavioral data
about customers and offer it to advertisers to better reach their target audience.

The better the advertisers do, the more money you make—and the cycle continues.

Examples of the ad-based business model:

• Hulu
• Instagram
• TikTok
• Google Search
• YouTube
5. Transactional business model

Transactional business models typically look like eCommerce websites and brick-and-
mortar stores. Customers buy specific items or services for a one-time cost, whether
that’s an ebook or an electric drill.

The transactional business model is probably one of the most common (and easy to
adopt) revenue-making models. Your business buys (or produces) goods at a discount
or wholesale cost and marks up those prices to buyers.

Examples of the transactional business model:

• Apple
• Nike
• Wendy’s
• Walmart
• Ford
6. Direct-to-consumer business model
Direct-to-consumer (D2C or DTC) business models eliminate the middleman and sell
directly to the customer. This eliminates the cost and profit sharing of being on
marketplaces like Amazon, eBay, or physical stores like Walmart and Target.

The D2C business model works great when you already have an audience, but it can be
hard to start from scratch. Building brand awareness and an initial customer base can
be difficult, especially when would-be buyers struggle to find your products.

Fortunately, pivoting is not too difficult if things don’t go in the right direction. You’ll lose
some of your profits and the exclusivity of your business, but you’ll gain access to a
larger pool of buyers through a global marketplace.

Many businesses use a combination of marketplaces and D2C to market their goods
and services. Take Nike, for example. You can buy Nike products at practically any
retailer, but you can also purchase their entire collection from the Nike website.
Examples of the direct-to-consumer business model:
• Casper
• Warby Parker
• Teva
• Everlane
• The Honest Company

7. Marketplace business model

The marketplace business model operates as a platform to connect sellers and buyers.
Typically, startups operating under this business model don’t sell their own goods—
however, Amazon is an example of a marketplace that also produces and sells its own
products (or does white labeling).

Marketplace platforms make money from transactions on their platform. They expose
sellers to a broader audience but take a small portion of their sales in exchange for the
exposure.

Examples of the marketplace business model:

• Amazon
• Upwork
• Fiverr
• eBay
• Etsy
8. Razor and blade business model
Razor and blade business models sell an entry-level item at a low price (or loss) but
profit from add-ons and refills. It was made popular by men’s razor companies selling
cheap razors but requiring you to purchase expensive replacement blades. Another
example is some console companies. Sony sells their Playstation consoles at a loss,
but they profit from online services, in-game purchases, and their online marketplace.

This business model is great for budget-minded customers that don’t want to invest in a
product they’re not sure they’ll love. It’s an inexpensive way for them to experiment with
new items—and if they like it, they often become long-time buyers.

Examples of the razor and blade business model:

• Harry’s
• Keurig K-cup pods
• Nintendo
• Amazon Kindle
9. Private label business model

Private-label (or white-label) business models create products or services through a

third-party provider but sell them under the brand’s name. You’ll see this commonly with
educational content created using a third-party platform but branded entirely with the
startup or creator.

This is also very common for products sold on Amazon. Most of the products look
exactly the same—they just have subtle differences and branding. For many products,
they likely just used a very similar manufacturer.

Private labeling is a typical way for brands to sell their own supplements. Most of the
ingredients might be the same, but their brand design differs. It’s hard to find real-life
examples of private labeling since the whole point of doing it (effectively) is to look like
it’s your brand’s own manufactured product.

Examples of the private label business model:

• Cosmetics
• Paper products
• Supplements
• Cleaning products
• Frozen foods
• Snacks
10. Franchise business model
Franchise business models are businesses that operate using the trademarked
branding and products of the parent franchising company. They’re simple to startup and
operate because most of the marketing material and products have been created—and
you likely already have loyal customers to the brand.

You’ll likely have to pay a franchise fee to operate under this model, which can eat into
your profits. However, if there’s a market need and a franchise solution to solve it, it’s
often easier to open a franchise than to try and introduce the same solution (under a
brand-new brand) to the market.

Examples of the franchise business model:

• Subway
• 7-Eleven
• Great Clips
• Ace Hardware
• The UPS Store
• Anytime Fitness
• Nothing Bundt Cakes
11. Dropshipping business model

The dropshipping business model is when your startup sells products online but doesn’t
keep any physical inventory. This means you don’t have to worry about storing your
goods in a store or warehouse—and you don’t worry about storage fees or expiring
products.

Instead, you just sell and market the product, while your third-party dropshipping
supplier takes care of all the inventory, shipping, returns, and customer service. It’s a
low-investment way to do business, especially if you have a small team but want to
scale your customer base.

Examples of dropshipping suppliers:

• AliExpress
• Wholesale Central
• Sunrise Wholesale
• Spocket
• Printful

12. Affiliate business model

With the affiliate business model, you don’t sell or manufacture your own products or
services. Instead, you get paid for recommending other businesses’ goods. When a
customer uses your link (or coupon code) to make a purchase, you get paid a
percentage (or commission) of the sale.

Affiliate business models are popular with influencers, bloggers, teachers, and coaches.
These individuals usually don’t have their own businesses, but they make money by
recommending trusted products and services.

Examples of the affiliate business model:

• Smart Passive Income Blog
• Nerdwallet
• The Wirecutter
• Finder
• The Points Guy
• Skyscanner

Business product
There are six types of business products that include major equipment,
accessory equipment, component parts, processed material, supplies,
and business services. These products have different functions and
have different importance to the business. Depending on different
industries, there will be different demands on these products.

A product in business can be separated into two major types: business

products and consumer products. In marketing, the definition of
a business product is a product that a business sells to another
business. These business products are often sold with the aim of being
processed in some other way before they are sold to consumers. On
the other hand, consumer products are products that are sold to the
customer and will not be further processed and sold again.
Business marketing refers to the marketing effort that is put into
selling business products to other businesses, sometimes this is called
business-to-business marketing. These are products that are purchased
for reasons other than personal consumption.

Business Founder
In many young organizations, the company founder or a co-founder serves
as the CEO. However, just because the roles are commonly held by the
same individual does not mean they are interchangeable.

During the early stages, many companies operate in an “all hands on deck”
manner, meaning the team members on board handle all aspects of the
business, including leadership. Before we examine how the founder and
CEO roles differ from one another, let’s discuss what it means to be a
founder of a company.

Essentially, a founder takes a business from an idea to an entity. As

mentioned above, in the early stages of a company, team members wear
many hats ensuring the work gets done to keep the company going as it
grows and scales. In many situations, this means the individual who
created the business is often tasked with managing the overall operations
of the company as CEO.

Founder Role and Responsibilities

1. Develop a Business Plan

Most successful businesses begin with a well-thought-out business plan,

and in many cases, it’s up to the company’s founder to ensure a business
plan has been created. The key elements of a an effective business plan
include the executive summary, a description of the company’s business
model, market analysis, the products/services your company offers,
operational plan, the marketing and sales strategy, and a detailed financial
plan.

2. Establish Mission and Vision

Startup companies are often established from a specific product idea or

service the founder wants to offer customers. Along with determining what
products to offer, founders are often tasked with determining the company’s
mission and vision to keep their employees and team members aligned and
on the same page regarding how they best serve their customers.

3. Form the Board of Directors

In the beginning stages of a company, the founder is often tasked with

determining what kind of governing body or board the business should
have, along with who should be on it. Once the board is put in place, the
company’s founder may oversee the relationship between the board and
the company.

4. Recruit Employees and Executive Team

When establishing a new business, the founder is also responsible for

assembling a team that can bring their vision to life. This typically begins
with an executive team that can oversee critical aspects of the business, as
well as support staff and employees who are responsible for product
execution and delivering the final offering to the customer.
5. Initial Funding

The company’s founder is also responsible for any initial funding to get the
business off the ground. This could mean applying for loans or financing,
applying for grants, seeking venture capital, or using their own personal
assets to fund the initial business costs until the company begins earning
enough revenue to cover costs.

Organization structure

An organizational structure is a system that outlines how certain activities

are directed in order to achieve the goals of an organization. These
activities can include rules, roles, and responsibilities.

The organizational structure also determines how information flows

between levels within the company. For example, in a centralized
structure, decisions flow from the top down, while in a decentralized
structure, decision-making power is distributed among various levels of the
organization. Having an organizational structure in place allows companies
to remain efficient and focused.

Types of Organizational Structures

Functional Structure

Four types of common organizational structures are implemented in the real

world. The first and most common is a functional structure. This is also
referred to as a bureaucratic organizational structure and breaks up a
company based on the specialization of its workforce. Most small-to-medium-
sized businesses implement a functional structure. Dividing the firm into
departments consisting of marketing, sales, and operations is the act of using
a bureaucratic organizational structure.

Divisional or Multidivisional Structure

The second type is common among large companies with many business
units. Called the divisional or multidivisional (M-Form) structure, a company
that uses this method structures its leadership team based on the products,
projects, or subsidiaries they operate. A good example of this structure is
Johnson & Johnson. With thousands of products and lines of business, the
company structures itself so each business unit operates as its own company
with its own president.

Divisions may also be designated geographically in addition to specialization.

For instance, a global corporation may have a North American Division and a
European Division.

Team-Based

Similar to divisional or functional structures, team-based organizations

segregate into close-knit teams of employees that serve particular goals and
functions, but where each team is a unit that contains both leaders and
workers.

Flat (Flatarchy) Structure

Flatarchy, also known as a horizontal structure, is relatively newer, and is

used among many startups. As the name alludes, it flattens the hierarchy and
chain of command and gives its employees a lot of autonomy. Companies
that use this type of structure have a high speed of implementation.

Matrix Structure

Firms can also have a matrix structure. It is also the most confusing and the
least used. This structure matrixes employees across different superiors,
divisions, or departments. An employee working for a matrixed company, for
example, may have duties in both sales and customer service.

Circular Structure

Circular structures are hierarchical, but they are said to be circular as it

places higher-level employees and managers at the center of the
organization with concentric rings expanding outward, which contain lower-
level employees and staff. This way of organizing is intended to encourage
open communication and collaboration among the different ranks.

Network Structure

The network structure organizes contractors and third-party vendors to carry

out certain key functions. It features a relatively small headquarters with
geographically-dispersed satellite offices, along with key functions outsourced
to other firms and consultants.

Benefits of Organizational Structures

Putting an organizational structure in place can be very beneficial to a
company. The structure not only defines a company's hierarchy but also
allows the firm to lay out the pay structure for its employees. By putting the
organizational structure in place, the firm can decide salary grades and
ranges for each position.

The structure also makes operations more efficient and much more effective.
By separating employees and functions into different departments, the
company can perform different operations at once seamlessly.

In addition, a very clear organizational structure informs employees on how

best to get their jobs done. For example, in a hierarchical organization,
employees will have to work harder at buying favor or courting those with
decision-making power. In a decentralized organization, employees must
take on more initiative and bring creative problem solving to the table. This
can also help set expectations for how employees can track their own growth
within a company and emphasize a certain set of skills—as well as for
potential employees to gauge if such a company would be a good fit with their
own interests and work styles.

Pitch Deck

A pitch deck is a visual presentation that tells the story of a business to

persuade and engage potential investors. The most common pitch deck
slides are introduction, problem, solution, market size and opportunity,
product, traction, team, competition, financials and use of funds.

5 Things Every Pitch Deck Needs

When it comes to creating the perfect pitch deck, Great pitch decks have
several things in common:
 • Consistent and error-free design: Slides in the pitch
deck must look like they belong together with a
professional look and design that is free of errors.
(Proofread it twice!)
• Something to hook the audience: Tell a story with
words and visuals that engage people and make them
want to be a part of your startup. You need to inspire
them.
• Value proposition: What makes your company special,
unique and valuable? What should investors expect as a
return? Spell it out.
• Personality: A pitch deck should reflect your brand
identity and personality.
• Template: Don’t reinvent the wheel every time you need
to tweak or give your presentation to someone else.
Create a template for your pitch deck (we have a few
ideas below to help you get started and throughout this
article) so that it’s quick and easy to prepare a
presentation on the fly. You never know where the right
opportunity might be waiting.

Business plan

For entrepreneurs who plan to apply for funding or raise investor capital, it's
essential to write a solid business plan before launching a business. This
document outlines the most important details about your new venture —
including your mission, your founding team, your market research and, most
importantly, your financial projections.

Once your business plan is written, you may be asked to present it in a variety
of circumstances. Much like a professional resume, your plan will need to be
tailored and tweaked to appeal to the specific audience you're trying to reach.
Whether you're preparing to write your first plan or refining your existing
one, here are some expert-recommended tips for successfully presenting it to
anyone who's evaluating your business.

The most common circumstances where you'll need to present your plan
include:

• Applying for a business loan, especially through a bank or the Small

Business Administration.

• Pitching investors and board members.

• Renting a commercial space.

Step by step guide of business plan

1. Write an executive summary

This is the first page of your business plan. Think of it as your elevator pitch.
It should include a mission statement, a brief description of the products or
services offered, and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it
can be easier to write it last. That way, you can highlight information you’ve
identified while writing other sections that go into more detail.
2. Describe your company
Next up is your company description, which should contain information
like:
• Your business’s registered name.
• Address of your business location.
• Names of key people in the business. Make sure to highlight unique
skills or technical expertise among members of your team.
Your company description should also define your business structure —
such as a sole proprietorship, partnership or corporation — and include the
percent ownership that each owner has and the extent of each owner’s
involvement in the company.
Lastly, it should cover the history of your company and the nature of your
business now. This prepares the reader to learn about your goals in the
next section.
3. State your business goals
The third part of a business plan is an objective statement. This section
spells out exactly what you’d like to accomplish, both in the near term and
over the long term.
If you’re looking for a business loan or outside investment, you can use this
section to explain why you have a clear need for the funds, how the
financing will help your business grow, and how you plan to achieve your
growth targets. The key is to provide a clear explanation of the opportunity
presented and how the loan or investment will grow your company.
For example, if your business is launching a second product line, you might
explain how the loan will help your company launch the new product and
how much you think sales will increase over the next three years as a result.
4. Describe your products and services
In this section, go into detail about the products or services you offer or
plan to offer.
You should include the following:
• An explanation of how your product or service works.
• The pricing model for your product or service.
• The typical customers you serve.
• Your supply chain and order fulfillment strategy.
• Your sales strategy.
• Your distribution strategy.
You can also discuss current or pending trademarks and patents associated
with your product or service.
5. Do your market research
Lenders and investors will want to know what sets your product apart from
your competition. In your market analysis section, explain who your
competitors are. Discuss what they do well, and point out what you can do
better. If you’re serving a different or underserved market, explain that.
6. Outline your marketing and sales plan
Here, you can address how you plan to persuade customers to buy your
products or services, or how you will develop customer loyalty that will lead
to repeat business.
Smart money moves for your business
Grow your small business with tailored insights, recommendations, and
expert content.

7. Perform a business financial analysis

If you’re a startup, you may not have much information on your business
financials yet. However, if you’re an existing business, you’ll want to include
income or profit-and-loss statements, a balance sheet that lists your assets
and debts, and a cash flow statement that shows how cash comes into and
goes out of the company.
You may also include metrics such as:
• Net profit margin: the percentage of revenue you keep as net
income.
• Current ratio: the measurement of your liquidity and ability to repay
debts.
• Accounts receivable turnover ratio: a measurement of how
frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for
those reading your plan to understand the financial health of your business.
» NerdWallet’s picks for setting up your business finances:
• The best business checking accounts.
• The best business credit cards.
• The best accounting software.
8. Make financial projections
This is a critical part of your business plan if you’re seeking financing or
investors. It outlines how your business will generate enough profit to repay
the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses
and profit estimates over at least a three-year period — with the future
numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before
giving projections. Your goals may be aggressive, but they should also be
realistic.
9. Add additional information to an appendix
List any supporting information or additional materials that you couldn’t fit
in elsewhere, such as resumes of key employees, licenses, equipment
leases, permits, patents, receipts, bank statements, contracts and personal
and business credit history. If the appendix is long, you may want to
consider adding a table of contents at the beginning of this section.

Business Exit strategies

A business exit strategy is an entrepreneur's strategic plan to sell his or

her ownership in a company to investors or another company. An exit
strategy gives a business owner a way to reduce or liquidate his stake in a
business and, if the business is successful, make a substantial profit. If the
business is not successful, an exit strategy (or "exit plan") enables
the entrepreneur to limit losses. An exit strategy may also be used by an
investor such as a venture capitalist in order to plan for a cash-out of an
investment.

Different business exit strategies also offer business owners different

levels of liquidity. Selling ownership through a strategic acquisition, for
example, can offer the greatest amount of liquidity in the shortest time
frame, depending on how the acquisition is structured. The appeal of a
given exit strategy will depend on market conditions, as well; for example,
an IPO may not be the best exit strategy during a recession, and a
management buyout may not be attractive to a buyer when interest rates
are high.
 Bankruptcy

Bankruptcy is a legal proceeding initiated when a person or business is

unable to repay outstanding debts or obligations. It offers a fresh start for
people who can no longer afford to pay their bills.

The bankruptcy process begins with a petition filed by the debtor, which is
most common, or on behalf of creditors, which is less common. All of the
debtor's assets are measured and evaluated, and the assets may be used to
repay a portion of the outstanding debt.

How Bankruptcy Works

Bankruptcy offers an individual or business a chance to start fresh by
forgiving debts that they can't pay. Meanwhile, creditors have a chance to get
some repayment based on the individual's or business's assets available for
liquidation.

In theory, the ability to file for bankruptcy benefits the overall economy by
allowing people and companies a second chance to gain access to credit. It
can also help creditors regain a portion of debt repayment.

All bankruptcy cases in the United States go through federal courts. A

bankruptcy judge makes decisions, including whether a debtor is eligible to
file and whether they should be discharged of their debts.

Administration over bankruptcy cases is often handled by a trustee, an officer

appointed by the United States Trustee Program of the Department of
Justice, to represent the debtor's estate in the proceeding. The debtor and
the judge usually have no contact unless there is some objection made in the
case by a creditor. When bankruptcy proceedings are complete, the debtor is
relieved of their debt obligations.
 Founder’s Do for startups Don’t go bankrupt

As startup Founders, we are constantly focused on making sure our fledgling

companies have enough runway to grow. We believe that if the company's
bank account runs out, the company goes bankrupt and it's game over.

But that's not always true. It's often not until your personal bank account
runs to zero that your startup is truly done for.

The fact is that startups don't truly go bankrupt until their Founders go
bankrupt. The problem is that Founders are often so focused on the startup's
finances that they overlook their own ability to stay afloat in the process. I call
this ability your "personal runway", or the amount of time that you can stay
alive and fed, regardless of the health of your business.

Back to Basics

I learned all about personal runway when I started my first company, which
went from a humble launch out of my apartment, to fancy new offices, to a
very humble return back to my apartment.

The company was growing, getting new customers, and evolving into a real
competitor in the marketplace. The only problem was that it was draining me
personally of any savings that I had. Actually, "savings" is a total misnomer
here; it was draining all of my credit card balances faster than I could apply for
new ones.

But this isn't a tale of my horrible credit management strategies as a college

kid.

What I learned quickly was that, by moving the operation back to my

apartment and drastically cutting costs, I could keep myself going
indefinitely. And from that position, I could take time to rebuild the
company. It wasn't fun, but it taught me that if I could keep my personal
runway extended, I could still move my business forward.

Personal Runway Matters

Your personal runway is critical to the success of your business. It may be

noble to forgo all personal income in order to help your business, but it will
crush you in the end. Your business can go a month without any activity; you
can't go a month without eating.
As long as you're still eating, you have the ability to operate the business. You
can still talk to customers, investors, and the press. You can still get up every
day and keep the spirit of the business alive, albeit in a reduced form.

That matters in a startup, because there are often times when the business is a
fraction of what it should be, but it's at least around long enough to blossom
again. Your personal runway is often the core of your business’s health.

Runway Comes in All Forms

There's nothing that says that the income you rely on has to come from your
actual startup. Founders use all kinds of methods to keep themselves fed
while keeping their businesses alive.

One of my favorite recollections comes from venture capitalist Fred Wilson,

who tells the story of the Founders of Airbnb getting really creative to
maintain their personal runway.

During the 2008 presidential elections, the Founders of Airbnb went to the
Democratic National Convention in Denver to raise money by selling boxes of
"Obama O's" and "Cap'n McCains" for $40 apiece. They raised $25,000 in
short order. The boxes that they didn't sell, they ate in order to save money on
food.

That anecdote comes from a company that has since raised over $300 million
in funding. They got creative. They made sure their personal runway kept
them alive long enough to make it to the next step. And that's exactly what I'm
talking about: doing whatever you need to do to keep the lights on personally
– including eating your own product – so that your business can live to see
another day.

Maintaining your personal runway may mean consulting on the side, working
a part time job, or reducing your expenses drastically (Château des Parents
isn't awesome, but the price is right).

Time Matters

Especially with startups, what you really need more often than not is time.
Time to get your business model right. Time to adjust your product. Time to
find more customers.

The longer you can keep yourself fed, the longer you have to figure out how to
solve those problems. It's OK that you are the only employee during this
time. It's not always ideal, but it means someone is still at the wheel long
enough to figure out the next step. What you want to avoid is having the
entire business go over a cliff because you just can't afford to show up
anymore. Employees can leave, but you have to go down with the ship. So
make sure can keep that ship afloat long enough to navigate to safe passage.

Succession planning for startups

Succession planning is part of preparing your business for the future. Often
assumed to be only important for larger companies, succession planning is, in
fact, critical for startups and smaller companies.

Entrepreneurs will recognize that in a startup, the departure of a top

employee can have a huge impact. Often companies only plan for the
succession path of their key executives, but it is wise to consider a succession
plan for virtually every key position and employee, no matter what the level.

Key steps in succession planning at your

startup

Step 1: Identify critical positions

Identify the critical positions and make those the focus of your succession
planning efforts. To pinpoint which roles are critical, perform a risk or impact
assessment. It helps to remember that a vacancy in a critical role will have a
significant tangible impact on the ability of the organization to deliver outputs,
achieve milestones, or meet budget requirements. In terms of succession risk,
a lengthy vacancy, underperformance, or high turnover in a critical role are
‘worst-case’ scenarios.
Step 2: Profile key competencies
By profiling key competencies for positions, your employees better understand
the key responsibilities of the position. The competencies should highlight the
qualifications and behavioural and technical competencies required to perform
the role successfully.

Step 3: Choose your talent management strategies

Choose the talent management strategies you wish to implement to address
succession planning. These strategies may span career
development, training and recruitment.

Step 4: Implement these strategies for succession

planning
Document your chosen strategies in an action plan and start to implement
them. Make sure your action plan clearly defines timelines, roles and
responsibilities.

Step 5: Monitor, evaluate and adjust your plan

To ensure that your succession planning efforts succeed, regularly monitor
the effectiveness of the plan. Evaluate its related activities and adjust as need
be.
 Harvesting strategy in a business plan

A harvesting strategy is a plan and management decision to reduce all the

marketing expenses to increase the profit. You can develop a harvesting
strategy for your business and the product, it serves as the function of an exit
plan when the product becomes obsolete.

The term harvest strategy usually goes for the business line or the brand.
However, the harvesting strategy is a part of the company’s business where
you decide whether to decrease the marketing budget or cancel it.
Management decides to oversee the cost of boosting the sales, if it costs
more, then they would leave it.
The marketers choose to apply the harvesting strategy when they think that
the product/service has finished its life cycle. Now, it’s time to extract as
much profit as you can.

When the profit doesn’t meet the marketing expense level, then you should
reduce or eliminate all the marketing expenses in order to increase the
profitability.

A harvest strategy is a calculated decision to minimize all types of

spending on a specific product to maximize profitability, despite a
potential decline in market share. A harvesting strategy can be developed
for product or business lines and serves as an “exit” plan should a product
become outdated.

Reasons to Employ a Harvesting Strategy

A business may decide to employ a harvesting strategy for reasons

including (but not limited to):

• Arrival of a product or business line at the cash-cow or

declination stage. Here, marketing the product is no longer
necessary, and resources can be allocated to other avenues that
may be generating increased revenues.
 • Development of new products and other interests. The new
product development may require additional resources and
investment to encourage increased income generation.
• Discontinuation of a product or business line. As a result of a
business’ decision to discontinue a product, further marketing
and reinvestment are no longer necessary.

Fail Fast or Succeed (FFS) approach

Failing fast is a philosophy that takes an iterative, hypothesis-driven
approach to developing and launching new ideas. It is heavily related to
the concept of a Minimum Viable Product (MVP) and is premised on
getting early feedback that can either validate or invalidate an idea.
As the name implies, a central tenet of the fail-fast approach is working
through the cycle of hypothesis, MVP, and results analysis as quickly as
possible, functionally increasing the velocity at which an organization can
learn and adapt to change.
This approach makes it so good ideas can be scaled more quickly and
ideas that aren’t driving their intended outcome can be tweaked or retired,
reducing the time and cost associated with programs unlikely to succeed.
The net result is organizations that can test and innovate more cost-
effectively and spend more time working on things that do work and less
time on the things that don’t.

The following represents the strategy process defined in that work:

• Frame the choice: Turn challenges into mutually exclusive
approaches that might address the issue.
• Generate possibilities: Expand the list to be as comprehensive as
can be .
• Specify conditions: Identify conditions that must be true in order for
the possibility or approach to be a viable solution.
• Identify barriers to choice: Determine which of those conditions is
least likely to hold.
• Design tests: Build a valid test of the hypothesis (that the entire
strategy team agrees is a valid).
 • Conduct tests: Execute the tests and review results.
• Choose: Based on results, choose the path forward.

Fundamentals of validating idea/ product

Idea validation is the process of gathering evidence around ideas

through experimentation to make fast, informed and de-risked
decisions.

It's a process that starts from an idea and typically ends with a paying
customer. The purpose of idea validation is to expose the idea to the
practicality of the real world before you build and release the final
product or offering.

In short, product idea validation is necessary to ensure that there is a

market need for the product and it offers features and functionality that
accurately addresses the pain points the target audience faces.

In this way, PMs avoid wasting substantial resources on

product initiatives that customers don’t need and that don’t help the
organization achieve its goals. In a nutshell, it saves you from product
failure and having to sunset products in the future.

6 steps of the product validation process

The product validation process consists of 6 key stages. Let’s look at each
of them one by one.
Step 1: Clearly define your product idea

Start by defining your product idea in as much detail as possible. Some

questions to answer include:

• What is the product?

• What customer pain points, needs, or wants does it address?

• Who is the target audience?

• What are the product goals?

• What are the key product features?

• How is it aligned with your organization’s vision, strategy, and

business model?
Goal setting framework.

Step 2: Conduct market research to gauge market demand

Market research is a critical step in the product idea validation process.

It helps you gather valuable insights about the market, customer interests,
industry trends, competitors, and the financial viability of the product.

Study industry trends

Studying industry trends will help you determine how well your product idea
fits into the current market landscape and whether the world is ready for
your product. It can also help you discover new opportunities.

How do you go about it?

Google Trends is a popular tool that can help you identify popular keywords
and search topics. They could be an indication of what users are currently
interested in.

You can also get ideas about the direction of the market from industry
blogs, reports, and publications. Monitoring social media platforms and
online communities can also shed light on market trends.

Analyze the competitive landscape

Analyzing the competitive landscape is essential to understand the existing

solutions in the market, finding potential gaps you could fill, and identifying
areas for differentiation.

Start by listing your main competitors and assessing their strengths and
weaknesses. Look at how they price and market their product. You can
also study customer reviews to find cracks you could exploit.

Evaluate the financial viability of your product idea

No matter how brilliant your product idea is, it won’t float if you either don’t
have money to build it or the ROI doesn’t justify the investment.

Apart from looking at the costs and possible ROI, assess it also against
other opportunities.

Not building the product at all is a valid option too if the cost of financing it
is higher than the returns. For example, the interest rates of the loan could
be too high or you might get a better return if you leave the capital in the
bank.
Step 3: Identify the target market of potential customers

The market validation process will also allow you to identify your target
customer groups.

If you’re building a completely new product, it’s a good idea to start with a
small specific segment, like a particular age group or a professional group.
That’s because satisfying the needs of a small user segment with very
specific attributes is much easier than building a product for everyone.

To give you the necessary focus, develop target user personas. In their
profiles, include information on:

• Their use case

• Their role in their organizations

• Who do they work with

• Their pain points

• Benefits of using the product

User persona template.

Step 4: Use different strategies to validate a product idea

When validating product ideas, there are a few tricks of the trade that
product managers can leverage to inform their decisions.

Conduct online surveys and user interviews

Online surveys are an easy way to collect customer insights at scale.

There are a couple of ways to do it. You can either collect active feedback
by triggering your in-app surveys for specific user segments at a specific
time or collect passive feedback with a feedback widget. In addition, you can
use email to deliver your surveys.

And what if you have no product or user base yet?

Lean into your social media followers and pick their brains.

Interviews and focus groups are other popular ways to collect qualitative
insights. They give you additional flexibility to ask follow-up questions but
are more time-consuming and logistically challenging to organize.

User interview prep sheet.

Carry out a fake door test

Fake door tests are a popular technique for validating product or feature
ideas before you invest in their development.

To carry out the test, you simply add the feature to your menu
or dashboard, as if it was already available. To drive traffic, create a
tooltip like the one below.

Fake door test for product idea validation.

Then track user engagement. If enough users click on the feature, it’s an
indication that there’s enough interest.

Of course, once they click on it, they will realize you’ve actually conned
them, so make sure to explain the purpose of all the shenanigans. If the
new feature looks promising, they will forgive you.
Beware though, as fake door tests could alienate your users if you run
them too often.

Fake door test for product idea validation.

Create a landing page and collect contacts of prospective customers

What if you have no product to conduct the fake door test in?

No problem. Just create a landing page with product details and video
demos, and use paid ads to drive traffic. Once users land on your page,
collect their contact details.

In this way, you will be able to test the market demand. If the product idea
is attractive to prospective users, they will want to hear about it when it’s
ready. This is also a good way to recruit focus groups, interview
participants, or beta testers for the future.

To encourage users to submit their details, why not offer them incentives
like early access to the product once it’s ready to roll out?
A landing page for product idea validation.

Offer an early bird discount

As the product is not quite ready yet, people may not be ready to pay the
full price for it. An early bird discount can be an incentive for innovators and
early adopters to make the purchase after all.

In this way, you will be able to assess interest in the product and finance its
further development. What’s even more important, you will get access to
valuable usage data and feedback that is essential to inform further
iterations.

Step 5: Create a minimum viable product for idea validation

The minimum viable product (MVP) is a functional but unpolished version

of the product with only core features.

Why would you want to launch a product that’s not 100% ready?

The truth is it’s impossible to build a 10/10 product without testing how it
performs in real life.

So instead of hiding your product behind the garage door until you think it’s
ready, just launch it.

Step 6: Iterate, refine, and develop your product idea

Once it’s out, watch how users engage with the product. Track product
usage data, collect their feedback in-app, and analyze their interactions
with customer support and success teams.

That’s how you will be able to pick up all the bugs and identify areas
for improvement. In some instances, you may discover that a more major
pivot is necessary.

When acting on the insights, implement changes in small increments but

often. Test the impact of the changes before introducing further ones.

In this way, you will avoid investing your time and effort in initiatives that
don’t add value to the product or are based on wrong assumptions.
 Rate of success

One of the more common metrics used in user experience is task success or
completion. This is a very simple binary metric. When we run a study with
multiple users, we usually report the success (or task-completion) rate: the
percentage of users who were able to complete a task in a study.

Like most metrics, it is fairly coarse — it says nothing about why users fail
or how well they perform the tasks they did complete.

Nonetheless, success rates are easy to collect and a very telling statistic.
After all, if users can't accomplish their target task, all else is irrelevant. User
success is the bottom line of usability.

several levels of success:

• complete success: the user places the order with no error, exactly as
specified
• success with one minor issue: the user places the order but omits the
gift message or orders the wrong flowers
• success with a major issue: the user places the order but enters the
wrong date or delivery address
• failure: the user is not able to place the order

Market opportunity

Companies need to generate new marketing opportunities to

grow their business and increase revenue. Using a variety of
market analyses can create strategic business plans and identify
new marketing opportunities. In this article, we discuss what a
marketing opportunity is, detail how to take advantage of
marketing opportunities and list some examples of how to
analyze the market for opportunities.

How to take advantage of marketing opportunities

Here are the steps for taking advantage of marketing opportunities:

1. Search for new marketing opportunities

Business always has a degree of instability as products and services have shorter
life cycles, new competitors emerge and business models change. This instability
requires businesses to search for growth and profitability through new marketing
opportunities. Some types of analyses that can help businesses find new
marketing opportunities include:

• Direct competitors
• Indirect competitors
• Purchasing situations
• Consumer environment
• Foreign markets
• Complimentary markets
• Consumer segmentation

2. Assess company outlook

Understanding the direction, goals, resources, capabilities and strengths of a

business can help it identify and analyze the market for opportunities. Many
companies use the SWOT analysis method, which stands for strength, weakness,
opportunities and threats. This powerful yet simple tool can help companies to
identify and list key SWOT areas, creating an awareness of these potential
opportunities and the ability to plan and take action.
3. Identify and meet consumer needs

Businesses take advantage of market analysis and find new marketing

opportunities by identifying consumers, assessing their needs and finding ways to
meet those needs. Many business models accomplish this by focusing on brand
value propositions, supply chains, direct and indirect competitors, existing
regulations and the overall sales environment.

Scope for commercialization

Commercialization is the process of bringing new products or services to

market. The broader act of commercialization entails production,
distribution, marketing, sales, customer support, and other key functions
critical to achieving the commercial success of the new product or service.

Typically, commercialization occurs after a small business has grown and

scaled its operations and reach levels that allow it to successfully reach a
larger market. For example, if a small bakery is known for its cinnamon
rolls and has sold them with great success, it can commercialize its
products by selling the packaged cinnamon rolls to local grocery stores,
where others can buy the pastries and the bakery can increase its sales by
multiple factors.

Commercialization is a term that is frequently used when something is

brought to the mass market or moved from the public to the private
sector. However, the term also refers to a situation where technology
has been transformed into usable products now consumed by
individuals.

Commercialization requires a carefully-developed three-tiered product roll-out

and marketing strategy, that encompasses the following major components:

• The ideation phase

 • The business process stage
• The stakeholder stage

Mentorship of startups

Mentors provide valuable advice and support to entrepreneurs through the

early stages of growing their business. Whereas VCs and angel investors
put in money, startup mentors invest their time and knowledge.

Startup mentors are typically successful entrepreneurs themselves.

They’ve seen their fair share of mistakes and missteps, and their years of
experience allow them to guide founders and warn them against common
pitfalls.

They can, for example, provide guidance on how to prepare your startup
for acquisition. Mergers and acquisitions (M&A) have an equally high
failure rate of 70% to 90%, so startups looking to be acquired should ideally
seek help from an experienced mentor.

Mentors take on the role of adviser, coach, sounding board, and

cheerleader, which can help founders make better decisions and weather
the ups and downs of entrepreneurship.

Top Five Benefits a Startup Mentorship Can Offer

1. Access to a Wider Network and Resource Pool

Networks are a valuable asset. Mentors can help you gain access to their web
of contacts and resources. They are established in their industries and can
connect startup owners with fellow industry leaders, potential investors, new
hires, or potential buyers.

Aside from connections, their resources may prove helpful in other ways. For
example, a mentor with a spare studio or workshop may let you use it to
develop a prototype, or connect you with discounts on software or other
equipment.
2. Improved Decision-Making Skills

Having a seasoned mentor can help a startup founder make sounder strategic and
operational decisions.

Mentors provide an objective view on the business and the industry, and can help
entrepreneurs view things from a different perspective. Using their experience, a mentor
can help you make informed decisions regarding:

• Finding and picking the right investor

• How much investment you need and securing the right kind of investment
• Resource allocation
• Balancing your short- and long-term goals
• How to expand your employee base
• Hiring the right leadership team

3. Support for Risky Situations

Risk-taking is a crucial component of entrepreneurship. A startup mentor can help

business owners identify which risks to take and how to effectively manage them as
they arise.

They may also advise when it’s best to play it safe. Often, having someone to warn you
of potential consequences can make the difference between surviving during difficult
times, such as economic downturns, versus falling into distress.

4. Professional Growth

A mentor can help you acquire new skills and knowledge as you navigate
entrepreneurship.

For instance, a mentor can teach you tips on cash flow management, a common area
that startups struggle with. They may also offer practical advice regarding business
processes, such as:

• Licensing an invention
• Getting market approval for your product
• Dealing with complex regulations
• Recognizing your weaknesses and determining whether to educate yourself or hire
to fill in the gaps
• Managing new hires
• Shaping company culture

5. A Boost in Confidence and Motivation

The startup journey can be overwhelming and lonely. A mentor can provide a boost of
motivation that keeps entrepreneurs focused, enabling them to push through challenges
and make progress toward their goals.

Mentors can also help business owners manage stress, combat feelings of self-doubt or
loneliness, and provide emotional support. Knowing that someone has experienced the
same struggles and came out on the other side can be invaluable for new founders.