Startup Innovation

Below are some additional resources and readings that are available online, and which compliment the readings in my introductory course for MBAs.

Most links appear first on my twitter feed, if you want to stay up to date.

Generating & Evaluating Venture Ideas

• I really like these five points as a guide to where startup ideas come from.
• Prof. Eric von Hippel’s book Democratizing Innovation (free online) is an excellent read on where ideas come from and how to generate them.
• Stanford’s Brainstorming Rules is a good primer on this powerful, but often misused, technique for generating ideas. Along similar lines, David Kelley’s guide to design thinking is also useful.
• Wharton Professor Karl Ulrich’s OPIM Wiki has a lot of good idea generation concepts and articles.

Grand Strategy and Overall Tactics

• Formal business plans may be out of style, but they are still useful, as studies have shown that startups that have gone through a planning process are more successful. Courtesy of the excellent webpage for Stanford’s E145 Class, there is the classic How to Write a Great Business Plan by Sahlman and a recent interview with Sahlman updating the article. There are more high-quality resources at Stanford while Wharton has a nice directory of resources.
• In my classes, I have been teaching about lean startups (but see my caveats in that section section).  Steve Blank and Eric Ries are the serial entrepreneurs who have pushed this concept, and their blog posts on it are key readings.  Steve’s book Four Steps to the Epiphany is probably the best step-by-step guide to the process.  The best set of resources on the topic are probably from Prof. Tom Eisenmann at HBS.
• A related approach to planning for startups is Discovery Driven Planning.  DDP does a nice job of forcing startup teams to understand the assumptions underlying their business, and plan ways to test those hypothesize.
• Depending on your industry, Judo strategy, or using the size of an opponent to your advantage, is another useful grand strategy for startups.

Researching and Planning  (Financial Projections, Competition, Business Models….)

• Financial planning: Thomas Hellman has a download-able Excel spreadsheet for financial projections.  Here are the instructions. Prof. Hellman also has a valuation spreadsheet with instructions.
• Business models: Osterwalder and Pigeur have a very pretty 72-page booklet on business model design that is an excerpt from their book – as long as your are not treating it as a definitive introduction to business models, it is useful.  Why is it not definitive?  See this diagram on the business model concept by Anders Sundelin to see how many different views of business models there are.
  • Hints for special business model types: Two Sided Markets, SaaS
• Assessing related firms: Tools for examining competitors, thoughts about finding partners.

Acting and Learning  (Lean Startups, Hypothesis Testing, Customer Development, and All That)

• I like the Lean Startup idea, but think that there is less value in the details of the system than in the concept that learning quickly and experimenting cheaply are keys to startup success. You also should be careful not to conflate the techniques of lean startups with the end goal. Some general techniques that might be useful are below.
• “Wireframing” is the process of creating  mockups of websites, and is a very important process for any business with a web/software component.  Six Revisions has a great guide to wireframing, including a list of useful tools.
  • Tools for Wireframing: A nice collection of mobile tools, a more in-depth set of reviews of mobile mockup tools, and a guide to using one too, Flinto.
  • Low-Fi prototyping is another good approach to mockups, especially hardware.
• “Smoke Testing” involves setting up dummy websites or using advertisements to figure out interest in a product before it launches.  You need to be careful not to be deceptive in this process, however, since you can go too far in promising services that don’t exist. Here is a walkthrough of testing a potential business idea using paid traffic and a website, and another for using advertising.  Finally, an interesting approach that relies on having people commit money upfront.
• “A/B Testing” involves trying multiple versions of a site, mail campaign, or other outreach effort to optimize your business.  Here are some examples of websites going through A/B Testing.  Here is a nice statistical overview of how to make sure you get this process right, and more on the dangers of doing it wrong.
  • Tools for A/B testing: Mailchimp is an application for A/B testing email campaigns.  Google Optimizer works for websites. Optimizely is a really easy to use tool as well.
  • On the line between user testing and A/B is Laura Klein on short tests
• Interviews and surveys can help you get at more information about your potential customers and business models  If you are doing qualitative work, here is a nice guide for user interviews, and some tips from Gif Constable, who also has a nice book on conducting customer interviews.  If you are doing surveys, please make sure to actually test your survey with small groups of people before going live.

Going to work for a start up/founding teams and new hires

• How much should you pay/get paid to work for a startup? The current best way to figure this out is through Wealthfront’s interactive graphs.  You can also see the results of the 2008 Compstudy, and the highlights of the 2009 Compstudy. Guy Kawasaki has also given some numbers, as has Compass.
• From the perspective of the entrepreneur, this is a good guide to designing compensation systems.
• I get asked this a lot, and Venture Hacks has a great answer: “I have a job offer at a startup, am I getting a good deal?”   But make sure you are joining a startup for the right reason, since you aren’t likely to get rich.
• I also like this guide to dividing equity.  Here is a nice diagram showing how equity evolves over the course of a startup.
• If you are hiring, interviewing is a critical skill. This is a nice guide to interviewing to find motivated people.
• Some nice template legal documents are available from the Business Journal.

Financing and Valuation

• Inc. magazine has a really interesting set of valuation tools, to complement Prof. Hellman’s valuation spreadsheet with instructions. More hints on valuation in early rounds.
• Crowdfunding: If you are interested in crowdfunding, I have a whole page with tips.
• Accelerators and Seed Incubators:
  • Be sure to read this
  • A good list of accelerator/incubators.
• VCs and Angels
  • The benchmarks you should think about achieving before raising an A round.
  • How to meet investors from 42 floors
  • FeldThought’s collection of Term Sheet articles does a great job of explaining provisions in funding agreements.  There is a also some specific information on pro-rata rights.
  • There are some nice model termsheets at other legal documents at The Founder Institute and Y-Combinator.
  • Ask the VC generally has nice articles on deals and deal terms as well.
  • Angel/entrepreneur Chris Dixon also has some good thoughts on first round financing terms.
  • A good list of angel investors and
  • A useful lecture by a famous angel and VC on how to raise funding, from their perspective.

Sales, Pitching, Presenting, and Marketing

• Some nice elevator pitch videos from MIT and Rice.  The original pitch deck from Mint.com (thanks, Ayo for funding this!)
• A template startup pitch deck and another and an annotated pitch deck from the founder of LinkedIn
• If you are interested in presentation style, a great introduction is Steal This Presentation. Garr Reynold’s tips and Presentation Zen blog are also wonderful sources.  Slideshare slides can also be very helpful.  And, of course, read your Tufte.
• You should also know how to tell a good story.
• Some really distinctive presentation styles: Lawrence Lessig (241 slides in 20 minutes!), Guy Kawasaki, Steve Jobs, and Pecha Kucha
• A good infographic (who knew?) with data on how to run a sales process, and this on lead generation
• A good online book on entrepreneurial sales that covers much of the basics: Innovator’s Traction by Steve Browne.
• As usual, Tom Eisenmann provides the definitive list of links about startup selling.
• Interested in naming your company? I love this guide as a nice base, and there are some good tips from Mashable.  If you are doing something classy, here are some nice tips from AskMetafilter.

Software and Tools:

• Balsamiq has a wonderful list of software and tools for fast-moving startups.  Some particularly good ones include: Get Satisfaction for customer feedback and Yammer for internal information sharing,   They have a Twitter feed with updates.
• This List.ly list has a nice set of tools, as does the StartupFoundry.
• More sources of tools: From Prof. Eisenmann at HBS and from IDEO (the IDEO list is particularly detailed).

Learning to Code/Design/Project Management:

• First, make sure you really need to learn how to code.  You should understand the technical world, but being a coder isn’t a requirement, even for a web startup.
• This is a very thorough introduction to the basics of app development.
• A couple of sites that offer useful tutorial introductions to coding and designing: Treehouse and Lynda are nice paid options covering things like basic web design, phone apps, and some programming languages. Hackety Hack is a free application that teaches you Ruby.
• A couple of classics: The Project Management Body of Knowledge and  How to Be a Programmer

Building a physical project

• Some quick-and-dirty lean techniques for prototyping hardware (including using the dollar store)
• Andrew “bunnie” Huang, hacker and MIT grad, has some nice stuff on how to get physical products from idea to outsourced manufacturing: The Quotation, On Design for Manufacturing, Industrial Design for Startups, and Picking (and Maintaining) a Partner, and lots more advice from bunnie is nicely captured on MetaFilter.