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Key Models & Definitions

Copyright © 2015 by the Board of Trustees of the Leland Stanford Junior University and Stanford Technology Ventures Program (STVP). This document may be reproduced for educational purposes only.

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What is Silicon Valley?

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Vision

Strategy

Execution

Starts With Vision!

Note: See Built to Last and other similar books by Jim Collins

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Vision

Strategy

Execution

Opportunity

Vision

Distinctive competencies

Business strategy

Structure

Profitability

Access to resources Capabilities of team

Innovation of novelty Industry context

Talent Processes

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Jim Collins’ Classic Entrepreneurship Model

FIRST THINGS FIRST

Assess Vision, Internal and External characteristics.

TALENT Team & Culture

IDEAS Product & Market Strategy

CAPITAL Cash Flow & Venture Finance

Managing Growth &

Change

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Sheryl Sandberg COO of Facebook

V-I-E E X E R C I S E

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Lean Startup Methods

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Moore’s “Crossing the Chasm” Model for B2B

The

Chas

m

Customers want Technology and Performance

Customers want Solutions and Convenience

Rela

tive

% o

f Cus

tom

ers

Time

INNOVATORS

EARLY ADOPTERS

EARLY MAJORITY

LATE MAJORITY

LAGGARDS

Tornado

Bowling Alley

Main Street

Source: Geoff Moore

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Moore’s “Gears” for B2C

Referral Contributions

SHARING

Advertising Retail

BUS MODEL

Traffic Eyeballs

HITS

Time on Site Interactions

LIKING

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Silicon Valley: Another Renaissance?

“No bankers, no renaissance.”

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The Most Important Risk Right Now?

TEAM RISK

MARKET RISK

CAPITAL RISK

TECHNOLOGICAL RISK

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Sources of Capital

Idea Business Plan

Prototype Beta

Sales Profitability

Decreasing Risk

$100K

$1M

$100M

Incr

easi

ng

Inve

stm

ent

Size

VC Banks Angels

(Groups & Syndicates)

FFF Gov’t

IPO Strategic Partners

Crowd

Reference: Trevor Loy (Flywheel)

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Bill Sahlman’s Classic Entrepreneurship Model

PEOPLE & RESOURCES Experiences, Skill,

Contacts, Attitude, Knowledge

CONTEXT Macroeconomy, Tax, Regulatory, Socio-political

DEAL Allocation of Risk

and Reward, Incentives, Signals,

Sorting, Consequences

OPPORTUNITY Entry Barriers,

Customers, Suppliers, Substitutes, Rivalry,

Economics

Project-Appropriate Financing

Option Preservation

Opportunity-Appropriate Knowing and Being Known

Appropriate Risk / Reward Allocation and Incentives

Investor Value Added

Favorable Technology Macroeconomy

Favorable Rules of the Game

Favorable Sociological Factors

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Models in E140A

TALENT

IDEAS

CAPITAL

Managing Growth & Change

C&L’s VIE

Cialdini’s Forces of Influence

Sahlman’s Concepts

Seelig’s Models, Blank’s Lean Startup, Moore’s Chasm

Mullins & Komisar’s Plan B, Kaplan’s Startup

Game, Osterwalder’s

Business Canvas

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Cases in E140A

TALENT

IDEAS

CAPITAL

Managing Growth & Change

C&L’s VIE

Cooliris, Roizen, Wily,

Hess

Yahoo, Dropbox

IMVU, Documentum

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Startup Development Phases