I don’t claim that these frameworks will work everywhere in the world (hence the London detail), but I’ve learned so much in the last two weeks that I had to share. And as a former consultant, I just can’t contain my joy when I hear awesome frameworks. Yes, I know, “nerdy”, but I can’t help myself. :)
There are so many models on how to ramp up a business (including a great book The New Business Road Test), but I always tend to trust the guys on the ground - those that have or are building businesses, and have seen what works/what doesn’t. This is also a snapshot of some really great startups in the London scene that are looking to make their mark in this emerging ecosystem (which includes Google coming in)
Understand what is unique about your offering as opposed to competitors, how big the TAM (total addressable market) is, and the micro-economics of your business, ie . the customer acquisition and margin numbers
A VC told me that the reason TAM is such a big deal is that first-time entrepreneurs will inevitably make mistakes; but as long as the TAM is big enough, they will be able to pivot around in that space and still be able to hit the target market in time.
First determine what the demand is - through a launch page from launchrock, for example, and the CPC and volume
Then understand how the product fits the user. What is the purchase to subscriber ratio? How much does it take to convert to a customer?
Lastly, how will it scale? Will CAC be larger than LTV, which is a central piece according to this article
Make sure you have enough of a product. Yes, make sure you’re as far along as humanly possible, eating enough ramen than your stomach can handle. (my comment, not his)
But make sure you’ve got people. Who wants to work with you? Who is willing to be your customer/supplier? Because once you’ve figured those things out, you do have a workable equation.
My question is this - what frameworks work for you?