Startup check list

5 key points to evaluate a startup

The DNA of a great startup in 5 points

It's not an exact science, so many investment fund players are looking for the nuggets to invest in with the best possible rate of return on investment (IRR). After having supported several hundred entrepreneurs via coaching sessions, cafes or having joined them on the Board, here are some recurring points of attention:

* 1 * The team, a magic recipe ... and uncertain

Having the right team is obvious. In our opinion, here are the right ingredients to bring together so that the marriage between partners lasts and succeeds:

• Fun: the associates must have fun and have a form of complicity; the road will be long and twisted, it is important to have a positive dynamic within the startup
• Admiration VS Complementarity: it is not enough to have complementary skills, the partners must have a form of admiration for one another, a form of respect which supposes reciprocal trust
• Experience : having already lived an entrepreneurial adventure is a plus, but not essential; this makes it possible in particular to avoid errors and to play down difficult moments… they are part of the way!
• Oppositions: the partners must be able to oppose and resolve their oppositions themselves, which allow the company to move forward, a kind of "creative destruction" essential to the innovation process
• Pro / personal balance : it is also important that the partners are on the same pace of life so as not to create a balance that can generate tension. Everyone can be at a different stage in their life (married, children, etc.) and it is important to draw up a moral contract between partners so that everyone is clear about their commitment.
• Hope / mission: finally, even if each entrepreneurial adventure has many surprises in store, the partners must share a common vision and have a common hope of what their success can mean (victory, mission, gains, etc.)

* 2 * User love for the product ... the (real) value proposition

The value proposition is sometimes summed up by a simple functionality or a sum of functionalities or by a business or technological expertise. These are pieces of the puzzle, but the real value proposition lies elsewhere; the startup must ensure that its service or product brings real progress in the lives of client users.

This requires knowing your market, your competitors, and especially your customers. Entrepreneurs must talk to them and involve them from the start to ensure the relevance of their offer, but also their propensity to use it and / or pay.

There are (almost) no startups that have failed after experiencing strong adoption by users (except in the case of management misconduct by the founders): when users vote for a service, traction follows and the adventure is launched.

* 3 * Persistent use… to create a good business model

Having a good read of the product-market fit is key: to penetrate new markets, the price alone cannot explain the traction of a company. Some founders believe they have validated their business model from the moment a few customers use their service for free or at low prices. Traditional players can then easily close the door to new entrants by playing on prices.

What is good is expensive; if your users like your product, then they will pay the price. The war must be won on the use of the service, regardless of a low price. The real good sign is based on usage, the business model is then a variable to be adjusted in the first months to have the financial fundamentals that allow you to build a business, and not just a product used.

* 4 * A tailor-made go-to-market… to generate traction

To succeed, you have to know how to address your market. Many entrepreneurs, and this is even more true for intrapreneurs within large companies, have mastered their subject, know how to build a good solution, recruit the first customers, but lack know-how on large-scale commercialization. How to sell?

There's no point in building a Roll-Royce if you don't take it out of the garage ...

The go-to-market strategy must be part of an ecosystem where key players already revolve: customers, regulators in certain cases (eg: FinTech, Biotech, etc.), competitors, partners / distributors, suppliers, etc.

Mastering all the sales levers, direct and / or indirect, digital or traditional, with an economic logic (Acquisition costs <Life Time Value) will allow a startup to leave the garage to drive at high speed on the highways.

* 5 * A network ... to find shortcuts

The team of founders will never stop improving its service ... through numerous tests and adjustments according to the principle of "Fixes that fail" + "Try again"

But, it is by surrounding themselves with experienced people that the founders will be able to find other "shortcuts", ways to progress more quickly, to access know-how or people from the network who will open doors for a partnership, recruitment, funding, etc.

These people can be serial entrepreneurs, industry experts, investors and can sit on the board of startups, for an incentive or remuneration. In general, Board Members benefit from a profit-sharing plan.

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