Posted by & filed under Accelerator, Entrepreneurship, Funding, Investing, workshop.

Pitching to investors to get funding can be scary. Typical professional investor listens to hundreds of pitches every year, and this makes them busy and impatient. If you don’t make it easy for them to understand why you are the next big thing, they’ll throw you out. You have to earn every second with the investor. Here’s the simple pitch deck structure that the Nestholma startups have been using successfully when pitching to investors for funding.

When you get a meeting with an investor for 20 minutes, don’t expect it to last for 20 minutes. It’ll last as long as the investor thinks you’re interesting. If you have five minutes to pitch on stage, don’t expect the investors to listen for the entire time. If you’re not making sense, they’ll start looking at their phones while waiting for the next pitch. Investors value their time – make sure you value it, as well.

You need to deliver the punchline right in the beginning: what is your big idea, what is the real problem you’re solving and how you do it. Tweet this!

If these seem interesting, only then the investors want to listen to the details and consider funding you. Start with these three first:

1. The elevator pitch needs to say the essentials in 10 seconds

Bankiton pitching for funding at Nestholma Demo DayIn the first 10 seconds you need to convince the listener that you have something interesting to say. Saying your value proposition is a great starting line. Personally, I’m fond of Steve Blank’s value proposition formula “We help X do Y by doing Z”. You need to get the investor excited and curious to hear more why you should get funding from them. The investor may only listen to this!

2. Problem worth solving and funding

What is the problem that needs to be solved (not all problems are like that)? How have you validated that the problem really exists? Don’t over-do this, but make sure that the investor can understand what you are solving and why. If you want to tell a short personal story, this is the place to do it – not in the beginning.

3. Solution that customers are willing to pay for

How can you solve the validated problem in a way that customers are willing to pay for? Be as concrete and specific as possible. Screenshots, workflows or even a short video are great. Stay away from meaningless jargon, such as “Our solution provides unprecedented ease of use and scalability”.

Now you’ve covered the most important things. If you’re still in the room, you can go into details in your pitch to get funding from investors.

4. Real and addressable market and customers

Your opinion about the market doesn’t matter. Numbers are great but explain clearly what is the significance to your business. “We are working in a $3 billion market” may sound nice, but it is meaningless fluff. Show your traction or explain the logic for getting the customers (deals in place, access to customers or distribution channels etc.). Testimonials are always good. When you have a paying or just a potential customer (at early stages) say nice things about you, it’s always powerful.

5. Revenue model for monetizing the value you provide

If you solve a real problem, the customer will want to pay for it. It can be with money, their data, time or, for example, with services that they provide in turn. Give a clear outline of how your company makes money with the idea. What value are your customers paying for, how much and often and who are your partners etc? Focus on the logic. The details – such as $4.99 or $9.99 a month – may change.

Especially at early stages, it’s more important to convince the investors that the logic behind the revenue model makes sense. Tweet this!

6. Your unfair advantage that keeps others away from your market

Do you have something that competitors don’t have or cannot get easily? Be critical about this! It has to be something unique, or don’t say anything. It can be existing deals, IPR or, for example, unique experience. It’s not “great and committed team”. Not everyone has an unfair advantage in the beginning (just think about Google or Facebook in the early days). For an investor, it’s an added benefit but not a showstopper if you don’t have it.

 

Download exclusive content:
Free checklist for preparing your investor pitch

Get the investor pitch checklist pdf

7. Marketing and getting customers

How do you reach your customers? This not a list of the obvious channels (blog, some, Adwords, PR etc.), but your recipe for success. Everyone uses social media channels, but how will you make them work for you? Explain in your pitch what are the most important channels to reach your specific customer base. What is the cost or, for example, conversion rate you’ve validated? Does your product have a growth engine or can you use some clever growth hacking tactic to boost your growth?

8. Why are you better aka positioning

The thing about what makes you unique and why your customers are paying for your product. Make a 2X2 matrix the two most important things in your product as the x- and y-axes. Place your company and the competitors on the matrix. The aim is to give an easy way to see how you compare with others at a glance. You can provide the feature-by-feature comparisons to investors as background materials if requested.

9. Running the business with the numbers

Provide an overview of the business with a simple cash-low estimate. Don’t just make Excel fantasies. Justify the numbers with deals, traction, benchmarks, sales funnel, customer development etc. Your business logic is more important than the plain numbers. Remember that these may end up in the actual funding decision, so don’t treat them lightly.

Don’t show Excel fantasies to investors! You need to justify the numbers with data. Tweet this!

10. The team worth funding

Explain why you have the perfect mix of people and way of working. Why can make a big business out of the idea? Show the core team, but also mention interesting advisors, investors or board members. Unless you have 100 people and a real organization, don’t use titles like SVP of Product. That may sound nice to your mother, but for an investor, it sounds funny. Most investors will tell you that the team is one of the – if not the – most important thing in funding decisions. Therefore sometimes startups start with their team slide. I’d advise against this unless the investors know the team members. Another “greatest full-stack developer in the world” is interesting only if you have a good idea. But if you have Mark Zuckerberg in your team, put that on the cover slide.

11. Roadmap and how you’ll use the funding

Present a timeline that shows what you are going to do and how much money you need for each step. Explain how you are planning to use the investors’ money. Pay also attention also to working capital needs if your solution has, for example, hardware unit costs. Make sure that the roadmap and spending is aligned with your overall message. It sounds strange if you claim to have the best developer team, and now you say that you need to hire more developers. You may need them, but you need to have justified the new hires with, for example, the market opportunity.

12. Make the last words count

We remember the first and last things. Don’t waste time and space on Thank you’s or contact details. They’ll find them if needed. Instead, end with your value proposition. It reminds the investor why you are interesting, what value you provide. And why they should join the ride.

Collectly pitching at Nestholma event

 

Every investor has their own preferences for the pitch content. Depending on your company stage, you will be expected to deliver different types of things. Also, take into account who are the persons in your audience. What interests them, do they like technical details, numbers or something else? Before every investor meeting, make sure you find out what is the expectation. Talk to their portfolio companies, read their blog posts and tweets or just ask the investors.

This blog post is based on one of the more than 20 workshops run during Nestholma’s accelerator program.Check out also how our startups pitch to investors at our Demo Day.

Topi Järvinen @topij

 

Download exclusive content:
Free checklist for preparing your investor pitch

Get the investor pitch checklist pdf

 

Posted by & filed under General, Press release.

Every company is build by its people. Having a great team with complementing individual talents is crucial for success. This is why I’m thrilled that Daniel Collado-Ruiz has just been invited to join Nestholma’s partner roster.

Nestholma partners

Daniel Collado-Ruiz wears a lot of hats with ease (both figuratively and literally). He has an impressive list of accomplishments as an academic, entrepreneur, business coach and educator. On the academic side Daniel was an Associate Professor at Universitat Politècnica de València in Spain. His specialty was ecoinnovation and creativity. As an entrepreneur, he has founded Nurtup that helps people interact better through games. Both in the academia and business, Daniel has been organising workshops for people and companies to develop in five continents.

Daniel has been already working for Nestholma since last summer. During Nestholma’s Nordea Startup Accelerator his contribution as the project manager, coach and Stockholm site manager was invaluable. Daniel continue to have a key role in running programs, coaching startups and running workshops,

Daniel will be in charge of some of our most important activities. One of Nestholma’s cornerstones is the scalable program model that we’ve been using to run 19 programs around Europe. I’m very pleased to have Daniel running the program model development from now on. The other area is taking care of our international network of mentors. Having a great team is crucial for any business, but having a great network of partners is equally important. And it’s great to have Daniel developing new collaboration opportunities for our mentors and startups.

On a lighter note, Daniel (top left in the picture) also fits our partners’ hairstyle requirements perfectly :-)

Topi Järvinen @topij
Managing partner at Nestholma

Posted by & filed under Accelerator, Corporations, Fintech, Startups.

We have done 19 accelerators mainly for global companies. 1-3 locations at the time. Being inside the corporations’ offices with startups. It’s a must. That’s the best way to deliver co-developed innovations for banks and bank customers. Corporations also buy learning from us. Learning to become like startups. They also want to learn how to cooperate with startups. And it only happens when they work with startups… (well, that’s self-evident =)).

Corporations really value the hands-on way how we run accelerators, but even with us, they face a real problem: how can they attract the best startups?

Solution to Banks: collaboration

Banks need to support each other to attract the best fintech startups. Globally. Best parts of a global and local accelerator. Each bank will have their own local accelerator and after the accelerator, each bank will participate in workshops/boot camps with the startups they see useful for them. And the startups are more bank compliant. That means, they’re easier to collaborate with.

Nestholma Global Fintech Accelerator attracts a large number of startups

Startups will join because they will have a fast track to all participating banks. During the accelerator, each startup cooperates with the bank they are located in. And when the program is done they will have a fast track to all participating banks.

So, we give startups our accelerator support and access to many banks. And that’s a promise they want to hear. And then we get more applications from the best fintech startups. A clear win-win. Yes to global. Yes to local.

Let’s talk!

I would like to have a discussion with all parties about this. Why is this the winning model? Why not? What should we have more/less? Let’s discuss!

Read more about the Global Fintech Accelerator here:

www.nestholma.com/fintech

 

Posted by & filed under Corporations, innovating.

Big corporations are clusters of amazingly smart people. They have resources, vast experience and deep knowledge of the industry. Be it banking, technology or pretty much any industry, the corporations are the rulers of the industry. At least till now.

Now startups with their amazing innovation power are taking over. Consumers are demanding better and better solutions, and big corporations can either learn how to really innovate again, collaborate with the startups or be left in the dust. To understand how you must first understand why. In this post, I am going to explain why exactly corporations are so bad at innovating.

Working together, but not really together

Big organizations do have plenty of smart people working together, but the problem is that they are not really working together. With big organizational size comes the need for structure, units, departments and all kinds of sections. There are departments for marketing, sales, legal and so on. The problem with it is that the employees don’t venture much outside their departments. They work with the same people all the time, and often with similar people. Marketing people with marketing people, sales with sales and so on.

To innovate, you need to have people with different knowledge bases and experiences working together, cross organizational boundaries. Even if people from different departments happen to work together, it is often just for a short time and for a specific mission. Innovations usually require time to just freely bounce around ideas. But with a focus on efficiency and the mission and hand, that is often just not possible.

To innovate different kinds of people have to work together. But in corporations that rarely really happens.  Tweet about it!

Quartile focus & the quest for efficiency

Corporations focus on making the next quartile better than the last. Innovations, on the other hand, require time. And that is exactly what such short-time focus does not provide. At the same time corporations look for efficiency. The same (or even more!) tasks are expected to be done with fewer and fewer employees. That leaves the employees no extra time for free thinking; creating new & innovative ideas. And even if they could squeeze in a bit of innovative thinking, why would they? Their performance score is based on how well they handle the tasks in their job descriptions, and that’s it! Such systems punish for trying to be innovative; ‘wasting time’. Even if the employees are told to innovate, fresh ideas rarely come on command.

Innovations require time. When you just focus on making the next quartile better, there isn’t enough of it. Tweet about it!

short-term focus quartile

Knowing their field too well

Another problem big corporations have is that they are the masters of their field. It obviously has a lot of benefits, but at the same time, they know their field too well. When you are so deeply inside, it is difficult to see possibilities for change. And often times the innovations that do come from within are fairly small. That is why big innovations come from the outside, from people who have a much less clouded view.

Resistance to change

Some corporations get cocky. They don’t realize that what has worked for the past 20 years, might not work at all now. They fail to recognize that with time also their customers, market etc. change and they need to change with them, preferably even lead the change.

Sometimes the organizations understand in principle that to stay on top of the game, they need to innovate and essentially: change. But to truly do that, you need to have the whole organization in it. But instead many big changes are faced with attitudes like: ”We have never done it this way” or ”We already tried this 30 years ago”. When you have lived too long in the same bubble it can be hard to recognize how much e.g. technology has changed over time. What was impossible before is often very much possible now.

You need to realize that what has worked for 20 years, might not work at all now. Stay current. Tweet about it!

Failing to fail enough

Being innovative requires tolerating failure. Like Ilkka Paananen from Supercell has said: most of their games fail, but they keep doing that to find the game that’s going to be on top. For big corporations, failure can seem daunting. Unlike the failures of smaller companies that often go unnoticed, everything big corporations do is scrutinized. They have a reputation to keep and they need to be careful of bad press and its influence on their brand, stocks and so on. But failures are a crucial part of being innovative.

Being innovative requires failures and the courage to fail. Tweet about it!

Failure failing success

Innovations don’t always seem so attractive

There are also negative sides to innovations, which can make them seem unattractive to corporations and especially their employees. New innovations often mean things can be done more efficiently and with lesser costs. And that often means the corporations have an excess of employees. They need to downsize, let go of people, and that is what no one wants to do. It is horrible for the employees; both for the ones leaving and staying, and very bad for the company’s public image.

Another obstacle is all the legacy systems big organizations usually have. Over the years corporations have invested a great sum of money into IT, machines and real-estate among many other things, and letting go of them often feels like just too big of a waste.

When you look at all these issues, getting corporations to innovate may seem like an impossible task. But it doesn’t have to be. There is definitely hope, but organizations need to take action now. What can they do then? One solution is (surprise surprise) to learn from the innovation masters: startups. In a future post, we will talk more about the different ways big corporations can innovate.

 

Start renewing your business today

Let’s talk how Nestholma can help to renew your entire company and find new businesses with startups and beyond.

I want to hear more

 

Related post: 7 differences between startups and corporations

 

Posted by & filed under Accelerator, Investing.

…or equally bad. When the head of Y-combinator had invested into 720 startups, he said that he can’t predict which of his investments will be successful. We can’t either. Because these are already the best ones and they all should succeed.

Out of 100 startups I have invested in, 3 are bankrupted and some are receiving XX millions of funding. And I was not able to predict that. The fact is that none of us can predict all of the investments right. So now I am trying to learn from our team’s decision making. I am also making a prediction. Let’s see if I’ll be right with it.

But seriously, we have not yet done single unicorns so Y-combinator is clearly ahead of us. But we try harder =).

We invested in all startups on Nordea Fintech Accelerator and today’s pick is Collectly.co

Their promise: increase effect 3-4 fold and do it 90% cheaper. Not a bad promise for a debt collection company. To do that they use AI and profile the debtor. They do profiling by using many sources and automating it all. Then they approach the debtor with the message and channel most effective for this kind of profile. All this automated. The system also keeps on learning to increase the efficiency. Simple stuff and strong value add.

 

They had relevant experience from the field. They had the tech skills as well as an ability to make people listen. They worked well together. I did not find any red flags. But one. I was wondering will they have the attitude “I’ve been there and done that, don’t tell me what to do”. Because the best teams are strong and skilled, yet able to listen and learn. Almost an impossible combination =). But that fear did not materialize. The opposite happened. They were cooperative and also brilliant in using us. And they still do. They make me talk with investors to share our experiences. And because they deliver, it’s easy to talk about them.

The best teams are strong and skilled, yet able to listen and learn.Tweet about it!

So how do we at Nestholma make investment decisions?

We look for great teams with simple, understandable big value add. So, one should always remember to ask the following questions from himself: are the benefits to customers big enough and will they understand it easily? Can the team deliver it? It’s as simple as that.

Ask: are the benefits to customers big enough and will they understand it easily? Can the team deliver it? Tweet about it! 

And my prediction: we’ll hear from the guys at Collectly. A lot.

Click here for Collectly’s pitch.

Posted by & filed under Marketing, Product development, Social Media, Startups.

Social media is often recommended as THE thing to do for startups. But they usually forget to say why. Non-social media people often see the different social media channels just as places where people share silly things about their lives and random cat videos. And with that, they fail to understand what an amazing tool social media can be. That’s why I’m going to share with you 7 reasons social media is a must for startups.

One of the harsh truths of being a startup entrepreneur is that no matter how cool your idea is, that alone isn’t enough. Some entrepreneurs believe that as long as their solution is good the customers will just somehow appear. But that’s just not how it works (shocking, I know). It is not just once or twice when the much worse solution has taken over the market (take for example the case of VHS). You need to get your startup in the minds of the buyers, how else would they know that your product/service even exists? And as a startup, you have to do that without having the budget of a commercial giant. That is where social media comes in. But it is not only that! The benefits of social media start even much before you have even launched. Read on to find out how.

Just having a cool startup isn’t enough. Customers won’t just magically appear: you need to let them know you even exist! Tweet about it!

1. Reach the right people

For getting your startups into the eyes and hearts of people, social media is one of the best ways. That is because most social media channels have amazing targeting tools. That means you can get the content you want in front of the people that are most likely to be interested in it. That means you are not wasting your time and effort on people who have zero potential of being your customers.

The reason social media targeting so great is that it goes way beyond just age, gender and other basic things like that. Every now and then there are articles about how social media channels know everything about their users. And I mean everything. That is usually told as a gruesome horror story, but for marketers: that means paradise. The more you know about your customers and potential customers, the more precisely you are able to target them. Be it their interests, the languages they speak, where to go on a holiday and so on and so forth. And the best part is: you can do it all for a very low cost!

 

2. Get most bang for your buck

Social media gives you the most bang for your buck. In fact, you might not even have to spend a dime and can still get amazing results! Though usually, you have to put a little bit of money in, especially at the beginning. What is a little bit of money? Often people think that means thousands of euros, but that’s not true. You can get a lot done with couple hundred or even just tens of euros. Sounds too good to be true, huh?

Almost all social media channels make money on ads. But at the same time, ads are exactly what the users don’t want to see. At least if the ads are not relevant to them. Relevant posts and ads, on the other hand, usually bring value to the user. And happy users makes the social media channels happy and they want to encourage the advertisers to keep making their users happy. In short: the better you target your ads, the cheaper it is going to be. So, in the end it’s not about how much money you have, but how you use it. And thus social media levels the playing field with big corporations with endless marketing budgets.

Social media levels marketing for startups – no need for a big corporation’s marketing budget to reach amazing results. Tweet about it!

3. Differentiate and show how cool you really are

The competition is getting more and more heated pretty much no matter what industry you are in. Social media is a great way to differentiate yourself from your competitors. Show who you truly are. What are your values. And why you’re so cool in general. No matter how much we try to think we make our decisions rationally, it is still emotions that play a big role in it. People like to buy from companies that have authentic personalities, companies that just feel good. Social media is an excellent tool to show them exactly that.

Doing social media is also a great way to get positive news about you to the internet, so you don’t have to really on others’ posts (which by the way, might never come). Not only does it help your startup to get know, but when people actually search for you, there is already something good out there.

4. Bypass people’s mental adblockers

Over time we learn to be more and more suspicious about the information we see in ads. ”Of course they would say so, it’s their product. It just can’t be that good in reality”, we think. But in social media, your ads & other posts can look just like the posts your customers’ friends & the people they follow have posted. That again means their mental adblockers are off, and they are much more receptive to your awesomeness.

Another thing is that people go to social media to have fun. They are looking for something to entertain them, something to help them pass a bit of time. And if you do your social media stuff well, that something can easily be the posts (and even ads!) you make. That means your marketing and sales efforts are not seeing as a nuisance, but something they get value from. And that’s a huge difference to traditional advertising!

5. Provide A++ customer service & increase customer loyalty

Social media is a great way to provide A+ customer service. For example, Twitter & Facebook have become THE way to interact and get help quickly from companies (read this post for inspiration). By interacting with your customers and being social you are shedding the image of a faceless corporation and giving them a good feeling about you. And again: it’s all about the feel. When someone has gotten a good feeling about your company through for example talking with you on Facebook, they are much more likely to choose your product over your competitors.

It also pays off long term. Brands that are active on social media will have more loyal customers. Good feeling about you -> they are much more likely to keep buying from you.

Being active on social media – recipe for customer loyalty! Tweet about it!

Here is another kicker: social media can be an amazing help for you way before you even launch your startup!

6. Get people excited about you before you even launch

Most of the startups I have been working with assume they should start doing social media after they have launched their product/service. But that is completely not true! The best possible problem is having people get excited and ready to buy your product/service before its launch. Take for example Dropbox, who had hundreds of thousands of people on the waiting list (read more here), and thus much smoother start when they finally did launch. So, you should definitely start acing your social media game as soon as you can.

Another bonus is that you learn what works and what doesn’t for your startup and its customers. Especially if you are new in using social media for businesses, starting early gives you time to learn before its too late. Also, the same things don’t necessarily work for all businesses, so you should try and test what are the best ways to use the channels for you.

7. Understand your market better & adjust accordingly

When you engage with your potential customers on social media, you start to understand their needs better. You will see if your idea is really worth pursuing or if you should adjust it a bit, pivot, or just scrap it all together. As people talk about their lives and their interests quite freely on social media, you will also get to see a rare glimpse into their lives. And that again helps see how your solution would fit in there. You can do also a lot of great spy work on your competitors! ;)

 

Any important benefits I missed? There definitely are plenty more! Share in the comments or tweet @TiinaHaapanen or @nestholma. In my next post, I will go more in depth about how to actually rule in social media. See you there! :)

 

Posted by & filed under Entrepreneurship, Funding, Startups.

It’s the beginning of a new year, and time to start working on those new year’s resolutions (if you stumbled upon this post later in the year, even more reasons to get to work NOW! :)). This post won’t help you lose weight but take care one other important resolution: having your precious startup finances in check. Here I will give you 7 tips on how to master one building blocks of startup finances: cash flow management.

In my previous post, I talked about the reasons 4 out of 10 startups fail (spoiler: it’s also related to cash-flow management). In this post, I will give 7 tips to master your cash flow and NOT be one of the 4. Some of the tips sound very simple & obvious, which they are, but they are still forgotten way too often. 

  1. Make it a habit to stop for a couple of minutes once every two weeks, and check the money coming in and going out – cash flow. Preferably do it with an outsider to get an unbiased view. And remember to do it properly! You don’t want to go bankrupt because of a silly calculation error. Tweet about it!
  2. Understand when the incoming money will really be in your account. If you sign a deal today, it doesn’t mean the money will be in your account tomorrow. It could come next month, next year or even later if that is what you agreed! So, understand when you will get the money, and make sure you won’t be out of cash before that. Tweet about it!
  3. Remember that not everyone pays their bills in time. There also might be other problems delaying the payment like dealing with reclamations. So, don’t count on that one payment too much! Tweet about it!
  4. It usually takes 2-3 years before your company is cash-flow positive. Most first-time entrepreneurs believe they can do it less than 6 months. And that obviously means trouble. So, a bit of pessimism will be a good aid in your journey. It is better to be pleasantly surprised than the opposite, especially if it means you will be out of money and business. Tweet about it!
  5. Pivot fast. Startups usually pivot, i.e. change from plan A to plan B or even D 3-5 times at the beginning. And every time you pivot, your revenues will be further and further in the future. So, the faster you pivot the faster you will get money coming in. Tweet about it!
  6. Multiply your estimated need for funding & time frames by 3 (or π/pi if you want to get precise), and you will get much closer to reality. Why three? You just read the reason for it: pivoting. That makes even the best estimates unrealistic. Based on our experience, multiplying the estimates by three gets startups closest to the reality more often than not. So, if you estimate that your product will be ready in 3 months, it usually takes 9 months in reality and so on. Tweet about it!
  7. Understand what you are selling, to whom and for what price. Before you yourself understand what you are doing, it will be hard to convince others to buy. It doesn’t mean your product/business has to be perfect, but no one is going to buy it if it is only almost ready. Tweet about it!

And that’s it! All in all, it usually takes longer and costs more to get your startups going than you’d think. It all might sound pessimistic, but think of it this way: the better you are prepared, the more likely you are going to be one of the success stories!

 

Related post: Why 4/10 startups fail: the realities of cash-flow management

 

Posted by & filed under Accelerator, Corporations, Startups.

I believe there are three phases of startup and corporation collaboration (all of which are needed by the way!):

One-night stands, dating, and finally marriage.

One night stands are the first contacts between startups and corporations. Mingling at startup events, arranging innovation competitions, hackathons and the like. These are needed for people to get first experiences with startups and learn how different, yet lovely they are.

Dating phase is an accelerator program. There corporations get to experience the startup way of doing things. Iterating fast, focusing on the user experience, and providing customer care that is beyond just words. They also get feel what it is to truly share information and work without silos – things that are essential for creating real innovations.

Research shows that such programs work when they are outsourced to a party that understands corporations, and even more importantly: follows “lean startup” or similar methods. Coaching in the program also has to be focused on designing the businesses so that it create value to customers, not pitching or scaling them too early (unfortunately that is what most, but not all, accelerators do). Dating may or may not include investments into startups, but at least it should include some kind of business deals with the most suitable ones.

To make all that happen, it is crucial to have commitment from the top management and resources allocated for collaboration. It is also important to be flexible to learn and adjust processes so that you can actually get the innovations from the startups.

Marriage means getting even more serious and committed to working with startups. In the startup world, marriage has to be polygamy as marriage with just one startup seldom works. There is a high risk of killing the customer orientation/speed of startups with corporate processes and rules. That is why you need to systematically work with enough startups to achieve the critical mass and also make sure the corporation learns to benefit from startups.

And that’s it, the lovely world of startups’ and corporations’ love life.

 

Posted by & filed under Accelerator, Corporations, Fintech.

Altogether 13 startups, 3 months. And in addition, we had one startup from Industrial Bank of Korea accelerator. We have learned a lot. Nestholma has now done 21 accelerators for large corporations and we are reaching the level that we know how to start the change in corporations. I would also say that Nordea has been an amazing partner. They accept the facts and start changing when needed. The guys working for Nordea have the right attitude for cooperation. Really professional gang, but also cool to work with.

But Nestholma has a bigger mission. We are saving corporations. They need to be saved. From themselves. And startups are great tools for that. Corporations learn how to be agiler, they learn how to make decisions fast and how to design products and services with customers; and fast. But the best thing on accelerators is that startups deliver the innovations, at the speed of light…or night. I usually say that it takes a year to iterate by a corporation and a night by a startup. It is almost true =). But often corporations are also lean. Well, at least some parts of them and yet still many projects just stop. For no reason, they just are undone.

The best thing about implementing our mission is that the startups gain so much. They get the support from our partner corporation and Nestholma team, they need and they can start scaling their businesses. And for investors, we provide “bank tested” startups. Of course, some of them are better than others, but all of them are much better than they were 3 months before.

So amazing 3 months done. Not to mention Slush week; I was on stage 4 times talking to corporations as well discussing the change at Bank of Finland event. We also did investments at Slush and Ultrahack hackathon. And last week I was named on the list of TIVI top 100 most influential professionals in Finland. I guess that is also a prove that corporate startup accelerators are here to stay.

I finally got some rest during the weekend and now I feel gratitude for the amazing entrepreneurs at Nordea accelerator startups, for Nordea guys and mentors and my colleagues at Nestholma. All this happened only because of you. My sincere thank you to all.

See the startups pitching in the Demo Day

Antti Kosunen @anttikosunen

Posted by & filed under Entrepreneurship, Product development, Startups.

All communities have their jargon, and startups are no different. Probably one of the most used terms is Minimum Viable Product, MVP for short. It’s considered one of the core messages of Eric Ries’ book The Lean Startup. If you hang out with entrepreneurs long enough, you’re likely to hear the acronym used for almost anything that people patch together.

According to Eric Ries, MVP is a “product which has just those features [that solve the core problem] (and no more) that allows you to ship a product that resonates with early adopters; some of whom will pay you money or give you feedback”. It’s necessary to learn quickly whether your idea makes sense to your customers. And if it doesn’t, you want to “fail” quickly, when you haven’t yet invested lots of resources! You build an MVP with the purpose of learning from your customers and understanding your market.

The problem with this is that most people get the meaning of MVP’s completely wrong! And probably the biggest reason is that every single word in that term is misleading. No wonder people misuse it!

Firstly, it might not be a product.

This word is loaded with meaning that does not apply to MVPs. We generally understand products as something that is manufactured or refined for sale. Even if you extend this to a service, the purpose of the MVP is not sales, but rather learning. And MVP is a tool that we use in order to experiment, to find out if the market really behaves like we assume it does. Of course, part of the assumptions we need to validate are whether people would pay for our product, but the mindset is completely different. What you build to validate that people will pay clearly does not include all the things that a final product would.

Using the word “product” makes people think that they have to build something that looks like the final product already, which might not be the case! Later MVPs will indeed be products (or product-looking), but early ones are likely not to be.

Think about the case of Buffer. They built a landing page to test whether people were interested in the product at all, and after that they modified to check whether people would be willing to pay for it. That was before they wrote a single line of code! Most people would not call that a product, but rather an experiment. You can read more about the story here.

Secondly, it’s only viable for the purpose of learning.

This is probably the most criticized word in the MVP term. Andrew Chen proposes to focus on a Minimum Desirable Product instead, to make the “product” more human-oriented. This gets a bit closer to the real purpose of an MVP: to test whether the value proposition is powerful enough to engage your early adopters.

The word viable tends to make people think of whether the business model holds together, and whether the product is technically feasible… which are not the first assumptions that you’re testing! If you’re testing your value proposition, early MVPs might not have a business model behind them. Most of them do not work as a complete business model — for example, if you’re building one side of a two-sided market-place — and are likely not to be viable… except for the purpose of testing your value proposition.

An example of this is Angellist. To test whether people would be interested in a service that connected startups and angel investors, they started by introducing them through email! That would definitely not be a scalable business, but thanks to that they found that there was quite some demand for it. You can read more about their initial launch here.

Finally, it’s not about the minimum set of features, but rather about the core value that it provides.

Don’t get me wrong: MVPs must be minimalistic and beyond. So much that you should be embarrassed about them when you show them around. But because of using the word “minimum”, most entrepreneurs tend to think about the complete product, and then start cutting things off. They often try to boil down their final product — their idea — to the minimum version they’d be happy with.

This is because the purpose of an MVP is to learn as fast as possible. Therefore, the train of thought should not be “what is the minimum set of features” — to which startups add all sorts of stuff — but rather “what’s the quickest way I can find out if this is good business”. As Steve Blank says, a minimum viable product (MVP) is not always a smaller/cheaper version of your final product. It’s something that helps you validate the core.

If the entrepreneur is thinking about several value propositions at once, they will be convinced that the “minimum” set of features is… well, a lot of things. And all of them are important, therefore they’re “minimum”. Instead, it pays off to ask the question of “where does the customer get the core value from”, and then build something that validates only that.

One often mentioned MVP is that of Dropbox. To validate whether people would use their product, they created a video showing the product. They didn’t have a product with any features when they put the video out, but the video went viral and they realised they had a really good case ahead of them! You can read more about their story here.

Even if the words we use to describe MVPs are not accurate, the concept of MVPs is clearly useful. So what would be a better way of calling it? Some have even proposed calling it Minimum Viable Experience. Some others, as we mentioned, favour the term Minimum Desirable Product. However, they only address part of the problems.

We think that we can correct each one of the words. And we think we can even do some word juggling so that you can continue using your acronyms comfortably!

Enter… the MVP: Main Value Proof! It’s the entity (product, service, experience, you name it) that lets you test the core value of your business. It’s not only minimal: it focuses on the main ideas, and only on those, so that you can validate them — or disprove them. It revolves around your value proposition, and not around other technicalities that you business concept might have — unless you’re in a later stage, in which you’re testing the value of those technicalities. You can have different MVPs to test your value proposition — which will be far from products — or the way you plan on delivering it — which will actually look a bit more like minimalistic products. But we’re not calling it product, since that could make you fall into innovator’s bias!

So next time you read the acronym MVP, think about the main value proof instead!

Dr. Daniel Collado-Ruiz, @ErCollao

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