I’ve been a fan for years, and now Launch413 and I have the honor of being on the Angel Invest Boston podcast. Listen to hear how Launch413 helps startup CEO’s beat the odds and attain sustained success.
[This is part of a series on the KISS Canvas]
30-page business plans are great for established businesses and terrible for startups that need to iterate quickly. 15+ years ago the Business Model Canvas (BMC) changed everything by giving us a 1-pager (or 4×3 foot poster) to help you quickly document and test the key hypothesis behind your business model. The BMC was a quantum leap forward.
However, my students and I often struggled with the structure of the canvas. While it was superior to a business plan it was relatively hard to read & use. You literally needed a map to show you how to read it – start here, jump to there, then jump down to here…
In a Nutshell
And so was born the KISS (Keep It Super Simple) Canvas. Each key stakeholder (payers, users, channel partners, etc.) gets their own row. Read the columns in each row from left to right and you’ll find the facts of the business model layed out in a logical narrative structure. In fact, it tells the story of your business, as you would in a good pitch. No map required.
At the highest level, this KISS canvas tells the following story just by reading from left to right: We help [key stakeholders] by providing [value proposition]. We find, earn, and retain their trust by [relationships]. This is economically sustainable because of [financials].
We help the blind and visually impaired by empowering them to connect with their fully sighted friends and family as equals. We find, earn, and retain their trust through word-of-mouth and strategic partnerships with nonprofits that serve the blind. This is economically sustainable because customers pay us an $8 monthly subscription.
And today, after 4 years of field testing, I’m proud to roll out version 4!
KISS Canvas v4.0
- Key Stakeholders – Who do you serve? Each stakeholder gets their own row to keep their information clear.
- Type – Stakeholders tend to fall into predictable categories: the one who pays you, the one who uses the product, the one who connects you to the customer, etc. It is important to know each type’s needs.
- Persona – Describe the archetype that represents the key traits of this the stakeholder.
- Pains – What problems do they have?
- Value Proposition – What do you offer?
- Benefits – What promises are you making to your customers?
- Competitors – Who else is solving the problem?
- Advantages – How are you superior at solving the problem?
- Relationships – What kind of relationships will you have with each segment?
- Find – How will you make people aware of your solution? This is often called marketing or promotion.
- Convert – Once aware of you, what process will they go through to use/pay for your solution? This is often called sales.
- Retain – Once someone is using your solution, how will you retain their loyalty?
- Financials – How does the money (and value) flow?
- Value Model – What value does each segment provide you in return for your product (money, attention, referrals, etc.)?
- Pricing – How much do you charge?
- Cost Structure – What are the costs associated with running your venture?
Get Your Own (free!)
If you would like to use the KISS Canvas, you may do so completely for free as they are licensed under creative commons :).
Check out more KISS Canvas Content.
Caya and his team at Slidebean kindly interviewed me about often-invisible deal-killer for startup raising money: the investment-culture differences between varying groups of investors. Did you know if you are using a SAFE note that 2/3rds of angels in New England angel groups will categorically decline you? Learn more about this and about how to suss out the cultural norms of your investment community.
And full credit for my background art goes to my daughters :).
If you enjoy the video ad want more content like this, listen to the longer & more detailed podcast version of the interview.
This is a repost from the Launch413 blog
Effective Tools Used By Launch413: A Case Study
When we created Launch413 in 2018, we had no idea what was just around the corner. We already knew entrepreneurs were one of the best ways to create prosperity in our communities and we knew how to help them. We also knew entrepreneurs were one of the most powerful forces for good in the world. Three years later, we still consider ourselves privileged and honored to help other entrepreneurs create jobs, innovations, and prosperity.
Startups need tools and advisors to help them stay on track, do the right things at the right time, and maintain momentum. At Launch413, we deeply believe our tools should be sustainable and our advisors should be impactful.
ApprentiScope, a Launch413 Portfolio Company
ApprentiScope is a software company with a vision to revolutionize the world of apprenticeship programs. In May of 2019, Founder Will Lippolis took the leap to begin running the company full time, and four months later had two paying customers and a robust customer feedback loop — a good start. He was measuring revenue, customer success and product market fit. Things were going well, but his ambition was to make millions of people’s lives easier. To scale his company, he understood that he would need more partners and tools.
The VIRAL Scorecard – A Roadmap
Humble by nature, Will began looking for experienced coaches that would be a good fit for him and for ApprentiScope. He discovered Launch413 and two of its advisors, Paul Silva and Rick Plaut, introduced him to one of their favorite tools, the VIRAL Scorecard, originally developed by Village Capital. Simply put, the VIRAL Scorecard identifies where a company is situated in specific categories key to its future success, including the strength of its team, its market penetration, and scaling. Working together, Will, Paul, and Rick determined where ApprentiScope fell in each of the eight Scorecard categories. The exercise produced clarity about the areas Will needed to focus on. “Having a baseline of what needed to be worked on from a holistic point of view was of immediate value,” said Will.
Their analysis of the VIRAL Scorecard indicated that ApprentiScope needed to work on the business model and scale categories first. To move forward the company needed a consistent and repeatable pricing structure and enough customers to prove it. Will met with Jim Geisman and Chris Fraser, two of Launch413’s domain expert advisors. “We talked and then I accomplished meaningful tasks that allowed our business to level up. Every month we’ve seen growth across the business. The core benefit of the VIRAL Scorecard is the ability to point out the weak (and strong) points of the business, on many different fronts, all at the same time, in a way that is really easy to digest. It’s very helpful for goal setting. If you want to be a level seven business by the end of the year, you can see that you have to do all these things. It’s a really powerful methodology.”
The VIRAL Scorecard is not just a tool to be used in a quarterly review. “I use it on a very regular basis because I can get a comprehensive look at the business quickly. We have other core business documents and they have their place, but they’re not super useful day to day.”
Value of the VIRAL Scorecard and Launch413 Advisors
“If you’re an early stage company, you want to actually know where you are as a business and not just live in your mind’s positivity realm somewhere,” says Will. “I really like the way we’re using the Scorecard with the Launch413 team. It’s a super helpful way of bringing in advisors and investors when working on specific areas and extracting people’s experience and expertise. And, they can ensure you’re filling this in accurately, because it’s only helpful if you do it truthfully.”
Launch413 co-founders, Paul Silva and Rick Plaut, summarize both the value of using the VIRAL Scorecard structure and working with their team of advisors. “We know that successful entrepreneurs are committed and revenue centered. We also know that to cross from early-stage to being a sustainable company entrepreneurs need to maintain momentum, and recognize and fill knowledge gaps. The VIRAL Scorecard provides the roadmap to scale and Launch413 domain experts work within that framework to partner with entrepreneurs to provide the consistent coaching and support needed for successful scaling.”
We are a community of entrepreneurs helping each other beat the odds, accelerate growth, access funding, and survive company-killing mistakes. It that sounds interesting to you, learn more here.
Get Your Own VIRAL Scorecard
You can learn more about, and get your own, VIRAL scorecard tool here.
This long, detailed, and excellent article is chock full of valuable advice on pricing. One part that particularly stood out for sharing are the four questions to ask a potential customer to help you determine where to price your product.
At what point is this way too expensive that you would never consider purchasing it?
At what point is this starting to get expensive, but you’d still consider purchasing it?
At what point is this a really good deal? (You’d buy it right away.)
At what point is this way too cheap that you’d question the quality of it?
One year ago the angel group I have the honor to lead pivoted to a substantially different model. Like all pivots, it wasn’t easy. In fact, it was scary as hell. But thanks to the incredible involvement of our members and our assistant manager Ethan Ferris, 2020 was our best year ever.
- Membership tripled, pulling in people from a much larger geography than conceivable before. Whereas before it was hard to get people to drive 45 minutes from Amherst to Springfield, now we have members as far away as Texas and prospective members attending from California.
- Invested in nearly twice as many companies in 2020 than in any prior year in our 18 year history.
- Increased diversification by making it easy for our members to place smaller bets on lots more companies.
- Delighted entrepreneurs by giving them answers in 7-10 days from when they pitch and providing pitch feedback they constantly rate as among the best they’ve ever received.
- Delighted our syndication partners by making life easy on them and their entrepreneurs by moving with speed, efficiency, and respect.
I’m proud as hell of what we we did in 2020 and can’t wait to see what 2021 brings us.
If you aren’t familiar with the River Valley Investors (RVI), we connect angels to strong startups who have already secured an angel group or venture fund to lead the round, share their due diligence, and help guide the company post-investment. Our streamlined, collaborative process means you get to leverage the expertise of dozens of fellow members to get to YES or NO in just a few short hours.
If that sounds like your cup of tea, learn what is required to be an RVI member.
For 14 years I’ve led the River Valley Investors angel investor network. A year ago the group was on death’s door. Membership was down to the lowest levels since I’d taken over leadership from our founder and my mentor, Joseph Steig. And none of us knew that COVID was just around the corner. If RVI failed then our region would have lost its only active angel group – a huge potential blow to local startups.
It was time to pivot. I spent the last 3 months of 2019 conducting intensive customer discovery, interviewing RVI’s top members, past and present. They taught me a lot.
In January RVI leveraged that learning and pivoted to focus on speed, convenience, and syndicated deals. In March we switched to meeting online permanently.
- Membership has nearly doubled in 9 months, pulling in people from a much larger geography than conceivable before.
- Membership is continuing to grow at the fastest rate in seventeen years.
- We’re investing in more deals than we’ve ever invested in before.
- We’re helping our members get more diversification than they’ve ever had before.
I’m proud as hell of what we’ve done in less than a year, and excited to see where the next year takes us. We’ve accomplished all of these results because of the incredible feedback our members, past and present, generously gave in Q4 of 2019. I can’t thank them enough for helping ensure our region continues to have a source of high-risk capital for startups!
If you aren’t familiar with the River Valley Investors (RVI), we are a network of successful business executives and entrepreneurs who invest in exciting startups. No one investor has all of the time and expertise needed to fully vet all deals. That is why we only look at startups that have already passed the hurdle of securing another angel group or venture fund as their lead investor. RVI members then leverage each other’s expertise and networks to vet the opportunities and come to a decision in just a few short hours of work, then co-invest to secure optimal terms.
If that sounds like your cup of tea, learn what is required to be an RVI member.
One of my favorite jokes goes something like this:
Whenever a new position opens up, and I have to sort through a stack of resumes, the first thing I do is take half of them at random and throw them away.
I don’t want unlucky people working in this department.
As with many good jokes, it’s funny because it has a nugget of truth to it.
Anyone who’s run an accelerator, a grant program, reviewed book/screenplay manuscripts, or been in charge of hiring has an impossible challenge: how do you find the proverbial needle in the haystack?
The answer is usually some variation on, “start sifting.”
Sorting through a massive pile of potential applicants is time consuming, boring, and feels pointless.
But we know that the results are undesirable. Being unable to fully and objectively review applicants perpetuates the existing weaknesses of the selecting culture, misses out on diamonds in the rough, and it is costly.
And it’s not like it’s a malicious problem – it’s just an effect of the system.
We just don’t have a better way to do it.
Or do we?
Option 1: Automate or outsourcing the task to less costly labor. Perhaps we give the young, inexperienced pre-screener a set of very simple rules of thumb like “Graduated from Harvard/MIT/Stanford” or “ready to work 40-hours-a-week on their venture.”
There are lots of problems with this. The first is that it inadvertently bakes in the flaws of our current systems as it prefers people who tend to graduate from top-tier schools or who can afford to work full time on their venture without going hungry or neglecting their family. You end up with a very young, white, and male demographic.
It also leaves out the ‘x-factor’. There are always factors beyond the obvious and quantitative that can signal a great applicant.
Option 2: Use Experienced Judges.
People who can spot that x-factor are rare, busy, and expensive. So we don’t use them until late in the process. When we do, we often use them in ways proven to be ineffective – for instance putting 3 judges in a room for 8 hours and sending applicant after applicant to them all day long. Studies show the applicants coming in at 5pm have a much lower chance of being accepted vs applicants coming in at 9am.
Another issue with these high-cost judges is that you often can’t get enough of them to achieve the diversity of perspective you need to spot the best applicants.
Because these people cost a lot of money, and moreover, are hard to find!
Oh, and on top of that, because of the cost of processing applications, there is NO practical way to provide feedback to the vast majority of people you reject. So, you can’t maintain a relationship with potential future applicants, nor give them a clear path to improvement.
How much of that applies to your system? What if you could do something better, more convenient, and at lower cost? Usually that requires a technological miracle. But in our case we just need to take advantage of a very old miracle – peer selection.
The Peer Selection Solution:
At Valley Venture Mentors (VVM) we created a selection process that improved on all of these issues – reduced cost, saved time, AND increased the quality of applications we accepted.
In short, it’s something of a miracle solution. And, like many miracles, we stumbled upon it largely by accident.
Let me show you how it works.
Step 1: Peer Selection
- The applicants submitted their applications, as normal. VVM’s applications, for example, had two sections:
- Pitch – Section describing the venture
- Rest – Everything else, notably: Entrepreneurs’ names, contact info, demographic data, etc.
- Drawing inspiration from research on blind auditions, we created packets containing 20 randomly selected Pitches without information about the founders. If you don’t know that the founder is female, of color, LGBTQ, etc. then that cannot influence your decision. (It isn’t perfect because if someone had a startup called “Black Girls Code” that information will be in the Pitch and the reviewer might make some educated guesses. However, we solve this later on in the process…)
- Give each applicant a packet and a limited amount of time to read, score, and provide feedback to every Pitch in their packet.
- Why 20? We wanted to have each company score as many of their peers as possible to get a more accurate score, but we had to balance that with the amount of time that would take the applicants to complete. Our goal was to have the whole process take < 4 hours so that the applicants wouldn’t get tired and start scoring people too harshly.
- This was all done with Google Forms and Google Sheets, so no costly or confusing software was required!
- We had a few simple checks to see if someone was gaming the system. We kept an eye out for things like:
- If you scored teams low that everyone else scored high (or vice versa).
- If you seemed to give random scores or score everyone the same.
- If you gave little or no feedback.
- Then we used some spiffy math to adjust for the fact that some people grade generously, some harshly, some with a tight spread, some use the whole scale, etc.
- We disqualified anyone who we felt was trying to game the system. In theory, this could be tricky. In practice, of the very few people who tried to game the system, 100% of them ended up with low scores from their peers anyway. I assume that would not always be the case, but it was the 3 years I managed the process.
Simultaneously we had a Control Group – a group of the usual kinds of people who are used as judges – the expensive people. We had them review a random packet and compared their scores to the crowd’s. The scores were 80% the same.
Benefits of Our Peer Selection System
- Faster – Processed hundreds of applications in 1 week
- Almost no “expensive” talent (just the 5 control group judges)
- A small portion of time from two staff people
- No expensive software!
- Dramatically reduced unconscious bias.
- Every applicant received feedback from more than a dozen peers.
- Tests the applicants’ commitment and willingness to work for the position (if they submit no peer review scores, you can safely disqualify them).
- The activity, one of the first any entrepreneur would experience working with us, showed applicants how serious we were about being a community and living by our values. It helped us find our kind of entrepreneurs and let them know we were right for them. In short, it made them like us. A lot.
That’s how it worked. Knowing this, you can build one for your program. If you’d like help I can put you in touch with someone you could contract to help you. Reach out to me on LinkedIn
I’m sure you’ve seen this before.
This triangle is a super-simplified way of discerning what pains your product or service is solving. In short, it helps you discern your value proposition.
Your company’s value proposition must provide benefits that perfectly match your customers’ pains. If the customer has no cash, you’ve got to be cheap. If they have no time, you’ve got to be fast, and so on.
First-time entrepreneurs asked to document their hypotheses about Pains and Benefits often experience “blank canvas” paralysis, the inability to get going because of a lack of a clear starting point.
That’s where this handy triangle comes in. It gives you a brief list of options, from which you can choose what fits best with your company and your customers.
This is very imprecise though.
It’s never as simple as, “I don’t have any cash,” or, “I’m short on time.”
If you want to solve the customer’s pains, you’ve got to understand them on a deeper level.
Of course, this requires interviewing your customers at length to get a full picture of the problem they are facing.
But, there is an intermediary step you can take.
This blog post aims to provide a set of categories and examples to guide an entrepreneur to find the relevant pain hypotheses, which can then be tested in interviews.
Each heading lists a category of Pain/Benefit. This is not an exhaustive list. Deep knowledge of your stakeholders will provide far more specific pain points and benefits. However, this list can kickstart the exploration process by giving you a running start.
So, find the pains that you think your customers may be feeling, then go out and talk to them about it!
Existential Risk / Survival
|Losing their job||Saving their position|
|Ruining their career||Maintaining their career|
|Physical pain||Free of discomfort|
|Dying||Live long & prosper|
Money (too little / more)
|Expenses too high||A growing savings account|
|Revenue too low||More customers|
More revenue from existing customers
Time / Convenience
|Too many tasks to do every day||A simpler schedule|
|No personal time||More personal time|
|Deadline missed||Hit the deadline with confidence|
Shame / Status
|Fear Of Missing Out (FOMO)||Pride in being in the “in” group|
|Failure leads to public shame|
Fear of being mediocre
Lonely / Connected
|Depressed by loneliness||Joy from belonging|
Can’t find their “tribe”
Can’t breakin to social network
|Connected to a community of like-minded people.|
Bored / Fun
|Ignorant of a topic of interest||Mastery of their craft|
|Seen it all before||Novelty, something new to experience|