Akylles Talks

By Rami Alame [Akylles]Business Entrepreneurship Investing

Akylles Talks episodes

April 06, 2021 Episode 18: Episode 18: Branding
Branding
Branding gives greater meaning to a company's name and its products. Through effective emotional appeals and market messages, your business can help the market identify your brand and differentiate it from competitors based on benefits such as better quality, services, or tools. Companies build brands using memorable names, symbols such as logos, and other images and phrases. Catchy slogans, for instance, sometimes become strongly connected to your brand so that people easily recall the brand from hearing the slogan.
Marketing Mix
Also known as the "Four P's" of marketing, the marketing mix includes four controllable strategic areas used by companies when making and implementing marketing decisions. Product is the actual product or service you provide. Place, or distribution, refers to the physical location of touchpoints available to customers and the order fulfillment processes that take place following sales. Price involves pricing decisions related to your value proposition. Promotion involves the specific marketing strategies used to deliver your brand and messages to its markets.
Market Segmentation
Market segmentation means breaking down a larger target audience into smaller, more homogeneous customer groups. This helps companies maximizing marketing effectiveness and improve efficiency by targeting more profitable customers with messages. Demographic, geographic, psychographic or lifestyle, and behavior are all approaches to market segmentation. Demographic segments are developed based on shared individual traits such as age, race, and gender. Geographic segmentation means targeting markets by location, such as local, regional, state, national or global. Small businesses often target local geographic customer segments. Psychographics means targeting customers with similar lifestyles, interests, or hobbies. Behavioral segmentation is based on usage rates.
Positioning
Positioning describes the way in which a company differentiates itself in the minds of a particular market segment. A company may try to brand itself as the highest quality provider of its product to a particular market, for instance. Other businesses position themselves as top service providers. Saying you are a highly trusted brand or that your business provides small-town friendliness and personal attention are other positioning approaches. Customer perception of your business, brand, and messages are key to effective positioning.
Check the guides on www.startupkudos.com
IG: @ramialame
6 min
April 06, 2021 Episode 17: Episode 17: User Personae
A user persona is a fictional representation of your ideal customer. You’ll start the design process by conducting user research—building empathy with your target users and identifying exactly what they need from the product you’re designing. A persona is generally based on this user research and incorporates your target audience's needs, goals, and observed behavior patterns.
Whether you’re developing a smartphone app or a mobile-responsive website, it’s essential to understand who will be using the product. To solve a real user problem, you need to have a clear problem statement in mind; to write this problem statement, you first need to understand your users and their needs.
Knowing your audience will help influence the features and design elements you choose, thus making your product more useful. A persona clarifies who is in your target audience by answering the following questions:
Who is my ideal customer?
What are the current behavior patterns of my users?
What are the needs and goals of my users?
What issues and pain points do they currently face within the given context?
Understanding the needs of your users is vital to developing a successful product. Well-defined personas will enable you to identify and communicate user needs efficiently. Personas will also help you describe the individuals who use your product, which is essential to your overall value proposition.
Personas help with strategizing and making smart design decisions. They make real users memorable for the product team, helping to focus efforts and build empathy.
In a nutshell, user personas are crucial if you want to design something useful, desirable, and valuable to your target audience. A solid user persona is your northern star, guiding your design decisions from start to finish.
Not only that. Most designers work in multidisciplinary teams where it’s important to communicate your findings from the user research stage. Personas encompass all the essential details about your users, presenting them in a memorable way that everyone can understand—not just designers.
A well-defined user persona contains four key pieces of information:
- Header
- Demographic profile
- The end goal(s)
- Scenario
Before you create a persona, conduct plenty of research to make sure your personas accurately represent your users. After you gather an adequate amount of qualitative and quantitative data, organize the information into persona groups representing your ideal customers. Remember to focus on the most important user groups' major needs—you can’t be everything to everyone, nor should you try to be!
Once you’ve got your user groups, you can turn them into user personas. Let’s take a look at the four steps that go into creating a user persona.
Step 1: Add a header
The header includes a fictional name, image, and quote that summarizes what matters most to the persona related to your product. These features help improve memorability, keeping your design team focused on the users they are building the product for.
Let’s imagine you’re designing a travel app. The foundations of your user persona could look like this:
Name: Mariam Kenorabi
Summary quote: “Take me to undiscovered holiday destinations away from the tourist traps.”
This first step might seem simple, but these features ensure that your persona is memorable, keeping the design team focused on who they are designing for.
Step 2: Add a demographic profile
While the name and image can be fictional, demographic details are factual and based on user research. The demographic profile includes four main sections: personal background, professional background, user environment, and psychographics.
Personal background
The personal background includes age, gender, ethnicity, education, persona group (e.g., working moms), and family status (e.g., single, married with children, widowed, etc.).
Mariam’s personal background might be described as follows: Mariam, 52 years old, a divorced mother of two, has a Master’s degree in chemistry.
Professional background
The professional background includes details such as job occupation, income level, and work experience. Here we might add that Mariam works full-time at a pharmaceuticals company and earns around $65,000 per year.
User environment
The user environment represents the physical, social, and technological context of the user. This section is used to answer questions like What technological devices do users have access to? Do they spend most of their time in a corporate office or a home office? And how often do they collaborate with others? So, Mariam's user environment could be in her office, mostly on a laptop, but also on her iPad when commuting to and from work.
Psychographics
Psychographics include details such as attitudes, interests, motivations, and pain points. Creating a psychographic profile enables you to understand better why your user behaves in a certain way—including why they use your product.
Let’s continue to imagine you’re designing a holiday-booking app. Some useful psychographic information to include in your user persona could be:
Mariam
- Enjoys luxury spa retreats, hates tourist traps
- Appreciates an element of exclusivity
- Enjoys trying authentic local cuisine
- Prefers to travel alone or with one other person
- Tends to favor quality over economy
- Overall, the demographic profile adds a layer of realism to a user persona, boosting empathy when exploring user needs and goals.
Step 3: Add end goal(s)
The end goal is the motivating factor that inspires action and answers the question: what do users want or need to accomplish using your product? End goals are your users' main driving forces and determine what the persona wants or needs to fulfill.
In Mariam's case, her end goal when using your holiday-booking app is to discover and book luxurious, off-the-beaten-track holiday destinations.
Step 4: Add a scenario
A scenario is a “day-in-the-life” narrative that describes how a persona would interact with your product in a particular context to achieve his or her end goal(s). The scenario usually defines when, where, and how the narrative takes place. They are typically written from the persona's perspective and describe use cases that may happen in the future.
For example, Mariam's scenario could start like this:
“At least once a year, I like to go away on a luxury holiday. I try to discover places I’ve never been to before and to stick to destinations that aren’t yet overrun with tourists. I work full time, so I don’t have that much time to browse and book each holiday's individual element. Ideally, I’ll find some package deal that comes with local restaurant recommendations…”
Check the full guide on www.startupkudos.com
IG: @ramialame
4 min
April 06, 2021 Episode 16: Episode 16: Facebook's Story
Facebook Made it because founders understood their users and could scale swiftly and organically.
In May 2005, TheFacebook received more money. This time investments of $12.7m from Accel and $1m from venture capitalist Jim Breyer's personal fortune. People were really paying attention now.
In August, the ‘the’ was dropped, and the company officially became Facebook (the facebook.com domain cost $200,000). The following month high school students are admitted, along with employees of Microsoft and Apple. The company was now ready to move beyond its student base.
Then in November, Zuckerberg took an important decision about his own life. Having taken the semester off from Harvard, he announced he was leaving entirely, returning briefly to hire some new employees. After significant investment and growing membership, Zuckerberg was ready to fully dedicate himself to running his company as a CEO rather than a programmer.
Did you hear of this thing called Facebook?
With Zuck at the helm full-time, Facebook continued its expansion plans. In December, Australian and New Zealand universities were included, and high schools from Mexico, the UK, and Ireland. That meant there were now 2,500 colleges and 25,000 high schools with access to Facebook.
It wasn’t until September 2006 when the platform became open for everyone (well, anyone over 13 with a valid email address). Facebook had now gone fully global. We also started to see the rate of membership growth:
December 2006: 12m
April 2007: 20m
July 2007: 30m
October 2007: 50m
In May 2007, Facebook opened its Marketplace, which lets users post classifieds to sell products and services. It also saw the launch of the Facebook Application Developer platform, opening the gates for developers to create their own applications and games integrated with Facebook.
The platform was also looking beyond personal profiles to how businesses could use the site. By the end of 2007, over 100,000 companies had signed up, with Facebook launching Pages for Businesses to support this. Already they’re making plans to build on existing ad revenue to make advertising on the platform accessible to even the smallest of businesses.
Then in 2008, we see a huge release from Facebook. April 2008 saw Facebook Chat rollout, allow us to annoy our friends and family more instantly. Essentially, the concept is no different to ZuckNet. We also see the People You May Know, Facebook Wall, and Facebook Connect released in the same year.
Meanwhile, the user count continues to grow:
August 2008: 100m
January 2009: 150m
February 2009: 175m
April 2009: 200m
July 2009: 250m
September 2009: 300m
We also saw one of the big Facebook games appear. Farmville was released in June 2009 and, despite being a rip-off of a game called Farm Town, became a huge success. By August, it had 10m daily active users. So, so much virtual corn.
7 min
April 06, 2021 Episode 15: Episode 15: Target Market -TAM - SAM -SOM
When doing their market analysis start-ups often refer to TAM, SAM, and SOM but what do these acronyms mean, and why are they useful to investors when assessing an investment opportunity?
TAM SAM SOM definition
TAM, SAM, and SOM are acronyms that represent different subsets of a market.
TAM or Total Available Market is the total market demand for a product or service.
SAM or Serviceable Available Market is the segment of the TAM targeted by your products and services which is within your geographical reach.
SOM or Serviceable Obtainable Market is the portion of SAM that you can capture.
Still, confused about TAM SAM SOM? Let's take an example.
Let's say you are starting a fast-food chain. Your TAM would be the worldwide fast food restaurant market. Potentially, if you were present in every country and had no competition you would generate TAM as revenues.
Sorry but that's not going to happen!
Let's be more realistic. You are starting your restaurant chain in two cities where the demand for fast food can be estimated based on the population, their food habits, and the revenues generated by fast-food restaurants in other cities having similar demographics.
That is your Serviceable Available Market: the demand for your type of products within your reach. In other words, if you were the only fast food in town you would generate revenues of SAM.
Now you are probably not the only fast food in town...
So realistically you can hope to capture only a fraction of your SAM. Most likely you will attract fast-food aficionados living or working close to your restaurants and a fraction of the people located further away that are willing to give your chain a try for the sake of fast food diversity. This is your SOM.
Ok, now let's look at why and when they matter.
TAM SAM SOM, when do they matter and why?
Put yourself in an investor's shoes. You need to deliver a target return to your own investors which implies both de-risking the investment early (i.e. figuring with the minimum possible of capital if the start-up has a market) and investing in opportunities that offer substantial upside potential (i.e. huge market size).
The SOM and SAM help de-risking the investment while the TAM enables to assess the upside potential.
The Serviceable Obtainable Market is your short-term target and therefore the one that matters the most: if you cannot succeed on a fraction of the local market chances are that you will never capture a large part of the global market.
As an investor, I expect you to have a realistic objective and I will judge you on your ability to deliver that objective.
To be realistic your SOM needs to factor in: your product: people will want to buy your goods your marketing plan and the identified distribution channels: you have a clear plan to reach a large portion of your target customers your SAM and the strength of your competition: chances are that you are not going to take 50% market share within 6 months. Therefore your SOM needs to be a reasonable fraction of your Serviceable Available Market.
For the investor, the ability to reach your SOM means that he will not lose his shirt. In that context, SAM acts as a good sanity check to assess the likelihood of achieving the market share implied by the Serviceable Obtainable Market and as a proxy for the short-term upside potential of your business.
If you can deliver SOM in time then you are capable and credible, and you might be able to increase the market share and reach a more important penetration of the SAM which would deliver a good return on investment.
And then comes the Total Available Market.
Once you have demonstrated your ability to penetrate a local market and de-risked the investment, the investor can start looking at how you can expand and increase the company's penetration within the TAM.
Let's illustrate this with a numerical example. You come to pitch an investor who has a target return of 10x. You are seeking a £250k investment in exchange for 20% of the start-up's equity.
Based on your market research and business plan we can reasonably assess that:
TAM = £2bn
SAM = £100m
SOM = £5m within 2 years and £12m within 4 years
EBITDA margin = 25%
Valuation at exit = 8x EBITDA based on the value of listed companies within the sector
What happens if you deliver your plan?
Well, once you deliver £5m in revenues the EBITDA is £5m revenues x 25% margin = £1.25m and the company is worth 8 x £1.25m EBITDA = £10m. The investor return on investment is £10m x 20% ownership / £250k investment = 8.0x.
When you reach £12m of revenues the EBITDA is £12m x 25% = £3m and the company is worth 8 x £3m = £24m. The investor return on investment is £24m x 20% ownership / £250k = 19.2x.
Clearly here if you can capture your SOM the investor will meet his target return and he is then left with a company that has achieved 12% market share on a segment that represents 5% of the TAM of £2bn (£100m SAM / £2bn TAM).
If you decide to expand the company and scale internationally, the company revenues potential (assuming you can reach a similar market penetration at scale) becomes 12% market share x £2bn TAM = £240m. Which would imply a £60m EBITDA (25% margin) and therefore a potential valuation of £60m x 8 = £480m. The investor could therefore offer to invest up to £48m in the company in year 4 in order to meet his target return on investment of 10x.
As you can see TAM SAM SOM have different purposes: SOM indicates the short-term sales potential, SOM / SAM the target market share, and TAM the potential at scale. All play an important role in assessing an investment opportunity and the focus should really be on getting the most accurate numbers rather than the biggest possible numbers.
7 min
April 06, 2021 Episode 14: Episode 14: Expertise in your Customer
The only expertise you need is not the industry-specific one. It is expertise in your customer. The startup game is all about knowing your customer, understanding their needs and wants, and making sure you are in sync with what they want. You are the result and consequence of this relationship.
To get your first customer, you need to be able to identify their pain points. Pain points are the specific issues or problems they're currently facing that your business could help them with.
If your brand doesn't provide a solution for its customers, then they'll find another business to invest in. Before marketing, research your customer base front to back to ensure you give them what they want.
Like many first-time business activities, finding your first customer becomes easier when you ask others how they've managed to do it. Join networking platforms to connect with other entrepreneurs, many of whom may have valuable connections that could boost your business growth.
It's helpful to post about what you can do and how you can help your customers. If you take the time to network and reach out, you'll land your first client.
Another excellent source of sales leads is the digital channels your ideal customer uses -- Instagram, Facebook, Pinterest, Twitter, etc. Start with one platform and building a solid community there.
Check the guides on www.startupkudos.com
IG: @ramialame
5 min
April 06, 2021 Episode 13: Episode 13: Startup Vs E-commerce Vs Trading
As we are going to a new age in the economy, we are moving towards different choices and different models. Young entrepreneurs are faced with new choices, new opportunities new challenges. Here are 5 major options to go through:
1. Employment at a major company, startup, multinational.
2. Talent Career
3. Financial trading [NEED TO LEARN]
4. E-commerce shop
5. Startup
Check the guides on www.startupkudos.com
IG: @ramialame
9 min
April 05, 2021 Episode 12: Episode 12: The cofounder dilemma
Your best friend, spouse, or family member is the least likely candidate, so don’t start there. Take a hard look at your own business strengths and weaknesses, and write down what partner skills and experiences would best complement yours. Seek input from seasoned investors and peers.
No matter how equal you all are, there is only room for one at the top to make the final decision on hard issues. Especially when everything feels good today, don’t be hesitant to ask the hard questions of each other. There can be only one chief executive officer.
For the success of your startup, finding the right co-founder is one of the most important things that a new entrepreneur needs to do. There are so many challenges in a startup that no founder should try to go it alone. When you find someone that works, I’m betting you will be together on your next startup and the one after that. Great teams persevere, and success breeds success.
Check the guide: www.startupkudos.com
IG: @ramialame
6 min
April 05, 2021 Episode 11: Episode 11: Before the startup
" Startups are very counterintuitive. I'm not sure why. Maybe it's just because knowledge about them hasn't permeated our culture yet. But whatever the reason, starting a startup is a task where you can't always trust your instincts.
It's like skiing in that way. When you first try skiing and you want to slow down, your instinct is to lean back. But if you lean back on skis you fly down the hill out of control. So part of learning to ski is learning to suppress that impulse. Eventually, you get new habits, but at first, it takes a conscious effort. At first, there's a list of things you're trying to remember as you start down the hill.
Startups are as unnatural as skiing, so there's a similar list for startups. Here I'm going to give you the first part of it — the things to remember if you want to prepare yourself to start a startup."
http://www.paulgraham.com/before.html
You can check the guides on www.startupkudos.com
IG: @ramialame
8 min
April 05, 2021 Episode 10: Episode 10: The Entrepreneurship Mindset
The Entrepreneurship Mindset is all about 3 main traits
1. Adaptation
2. Listening
3. Creativity in Organization
An entrepreneurial mindset is a set of skills that enable people to identify and make the most of opportunities, overcome and learn from setbacks, and succeed in a variety of settings.
It’s not a big idea alone that paves the path to ultimate entrepreneurial success. Oftentimes the success or failure of a business comes down to the characteristics of the entrepreneur themselves. It takes a unique aggregate of characteristics to meld one big idea into a fully functional thriving business. Is there a certain amalgam of skills and traits which allows some entrepreneurs to become wildly successful?
Suffice it to say that there is no magical formula to succeed in business (if so, Harvard Business School would have patented it). However, there are certain characteristics that all aspiring entrepreneurs should cultivate to dramatically boost their own odds for success. An entrepreneurial mindset, if you will, may mark the difference between a lucrative business and one which shatters the doors before the first year is over.
So what ARE these all-important characteristics aspiring or new entrepreneurs should cultivate? What attributes tend to tip the scales in favor of heading up a booming business? Read on, as we share our experts’ opinions on the matter.
1. Positive Mental Attitude
2. Creative Mindset
3. Persuasive Communication Skills
4. Intrinsic Motivation and Drive
5. Tenacity and an Ability to Learn from Failure
Check the guides on www.startupkudos.com
IG: @ramialame
Be Organized, Be Passionate, Be Structured
8 min
April 03, 2021 Episode 9: Episode 9: How to set KPIs
So, this is important because, obviously, you should know what state your business is in at all times. So, setting the right KPIs and goals will objectively tell you if you're doing well, just okay, or bad. So, nothing keeps you more grounded, humbled, and realistic about where you are than a bunch of numbers because if you interpret those numbers correctly, they don't lie. It'll also actually act as a feedback mechanism for whether your current strategy like user acquisition, launching new features, and so on and so forth, are actually working. So, if you do something and things go up, that's probably good. If you do some things, some things go down, that's probably bad.
And it will not only help you prioritize your time but also course correct. So it follows if you do this incorrectly. If you set your KPIs and goals incorrectly, you can direct your startup into a bunch of circles. Or if you do it for too long on to the wrong path, it'll lead to its unnecessary demise. So, what are the right KPIs to set? I'm going to break this down into two pieces, primary metric, and secondary metrics. And most of this is going to be focused on the primary metric.
One, so your primary metric should quantify how much value you're delivering to your customer. That is, you obviously want to build something that people want. Now, how much do they actually want it? And users often indicate the value through either training you through money or time. So, revenue is always the best metric. I pay you $100 to use your product, your software, I must at least value that $100. Active users using the product once a week or once a day, we call that weekly active user or daily active user, is a weaker, but another good decent indication of whether you're delivering value or not. The second one here is your primary metric must capture whether your product has recurring or enduring value to your user, or it should anyway. So, for example, in a SaaS tool, most SaaS tools use MRR, monthly recurring revenue as their primary metric. I commit to forking over 100 bucks a month, continuously every month, because your product demonstrates to me every month that it has value to me. Another example is if you're building an online digital daily newspaper, then obviously DAU, a daily active user is a good one because I expect to be delivering content to you that is valuable to you every single day. So, hopefully, you'll come back every day.
The third one here is your primary metric should be a lagging indicator for its success. So, a common trap that founders do to trick themselves is by picking a primary metric, let's say, something like email signups. Because one, it's easy to move. But while it may eventually influence revenue or actual usage, it actually doesn't represent the real value the best. So, the best indication is when the value has already been delivered, it's already occurred. So, when someone has already forked over their time or money, to use it, then that is what a lagging...that's a definition of what a lagging indicator is. So, if revenue increases, it's because more customers have already paid for the product's value, versus a potential customer who came to your site, gave you an email, and maybe they'll sign up one day or maybe they'll use your product one day to buy something.
And lastly, your primary metric should be usable as a feedback mechanism. That is it helps you prioritize strategies and make decisions quickly. In a start-up, one of the key things to be to being successful and getting past the product-market fit stage is to iterate very fast, right? So, while you want it to be a lagging indicator, you also don't want it to lag too much. So, for example, a lot of people pick MAU, the monthly active user. But this is usually not a great metric because it takes time to understand the impact of movement, especially in a startup this early as in your startup. And so, many things can happen within a month. And also, another reason why I don't like MAU, generally, is because if your user only comes back once a month, they only value something that you're building once a month, I really question actually, if you're solving a real problem.
All right. So, you may have guessed from me talking about these four characteristics of a primary metric that there are really two primary metrics to pick from. So, one is either revenue or active users. Ideally, you're picking revenue because nothing tells you more about delivering real value than people forking over, handing over real hard-earned dollars to you. And even better, is picking revenue that people keep giving you over and over and over again, like monthly recurring revenue, MRR. It's the best test for whether people really want what you're making. So, that being said, some people do pick revenue, but a common trap they fall into is that they don't actually get paid. And usually, I hear something to the variant of, "Oh, I have these 1000 users not paying me anything. I just want to get their feedback and see how they're using the product and make it a little bit better and then eventually, I'll get them to pay, or the next 1000 users, I'll get them to pay." That's a trap because free users will give you different types of feedback than users who are actually paying you. Paid users are just more serious about the product, and hopefully, will be more serious about giving you feedback.
So make sure you set your Goals, KPIs, and move forward
Make sure to check the guide on www.startupkudos.com
IG @ramialame
6 min

About Akylles Talks

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The Startup Kudos is originally a book that tells the story of Akylles an entrepreneur, ex-lawyer who begins an entrepreneurship journey that takes him through difficulties, complications, obstacles,…

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