LTV Syllabus

LTV Syllabus 

Launching Technology Ventures 

Course Number 1757 

Faculty: Jeff Bussgang

Spring, Q3/4: 3 credits 

Course Syllabus 
The course materials are available online via the course platform (Canvas). 

	Class date	Case	Guest
	MODULE 1: IDEATION & CUSTOMER VALUE PROP EXPERIMENTS
1	01/27/25	Classtivity	No Guest
2	01/30/25	Project SHED	Scott Brady
3	02/03/25	C16 Bio	Shara Ticku
4	02/04/25	Summer Health	TBD
5	02/05/25	Sober SideKick	Chris Thompson
	MODULE 2: GO TO MARKET EXPERIMENTS
6	02/11/25	Shippo	No Guest
7	02/12/25	Ovia	Gina Nebesar
8	02/18/25	Lightricks	Danny Cohen
9	02/19/25	AllSpice	Valentina Ratner
10	02/24/25	Comun	Abiel Gutierrez & Andres Santos
	MODULE 3: PF EXPERIMENTS
11	02/25/25	Squire	No Guest
12	03/03/25	Business Model Exercise	Coaches
13	03/04/25	Sprout	Alexandria Gentry
14	03/05/25	Fixie	Matt Welsh
16	03/11/25	XYZ Robotics	Peter Chen
	MODULE 4: THE STARTUP ORGANIZATION
15	03/10/25	Bubble	Emmanuel Straschnov
17	03/24/25	Startup Hiring and Agentic AI	TBD
18	03/25/25	Build Workshop	TBD
	MODULE 5: ECOSYSTEM AND ETHICS
19	03/26/25	Khatabook	Ravish Naresh
20	03/31/25	Founder Field Day	Brandon Farwell
21	04/01/25	Everlywell	Julia Cheek
	MODULE 6: FINANCING AND EXITS
22	04/07/25	Mented	KJ Miller
23	04/08/25	ReMo	Scott Rackey & Bhargavi Chevva
24	04/09/25	Chief	Lindsay Kaplan
25	04/14/25	Pitch Exercise	Coaches
26	04/15/25	Bastion Zero	Sharon Goldberg
27	04/22/25	Wrap	No guest

Background Reading:

Students are encouraged to review their notes from the MBA First-Year Course, "The Entrepreneurial Manager” as well as Field, but particularly the following Case Notes:

·             Ten Tools for Design Thinking (UV5187) 

·             The Hypothesis-Driven Entrepreneurship: The Lean Start-Up (812-095) 

·             Business Model Analysis for Entrepreneurs (812-096) 

·             Customer Discovery and Validation for Entrepreneurs (812-097) 

For students who want an accessible primer on software development processes and coding, read:

·             Paul Ford | What is Code?

 

A more detailed review of the standard methodology for software development, which is central to experimentation, Continuous Development, can be found here:

·             HBS Teaching Note | Continuous Development

 

Finally, throughout the course we will draw on Professor Jeff Bussgang's books, Entering StartUpLand and Mastering the VC Game, to provide context for how startups are organized and execute experiments in their search for product-market fit. I will assign various chapters throughout the semester.

 

 

MODULE 1: IDEATION AND CUSTOMER VALUE PROPOSITION EXPERIMENTS

 

CLASS 1. CLASSTIVITY

Techstars graduate, Classtivity, has a vision for helping people stay fit by making local gyms more accessible but has struggled to achieve product-market fit. The founders are debating whether to persist with their new model, which is getting some traction, or contemplate launching a second major pivot. There is no class guest.

Readings:

·        HBS Case 817-002 | Classtivity: Payal's Pirouette

·        Chris Dixon | Founder/market fit

·        Marc Andreessen | The Pmarca Guide to Startups, part 4: The only thing that matters

Optional Readings:

·        Steve Blank | Vision vs. Hallucination: Founders & Pivots

Assignment Questions:

1.       The first business model, the search engine, failed and the team pivoted away. Why did the team make such a large mistake? Can you think of an MVP test they might have conducted that could have saved them 18-24 months of work building the search engine?

2.       Is Passport working? What is the business model?

3.       If you were Payal, would you pivot away from Passport and pursue the subscription offering? Does it have to be an either/or decision or can you stick with Passport while experimenting with the subscription offering?

4.       Evaluate Passport's unit economics and compare it with the contemplated subscription offering. Based on the data in exhibits 3, 6, and 9:

                                                               i.      How favorable are the unit economics?

                                                              ii.      How would you assess the value proposition for both the user and the studio?

                                                            iii.      How sensitive are the unit economics to your assumptions? For example, If you wanted a 3x LTV/CAC ratio and assumed a lower conversion than shown in exhibit 9, such as 10%, what monthly price would you need to charge assuming similar churn and class usage?

 

CLASS 2. PROJECT SHED

Four Stanford Graduate School of Business (GSB) students come together in an entrepreneurship class and agree to start a company together. Although they did not yet have an idea, they were determined to pursue a process that would lead to a compelling entrepreneurial venture to pursue and build something meaningful. Our class guest will be Scott Brady, CoFounder of Project SHED.

Readings:

·        GSB Case E116A | ProjectSHED

·        Chris Dixon | The Idea Maze

·        Niklaus Gerber | A Critical Review of Design Thinking

·        Natalya Bailey | How I’m Using Chat GPT As I Start A New Business

Optional Readings:

·        Career Foundry | A Guide to the Most Important Ideation Techniques

·        Sudeep Srivastava | 21 Solid Ways to Validate Your MVP

Assignment Questions:

1.       Evaluate the SHED founders’ process in forming the team. What are some of the benefits and risks of their approach? What would you have done differently?

2.       Assess the search criteria defined by the SHED team. What are the “must haves” versus “nice to haves” and why? What, if anything, would you change if developing your own list?

3.       What are the pros and cons of their process for finding and selecting a business idea to pursue? How might it be improved?

4.       Is the SHED ideation model replicable? Would you consider using a similar approach yourself? Why or why not?

CLASS 3. C16 BIO

C16 Bio is a synthetic biology startup that is replacing natural palm oil, whose harvesting is an environmentally damaging process, with lab-grown palm oil. The founding team is beginning to figure out the science and now needs to turn their attention to the business model. What is the best point of entry for the product in the context of the value chain and what business model should they construct? And should they choose a market focus based on financing availability?

Readings:

·        HBS Case 820-008 | C16 Bio

·        Abrahm Lustgarten | Palm Oil Was Supposed to Help Save the Planet. Instead It Unleashed a Catastrophe.

Optional Readings:

·        Amy Feldman | The Life Factory: Synthetic Organisms From This $1.4 Billion Startup Will Revolutionize Manufacturing

·        James Mitchell Crow | Life 2.0: inside the synthetic biology revolution

Assignment Questions:

1.       Should Shara take advantage of the market buzz/momentum for food and jump right into that sector or do personal care first and then food later?

2.       If you think she should focus on personal care, should she:

a.       build her own brand?

b.       build a white label end product and get someone else to build the brand?

c.       work with a challenger brand?

d.       work with a large brand?

e.       why do you recommend this choice?

3.       Given your strategic choice, lay out your 12-18 month plan with respect to fundraising, hiring, experiments, and key milestones.

 

CLASS 4. SUMMER HEALTH

Introduction 

Summer Health is a NYC-based pediatric telehealth startup. Founded in 2021, the company offered parents quick, text-based access to licensed pediatricians. The founder, an experienced telehealth executive, was inspired by her own struggles finding reliable after-hours care. As the startup expanded, the rise of generative AI spurred the team to consider integrating the technology. Despite not being an AI company, should they build out an AI platform, potentially altering the product roadmap and company priorities? Our class guest will be Summer Health CEO and founder Ellen DaSilva.

Readings

• HBS Case | Summer Health
• Noam Bardin | What is a Startup CEO’s Real Job?
• First Round Capital | The Four Levels of Product-Market Fit

 

Optional Readings:

• Michael Seibel | The Real Product-Market Fit

 

Assignment Questions

1. Do you think Summer Health has achieved either “nascent” or “developing” product-market fit (level 1 or 2, according to the First Round reading)?
2. Should the team pause their product roadmap to go “all in” on building out a fully AI-enabled platform? Or should DaSilva insist (as Noam Bardin writes) that the team “hold the line” and stay focused on delivering capabilities to their target customers?
3. How should DaSilva make this decision? What are the key tests she might run to further collect information? Or should she just “go for it” and jump on the AI wave?

CLASS 5. SOBER SIDEKICK

Sober Sidekick is an app to support addicts. The founder has successfully bootstrapped the company to $700K in annual recurring revenue but is considering a business model pivot that will temporarily take the revenue down to zero – just as he’s considering a fundraise. Our class guest will be Sober Sidekick Founder & CEO Chris Thompson.

 

Readings:

·        HBS Case | Sober Sidekick

·        Brian Balfour | Product Market Fit

·        Semil Shah | Startup Risk and Fear

·        First Round Review | How Superhuman Built an Engine to Find Product-Market Fit

Optional Readings:

·        Lenny Rachitsky| What Is a Good Activation Rate?

·        Sequoia | Selecting the Right User Metric

Assignment Questions:

1.       Who is Sober Sidekick’s customer? Should a startup have only one “true North” customer?

2.       Should Chris take his revenue to zero and focus his business model on insurance payors?

3.       In your judgment, what milestones does Chris need to achieve to raise a seed financing? Who would be the right capital partner for him and why?

4.       What kind of business should Chris try to build and what special obligations does he have, if any, given the nature of the business and his customer?

 

MODULE 2: GO TO MARKET EXPERIMENTS

 

CLASS 6. SHIPPO

Shippo is an SF-based startup trying to revolutionize e-commerce shipping and fulfillment. The company is struggling to decide the best go to market approach: API-based or application-based. Which path will position the company best for success and why?

Readings:

·        HBS Case 817-065 | Shippo

·        Scott Raney | Services as Code: Selling through vs. Selling to Developers

Optional Readings:

·        Lenny Pruss | Party Like It's 1849: The Developer Tools Gold Rush

Assignment Questions:

1.       How would you assess the Shippo founding team’s founder-market fit?

2.       How do you interpret the volume figures in exhibit 7 and the churn numbers in exhibit 8? Does the app strategy appear to be working? What are the app strategy’s unit economics as compared to the API strategy? To answer this question, calculate LTV and CAC for each strategy.

3.       What should Behrens Wu do: continue to focus on the app, pivot to the API, or try to do both?

4.       For each go to market strategy, what changes would you make to the sales and product organizations?

 

CLASS 7. OVIA

Ovia is a mobile and online platform to help women and families manage fertility, pregnancy and early parenting. The company faces an enviable dilemma: a huge channel partner is at the table with a possible “make the company” deal. Should the founders leap at the opportunity or pursue a riskier, yet potentially more lucrative go to market approach? Our class guest will be Ovia Co-Founder Gina Nebesar.                                      

Readings:

·        HBS Case 818-004 | Ovia

·        Ovia Health | Case Exhibits (Excel File)

·        Mark Suster | The Fallacy of Channels: Startups Beware

Optional Readings:

·        Jeff Bussgang | Entering StartUpLand Chapter 3: The Business Development Manager

·        Ben T. Smith IV | Managing the Startup-Big Company Relationships

Assignment Questions:

1.       Review the various business model experiments (paywall, native advertising, benefits plans). What are the pros and cons of each, factoring in the market data provided in exhibits 2, 7, and 8? Why do you think it took the team so long to find an attractive business model? 

2.       Review the cohort charts in Exhibits 6a and 6b. What insights can you derive from them?

3.       What choice should the Ovia team make: 

a.       go direct or work with the channel partner?

b.       To help you frame the decision, calculate the total available market (TAM) for both options and then run a summary analysis of the unit economics to build up an employer sales force.

c.       Assume: (i) $250K of base and bonus compensation for each sales rep who achieves their quota; (ii) 60% overhead per rep in travel, benefits, management and marketing support, and (iii) a quota target of $1.2M/year.

 

CLASS 8. LIGHTRICKS

Without any outside capital or assistance, the Lightricks team has successfully bootstrapped their flagship app, Facetune, into a bestseller on the Apple app store. How did they do it and what comes next in terms of pricing strategy, product roadmap and financing? Our class guest will be Daniel Cohen, general partner at Viola Ventures and the company's lead investor.

Readings:

·        HBS Case 817-051 | Lightricks

·        Jeff Bussgang | Entering StartUpLand Chapter 4: Marketing

·        Fred Wilson | Marketing

·        Ryan Matzner | How To Determine the Right Price for your App

·        Sarah Tavel | The Hierarchy of Engagement

Optional Readings:

·        Shane Schick | Vision Mobile: "App Poverty Line" represents 60% of all developers

·        Murray Newlands | What Factors Indicate Your App Will be Successful

·        Growth Studies | Whatsapp

 

 

Assignment Questions:

1.       What do you think of the founders’ early decisions (e.g., paid vs. free, bootstrapping)? Do you agree with them, or would you have made different decisions? Reflect on the ways in which the company has bucked conventional wisdom in their decisions vs. "startup 101." Why? Has it worked? 

2.       Do you agree with Fred Wilson's statement that "marketing is for companies with products that suck?" Should Lightricks have focused on free acquisition early on?

3.       Look at Exhibits 6a, 6b, 6c, 7a, and 7b. What pattern can you discern regarding their pricing, install cost, and install volume? How are they so profitable given their revenue is $3.99 (which is $2.80 net of Apple’s 30% take rate) as compared to a cost per install of $2-3?

4.       Should the Lightricks founding team take the VC term sheet? Why or why not? In either case, what should their action plan be from here?

 

CLASS 9. ALLSPICE

AllSpice is a SaaS platform to help hardware developers collaborate during their product development processes (aka “Github/Gitlab for hardware”). The company closed its seed round and launched its product just before a severe market correction in early 2022. The founders need to decide how fast to ramp their burn rate in light of their early success, despite the turmoil in the capital markets, as well as their go to market approach. Our class guest will be AllSpice cofounder Valentina Ratner.

Readings:

·        HBS Case 823-022 | AllSpice

·        Blake Bartlett | What is Product-Led Growth?

·        Neeraj Agarwal | Triple Triple Double Double Double

Optional Readings:

·        Jeff Bussgang | Entering StartUpLand Chapter 6: Sales

·        Jonathan Hsu | Diligence at Social Capital Part 2: Accounting for Revenue Growth

Assignment Questions:

1.       If you were Valentina, would you ramp your burn rate? Why or why not?

2.       What go to market approach should AllSpice pursue? Examine their goals for the Series A (exhibit 7b) under each of the three scenarios. Which scenarios seems more attractive to investors? Which scenario is the better approach to build a long-term, sustainable and valuable business? Or these two goals in synch in your opinion?

3.       Neeraj Agarwal’s blog post shares a commonly understand conventional wisdom for SaaS company growth. Assume AllSpice’s goal for the Series A is to raise $10m on $30m pre (i.e., $40m post). If an investor’s goal is to achieve a 10x on this investment (i.e., a $400m valuation), when do you think AllSpice will grow into that valuation? Assume the company’s valuation would be at a 10x revenue multiple and assume the company follows whatever growth path you think appropriate from their YE 2023 goals. Does that seem realistic? Does that multi-year pro forma affect your thinking on burn rate and go to market?

CLASS 10. COMUN (new)

In the spring of 2023, Abiel Gutierrez and Andres Santos, the co-founders of Comun, faced a pivotal moment. Their digital banking startup, designed to provide financial services to Latino immigrants in the U.S., had seen rapid growth. But alongside the early success came rising fraud and restrictive partner demands, threatening the company's core value proposition. With only a year's worth of runway and the fintech landscape heating up, Gutierrez and Santos needed to decide: stick with their existing partners and rapidly address their operational challenges or risk switching to new ones. What path would lead Comun to long-term success?

Readings:

·        HBS Case xxx-xxx | Comun

Assignment Questions:

1. If you were the founders, what would you do about your underperforming partners? Develop a plan for the next twelve months that factors in (a) your cash on hand; (b) your burn rate; (c) the current marketing funnel performance and unit economics (see below); and (d) your team’s capabilities.
2. If you were an investor, what milestones would you need to see before investing in Comun with high conviction?
3. What are Comun's Customer Acquisition Costs (CAC) for TikTok and Facebook? Which channel appears more scalable, and what strategies would you recommend to improve CAC across these channels?
4. Examine the payback curve for Comun's LTV/CAC ratio. What assumptions must hold true for LTV to exceed CAC over time? Analyze the impact of different monthly revenue figures (e.g., $6 vs. $3 per customer) on the payback period and LTV. What would the LTV look like under these scenarios?

 

MODULE 3: PF EXPERIMENTS

 

CLASS 11. SQUIRE

Squire is a vertical SaaS start-up for barbershops. The company has struggled to convince investors that its market size is large enough to be “venture-scalable” and just as the founders feel like they’re getting traction, COVID-19 hits and their end users are forced to shut down. Should the founders adjust their business model to meet the needs of their customers or the feedback from their investors?

Readings:

·        HBS Case 821-073 | A Close Shave at Squire

·        Spreadsheet | Squire Exhibits 11, 12, and 13

·        SimilarWeb | Market Sizing

·        Mike Vernal| The Market Curve

Optional Readings:

·        A16Z | Fintech Scales Vertical Saas

Assignment Questions:

1.       Why are the founders getting push back from investors on total available market (TAM) size? Is it justified? What is your math with respect to the TAM/SAM/SOM for Squire?

2.       Are the company’s unit economics attractive? In answering this question, calculate LTV and CAC based on the data from the exhibits. What assumptions do you need to believe for the company to have an attractive business? 

3.       What should the founders do at the end of the case in terms of pricing (i.e., waive SaaS subscription fees?) and staffing (i.e., initiate a layoff?)? 

 

CLASS 12. BUSINESS MODEL EXERCISE

In this exercise, teams of three or four students will analyze one team member’s proposed business model for a new venture with the goal of refining the model and specifying MVP tests for key hypotheses. 

Readings:

• Jens-Fabian Goetzmann | You Can’t A/B Test Your Way to Greatness

In this exercise, your job is not only to evaluate your classmate’s planned experiments (i.e., process quality) but also their overall business model (i.e., idea quality). The assigned reading will help prime your thinking on the latter.

 

CLASS 13. SPROUT

Manilla-based Sprout is a leader in SaaS in the Philippines, an attractive but small market. The founders are set to expand beyond their initial application and initial market segment but are unsure of which direction to pursue – and which is more financeable. Our class guest will be Sprout co-founder Alex Gentry.

 

Readings:

·        HBS Case 824-052| Sprout Solutions

·        Kyle Poyar | International Growth Is No Longer Optional for SaaS Companies

Optional Readings

·        Bessemer | Six Product Strategies to Catalyze Your Second Act

Assignment Questions:

1.       What should the founders do: double down in the Philippines or expand throughout SE Asia? If you think they should double down in the Philippines, does that mean you disagree with OpenView’s Kyle Poyar? If you think they should expand throughout SE Asia, how do you think they can reconcile this with their “true north” of impacting lives in the Philippines?

2.       For whatever decision you recommend, create the first page of the pitch deck to investors using no more than four bullet points. Then, create the first page of the “all hands” company meeting to announce the new direction.

3.       Should the team pursue international or local investors? Does their expansion path dictate their investor profile?

 

CLASS 14. FIXIE

SF-based Fixie was founded by a technical team with the vision of making generative AI useful in the enterprise. The company is off to a fast start and the market is white hot – perhaps too hot. Just as Fixie’s vision crystallizes and on the eve of launching their initial product, ChatGPT announces the creation of a competing platform. Now what? Will this startup be a casualty of the generative AI wave or can it nimbly position itself to be a winner? Our class guest will be Fixie founder Matt Welsh.

 

Readings:

·        HBS Case 824-037| Fixie and Conversational AI Sidekicks

·        Fred Wilson | Team and Strategy

Optional Readings

·        McKinsey | The Economic Potential of Generative AI

 

 

Assignment Questions:

1.       How should Welsh and team respond to the news that ChatGPT is building essentially what they are planning to launch?

2.       What are some of the team’s key hypotheses? What experiments should they run to test these key hypotheses in the light of the news?

3.       When and how would you communicate to your prospective series A investors?

 

CLASS 16. XYZ ROBOTICS (new)

In August 2023, Jiaji Zhou, the founder and CEO of XYZ Robotics, a China-based startup striving to revolutionize the warehouse and manufacturing industries with advanced robotics solutions, faced a pivotal moment in his company's journey. Despite raising over $100 million in capital and receiving significant attention from the industry, XYZ was grappling with strategic challenges amid a shifting macroeconomic landscape. Zhou’s dilemma centered on whether to focus on one of the company’s two core products—the picking robot or the 3D machine vision system—or to continue pursuing both. As Zhou prepared to present his recommendation to the board, the question of focus, execution, and financing loomed large.

Readings:

• HBS Case 825-059 | XYZ RoboticsDownload XYZ Robotics
• XYZ Robotics | Data ExhibitsDownload Data Exhibits
• Please watch this videoLinks to an external site. from time 18:45 - 20:25 to get a vision of what the XYZ Robotics robots, and others like it (in this example, competitor Boston Dynamics), look like in a warehouse setting.
• Please watch this videoLinks to an external site. from Boston Dynamics showing off the Stretch mobile manipulation robot that the company released in 2022.

Optional Readings:

• The Economist | Robots are suddenly getting cleverer. What's changed? Download Robots are suddenly getting cleverer. What's changed?
• The Economist | The quest to build robots that look and behave like humans Download The quest to build robots that look and behave like humans
• Video | Figure Status Update - OpenAI Speech-to-Speech ReasoningLinks to an external site.

Assignment Questions:

1. What should Jiaji Zhou do next – pivot towards the mobile manipulation market and develop the "Rocky" robot or continue to develop and incrementally improve its current product lines? How should he balance the company's growth ambitions with the need for profitability, especially in the context of current macroeconomic challenges?
2. What process should Zhou undertake to assess the potential risks and benefits of this new direction? What implications does this decision have for the company’s future? 
3. How would you communicate your decision to the board of directors (in three bullet points)?
4. Conduct a pro forma financial analysis of the two possible scenarios for XYZ Robotics using the provided income statement (Exhibit 7). Feel free to pair up with another student or two to team up on the analysis. Make whatever assumptions you think make the most logical sense for these two scenarios:

   a. Invest & Pivot: XYZ invests heavily in R&D to accelerate the development of its mobile manipulation robot, targeting rapid growth in this product line, while gradually phasing out the 3D Vision System over the next three years.

   b. Grow Gradually: XYZ adopts a more conservative growth strategy, maintaining its current product lines while prioritizing profitability by reducing operational and R&D costs.

   c. For each scenario, calculate the high level P&L and cumulative cash flows over the next five years (2023-2027) and estimate the potential exit valuation (i.e., how valuable is this company under this scenario?) in 2027.

5. What are your takeaways from your pro forma analysis and what does it say about Zhou’s decision?
6. What are your takeaways from your pro forma analysis and what does it say about Zhou’s decision?

 

MODULE 4: THE STARTUP ORGANIZATION

 

CLASS 15. BUBBLE

Bubble is a low-code tool for entrepreneurs to rapidly build their web-based applications founded by two entrepreneurs who have elected to bootstrap the company. Six years into their company-building journey the company had achieved over $1 million in revenue and profitability. Just as they seem to be achieving product-market fit, the founders faced the hard question as to whether to raise their first round of outside capital and how to spend the money. Our class guest will be Bubble co-founder Emmanuel Straschnov.

Readings:

·        HBS Case 822-033 | On the Bubble: Startup Bootstrapping

·        Ryan Smith| Why Every Startup Should Bootstrap

·        Sramana Mitra | Bootstrapping to Exit

Optional Readings:

·        Eric Paley | Venture Capital is a Hell of a Drug

Assignment Questions:

1.       Do you think the founding team made a mistake to bootstrap for six years versus raising capital to hire a team and fuel their growth?

2.       If you were the Bubble founders, would you take capital now?

3.       If so, who would you hire and why?

CLASS 17. STARTUP HIRING WORKSHOP

In today’s class, we will conduct an exercise focused on startup hiring. We have touched on some of these themes with many cases and will use this class session to deconstruct the nuts and bolts of how to source, interview, and close candidates. Our class guest will be Claire Hughes Johnson, former COO and current Board member of Stripe.

In preparation, please read the articles below (each of them is quite short).

Readings:

·        Harj Taggar | How to Hire Your First Engineer

·        Paul Blumenfeld | Do job specs matter?

·        First Round | The Playbook for Hiring the Right Marketer at the Right Time for Your Startup

Optional Readings:

·         Harj Taggar | Convincing Engineers to Join Your Team

·         Jeff Bussgang | Valuing Those Pesky Stock Options

·         Carta | 2024 H1 Startup Compensation Report

 

CLASS 18. BUILD WORKSHOP

Objectives

In this exercise, students will experiment using AI tools to further refine their proposed business models and prototype an artifact to get real customer feedback.

1. Explore the possibilities for prototyping enabled by the latest AI tools.
2. Think critically about the trade-offs of using AI in validating a business model.
3. Build your facility and confidence in building with AI tools, prototype, and increase your leverage beyond this class.

***Download the full assignment hereDownload here

Readings

• Jeffrey Bussgang | The 10x FounderLinks to an external site.
• Chapters 2 and 7 of The Experimentation Machine

Submissions

Important: Make sure to submit your work at each of the submission points linked here and at the checkpoints in the homework assignment.

Submission 1 - Reflections on Using AI for Product Market FitLinks to an external site.

Submission 2 - Public App Link and ChatLinks to an external site.

Submission 3 - Reflections on Building with AILinks to an external site.

***Please make all submissions before Sunday 4/23 at 11:59pm ET

 

Recommendation: Start this assignment early, use ChatGPT, and seek guidance from a technically-inclined classmate if don’t have a technical background.

NOTE: Please bring your laptop to class 

Our class guest will be John Yang-SammataroLinks to an external site.

Readings:

·        Jeffrey Bussgang | The 10x Founder

·        Scott Belsky | The Era of Scaling Without Growing

Assignment Questions:

1.       Questions to come

MODULE 5: ECOSYSTEM AND ETHICS

 

CLASS 19. KHATABOOK

India-based Khatabook is a digital ledger app for small businesses to record financial transactions and accept payments online. The company’s product-led growth strategy has yielded promising results in the face of strong competition. But with zero revenue and sky-high expectations, the founding team is faced with a series of dilemmas regarding where to focus next. Our class guest will be Khatabook founder/CEO Ravish Naresh.

Readings:

·        HBS Case | Khatabook

·        Jeff Bussgang | Entering StartUpLand-Chapter 5: The Growth Manager

·        Nicholas Epley and Amit Kumar | How to Design an Ethical Organization

Optional Readings:

·        Tom Byers | Finding Our Values: A New Era of Entrepreneurship Education

 

Assignment Questions:

1.       What should Naresh do at the end of the case:  focus on growth/top of the funnel, usage/bottom of the funnel, or monetization?

2.       What is your assessment of Khatabook’s decisions to date with respect to monetization timing?

3.       If you think it’s time for monetization, what monetization experiments should Naresh run?

4.       Do you agree with the Ravish’s choices to date more generally? How would you compare his actions and approach in building Khatabook to other entrepreneurs we have studied far?

 

CLASS 20. FOUNDER FIELD DAY

Born out of Harvard Business School, Rothenberg Ventures is off to a fast and promising start. Founded by Stanford and HBS alumnus, Mike Rothenberg, the firm aspires to be a disruptive force in the staid venture capital industry. Does the firm’s fall from grace represent an individual anomaly or something more systemic and insidious about StartUpLand? Our class guest will be former Rothenberg Ventures general partner Brandon Farwell. NOTE: Just focus on pages 1-8 of the case. The remainder can be skimmed as it is anchored on Fran Hauser’s decision, which is not the focus of our class discussion.

Readings:

·        HBS Case 815-101 | Founder Field Day

·        The Rise and Fall of a Virtual Gatsby

·        The SEC Has Charged Mike Rothenberg For Fraud

·        The Ugly, Unethical Underside of Silicon Valley

Assignment Questions:

1.       How would you summarize RV’s investing strategy at the time of the case? What is their competitive advantage as investors?

2.       If you were an entrepreneur, would you take their money? If you were a limited partner, would you invest in their next fund?

3.       After reading the assigned articles that came out after the case, why do you think things went so wrong at the firm? If you were an LP on the firm’s advisory committee, what might you have done differently?

4.       If you were Brandon Farwell, what might you have done differently?

CLASS 21. EVERLYWELL

Everlywell is an at-home lab testing startup achieving strong growth in a competitive market. In March 2020, the COVID-19 pandemic begins to sweep through the United States and the company is faced with both the challenge and opportunity to step in and develop at-home coronavirus tests despite concerns from regulators and the risk of distraction from their core strategy.

Readings:

·        HBS Case | Everlywell

·        Claudine Gartenberg and George Serafeim | 181 Top CEOs Have Realized Companies Need a Purpose Beyond Profit

·        Natasha Singer | Lawmakers Question Start-Ups on At-home Kits for Coronavirus Testing

·        Milton Friedman | A Friedman doctrine‐- The Social Responsibility Of Business Is to Increase Its Profits

Optional Readings:

·        Atlantic | US Coronavirus Testing Could Fail Again

Assignment Questions:

1.       Did Cheek do the right thing to pursue the coronavirus test from a shareholder perspective?

2.       What experiments could the company have run to reduce regulatory risk?

3.       Given the FDA news, what should Cheek do now?

MODULE 6: FINANCING AND EXITS

 

CLASS 22. MENTED

Mented is an ecommerce cosmetics company founded by two Black women focused on women of color. The founders believe they have uncovered a large unmet need within the beauty industry and have developed enough conviction in their CVP and go-to-market experiments to quit their jobs and pursue financing to launch the venture. What should their financing strategy be based on their business model, financial forecasts, and the systemic biases that persist in the venture capital industry? Our class guest will be Mented co-founder KJ Miller.

Readings:

·        HBS Case 318-093 | Mented

·        Spreadsheet | Mented cap table exercise

·        Dimira Teneva | Beauty Brands Ecommerce Benchmarks

·        James Norman | A VC’s Guide to Investing in Black Founders

Optional Readings:

·        Geoff Ralston | A Guide to Seed Fundraising

·        Lee Hower | What Milestones Are Needed to Raise a Series A

Assignment Questions:

1.       Is Mented’s business an attractive one? How would you assess the market opportunity and business model?

2.       What should Johnson and Miller do with their financing strategy? How much money should they raise and how aggressive should their projections be?

3.       What are the tactical steps Johnson and Miller should embark on to test the fundraising market and best position Mented for success?

4.       DO THE CAP TABLE MATH:  using the Excel file on Canvas, "Mented cap table exercise", model out what KJ and Amanda's ownership would look like post series A (i.e., after the pre-seed, seed, and series A rounds) assuming they are able to follow the "20% rule" (i.e., they sell 20% of the business) in each of the three rounds.  Note: assume there is a 10% option pool for other employees post series A. Now assume they must sell 33% of the business in each of the three rounds -- what is their resulting ownership?

 CLASS 23. REMO

ReMo is a climate tech startup with little technical innovation but significant business model innovation that is capital intensive to execute. The founders have a clear vision but are struggling with the execution and financing path to realize it. Our class guest will be ReMo co-founder Bhargavi Chevva.

Readings: 

·        HBS Case 824-027 | ReMo Energy

·        The Engine | A Blueprint for Tough Tech Entrepreneurs

 

Optional Readings:

·        Fortune | Why this Venture Capitalist is Tackling Tough Tech

Assignment Questions:

1.       Evaluate each of the financing options the founders are facing. Which would you recommend and why?

2.       Is the increased risk associated with ReMo justified by an increased reward if the company gets it right? How much is an ammonia plant company worth and why?

CLASS 24. CHIEF

Chief is a private network for female executives. The company has gotten early positive indications of product-market fit post-launch but the founders are unsure how aggressively to expand the service. Should they abandon lean principles and blitzscale? Our class guest will be Chief co-founder Lindsay Kaplan.

Readings: 

·        HBS Case 920-021 | Scaling at Chief

·        Tim Sullivan | Blitzscaling

·        Manas J. Saloi |Premature Scaling Will Kill Your Startup

Optional Readings:

·        Ben Horowitz | The Case for the Fat startup

·        Fred Wilson | Being Fat is Not Healthy

Assignment Questions:

1.       Does Chief represent an attractive business model (i.e., should it be worth 10x revenue or 2x)? Why?

2.       Has Chief achieved product-market fit (PMF)? What more would you like to see to have high conviction on PMF if you were Childers and Kaplan?

3.       The two assigned readings represent different approaches to startup scaling – or do they? What should Childers and Kaplan do with respect to their scaling decision: how aggressive should they be and how much money should they attempt to raise?

4.       The case notes on page 5 that Chief’s seed round was $3m and led by two early-stage VC firms. The case doesn’t disclose that the two lead partners on the deal from each firm are men. How should that effect the founders’ thinking on who it should raise money from in the upcoming Series A round, if at all?

CLASS 25. PITCH EXERCISE
The startup pitch exercise will be an opportunity to learn about how to pitch your startup and then watch four of your classmates put the learnings in action. There is no case to prepare for the session. Instead, please read the two assigned readings below and come ready to both support and critique your classmates.

Readings:

·         Background Note | Raising Startup Capital

·         Jeff Bussgang | Mastering the VC Game Chapter 1
Optional:

·         Watch this video of Jeff Bussgang (on 1.2x speed, it will take ~ 16 minutes) or skim the transcript (~ 8-10 minutes) for a tutorial on how to effectively pitch your startup.

 

CLASS 26. BASTION ZERO

Sharon Goldberg and BastionZero explores the journey of a cybersecurity startup navigating market shifts, funding challenges, and strategic pivots. From its origins as a blockchain-focused venture to its evolution into a secure remote access platform, the case examines the complexities of achieving product-market fit, managing investor relationships, and deciding between growth or acquisition during economic uncertainty. Sharon Goldberg will be our guest for this brand new live case (more twists and turns will unfold in class). 

Readings:

• BastionZero caseletDownload BastionZero caselet
• Scott Orn | What Does Your Startup Need to Know about Acqui-hires?Links to an external site.

Optional Readings:

• Sarah Lacy | The Acquihire Scourge: Whatever Happened to Failure in Silicon Valley?Links to an external site.
• Sarah Needelman | Startups Get Snapped Up For Their TalentLinks to an external site.
• Fred Wilson | M&A Issues: The Integration PlanLinks to an external site.

Assignment Questions:

1. Should Goldberg pursue an acquisition at this juncture, or try to raise another round of financing and keep chipping away at the opportunity? 
2. What factors should BastionZero's leadership consider when evaluating potential acquiring companies? 
3. What process should she follow?
4. How might Goldberg approach valuation and price negotiation for BastionZero in a potential acquisition discussion?

 

CLASS 27. WRAP

This final class is dedicated to reviewing and discussing the concepts learned during this course as well as stepping back and sharing a few observations about an entrepreneurial life. 

Readings:

·        Clayton Christensen | How will you measure your life?

·        Hannah Weisman | The Meaning of Work

·        Jon Jachimowicz, et al | The Unexpected Benefits of Pursuing a Passion Outside of Work

Assignment Questions:

1.       Please complete the Feedback Poll on LTV Cases & Sessions.

2.       Please bring your laptop to class to complete the HBS Course Evaluation.