LTV Syllabus

Launching Technology Ventures
Course Number 1755
Faculty: Jeff Bussgang, Samuel Clemens, Donna Levin, & Reza Satchu
Fall, Q1/2: 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
9/2/2020
Aardvark
David Hornik
9/8/2020 Mattermark Danielle Morrill & Elliott Robinson
9/9/2020 Analytical Space Dan Nevius & Katie Rae
9/14/2020 Classtivity Payal Kadakia Pujji & Simon Rothman
9/15/2020 Project SHED Scott Brady
9/21/2020 Zipline Keller Rinaudo & Jon Rubinstein
9/22/2020 Shippo Laura Behrens Wu & Harley Finkelstein
MODULE 2: GO TO MARKET EXPERIMENTS
9/28/2020 Plastiq Dan Choi & Mala Gaonkar
9/29/2020 BabbaCo Jessica Kim & Kirsten Greene
9/30/2020 ZappRx Zoe Barry & Jonathan Bush
10/5/2020 Ovia Paris Wallace & Gina Nebesar
10/06/2020 Business Model Exercise No guest
10/13/2020 Choosy Sharon Qian & Katia Beauchamp
10/14/2020 Everlywell Julia Cheek & Marc Casper
10/19/2020 RapidSOS Michael Martin
MODULE 3: BUSINESS MODEL EXPERIMENTS
10/20/2020 Codecademy Zach Sims & Deborah Quazzo
10/26/2020 AirFox Victor Santos & Arianna Simpson
10/27/2020 Lightricks Daniel Cohen
11/2/2020 C16 Bio Shara Ticku & Carmichael Roberts
11/9/2020 Khatabook Ravish Naresh
MODULE 4: FINANCING, EXITS, AND ETHICS
11/10/2020 Startup Pitch Exercise No guest
11/16/2020 Chief Carolyn Childers, Lindsay Kaplan & Alexa von Tobel
11/17/2020 Yahoo Jackie Reses
11/23/2020 Soofa Sandra Richter & Prem Ramaswami
11/24/2020 Mented Amanda Johnson & KJ Miller
11/30/2020 Founder Field Day Brandon Farwell
12/1/2020 Wrap No guest


Background Reading:

Students are encouraged to review the following Case Notes that were taught during the MBA First-Year Course, "The Entrepreneurial Manager."

If you want an accessible backgrounder on coding languages and software development processes, read this:
A more detailed review of the new methodology for software development, Continuous Development, can be found here:
Finally, throughout the course we will draw on Professor Bussgang's book, Entering StartUpLand, to provide context for how startups are organized and execute on their vision. In preparation for the first class, please read:
  • Entering StartUpLand, Chapter 1

MOODULE 1: IDEATION AND CUSTOMER VALUE PROPOSITION EXPERIMENTS


I. Wednesday, September 2--AARDVARK

Aardvark is an online social search service founded by veterans from Google. This case captures the management team in the midst of searching for product-market fit. We will focus on Aardvark's early strategic decisions, experiments regarding its customer value proposition, as well as its use of a lean, user-centric product development process.Our class guest will be David Hornik, general partner at August Capital and lead investor in Aardvark.

Readings:

Optional Readings:

Assignment Questions:
  1. Do you consider Aardvark a success as of January 2010? To what extent is Aardvark's success or lack of success attributable to the team's reliance on user-centric product development methods? What hypotheses were they testing?
  2. The Aardvark team refused to implement the features most requested by their users. How does this square with user-centric design?
  3. If you were in charge of marketing for Aardvark, what would you do to stimulate growth?

II. Tuesday, Septmber 8--MATTERMARK

Mattermark is a SaaS start-up that provides business information and analytics software. Having raised a successful Series A, the company's founder is faced with a dilemma--whether to invest in scaling sales and marketing or the product? Our guest will be CEO and founder, Danielle Morrill.

Readings:

Optional Readings:

Assignment Questions:
  1. Has Mattermark achieved product-market fit? Why or why not? Looking at Exhibit 3, what are the key metrics that inform your answer to this question? Please make sure to calculate CAC and LTV and the ratio of the two.
  2. Is it time to expand into other markets beyond venture capital?
  3. If you were Danielle, what would your presentation to the new board look like in terms of specific recommendations and courses of action?

III. Wednesday, September 9--ANALYTICAL SPACE

With one satellite aloft and in the midst of beta testing in late 2018, Analytical Space aimed to build and operate a constellation of inexpensive satellites that would receive and relay to the ground data gathered by orbiting Earth observation satellites, thereby speeding and increasing the amount of data their operators could collect and sell to clients in the multi-billion market for information on crop, weather, and other visible changes on Earth. The cofounders now need to select the best initial customers, validate demand for their unique data relay service, and establish pricing that would both spur adoption and impress investors ahead of their next financing round. Our class guest will be Dan Nevius, Co-Founder & CEO of Analytical Space.

Readings:

Optional Readings

Assignment Questions:
  1. What should ASI’s priority be in the coming months: validating demand or validating pricing? What are the implications of each with respect to their financing prospects?
  2. What experiments should the founding team focus on in early 2019?
  3. What profile would you target for the initial business development hires?

IV. Monday, September 14--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. Our class guest is Payal Kaddakia, CoFounder and CEO at Classtivity.

Readings:

Optional Readings:

Assignment Questions:
  1. Is Passport working? What's the business model?
  2. The first pivot seemed like an obvious choice. 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?
  3. If you were Payal, would you pivot away from Classtivity? Does it to have to be an either/or decision or can you stick with Classtivity 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, how favorable are the unit economics and how would you assess the value proposition for the user and the studio? How sensitive are the unit economics to your assumptions? E.g., If you wanted a 3x LTV/CAC 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?

V. Tuesday, September 15--PROJECT SHED

Four Graduate School of Business (GSB) students from Stanford 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 find a compelling entrepreneurial venture to pursue and build something meaningful. Our class guest will be Scott Brady, CoFounder of Project SHED.

Readings:

Optional Readings:

Assignment Questions:
  1. Evaluate the founders’ process in forming the team. What are some of the benefits and risks? 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?

VI. Monday, September 21--ZIPLINE

Zipline is a startup that aspires to deliver lifesaving products quickly, safely, and reliably by drone. The team is evaluating which market segments to consider next as they looked to expand beyond Ghana and Rwanda. Our class guest will be Keller Rinaudo, Founder and CEO at Zipline.

Readings:

Optional Readings:

Assignment Questions:
  1. Why do you think Zipline will be successful? Why may they fail?
  2. How good is the “product/market” fit for the services Zipline provides in Rwanda and Ghana? Would you have done anything differently? Why?
  3. Which market segment should Zipline pursue next – more low-income, middle-income or high-income countries? What criteria were most important to you in making your choice? Why? What is the 60 second pitch you’d make to the Minister of Health in your next country of choice to convince them to consider Zipline?
  4. Which of the Entrepreneurial Ecosystem Challenges identified in the WEF study has Zipline encountered and how have they mitigated them? What issues, if any, might they be missing?
  5. If you had been a Zipline co-founder, what is the argument you would have made for starting in the US instead of Rwanda?

VII. Tuesday, September 22--SHIPPO

Shippo is a graduate of 500 Startups 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? Our class guest is Laura Behrens Wu, cofounder and CEO of Shippo.

Readings:

Optional Readings:

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?
  3. What should Behrens Wu do: continue to focus on the app, pivot to the API, or try to do both?
  4. How would you configure the sales and product organization and focus areas appropriately?

MODULE 2: GO TO MARKET EXPERIMENTS


VIII. Monday, September 28--PLASTIQ

The founders of a venture-backed startup need to figure out their go-to-market strategy and the right profile for their first key sales hires. Should they develop partnerships with channels that would provide leverage or build out a direct sales force? And should the sales team be led by an experienced senior sales executive or a scrappy mid-level sales manager? Our class guest is Dan Choi, Co-Founder of Plastiq.

Readings:

Optional Readings:

Assignment Questions:
  1. What go-to-market strategy should the founders choose? What are the tests they can conduct to help validate their go-to-market decision? What metrics should they use to help determine if they're on the right path?
  2. How far down does the sales learning curve is the company by the end of this case? What specific metrics should they achieve before scaling more aggressively?
  3. Who should Plastiq hire to become VP of Sales and why?

IX. Tuesday, September 29--BABBACO

Having just raised a Series B financing, the founder of BabbaCo is faced with a tough decision: should she "step on the gas" and scale the customer base, or continue to focus on fine-tuning the product and business model. The case describes the various marketing channels employed by the BabbaCo team (Search, Email, Social Media, Deal Sites, Affiliates, etc.) including the strategy and effectiveness for each. Our class guest is CEO/founder Jessica Kim.

Readings:

Optional Readings:

Assignment Questions:
  1. Is now the right time to scale? If not, why not? If so, what areas would you invest more heavily in?
  2. Looking at exhibits 5 and 6, analyze the results from each of the various customer acquisition channels and develop a dashboard evaluating the effectiveness of each channel. Are there additional customer acquisition strategies or tests that Kim should attempt?
  3. Discuss and come up with additional approaches Kim should use to refine the product and content offering to build a successful company in the long-term. What tests would you run to validate these approaches?
  4. What strategy should Kim present at the upcoming board meeting?


X. Wednesday, September 30--ZAPPRX

ZappRx is a health technology startup trying to streamline the specialty pharmaceutical industry. The founder is struggling with a business model choice, one that is made even more difficult by the fact that her senior management team is expressing doubt about her leadership and vision. Our guest will be CEO and founder Zoe Barry.

Readings:

Optional Readings:


Assignment Questions:
  1. Of the various possible "customers" for ZappRx's service, for whom is the value proposition most compelling? Who has the highest willingness to pay?
  2. What strategic path should Barry pursue and why? What experiments should she consider to inform her decision?
  3. Based on the path she chooses, what actions should she take with respect to fundraising, team and go-to-market?

XI. Monday, October 5--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 guest will be CEO and founder Paris Wallace.

Readings:
  • HBS Case 818-004 | Ovia
  • Jeff Bussgang | Entering StartUpLand Chapter 3: The Business Development Manager

Optional Readings:

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 Exhibits 6a and 6b. What insights can you derive from the cohort analysis?
  3. What choice should Wallace and team make? Run a summary analysis of the cost of building up an employer sales force, using some reasonable assumptions based on data provided in the case, and going direct as compared to working through a channel partner. How do the unit economics of the benefits market compare to the native advertising market?



XII. Tuesday, October 6--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.

XIII. Tuesday, October 13--CHOOSY

NY-based Choosy has just completed its launch and the founders are now pausing to wonder “what now?” Their fledging e-commerce fashion startup has a clear market focus, but they worry that it may be too niche and they are contemplating a series of pivots that would dramatically affect market size and user experiences. Our class guests are Sharon Qian, CTO, and Jessie Zeng, Founder & CEO, of Choosy.

Readings:

Optional Readings:

Assignment Questions:
  1. What is your assessment of Choosy’s total available market (TAM) and unit economics?
  2. What should the founders do with respect to their target market choice? What experiments should they run to inform their decision?
  3. What should the founders do with respect to the drop ship question? What experiments should they run to inform their decision?
  4. What conversation should Zeng have with her board at the time of the case’s end?

XIV. Wednesday, October 14--EVERLYWELL

Everlywell is an at-home lab test 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. Our class guest is founder and CEO Julia Cheek.

Readings:

Optional Readings:

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?

XV. Monday, October 19--RAPIDSOS

Founded in 2014, RapidSOS aspires to transform emergency response communications systems through a mobile-centric approach. In the earliest stages of figuring out its go-to-market strategy, the company has a range of options, including the opportunity to team up with a major industry player. Our class guest is Michael Martin, CEO of RapidSOS.

Readings:

Optional Readings:

Assignment Questions:
  1. Consider the four entrepreneurial strategy alternatives laid out in "Full Speed Ahead...but in What Direction?" Do you think these are mutually exclusive choices for RapidSOS or do you think they can "do it all"?
  2. Is there an experiment you can propose that would allow them to choose between the alternatives they face?
  3. Given the information available in the case, which one would you recommend?
  4. How does the opportunity offered by Big Mobile impact your recommendation? How should Michael and his team react to this opportunity?


MODULE 3: BUSINESS MODEL EXPERIMENTS


XVI. Tuesday, October 20--CODECADEMY

NYC-based Codecademy has seen tremendous growth and user adoption since its launch. The company is now contemplating its next move--whether to continue to drive adoption or begin to run monetization experiments. Our class guest is Zach Sims, co-founder and CEO of Codecademy. 

Readings:

Optional Readings

Assignment Questions:
  1. Union Square's Andy Weissman warns against pursuing monetization strategies too soon. Do you agree with this? When is the right time to pursue monetization strategies and how do you know when the time has come?
  2. Is it time for Codecademy to pursue monetization efforts?
  3. If so, which one should they choose and why?
  4. What experiments should Codecademy run next to test out monetization strategies? Or is it time to focus on, and scale up, one particular model?

XVII. Monday, October 26--AIRFOX

Airfox is a struggling startup facing a dwindling cash runway. The company has a big vision: to enable billions of offline and pre-paid mobile subscribers in emerging markets the opportunity to have access to capital for data. But to execute that vision, it needs to overcome investor skepticism and raise a lot of capital. The founders are contemplating completing an Initial Coin Offering (ICO) in order to both raise the desired funds and develop a new, token-based model for their service. Our class guest is co-founder and CEO, Victor Santos.

Readings:

Optional Readings:

Assignment Questions:
  1. Evaluate each of Airfox's pivots. What experiments could they run for each one to help short circuit their search and discovery process?
  2. Should the company choose to leverage the blockchain for their application?
  3. If you were Victor, would you launch the ICO? Why or why not? What are the key factors that need to be weighed in this decision?

XVIII. Tuesday, October 27--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 is Daniel Cohen, general partner at Viola Ventures and the company's lead investor.

Readings:

Optional Readings:

Assignment Questions:
  1. What do you think of their paid vs. free decision? Do you agree with it or would you have made a different decision?
  2. Do you agree with Fred Wilson's statement that "marketing is for companies with sucky products?" Should Lightricks have focused on free acquisition early on?
  3. Reflect on the ways in which the company has bucked conventional wisdom in their decisions vs. "startup 101." Why? Has it worked?
  4. Look at Exhibits 6a, 6b, 6c, 7a, and 7b. If you were in charge of pricing at Lightricks, what price would you set and why?

XIX. Monday, November 2--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? Our guest will be CEO and founder, Shara Ticku.

Readings:
Optional Readings:
Assignment Questions:
  1. Should Shara take advantage of the buzz/momentum and jump right to food or do personal care first and then food?
  2. If you think she should focus on personal care, should she:
    • build her own brand
    • build a white label end product and get someone else to build the brand
    • work with a challenger brand
    • work with a large brand?
    • Why do you recommend this choice?
  3. Given your strategic choice, lay out your 12-18 month plan with respect to fundraising, hiring and key milestones?


XX. Monday, November 9--KHATABOOK

o 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 guest will be founder/CEO Ravish Naresh.

Readings:

Optional Readings:

Assignment Questions:
  1. How is Khatabook’s situation different or similar to Codecademy with respect to monetization timing?
  2. Do you agree with the Naresh’s choices to date?
  3. What monetization experiments should Naresh run?


MODULE 4: FINANCING, EXITS, AND ETHICS


XXI. Tuesday, November 10--STARTUP PITCH EXERCISE


Readings:

XXII. Monday, November 16-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 guest will be founder Carolyn Childers.

Readings: (Students can skim the two Chief Role cases but read the Scaling at Chief case thoroughly)

Optional Readings:

Assignment Questions:
  1. Does Chief represent an attractive business model?
  2. Has Chief achieved product-market fit?
  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?


XXIII. Tuesday, November 17--Yahoo!

This case explores both sides of an acquisition-hire ("acqui-hire") with Yahoo! as the acquiring company and Stamped as the start-up potentially being acquired. Our class guest is Robby Stein, co-founder of Stamped.

Readings:

Optional Readings:

Assignment Questions:
  1. Evaluate Yahoo’s M&A “acquihire” strategy and corporate development organization at the time of the Stamped acquisition opportunity and describe what direction the corporate development group needs to take to contribute to the Yahoo turnaround.
  2. Should Jackie embark on the Stamped acquisition? What should be her main considerations in evaluating the decision?
  3. Should Robby accept the Yahoo offer? What should be his main considerations in evaluating the decision?

XXIV. Monday, November 23--SOOFA

Soofa is a civic tech startup keen to improve urban life in cities and bring communities together. The company has completed a pivot with some promising results but is once again out of money and in need of raising capital to survive. Should the founder embrace her board’s recommendation of teaming up with a more senior operator and his aggressive growth strategy or stick to her more conservative growth plan. Our class guest is Sandra Richter, co-founder and CEO.

Readings:

Optional Readings:

Assignment Questions:
  1. Should Richter embrace Binder’s plan and pitch it to investors?
  2. How would you evaluate the behavior of the venture capitalists in their support of Soofa and Richter?
  3. What are Richter’s obligations and who is she accountable to in her role as a startup CEO?

XXV. Tuesday, November 24--MENTED

Mented is an ecommerce cosmetics companies 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 as a result of their consumer value proposition and go to market experiments to quite 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 guests will be co-founders Amanda Johnson and KJ Miller.

Readings:

Optional Readings:

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 accounts for the fact that US VC dollars to female-founded or mixed gender startups are 12% of the total and to Black founders < 1% (2019 figures)?

XXVI. Monday, November 30--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.

Readings:

Optional Readings:

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?
  4. Do you think that VCs and/or founders face an inherent tension that makes it difficult to operate ethically and above reproach while trying to “ignore the rules” and “fake it till you make it”?

XXVII. Tuesday, December 1--WRAP UP

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:

Optional Readings: 

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

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