LTV Readings

Launching Technology Ventures
Course Number 1755
Senior Lecturers: Jeffrey Bussgang & Samuel Clemens
Fall, Q2: 1.5 credits

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

Class date
Case
Guest
10/24/2019
Plastiq
10/25/2019
Shippo
10/30/2019
Aardvark
10/31/2019
Classtivity
11/6/2019
Choosy
11/7/2019
Analytical Space
11/14/2019
BabbaCo
11/15/2019
Mattermark
11/20/2019
Ovia
11/21/2019
ZappRx
11/22/2019
Lightricks
12/4/2019
Airfox
12/5/2019
Codecademy
12/6/2019
Course 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 new 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


I. Thursday, October 24--PLASTIQ

The young founders of a venture-backed startup needs 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 Daniel J. 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?


II. Friday, October 25--SHIPPO

Shippo is a graduate of 500Startups 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, Founder 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 6 and the churn numbers in exhibit 7? 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?


III. Wednesday, October 30--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 is David Hornik, general partner of August Capital and Aardvark's lead investor.

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. Why isn't this social service more viral? If you were in charge of marketing for Aardvark, what would you do to stimulate growth?


IV. Thursday, October 31--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 Spencer Lazar

Readings:

Optional Readings: 
  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. Wednesday, November 6--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 Reading:

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?

VI. Thursday, November 7--Analytical Space

With one satellite aloft and in the midst of beta testing in late 2018, Analytical Space founders Justin Oliveira and Dan Nevius turned to critical questions about the pioneering startup’s go to market, pricing, and business development strategy. 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 needed 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 guests are Dan Nevius, Co-Founder & COO, and Justin Oliveira Co-Founder, President and 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?


VII. Thursday, November 14--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 Rob Go.

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?


VIII. Friday, November 15-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?


IX. Wednesday, November 20--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 | 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 Paris 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?


X. Thursday, November 21--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. Friday, November 22--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 cofounder, Itai Tsiddon.

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?


XII. Wednesday, December 4--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? 


XIII. Thursday, December 5--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 time to focus on, and scale up, one particular model?


XIV. Friday, November 6--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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