#Startups In VUCA World

Handling Setbacks Effectively

By Vijay Kambhammettu

p.1

#Startups In VUCA World

Execution in VUCA world is the 90% battle for success
eBook Content

VUCA Startup World

VUCA Drivers, Effects, & Demands
Setbacks Are A Norm Today How To Recover Quickly

Business Model Failure Forget The Plan, Embrace Continuous

Planning

Time Is Money - Avoid Missing Deadlines

Money Is Time Avoid Running Over Budget

Key Resources Are Your TIME & MONEY Plan them diligently

Continuous Risk Management Integral To Succeed

No Customer Traction You Have Not Dated Your Customers Enough

Success = Planning + Execution

p.2

VUCA Definition & Startup Correlation

Introduction

Volatility;

Complexity;

Startup Execution In Todays digital age is

filled with Volatility, Uncertainty, Complexity
and Ambiguity (VUCA). Technological
innovations and ease in Information access
will continue to create exponential customer
needs that never existed before which are the
prime drivers for startups.

The nature and dynamics of change,

the dramatically escalating rate and
speed of change and the associated
risks of instability and flux. Volatility
demands a willingness to take action,
to explore and probe in changing
conditions. BUT Volatility can cause
fear, risk-aversion and back- tobasics reactions

The intricate relationship of systems

and their parts, the opposite of
simplicity and the multifaceted effects
of multiple factors, drivers, and
influencers. Dealing with Complexity
requires us to stay focused on what
we are trying to achieve and to be
flexible and creative in how we carry
out our intentions. But Complexity can
drive the unproductive behaviors of
scapegoating and black and white
dualities

Entrepreneurs are distinguished with the

FORESIGHT to create new INSIGHTS in solving
new problems with their ACTIONS.
In a linear world, a startup would succeed by
directing, predicting, knowing the answers,
controlling, managing, and doing more of the
same. The future is an extension of the past.
But, in a VUCA world - one filled with Volatility,
Uncertainty, Complexity and Ambiguity startups must change how they operate.

Uncertainty;
The lack of predictability, and the
sense of not knowing what the
outcomes of even known changes
might be. To operate successfully in
Uncertainty, we must develop a wider
sense of the events and conditions
surrounding us. On contrary the
inordinate amount of data collected
could lead to execution paralysis.
There needs to be balance and some
level of risk taking

Ambiguity;
The fuzziness of reality and the state
of an event or situation that is capable
of being understood, made sense of
or misinterpreted - in many different
ways. Ambiguous conditions demand
agility and require that we create
conditions that foster decision- making
and innovation at the front- lines. BUT
Ambiguity often induces doubt,
distrust and hesitancy in decision
making. And it can stifle innovation

p.3

Understanding VUCA Impact Deeper

Impact & Mitigations

Drivers
ity
l
i
at
l
Vo

a
rt
e
c
Un

ty
n
i

ty
i
ex
l
p
m
Co

Am

ty
i
gu
i
b

Effects

Calls For

Nature Of Change
Dynamics Of Change
Rate & Speed Of Change

Risks
Instability
Flux

VISION
Take Actions
Probe Challenges

Unpredictability
Potential Surprises
Unknown Outcomes

Direction Paralysis
Due To Information /
Data Overload

UNDERSTANDING
Wilder Understanding
Different Perspectives

Tasks Correlation
Multifaceted Effects
Influencers

Unproductive
Dualities

CLARITY
Key Focus
Flexible & Creative

Ideal vs. Actual

Misinterpretations

Induce Doubt & Distrust

Lapses In Decision Making
Hurts Innovation

AGILITY
Decision Making
Innovation

p.4

Setbacks Are A Norm In Todays VUCA World

Top 6 Setbacks That Todays Startup Face

Business Model Failure

Missing Deadlines / Lack Of Time

Financials Over Budget / Funding

Lack/Loss Of Key Resources

Hit With Unexpected Risks

No Customer Traction

Always celebrate small wins (Milestones) on your startup journey in reaching the long term
goals

p.5

Business Model Failure

Leverage Business Model Canvas in creating, delivering and capturing value
Business Model Canvas* 9 Segment ;

Business Model;

6 Reasons For Failure;

Strategy determines WHAT to do.

The business model determines
HOW to do it. Strategy is the
plan and business model is the
tactics. Your model details how
to generate profits. There are
two sides to a business model
the revenue aspect and the cost
aspect.

Problem Solution / &

Product Market fit.
Mismatch between Value
proposition and customer
interest / segment

1. Problem : How intense is the problem and how

urgent is the need to fix it

Financial Viability. When

costs (Including Customer
acquisition) exceed revenues
generated

3. Unique Value Proposition : Why your solution is

different and worth buying

Business Model Canvas;

Created by Alex Osterwalder
is the first visualization of a
combination of the business
model and plan. the ability to
succinctly capture the
business model on one page
was powerful and widely
accepted.

External Factors Poor risk

management, competitive
analysis, market & economic
trend analysis, and other
external factors
Execution. 90% of startups
fail due to poor execution
Continuous Adaptation. Past
success hinders future
planning by not allowing to
think in current circumstances
Right Resources. Its people
who make startups succeed.
Wrong resource choice can
hinder momentum very badly

2. Customer Segments: Who is/are the customers and

collaborators (other users). Identify the early adopters

4. Solution : Features that address each problem

stated
5. Channels : Distribution and paths to reach
customers
6. Cost Structure : Identify costs, capital requirement,
and your burn rate. Know breakeven point
7. Revenue Streams : Pricing. Start with validating
your premium pricing first. Estimate customer life
time value
8. Partners : Capture key partners, collaborators,
influencers
9. Unfair Advantage : Why is it difficult for somebody
else to copy
*Originally developed by Alex Osterwalder
Key Omission Replaced Metrics with Key Partners.
Entroids.com has automated ways to capture KPIs

p.6

Missing Deadlines / Lack Of Time

What Seems Urgent Might Not Necessarily Be Important
The Scenarios;

All Startup Projects are

executed through tasks and
every task has a level of
urgency and importance.

Quadrant 1: Urgent & Important

These are crisis, problems and critical
deadlines. Quadrant 1 tasks get the first
priority. This can be meeting customer
deadlines, investor presentations or
contract negotiations.

Urgent: Any task that

needs to be done right away.
These are the ones that are
right at your face,
screaming now. Problem of
the day, squeaky wheels, the
naggers are examples of
what leads to urgent tasks.

Important: These are tasks

that contribute to the vision
and strategic needs. These
help to achieve the goals and
objectives. Planning, Risk
mitigation, Validating
assumptions, meeting
deliverables etc are
examples of important tasks.

Quadrant 2: Not Urgent & Important

These tasks help achieve your goals and
strategic needs. They are important but
dont have a deadline. Typical tasks
include planning, risk mitigation,
validating value proposition, verifying the
business model assumptions.
Quadrant 3: Urgent & Not Important
These tasks are distractions and day to
day fire-fighting activities, these usually
include helping other people out. It is not
necessarily bad but it keeps you from
doing other important things.
Quadrant 4: Not Urgent & Not
Important
These tasks are interruptions and
completely non value added. Internet
browsing, engaging in trivia, water cooler
talks are some examples

Urgent

Important

Definitions;

Q Necessity
Crisis management
1
Various Deadlines:

Not Important

Customer Service,
Regulatory
Requirements,
Quality Control
Fire fighting

Q Deception
Pressing Tasks
3 Distractions: Email,

Social Media
Urgent requests
Small quick hitter
jobs
Popular Feel Good
tasks

Not Urgent

Q Leadership
Planning
2

Risk mitigation
Design validations
MVP testing
Verify business
model
Budget control
Validate
assumptions

Waste
Q
Trivia Busy Work
4
Escape Activities :

Internet, News, TV
Unimportant Emails
Unproductive
Actions In Social
Media

The Secret to success;

If most of the time is spent in Q1 it leads to
burn out and which leads to moving to Q4
to get a break. Many people spend time in
Q3 without realization; they perceive that it
is a Q1 task. The urge to think that
everything urgent is important takes over.
To be effective, teams need to spend
time in Q2. This is where foundation
to greatness is achieved

p.7

Financials Over Budget / Under Funding

2 Ways to minimize budget overrun & avoid immediate funding

Budget Components; The Golden 80/20 Rule F

; ollow MVP Approach;
Startup spend money for
two main purpose : Product
Development & Product
Marketing. Allocating
appropriate budgets for
both is very critical as they
need both spends to be
successful.
Product Development
Costs: These are the costs
incurred to design, build
and test a product.
Examples: A Saas
application, A Internet of
Things Device, ..
Product Marketing
Costs:
These are costs incurred to
reach your customers,
convince them with your
value proposition.
Examples: Social media
management, Customer
visits, Promotional content,

80% of your spending comes

from 20% required resources for
each of Product Development &
Marketing. Identify what is the
20% resource in each of the
categories and shop around for
the lowest price without
compromising on quality.
Typically, these are software or
design engineering resources
required for product
development and content
creation for product marketing.
Example: In our startup, we
have offered equity to our
software developer which
brought our costs down
dramatically.
Analogy: We can SAVE LOT
MORE when we spend our 80%
time and effort in bargaining a
house which is far less then 20%
of the activities we do in our life
time versus collecting &
redeeming coupons all along the
life

Build product in a iterative process to continuously adjust your

product or service to fit the customer needs (Problem Solution Fit)
and to be able to do so economically with ability to scale (Product
Market Fit).
A Minimum Viable Product (MVP) is a means to test and validate
the startup hypothesis early in the process. The inputs to a MVP
are the assumptions around your market and product strategy. The
minimum viable product is the embodiment of the assumption
that can be created quickly, and is something the potential
customer can interact with. A MVP is not representation of the
final product.
An MVP is not a one-time event. You should do it at all stages of
development; however, as you reach final stages, it will merge
into your beta and then final product. The result of the MVP
feedback should be to tweak and adjust your value proposition
and business model.

p.8

Lack / Loss Of Key Resource

2- Step Resource Gap Analysis To Have Right Resources Onboard
Step 1;

Step 2;

Your strategy determines

what to do, and the business
model determines how to do.
When you have a fairly good
idea of the strategy and
model, it is time to move on
to Who.

Identify the key skills of importance for your startup.

Through the value stream, identify the tasks to be
done and list them. A generic starter list is as below;
Technology this includes R&D, innovation. View
this as the ingredients to make the secret sauce.
Product Development This is commercialization
of the technology. This involves creating the
product that can be repeatedly reproduced in an
economical manner. Design could be a subset of
this and again combine if it appropriate in your
case. View this as the recipe for sauce.
Design This gives the idea a form be it a website
or a product. This creates tangible personification
of the idea. View this as the presentation / plating
of the dish.
Manufacturing This is the process of converting
the inputs into a saleable product. This is the
cooking of the sauce.
Distribution This is getting your product into the
hands to the users.
Network This is the rolodex required to make
your startup fly.
Customer Acquisition and Retention This is about
marketing, sales conversions and customer
support. You should break them out if the skills or
resources required to do this are different in your
startup.
Management and Leadership This is probably the
hardest, because a founder thinks he is always the
best person to lead his company.

Evaluate each of the tasks or required skills

identified to determine what to do yourself
and what is best to seek partners. Keep
skills that are central to creating customer
value or enhance differentiation. Below is
the criteria you can use to evaluate each
skill or resource area;
Valuable Is this skill valuable in
increasing revenue or reducing cost
Rare Is this skill hard to find.
Inimitable This skill is not easily copied.
Non-substitutable Not many
alternatives exist for this skill
Identify the areas that are valuable and
rare or that cannot he imitated or
substituted. These areas are critical to your
success.
Typically, you will have two or three areas
that are important. Assess if you have
these skills or can develop it. You should
not keep more than two critical areas to be
able to do them well. Find partners for all
other skill areas. Of the skill areas you keep
internal, one can be your core competency

Startups should not do it all.

Trying to do everything has
the detrimental effect of
spreading yourself or your
team too thin and also, it is
expensive to develop all the
necessary skills internally.
This will affect the time to
market, quality of the product
and drive up the costs.
Rather than trying to do it all,
experienced founders know
what they are good at. They
nurture their strengths and
grow it, while partnering and
outsourcing everything else.
This is faster, cheaper and
better.

Resource Gap Analysis;

Identifying Resources ;

p.9

Hit With Risks

Continuous Risk Management Is Key To Success

What & Why Of Risk Mgt;

Failure Path;

The pitfalls for not managing risks

in a formal planned process are
huge in terms of schedule delays,
resource consumption, and
opportunity cost of not able to work
on the right things.

Risk Impact &

Probability increases
with improper / no risk
management from the
time capital is
committed

Risk management is the process of

identifying possible risks upfront
that could potentially come up while
adventuring into the business
world.
Each risk has three critical
components associated with it:
probability of occurrence of the risk,
impact of the risk if it does occur,
and planned mitigation to avoid /
minimize it.
Every startup tries to solve a new
customer problem or an existing
problem in newer way. The
ambiguity and never been done
nature of startups, make it difficult
for a founder to react to startup
risks mentally fast enough even to
avoid the smallest unplanned risk.

Startup Path To Sucess

Success Path;
Upfront Identification,
ownership, analysis &
mitigations reduce the
Risks impact &
probability

Best Practices;

Identify Risks Early

Analyze &
reprioritize
Develop mitigations
Allocate owners
Update & re-identify
continuously

Entrepreneurs are, by definition are risk takers.

Strong risk management is an important source of
competitive advantage. You can beat the odds and
build a thriving and rewarding venture by learning to
recognize and mitigate risks.

Akira Hirai

p.10

No Customer Traction

The pursuit of traction is what defines a startup success

Reasons For No Traction 19 Ways To Gain Traction Best practices

Lack Of Customer Value
Proposition. Validate early
on if the problem exists and
your solution is unique in
solving it that customers
would embrace
Improper communication of
value proposition. Get away
from describing features
and describe more on what
can the customer benefit
Too many features to
confuse customer with and
loose sight of the key value
proposition. Solve 1 problem
at a time
Looking for customers in the
wrong places
Not leveraging the existing
customers and focusing
only further reach. Wow
your customers to be your
brand promotion agents

1. Targeting Blogs
2. Publicity stunts
3. Unconventional PR
4. Search Engine marketing
5. Social & Display Ads
6. Offline Ads
7. Search Engine Optimization
8. Content marketing
9. Email marketing
10.Engineering as marketing
11.Viral marketing
12.Business development
13.Direct Sales
14.Affiliate programs
15.Existing platforms
16.Trade shows
17.Offline events
18.Speaking engagements
19.Community building
Source: How
any startup can
achieve
explosive growth
traction By
Gabriel Weinberg
& Justin Mares

Identify what customer traction technique

works best for reaching your target customers
and be really good with that. Dont spread
yourself across all the techniques. When you
have really mastered one, you can then try
another to build upon the previous techniques
Hangout & interact more where your
customers are likely to hang out online &
offline
Dont forget to request existing customers in
spreading the word. No better way to promote
than your customers promoting you
Quality vs. Quantity of customers: Know your
customers well. In the initial stage focus on
identifying your target customers (Quality)
with your direct contact sales efforts. Once you
gain momentum, you can then leverage digital
marketing to reach the quantity of customers.
Have a customer acquisition plan and keep
measuring against it at periodic intervals.
Adjust your efforts / techniques based on the
target vs actuals

p.11

Handling Setbacks - Recap

How to recover quickly Prevention & Cure
Prevention;

Cure;

Business Model
Failure

Focus on the most important Feature valuable to your

customer and start charging early on . The sooner you
experiment your startup hypothesis, validate
assumptions, and mitigate risks the better chances you
have in avoiding Business model failure

Re-Analyze Problem-Solution Fit & Product-Market Fit.

Re-define and execute on your MVP. Take help from
mentors & peers. Discuss your business model with
mentors and peers to bring further insights in Pivoting
if required

Missing Deadlines /
Lack Of Time

Use of some project management tracking productivity

tool is always better than conventional Excel. Always
understand your teams important vs. urgent tasks and
monitor continuously Focus On right tasks

Step 1. Identify the critical tasks to validate your MVP

Step2. Identify Risks & Mitigations Step 3. Update your
project management plan based on current status

Financials Over
Budget / Funding

Follow 80/20 rule in planning your budget controls. 80%

of the costs typically come from 20% of the resources
(Example: software development) Spend enough time in
evaluating the cheapest route on minimizing this 80%
expense upfront

More money is not the answer. Accept sunk costs,

leverage implemented development efforts and reexamine the prevention approach mentioned

Lack/Loss Of Key
Resources

Identify critical resources (Skills) required upfront and

evaluate outsourcing options for all the non critical
resources required. Dont start capital spending unless
you have key skills required within your team. Focus on
finding the resource first. Development can always be
expedited if right resources are onboard

Let go of bad resources (people / tools, other) as soon

as you realize they are not working, instead draining
your energy. Find better resources by joining meetups
were like minded skilled people are hanging out.

Hit With
Unexpected Risks

1. Identify risks upfront 2. Analyze and prioritize them 3.

Develop mitigation plans 4. Assign risk resolution
owners 5. Update & identify risks continuously

Understand the Impact of Risk. Every problem has a

solution. How soon can you solve it is the key to
getting back on track. Talk to mentors & peers for
advice. Spend additional funds to address risk faster.

No Customer
Traction

Talk to real customers in person starting early on. Social

media is wild, have a well thought customer
engagement plan. Engage with customers continuously
through out the development

Assuming Product-Market & Problem-Solution fit are

validated, evaluate newer marketing techniques
(Social media, Guerilla Mkt, Customer hacking). Refer
to the 19 ways mentioned in this eBook & try the next
channel.

5
6

p.12

Success = Planning + Execution

Execution is the art of getting things done

Key Concepts For

Success

perfect execution
strategic execution
the science of
startups

Perfect Execution

Strategic Execution

The best selling book by

Larry Bossidy and Ram
Charan has the title
Execution The discipline
of getting things done.
Perfect execution is an
extension to this definition.
Startup life is chaotic and its
easy to get caught in the
whirlwind of daily firefighting
and lose focus on more
important things. Keeping
focus of the team and the
habit of getting important
things done is the core of
Perfect Execution.

Key to success is simplifying

strategy to tactical activities
that result in achieving the
goals; and keeping the team
focused and getting these
tasks done. The activities of
the team will be in flux
depending on
circumstances. Keeping
team tasks nimble and
aligned to strategic needs is
the ultimate challenge. It is
the key differentiator for
winning at execution.

The Science Of
Startups
I wish we could say there is
a formula for success. Next
best thing is to use
productivity tools that keep
your team tasks aligned to
the strategic needs. One
simple and effective tool to
use is the A3 Management
Process popularized by
Toyota. At Entroids.com, we
understand the need for
speed and consistency in
getting results. It is one way
to automate productivity
and promote team
accountability.

Strategy without tactics is the slowest route to

victory. Tactics without strategy is the noise
before defeat.

Sun Tzu

p.13

Thank You

Please help improve and develop this E-book to be the voice of Startups

vijayk@entroids.com

About the Author

About the eBook

About Entroids.com

Passionate and fiery cross

functional business leader,
who earned his living in
product management and
development.
Having worked over 15 years
in the HVACR and Electronics
industry , one problem I have
faced always was lack of
productivity tool which would
align the strategic needs with
execution continuously.
With the diverse experience
in new product development,
product management ,
marketing & business
development that I have I
have partnered with my team
in solving this burning
problem for product
managers and startup
founders like myself.
I am the co-founder of
Entroids a strategic project
management platform that
helps startups and
corporations get better

I hope you enjoyed reading

this mini eBook as much I
enjoyed writing it. This is a
small step in the journey of
studying the secrets of
success in execution. Please
let me know what you think
of this eBook and of the
www.entroids.com. I hope to
improve this book with your
comments and experiences.

@entroids is striving to
understand the hidden art of
startup execution. Our first
step is to automate startup
activities for faster results
and enhanced team
performance.

p.14

Free Signup
Click Here
p.15