Blitzscaling Course Lecture 4.2. Ann Mura-Co: Product, Corporate and Category Value

Original author: Ann Mura-Co
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This lecture was delivered by Anne Muir-Co, one of the co-founders of Floodgate, to which John Lilly joined later in answering questions.

Lecture 1: Introduction
Lecture 2.1: Startup growth stages, “family stage”
Lecture 2.2: Startup growth stages, “family stage”
Lecture 3.1. Michael Diaring. A bit from the history of entrepreneurship and management
Lecture 3.2. Michael Diaring. Questions and Answers with Reid Hoffman
Lecture 3.3. Michael Diaring. Questions and Answers with Reid Hoffman
Lecture 4.1. Ann Mura-Co: The Thunder Lizard Theory. Copyright value
Lecture 4.2. Ann Mura-Co: The Thunder Lizard Theory. Product, corporate and category value.
Lecture 4.3. Ann Mura-Co: Questions and Answers with John Lilly




V. Product Value


Product value is the ability to achieve product conformity with the market. Many startups cannot achieve the transformation of their technical innovations into a real product. Many startups are based on technology that requires a problem that they would solve.

Product conformity to the market is often discussed, but few people correctly understand this concept. Some people say "if anyone in the world likes your product - the product matches the market" - this is not true.

A product corresponds to the market - this is when there is a large and growing market for the sale of your product, and the demand seems limitless.

Take, for example, Instagram - at the time of launching Instagram, its founders specially designed technical support so that from the very first day the hosting was not on internal servers, workstations and systems. After the first 12 hours after launch, their use exceeded the current demand for internal services and required scaling even higher than what was originally planned. The founding team immediately understood what it was necessary to strive for from the very first day.

Usually, if you are the founder of a startup, and you ask yourself - “does my product fit the market?” - that means not yet. As soon as this happens, you will feel it.

Question from the audience - Is it possible to create a new market if you have a revolutionary product?

Of course, this is possible, but it is much more complicated. One example that comes to mind is VMware, which has created a completely new virtualization-based market that never existed before.

One of the types of companies that find it more difficult to feel the product is in line with the market is a market business. The reason that markets usually develop slowly is because they need to be very careful in balancing supply and demand, and it is very easy to upset the balance in the early stages.

Question from the audience - Can you check the market for product compliance with the market before starting to create a product?

Yes, Anne Mura-Co helped Steve Blanc teach courses on customer business development, which is exactly the same.

It is possible to test various hypotheses of our customers and try to conduct various experiments before starting to create a product. What can go wrong is the development of the client’s business, which has more in common with art than with science.

It is very difficult to understand where the experiment went wrong, or where its results were erroneously presented, and where corrections are required. At the same time, real ideas about the actions of the buyer usually do not arise where you expect them - they arise from observations.

For example, when conducting surveys among buyers, you should not seek confirmation of your ideas and thoughts - you need to ask buyers about their life and their problems - and then use this information to find inspiration when creating a real product.

VI. Corporate value


The concept of corporate value can be divided into several elements:
  • A scalable business model that is the foundation of your company
  • company cultural values;
  • the idea of ​​your company;
  • compensation model for the promotion and development of talents;
  • career paths of your employees;
  • ways of communication within the company and the culture of communication.

Many startups with an estimated market value of more than $ 1 billion are looking for scalable business models today, and if you don’t think about it in advance, you will accumulate many organizational problems over time.

For example, at later stages of development, some companies begin to face the following problems:
  • Why do I need these eight CEOs? Is an organizational problem.
  • Why does our compensation and incentive system have many shortcomings and do not encourage employees who have made a really big contribution to the company's activities? This is an organizational problem.
  • Why do our employees not see adequate career prospects for themselves? This is an organizational problem.


In the early stages of development, when evaluating a company, we primarily pay attention to whether the founders pay due attention to these issues. We are trying to understand whether this founder will run the company for a long time, whether he is going to grow to his position and really understand the intricacies of the organizational side of the business.

Question from the audience - How do you define these cultural and organizational issues in the early stages?

In the early stages, you can pay attention to how they select staff. What are they able to refuse to get the best workers?

One of the companies in which we invested has successfully lured the best employees of leading companies from the outskirts of Silicon Valley, even despite the extremely high competition in this market. We saw that the founders spent a great deal of time thinking about who they want to hire, how they interviewed, the compensation structure, and so on. They spent as much time on this as on the product itself.

VII. Categorical value


The final value from the Thunder Lizard's value system is the concept of “categorical value”. This is the ability to take the previous three levels of the system and turn their advantages into absolutely irresistible power.

One of our observations was that the most successful companies spend time creating an entirely new market category for themselves because they do not want to compete on someone else's terms. They want to be the only Thunder Lizard in their valley.

Netflix, for example, didn’t start with being an improved version of Blockbuster. They created their own category, after which they completely destroyed Blockbuster. Another example is Starbucks: who would have thought that people would buy coffee for $ 5, while others would sell it for 50 cents. They created a new category.

Categorical value is the ability of founders to reflect on the language of the market they enter and how they see their company in it. If they allow the market to determine who they are, we pay attention to it.

Question from the audience - Is it possible to create categorical value before the product was created?

It is theoretically possible only due to the fact that these two concepts are individual. Categorical value is more about what you see when you look at yourself from the inside, how you position yourself, and product value is an external characteristic.





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