{"id":853,"date":"2016-07-22T12:26:30","date_gmt":"2016-07-22T12:26:30","guid":{"rendered":"https:\/\/gec.whooom.nl\/?p=853"},"modified":"2021-02-15T14:54:33","modified_gmt":"2021-02-15T14:54:33","slug":"introducing-and-explaining-the-golden-egg-check-matrix-for-startup-strategies","status":"publish","type":"post","link":"https:\/\/goldeneggcheck.com\/en\/introducing-and-explaining-the-golden-egg-check-matrix-for-startup-strategies\/","title":{"rendered":"Introducing and explaining the Golden Egg Check Matrix for startup strategies"},"content":{"rendered":"

Startups want to become successful and investors want to invest in successful startups. But how can one estimate which startup is likely to\u00a0become successful and how can one develop strategies to increase the probability of startup success? In this blog post we introduce our methodology; the Golden Egg Check (or: GEC) Matrix, also known as Startup Matrix.<\/strong><\/p>\n

The\u00a0Startup Matrix is created\u00a0by Golden Egg Check to visualize the most essential success indicators of an early stage startup or business case: (short term)\u00a0feasibility<\/strong>\u00a0and (long term)\u00a0potential<\/strong>. The rationale behind this is that startups not only\u00a0need\u00a0to have the potential to generate cash in the long run, but they also have to be able to actually reach that potential before they run out of money and die in the \u2018valley of death\u2019. Short-term survival and long term success should be in balance.<\/p>\n

In a way, the Startup Matrix is the startup equivalent of the\u00a0BCG matrix<\/a>. This famous model is not applicable to\u00a0startups as one of the two variables, market share, is close to zero for any startup. Moreover, there can be a situation where a startup is gaining a large market share in a niche market, or a small market share in a mass market. Market share is not the dominant metric for a startup.<\/p>\n

Nevertheless, the Startup Matrix has a similar usability and four quadrants, which we will introduce below.<\/p>\n

\"\"<\/p>\n

Hobbyist<\/strong>: This is a startup with limited feasibility and potential. The commercial success of this type of startup is expected to be low, and this startup should be repelled or adjusted significantly. In lean startup terminology: it\u2019s time for a pivot.<\/p>\n

Consultant<\/strong>: This type of startup generates enough cash in the short term, but lacks an interesting commercial perspective in the long run. This could be interesting for the time being but is not a startup to invest in for a typical venture capitalist, unless the long-term benefits can be increased. Please bear in mind that this can be a low-risk type of startup where you can make sufficient money and enjoy your career, which can be great for a lot of (aspiring) entrepreneurs.<\/p>\n

Dreamer<\/strong>: This is a common type of (innovative) startup: success is projected in the long term but the startup has a low feasibility in the short term. This could be problematic, as the potential of the startup cannot be (fully) reached due to liquidity problems. Many high-tech startups are in this quadrant, where they have long time-to-market and will need deep pocket to get their first customers.<\/p>\n

Money Maker<\/strong>: This startup has both long term potential and a solid strategy to reach it. As a startup, you ideally are in the Money Maker quadrant. Also, this is the most interesting type of startup for investors, because the risk-return ratio is better aligned.<\/p>\n

To use the Startup\u00a0Matrix, analysts plot a scatter graph to rank and analyze a (portfolio of) startup(s) on the basis of their feasibility and potential. We use Golden Egg Check\u2019s criteria to assess both aspects. Golden Egg Check\u2019s \u2018investor readiness check\u2019 contains 21 criteria that (venture capital) investors find most important in their assessments. Each of these criteria is categorized into \u2018potential\u2019, \u2018feasibility\u2019 or both. For example, if a startup can demonstrate a market demand, then it has some proof that its value proposition fits with the market, increasing its feasibility. Moreover, if a startup has a scalable business model in a large and\/ or growing market, then it is designed to scale and grow fast, adding up to its potential.<\/p>\n

Strategies to become a Money Maker
\n<\/strong><\/h4>\n

A successful startup has potential\u00a0and<\/em>\u00a0a strategy to reach that potential. Successful startups can therefore be found in the Money Maker quadrant. Startups not (yet) in the Money Maker quadrant can develop strategies to eventually reach this quadrant. Below we\u2019ll share some of the most important findings so far. More (extensive) strategies will be added to this blog later.<\/p>\n