Typically MBA programs are not designed to create startup founders but to forge the next generation of top management for large corporations. Hence, in this article I do not want to list the obvious startup frameworks, like the Lean methodology Build-Measure-Learn or the Business Model Canvas that rather made it from the startup world into the MBA programs. I want to share more traditional tools that I learned during the HSG MBA program, which I believe every (HealthTech) startup founder should know.
Strategy Tools
Let’s start with my favorite topic, Strategy. Strategy is basically your long-term plan to achieve a well defined goal under uncertainty. Hence it is important to understand your market, competition, customers and internal capabilities. If you want to read more about What is Strategy, read this article by strategy guru Michael Porter.
1. Porters 5 Forces
One of the most famous frameworks are Porters 5 Forces. Especially in the healthcare market (one of Michael Porters favorite topics as he laid the foundation for value-based healthcare, see article) this framework helps to evaluate the relevant players in the market and identify the risk for you business model. The higher the rivalry, the lower will be the profitability of your business model. Consider Digital Health Apps in Germany for example, with multiple players in the same segment already in the first few years. Threat of new entrants is relatively high because solutions can not be patented, there are certainly substitute products and buyers (insurance companies) have a large bargaining power.
2. PESTLE Analysis
The PESTLE framework examines the Political, Economic, Social, Technological, Legal, and Environmental factors that could impact a business. For HealthTech startups, this tool is particularly useful for understanding the broader macroeconomic environment in which they operate. For example, changes in healthcare regulations can drastically alter market dynamics, making PESTLE analysis critical for strategic planning.
Example: A startup aiming to introduce a telemedicine platform in Europe used PESTLE analysis to identify key differences in regulations and healthcare infrastructure across various countries. This analysis helped them prioritize markets with favorable conditions, such as strong internet infrastructure and supportive regulations, while delaying entry into more challenging markets.
3. SWOT Analysis
SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is a cornerstone of strategic planning. By identifying internal strengths and weaknesses and external opportunities and threats, startups can develop strategies that leverage their strengths and mitigate potential risks.
Practical Application: For instance, a HealthTech startup with a strong R&D team but limited marketing experience might focus on developing innovative products (a strength) while seeking partnerships to improve their market reach (addressing a weakness).
Fundraising Strategy: SWOT analysis is also invaluable in fundraising. Investors often look for a clear understanding of a startup’s competitive advantages and how they plan to capitalize on market opportunities. A well-conducted SWOT analysis can help founders present a compelling case to potential investors, showing that they have a deep understanding of their business environment and are prepared to address potential challenges.
The next set of frameworks and tools are mainly about people management and soft skills.
People Tools
4. Providing Feedback based on Schulz von Thun’s four aspect of a message.
As a founder it is important to provide constant feedback to your colleagues. Positive aspects should be mentioned directly to show appreciation and keep up the morale. Sometimes there can be more delicate topics that you want to discuss in a more confidential 1-1 setting. For such cases I found this feedback framework based on Schulz von Thun very helpful.
Here is how it works:
- Provide an objective observation with factual information. Everyone should see this the same way. It builds the foundation of the feedback.
- How does it make you feel? Be open and share how this situation has affected you or the company.
- Share your values. Make sure it can be understood why it made you feel a certain way.
- Explain your wish for the future. What exactly are you expecting from the person in the future? Be concrete and leave no room for interpretation.
5. Negotiation Tactics
Founders are constantly negotiating, whether with investors, employees, suppliers, or customers.
Here is a structured way to prepare for negotiations:
- Identify your own and the other party’s interests
- List issues and options
- find negotiable items
- Define objective arguments for your goals
- Find best alternatives to this agreement (BATNA) for each party
- Foresee negotiation position of other party
Based on this preparation you can prepare your negotiation strategy. I always carry a business card sized template in my laptop case to go through these topics mentally at least.
6. Factors for a Winning Team
One of your key priorities is to build a functioning team.
Here are five of the most important parts. I adapted it slightly and put Vision in the middle, as I believe leading with a strong vision helps to attract strong individuals (which was in the middle originally). How to define such a vision and achieve great results, I will explain in another blog about the Hoshin Kanri matrix.
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7. Dysfunctions of a Team
Knowing what makes a team work is important, but also what inhibits performance. This Pyramid shows the five most important reasons why a team does not achieve great results (by Patrick Lencioni).
8. Pyramid Principle
Another powerful framework is the pyramid principle, a great concept to provide persuasive ideas and messages. The idea is that you lead with your answer and then back it up through supporting logic and facts.
7. Eisenhower Matrix
Time management is a constant challenge for startup founders. The Eisenhower Matrix helps prioritize tasks based on their urgency and importance, ensuring that critical activities are completed first.
Application Example: A founder used the Eisenhower Matrix to delegate tasks within their team, focusing their own time on high-impact strategic decisions while delegating less critical tasks to other team members. This approach not only improved efficiency but also empowered team members by giving them more responsibility.
Let’s finish this list with a topic that most founders worry about all day long: Fundraising.
Fundraising
8. VC calculation method
Have you been wondering how VC’s calculate your company valuation and if an investment makes sense for them. Here's how they are thinking about it:
- What is the exit valuation for this company? e.g. 100m
- What is our target multiple on our investment? e.g. 10x
- What is the expected retention percentage (dilution)? e.g. 80%
- Today’s startup valuation = Exit value x retention / Multiple e.g. 100 x 80% / 10 = 8m.
- What is the proposed ownership percentage today? e.g. 8%
- Estimate the partial valuation = startup valuation x proposed ownership e.g. 8m x 8% = 640k.
- Investment recommendation: Partial valuation > required investment.
By integrating these MBA tools into your strategic planning, you can enhance your decision-making processes and better position your startups for success. As you embark on your commercialization journey, consider how these tools can be tailored to your unique challenges and opportunities in the HealthTech landscape.
Stay tuned for more insights on leveraging business strategies to propel your startup forward. While reviewing my material I identified over 20 tools and frameworks. Some of them will be presented in the following blogs about strategy management or market, competitor and customer analysis.
Let’s Connect: Foundational business knowledge is crucial to run a company successfully. Reach out if you want to set up your company for success and implement some MBA frameworks.
