20110413 founder institute

HOW TO GET A CLUEor, Startup Research for Scientists, Engineers, and Other Geeks

@[email protected]

Founder Institute Singapore13 April 2011

mengwong.com/sg/capital/

mailto:[email protected]

mailto:[email protected]

PITY THE POOR INVESTORwho hears ten pitches a day

The Art Project

Profit?Eww, no.

I’m a social entrepreneur.

Patently Obvious

Due Diligence

VENTURE FUNDR AISING REJECTION

FORM LET TER

Dear Entrepreneur,

! business plan

! slide deck

! in-person pitch.

! Unfortunately, due to the volume of unsolicited content we

receive, we were unable to give it the attention it deserves. Please

ask somebody we already know to refer you, and we will look at

it again.

! Because you asked us to review your materials under

nondisclosure, we are returning them to you unread. We are

unable to sign NDAs.

! We were impressed by your presentation.

! We would like to begin our due diligence process. We will

ask you to repeat your pitch to an expert reviewer sometime

in the next two weeks.

!in that term sheet is not a typo; we are aware that it is not

the valuation you asked for.

! We regret to inform you that we will pass on your opportunity at

this time. !

Please ping us again

! ! if you are able to demonstrate market traction in

accrued revenue.

! Something about you or your pitch triggered a visceral negative

reaction. Please do not contact us again.

! Notably, another investor warned us about you.

! You seem to lack basic social graces, and we don’t like to

work with annoying people.

! Your pitch held promise but we would like further information

about one or more aspects of your plan. See below.

Before we proceed further, allow us to make the following comments

about your presentation:

!unsubstantiated claims.

! you do not understand basic accounting principles: for instance,

for a dot-com.

! please do not read aloud each slide.

! you went way over the allotted time. We’re sorry, but we had to

!

! you should be more precise about what you plan to do versus

what you are already doing.

! every time you said the word “million”, you sounded like you

thought that was an impressively large number.

! it omitted one or more key elements which we will describe

below.

Please review the following presentation-skills guides before pitching

any other investor:

! Presentation Zen

! http://www.garage.com/resources/perfectingpitch.shtml

You must understand that our investment focus is limited to

! pre-seed

! seed stage

! early stage

! growth stage

! pre-IPO

investments only. Your startup is too early / too late / just right for us.

! You’re pre-seed because you have an idea but no prototype or

users.

! You’re seed stage because you have a prototype or some

nonpaying users, but no scalable way to convert those users to

revenue.

! You’re early stage because you have revenue, but are not yet

!only in a small market, and you want to roll out new products

and services to new markets.

! You’re pre-IPO because you’ve got a solid track record of

dominating your market.

!

! Unfortunately, the amount of funding which you seek lies outside

our investment range.

Accordingly, we suggest that you seek funding from a more

appropriate funding source. Have you considered:

! friends and family

! building a prototype on a part-time basis while still working a

day job; but do consider the IP clauses in your contract.

! a local angel association or any angels you know directly

! an institutional venture capital investor

! government assistance schemes

! potential customers

! the venture arm of a large corporation which might be interested

in a strategic investment.

Furthermore, we focus on

! high-technology

! Internet infrastructure

! media and entertainment

! ! ! energy

! biotech and healthcare

! turnaround

not look at our website?

Technology Cluelessness

Prior Art:! ! ! ?

Cutting Edge:! ! ?

Innovation:!! ! ?

How to Build it:! ?

Market Cluelessness

What Doesthe Customer Want:! ! ! ! ?

Who is theCompetition:! ! ?

Name of yourIndustry:! ! ! ?

Research Development&

Research Development&money into ideas

Researchideas into money

Development&money into ideas

Research Development&Technology

Research Development&Technology Technology


know the state of the art


be able to advance itknow the state of the art

Research Development&Market

Research Development&Market Market


know the industry


start selling to customersknow the industry

Alpha geeksscratching

their ownitch


their ownitch

tech research


their ownitch

tech research

tech development


their ownitch

tech research

tech development

market research


their ownitch

tech research

tech development

market research

market development

Be the CustomerDo absolutely everything a frustrated customer would.

Spend hours looking for solutions.

Ask for help on forums.

Go to industry conferences.

Ask your friends and colleagues for advice.

Spend money to buy existing solutions, only to find they’re imperfect.

Do the time!

You may already be doing this in some area of our life. What is it? Ask friends and colleagues what you’re really good at – surprise yourself!

Ten Years of your LifeThis could very well be the biggest accomplishment of your life

Or the biggest failure.

What do you care about enough that you can say, “all that matters is that I tried”?

“I wrote, so I would have something to read” –author

What’s more important than making $10,000 a month and living the good life?

Not everybody has an answer to that question.

Not everybody is destined to be an entrepreneur.

Go tell your ego that that’s okay.

MBA Market ResearchMarket Sizing

top-down / bottom-up

Customer Research

Price Sensitivity

Competitive Research

Features / Benefits / SWOT / etc

Why do Profits Matter?

Money is a measure of value.

Ceteris paribus, the entrepreneur who delivers a greater profit contributes more to society. (modulo “right livelihood”.)

Capitalism means you get to capture the NPV of future earnings and use that to enable the next generation of entrepreneurs.

You can’t take it with you when you die; it’s just a game.

Startups are a humanity more than any other field of business.

Competitive ResearchDon’t skate to where the puck is.Skate to where the puck will be.—Gretzky

Crunchbase.com. ListIO.com. LMGTFY.com.

An invention must make sense in the world in which it is completed, not the world in which it was begun.—Kurzweil

Art and Science

http://www.flickr.com/photos/ncinco/5482521736/



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DIFFERENTIATIONmake new mistakes! —Esther Dyson

Why My Startup Doesn’t Already Exist

Why My Startup Doesn’t Already Exist

1. Actually it does. I’m a clone.… but I’m adding a twist!

2. Nobody’s ever had the idea before.…actually they have, I just don’t know it.

3. It’s nice, but nobody cares.4. It’s nice, but too expensive.5. Previous teams couldn’t

execute.

6. Previous teams too early; external enabler was absent.

7. Lacked secret sauce:internal enabler was absent.

8. Previous teams built too slow or too big.

9. Previous teams weren’t agile enough to keep up with competition.

secret sauce, please

Industry Experience ++

Domain Expertise ++

I have a PhD + –

I have an MBA – –

I dropped out of college ++

why you?why now?

are you riding some sort of disruptive wave?

WE HAVE NO COMPETITION“They tried and failed?” “No. They tried and died.”

PAUL BARANApril 29, 1926 — March 26, 2011

20110413 founder institute

Business

Transcript of 20110413 founder institute