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Transcript of Ims 2016-workshop-entrepreneurship101-v2-may2016
Entrepreneurship 101 – May 23, Entrepreneurship 101 – May 23, 20162016
R. Paul Singh –
CEO, Startup Strategies (Helping Startups in the Art of Start and Scaling)
Entrepreneur & Educator (Have founded 5 companies with one going public and other three acquired)
rpaulsingh
1
8 Steps To A Startup Journey8 Steps To A Startup Journey
Readiness and IdeationReadiness and Ideation
3
New Revenue
Why do you want to be an Entrepreneur?
What are the components of a Startup?
Where do ideas come from?What kind of a startup are you building?
EmployeeSmall BusinessOwner
Entrepreneur
Why Do You Want To Be An Why Do You Want To Be An Entrepreneur?Entrepreneur?
How long can you go without a check?
Startup = 3xPassion +2xPerseverance Startup = 3xPassion +2xPerseverance +1xPracticality+1xPracticality
5
Perseverance
Practicality
Where Do Ideas Come From?Where Do Ideas Come From?
What Kind Of A Startup Are You What Kind Of A Startup Are You Building?Building?
7
New Revenue
Comparing The 3 Types Of Comparing The 3 Types Of StartupsStartups
8
New Revenue
Insurance Cost-Savings New RevenueSecurity, Compliance
Cheaper &/or Faster
Create new revenue opportunities for target customers/users
Got to buy one of everything - CYA
Must fit into existing way of doing things
Rethinking existing tasks & simplifying it
Easiest to penetrate
Most difficult to penetrate
First mover advantage
Difficult to scale
Cost of sales highest
Difficult to get started but then easier to scale
Palo Alto Networks, FireEye, Mobile Iron
Many Storage Companies
Uber, FB, Salesforce, Hadoop, Docusign
Which Company Do You Prefer?Which Company Do You Prefer?
9
Of
Of
Control stays with you
Control lies with the investors
Time To Think About Founding Time To Think About Founding TeamTeam
10
New Revenue
Should I go lonely and for how long?
How many founders?How about my best friends and or family?
What skills should we have in the founding team?
How do you divide equity?How does equity work in the company lifecycle?
Number of FoundersNumber of Founders
11
New Revenue
It is always lonely at the top
1+1 can be 11
How many is a crowd?
Types of FoundersTypes of Founders
12
New Revenue
How to Divide Equity Between How to Divide Equity Between FoundersFounders
13
New Revenue
Least ConfrontationalLeast Confrontational
Both @ Similar LevelStarted at about the same timeSame level of commitment
Doesn’t need to be divided equallyDoesn’t need to be divided equally
One was working for over a yearOne is way more seniorOne can increase value significantly
3Ws of Product Value 3Ws of Product Value PropositionProposition
Link to Videos on various topics:http://www.indtvusa.com/video-on-demand/vod-tie/tie-institute-r-paul-singh/
Know Thy CustomerKnow Thy Customer
Segmenting & Finding your Segmenting & Finding your CustomersCustomers
Market Sizing – Top Down but with Market Sizing – Top Down but with SegmentationSegmentation
Source: http://lsvp.com/2011/03/16/how-to-estimate-market-size/
Why you - Where to Why you - Where to Start?Start?
Where is your Elephant?Where is your Elephant?
BA
C
One More thing – from DilbertOne More thing – from Dilbert
Some Examples – Zoom.UsSome Examples – Zoom.Us
Some Examples – Dropbox.ComSome Examples – Dropbox.Com
Some Examples – Box.ComSome Examples – Box.Com
Validation ProcessValidation Process
Validating the ideaFirst Step in ValidationGet out of the officeTime for MVPDefinitionProcessHow to decide features
Now that you have an Now that you have an ideaidea Let us Validate Let us Validate
Time to do some serious web surfingHow do customers solve this problem today?What kind of competitors exist? Do you know their product inside out?Some products lend well to placing some ads and creating landing pages to see the response
Some products can even be sold before they are ever built.
Check https://www.entrepreneur.com/article/233408
First Step in Validation is First Step in Validation is EasyEasy
Time To Get Out Of The Time To Get Out Of The Office To ValidateOffice To Validate
Time To Get Out Of The Time To Get Out Of The Office To ValidateOffice To Validate
Find your targeted customersDo they perceive the problem to be as big as you thought?
Are they willing to pay and how much?
If not priced really low, would they have the budget
Time to now validate with an MVP
What is an MVP?What is an MVP?
“The minimum viable product (MVP) is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort”
Eric Ries Lean Startup Methodology
What is not an MVP?What is not an MVP?
MVP Is Really a ProcessMVP Is Really a Process
Credit to Andrew Floyd over at http://blog.b60apps.co.uk/selecting-the-right-features-for-a-minimum-viable-product-mvp
How To Decide Features Of MVPHow To Decide Features Of MVP
Taken from Primož Škerget Medium Article
Getting Your First Getting Your First CustomersCustomers
Understanding Sales CycleFinding SuspectsGetting ready for first customer meeting
How to qualify suspectsFrom customers to referenceshttp://
For more details watch videos onwww.indtvusa.com/video-on-demand/vod-tie/tie-institute-r-paul-singh/
Understand Sales ProcessUnderstand Sales Process
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Suspects
Prospects
Customers
References
Qualification Wall
Follow-up Wall
Love Wall
Finding Suspects Finding Suspects
HOTWell Known
Your Address BookYour Customer’s Social NetworksGet Out Of The Office ◦Trade Shows, Conferences, Meetups
In-bound Marketing
How to get the first meeting – It is How to get the first meeting – It is all in the Messageall in the Message
Great Subject makes Suspects open messages◦Save xy% with our◦Special offer◦How would you like to….◦Would like your feedback on….
Focused Body will get a better response◦Short focused content focusing on one thing at a time
◦Put yourself in customer shoes◦Be very clear on the action you want – seek a meeting
Getting ready for your first Getting ready for your first customer meetingcustomer meeting
Online presentations are harder – Why?Make Suspects feel important – Add their logo, ask about their problem, how they do it todayHave as little content on each slide as possible◦Don’t use power point as teleprompter◦Too much content causes distraction◦Don’t try to make every point in first meeting
Slides are the least important part of presentation
Is this Suspect Qualified?Is this Suspect Qualified?
From Prospects to Customers From Prospects to Customers Tact, Time, Follow up, SupportTact, Time, Follow up, Support
40
Suspects
Prospects
Customers
References
Qualification Wall
Follow-up Wall
Love Wall
Crossing Follow-up WallCrossing Follow-up Wall
How many & who are involved?
From Customers to ReferencesFrom Customers to References
42
Suspects
Prospects
Customers
References
Qualification Wall
Follow-up Wall
Love Wall
Crossing Love WallCrossing Love Wall
Love should be built into the productRed carpet welcome, on-time supportCan you buy love?Now that you got love – what to do with it?
One More thing – from DilbertOne More thing – from Dilbert
FundingFunding
Are you ready to give up control but grow with or without you?
How much money to raise and when?Crowd fundingSeed RoundFirst Round or Series ADilution is something you must add to your vocabulary
Founder’s, Investors and Company may not always have the same interest
Funding – Understand Funding – Understand Alternatives and RequirementsAlternatives and Requirements
Are you ready to give up control but grow with or without you?
How much money to raise and when?Crowd fundingSeed RoundFirst Round or Series ADilution is something you must add to your vocabulary
Founder’s, Investors and Company may not always have the same interest
Seed FundingSeed Funding
• Usually <$1.5M• Convertible Vs Priced• Friends & Family• Professionals who do Seed - Angels• Super Angels or Small Funds• Presentation needs vary• What will you be able to show@the end of Seed Funding
Crowd FundingCrowd Funding
• Kickstarter• Indiegogo• gofundme• Beware of Fees • From 4-5%+3% • Become Marketing
• Angel List• CircleUp – B2C• Fundable• Jobs Act – May 16• $1M no audit • $2M audit
Incubators Vs AcceleratorsIncubators Vs Accelerators
• Mentorship• Usually no Cash• No equity• Long time• University or CorporateSponsorship • May come with Coworkingspace
• Mentorship• Usually some cash• Some equity 3-7%• Short term classes• YCombinator• TechStars• TiE LaunchPad• Google LaunchPad
All VCs Are Not EqualAll VCs Are Not Equal
Getting Ready For Your Funding Getting Ready For Your Funding PitchPitch
Remember 3Ws – Who, What and WhyTraction is a keywordGo to market trumps manyHow much money do you need & why?Pitch Deck – 8 to 12 slidesExecutive Summary – 1 to 2 Page
Some Go to Market BasicsSome Go to Market Basics
<$500$500 To$1,000
$1,000 To$5,000
$5,000+
CAC = 3 to 6 Months of RevenueAnnual Vs Monthly
How Does Equity Work?How Does Equity Work?
53
Founder 150 Shares
Founder 250 Shares Just the Founders
Founder 150 Shares
Founder 250 Shares
Adding EmployeeOption Pool @20%
Option25 Sh
Convertible Debt Raised from Angels @ 25% Discount
How Does Equity Work?How Does Equity Work?Series A Raised $5M at $5M Pre-MoneySeries A Raised $5M at $5M Pre-Money
54
F150
Did Founders lose or gain?
F1 owns 20% of the company & $2M worth of equity
CommonStock
PreferredStockVs
F250
O25
Investors Shares125
How Does Equity Work?How Does Equity Work?Series B Raised $25M at $100M Pre-Series B Raised $25M at $100M Pre-
MoneyMoney
55
F150
Did Founders lose or gain?
F1 owns 16% of the company & $26M worth of equity
SeriesA
SeriesBVs
F250
O25
Investors Series A125
What Is Needed At This Stage?What Is Needed At This Stage?
Some Thoughts on GrowthSome Thoughts on Growth
Focus on getting your sales process rightBuild a team as passionate as youSet a company culture with core set of valuesGet an experienced operations executive if you don’t have such a person in the teamNot enough time to go into details
Understand Exit ScenariosUnderstand Exit Scenarios
Most companies get acquired◦Some for technology and people◦Some for early sales and new markets/customers
◦Some for their growthIPO was very entrepreneurs’ dreamWhat do your investors want?Don’t just get rich, make others rich too
8 Steps To A Startup Journey8 Steps To A Startup Journey
Zig Ziglar