How to WIN the New Venture Challenge & SUCCEED in Business

George Deriso, Leeds School of Business george.deriso@colorado.edu

Data Node

Lesson: Be the of secret!

• Talk to your market (customers)

• Talk to your industry (know your competitors)

• Collect and analyze data (evidence)

• Iterate continuously

The Software Guild

Lesson: Craft the right

• Deliver the value your customer wants

• Deliver your product the way your customer wants

• Work with the right partners

• Keep it simple

Apple

Lesson: Learn to embrace

• If you want to differentiate or innovate, expect to fail

• Make failure OK, and reward risk-takers

• Use failure as a learning tool

• Know when to “shoot it in the head”

MIACO

Lesson: You must have the

• If you want to get s#*t done, hire well

• Be sure you and your partners agree, then put it in writing

• It’s not enough that the Captain can clearly see land, if everyone is rowing in different directions! (Communicate without constraint)

Insession

Requisite Technology

Intermezzo

Solista

Beyond Solista

• 2 years in an earn-out (indentured servitude)

• 2 more technology product & service startups

• 6 sell-side acquisitions (not all mine)

• 3 years on the investor side of the table

• 8 years working with CU and social enterprises

a lot more lessons…

Key Lessons

• Opposite of secret

• Business model

• Embrace failure

• Right team

• Communicate

• Innovate/differentiate

• Validate constantly

• Product/market fit

• Know who you are

• Banish ambiguity

• Improve continuously

• Exploit your network

• Build win-win partnerships

• Cover your legal and accounting bases

Let’s break it down

What the NVC judges want

• A great Executive Summary

• A flawless live presentation

• A clear and understandable business concept

• Validation and evidence

• A plausible business model

• A competent and experienced team

• Evidence of strong support for the business

Let’s work on it

• Your Executive Summary and Presentation will be topics of future workshops

• Let’s focus right now on how you communicate and present your business concept

So…you’ve got a good idea?

Start by being the opposite of secret…

…and be sure to get their perspectives in return!

Evidence of PAIN

• Demonstrate that you’ve talked to your target market

• Demonstrate that you’ve talked to members of your industry

• Prove:

– The PAIN is known and well understood

– Industry and market AGREE on what the PAIN is

Evidence of DEMAND

• Demonstrate that you’ve presented your solution to your target market

• Demonstrate that you’ve presented your solution to members of your industry

• Prove:– The DEMAND for your product is present and

measurable

– The market accepts your solution at your price delivered the way you expect to deliver it

Embody your evidence

• Create a brief PITCH

• Create a succinct ENCAPSULATION

• DISTILL your essence into one word

• Here’s how it looks…

The pitch: <=60 seconds

• What you should include:

– Start with a “hook;” capture their attention.

– What are you about? Mission? Objective?

– What’s the BIG DEAL? Exactly what do you do?

– So what? What makes you different? Why should they care?

– Who’s your target? What problem do you solve?

– Sell yourself – why will you succeed?

– Strong close – leave them with a reason to want more. (This is a good place for a testimonial).

Encapsulate: <=7 words

• Think of this as a 7-word pitch that answers what you are about.

• If this is all you get to say, what will you leave them with? What should they think about you?

• Leave out company name, extraneous details.

• Here’s an example:

“Mobile electronics, proven to simplify your life!”

Distill: one word

• What single word captures the absolute essence of your company?

• Examples:

– Apple “Design.” OR “Innovation.”

– Dell “Efficiency.” OR “Custom.”

– Tiffany “Special.” OR “Luxurious.”

– Prius “Clean.” OR “Thrifty.”

– Hummer “Rugged.” OR “Powerful.”

Why is this exercise important?

• Clarity of your mission

• Foundation of your brand/identity

• Demonstration of intent

• Gets your most important conversations started

• Judges need to walk away from your presentation convinced that you have a great idea and are the right person (or team) to execute it successfully.

You’ve got their attention…

• …Now convince them that you’ve got something.

• You need to PROVE beyond doubt that you have identified the PAIN suffered by your target market…

• …and that you have a solution that your market will DEMAND.

They believe you, but can you execute?

• How well do you know your competitors?

• How well do you understand HOW customers buy products like yours?

• How “connected” are you in the industry? Does your experience align with what you are intending to do?

They believe you, but can you execute?

• In what stage of development is your product?

• Do you have the right team in place?

• What is your business model and how have you proven it will work?

How will you PROVE your business will work?

• Best way is to have sold something…repeatedly.

• Next best is to present evidence that your target market will buy at the price you want, once your product is available.

• In both cases, your business model must make sense.

Your business model

• Does your product solve a recognized problem?

• Will your customers buy it at the price you are asking?

• Will your competitors recognize that you have an advantage they don’t?

• Is your marketing crafted in the most effective way for driving demand from your target market?

Your business model

• Do you have partnerships in place that support or enhance your product offering?

• Have you proven your business will survive?

• Does your cost structure support immediate and persistent profits?

• Does your growth plan make sense?

• Will your operations support the business processes necessary to deliver your product?

One last thing…

Jargon:

the dirty little secrets of Geoffrey Moore and Eric Ries.

Applied jargon

• Geoffrey Moore (Technology Adoption Curve)– Crossing The Chasm (1991)

– Popularized “Chasm,” “Bowling Alley,” “Tornado,” and “Main Street”

• Everett Rogers (Market Diffusion Theory)– Diffusion of Innovations (1962)

– Originated “Innovators,” “Early Adopters,” “Early Majority,” “Late Majority,” and “Laggards”

Applied jargon

• Eric Ries (Lean Startup movement)– The Lean Startup (2011)

– Popularized “Lean startup,” “MVP,” “Customer Development” and “Pivoting”

• Every successful entrepreneur– Most entrepreneurial texts

– Popularized “manage cash flow,” “make something people will buy,” “market testing,” “build on your successes,” and “fail, fix and try a new approach”

Judges hate jargon…

…present your plan in simple terms using plain English

BTW, don’t use texting abbreviations

And recognize that your customers want plain simple language as well!

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Time for questions…