1 application workshop december 3, 2010 sabin environmental prize

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Application WorkshopDecember 3, 2010

Sabin Environmental Prize

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Sabin Application Info

Letter of Intent due Jan 14Full Application due March 4• Today: Researching your idea• Jan 21st – Financial issues• Feb 11th – Writing &

Presentations

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Sabin Questions

• Idea (what is it – what is appealing)

• What is original (unique advantage)

• What have you done so far (stage)

• Next steps – what do you need to do?

• What is the environmental benefit?

• Who is on your team?• How much $ do you need? Use

of prize?

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Judges in 2010

• Andrew Sabin, prize funder & investor

• Rosemary Ripley – NGEN – investor

• Konstantine Drakonakis – Launch Capital - investor

• Sally Fan, Deutsche Bank - investor

• Ralph Earle, Assabet, consultant to investors, investor

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Judges are Investors by Day

They want to:• Hit a homerun (big financial

upside)• Avoid known losers (high

failure rates)• Minimize risks (pick the surest

thing)• Back winners (proven track

records)

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Ideal Investor Characteristics

Exciting company• Unique Product / Service • Large potential market• Rapid growth prospects

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Unattractive Sectors

• Restaurants -- one location

> Too many cooks

> 80% bankruptcy rate

• Retailing -- one location

> Too easy to enter

> 80% bankruptcy

rate

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More Unattractive Choices

• Consulting

> Not scalable

> No need to raise $ from

others

• Some International Businesses

> Depends on your access

> Also, perspective of the

judges

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Avoid

Ideas with Large Capital Requirements

Need to buy an island?Need to buy an island?

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Consider...

Do you have:• The skills to make the venture

happen?• Or, an “in” to acquire those skills?

If not, your application is just creative writing

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Most Important Question

• If the idea is so great...• Why hasn’t anyone done it

before?

• Might be – Technology didn’t exist before

• Might be – it just won’t work!

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The Best Ideas

Come from your own experiences

• School, jobs• Hobbies, family• A problem you’ve faced

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Themes of the Day

You want to communicate an idea that:

• Addresses a big, exciting opportunity

• In a new, unique, innovative way

• That is feasible and believable• With great people on your

team

To Win Contests (or Raise $)

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Idea: Big, ExcitingOpportunity

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The Need or Opportunity

•What is it?•How large is it ? • Is it growing ? By how much ?

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Caution: Use Data, Sources!

• Your opinion about a need has little value

• You want to win contests….• Do research! • Industry reports, articles,

interviews, etc.

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Caution: Look at the Right Market!

GreenCleaning.com will sell all brands of environmentally friendly cleaning products – on one website.

Cleaning product sales in the US were $28 billion in 2009.

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GreenCleaning’s Market

• Green cleaning products Say, 5% of all cleaning products $1.4 billion

• Sell them (not make them) Say, for a 10% commission

$140 million - not $28 billion!

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Research the Interest

• Who are the customers?• How many are there?• What do they want?• What can you do for them?

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Caution: Don’t Assume!

• Your ideas about customer have little value

• You want to win contests….• Do research! • Do interviews & surveys!• Get someone to sign up!

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Caution: Get the Customer Right!

GreenCleaning will sell its own brand of environmentally friendly cleaning products – in retail stores.

• Who is the customer?

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Caution: Get the Customer Right!

• The customer = stores• Stores’ customers = consumer

• You must appeal to the consumers

• But you also must understand customer needs – and meet them

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Caution: Get the Customer Right

GreenCleaning.com will sell all brands of environmentally friendly cleaning products – on one website – for a commission.

• Who is the customer?• Cleaning product companies

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Testing Customer Interest

Develop a one page product description

• What does it do ?• How does it work ?• List the main features• List main benefits -- to

customers

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Use the Product Description to:

• Conduct interviews • Do surveys• Ask customers if they want your

product !

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Find Out:

> Do they like your product ?

> Will they buy/use it when it is

ready ?

> Will they pay the price you’re

asking?

> Do they have any issues /

concerns ?

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Surveys

• Survey Monkey = online survey

product Easy, nice looking

Includes analysis tools

Free for short, simple surveys

• Keep your survey short, simple

• Test your survey before sending!

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For Your Application

• Describe your venture (what will it do)

• Also, the need / opportunity• And the customer (who will pay

for it)• Include secondary research

data• Quote your interviews• Present your survey data

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Unique: Innovative,Competitive Advantage

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What is Innovative?

• How is your idea – unique?• Different from the competition?• Different – from alternatives?

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The Competition

• Who are the competitors ?

• How do they compete ?

• How are you different ?

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What is Innovative?

• Always more competition - than you think

• Compare major features of your product> To all competitors’ products

> To doing things “the old way”

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Construct a Competitor Grid

Reason Co. A Co. B Our Co.

Price X X

Reliability X X X

Env Benefit X X

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Caution: Be Objective!

• You saying you are better = little value

• You want to win contests...!• Why, objectively, are you

better?• Did customers say you were

better?• Admit where you are not better

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If your Grid Looks like this….

MadeCompetitor By Us Better Cheaper FasterOur ServiceCompetitor ACompetitor BCompetitor C

MadeCompetitor By Us Better Cheaper FasterOur ServiceCompetitor ACompetitor BCompetitor C

X

X XX

XX X

X

Buyer has no reason to switch -- probably won’t

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Beware the Status Quo

• People hate to change• Or to pay -- for what was free

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Key Avenues For Investigation

• Why has no one done this

before ? Technology didn’t exist?

New regulations or incentives?

It won’t work for some reason….?

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Unique, Big Idea: Example

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• Fresh farmed tilapia fillets• Purified and filtered re-

circulated water• “Seafood Safe” and Organic• 100% organic feed

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Evidence of Opportunity - over 3 years:• US seafood consumption up 12% - $12

billion• US tilapia consumption up 110% - $400

million• Demand for organic meat & fish up

120%

Over 70% of Americans would by organic seafood if available; 60% ‘strongly

prefer’ domestic

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Customers • Suppliers of restaurants,

grocery & fish stores• Also, Trader Joe’s, Whole Foods

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Talking to customers:• 450 chefs and 150 retailers

Most prefer environmentally friendly fish

• Local restaurant owner: “customers care”

• Wholesaler: “Not enough good farms”

• EcoFish: I will buy all you have to sell

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Competition• 96% of tilapia

– imported, mostly frozen, not organic

• Most US farm-raised – small, not organic

The Good Fish tilapia will be more expensive vs. competitors

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Feasibility: Making it Happen

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Demonstrate:

• You have a detailed strategy

• You’ve made some moves

• You know what the next ones are

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Issues to Cover

1. How will you make your product?

2. How will you get customers to buy it?

3. How will you start – and expand?

4. Who will run your business?

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Make a List

• What are your product “inputs”?

• What kind of facilities do you need?

• What is your production plan? • How will you deliver to

customers?• How will you provide ongoing

service?• How will you handle HR,

finance, legal?

Research the answers!

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People might be your main “input”

• Skilled managers• Customer service• Engineers, scientists, IT• Support functions

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People Issues

• What skills should they have?• How many people will you need –

to start?• How many – as you grow?• Where will you find them?

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Making the Product Feed: Organic vegetarian Staff: Monitor equipment, move, clean,

fillet fish Facilities: series of tanks (“Pod

System”), heating, warehouse space Production planning: 28 week growth

cycle Delivery: Distributors pick up Byproducts: Waste and offal

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Getting Customers to Buy

• Selling• Advertising• “PR”• Partnerships

Key Challenge

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Two Main Categories

• In person Sales Force• Direct Marketing

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How to Decide?

• Complicated or Simple?• Must be “test driven”?• Expensive or Cheap?• Custom or Standard?

What Kind of Sale Are You Making?

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Sales Force is Probably Necessary

If the Sale:• Involves education• Requires a lot of customization• Is expensive or risky

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Sales Force

• Door-to-door• In-store• Telesales

• Door-to-door• In-store• Telesales

• Strong track record

• Industry contacts

• Product Expertise

• Strong track record

• Industry contacts

• Product Expertise

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Sales Tools

• Conferences & Trade Shows• Joining industry

associations• Buying customer lists • Company brochures• Customer specific sales info• Demonstrations

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Direct Marketing

• Mailings• Yellow Pages• Email• Print Ads• Television

• Mailings• Yellow Pages• Email• Print Ads• Television

• Newspaper inserts

• Coupons• Flyers• Catalogs• Radio

• Newspaper inserts

• Coupons• Flyers• Catalogs• Radio

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Internet Marketing

• Web Sites• Key word search• Sponsored Links• Ads with online

trade journals• You Tube Ads

• Web Sites• Key word search• Sponsored Links• Ads with online

trade journals• You Tube Ads

• Banner, pop-up ads

• Blogs• Yelp• Groupon• Facebook• Twitter

• Banner, pop-up ads

• Blogs• Yelp• Groupon• Facebook• Twitter

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Web Sites

• Not a sales tool, on its own• Must drive people to it• Search engine

optimization?• Buying key words?

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“PR”

“Free” exposure in:• Newspaper reviews• TV stories• Industry publications• Celebrity photos

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Develop Partnerships

• New homeowners – Real estate agents

• For kids’ programs -- Schools• People with health conditions –

Doctors • Churches, libraries, nonprofits

Keep in Mind:

They will only partner with you if there is something in it for them!

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Find Out:

• Will they partner with you? • What do they want?

A share of your Sales?

An exclusivedeal?

To do good?

Another servicefor their

customers?

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Green Brides

“Partnering” with the Wedding Institute

• Green Bride makes online course

• Wedding Institute sells it to students

Wedding Institute getsFree contentHalf the $ from the courses

Green Bride getsExposure to wedding plannersHalf the $ from the course

Wedding Wire agreed to the partnership

It’s clear what both sides get

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Getting Customers Strategy Hire Sales Force Visit customers, explain the benefits List in organic seafood directories Advertise with trade associations Host events, tours, tastings

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How will you Start – and Expand?

• Start small• Prove you can do it -- then

expand

CT

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How will you Start – and Expand?

Start in New Haven then go to Hartford?Start with one product, then add?

Sell in one store, then more?

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What have you done so far?

• If you’ve done something – risk is lower

• Do you have a sample product?• A first customer?• A potential customer – in

writing?

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Team (who’ve you got?)

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Investors will Say: Keys to Success

People People People !

People People People !

More important than everything else -- combined

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Your Team

• Who are the Yale members?• What roles will they play?• What skills, experience do they

have…• Directly relevant to your

business

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Management Strategy

• Key management people – skills?

• Who are you missing – but will hire?

• Advisory board or board of directors?

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Environmental Benefit

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Final Words of Advice

• Do your homework Use data, research – talk to

customers Not just your opinions

• Try to do something – now - to risk

• Think like an investor!