Lead to Win

Lead to Win

Lessons from Start Up experiences along the road from Idea Park to Main Street07, 2009

Dave Thomasdave@bedarra.comwww.davethomas.net

Lead to WinSlide 2

Agenda

• Lessons from Start Up experiences

• Brief Background for Context• High Tech Founder versus Entrepreneur?• So What Makes Your Business Special?• Know and Respect your Competitors!• Don’t Play Company – Execute • Advisors, Board Members and Executive Team• Geoffrey we are not crossing the chasm any more• Shut Up and Ship!• Crossing the Border• Partnering and Alliances

Lead to WinSlide 3

Lesson

• Upon completion,– You will know about

• Many common mistakes that Start Up founders make

– You will know how to• Recognize the potential mistake

• Take an alternative positive action or seek advice

Lead to Win

Brief Personal Background

• Professor Engineering, Business and Computer Science

• Start Up Experience – CBIS, DY-4, DCS, 4Ys, IF Interface, OTI, OLL, Bedarra Research Labs

• OCRI Founder

• Competitive Analysis and Technical/Business Due Diligence

• Investor, Advisor, Board with 25 startups over 30 years in Canada, Europe, Australia and Anguilla

• Angel Investor and Limited Partner

Lead to Win

Business is Easy Just 1 - 2 - 3

• Know how to Sell

• Know how Build

• Know how to Get Along

If you are not doing all of these well or you are wasting time doing something else watch out!

Lead to Win

High Tech Founder versus Entrepreneur?

• An Entrepreneur can sell ideas, concepts and barely working code

• If you can’t sell it how can you get a sales person to sell it• If you can’t sell it now how will I know if you can sell it

after I invest $$$$?• Entrepreneurs SELL

– their personal Brand– their Expertise– their Seminars, Courses– their Services– their Solutions– their Products

Lead to Win

So What Makes Your Business Special?

• These DON’T!– We have great people!

– We have an amazing technology!

– We care about our customers!

The above everyone expects!!

• What is your business model? – Not The Long Tail

– It is a $$$B market so we only need a small %

• Elevator Speech – What is the pain and what is the gain!?

• Is this a first to market play?

• Is this a sustainable competitive advantage play?

Lead to Win

Know and Respect your Competitors!

• Know the companies that define your market

• Know their products/positions on the market

• Know thought leaders in your market

• Know the strengths of their team and their products

• Know what the market analysts/pundits are saying

• Know who your competitors may be tomorrow

Lead to Win

Don’t Play Company – Execute

• Org charts, titles ...put someone in charge and hold them accountable

• Have the answer to the important questions ready– How much to buy the business?

– How much equity will I get if I work for you or if I invest?

• Make virtual as much as possible!

• Short and simple Shareholder Agreements

• Hire only when you need it

• Check everyone’s references

• Insist on 3 month reviews

Lead to Win

Advisors, Board Members and Executive Team

• You want people who have experience who will disagree with you and your team

• They provide advice, it should be challenging and not all agree with each other!

• Don’t create a board until you really need one

• Don’t retain someone because you don’t understand the area or don’t like it – accounting, marketing, development…

• Pay everyone even if it is an IOU which may bounce

• Check the references from other founders

• If they all same something is wrong it likely is?

Lead to Win

Crossing the Chasm – So Old 90s!

• VC is scarce and IPOs exits are non-existent

• Debt financing is limited to larger companies

• There are a few major players who are doing most of the business and most of the acquisitions and control much of the access to major customers– IBM, MS… spend more on marketing and acqusitions than the

total amount of VC available

• You may need to marry an Elephant to be your one true Partner for life

Lead to Win

Sell Value Not Price

• Your sales process needs to sell value otherwise it will only sell price

• What value does your company add to the client to improve their bottom line or time to market?

• Fixed Price with Warranty

• Work for Hire make the IP is cheap/free, value add is what customer pays for so you can enhance the IP and keep it

• Initial OEM – sell the NRE, discount the royalty

• Include 1 year support 15-20% in the deal

• Include skills transfer (make them smarter)

Lead to Win

Shut Up and Ship!

• Have a disciplined process such as Agile with 2 week sprints and 3 month release time boxes (or shorter)

• Buy versus Build?

• Build on technology with known risks

• Only hard decision is what to leave out!

• Isn’t there a clever, faster, simpler way to do this another way?

• How are our competitors doing it?

Lead to Win

Crossing the Border

• Which border?

• Which location?

• What will it cost now?

• What will it cost later?

• Leverage CDN trade offices in major cities

• Leverage relevant conferences

Lead to Win

Partnering and Alliances

• Ants and Elephants – the right to sell

• Elephants want Ants to be loyal to only them

• Focus in a vertical they talk to each other

• Sell complementary value to their great product

• Get references from their customers

• Make it worth their while to push your stuff

• Geographic Partners

• VAR or OEM Partner