Fall 2010 Technology Entrepreneurship Boot Camp Sponsored by Jackson Walker

1. Fall 2010 Technology Entrepreneurship Boot CampSponsored by Jackson Walker Dr. Cory R. A. Hallam Director UTSA Center for Innovation and Technology Entrepreneurship http://entrepreneur.utsa.edu CITE BootCamp January 2010

2. Technology Entrepreneurship • Technology Entrepreneurship is a major driver of our economy and is growing in San Antonio CITE BootCamp January 2010

3. So Let’s Play Spot the Entrepreneur CITE BootCamp January 2010

4. OK, That was easy – let’s make it a little harder CITE BootCamp January 2010

5. Oprah B) Richard C) Bill D) Crazy Scientist CITE BootCamp January 2010

6. Don’t get confused Between inventors and entrepreneurs • Inventors create new technologies (ideas) • Entrepreneurs create new business (money) • Which one has the better ROI? CITE BootCamp January 2010

7. The former have these CITE BootCamp January 2010

8. The latter have these CITE BootCamp January 2010

9. Do You Have The Courage? CITE BootCamp January 2010

10. Your Weapons: Elevator Pitch, Slide Deck, and Business Plan Dr. Cory R. A. Hallam Director UTSA Center for Innovation and Technology Entrepreneurship http://entrepreneur.utsa.edu CITE BootCamp January 2010

11. Weapons you need • Elevator Pitch • 30 Second story that sticks • Slide Deck • 10-20 Minute story with nice pictures • Executive Summary • From the business plan, the words that describe your slide deck in 5 pages • Business Plan • Detailed financials and answers to every question ever thought of in the entire universe • Or at least great financials and management CITE BootCamp January 2010

12. A Checklist for Opportunity Evaluation(J. Picken UTD) • You must begin by understanding the basic transaction: Why is someone (your customer) going to pay you (substantially) more for the good or service you are providing than it will cost you to produce? • Opportunities can be evaluated one step at a time – following a Checklist for Opportunity Evaluation CITE BootCamp January 2010

13. CUSTOMER NEEDS 1. Who is the customers? What are their needs? What are their alternatives? • Who is the target customer? • Can we identify a set of customers by name? • What customer need would be satisfied by our offering (do they realize they have a need)? • How important is meeting that need to the customer (a “nice to have” or “essential”)? • What are the customer’s alternatives (competition, not spending!)? CITE BootCamp January 2010

14. COMPETITIVE ADVANTAGE 2. Competitive advantage: Why will customers buy this product/service from us rather than from one of our competitors? • Better product at the same price? • Same product at a lower price? • Meets the needs of a particular group of customers better than any other offering? • Unique technology protected by patents? • Is the competitive advantage sustainable? How? STOP CITE BootCamp January 2010

15. The 9X Effect A customer takes on a huge risk in displacing a known solution with a new and unproven product/technology from a not very well established company Every entrepreneur’s “baby” is beautiful in his eyes – often blinding him to the possibility of alternate solutions • Entrepreneurs • are often: • Convinced the innovation works • Likely to see the need for the product • Dissatisfied with the existing substitute • Set on viewing the innovation as the benchmark • Consumers • are usually: • Skeptical about a new product’s performance • Unable to see the need for it • Satisfied with the existing product • Quick to see what they already own as the status quo 3 X 3 Consumers overweight the incumbent product’s benefits by a factor of three Entrepreneurs overweight the new product’s benefits by a factor of three 9X From: Gourville, J.T. Eager Sellers, Stony Buyers: Understanding the Psychology of New Product Adoption . (HBR June 2006) CITE BootCamp January 2010

16. VIABILITY 3. Assessing Viability: Is there a business (market) opportunity? • Scope of target market (geographic/demographic) • Potential (how many customers in target market?) • Market penetration (how manypotential customers will buy?) • Share of market (realized vs. potential) • Competitors (how is the need currently being met?; is our offering demonstrably better?) CITE BootCamp January 2010

17. SUCCESS FACTORS AND TIMING 4. Critical success factors • What three or four things must go right in order to succeed? • Is our management team capable of making it happen? 5. Timing considerations • Is the window of opportunity broad or narrow? • Is timing critical to capturing market share? • Who else is trying to get there first? CITE BootCamp January 2010

18. BUSINESS MODEL AND PROFIT 5. Do we have a viable Business Model? • How will we reach our customer (sales & distribution)? • How will we produce the product? • How will we price the product? • How will we support the product after the sale? 6. Can the business be profitable? • Selling price (to achieve target volume goals) • Cost to manufacture (function of volume)? • Cost to distribute, sell, service, support? • Other costs? • Cost/volume relationships? • Breakeven point? CITE BootCamp January 2010

19. Managing Risks • Technical risk – will it work? • Market risk – will they buy? • Competitive risk – can we sustain a competitive advantage? • Implementation risk • Leadership • Resources • A viable business plan? • What could go wrong? (remember Murphy’s Law) CITE BootCamp January 2010

20. Elevator Pitch You want to catch their attention and get invited to give your pitch… • Start with a question to catch someone’s interest? • Describe the “market pain”? • i.e. The problem you are trying to solve • Say your “value proposition”? • i.e. Why your product is better than others • Tell them the market size? • Tell them your projected revenues? CITE BootCamp January 2010

21. Slide Deck • Guy Kawasaki – The Art of the Start • 10 slides • Title • Problem • Solution • Business model • Underlying magic • Marketing and sales • Competition • Team • Financial Projections • Status and timeline • 10 slides, 20 minutes, 30 point font CITE BootCamp January 2010

22. Executive Summary • 5 Pages • Put your slide deck into words CITE BootCamp January 2010

23. Business Plan A business plan is a document that describes the opportunity, product, context, strategy, team, required resources, financial return, and harvest of a business venture. CITE BootCamp January 2010

25. Top 10 Mistakes in B Plans • Solutions or technologies looking for a problem • Unclear or incomplete business model and value proposition • Incomplete competitor analysis and marketing plan • Inadequate description of the uncertainties and risks • Gaps in capabilities required of the team • Inadequate description of revenue and profit drivers • Limited or no description of the metrics of the business • Lack of focus and a sound mission • Too many top down assumptions like "we will get 1% market share" • Limited confirmation of customer demand or pain

26. Summary • Entrepreneurial success takes more than a bright idea, luck and hard work. You must also have: • A real customer need (recognized by the customer) • The best solution to meet the need (or close to it) • A viable business model • Timing, resources, management talent, partners and allies • Too many would-be entrepreneurs start with a clever technology or a bright idea and assume that the world will beat a path to their doorstep • Unfortunately, it rarely works that way • Opportunities must be evaluated quickly, but carefully and deliberately to avoid making the most common errors CITE BootCamp January 2010

27. The Growth “Rule of Ten” • Who is my first customer • Why will they pay me for my product/service? • How will I secure the deal? • What resources do I need to complete the transaction? • Who are my next 10 000 customers • Who are my next 1 000 customers • Who are my next 100 customers Each growth by a factor of ten requires the entrepreneur to evaluate how they will do business Without this vision forget going into business • Who are my next 10 customers CITE BootCamp January 2010

28. TIME TO GET STARTED UTSA Center for Innovation and Technology Entrepreneurship (CITE) CITE BootCamp January 2010