Google had 3 concepts:

- Timely due to the internet

- Adversity Coecient – tried to sell it to you yahoo & couldn‟t afford computer technology

- Proof of concept – got millions to try it then monetized it

- Creative destruction – Google was so much better that other search engines like AltaVista

- Attractiveness – lots of traffic and money from ads

- Facebook – scalability – make it once and it keeps growing

- Ben and Jerrys – Values – Getting Vermont cows

- Home Depot – Social Entreprenurship

- Richard Branson – Adversity –

- Trump – Team – His show builds team

- Mary K (Cosmetics) –

store

• Did the adversity affect the implementation?

– $1m debt in 1980 – The Manor attracted Phil Collins

Do you need to clean up your car? Do you buy 10s

You can buy 1 for the price off 10

• Sir Richard Branson - His first business venture was a magazine called Student at the age of 16.[3]

In

1970, he set up an audio-record mail-order business. In 1972, he opened a chain of record stores, Virgin

Records, later known as Virgin Megastores. Branson's Virgin brand grew rapidly during the 1980s, as he

set up Virgin Atlantic Airways and expanded the Virgin Records music label.

Richard Branson then embarked on a quest to turn the controversial into cash. Virgin Records

signed on controversial bands other record companies were afraid to touch such as the Sex

Pistols, Faust and Can as well as the Culture Club to name a few.

My interest in life comes from setting myself huge, apparently unachievable challenges and trying

to rise above them...from the perspective of wanting to live life to the full, I felt that I had to

attempt it.”

Richard Branson's approach to business is to succeed within the first year or exit the market. This

includes a one-year limit on everything associated with starting up.[7]

Virgin Atlantic became

profitable during the first 12 months, aided by sister company Virgin Records' ability to finance

the lease of a second-hand Boeing 747.

• Virgin

• Did the adversity lead to opportunity?

– He had Dyslexia – and did not enjoy education system. He had poor grades left school

to pursue something that worked for him – to change the world he started up a magazine

company to give students a voice

– Girfriend‟s abortion – walk-in clinic he created Student Advisory Centre in his magazine-

Branson used the lack of experience as an advantage by garnering attention through his teams

enthusiasm. Branson started his record business from the crypt of a church where he ran The

Student. Branson advertised popular records in The Student Magazine and it was an over night

success.

– Mail strike – record store - When we sensed that Student magazine's circulation was

reaching its peak, we looked for more ways to make money, and decided to start selling records

by mail order. A postal strike stopped the business in its tracks, but we had caught the music bug.

Instead we set up our first record store.

o Constrained by a lack of capital after the strike, we found a former shoe shop on Oxford

Street in London, and we talked the owner into letting us use the empty space. We were

not trained retailers, but we liked music and wanted to create a cool hangout for young

people. Instead of building displays designed to move merchandise quickly, with huge

racks of records and no place to sit down, we brought in big, comfy cushions and built

listening booths -- it was a place where you could chat about music with your friends and

share your favorites with them.

From music retailing we moved into the recording industry, but it was our move into the airline

business that underlined for me the advantage of inexperience. When we leased our first 747

jumbo jet in 1984, I knew very little about the airline business, beyond the fact that I had flown a

lot as a record executive and disliked it. The food was poor, the entertainment was bad, the seats

were uncomfortable and the service was lackluster. Surely all this could be changed -- it was just

common sense.

o Virgin Atlantic's early years were all about breaking conventions. I hated being stuck in

one place for eight hours at a time, so we created a bar where Upper Class passengers

could meet and talk during the flight. We brought massage therapists on board to relieve

the tedium and ensured that all passengers had better seat-back entertainment.

Continuing this tradition, Virgin America, our newest airline, has similarly revolutionized

the industry in the United States.

–

• Bliss Girl

• Home Depot

• Ebay

• Facebook

• Email

• The Grameen Bank (Muhammad Yunus)

• Wikipedia

• Transgaming Technologies (Vikas Gupta, CEO)

• Carly Fiorina

• Terry McBride

• Magnotta

• Jack Welch

• Thomas Edison

• Spencer Trask

• SpinMaster

• Ballard Power

• Mold Masters (Jonathon Fischer)

• Google

• Dragons‟ Den

ENT526 – Midterm Review (Week 1-5)

Venture Capitalist (VC) is financial capital provided to early-stage, high-potential, high

risk, growth startup companies. The venture capital fund makes money by owning equity in the

companies it invests in, which usually have a novel technology or business model

The typical venture capital investment occurs after the seed funding round as growth

funding round (also referred to as Series A round) in the interest of generating a return

through an eventual realization event, such as an IPO or trade sale of the company

A Series A round is the name typically given to a company's first

significant round of venture funding in the Silicon Valley model of startup

company formation.

o Usually the first series of stock after the common stock and common stock

options issued to company founders, employees, friends and family, angel

investors, etc.

o Common stock is a form of corporate equity ownership, a type of security.

It is called "common" to distinguish it from preferred stock. If both types

of stock exist, common stock holders cannot be paid dividends until all

preferred stock dividends (including payments in arrears) are paid in full.

Venture capital is a subset of private equity. Therefore, all venture capital is private

equity, but not all private equity is venture capital.

Private equity is an asset class consisting of equity securities in operating companies

that are not publicly traded on a stock exchange. Usually made by private equity firm,

a venture capital firm or an angel investors

Seed money, sometimes known as seed funding, is a form of securities offering in which

an investor purchases part of a business. The term seed suggests that this is an early

investment, meant to support the business until it can generate cash of its own, or until it

is ready for further investments. Seed money options include friends and family

funding, angel funding and -- recently -- crowd funding

Crowd funding or crowdfunding (alternately crowd financing, equity crowdfunding, social

funding or hyper funding) describes the collective effort of individuals who network and pool

their resources, usually via the Internet, to support efforts initiated by other people or

organizations.

Ben and Jerry offered stock to raise money to buy a manufacturing faculty through their

Vermont community. He believed a ‘Business has a responsibility to give back to

the community from which it draws its support’. Cohen’s idea was for the

company to be owned by the same people who had lined up for scoops of ice

cream at the gas station [i.e. the first scoop shop]".

Entrepreneur is an enterprising individual who builds capital through risk and/or initiative

o Entrepreneurship implies a special natural ability to sense and act on opportunity,

combining out of the box thinking with determination to bring something new into the

world

o A person who senses an opportunity and displays out of the box thinking and

determination

o Jean-Baptist: An entrepreneur is one who shifts economics resources out of an area of

lower and into an area of higher productivity

o Niccolo Machiavelli: Entrepreneurs are simply those who understand that there is little

difference between obstacle and opportunity and are able to turn both to their advantage.

Social Entrepreneurship – recognition of a social problem and the uses of entrepreneurial

principles to organise, create and manage a social venture to achieve a desired social change.

A venture that gives a portion of each dollar it makes in profit to the company

When you buy a product it donates it or something else

Ben and Jerry bought local milk to support

Agent of Change – Alters human capability or organizational systems to achieve a higher degree

of output or self-actualization.

Exploits opportunity

Richard Branson is an Agent of change by bringing in cell phone company and brought

change number easier

The 10x Rule - in order to gain market traction a product must be exponentially better. ie 10 x

faster, 10x smaller, 10x cheaper, 10x more profitable.

A little better is not enough

o Wikipeida The Britannica Encyclopedia

o Ebay Garage Sale

o Email Snail Mail

o NetFlix Blockbuster because it was 10 times cheaper, faster, comfort

Opportunity - favorable set of circumstances that create need for product or service

an appropriate or favorable time or occasion

a situation or condition favorable for attainment of a goal.

a good position, chance, or prospect, as for advancement or success.

Bliss Girl (Marcia Kilgore): She took a Skin-care course (acne) and learned unique ways,

so that lead her giving facials for friends. She saw the current spas were boring and not an

experience, so she made a place that was fun, inclusive and a girlfriend atmosphere

Magnotta Winery: They came up with an innovative solution. Another nearby winery

was closing down and selling all its equipment, including several huge stainless steel

tanks. Gabe and Rossana negotiated a wholesale price for the stainless steel tanks with

payment due the following month. They then sold the tanks separately to smaller

businesses that only needed one or two tanks. The revenue from the sale gave the

Magnottas the cash they needed to pay for the tanks as well as to purchase the assets of

Charal Winery.

Opportunity - Opportunity has 4 essential qualities

1) Attractive (10x returns)

Attractive has to generate money

2) Durable (lasts long enough to profit)

Durable – Obama 2012 Shirts

3) Timely (the time is now!)

Timely – iTunes around iPod

4) Focus on Customer value add or pain relief

How to identify an opportunity

Observing trends – demographics (ageing), economic forces, (time poverty) fashions,

(SMS) new technologies (Internet), political changes (OH&S)

Solving a problem – often from personal experience (childcare, fitness, package

delivery)

Finding Gaps in the Marketplace –(Curves, BoostJuice, specialty interests)

Finding Opportunities

Observing/Study Trends

Economic factors

Social factors

Technological Advances

Political Action/Regulatory statutes

Solving a Problem

Observe people challenges

Look for problems

Listen to people complains

Think of your own problems

Brainstorming:

Generate ideas quickly, no analysis or decision making.

Enthusiasm, originality, lots of ideas

Freewheeling, lively

No criticism allowed

Session moves quickly

Focus groups

People selected are familiar with issues

What‟s on customers mind

Conducted by trained moderator

Success depends on moderator‟s ability to ask questions and keep on track

Evaluating Opportunities

Feasibility Analysis - The process to determine if a business idea is viable worth

pursuing

1. Product/service feasibility analysis

2. Industry/market feasibility

3. Organizational feasibility

4. Financial feasibility

Concept testing - validate customer interest, desirability & purchase intent

1. Validate underlying premise

2. Help develop the idea

3. Try to estimate sales

Competitive Analysis - Assessment of the strengths and weaknesses of current and

potential competitors.

Limitations - A limiting rule or circumstance; a restriction.

A condition of limited ability; a defect or failing.

Limitations vs. Opportunities

Leadership sees possibilities where others don‟t. Then helps others to not only see, but

seize, those opportunities”

People who focus on opportunities, while others focus on limitations, achieve more

Being a leader is a matter of choice

Scalability – Your revenue grows while expenses stay the same

Potential for economic growth within the company.

Ability of a system, network, or process, to handle a growing amount of work in a

capable manner or its ability to be enlarged to accommodate that growth

Whats not scalable? electrical work? what is scalable? perfume

Adversity Quotient - Measure of how you respond to adversity (change and challenges). It

provides the tools for improving how you respond and thus overall professional effectiveness.

Ben and Jerry: In 1984, Häagen-Dazs wanted to limit distribution of Ben & Jerry’s in Boston,

prompting Ben & Jerry’s to file suit against the parent company, Pillsbury, in its now famous

“What’s the Doughboy Afraid Of?” campaign. In 1987, Häagen-Dazs again tried to enforce

exclusive distribution, and Ben & Jerry’s filed its second lawsuit against the Pillsbury Company.

Richard Branson for Virgin: British Airways dirty tricks campaign – sell record - A series

of disputes in the early 1990s caused tension between Virgin Atlantic and British Airways, which

viewed Virgin as an emerging competitor. Virgin subsequently accused British Airways of

poaching its passengers, hacking into its computers and leaking stories to the press that

portrayed Virgin in a negative light. After the so-called campaign of "dirty tricks", British Airways

settled the case, giving £500,000 to Branson and a further £110,000 to his airline and had to pay

legal fees of up to £3 million. Branson divided his compensation (the so-called "BA bonus")

among his staff

Magnotta Winery: Two weeks before Gabe and Rossana Magnotta were to release the

first bottles of wine from their new winery, they learned that Ontario‟s liquor agency had

decided not to carry Magnotta‟s wines in its retail stores, citing lack of shelf space. It was

a devastating blow in an industry that is controlled and regulated by the Liquor Control

Board of Ontario (LCBO), which also has a monopoly on retail sales of alcoholic

beverages through its province-wide chain of liquor stores. But instead of being

discouraged, the husband and wife team used the setback to look for other opportunities

to get their wine into the hands of consumers. That was in December 1990. Today,

Magnotta is the third largest winery in Ontario,

Life = Risk - Risk is, by nature, scary. It's uncertain and unpredictable. You're heading off into

uncharted territory. You may lose your life savings or lose face. You risk criticism and

humiliation, or having to pick up the pieces and start all over again. You're giving up what you

know for what might be. The rewards can be great, but so can the cost.

If you haven‟t failed, you are not trying hard enough

If you haven‟t failed, you haven‟t lived

Survivorship Bias - the logical error of concentrating on the people or things that "survived"

some process and inadvertently overlooking those that didn't because of their lack of visibility.

This can lead to false conclusions in several different ways.

Survivorship bias can lead to overly optimistic beliefs because failures are ignored, such

as when companies that no longer exist are excluded from analyses of financial

performance.

Entrepreneurships succeed Survivorship Bias

Risk - Potential that a chosen action or activity (including the choice of inaction) will lead to a

loss (an undesirable outcome).

A situation involving exposure to danger:

Direct Action - occurs when a group of people take an action which is intended to reveal an

existing problem, highlight an alternative, or demonstrate a possible solution to a social issue.

The aim is to either obstruct another political agent or political organization from

performing some practice to which the activists object; or to solve perceived problems

which traditional societal institutions (governments, powerful churches or

establishment trade unions) are not addressing to the satisfaction of the direct action

participants.

Examples of direct action can include strikes, workplace occupations, sit-ins, tax

resistance, graffiti,sabotage, hacktivism, property destruction, blockades, and other forms

of community resistance.

By contrast, electoral politics, diplomacy, negotiation, and arbitration are not usually

described as direct action, as they are politically mediated.

Non-violent actions are sometimes a form of civil disobedience, and may involve a

degree of intentional law-breaking where persons place themselves in arrestable

situations in order to make a political statement but other actions (such as strikes) may

not violate criminal law.

The Need for Pain

Pain = Revenue – Expenses or Pain= Number of sufferers * Severity

Listening to the customer and then delivering value on what they want

o Entrepreneur Pain: The sometimes chronic feeling of angst, dissatisfaction or

discontent experienced by those who dream of solving a real problem through

business or teamwork that they see clearly, but most likely don’t see or can’t

see.

Balanced Feedback Loop - A balancing loop attempts to move some current state (the way

things are) to a desired state (goal or objective) though some action (whatever is done to reach

the goal).

Positive Feedback Loop - occurs in a feedback loop when the mathematical sign of the net gain

around the feedback loop (sometimes called the loop gain) is positive.

Positive feedback is a process in which the effects of a small disturbance on a system can

include an increase in the magnitude of the perturbation.[1]

That is, A produces more of B which in turn produces more of A.[5]

In contrast, a system

that has negative gain around the loop has negative feedback

Positive feedback tends to cause system instability. When the loop gain is positive and

above 1, there will typically be exponential growth of anyoscillations or divergences

from equilibrium

Suboptimal Solutions – An unmet need

Entrepreneur see unmet need as opportunity and wants to shift the suboptimal

equilibrium

Entrepreneur is one who sees the original state, sees the “happiness deficient” and moves

to change it

We as a people will continue to improve something till its optimal. If it suboptimal, work

will continue on it

Leads to Creative Destruction

Creative Destruction - Capitalist economic development arises out of the destruction of some

prior economic order

Bootstrapping - A situation in which an entrepreneur starts a company with little capital. An

individual is said to be boot strapping when he or she attempts to found and build a company

from personal finances or from the operating revenues of the new company.

Compared to using venture capital, boot strapping can be beneficial as the entrepreneur is

able to maintain control over all decisions. On the downside, however, this form of

financing may place unnecessary financial risk on the entrepreneur. Furthermore, boot

strapping may not provide enough investment for the company to become successful at a

reasonable rate.

Entrepreneur Attributes

A desire to achieve - Needed to achieve any goal and success

o Without strong, burning desire and will power, you will give up quickly, you will

not persist and hence you won„t achieve what you had in mind. Knowing exactly

why you want something, helps keep the burning desire awake inside of you at all

times and it will lead you to take action.

Hard Work – Difficult labor

o The much tougher challenges will usually see a lot less competition and a lot

more opportunity.

Acceptance of Responsibility (e.g. internal locus of control) - individuals believe that

they can control events that affect them

o Individuals with a high internal locus of control believe that events in their life

derive primarily from their own actions; for example, if a person with an internal

locus of control does not perform as well as they wanted to on a test, they would

blame it on lack of preparedness on their part. If they performed well on a test,

they would attribute this to ability to study

o In the test-performance example, if a person with a high external locus of control

does poorly on a test, they might attribute this to the difficulty of the test

questions. If they performed well on a test, they might think the teacher was

lenient or that they were lucky

o Those with a high internal locus of control exhibit better control of their behavior,

tend to be more politically involved and are more likely to attempt to influence

others than are those with an external locus of control. They also assign greater

likelihood to their efforts being successful, and more actively seek information

concerning their situation

Reward Orientation

Optimism - a mental attitude or world view that interprets situations and events as being

best (optimized), meaning that in some way for factors that may not be fully

comprehended, the present moment is in an optimum state

o The concept is typically extended to include the attitude of hope for future

conditions unfolding as optimal as well.

Focus on Excellence – To perform the best

Highly Organized - Planned and controlled

Strategic Risk Taker

In business and investing, risk has traditionally been viewed negatively: investors and

companies can lose money due to risk and therefore we typically penalize companies

for taking risks.

Entrepreneur’s Key Docs – Documents needed to define and present the idea

Business Plan - Formal statement of a set of business goals, the reasons they are believed

attainable, and the plan for reaching those goals. It may also contain background information

about the organization or team attempting to reach those goals.

◦ You write a business plan for yourself

◦ Should contain all the information an investor needs to make a decision

To find a scope

Ask key questions

What am I missing

Costs

Getting partners on same page

◦ Should be:

20 pages max for seed stage

30 pages max for early stage

35 pages max for late stage

◦ Doesn‟t have to be right just reasonable

◦ Business plans focus on the 7 P‟s of investment

Investors look for 7ps in the following documents: Business Plans, exec

summary

Province refers to the industry

CAGR – Cumulative Annual Growth Path

1. People - Investors want:

People in the Know and who are known

Who have been there done that

A team which is equal parts:

o Domain Knowledge – Knowledge of the field you are in

Area of human endeavour, an autonomous computer activity, or other

specialized discipline.

o Operational Experience – Knows the logistics of the whole process down to the

day to day activities

o Business Acumen - the knowledge and understanding of the financial,

accounting, marketing and operational functions of an organization

keenness and quickness in understanding and dealing with a business

situation

the ability to make good judgments and quick decisions

All business knowledge: What logo, how many drivers we should have,

2. Pain – Need in the economy for change

The bigger the pain, the faster the adoption

Is the pain big enough to generate $50M revenue in 5 years?

Inelastic demand is best (e.g. air is inelastic)

You want to be quantify the opportunity by :

Size of Pain x Number of People suffering

Elastic – Sensitive to price example food, water bottles in Toronto

Inelastic – Not sensitive to price - gas

3.

4.

Hockey Stick Growth - companies experiencing massive user growth in a short

period of time

To show in financial statements that your business will grow

Compounded Annual Growth rate (CAGR) is a business and investing specific

term for the smoothed annualized gain of an investment over a given time period

5. 6. Pitch - Be able to explain your idea in 2 minute

It is not for me to understand. It is for you to explain

Your pitch is the golden thread that runs through all your messaging

Elevator Pitch - The 2 minute conveyance of what you do and why I should care

Made up of 2 parts:

◦ Pain Statement

◦ Value Proposition

In real life you do not get five percentage, you tell investors what you are doing, what

you are going to do and what you need the money for

After investors decide how they want in

Basic pitch for email, iTunes, Google search

Pain state – solves the annoyance

Do a pitch together for Google.

Writing a Good Elevator Pitch

Must be 4 things:

◦ Irrefutable (i.e. not subjective)

◦ Easily understandable (i.e. anyone could get it)

◦ Greed inducing (i.e. will make big $$$)

◦ Succinct (i.e. under a minute!)

◦ Samples:

◦ Viagra: People want to have sex longer than our bodies will allow. Our blue, FDA

approved pill allows them to do so in a cost effective, embarrassment free,

clinically proven manner.

◦ eBay: One person‟s trash is another‟s treasure. Our online global garage sale

brings together buyers and sellers from around the world through our proprietary

trust-based platform.

◦ Write an elevator pitch for Google: Everyday millions of webpages come

online, but no one has the technology to keep up. Google has the technology to set

through and find pages in an organized manner.

◦ The internet is growing and the information there is impossible to find.

7.

Pre money valuation = what is the company worth the day before the deal

Post money valuation = pre money valuation plus the money

Pitch Deck - first thing you will use when interacting with a potential investor. In many

ways, it is one of your most important tools. The content of the pitch deck, along with

your presentation, can help the investor to determine whether or not to continue

evaluating your business opportunity.

The investor presentation contains:

o The Back of the Napkin (BoND)

o The Elevator Pitch

o The Executive Summary (?)

Must understand what you do & who cares RIGHT AWAY

Need to focus on the audience

Clean message a focused company strong management

10/20/30 Rule of Powerpoint

◦ No more than 10 Slides

◦ No more than 20 minutes

◦ No less than 30 point font

The Back of the Napkin (BoND) - Used to convey your entire venture in one image

aka Infographic or xplane diagram

Very Canadian

Shows all the moving parts, without the underlying tech

Focus on customers and value add

Proof of concept - Realization of a certain method or idea(s) to demonstrate its feasibility,[1]

or a

demonstration in principle, whose purpose is to verify that some concept or theory has the

potential of being used. A proof-of-concept is usually small and may or may not be complete.

What do you need to implement change?

◦ Courage, Vision, Will, Perseverance

Why is Change so Hard?

1) Fear - Everyone is afraid, courage is not the absence of fear. Courage is action in the face of

fear.

2) Momentum - Those in Power like the status quo.

◦ People in power invest to keep that power.

◦ Why take risks when you are in control and fail? Why fix something that ain‟t broke?

3Cs of 21st Century Leadership

Capability

◦ Ask Questions Hear Answers

◦ Lifelong learning

◦ Be Adaptive to Change

Collaboration

◦ World is Flat

◦ Good decisions come from diversity

Character

◦ Judgment

◦ Perspective

◦ Ethics

Guerilla Marketing - In advertising strategy in which low-cost unconventional means (graffiti,

sticker bombing, flash mobs) are utilized, often in a localized fashion or large network of

individual cells, to convey or promote a product or an idea

◦ Unconventional, unorthodox approach to marketing

◦ Lilith Fair; shopping mall free concerts (multiple hits)

◦ Ben and Jerry have an ice cream day where they give away free ice cream

◦ Magonta Winery: She won them over with a creative marketing strategy that

included offering free analyses to customers who were having problems with their

wine and by producing a booklet, “Making Wine the Festa Way,” that provided a

step-by-step guide to making wine. She had the booklet translated into Italian and

Spanish, and gave it away with every purchase of Festa Juice.

Selective Information - In a World of Information overload, a leader must be able to separate

“truly important from the merely interesting”

Influence of Values - Organizational culture begins with company founders values

it's important because employees are more likely to be loyal to companies that values social

responsibility; same with the public

ben and jerry's was an example

Adaptive behavior is a type of behavior that is used to adjust to another type of behavior or situation. This is often characterized by a kind of behavior that allows an individual to change an unconstructive or disruptive behavior to something more constructive. These behaviors are most often social or personal behaviors. For example a constant repetitive action could be re-focused on something that creates or builds something. In other words the behavior can be adapted to something else

Terry Mcbride values

◦ Mirror Mirror on the Wall …

– Be honest with yourself re your own core values.

◦ Who’s in the Fairest Market of them all?

– Identify the market that aligns with your core values, understand them and don‟t

manipulate them.

◦ Adaptive Behavior:

Hallmark of the independent (NICHE entrepreneur)

Use the right information and use the information right.

Take advantages of opportunities that lie outside the mass view.

– When the mass zigs, they must zag.

Examples of firsts: crude website, own graphics, enhanced CD, pay-for-

downloading site with iTunes

◦ Be the Last Lemming Standing

Don‟t be afraid not to follow the crowd!

◦ Heritage Artists

– Based on belief that music was not trend-driven and disposable.

– If an artist displayed values that spoke to emotion, was literate, had meaning,

spoke to causes and influenced causes, he/she would experience longevity and

become

◦ Response-based marketing -

– bottom-up process or pull from consumer

Why is Talent so key?

Hiring Mistakes at Startups

The BodCat Management Style

◦ The Talent Triangle

Business Acumen – Knowing how to run a business. Previous experience,

Richard branson is renowened for all his various entrepneur projects

(CEO)

Domain Knowledge

Operational Experience

Top Down vs. Bottom Hiring –

◦ Top down is the higher up, hiring from another company

◦ Bottom up hiring, taking lower ranks

Ballard Power

Jack Welch 6 or 9 - Fire the bottom 10% and reallocate their options, budget and bonus to the

top 20%

Neutron Jack, CEO of GE for 20 years

In that time made it the most profitable and largest company in the world

On his first day he fired more than 10,000 people

All based on the his 6 or 9 Theory

“For flowers to bloom, first get rid of the weeds which compete for sunshine, water and

space.”

The idea is that you cut out the half that is weak and invest the money and time into what

you‟re good at to make it even better

Top Down vs. Bottom UP Hiring

BOTTOM UP:

◦ Leads to getting people on the team who are generalists vs. someone who's the

right fit for a single job.

◦ Hiring from the bottom up means filling specific roles with specific skill sets

◦ gives people an opportunity to add value and expand their roles,

◦ ultimately helps grow the company

Hiring Mistakes

Hiring someone just because you know them. lack sense of objectivity and

accountability in the workplace.

Hiring someone to "help them out." Only hire someone who can add value to the

company and its operations.

Taking someone on as a partner because you can't afford to hire him. outsource

projects or work on a fee basis.

Hiring someone to do a bit of everything. the specific functions of a business need

to be staffed with people who are specialists.

Not knowing what job you want to hire for. Clearly define roles for any new hires.

Not only will you avoid hiring a non-productive person in an ill-defined role, you'll start

attracting people who'll add real value to their role and your operation.

Hiring for the job you hate. only assign things that others can do better, not just with

less moaning.

BODCAT Management Model

Show that you have the:

• Business Acumen -

• Operational experience – Logistical, get product from point A to B

• Domain knowledge – Experienced the problem them self

To make the business a success:

• Match up the operational phase of the business with the talent triangle (start-up,

rapid growth, operational excellence, global reach, public)

Show that all decisions are made based on:

• Consultation

• Authority

• Trust

External parties (VCs, clients, staff) must at all times see the Management Team as being

100% in agreement

Startup Hiring Catch 22

To get Money we need a Team

To get a Team we need Money

The Double Dip – Make the content once, and used in a variety of ways

Make business case for class and then sell it to another company