How to Start a Start-Up Company

NASBEER AHAMMED

MANAGING DIRECTOR

STARTUP SHOWCASE VENTURES

Expibotz Technologies Pvt Ltd

GETTING STARTED

• People

• Idea

• Plan

• $$

• Turn idea into product

• Manage evolution

Building a Team• Smart, complementary skills

• Meeting around the kitchen table

• Domain expertise

• Investors are wary of non-business types

• Industry is different than University life

• Product development very different than research

Hire in Context

• Right person, wrong time

• Right kind of skills and experience

• Strategist vs. scrappy

• Big company vs. little company

• Personality or Culture Fit

PROCESS STUFF

• Space

• Legal

• Getting organized

Legal Stuff

• Referrals

• Interview for personality fit

• Plain vanilla is always better

• Simple, simple, simple

• IP important, but not panacea

Business Plan—Think Like an Investor• What’s the problem?

• What is solution?

• Will customers really care?

• Who is competition? Narrow vs. Broad

• Why win?

• Why should I believe these guys?

• Gross characteristics of financial forecast

• What is dream?

Depth of Critical Thought• Basic rules of business

• # of competitors• Depth of value-add• What are customer options?

• Know relevant models• What are competitive models?• What are historical models?• Why have predecessor technologies failed?

• Know your own model• What are you betting on?• How soon does it have to work?• What’s important to your success?

• Business plan is test of the people

Realism

“When a great executive meets up with a bad business, it is usually the business whose reputation remains intact.”

- Warren Buffett

Realism

• Hockey sticks are extremely rare outside the NHL

• Even if market is hockey stick, why are you?

• It always takes longer and costs more

• Plan for reality; be prepared to react to the dream

• Know what you are betting on

Raising Money

• Angels, Friends, and Family

• Govt grants of various kinds

• Venture Capital• Many different flavors and tastes

• Tradeoff between dilution and time

• How much do you need to get to the next milestone?

Where Do Ideas Come From?• Lab--Modumetal

• “There must be a better way”—Housevalues

• Previous job-Azaleos

• Enabling technology—Insitu

• Enabling legislation

• Enabling world events—Insitu

From R&D To Product

• Different discipline; often different teams

• Products evolve; but need to be “done” at different points in time

• “Better is the enemy of Good Enough”

• Completeness; providing real solution

• Customer feedback loop is critical

• V1, V2, V3

Get to Market Early

• Get revenue, “traction”, start selling

• Customer satisfaction more important that product and technology

• Build customer relationships and customer feedback loop

• Make mistakes early and cheaply

Low Hanging Fruit

• Who can make a decision?

• High value, low risk

• Big budget, already approved

• History of trying new stuff

• Other hurdles—Regulation, compatibility, etc.

Build domain expertise• Focus on success of customer—every decision should

be weighed against this

• Listen to customers—Fine line between vision and passion, and being stubborn

• All startups are in the service business

• More things liable to change than stay constant

• Everyone sells

• Be the voice of the customer

Falling in Love with First Plan

• Product is “done”; it’s just a sales/market problem

• “Great technology”• Customer don’t care; problem doesn’t exist

• Too complicated

• Who’s the customer?

• Agility is critical

Sell the Vision, Plan to Struggle

• 2X Rule: Everything takes twice as long and costs twice as much

• Sales learning curve

• Be realistic about valuation milestones

• Raise more money; relax about valuation

Focus• Rare to fail due to excessive focus

• Companies pulled in many directions• Lots of unexplored potential

• Lots of ideas; many of them bad

• Well-meaning board members

• Conventional wisdom is frequently inappropriate

• Focus on core value-add to highest priority customers, then expand

Getting Ahead of Yourself

• Do not confuse activity with revenue• Brother in law sales

• Great meetings

• Pipeline Value

• What would you do if you were the customer?

• Invest FOLLOWING growth

Be Cheap

• Good intentions…but it is a slippery slope

• It isn’t supposed to be comfortable

• What culture do you want to establish?

• It is okay to be small for awhile

• What do you really need?

• Minimum now vs. cash crunch

• Growth and progress are not linear

Invest in Culture Early

• Values are easier to establish than change

• Frugality, integrity, customer orientation, accountability, focus

• Invest in “team” values: balance, support, communication, shared values, collaborative, flexible job descriptions

• Consistent values + clear priorities simplifies management

Manage the Company, Even When It is Small

• Don’t assume everyone knows

• Communicate goals and objectives• Share successes and failures

• Enroll people; Encourage debate

• Communicate often; clearly; think about it• Think about cultural icons

Knowing What You are Good AtOr, Why “Founder” Becomes a Dirty Word

• Focus on your strengths

• Aggressively complement yourself

• Focus outward--make everyone else successful

• Ongoing conversation about yourself

Knowing What You are Good AtOr, Why “Founder” Becomes a Dirty Word

• Fixated on first vision

• Personal agenda—it’s not your company

• Over-rating your own capabilities

• Failure to delegate and micromanage

• Statistically, you’re eventually the wrong person

• You don’t know if you even want the job

Leadership

• Domain experience and customer advocacy

• Recruits great people

• Manageable ego

• Thoughtful about the business

• Thoughtful about company culture, and management

“It’s An Execution Play”• All businesses are execution plays

• Not about patents and secret sauce

• Not about being first

• First strategy is probably wrong

• Winners, especially today, are those who execute the best, and often changed strategy the best

• Winners are never satisfied

Building Great Companies

• Business is a journey of unknown duration and course

• It takes a fundamentally strong business idea

• More importantly, a talented team that has thought about and built what it takes to win

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