making it work u of manitoba
DESCRIPTION
TRANSCRIPT
Making it Work!
News From the Front Lines
Extended Version
Rob Adams
© Rob Adams2
Making it Work
Good ideas are scarce I know my customer I have to ship the killer product I must raise a lot of capital quickly Investors fund business plans Investors want their money back quickly Advertising is the hallmark of a good marketing plan I can use partners to sell my product
© Rob Adams3
Making it Work
Good ideas are scarce…• Ideas are commodities• 1:8:20 rule• Get to market first fallacy• No competition fallacy
Characteristics of a solid concept• New approach to an existing business process• Real, existing corollaries today• Solution today has market potential of $ 1 billion• Multiple adjacent markets just as large• Start up team with execution skills in the space
© Rob Adams4
Making it Work
I know my customer…• Deadliest of all myths• Market validation from friends• Ready, fire, aim approach to products• Consumes capital at a furious pace
Market validation• Right product, features and markets sooner• Natural alpha, beta and first customers emerge• Helps recruit savvy employees• Raises smart capital• Optimizes company’s capitalization
© Rob Adams5
Making it Work
I have to ship a killer product…• ‘Boiling the ocean’ feature sets• Delays time to market, and the market always is moving• Uses large amounts of capital
Build it, buy it, partner for it• Prioritized market feedback from validation• Get to market faster and with less capital• Go after partners like you go after customers• Ship ‘minimal functionality’ products
© Rob Adams6
Making it Work
I must raise a lot of capital quickly…• Lots of capital before any value is created• Causes dilution• Produces a spend mentality• Output versus execution orientation
Focus on value inflection points• Validate markets and business models• Customer traction• Bring on key executives and advisors• Raise enough capital to get through the next set of value inflection
points
© Rob Adams7
Making it Work
Investors fund business plans…• Typically #1 on the start up to do list• Lots of energy and time• Output orientation• Companies get funded without them
How to handle the business plan• Put it last on the list• Validate markets and business models• Hire a team with ‘execution expertise’ in your space• Mitigate risk• Develop your investment pitch• Then the plan writes itself
© Rob Adams8
Making it Work
Investors want their money back quickly…• Common misperception• Liquidity events do not produce liquidity for founders… or investors• Quality investors expect a return, but want it from a quality company
Who to raise money from• Professional investors know how to build quality companies• Go with investors who can continue to fund the company – through
good times and bad• Pick your partners carefully
© Rob Adams9
Making it Work
Advertising is the hallmark of a good marketing plan• Marketing issues are the highest risk components of early stage
companies• No early stage company needs mass marketing
How do you address this?• Bring on marketing resources early• Get your entire company to focus on customers and market validation• Early stage companies do need marketing – focused on product
management, company buzz and customer acquisition
© Rob Adams10
Making it Work
I can use partners to sell my product• Many technology focused companies rely on others to ‘go to market’• Companies forget sales is a form of ongoing market validation• Partners work only after you’ve established a strong market position
How do early stage companies sell?• Three basic sales models for early stage companies; direct, telesales
and OEM• Prove an economic model that has reasonable customer acquisition
costs• Understand your sales cycle, sales model and who in the organization
are in the decision chain
© Rob Adams11
If You Want More…
Presentation content from research done for this book
Random House/Crown Books All major booksellers
• Amazon
• Barnes & Noble
Contact information• Rob Adams
• 512-633-5955