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Techpreneuring for Wealth Creation

The POEM® Frameworkby

Tomi Davies

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1st Some Definitions...

• Techpreneur• A warm-blooded animal, male or female, who feeds on no sleep,

limited resources and a passion for technology: aka, any person who creates a company around his or her vision of leveraging technology to change the world around them.

• Wealth• a great quantity or store of money, valuable possessions,

property, or other riches.• the state of being rich; prosperity; affluence.

• Vision• a vivid, imaginative conception or anticipation

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Next, The Context

• People invest in people, not just ideas - Investors buy into other people first then their story. That story when told must contain the information necessary to quickly engage and retain the interest of any potential investor

• Because investors (and partners) are interested in learning about the business of the company first and foremost, Techpreneurs need to also focus on how their product or service makes money by solving a problem rather than only on how delivery of the technology solution is achieved.

• My POEM ® framework provides Techpreneurs with a model that helps meet this need in a way they can use day to day knowing you need more than a brilliant idea or fantastic innovation to start and sustain a successful technology business – you need a vision!

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The POEM ® Framework

PROPOSITION

ORGANISATION

ECONOMICS

MILESTONES

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P is for PROPOSITION – what’s the value?

• The Techpreneurs vision should deliver a value proposition which provides clear descriptions for:• Functions & Features on Offer (Customer experience)• Target Market(s), Segment(s) & Customer Profile(s) • Derived Benefits of the Offer – WIIFM?• Alternatives and Differentiation• Regulation & Compliance• Inputs & Dependencies• Competition & Substitutes• Elevator Pitch….3 minute guide

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4. Cre

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5. Conce

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6. Concr

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7. Cust

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8. Consis

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9. Conve

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O is for ORGANISATION – who and how?

• PROCESS• BUY

• PROCURMENT & LOGISTICS• VENDORS

• MAKE• HUMAN CAPITAL• RESEARCH• ANALYSIS & DESIGN• PROGRAMMING & DEVELOPMENT• TESTING• COMMISSIONING/LAUNCH

• SELL• MARKETING• SALES• CUSTOMER SUPPORT• CORPORATE AFFAIRS

• PEOPLE• BOARD OF DIRECTORS/ADVISORS

• EXECUTIVE• TECHNICAL • COMMERCIAL• OPERATIONS

• NON-EXECUTIVE• MANAGEMENT

• SENIOR• MIDDLE• JUNIOR

• STAFF• CAREER PROFILE• EXPERTISE & EXPERIENCE• PERSONAL VISION/ MISSION/

OBJECTIVES• CAPABILITIES & COMPETENCIES

• TECHNOLOGY• CLIENT

• INTIMATE, PERSONAL, DESKTOP

TGY• SERVER

• APPLICATION, INFRASTRUCTURE, SECURITY, SERVICES

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E is for ECONOMICS – show me the money!P&L STATEMENT PERIOD 1

REVENUE 1,000,000

Less DIRECT COST OF SALES 300,000

GROSS MARGIN 700,000

Less OPERATING EXPENSE 500,000

EBITDA (Profit or Loss) 200,000

CASHFLOW STATEMENT PERIOD 1

INFLOWS

- REVENUE 1,000,000

- LOANS & FACILITIES 700,000

- SHAREHOLDERS EQUITY 500,000

OUTFLOWS

- EXPENSES 800,000

- INTEREST 70,000

- REPAYMENTS 400,000

NET FLOW 930,000

BALANCE SHEET

ASSETS LIABILITIES

FIXED ASSETS 1,300,000 PAYABLES 300,000

CASH & BANK 300,000 LOANS 700,000

RECEIVABLES 700,000 EQUITY

TOTAL ASSETS 2,300,000 PAID UP CAPITAL 1,000,000

RETAINED EARNINGS 300,000

TOTAL LIABILITIES & EQUITY

2,300,000

MARKET(S)• $ SIZE?• % SHARE?• % INFLATION?• DEMAND• TRENDS

ROI - NPV - IRR

FORECASTASSUMPTIONS

ACTUALPERFORMANCE

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M is for MILESTONES – where are you going?

• SEED• CONCEPT DEFINITION• BUSINESS MODEL• FRIENDS, FAMILY & FOOLS

FUNDING

• START-UP• BANKABLE BUSINESS PLAN• ESTABLISHED CUSTOMER

BASE• FULL-TIME OPERATIONAL

STRUCTURE• STEADY CASH BURN RATE• ANGEL/VC FUNDING

• GROWTH• REVENUE GROWTH• INCREASED MARKET SHARE• PE FUNDING

• ESTABLISHED• PRODUCTIVITY• NEW PRODUCTS/SERVICES• COST MANAGEMENT

• EXIT• AGREED VALUATION

… and when will you get there?

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CONCLUSION

• The POEM ® framework provides Techpreneurs with a model that meets the need for organising the business of their company in a form which they can use on a day to day basis.

• Each Techpreneur will need to determine the level of detail they require for each peculiar situation they find themselves in be it operational, marketing, selling, soliciting for funding or recruiting resources, POEM ® provides guidance for execution while ensuring that all critical information are given consideration

• Because investors don’t only come to organised pitch events and you may run into them anywhere, a simple mental model such as POEM ® that can be backed up with as much documentation as required gives you an edge in todays world where a growing number of entrepreneurs compete for a shrinking pool of capital.

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THANK YOU!THANK YOU!

QUESTIONS?