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The Kai Method VC Proposal

The Kai Method VC Proposal



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Kai Vc Presentation V4   Linked In Kai Vc Presentation V4 Linked In Presentation Transcript

  • Spring 2009 CONFIDENTIAL Proposal for Portfolio Company Growth: Innovative strategy workshop
      • KAI overview/relevance to portfolio company growth
      • Proposal
      • Who we are
      • Appendix
      • Capital Crisis: zero venture backed IPO’s in Q2 2008
      • Companies held in portfolio longer require continued growth to protect return to investors
      • Companies need creative ways to improve cost efficiency to manage through downturn
      • Achieve profitability before run out of runway
      • Transition successfully from short term to long term strategy
      • Respond effectively to rapidly changing market conditions
      • Gain market acceptance for product / service
      • Company is reactive rather than proactive to competition
      • Exhausted initial customer base
      • Need to build effective distribution channels and partnerships
      • Maintain quality of product / service with rapid growth
      • Cost effective production
        • In-house vs. outsourced
      • Correctly identify industry trends and verify with tests
      • Develop effective strategy to address trends
      • Implement new strategy successfully
    Liquidity Crunch Recession Market Acceptance Competition
    • Practitioners
      • Few hurdles to growth
      • Neither innovative strategy nor rapid response required for growth
    • Strategists
      • Many hurdles to growth
      • Rapid response required for growth
    Low High Competitiveness of Industry Low High Complexity of Strategic Hurdle
    • Creative Strategists
      • Many hurdles to growth
      • Innovative strategy & rapid response required for growth
    • Innovators
      • Few hurdles to growth
      • Innovative strategy leads to many potential strategic options
  • DOWN TURN IN ECONOMY OFFERS OPPORTUNITIES AS WELL AS RISKS Representative quotes “ Great entrepreneurs build value and market-share in down markets. They go to work seven days a week and the(y) breakout when other folks check out.” “ Usually, when the economy slides, the first natural reaction is to cut expenses, conserve cash, and hunker-down to weather the storm. All good advice. But don’t forget also that this could be your time to shine, albeit, in a strategic and intelligent way.” “ If you are a start-up that is not cash-flow positive you are in a tough spot right now. If you haven't figured out your business model yet you are in trouble.” Jason Calacanis, founder of Mahalo, co-founder of Weblogs Inc., industry blogger “  Like every major shift in the environment, this one will offer  opportunities as  well as risks…The real key is to have a keen understanding of the game on the field and to be the one that adjusts swiftly, rather than the one that moves after it’s become blatantly obvious to everyone else it’s time to move.”
  • VENTURE CAPITAL FIRMS HAVE RECOGNIZED THE NEED FOR INNOVATIVE STRATEGY AMONG THEIR FUNDED COMPANIES Representative website quotes “ CEOs need to move beyond products toward using many types of innovation. They should start by using diagnostics and toolkits that start the innovation process . . . they should consider working on a few bold concepts with teams and implement these new ideas clearly and quickly.” “ We encourage our portfolio companies to make sure they take time out from the operational demands of their business to think about the bigger strategic picture.” “ Ready-Aim-Fire. Whether you know it or not, this seems to be the way that a lot of early stage companies make strategic and tactical decisions. People run around the halls and manage by crisis, moving from one deal or issue to the next without any overarching goals and process in place.” union square ventures “ Strategic planning sessions often fail to be either strategic or helpful in planning for the future. The expense in time, energy, and dollars can be significant. And yet, often the process leaves people frustrated and unfulfilled.” “ The absence of a framework or model for decision making and discussion and the lack of a common lexicon to discuss issues results in people talking past one another and endless loops that lead nowhere.” Will Price , former MD at Hummer Winblad Venture Partners, current CEO Widgetbox
      • A 1-day workshop where your portfolio companies will generate at least 20 strategic business ideas for each of your companies
      • Strategic creativity focuses on innovation by learning time-tested patterns of strategic success
      • Management teams learn to outthink the competition
      • Management teams of portfolio companies receive a playbook to guide future strategy decisions & rapidly respond to competition
      • Anytime a venture capital firm would want to hold a workshop.
      • Typically for 10-30 Portfolio companies and venture capital partner
      • The Kai Method Team
        • Kaihan Krippendorff , Founder CEO
        • Doug Muir , COO
        • Ravi Srinivasan , venture capital consultant
        • Ben Bewick , venture capital consultant
      • Workshops can take place within the conference facilities of your Firm or offsite
  • HOW DOES A KAI WORKSHOP WORK? Understand methodology Create individual aspirations Develop strategic options Prioritize options
      • Listen to presentation
      • Understand how KAI method fits into overall strategic planning
      • Defines desired growth path or response to rapidly changing market
      • Understand 7 common strategic options
      • Brainstorm creatively to develop large list of options from asking 7 key questions
      • Understand estimated impact and likely feasibility of each option
      • Compare options
      • Develop final list of options to pursue more rigorously
    Revenue Growth
      • Management Team
      • Venture
      • Capital
      • Partner
      • KAI
      • consultant
      • End result
      • Listen to presentation
      • Understand how KAI method fits into overall strategic planning
      • Explain KAI method of creative strategy
      • Provide overview and goals of workshop
      • Understanding of why KAI method is useful
      • Understanding of workshop goals
    Explanation of roles and activities in KAI workshop
      • Helps managers define desired growth path or response to rapidly changing market
      • Guide workshop participants in formulating desirable aspirations
      • Reinforced growth objective in portfolio companies
      • Attainable business goal
      • Co-create with management team
      • Help managers think about 7 strategic questions
      • Explain 7 key questions
      • Make client ideas more robust
      • At least 20 creative strategic ideas for each portfolio company
      • No feasibility analysis yet
      • Help managers prioritize by adding expertise to both impact and feasibility analysis
      • Explain prioritization process
      • Facilitate and assist with prioritization
      • Final list of strategic options to pursue more rigorously
      • Next steps with VC for help with ideas
    1 2 3 4
  • 7 KEY QUESTIONS TO OUTTHINK THE COMPETITION Partner with someone unexpected Move early to the next battle-ground Lock up resources Attack from two fronts Introduce a new piece the board Coordinate the uncoordinated Embrace what others abandon Who else benefits if you win? Where is the next battleground? What inputs can you control? With whom can you launch a two-front battle? What player do you wish was in the game? Who could you coordinate? What has been abandoned? 1 2 3 4 5 6 7
  • EXAMPLES OF CLIENT IDEAS GENERATED AT WORKSHOPS A division of a leading hardware firm conceived of an idea for sharing past purchase data with distributors. They structured a tiered program that gave certain loyal distributors preferential access to leads in exchange for loyalty. They launched the program in 7 Latin America countries initially and later expanded it through all of Latin America and Asia. The program tripled revenues in three years. An entrepreneur was about to enter into a simple commercial agreement and realized that he represented a “borrowed road” to his new partner. He saw an opportunity to form a broader alliance by which his partner would distribute its services through his network of 7,000 independent sales representatives. He successfully established relationship and now has an expanded portfolio to offer. Southeast US. regional bank saw an opportunity to establish an alliance with a similar bank in Northeast to co-serve clients that were co-located in the regions. They can now offer retirees moving from the Northeast to the Southeast a seamless banking relationship. A marketing team wrestling with foreign entrants saw an opportunity to lobby for changing importation laws in a way that put foreign competitors at a disadvantage and found new ways to use existing regulations to their advantage. They are currently pushing regulatory changes through. A mid-sized pharmaceutical company was facing flat growth held down by deteriorating regulatory and competitive environments. We helped them generate new growth options, prioritize the highest-potential ones, develop execution plans, and build a tracking system to continually monitor progress. The company focused on the product-market segments in which it could win, partnered to expand production capabilities abroad, and began growing faster than the market. Client Ideas 1 2 3 4 5
  • REPRESENTATIVE CLIENTS “ Kaihan's groundbreaking work on strategy development changes the game for organizations facing an increasingly competitive environment. As a consultant and facilitator, Kaihan makes developing strategy look easy but don't be fooled. The easygoing demeanor masks depths of experience, a razor-sharp intellect and true creative genius. We have benefited from working with this emerging leader in the field of strategic consulting."   - Shannon Wallis, Director Microsoft Worldwide Leadership Programs
      • KAI overview/relevance to portfolio company growth
      • Proposal
      • Who We Are
      • Appendix
      • A new methodology they can use to outthink the competition for long-term growth
      • Playbook to create strategic responses to rapidly changing market conditions
      • Professional development for the attendees
      • At least 20 (and frequently more than 100) innovative business ideas they can implement for growing their company
    Venture Capitalist
      • Professional development as strategic advisor to portfolio companies
      • Opportunity to generate cross-company business solutions
      • Add a tool to strategy toolkit
  • KAI WORKSHOPS COMPARE FAVORABLY TO OTHER AVENUES FOR ENTREPRENEURS TO BECOME INNOVATIVE STRATEGISTS Professional development: add a tool to strategists’ repertoire Cross-company strategy innovation Actionable Items Low Time Commitment Cost Efficiency Low High
    • Agree to participate in one KAI workshop with 10-30 portfolio companies and venture capital partners in attendance
    • Venture capital firm will promote and market the event as a new service to its portfolio companies
    • Venture capital firm will provide refreshments and venue within Firm
    • KAI will provide all conference materials , and will customize its offerings over time to specific sectors / verticals
    • KAI will provide Kaihan Krippendorff as the workshop presenter and facilitator
    • Only additional expenses would include actual out-of-pocket travel and accommodation expenses of presenter (airfare, hotel, ground transportation, meals)
    • KAI encourages the firm to track return on investment from portfolio companies who attended the workshop and will assist firm in its efforts to do so
    KAI would like to demonstrate to your Firm: The value of the workshop as a growth tool
    • Talk to additional key decision makers within your Firm to assess interest in the workshop as a business development tool
    • Choose a date for initial workshop, building in sufficient time for budgeting and marketing of the event
    • KAI will be happy to provide any additional materials your Firm may need to evaluate the opportunity
  • CONTACT INFORMATION For additional information, please contact: Benjamin Bewick Consultant KAI Method LLC 1756 N. Bayshore Road Miami, FL 33132 [email_address] Cell: 415-420-2329 Fax: 888-253-8422 www.kaimethod.com
      • KAI overview/relevance to portfolio company growth
      • Proposal
      • Who we are
      • Appendix
  • WHO WE ARE: KAIHAN KRIPPENDORFF S trategist, former McKinsey consultant, and author of three business strategy books – The Art of the Advantage , Hide a Dagger Behind A Smile , and The Way of Innovation – Kaihan Krippendorff has over a decade studying corporate conflict. Kaihan works regularly with large and medium-sized corporations including Microsoft, J&J, Ryder, DHL, and Fidelity Investments to design bold and innovative growth strategies. He delivers key-note speeches across the U.S., Europe, Asia, and Latin America and lectures regularly at business schools including Wharton and MIT Sloan. He earned his MBA from Columbia Business School and London Business School, his BSE in Finance from the University of Pennsylvania's Wharton School, and his BSE in Engineering from the University of Pennsylvania's School of Engineering.
  • WHO WE ARE: DOUG MUIR D ouglas Muir is an authority in business strategy for small to mid size businesses and the credit industry. He has successfully built several multi-million dollar businesses from the ground up. He is the Chief Operating Officer of KAI Method, LLC, a firm that helps SMB companies design innovative growth strategies and also trains the owners and management to be more creative strategists. Doug speaks internationally to entrepreneurs, finance, real estate, banking, and mortgage professionals about the importance and effects of credit. He has been published in many financial papers and magazines including The Scotsman Guide, a prestigious magazine for the banking, mortgage, and investor industry, and he was recently featured in Kaihan Krippendorff's business tactics book, "Hide a Dagger Behind a Smile" about how he infiltrated the insurance industry and locked out his competition.
    • Ravi has over 15 years of business experience in software and IT services and consulting, business and knowledge process outsourcing, business continuity and most importantly, entrepreneurship. Recent positions:
      • Currently launching ProCompare, an SMB IT product and services portal and advising companies in the areas of business continuity and training
      • Principal and ongoing Advisor at Pride Capital Partners, where he built and grew their BPO operation in the areas of insurance services, accounting, vendor management and data processing
      • Co-founder of OfficeTiger LLC, a leading business and knowledge process outsourcing company. Key responsibilities included:
        • Grew the company from 2000 to 2007 through multiple rounds of financing and an exit via acquisition by RR Donnelley in 2006 for $250mm
        • Created a key accounts growth strategy and executed new services engagements in the areas of financial print and transaction analysis / processing
        • Developed and managed the corporate business continuity and resiliency strategy, and
        • Initial technical architect for OfficeTiger, serving as initial CTO and subsequently directing client and technology solutions for clients across all areas, including strategy planning, operational support and cost management
    • Ravi graduated from Princeton University in Electrical Engineering. He also holds a MS from Stanford University in Management Science and Engineering.
  • WHO WE ARE: BENJAMIN BEWICK Finance professional with extensive economic consulting experience. Ben invested in portfolios of corporate debt for a $2 billion proprietary book at Wells Fargo and negotiated transaction details with investment bankers. He also co-managed $900 million of corporate debt for outside investors. Ben advised on a number of M&A transactions and antitrust lawsuits in Silicon Valley, including Seagate Technology’s $1.9 billion acquisition of Maxtor Corporation and Fortune Brand’s $5 billion acquisition of Canadian Club, among other brands, from Pernod Ricard. He helped a number of mergers pass regulatory review by the Department of Justice and Federal Trade Commission. He worked with economic experts at Berkeley, the Hoover Institute at Stanford, NYU, and Princeton, including three former US Department of Justice deputy assistant attorney generals for antitrust. In the late 1990’s, Ben gained operations experience at two financial software startups in the Boston area. Ben has a B.A. in Economics and History from the University of Pennsylvania and was a member of the 1991 National Championship crew team.
      • KAI overview/relevance to portfolio company growth
      • Proposal
      • Who we are
      • Appendix
  • 1% CONVERSION RATE ON PORTFOLIO COMPANY IDEAS GENERATED TO GROW REVENUE WOULD LIKELY YIELD 75% RETURN ON INVESTMENT Return Calculation Cost of Workshop Additional Revenue at Exit per Idea Profit Margin Profit at Exit Successful Ideas Total Additional Profit at Exit Affect on Sales Price Yield                 10,000 100,000 20% 20,000 2 40,000 200,000 53% 10,000 250,000 20% 50,000 2 100,000 500,000 75% 10,000 500,000 20% 100,000 2 200,000 1,000,000 93%                 Assumptions: Exit in 9 years Exit multiple of 5 x EBITDA 10 companies at workshop, 20 ideas generated per company, 200 total ideas generated, 1% converted successfully results in 2 ideas that have significant impact. Note: These assumptions are conservative and could under estimate returns.