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despicable me ways to
make money
5
Ritchie Ng
without investments from early
investors
And be fascinated by the
presentation
Sit back
and relax
We’ll be discovering 5
business models that can
finance your start-up
without early investors
The minions have very
innovative & unorthodox
ways when it comes to
solving problems.
We should be like
them!
Founders of start-ups
often scramble to
pitch their ideas to
early investors and
hope for financing.
Typical founder of a ...
Is this an
efficient
method?
SAY NOTO
Early investors
SAY YESTO
Using your clients’
cash for financing“Negative Working Capital” in
Accounting Terms
Focus on
strategy
Skip the competition with the
rest to get financing from early investors.
What are the
benefits
You’ll have the time to
create, test, refine
and prove your
business model
Ditch the pitch to
investors!
You’ll have typically
higher valuations
as your business
model has been
proven to work
Skip traditional
financing such as bank
loans which may be
tight
BUSINESS MODELS
5
ENTREPRENEURS OFTEN NEGLECT
The
Middle manMODEL
When to use How to implement
What to watch out for
Use for customer-to-
customer (C2C)
settings connecting
buyers and sell...
Established Examples
Nascent Examples
eBay
Real estate brokers
Expedia
Airbnb
DogVacay
Zopa
Benefits
Low capital outlay
Lo...
Upfront PaymentMODEL
When to use How to implement
What to watch out for
Use for customer-to-
customer (C2C) and
business-to-business
(B2B) sett...
Established Examples
Nascent Examples
Consultants
Architects
Lawyers
Via
easyFairs
Studenterbolaget
Benefits
Low capital o...
SUBSCRIPTIONMODEL
When to use How to implement
What to watch out for
Use C2C and B2B
settings where
consumables (organic
vegetables, vitamin...
Established Examples
Nascent Examples
Newspapers
Cable Channels
Gyms
TutorVista
Massage Envy
Yammer
Benefits
Highly capita...
STANDARDISE
AND
RESELLMODEL
When to use How to implement
What to watch out for
B2B settings where a
customer service or
product created for one
client...
Established Examples
Nascent Examples
Microsoft
• Bill gates won a contract to
provide systems for IBM
• The software cons...
SCARCITYMODEL
When to use How to implement
What to watch out for
B2C settings involving
rapid product or
fashion obsolescence
(apparel, ...
Established Examples
Nascent Examples
Zara
• Zara pays its vendors on
extended terms, creating
negative working capital.
G...
Summary
Each of these models allowed
many companies to launch
with little or no external
financing
Ditching the pitch gave...
Limitations
Customer-funded models
don’t suit every venture
Capital-intensive projects
which require manufacturing
plants ...
Thank you your support!
This presentation is the…
Ritchie Ng
Linkedin: linkedin.com/in/ritchieng
Facebook: facebook.com/ritchie.ng.zhenghao
Twitter: twitter.com/ritchieng
S...
IMAGES
Despicable Me, Alphacoders
ICONS
The Noun Project
NOTES
I was inspired to create these slides after an
article I’ve...
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5 despicable me ways to make money

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I've decided to revamp my previous presentation and gave it a theme so it's more fun to read. I hope more people consider these ways to finance your start-ups. There are many examples who've succeeded using these models without financing from investors. But there should be more.

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Transcript of "5 despicable me ways to make money"

  1. 1. despicable me ways to make money 5 Ritchie Ng without investments from early investors
  2. 2. And be fascinated by the presentation Sit back and relax
  3. 3. We’ll be discovering 5 business models that can finance your start-up without early investors
  4. 4. The minions have very innovative & unorthodox ways when it comes to solving problems. We should be like them!
  5. 5. Founders of start-ups often scramble to pitch their ideas to early investors and hope for financing. Typical founder of a start-up obsessed with financing from early investors like how minions are obsessed with bananas.
  6. 6. Is this an efficient method?
  7. 7. SAY NOTO Early investors
  8. 8. SAY YESTO Using your clients’ cash for financing“Negative Working Capital” in Accounting Terms
  9. 9. Focus on strategy Skip the competition with the rest to get financing from early investors.
  10. 10. What are the benefits
  11. 11. You’ll have the time to create, test, refine and prove your business model Ditch the pitch to investors!
  12. 12. You’ll have typically higher valuations as your business model has been proven to work
  13. 13. Skip traditional financing such as bank loans which may be tight
  14. 14. BUSINESS MODELS 5 ENTREPRENEURS OFTEN NEGLECT
  15. 15. The Middle manMODEL
  16. 16. When to use How to implement What to watch out for Use for customer-to- customer (C2C) settings connecting buyers and sellers Concentrate on a niche market and expand to other markets from there A lack of either buyers or sellers may be an indication that you may have overestimated the demand for your market.
  17. 17. Established Examples Nascent Examples eBay Real estate brokers Expedia Airbnb DogVacay Zopa Benefits Low capital outlay Low cost of goods sold
  18. 18. Upfront PaymentMODEL
  19. 19. When to use How to implement What to watch out for Use for customer-to- customer (C2C) and business-to-business (B2B) settings where the work unfolds gradually and incrementally rather than a single transaction. Be bold and ask! Deposits in advance are common in many industries. If your clients do not want to pay upfront, there is a high chance they may not want to purchase your products or employ your services at all.
  20. 20. Established Examples Nascent Examples Consultants Architects Lawyers Via easyFairs Studenterbolaget Benefits Low capital outlay More cash for your business activities
  21. 21. SUBSCRIPTIONMODEL
  22. 22. When to use How to implement What to watch out for Use C2C and B2B settings where consumables (organic vegetables, vitamins) or services (entertainment) are sold Offer a short trial subscription and measure renewal rates. Poor renewal rates? Demand may exist, but your offering is not right yet.
  23. 23. Established Examples Nascent Examples Newspapers Cable Channels Gyms TutorVista Massage Envy Yammer Benefits Highly capital- efficient because customers pay a predictable monthly fee in advance Smoother revenue growth than most start-ups
  24. 24. STANDARDISE AND RESELLMODEL
  25. 25. When to use How to implement What to watch out for B2B settings where a customer service or product created for one client can be adapted and sold to a much large group of customers Labour-intensive processes don’t scale. Develop technology or systems that can do what people have been doing manually. Be very patient. Offshoots will much later than your initial sale.
  26. 26. Established Examples Nascent Examples Microsoft • Bill gates won a contract to provide systems for IBM • The software consequently served as the underpinnings of the Windows Operating System MapmyIndia GoViral (now AOL’s Be On) Benefits Lower R&D costs because of the use of the previous project’s funding, improvising the product and selling it to the mass market.
  27. 27. SCARCITYMODEL
  28. 28. When to use How to implement What to watch out for B2C settings involving rapid product or fashion obsolescence (apparel, jewellery) Your product range can be wide (Zara) or focused (Vente-privée) but not deep. When an item is gone, it’s gone forever. Avoid the temptation to manufacture more of what sells well. Alter or build on it, but do not repeat it.
  29. 29. Established Examples Nascent Examples Zara • Zara pays its vendors on extended terms, creating negative working capital. Gilt Privalia Vente-privée (able to forgo outside investment for six years) Benefits Negative working Capital
  30. 30. Summary Each of these models allowed many companies to launch with little or no external financing Ditching the pitch gave founders more time to refine their businesses Many founders realised that VC firms are more eager to write them cheques after their business models have been proven successful
  31. 31. Limitations Customer-funded models don’t suit every venture Capital-intensive projects which require manufacturing plants or other infrastructure must almost always rely on traditional financing.
  32. 32. Thank you your support! This presentation is the…
  33. 33. Ritchie Ng Linkedin: linkedin.com/in/ritchieng Facebook: facebook.com/ritchie.ng.zhenghao Twitter: twitter.com/ritchieng Scribd: scribd.com/ritchieng Managing Director, Tesglo Pte. Ltd. Editor-in-chief, Lexiro Labs Email: info@lexiro.com Thank you
  34. 34. IMAGES Despicable Me, Alphacoders ICONS The Noun Project NOTES I was inspired to create these slides after an article I’ve read through my email. I’ve created these slides to help people digest these five neglected ways of start-up financing better by paraphrasing, summarising and using visual representations for easier comprehension. I’m willing to give any credits where and when necessary. All content credits given to the author of the article, John Mullins. Credits

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