Creating Value in your Startup Company PPT

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Creating Value in your Startup Company PPT

  1. 1. Creating Value in your StartupDec 5, 2012R. Paul SinghEntrepreneur@rpaulsingh 1
  2. 2. AGENDA• Components of Value• Team• Technology• Customers• Profitability/Growth• Branding• Scaling• Examples 2
  3. 3. Value lies in the eye of the acquirerVALUE OF A COMPANY IS IN THE EYE OF THE ACQUIRERMORE LIKE IN THE HANDS OF YOUR TEAM
  4. 4. Components of Company Value SCALING SCALING BRANDING BRANDING PROFITABILITY/GROWTH PROFITABILITY/GROWTH CUSTOMERS CUSTOMERS TECHNOLOGY TECHNOLOGY TEAM TEAM 4
  5. 5. Components of Company Value TEAM TEAM• Team Value – Composition – Business Vs Technical – Domain Knowledge & Experience – Record of team members – Chemistry of the team – Location of the team – Size matters but Quality matters more in a startup 5
  6. 6. Components of Company Value TECHNOLOGY TECHNOLOGY• Technology Value – Breakthrough Technology VsIncremental Technology– Design is new Technology– Causing disruption to an existingMarket– Relevance to trends– Are you filling in product gap for a large vendor– Are you tied to an Ecosystem– Protecting IP 6
  7. 7. Do companies get acquired just for TEAM TEAM• Many large companies buying just for TECHNOLOGY TECHNOLOGY getting good teams• Who has done most team/tech acquisitions amongst large companies? 7
  8. 8. Some Examples & Analysis of Acquisitions for TEAM TEAM TECHNOLOGY TECHNOLOGY• Twitter Acquisitions – Vine – Video Sharing – 3 Employees – Posterous – Tumblr like – Rest Engine – Personalized Email Marketing – Clutch.io – Mobile IP Testing• Google Acquisitions – Bufferbox – Shipping lockbox – Incentive Targeting – Online marketing coupon – Nick Software – Snapseed mobile photo editing – Sparrow – Email for iOS 8
  9. 9. What you get in Acquisitions for TEAM TEAM TECHNOLOGY TECHNOLOGY 9
  10. 10. Components of Company Value CUSTOMERS CUSTOMERS• Customer Value is the true value – Consumer Vs Enterprise– Life time value of customer– Cost of Acquisition– How easily can you be replaced?– Type of customer matters too!– Size matters but Quality matters more in a startup– Is customer service just for Enterprise products?– Why are pure services company valued lower? 10
  11. 11. Components of Company Value PROFITABILITY PROFITABILITY• Profitability gives you Freedom but – Profitability Vs Cash flow– Profitability Vs Growth– Revenue matters more– Gross Vs Net Revenue 11
  12. 12. Components of Company Value PROFITABILITY PROFITABILITY Which company is more valuable? Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Revenue 5 9 15 27 47Company A COGS 2 3 5 9 16 GM 3 6 10 18 31 Op. Costs 4 8 12 14 16 Profits (1) (2) (2) 4 15 Revenue 5 6 8 10 12Company B COGS 2 2 3 3 4 GM 3 4 5 7 8 Op Costs 3 3 4 5 5 Profits 0 1 1 2 3 12
  13. 13. Components of Company Value BRANDING BRANDINGPeter Thiel: Brand is as a classic code word for monopoly.But getting more specific than that is hard. Whatever abrand is, it means that people do not see products asinterchangeable and are thus willing to pay more.A good brand provides a clear and memorable sense ofwhat your business stands for! 13
  14. 14. Brand Building 101 – source KissMetrics BRANDING BRANDING• Some simple steps in Startup Marketing – Market Segmentation– Keyword Definition– Defining and Measuring Success– Marketing Budget – Inbound and Outbound– Inbound – PR, Influencers, Social Networks, Blogging– Outbound – Ads, Conferences, Analysts 14
  15. 15. Components of Company Value BRANDING BRANDING• Building Brand is as important as finding Customers – Brand is more valuable when others talk about it – Brand Building is very similar whether you are dealing with B2B or B2C Markets – Brand building costs are always underestimated – Always seek a healthy balance of Push Vs Pull Marketing – Brand building is responsibility of everyone in your company 15
  16. 16. Scaling gone wrong SCALING SCALINGhttp://www.youtube.com/watch?v=gpy5tR3UOaQ
  17. 17. Some Recent ExamplesCariden – Optical Nw & Tools - $141MMeraki – Wifi + Cloud = $1.2B SCALING SCALING BRANDING BRANDING PROFITABILITY/GROWTH PROFITABILITY/GROWTH CUSTOMERS CUSTOMERS TECHNOLOGY TECHNOLOGY TEAM TEAM 17
  18. 18. Some Recent ExamplesMarketing Pilot – Mktg automationPhone Factor – Multi-factor AuthStorSimple – Ent. Cloud StorageYammer – Social Enterprise SCALING SCALING BRANDING BRANDING PROFITABILITY/GROWTH PROFITABILITY/GROWTH CUSTOMERS CUSTOMERS TECHNOLOGY TECHNOLOGY TEAM TEAM 18
  19. 19. SummaryFocus on buildinglong term valueand the rest willfall in placeValue is not justtechnology orteam but acombination ofthese, branding,profitability andgrowth 19 19
  20. 20. Questions?Thank You 20

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