Executive Summary Workshop Ideas Inc

Executive Summary Workshop - Ideas, Innovation & Purpose Dr Bernard Leong Partner, Thymos Capital & Co-‐Founder, SGEntrepreneurs.com h=p://www.bernardleong.com 1

Outline • Why: Idea against Problem? • What: Developing from Prototype to Product? • How: Writing an Executive Summary? • Q&A 2

Team Cash Idea Cashﬂow 3 3

In everyday life, we are trying to solve problems. 4

Then an Idea sparked in your head and .... 5 5

You gather the People, Resources and Partnership to Make It Happen 6 6

What is the problem Once you work that out, you are trying to solve? ExecuSon is key. What type of resources do you need to solve Are there customers or your problem? there is an exisSng Mentors, Partnerships or market for your Resources? soluSon? Who are the exisSng players from partners to compeSSors? How are they benchmarked against your idea? 7 7

Idea without ExecuSon is useless, ExecuSon without Idea is dangerous. 9 9

ExecuSon depends on a A-‐Team 10 10

“A players hire A players; B players hire C players; and C players hire D players.” Steve Jobs, Apple Inc “I am a winner because I’m good at what I do and because I am surrounded by people who think they are.” Jose Mourinho, Coach, Inter Milan FC 11 11

You will deﬁnitely not make it if you submit... • Ideas that can be easily replicated. • Ideas that has no business or tech innovaIon. • Ideas that are not scalable. 12 12

The Big Picture 13 13

Why write an ExecuIve Summary? • Organizes and clears the confusion and ambiguity of your business idea. • Correct posiIoning to convince potenIal investors. • PotenIal investors, partners and clients have no Ime for your grandmother stories about the idea. 14 14

Criteria for ExecuIve Summary • Organized and Understandable. • Use plain language and vocabulary. • Present the Problem and SoluIon on the same page. • The Purple Cow effect: making your summary disIncIvely different even if it confines to basic rules. 15 15

Language Avoid Phrases like ... Use Phrases like ... “We would like to be the leading provider of ...” “We aim to become the leading provider of ...” “We want to be the best in ...” “Our company’s core competency is ...” “Based on our ﬁnancial projecSons, we esSmate “We will make $X by the end of the year.” our sales revenue to be $X and proﬁt margins to be $Y.” 16 16

Layout of ExecuIve Summary • IntroducIon -‐ Type of Business • Problem & Opportunity • Technology/Service/Product • Management Team • Business Strategy & Route to Market • Financials • Exit Strategy 17 17

The Mantra • Name of your Company/Project/Idea. • Logo and Tagline. • Mission Statement 18 18

Type of Business • What is the Industry? • Product or Service based? • How Product or Service delivers? • Who are the customers to your business? B2B, B2C? 19 19

When is an idea an opportunity? • Create or add value to customer. • Solve a significant problem, removing a pain point or meeIng demand. • Have robust market, profit margin and money markeIng. • Good fit with founder & management team at the right Ime & place 20 20

RelaIonship -‐ Markets & Tech 21 21

Industry Sample Introduc:on MaterialSod aims to be the provider in creaSng proprietary fabrics that can withstand Materials Engineering Product harsh condiSons. We sell our fabrics to the users in the defence and coal/mining industry. RealTime is a Singapore based company that focuses on delivering an innovaSve real Sme IT based Product adverSsing soluSon to brands. Our chief consumers are brand marketers and digital markeSng agencies. 22 22

Problem & Opportunity • You are selling the soluIon to a problem. • What is the “blue ocean” you are exploiIng? • Is there any interest in your business lately? • Lies, Damn Lies & StaIsIcs 23 23

Opportunity Example Descrip:on Recently, the Singapore government has allocated S$13.5B into high technology research and development and placed their eﬀorts in three industries: biomedical sciences, Facts/StaIsIcs/News renewable energies and digital media. The soluSon we proposed is in the life sciences market, where we can reduce drug development process by a half with our technology. Based on the assumpSon that Singtel has sold a 100K iPhones, we esSmate each smart EsImate phone will purchase about 5-‐10 applicaSons and spent on average S$10 on them each month. 24 24

Technology or Idea • You must make your technology or idea understandable to your audience. • For an execuIve summary, never put too much jargon into your descripIon. • Make comparisons on how your soluIon can increase producIvity and eﬃciency. 25 25

Technology Example Descrip:on MaterialSod uses an improved composite ceramic material to build ﬁbres which can eﬃciently hold vehicles on muddy grounds. Materials Our soluSon supercedes the present ones with half the cost but twice the material strength to hold vehicles above muddy grounds. Our soluSon uses a proprietary based algorithm developed to resolve blurred objects Digital Media of movies in a format 1000 Smes be=er than the formats which are adopted by the industry. 26 26

Team • Diversiﬁed and Complementary Skill Sets. • Get Grey Hairs and put them in your advisory board. • Don’t give too much Itles to your team. • Be mature about your experience. 27 27

People Example Descrip:on John Ho is the CEO of MaterialSod. Prior to joining this company, he was the Vice President, Sales in Nippon Fabrics, a MNC Experienced specializing in fabrics. His experience with the market will help to generate sales lead for the company. Larry Pang is the founder of Project AceFire. Currently a second year undergraduate, he has spent a year working in Prof Johnston’s Young Rookie mulSmedia laboratory. He will act as the CTO of AceFire and will seek to ﬁnd a CEO who can mentor and guide the team. 28 28

Route to Market & Business Strategies • How do you sell your service or product? • 80-‐20 rule on market segmentaIon? • What are the markeIng channels on your product? • What business strategies do you use to generate revenues? 29 29

Route to Market/ Example Descrip:on Business Strategy MaterialSod engages directly with known industry partners in the fabric industry. The company does not deal directly with customer base but sells via resellers or fabric Partnerships/Licencing distributors. One alternaSve strategy to generate revenues is done via licensing of the proprietary technology to other fabric producing companies. RealSme oﬀers the customers a free beta version of the sodware with limited features so that they can enSce them to buy the Freemium Model premium version (with addiSonal features) of the sodware. The company is currently in negoSaSons on strategic relaSons with diﬀerent gaming companies. 31 31

How to EsImate Market Size • Start with simple, reasonable and valid assumpIons. • Approximate to the closest ﬁgure (10K, 1M)? • PracIce makes perfect by making esImates to problems. 32 32

PracIce Problems • How many Internet users are there in Singapore? (Hint: Start with the populaIon and number of households) • How many mobile handsets each person will hold on average? (Hint: make a guess from how many people losing phones?) • How many students are playing World of WarCrae? (Hint: Demographics) 33 33

Gartner’s Hype Cycle 35 35

4 Ps of MarkeIng 36 36

Risks & Barriers to Entry • Who are your compeItors? • How do you prevent your compeItors trumping you? • What are the problems you face against them? • Don’t assume that you are the only one or have indefensible patents. 37 37

Barriers to Entry/ Example Descrip:on Compe:tors MaterialSod faces the risk of a saturated and tradiSonal ceramics industry mindset not to adopt new technologies. To miSgate the risk, TradiIonal Industry Mindset the company will launch markeSng campaigns and present the product in various conferences to provide industry players an awareness of the product. The compression format of RealTime sodware cannot be replicated based on the proprietary Unique Selling Point algorithm used in performing the compression. We are in the process of patenSng the product to act as a deterrence against our compeStors. 38 38

SWOT Analysis 39 39

Financials • How much do you need? • How much equity you want to give? • How do you raise that amount of money? • Can you bootstrap without raising funds? 41 41

Financials Example Descrip:on MaterialSod seeks US$300K as an iniSal investment to build a proof of concept and will raise US$2M to bring the prototype to market. Fundraising The company generates revenues via sales in producing fabric for the defence and coal/ mining industries. RealSme generates revenues via the number of purchases made on the premium version and online adverSsing with the huge traﬃc Bootstrapping generated by visits from the site. The company seeks to bootstrap via hiong 1M sales target within two years. 42 42

Who do you raise funds from? • Friends, Family and Fools. • Business Angels. • Venture Capitalists. • Government InsItuIons. • FoundaIons and Agencies. • Private Equity Firms • Banks 44 44

Source: www.mengwong.com/capital 47 47

Exit Strategy • What happens to the company in 3 to 5 years Ime? • Possible Exits: –IniIal Public Oﬀerings (IPO) –Trade sale/Merger/Management Buyout –Family/Company Succession –Wind it Down! 48 48

Exit Strategy Example Descrip:on MaterialSod hopes to exit in 3 years with a proﬁt margin of 20M via a trade sale to a Trade Sale/Buyout larger player within the industry, for example, Cepheus Ceramics. RealTime seeks to IPO in 3 years as an exit IPO strategy. 49 49

Appendices 50 50

Top 10 Lies by Entrepreneurs 1. Our projection is conservative. 2. (Pick your favourite market research company) predicts our market to be US$50B. 3. (A big MNC) is signing our contract next week. 4. Key employees will join us as soon as we get funded. 5. Several investors are already doing due diligence on us. 6. This big company is too old, big, stupid and slow to be a threat. 7. Patents makes our business defensible. 8. All we have to do is to get 1% of the market. 9. We have 1st mover advantage. 10. We have a world-class proven team. 51 51

Top 9 Lies by Investors 1. I liked your company but my partners don’t. 2. If we get a lead, we will follow. 3. Show us some traction and we will invest. 4. We love to co-invest with other venture capitalists. 5. We are investing in your team. 6. I have lots of bandwidth dedicated to your company. 7. This is a vanilla term sheet. 8. We open doors for you at our client companies. 9. We like early stage investing. 52 52

References • StarIng Up, New Venture, McKinsey & Co. • The Art of the Start by Guy Kawasaki • Singapore Entrepreneurs blog (Dummy’s Guide) hmp://www.sgentrepreneurs.com • Gladstone, Venture Capital InvesIng • CompeIIve Strategy, Michael Porter • Crossing the Chasm, Moore • ACRA -‐ hmp://www.acra.gov.sg 53 53

Resources: Intellectual Property h=p://www.ipos.gov.sg 54 54

Resources: Business Info h=p://www.business.gov.sg 55 55

Resources: InnovaIon & Tech h=p://www.exploit-‐tech.com 56 Go to this page only if you are looking for a technology to commercialize 56

Resources: Business RegistraIon h=p://www.acra.gov.sg 57 57

Resources: CommuniIes h=p://www.sgentrepreneurs.com 58 58

Resources: Other CommuniIes h=p://www.e27.sg h=p://www.youngupstarts.com 59 59

“Study the past if you would deﬁne the future.” -‐ Confucius Contact: bleongcw (GMail) 60 60

http://sgentrepreneurs.com	209
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Executive Summary Workshop Ideas Inc

by Bernard Leong on Oct 25, 2009

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Executive Summary Workshop Ideas Inc — Presentation Transcript