Making it work u of manitoba

Making it Work! News From the Front Lines Extended Version Rob Adams

Making it Work  Good ideas are scarce  I know my customer  I have to ship the killer product  I must raise a lot of capital quickly  Investors fund business plans  Investors want their money back quickly  Advertising is the hallmark of a good marketing plan  I can use partners to sell my product 2 © Rob Adams

Making it Work  Good ideas are scarce… • Ideas are commodities • 1:8:20 rule • Get to market first fallacy • No competition fallacy  Characteristics of a solid concept • New approach to an existing business process • Real, existing corollaries today • Solution today has market potential of $ 1 billion • Multiple adjacent markets just as large • Start up team with execution skills in the space 3 © Rob Adams

Making it Work  I know my customer… • Deadliest of all myths • Market validation from friends • Ready, fire, aim approach to products • Consumes capital at a furious pace  Market validation • Right product, features and markets sooner • Natural alpha, beta and first customers emerge • Helps recruit savvy employees • Raises smart capital • Optimizes company’s capitalization 4 © Rob Adams

Making it Work  I have to ship a killer product… • ‘Boiling the ocean’ feature sets • Delays time to market, and the market always is moving • Uses large amounts of capital  Build it, buy it, partner for it • Prioritized market feedback from validation • Get to market faster and with less capital • Go after partners like you go after customers • Ship ‘minimal functionality’ products 5 © Rob Adams

Making it Work  I must raise a lot of capital quickly… • Lots of capital before any value is created • Causes dilution • Produces a spend mentality • Output versus execution orientation  Focus on value inflection points • Validate markets and business models • Customer traction • Bring on key executives and advisors • Raise enough capital to get through the next set of value inflection points 6 © Rob Adams

Making it Work  Investors fund business plans… • Typically #1 on the start up to do list • Lots of energy and time • Output orientation • Companies get funded without them  How to handle the business plan • Put it last on the list • Validate markets and business models • Hire a team with ‘execution expertise’ in your space • Mitigate risk • Develop your investment pitch • Then the plan writes itself 7 © Rob Adams

Making it Work  Investors want their money back quickly… • Common misperception • Liquidity events do not produce liquidity for founders… or investors • Quality investors expect a return, but want it from a quality company  Who to raise money from • Professional investors know how to build quality companies • Go with investors who can continue to fund the company – through good times and bad • Pick your partners carefully 8 © Rob Adams

Making it Work  Advertising is the hallmark of a good marketing plan • Marketing issues are the highest risk components of early stage companies • No early stage company needs mass marketing  How do you address this? • Bring on marketing resources early • Get your entire company to focus on customers and market validation • Early stage companies do need marketing – focused on product management, company buzz and customer acquisition 9 © Rob Adams

Making it Work  I can use partners to sell my product • Many technology focused companies rely on others to ‘go to market’ • Companies forget sales is a form of ongoing market validation • Partners work only after you’ve established a strong market position  How do early stage companies sell? • Three basic sales models for early stage companies; direct, telesales and OEM • Prove an economic model that has reasonable customer acquisition costs • Understand your sales cycle, sales model and who in the organization are in the decision chain 10 © Rob Adams

If You Want More…  Presentation content from research done for this book  Random House/Crown Books  All major booksellers • Amazon • Barnes & Noble  Contact information • Rob Adams • rob.adams@mccombs.utexas.edu • 512-633-5955 11 © Rob Adams

Making it work u of manitoba

by Rob Adams on Jul 09, 2010

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