New Venture GMU Presentation by Silver Beacon Marketing

Starting A New Venture
How will you know if you succeed?
George Bounacos
Silver Beacon Marketing
www.SBMteam.com

About George (aka Why George?)
GMU alum
Judge SOM business case competition
Fairfax County Consumer Protection Commissioner
COO, Silver Beacon Marketing
4 prior startups, plus federal and B2B work
Silver Beacon Marketing www.SBMteam.com

Universal Successes

Without a mission and metrics,how is success determined?

Qualified Successes
The Internet – inventors didn’t intend current use
Constantly changing storage media
Tape (reel-to-reel, cassette)
Optical drives
Solid state drives
Reset to cloud computing

Measure orPerish

Organization

Umbrella goal
Strategic Plan – 6 mos.
Marketing Plan – 6 mos.
Tactical Plan – 1 month increments

Create a success metric

Why are we starting this venture?
What is our financial plan?
Who is accountable?
How will we define success?
When will our milestones occur?
Questions To Ask

Funny, but true concept #1

Go All-In
New ventures are not 40 hour / week jobs
Prepare to go all-in
Commit:
Your time
Your personal resources
Your reputation

Warren Goes All-In

YourFourTakeaways

Be RealisticFundingCash FlowSales ProjectionsCustomer Service

Funding Sources
Bootstrapping
Savings
Credit cards
Family lending
Commercial lenders
Govt backed lending
Selling equity

Cash Is King
“Some people around here better get some perspective. My promotions budget at [company] was bigger than this whole place’s free cash flow.”
--COO to Morgan Stanley partner shortly before road show

Cash Is King
“Someone who owns the company writes on both sides of the paper.”
--the same COO after the IPO blew up

Cash Is King – The Simple Version

Cash Is King – The Real Version
Lower sales than expected

Litigation / Insurance

Debt servicing
Litigation / Insurance

Cash Flow – Famous Business Quote
Yesterday is a cancelled check.
Tomorrow is a promissory note.
Today is cash.

Hockey Stick
Projections
Graphic: allthingsd.com

Managers hate unrealistic projections

…but this projection is actual growth.

Sales Projections
Your organization’s sales growth will not ramp up like Twitter’s
Or Google’s
Or Microsoft’s

KEEP IT REAL
Or
Go Home
Sales Projections

Customer Service

Customer Service
25 people learn about 1 negative experience
Who knows if this is true?
Who cares?
Isn’t it enough 1 does?

Customer Service
Costs to acquire customers almost always more than to keep ones you have.
But who does that work?

Customer Service
Hiring people costs money.
Average customer service rep salary in Washington, D.C.:
$30,000
Fringe benefits:
$10,000
Explicit Cost:
$40,000 for one person

Customer Service
Who is answeringthe phone when I go to lunch?
:sigh:

Customer Service
New organizations must budget customer or client service time.
That is time not spent making sales
…or working on strategy
…or doing anything but holding on to existing business.

YourFourTakeaways

Be RealisticFundingCash FlowSales ProjectionsCustomer Service

BonusTakeaway

Change
Look for hidden competencies

Earth’s biggest bookstore

KEEP IT REAL
Or
Go Home
Starting a New Venture

Starting A New Venture
How will you know if you succeed?
George Bounacos
Silver Beacon Marketing
www.SBMteam.com