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Ray mc connell competitive strategy

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TSS Core event 4: Competitive Strategy - Monday 8th November

TSS Core event 4: Competitive Strategy - Monday 8th November

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Ray mc connell competitive strategy Ray mc connell competitive strategy Presentation Transcript

  • Competitive Strategy Ray McConnell
  • Startup: Is it like this? No
  • Startup: More like this!
  • Who I am
    • Founder of Four Start-ups, Focused on Semicon
      • 2 IPOs (LSE, AIM), 3 Plcs (high net worth network)
      • Managed strategic patent portfolios
    • Blu Wireless Technology
      • Just filed 15 patents (Thanks ElementOne IP)
      • Market is potentially huge: Now part of WiFi 1B parts/year
    • Larger Strategic Technology Theme
      • Built up a community of expertise over the years
      • Embedded high volume applications are opening up
    • The Silicon Cluster is the bigger picture
  • Competitive Strategy; What is it?
    • Optimising and mitigating risk
      • Risks are hard to quantify even if they are known
      • Protecting yourself is mandatory
    • No clear single method
      • It's always different , you will know best
      • Seek the experience of repeatability
      • Avoid “Black Swan” advice
    • Be familiar with the basics
      • There is a lot of analysis, it might not feel relevant
      • Take your time to understand it
  • Startup Focus: Duel Strategy
    • Put some thought to understanding potential Exits
      • For investment direction
        • Useful to figure this and work the plan backwards
      • An acquisition maybe your biggest customer
        • Understand any potential conflict with your market strategy
    • Your market
      • Core competence
        • Does your team have enough technology knowledge and skills?
      • Product
        • Does your team have enough market knowledge and skills?
        • Engage early, it may feel like its slowing your development
        • Much easier to sell a relevant product
  • Competitive Advantage; Michael Porter
      • Cost Leadership
      • Differentiation
      • Focus
      • Fairly obvious, mainly for established business
  • Disruptive Technology; Clayton Christensen
    • Don’t try selling features alone
      • Sell low cost + value add
  • The Hype Cycle; Gartner Research
    • Actually many curves
      • Investment expectation, you must time this right!
      • Market uptake, plan your spend appropriately!
  • Crossing the Chasm; Geoffrey Moore
  • Crossing the Chasm
    • Focus value proposition on single market sector
      • Show the real £$ value in your customers terms
      • Reduce market USP and communication to “two sentences”
    • Establish your beach head
      • Don’t be fooled by early market success
      • Wider non focused activity can overwhelm and confuse
      • Bowling pin analogy
        • Hit the pin that propagates best
    • Be crystal clear on sales channel
    • Don’t get caught up in your own hype
      • Keep a clear head
    • Careful! Your investors might abandon you
      • Try to get ‘Smart Money’
    Hype with Chasm
  • Semicon Valuation Lifecycle Milestones Team/IP Value Promise Value Valley of Death Financial Value Initial Funding Build Team & Product Dev. Samples (Launch) Production Shipping Revenue Ramp Revenue Valuation
  • Partnering
    • Can lower R&D Cash spend
    • Can help you get funding
    • Help you get to market
      • Help define product
      • Provide validation
      • Intro to customers
    • “ the thing that typically kills you is not technology, or
    • there wasn’t that gap in the market, it’s simply the
    • fact that you could not achieve enough scale to service that gap in the market
    • and a larger vendor can come along and apply more resource to it…the scale
    • that is required just to service these market opportunities is too big and a lot
    • of times that’s why companies end up getting bought out”
  • Patents
    • Good
    • Protecting the technology
    • Validating originality
    • Increase valuation
      • Adds value to your exit
    • Can be marketed
    • Helps clarify USP
    • Good for CV
    • Even if not granted,
      • Prevent others patenting it
    • Bad
    • Takes a lot of time
    • Granting even more time
    • Costly
    • Exposure
      • None before priority date
      • Then broadcast to everyone
    • Too small to leverage
      • Ever?
  • Patent story #1 (not recommended)
    • Created large UK filing for priority date
    • Many claims
    • US filing, UK priority date
    • Took 7 years for UK and US patent office not process it!
    • Modified UK to single claim for grant
    • US rules allowed claims re-vamp
      • Targeted specific companies products with new claims
      • With original priority date!
    • Most/all patent attorneys in US have conflict in interest!
    • Litigation costs were estimated to be many $M
    • Patents sold recently (multiple £M, still cheap though!)
  • Patent story #2
    • Created abstract for filing date in UK
    • Added claims within 1 year
    • US filing within that same year
    • UK patent office feedback:
      • Not valid as a Software or Business process
    • Continued in US
    • Expecting US grant
  • Startup Competitive Strategy
    • You have to ‘see’ it early
      • If you are tech savvy this will be instinctive
      • Has to be a ‘big’ opportunity, need to see where it fits on the hype curve
    • Bring a different technology into the established market
        • The ‘joining’ will bring new value and patentable IP
        • Know your market and create the USP
    • Market downturns are your friend
      • Incumbents R&D is first to go!
      • Incumbents will be left out if not partnering or acquiring
    • Build your case
      • Seek specialists, build team, offer equity
      • Seek partners, offer equity
      • Patent key concepts
    • Build route to market
      • Find localised biz development expertise, offer equity
    • Verify Market
      • This will take time, build credible numbers
    • Seek funding
  • Some Tips
    • The start-up fear is addictive!
    • Don’t pick a niche market:- or a market that is post hype.
    • Write a good business plan
    • Think about the investors’ perspective:-
      • Smart money helps
    • Take time to pick your team:-
      • Don’t grow too Fast - a poor hire hiring is a disaster.
    • Find partners, they are out there somewhere.
    • Get early customer engagement:-
      • But don’t launch an immature product
    • The market always takes longer to develop:- Spend appropriately
    • Protect intellectual property
      • NDA, copyrights, trademarks and licenses.