TechBA Roadshow 2008

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  • TechBA Roadshow 2008

    1. 1. Understanding the US Market Jorge Zavala CEO TechBA – Silicon Valley September 2008
    2. 2. Agenda <ul><li>The Silicon Valley – Environment & Ecosystem </li></ul><ul><li>Expanding into US – Common Mistakes </li></ul><ul><li>The Effective Process </li></ul>
    3. 3. I. The Silicon Valley
    4. 4. Facts about Silicon Valley <ul><li>2.4 M population </li></ul><ul><li>40% of population is foreign born </li></ul><ul><li>40% with least a bachelor’s degree </li></ul><ul><li>23% speak Spanish </li></ul><ul><li>Maintains 35% of the U.S.’s entire venture capital resources. </li></ul><ul><li>11% of all U.S. patents generated here </li></ul>
    5. 5. San Jose Fact Sheet <ul><li>Largest city in the 9 county Bay Area </li></ul><ul><li>3 rd largest city in California </li></ul><ul><li>10 th largest city in U.S. </li></ul><ul><li>Population: more than 1M </li></ul><ul><li>Around 7,000 high-tech companies </li></ul>
    6. 6. Silicon Valley = Innovation Environment <ul><li>Rewards risk and accepts failure </li></ul><ul><li>Results-oriented </li></ul><ul><li>Smart and creative workforce </li></ul><ul><li>Industry clusters </li></ul><ul><li>Intellectual capital abounds with universities and national research institutions </li></ul><ul><li>Collaboration between government, private industry, development community and academia </li></ul>
    7. 7. II. US Expansion Process: Common Mistakes
    8. 8. Common New Market Expansion Issues <ul><li>Company establishes operations in a new market only to pull out less than 1 year later </li></ul><ul><li>Company does not meet sales goals </li></ul><ul><li>Staff does not assimilate into the local business culture </li></ul><ul><li>Marketing message is not right or not tailored to the local market </li></ul><ul><li>Selling on the basis of “we are low-priced” rather than “we deliver good value.” </li></ul>
    9. 9. How Does This Occur? <ul><li>Lack of preparation </li></ul><ul><ul><li>Little market development or research </li></ul></ul><ul><ul><li>Minimal company-wide planning or goal-setting </li></ul></ul><ul><ul><li>No company market entry team created </li></ul></ul><ul><li>Lack of consideration for differences in culture, communication patterns and buying habits </li></ul><ul><li>Underestimating market complexity </li></ul><ul><li>Underestimating the competitors </li></ul>
    10. 10. U.S. Business Culture <ul><li>Business and legal structures are rigid. </li></ul><ul><li>Deal terms and pricing take priority over personal relationships, most times. </li></ul><ul><li>In general, U.S. buyers: </li></ul><ul><ul><li>respect achievement, success, wealth </li></ul></ul><ul><ul><li>respect punctuality and accuracy </li></ul></ul><ul><ul><li>respect adherence to instructions </li></ul></ul><ul><ul><li>are very competitive </li></ul></ul><ul><ul><li>have very short attention spans </li></ul></ul>
    11. 11. Common Sales Mistakes <ul><li>Not understanding the market </li></ul><ul><li>Unclear value proposition / message </li></ul><ul><li>Lack of a sales process </li></ul><ul><li>Ineffective hiring of sales representatives </li></ul><ul><li>Not selling value to the prospective customers </li></ul>
    12. 12. Effective Preparation for Growth <ul><li>Conduct market research </li></ul><ul><li>Validate your message and refine the value proposition </li></ul><ul><li>Make changes to your product or service </li></ul><ul><li>Create marketing materials or modify existing ones </li></ul><ul><li>Obtain government approvals, permits </li></ul><ul><li>Protect the intellectual property </li></ul><ul><li>Hire consultants, advisors or employees </li></ul><ul><li>Establish a viable customer support strategy </li></ul>
    13. 13. Effective Preparation for Growth <ul><li>SWOT analysis </li></ul><ul><ul><li>S trengths </li></ul></ul><ul><ul><li>W eaknesses </li></ul></ul><ul><ul><li>O pportunities </li></ul></ul><ul><ul><li>T hreats </li></ul></ul><ul><li>Leverage from your position of strength </li></ul><ul><li>Expansion may not necessarily include the company’s entire product suite </li></ul>
    14. 14. Create a Market Entry Success Team <ul><li>Who participates in this team and why? </li></ul><ul><li>Representatives from every functional group in your company </li></ul><ul><li>Sales, marketing, engineering, support, finance, operations, legal, services, strategic alliances, business development, and perhaps more…. </li></ul>
    15. 15. Plan Accordingly <ul><li>Staffing </li></ul><ul><li>Capital investment </li></ul><ul><li>Realistic sales goals </li></ul><ul><li>Realistic timelines </li></ul><ul><li>Reassess every 90 days </li></ul>
    16. 16. Never Underestimate… <ul><li>Cultural differences </li></ul><ul><li>Language differences </li></ul><ul><li>How relationships develop </li></ul><ul><li>Business style differences </li></ul><ul><li>Negotiation style differences </li></ul><ul><li>Sales cycle vs. the buying cycle </li></ul><ul><li>Complexity of the market </li></ul><ul><li>Competitors </li></ul>
    17. 17. III. The Effective Process: How to get inside Silicon Valley
    18. 18. The Effective Process <ul><li>1. Find the “best” product or service </li></ul><ul><li>2. Analyze your market </li></ul><ul><li>3. Define a clear marketing strategy </li></ul><ul><li>4. Get a proof of concept and sales strategy </li></ul><ul><li>5. Tune your company to scale </li></ul><ul><li>6. Get the the right team to execute </li></ul><ul><li>7. Establish a Clear Legal structure </li></ul><ul><li>8. Set high entry barriers (IP protection) </li></ul><ul><li>9. Have a clear future path (permanent innovation) </li></ul>
    19. 19. 1.The Product or Service <ul><li>Solves a big problem (Fills a gap) </li></ul><ul><ul><li>Must have vs. Good to have vs Nice to Have </li></ul></ul><ul><li>Has a large and growing market </li></ul><ul><li>Sustainable competitive advantages </li></ul><ul><li>Scalable </li></ul><ul><li>High entry barriers </li></ul><ul><ul><li>Complex technology </li></ul></ul><ul><ul><li>Intellectual property protection </li></ul></ul>
    20. 20. 1.The Product & the Opportunity Looking for the Gap ProvidersNeeds Need1 N2 N3 N4 N5 N6 Large P1 X X X N/A P2 X X N/A P3 X N/A P4 N/A P5 N/A Medium P1 X X X N/A P2 X X N/A P3 N/A P4 X X X X N/A P5 X X X N/A
    21. 21. 2. The Market <ul><li>Find out </li></ul><ul><li>Size of the market , and how it is growing : (trends) according with known analysts. </li></ul><ul><li>Identify segments </li></ul><ul><li>Who are the main players: competitors, distributors, influencers per segment </li></ul><ul><li>Client’s key decision factors per segment </li></ul><ul><li>Your competitive advantage </li></ul>
    22. 22. 3.Go to Market Strategy : <ul><li>Segments ( verticals?) </li></ul><ul><li>Pain ?: different for different segments </li></ul><ul><li>Decision maker ? </li></ul><ul><li>Key decision factors? </li></ul><ul><li>Biz Model: For example: </li></ul><ul><li> Rent or sale ? </li></ul><ul><li>Price (not based only on cost) VALUE </li></ul><ul><li>Channels (Distributors, internet?) </li></ul><ul><li>Marketing Materials and Public Relations </li></ul>
    23. 23. 4. Sales strategy <ul><li>Find out where to find your clients (events) </li></ul><ul><li>Where to find your partners/channels </li></ul><ul><li>How to open the door (communications) </li></ul><ul><li>Get your beta clients </li></ul><ul><li>Get your first paying clients in the segment you are focusing on ( references) </li></ul><ul><li>Plan your expansion ( Channels? Partners? Sales people?) </li></ul>
    24. 24. 5.Scalable Operations <ul><li>Plan how to SCALE your business (productivity per employee) </li></ul><ul><li>Lead generation and follow up ( website) </li></ul><ul><li>Channel support and training( Webex, Interwise) </li></ul><ul><li>Local and remote client /partner support </li></ul><ul><li>( e-learning) </li></ul><ul><ul><li>Pre-sales </li></ul></ul><ul><ul><li>Post- sales </li></ul></ul><ul><li>Sales ( Internet? Amazon) </li></ul>
    25. 25. Value of the Knowledge (Wealth per capita – from $1M to $22M) <ul><li>SV Corporations – market value vs. number of employees </li></ul><ul><ul><li>Cisco (1984) - US$147B – 50K employees - $3M/employee </li></ul></ul><ul><ul><li>Google (1999) - US$130 B – 5.7K employees </li></ul></ul><ul><ul><li>$22M/employee </li></ul></ul><ul><ul><li>Intel (1968) - US$118 B – 102K employees </li></ul></ul><ul><ul><li>$1.2M/empoyee </li></ul></ul>
    26. 26. 6.The TEAM <ul><li>Local CEO ( serial entrepreneur) </li></ul><ul><li>Business Development / Marketing & Sales VP with strong Knowledge of the market </li></ul><ul><li>The CTO </li></ul><ul><li>The Lawyer </li></ul><ul><li>Strong Board of Advisors </li></ul><ul><li>Strong Board of Directors </li></ul>
    27. 27. 7. Legal structure in the US <ul><li>Subsidiary, independent or head quarter? </li></ul><ul><li>C -Corporation or LLC </li></ul><ul><li>Where ? Delaware- California – Florida? </li></ul><ul><li>Agreements ( employees , client licenses , distributors, contractors) </li></ul><ul><li>Stock options plan </li></ul>
    28. 28. 8. Protect your Intellectual Property <ul><li>Patents in the US( protect the idea ) </li></ul><ul><ul><li>Provisional patents </li></ul></ul><ul><li>Copyrights ( protect the form- software) </li></ul><ul><li>Trade Marks, logos etc( registration) </li></ul><ul><li>Trade secrets ( coca-cola) restricted areas </li></ul><ul><li>Non Disclosure Agreements (NDA) </li></ul>
    29. 29. 9. Clear future path <ul><li>Product Road Map (innovation) </li></ul><ul><li>Sales and revenue forecast (3-5 years) </li></ul><ul><li>Operational needs </li></ul><ul><li>Financial needs </li></ul><ul><ul><li>Bootstrapping or Investors? </li></ul></ul><ul><li>Financial exit </li></ul><ul><ul><li>Acquisition – Potential buyers </li></ul></ul><ul><ul><li>IPO </li></ul></ul>
    30. 30. The Effective Process ( Summary) <ul><li>Unique product for a big, growing market </li></ul><ul><li>Clear marketing and sales scalable strategy that lets you penetrate the market in a short time frame </li></ul><ul><li>Clear future path (permanent innovation) </li></ul><ul><li>The right team to execute </li></ul><ul><li>Clear financial projections & needs </li></ul>
    31. 31. Thanks! <ul><li>Q & A </li></ul>

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