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Venture Development: Concept to Execution

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Venture Development: Concept to Execution

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Venture Development: Concept to Execution

  1. 1. Ikhlaq Sidhu Ikhlaq Sidhu Founding Faculty Director, Sutardja Center for Entrepreneurship & Technology IEOR Emerging Area Professor, UC Berkeley Department of Industrial Engineering & Operations Research, UC Berkeley From Opportunity to Execution
  2. 2. Ikhlaq Sidhu 1. Ideation: Finding an Opportunity 2. Execution: Developing the Venture Author: Ikhlaq Sidhu
  3. 3. Ikhlaq Sidhu Story/Pitch Prototype Validation Now that you have the starting point: Ready to Execute? A B 2. Your target1. Your high concept 3. Match with your team What’s Next: How do you execute?
  4. 4. Ikhlaq Sidhu Execution: From Story to Company Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later
  5. 5. Ikhlaq Sidhu Execution: Two Stages Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later
  6. 6. Ikhlaq Sidhu Demystify New Venture Journey Company Stages over Time Progress on Technology and Product Social Progress on Developing Stakeholders and Ecosystem
  7. 7. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Time FundingMVP T S A B Your high concept Match with your team
  8. 8. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Time FundingMVP T S A B Your high concept Match with your team
  9. 9. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Time FundingMVP T S A B Your high concept Match with your team
  10. 10. Ikhlaq Sidhu Demystify New Venture Journey Company Stages over Time Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Time FundingMVP T S A B Your high concept Match with your team
  11. 11. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Time FundingMVP T S A B Your high concept Match with your team
  12. 12. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Time FundingMVP T S A B Your high concept Match with your team Ikhlaq Sidhu End of Section
  13. 13. Ikhlaq Sidhu To get there, what will you need to be successful?
  14. 14. Ikhlaq Sidhu For Professional Funding or Scale:
  15. 15. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later
  16. 16. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later Prior to Traction: You need to be in the market What can you be selling (testing) now – before you spend too much money: • MVP • Advertisement • An NRE Agreement • A Service • Consulting • Why: Validation, Commitment, Stakeholders.
  17. 17. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later My Advice: 1. Make a list of stakeholders (ecosystem) 2. Get the ones your funders will care about later 3. Tell the “story”, “listen” and “collaborate” 4. Initially ask for advice, not money 5. Sometimes get them all together 6. Know how to close the deal (time limit, scarcity, ..).
  18. 18. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later
  19. 19. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later What is Traction: • Revenue • Customers • Downloads • Usage • Trial • Promise to Buy • (else the story is fiction)
  20. 20. Ikhlaq Sidhu Funding Request Based on Traction Subject: Introducing Ning to Blue Shirt Capital Hi [Middleman], Thanks for offering to introduce us to Blue Shirt Capital. I've attached a short presentation about our company, Ning. Briefly, Ning lets you create your own social network for anything. For free. In 2 minutes. It's as easy as starting a blog. Try it at: http://ning.com We built Ning to unlock the great ideas from people all over the world who want to use this amazing medium in their lives. We have over 115,000 user-created networks, and our page views are growing 10% per week. We previously raised $44M from Legg Mason and others, including myself. Before Ning, I started Netscape (acquired by AOL for $4.2B) and Opsware (acquired by HP for $1.6B). Blue Shirt’s investments in companies like Extensive Enterprises tell me that they could be a great partner for Ning. We're starting meetings with investors next week, and I would love to show Blue Shirt what we're building at Ning. Best, Marc Andreessen xyz@ning.com 415.555.1212 Source: Pitching Hacks, by VentureHacks.com
  21. 21. Ikhlaq Sidhu Funding Request Based on Traction Subject Social Proof What is it and for whom? Traction We are credible Why them? A reasonable request Source: Pitching Hacks, by VentureHacks.com Subject: Introducing Ning to Blue Shirt Capital Hi [Middleman], Thanks for offering to introduce us to Blue Shirt Capital. I've attached a short presentation about our company, Ning. Briefly, Ning lets you create your own social network for anything. For free. In 2 minutes. It's as easy as starting a blog. Try it at: http://ning.com We built Ning to unlock the great ideas from people all over the world who want to use this amazing medium in their lives. We have over 115,000 user-created networks, and our page views are growing 10% per week. We previously raised $44M from Legg Mason and others, including myself. Before Ning, I started Netscape (acquired by AOL for $4.2B) and Opsware (acquired by HP for $1.6B). Blue Shirt’s investments in companies like Extensive Enterprises tell me that they could be a great partner for Ning. We're starting meetings with investors next week, and I would love to show Blue Shirt what we're building at Ning. Best, Marc Andreessen xyz@ning.com 415.555.1212
  22. 22. Ikhlaq Sidhu How would this look from you Subject: Introducing (your firm XYZ ) to ABC Capital Hi [Middleman], Thanks for offering to introduce us to ABC Capital. I've attached a short presentation about our company, XYZ Briefly, this is what it is and who would use it We have been working with A, B and C firms – or we have X downloads … At UC Berkeley, I have been working in the ZZZ Lab which is the world’s leading place to specialize in YYY. Our team has seen these problems first hand at companies A1, A2, and A3. Your investment in companies like CBA tell me that they could be a great partner XYZ. We're starting meetings with investors next week, and we would love to get your advice on how to make the most of this opportunity. Best, Student / Researcher at Berkeley (or other great place)
  23. 23. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later This is a real company Example • Sales Targets: $5M this quarter • Customer Base: Top 10-30 Customer List • A Leading Product • Sales / R&D / Marketing / Operations • Operational Measures: • Customer Happiness Proxy • Churn / Subscriber Growth.. • Costs of Goods • Development Cycle Time • Market Share • Defect Rate • … • The entrepreneur is now thinking about leaving (or converting into an executive)!
  24. 24. Ikhlaq Sidhu Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later
  25. 25. Ikhlaq Sidhu Mindshare Execution: Work Backwards Story/Pitch Prototype Validation Market Traction Funding Scale/ Goal Sell First/ Build Later Awareness / PR Company Story/Brand Public Communication: In parallel, how could this be in the news? Is there something exciting, new happening?
  26. 26. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Stage FundingMVP T S External World is changing Background of team/
  27. 27. Ikhlaq Sidhu Demystify New Venture Journey Types of Risk and Progress: q Technology Capability q Business Model q People and Team q Funding & Resources Story/Pitch Prototype Validation Market Traction ✔ Business Model ✔ Sale Process Sell First Momentum Stage FundingMVP T S External World is changing Background of team/ Key Question: How will you handle the changes that you don’t know about yet? Depends on: • Technical skills • People skills
  28. 28. Ikhlaq Sidhu End of Section

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