Tips and typical pitfalls of startups at Hokkaido univ.pdf

Copyright © K Consulting All Rights Reserved.
Tips and typical pitfalls of startups
Kazuaki Oda
Hokkaido University, 8th August, 2023

#SerialEntrepreneur #Professor #Consultant
#Investor #Athlete #Mathematics #KeynoteSpeaker,,
-K Consulting Co., Ltd (CEO)
-Nagoya University (Visiting Professor)
-SLOGAN Inc.（Co-Founder & Executive Fellow） *IPO(2021)
-IIT Kharagpur, IISc, Indian Institutes of Management,
IIT Hyderabad, National University of Singapore,
Institut Teknologi Bandung, University of Indonesia,,,
（Guest Lecturer）
Kazuaki ODA (織田一彰)

Copyright© K Consulting All Rights Reserved.
Please keep in mind
Always think and talk
with a “Number”

(Work) *10 min.
To realize your SDG’s business,
what can be big problems?

The problems may be something like,,,
-No business model(product)
-No money
-No experience
-No good team
-No customer
…

The problems may be something like,,,
-No business model(product)
-No money
-No experience
-No good team
-No customer
…
=>Product/Fundraise/Team

Thomas Alva Edison

(Examples of Innovations)

The Inventions of The Human
-Language
-Fire
-Agriculture
-Currency
-Electricity
-Telephone
-Car/Train/Plane
-Medicine
-Metal(Iron/Copper/Aluminum,,,)
-Paper/Book
-Music/Art
・・・

Four Greatest Inventions of China
(四大发明)
-Compass(罗盘)
-Gunpowder(火药)
-Papermaking(造纸)
-Woodblock Printing(木版印刷)
Three Greatest Inventions of Europe
-Nautical Compass
-Gunpowder
-Printing Press
Great inventions changed our life

The Three Sacred Treasure(三種の神器)
in Modern JAPAN
<SHOWA(1)>
-Refrigerator
-(Mono-color) TV
-Washing Machine
<SHOWA(2)>
-Color TV
-Cooler(Air Conditioner)
-Car

Myth of Innovations
-They are science/engineering based
-Heroine/Hero can make it
-Suddenly it happens
-Found by educated people
-Planned by organizations

Innovations are not so difficult!(1)
“S Trap”

“Laundry Ball”

“Laundry Net”

“Vertical Farm”

“Innovations” are waiting next to us!
(Tips by Prof ODA)

Deep Technologies(“Deep Tech”)
Artificial intelligence
Biotechnology
Drones
Blockchain
Advanced materials
Quantum computing
Electronics
Robotics
Nano-technology
Energy

New IT city of Vietnam, DaNang
Danang University of Technology
(Vietnam)

China’s Startup Ecosystem at Shenzhen

EV-bus and EV-taxi in Shenzhen

Big Cites of China, Beijing/Shanghai!

Indonesia’s Big City, Jakarta

GoJek Headquarter at Jakarta, Indonesia

India’s IT center, Hyderabad

Rakuten India Headquarter, Bangalore

German Accelerator (Singapore)

Google Asia Pacific Headquarter(Singapore)

What make The Innovations?
-Pain(=Need)>Want
-Funding
-Trial and Error
-Technology(R&D)
-Team and Leadership
-Marketing
etc.

“Business Opportunity Principle”
Pain >>> Want
Social issues
(natural disasters,
poverty, inequality,,,)

“Business Opportunity Principle”
Pain >>> Want
Social issues
(natural disasters,
poverty, inequality,,,)
Business Opportunity

“Any problem is an opportunity”
(Tips by Prof ODA)

There are some approaches
to find business opportunities
(1) Imagination
(2) Brainstorming
(3) Analogy
(4) Copying
* Bathing, Horse riding, Toilets may be good!

There are some approaches
to find business opportunities
(1) Imagination
(2) Brainstorming
(3) Analogy
(4) Copying
* Bathing, Horse riding, Toilets may be good
=>Right hemisphere(右脳)
=>Left hemisphere(左脳)

“Stay foolish!”
We can learn from the legend!

What is your TARGET market?
(どのマーケットを取りに行くか？)

Product design and marketing are
as important as inventions
(Tips by Prof ODA)

・Can You Predict the Future Market?
－Size is big enough? (How many use the product?)
－How can people come to use the product?
－People are ready to use it?(good time?)
Product Design and Marketing

Can You Predict the Future Market?
－Size is big enough? (How many use the product?)
－How can people come to use the product?
－People are ready to use it?(good time?)
Product Design and Marketing

Nobody knows the future markets!
(誰も未来の市場については知らない)

<“Marketing” Principle>
マーケティングの原則
Market size = Product * Customer

<Extreme Simple “Marketing” Questions>
マーケティング究極の3つの問い
(1)”Who” pays(誰が)
(2) to “What”(何に対して)
(3)”How much”(いくら払う)

<Extreme Simple “Marketing” Questions>
マーケティング究極の3つの問い
(2) to “What”(何に対して)
(3)”How much”(いくら払う)
Customer
Product
$
$

Customer $
”Who” is this person?(コレは誰？)

Take time to know “exactly”
what our customers are!
(Tips by Prof ODA)

Market size is simulated mainly
by the number of users!
(Tips by Prof ODA)

Where Is It in Company Growth Curve?
CompanyValue
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time
Potential Size
Present Size
Present Stage Matured Point

Where Is It in Company Growth Curve?
Company
Value
（Ⅰ）（Ⅱ）（Ⅲ）（Ⅳ）
Time
Potential Size
Present Size
Present Stage Matured Point
<=Market Size = Product * Customer

Time
Company
Value
$50M
$10M
$1B
$300M
Series A
Series C、D、、
IPO (Initial Public Offering )
Secondary Public Offering
Series B
Fund Raising ( by Issuing Stocks)
Pre IPO Growth Post IPO Growth

FUNDING must be done
to have a good team and a product
(Tips by Prof ODA)

Finance is most important
to survive for startups.
初期のスタートアップにとって
資金調達は死活問題！

Do NOT die!
（死ぬな！）

Only one KPI to survive is
(たった一つの生きているか知る指標は)
“CASH POSITION”(現預金残高)
≠Current Floating Asset(流動資産)

Time(時間)
Cash Position
(現預金残高)
“Cash Flow Management” is important!
(キャッシュフロー管理が大切！)
＜Key!(重要)＞
* Burn Rate(現金の減る速度)
Fundraising

Typical “Cash Position” of Growing Company
(典型的な成長企業の現預金残高)
Series A
Series B
Series C
Fundraising
Cash Position
(現預金残高)
Time(時間)

Time（時間）
(10-20 years)
$50M
$10M
$1B
$300M
Series A
Series C、D、、
（新規上場）
（市場での調達）
Series B
Road to IPO(Initial Public Offering) and after
（企業のIPO前後の道のり）
Company
Value（企業価値）

Who are good investors for you?
-Socially trustful person?
-Fund size is big enough?
-When is the maturity of the fund?（duration 10 years）
-How is the investment contract?
-Matching to the target market
-Chemistry to a management team
-How much do they collaborate?

-Only two numbers should be decided,
“valuation” and “number of new stock(=share)”
-Timing and investors
-Plan the “Series of fundraising”
Points of Fundraising

-”Bad” shareholders are insiders
-No experience, no knowledge of fundraising
-In early stages, outsiders have big shares
-Targeting markets are too small
-Limited business partners and HR resources
-No business model and/or No product
Typical Pitfalls(Creation)
（Ⅱ）（Ⅲ）（Ⅳ）
創業期
Creation
成長期
Growth
成熟期
maturity
衰退期
Declining
（Ⅰ）
Market size
(マーケット
サイズ)
Time(時間)

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 1)
Select new share holders
very carefully!

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 2)
Even in the worst scenario,
cash position must be positive.

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 3)
Company valuation will depend on
stock market and new investors.

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 4)
Do not overrate big company’s names.

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 5)
Create a “Big picture”
for the long future!(after IPO)

-Difficulties from bad condition of stock market
-Shortage of money to accelerate business
-Owner’s share is too small
-Complicated variation of stocks
-Growth is not enough
-Preparation for IPO
-No growth after IPO
-IR activities are too heavy
（Ⅱ）（Ⅲ）（Ⅳ）
創業期
Creation
成長期
Growth
成熟期
maturity
衰退期
Declining
（Ⅰ）
Market size
(マーケット
サイズ)
Time(時間)
Typical Pitfalls(Growth)

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 1)
Create a good plan
before “AND” after IPO!

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 2)
Have a good CFO!

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 3)
Raise money for next 2 years!

$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）
Tips(No. 4)
After raising fund,
concentrate on business and operation!

Tips(No. 5)
Stock option must be considered
in a series of fundraising.
$300
M
Time（時間）
(10-20 years)
$50M
$10M
$1B
Series A
Series C、D、、
（新規上場）
Series
B
CompanyValue
（企業価値）

Let us study another Math question!

(Question)
You draw 10% lotteries 10 times.
Then what is the probability
that you win at least once till the end?
(1) 25%
(2) 45%
(3) 65%
(4) 85%

(1) 25%
(2) 45%
(3) 65%
(4) 85%
(Question)
You draw the lotteries 10 times.
Then what is the probability
that you win at least once till the end?

Mathematics tells us…
0
20
40
60
80
100
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Probability(%) of winning in
1/10 lottery with N times trial
Trial(N) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Probability(%) 10 19 27 34 41 47 52 57 61 65 69 72 75 77 79 81 83 85 86 88

Take your time and take a “trial and error” approach.
(Tips by Prof ODA)

“Be Ambitious!” by Dr. Clark
Thank You !!

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