Start Smart: Positioning Your Software Venture for Success (v2)

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Updated version of the Start Smart slide deck we use in the 2-3 hour version of our program. Added alternate title: Stop Coding: Put Down the Keyboard and Do the Hard Stuff First

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  • No one has summarized better than you. This presentation is awesome. You and I share the same fundamentals in business. Thanks Lincoln.
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Start Smart: Positioning Your Software Venture for Success (v2)

  1. 1. Start Smart Positioning Your Software Venture for Success http://sixteenventures.com
  2. 2. Alternate Title... http://sixteenventures.com @16v on Twitter
  3. 3. Stop Coding Put Down the Keyboard and Do the Hard Stuff First! http://sixteenventures.com
  4. 4. Agenda • Pre-Game Prep • Idea Due Diligence • Technical Resource Engagement • Raising Capital • Missing Pieces http://sixteenventures.com @16v on Twitter
  5. 5. Ideas = $0.10/dozen • ideas don’t matter; execution does • people won’t steal your ideas • you need feedback from others http://sixteenventures.com @16v on Twitter
  6. 6. Pre-Game Prep mental • Focus • Failure IS an Option • Fear • Motivation http://sixteenventures.com @16v on Twitter
  7. 7. Pre-Game Prep organizational • Equity • Software Ventures 101 • Does the Founder need to be a Programmer? http://sixteenventures.com @16v on Twitter
  8. 8. Pre-Game Prep business • Revenue Model • Technology Has ZERO Value http://sixteenventures.com @16v on Twitter
  9. 9. http://sixteenventures.com @16v on Twitter Focus • One Venture at a Time • Don’t be greedy • Don’t “hedge your bets” • but <<famous entrepreneur>> has six ventures going at one time • he’s famous for a reason; you aren’t. Don’t worry about what he is doing. Besides, he has people. Mental Prep
  10. 10. http://sixteenventures.com @16v on Twitter Failure IS an Option • Nobody wants to fail but you must know it is possible • don’t let the fear of failure keep you from trying • If you do fail, fail fast • do the “hard work” early to avoid failure later • do not hold onto an idea that won’t work Mental Prep
  11. 11. http://sixteenventures.com @16v on Twitter Fear is Okay • without fear, you lose focus • lack of fear breeds sloppiness • fear is a very personal word, and at this point in your venture, it is personal Mental Prep
  12. 12. http://sixteenventures.com @16v on Twitter Motivation • Desperation is the wrong reason to start a business, especially a product-based business • Looking for an “out” • Consider Service-oriented business rather than a product-based company Mental Prep
  13. 13. http://sixteenventures.com @16v on Twitter Equity • Understanding It; it is much more complex than you think • Two-Sides to the story • Until you are ready to engage proper legal counsel, you are not ready to discuss equity Org Prep
  14. 14. http://sixteenventures.com @16v on Twitter Equity your perspective • Equity is NOT currency • you are too early to be dealing in equity positions • hold onto as much as possible for as long as possible (this is not greed) • entrepreneurs often feel like those they bring in “need some skin in the game” as if that will get more out of them • pay cash whenever possible; it will save you money in the long-run Org Prep
  15. 15. http://sixteenventures.com @16v on Twitter Equity their perspective • you are asking them to invest in your venture • equity only pays on exit or buy-back • without control as well as equity, they are at the mercy of your performance or whims • cash is king
  16. 16. http://sixteenventures.com @16v on Twitter Software Ventures 101 • ISV defined • On Premises vs. On Demand • If its on the web, its a software venture, right? • Growth vs. Lifestyle Org Prep
  17. 17. http://sixteenventures.com @16v on Twitter Founding Programmer? • Not required • Should be technical (or willing to learn) • should not learn to program • focus on the business • you wouldn’t learn to weld just because you wanted to open a body shop Org Prep
  18. 18. http://sixteenventures.com @16v on Twitter Early Team Members • Be Cautious • Attorney • Advisor(y board) • Board of Directors? Org Prep
  19. 19. http://sixteenventures.com @16v on Twitter Revenue Model • what is a revenue model? • 7 different ways to make money • do startup software ventures need to have a revenue model? • You can’t know what revenue model(s) to choose at this stage in the game, but you MUST be thinking about it Biz Prep
  20. 20. http://sixteenventures.com @16v on Twitter Revenue Streams Biz Prep
  21. 21. http://sixteenventures.com @16v on Twitter Technology = 0 Value • the fact that you use Ruby on Rails or Java to build your app means nothing • Postgres vs. MySQL? Who cares • Ajax UI? Android client? Nothing! • Solved a problem? Aha! Now we’re onto something Biz Prep
  22. 22. Idea Due Diligence • Goal: determine if the idea is a good idea, or a good business • Ideal Idea • Validation • Detailing your Vision • Presenting your Vision http://sixteenventures.com @16v on Twitter
  23. 23. Ideal Idea • It Solves a Real Problem in a Low-tech, fragmented vertical market, with few relevant competitors and a proven business model • Deviating from this rule increases chance of failure • Adhering to the rule does not guarantee success • Whole Product Solution, not just a Feature • No “Me Too” products just to be “in the market” • Avoids “commodity pricing” by not just solving the pain, but doing it in a *great* way http://sixteenventures.com @16v on Twitter
  24. 24. Market Validation • is there a market for the product/service? • Primary vs. Secondary Market Research • Target Market Identification • Competitive Research • Sustainable Competitive Advantage • Talking to Potential Users • You Must Be Present to Win http://sixteenventures.com @16v on Twitter
  25. 25. Detailing Your Vision • Extract it from your brain • put it into a format that other people can make sense of • screen mockups, process flows, etc. • You are not a Product Manager... forget UML, Req. Docs, etc... just draw pictures! • use this to get feedback, engage technical resources, and/or raise capital http://sixteenventures.com @16v on Twitter
  26. 26. Presenting Your Vision • Show trusted advisors, colleagues, friends, and family your vision drawing • make sure that they “get it” immediately from your drawings... if they don’t, refine • determine minimum features required for version 1.0 http://sixteenventures.com @16v on Twitter
  27. 27. Technical Resource Engagement • Partner, Employee, Consultant or Software Development Firm • Protect your Intellectual Property (IP) • Build vs. Buy • Hosting / Platforms and Architecture • Beware “Bet Your Business” Decisions http://sixteenventures.com @16v on Twitter
  28. 28. Raising Capital • Bootstrapping • Go-to-Market vs. Raise Money • Money Talks • Choosing Investors • Formal Business Plan • Exit Strategy http://sixteenventures.com @16v on Twitter
  29. 29. Until Someone Pays You, Its Just an Idea http://sixteenventures.com

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