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Danny Maher
- 1. Visiting Entrepreneurs Program DannyMaher November 2015
- 2. Danny Maher Background Asummary of companies that I have joined in business building/ commercialisation roles over the last 15 years: UK focused– acquired once USA focused – acquired twice Asia/Asia Pacific focus – acquired three times Global focus – acquired twice All focused - 1 at a time© Acquisition on average every 22 months Highest ROI: 250X (=25,000%) © Danny Maher dannym@dannymaher.com2
- 3. Current Project: OpmantekLtd (ASSOB:OMK) Global commercial open source software company 80,000 organisations around the world use Opmantek products Founded in 2011 at the Gold Coast All R&D at the Gold Coast Australian Exporter of the year, American business awards winner, iAwards winner, Stevie Awards winner, top 20 Open Source companies globally – CIO magazine. High growth © Danny Maher dannym@dannymaher.com3
- 4. Something To ThinkAbout Startup One Great Business Plan Successful capital raise Build quality and innovative product Hire the best people including an experienced startup management team Undertake a good marketing strategy Startup Two No business plan Less capital Buggy product No money to hire experienced people No money for marketing © Danny Maher dannym@dannymaher.com4
- 5. Commercialising Innovation © DannyMaher dannym@dannymaher.com5
- 6. Commercialising Innovation © DannyMaher dannym@dannymaher.com6 Sell the technology to someone else - work for them Sell a share in the technology to someone else - work with them Maintain full ownership and partner Maintain full ownership and go it alone
- 7. Being on Safari ©Danny Maher dannym@dannymaher.com7
- 8. On Safari © DannyMaher dannym@dannymaher.com8 Spend time thinking Become self actualised Protect yourself from the downs Celebrate the ups
- 9. On Safari © DannyMaher dannym@dannymaher.com9 Anything that you plan as simple will become complex and anything that you plan as complex you will never achieve Network with people you want to become When networking have a goal of giving – what can you do to help people.
- 10. On Safari © DannyMaher dannym@dannymaher.com10 Watch your diet, rest etc – just as if training for physical achievement. It’s an intense race Recognise it’s not the movies – there are not multiple sessions There is no ready, set, go – just GO and keep going Enjoy the journey – some people climb Everestsome go in “fun runs” some people have kidsno one says it’s easy, but it is enjoyable
- 11. Business Goals © DannyMaher dannym@dannymaher.com11
- 12. Be Clear OnThe Goal For Your Business © Danny Maher dannym@dannymaher.com12 To produce the highest performing drill To produce the most fuel efficient engine in the world To attract 100 customers within 5 years These are not true business goals, these are methods, tools and sub goals to assist in reaching your business goal
- 13. Be Clear OnThe Goal For Your Business © Danny Maher dannym@dannymaher.com13 VeryfewEntrepreneursstartabusinesstomakemoney,theystartbusinesses because they: • are passionate about their innovation or service • want to challenge the status quo • want to live in a particular place • want to do something which will be great for their family • want to do something that aligns with their social values • want to work less hours…
- 14. Be Clear OnThe Goal For Your Business © Danny Maher dannym@dannymaher.com14 Like it or not the ultimate goal of your business almost certainly will be: To make X amount of money in X amount of time. at a minimum enough to live the way you want to and operate the business Keep your “Entrepreneurial motivations” but never lose sight of the true goal or you will lose everything you are passionate about that relates to the business
- 15. The Evolution OfA Business © Danny Maher dannym@dannymaher.com15
- 16. Evolution Of ABusiness -Maher • The Dreaming • Existing • Validation of your existence • Living • Mastery • Re-invention © Danny Maher dannym@dannymaher.com16
- 17. Evolution Of ABusiness -Maher © Danny Maher dannym@dannymaher.com17 • The Dreaming • Existing • Validation of your existence • Living • Mastery • Re-invention
- 18. The Dreaming AndDiscovery © Danny Maher dannym@dannymaher.com18 You will look back on this early stage and realise how different things actually turned out You will also realise that this was the creation and while different, everything stemmed from here During this stage you will: • Overestimate your market size • Overestimate the value of your IP • Underestimate the timeframes involved • Underestimate the resources involved • Overestimate the demand for your innovation
- 19. The Dreaming AndDiscovery © Danny Maher dannym@dannymaher.com19 During this stage you will encounter: • People who don’t understand what you are doing (this is your problem – fix your message) • Investors who doubt you/reject you as too early stage (you probably are) • Friends and family who question what you are doing • People that don’t return your calls • Professional friends and colleagues who have “parked you” till further notice
- 20. The Dreaming AndDiscovery © Danny Maher dannym@dannymaher.com20 During this stage you will need to: • Develop your business plan (at least business model) • Work our what will be your Minimum Viable Product (MVP) • Great if you can engage a customer at this stage
- 21. Existing © Danny Maherdannym@dannymaher.com21 During this stage you will need to: • Release your Minimum Viable Product • React fast to fix customer bugs/problems • Focus your development on what your customers want – even if you only have one • Value paying customers above all else, no matter what they pay
- 22. Existing © Danny Maherdannym@dannymaher.com22 During this stage you will: • Struggle • No one will believe you are “real” Value paying customers above all else, no matter what they pay
- 23. Validation of Existence ©Danny Maher dannym@dannymaher.com23 During this stage: • (Some) phone calls get returned • People think you are more real than you do • People think you are doing better than you are • Friends ring you complaining you undersold the business to them and they would have invested • Value paying customers above all else, no matter what they pay – build out our products • Don’t panic – do realign your story/plan
- 24. Living © Danny Maherdannym@dannymaher.com24 During this stage: • You are real • You can consider appropriate market pricing • You can finally ditch that painful unprofitable customer • Some people return your calls • Investors are more interested
- 25. Example Focus AreasBy Stage © Danny Maher dannym@dannymaher.com25 Customer Growth MVP Market fit Hiring/HR Funding The Dreaming 1 2 3 5 4 Existence 1 2 3 4 (?) 5 (?) Validation of Existence 1 2 4 5 3 Living 1 5 4 3 2 Mastery 1 5 4 2 3
- 26. Market Estimation ByPhase © Danny Maher dannym@dannymaher.com26
- 27. Product Development © DannyMaher dannym@dannymaher.com27 Product development within a startup is not a one dimensional or circular flow – even ideas should be tested internally and released to a customer for feedback Develop and Produce INTERACT TestIdeas Release/ Customers
- 28. MVP (Minimum ViableProduct) © Danny Maher dannym@dannymaher.com28 No - MVE!
- 29. MVP (Minimum ViableProduct) © Danny Maher dannym@dannymaher.com29 Release your Minimum Viable Product ASAV • Early adopters of your product wont be surprised by issues • Fix your customer impacting bugs/faults rapidly • Early adopters of your product are expecting rapid feature enhancement – supply a roadmap and get their feedback • Getting your product to customers as early as possible is incredibly useful NOT incredibly risky • NEVER build out any part of a business expecting success – build in line with revenues
- 30. Why Would AnyOrganisation Buy First? © Danny Maher dannym@dannymaher.com30 • You are allowing a small number of organisations with appropriate skills to engage directly with your product development team • Assuming their requests can be reused/marketed, you will adapt the product for them (for free) • You will oversee the implementation and ensure success directly • You will co-fund if they will be a reference
- 31. Competitive Advantage © DannyMaher dannym@dannymaher.com31 • Your product and IP • Your personnel Also • Market intelligence • Partners But most importantly • YOURPRICE YOUR CUSTOMERS
- 32. Developing Your BusinessPlan © Danny Maher dannym@dannymaher.com32 For you: • Ensure it is a working document not a “write and execute” document • Check back to it at regular intervals, update forecasts For others: • If seeking investment your business plan will be the key document – make sure it is easy to understand and absorb including an exit strategy
- 33. Developing your ‘Canned’Product Pitch © Danny Maher dannym@dannymaher.com33 The concept of a single elevator pitch is nonsense You should never have a single canned pitch, you must target it by management level at a minimum – you must be aware of who you will/should pitch to Always reference an appropriate use case/customer in your pitch – customers follow customers Example: • Executive Management – we have a technology your competitor is using to reduce their OPEX by 8% over the next 3 years Middle Management – we have a technology that managers like you use for better reporting and oversight of your team • Operational Management – we have tools to make your team’s day to day jobs easier and your day to day life better, I can put you in touch with P&O Cruises who implemented this last month – they love it
- 34. Developing Your BusinessPlan © Danny Maher dannym@dannymaher.com34 • Sales and Marketing Plan • Communication Plan • Product Roadmap • Operational plan/hiring plan • Operational Forecast (including hires) • Sales Forecast • Peel back OPEX and have a lower forecast to de-risk the business
- 35. Exit Strategy © DannyMaher dannym@dannymaher.com35 • Do you want to exit?? • When? • Trade sale? IPO? LBO? Partial exit? • What industries might converge with yours? • Is there consolidation within your industry? • Who will help with your exit - investors are often handy during an exit • Competitors and partners are often acquirers
- 36. Mentoring © Danny Maherdannym@dannymaher.com36 • Mentor’s are very useful • Don’t be afraid to ask someone to mentor you • You may want to work in another organisation where you have a good mentor/good learning prospects • No one goes to university to become a student, think the same of taking a “learning job”
- 37. Capital Raising © DannyMaher dannym@dannymaher.com37
- 38. Attracting Investment © DannyMaher dannym@dannymaher.com38 • Government, VC, Angel, Bank, Stock market • Ideas do not get funded (unless linked to the funder) • No one invests in something they can’t understand • No one spends a lot of time trying to understand, they’ll move on to something in their comfort zone • Selling equity for early stage funding is not easy and will prove very expensive if you are successful • The best place to get money is from customers • YES THERE IS SHITLOADS MORE MONEY IN THE USA – YES WE KNOW ABOUT SANDHILL ROAD • It is changing
- 39. Attracting Investment prerevenue/validation © Danny Maher dannym@dannymaher.com39 • FFF (Friends Family and Fools) Structure to keep at arms length, Shareholders agreement, TechFundr, ASSOB etc • Indigogo / crowd funding • Invested customer • Work for equity - What is the purpose you are raising money for can you pay for those purposes with equity?
- 40. Post Revenue –Angels © Danny Maher dannym@dannymaher.com40 • Typically achieve higher returns than VC funds • Typically have more domain knowledge in the business they are investing • Claim a closer business relationship and that their domain knowledge will assist the business • Pitch or build relationship • Update over time
- 41. Post Revenue -Venture Capital © Danny Maher dannym@dannymaher.com41 • VC funds have specific rules relating to how they invest • Find the right VC for you • Make sure your pitch is right • Update over time/build relationship
- 42. Some ASSOB stats ©Danny Maher dannym@dannymaher.com42 Here is a look at the past 5 years: • Total number of individual investments in ASSOB listed companies 2328 • Total number of individual Investors 2005 • Average investment per investor $38,023 • 176 Companies received investment • 152 are still operational • Average invested per Company $503,305 • Highest individual company raise $3,540,000 • 2054 Australian investments and 274 International investments have been made • 179 invested in 2 companies • 36 invested in 3 companies • 10 invested in 4 companies • 10 invested in 5 or more companies • On average 11 investors per company Main investment segments of companies receiving funding • IT & T 11% • Food & Beverage 8% • Mining / Oil 8% • Technology 6% • Software 6% • Green technology 5% • Health & Beauty 5% • Media / Entertainment 5% • Health 5% • Web Based 5% • Biotechnology 4% • Environmental 3%
- 43. Tech FundR (www.techfundr.com.au) © Danny Maher dannym@dannymaher.com43 • New Australian based equity crowd funding platform • Linked to a VC fund also! • Six focused platforms: Health, Agriculture, Energy, Aviation/Defence, Social Enterprise and Mobile/Gaming. Heathfundr.com.au Agrifundr.com.au Flightfundr.com.au Energyfundr.com.au Socialfundr.com.au Gamefundr.com.au
- 44. Post Revenue -Venture Capital © Danny Maher dannym@dannymaher.com44 • Create a short pitch – 3 or 4 minutes (this is tough!) • Often the organisation you are pitching to has a recommended structure • Company history and milestones • Current revenues and customers • Funding requirements – how much and to fund what activities • Proposed equity in exchange for funding • Management team • Market and competitor analysis • Products/IP • Revenue • Method to market • Risks /SWOT analysis • Exit strategy
- 45. Pitch Demo –Opmantek © Danny Maher dannym@dannymaher.com45
- 46. The Best WaysTo Spend Early Investment $ © Danny Maher dannym@dannymaher.com46 • It is a common mistake to spend early stage $ to “finalise”, “complete”, “enhance” the product • It is a common mistake to spend early stage $ on the wrong type of executive • It is a common mistake to overspend early stage $ on marketing – especially conferences • It is even a common mistake to spend early stage $ executing the business plan
- 47. The Best WaysTo Spend Early Investment $ © Danny Maher dannym@dannymaher.com47 1. Customers 2. Customers 3. Customers • Funding a customer to use your product • Getting your MVP to a customer • Adapting your product for a customer • Keeping your customer happy • Funding more customers Increasingyourcustomerbaseaddsmorevaluetoyourbusinessthanfurthering your product or any other activity.
- 48. Business Partnerships © DannyMaher dannym@dannymaher.com48 • Partnershaveahabitoftellingyouwhatcustomerswant(incorrectlyassuming they know) and will not fully understand your product • If an organisation wants to resell your product be wary of how much time you put in and make sure you have a direct relationship with end customers • Don’t confuse who is your partner and who is your customer
- 49. © Danny Maherdannym@dannymaher.com49 Something To Think About Startup One Great Business Plan Successful capital raise Build quality and innovative product Hire the best people including an experienced startup management team Undertake a good marketing strategy Startup Two No business plan Less capital Buggy product No money to hire experienced people No money for marketing
- 50. Something To ThinkAbout © Danny Maher dannym@dannymaher.com50 Startup Two will out of necessity • Get their product to a customer as soon as possible • As the product is buggy they will have to take customer feedback and fix it • They will scale their business as revenue ramps • Readdress their plan and continue to evolve the plan
- 51. Something To ThinkAbout © Danny Maher dannym@dannymaher.com51 Startup One: is highly unlikely to undertake ANY of the activities mentioned for Startup Two It is VERY common for companies well funded early on to: • Perceive the funding as their success • Develop the product according to their specification, not the customer’s • Executetoorigidlyontheir(funded)businessplanwithoutadaptingsufficiently • Hire the wrong executives for their stage of development (safari) • Utilise their funds in their business not their customers Startup two is far more likely to succeed under this scenario
- 52. From Qld tothe World © Danny Maher dannym@dannymaher.com52
- 53. Why Qld? © DannyMaher dannym@dannymaher.com53 • Because you want to live here? • Because you will find it easier to operate within your own culture/ environment/with your support? • It’s not a natural choice for a startup, nor is Australia – you need to leverage external ecosystems • If you’re going to be small, you may as well be a startup
- 54. To Leverage inAustralia/Qld © Danny Maher dannym@dannymaher.com54 • Research and Development Grant (“tax concession”)* - 45 cents per $1 spent when in loss making – cash payment. • Export Market Development Grant* - Approx 50 cents in the dollar up to a maximum of $150k. *these grants are not competitive – they are yours • Entrepreneurs scheme • Advance Queensland - includes investment matching of $125k - $2.5M • Some assistance from local Council • Commercialisation Australia • Quality staff and people
- 55. To Leverage inAustralia/Qld © Danny Maher dannym@dannymaher.com55 • Small Market - Get established/proven here then grow – less competition • Developed Country - While we are adverse to failure, we do take up new innovations • Wealthy Country - Especially in certain industries – mining, gambling, boat building… • Asian business - Cultural bridge for USA etc, time zone Use tools such as compass.co
- 56. To Leverage inAustralia/Qld © Danny Maher dannym@dannymaher.com56 They are all behind you: • Incubators and Accelerators • Govt Departments • Trade Investment Queensland • Austrade
- 57. Structuring for growth Toolsto assist © Danny Maher dannym@dannymaher.com57
- 58. When to establishoverseas © Danny Maher dannym@dannymaher.com58 • Never if possible • When the law requires it • When a customer requires it - If you can’t transact through a partner • When a funder or accelerator requires it - Flip - US lawyers commonly do this • “Partners” – employees as contractors to Australia • Direct employees of the Australian Entity • Partners–Donotconfuseapartnerwithacustomer,Partnersaresometimes necessarybutcanbreakyou–theydonotgobankruptifyoudon’tsucceed.
- 59. Some of myfavourite supporting tools © Danny Maher dannym@dannymaher.com59 • Western Union - Payments system, multi currency, low cost and the best - Not a bank, can only keep funds in there for 90 days • Suncorp Bank - foreign currency accounts - Lowest cost – couple with Western Union • Silicon Valley Bank - I believe the only bank that can open a US account (in the US) for an Australian company. • Specialist startup accountants - Who understand EMDG, R&D and startups (I use Altezza partners in Brisbane but there are others) • Startup Compass - www.compass.co - Automated business advice and benchmarking/measuring the path of your startup vs other similar startups.
- 60. Tools and outsideof Australia © Danny Maher dannym@dannymaher.com60 • Google Apps - Email, Calendar and more - All mobile devices, desktops/laptops etc pay as you grow • Hosting/website - Host your website near your clients not near you • Use adwords tools when considering your SEO - Even if you never buy an adword, great tools • Google Analytics - Excellent insight in to activity - free • Claim your place of business on Google Maps - Helps search and we do live in a great place • Virtual Offices - REGUS - Can use ad-hoc or can pay a small monthly fee
- 61. Some of myfavourite supporting tools © Danny Maher dannym@dannymaher.com61 • ASSOB, Techfundr etc - Not for everyone, I enjoy the benchmarking of the companies valuation • Internet marketing experts - Opmantek does in-house, I haven’t found the perfect firm yet • Firms to assist in raising funds - Opmantek uses Bluemount Capital primarily due to ASSOB “listing” • Lawyers - Consider linking early with a good law FIRM (not just a lawyer)
- 62. Some of myfavourite supporting tools © Danny Maher dannym@dannymaher.com62 • Domains - If you are going to operate outside of Australia you need the .com • Supporting Domains - Community site, review sites • Video Content, Wiki’s blogs, social media, review sites, podcasts, advetorials - But especially video and review sites • Mobilesite/Responsivesite
- 63. © Danny Maherdannym@dannymaher.com63 Summary • Enjoy the journey Reward yourself when things go well Your passions are your motivations and you are lucky to pursue them • Don’t get lost in your enjoyment and creation/product Recognise and track your revenue goals in particular Always develop your product for real customers • Get started and be agile - if you do nothing: nothing happens and there’s nothing to adapt • Getting fundedisagreateventbutisnotasuccessinitself • Youwontnecessarilyknowyourgooddecisions • RecogniseyourbaddecisionsFAST
- 64. © Danny Maherdannym@dannymaher.com64 Summary • Leverage local tax and grant schemes • Focus on speed to market and MVE • Be ready to deviate from the business plan • Leverage local resources including coworking spaces • Leverage the internet, especially to create external linkages • Find good mentors/people/groups or take a “learning job” • Much more !
- 65. The Beginning © DannyMaher dannym@dannymaher.com65 Current Project: www.opmantek.com www.assob.com.au/OMK Danny Maher dannym@dannymaher.com