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Critical Success Points
David J. Donovan
CEO, WRevGenUpdated September 2010
www.wrevgen.com
08/01/2010 1Copyright © 2008-2010 All Rights ReservedStartup Critical Success Points • David J. Donovan
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Preface
Working in a startup environment can be an adrenaline packed rewardingexperience, pushing the risk reward envelope to "infinity and beyond". Not withoutchallenges, navigating a startup through the obstacle course of cash burn, riskmitigation, hiring the right employees, staying focused and timely execution are theresponsibility of EVERY member of the team.
All too often in the startup environment there are misaligned expectations, pooraccountability, and inconsistent goals that needlessly add additional layers of risk.Large companies, small companies as well as startups suffer from thesemalignancies.
A toolkit based on first hand learning experiences in this environment is valuableinsight into your current or next engagement. To that end I have compiled a set oftake-a-ways based on what I have learned over the last 10 years working fortechnology startups. I use these critical success points as a filtering mechanism anda check and balance in my daily activities. I hope you find them as useful as I do.
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Clarity of Purpose
• Need to be able to state the company’s
value prop & purpose in one sentence.
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Focus, Focus, Focus
• Stay on the course to meet the statedobjectives
– Be wary of distractions such as
• Non target customers taking an interest in yourproduct and diverting resources off the course
• Feature creep- allowing additional productfunctionality or features into your design and
production path.
– Maintain a single clear value proposition
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Cash
• Cash is King
– Spend money on execution not on fluff
• Pre revenue focus is to minimize burn rate• Expenses should be commensurate with
industry peers
• Manage to cash flow• Preservation of capital trumps everything
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Execution
• Give ownership to department heads, setexpectations and make accountable
• OSTM Process
– Each project/subproject should identify abasic and communicable Objective, Strategy,Tactics and Metrics
– Applies across all functional departments
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Communication
• No one group/person isdesigning/producing in a vacuum
– No assumptions, check your interfaces
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Customer
• Your customers are internal and externalto the company
– Each group must understand the total solution
that the team is presenting to the marketplaceand their departments role in its success
– The components of a successful total solution
to the market place depend on internaldeliverables first
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Personnel
• Hire the best skilled people you can
– Multidimensional skills and advanced degreesare generally greater asset than single point
expert with some exceptions
– Enthusiasm, commitment, ownership,accountability, communications skills are as
important as subject matter experience
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Marketing
• Critical to understand customer point ofpain and address in timely and costeffective manner
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Product
• The tech road map is full of pot holeswhere companies are buried when they:
– Designed a compelling product in a vacuum
and failed to see the total solution
– Designed a compelling total solution but failedto deliver the product
• Right message, right timing, right valueprops mean nothing if you can’t the get
product to customer on time
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Manufacturing
• Critical component lead time can kill alaunch
– Need contingencies
• Adjacent mature market demand cancorner critical components needed forapplications
• Displays, GOBI, flash, duplexer
• Secure supplies
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Authority
• If you give me the responsibility then giveme the authority
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Startup Lessons Learned(by function)
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BOD/VC
• Critical that BOD/VC have industry backgroundcommensurate with the technology funded
– Eg., semiconductor capitalization needs a cost
understanding of masks, engineering tools, multipletape outs, testing, yields, market risks
• Expectations need to be managed by CEO &CxO
• Shoot for tier 1 VC funding. Micro VCs haveshallow pockets for follow-on investments
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CEO
• Ensure that CEO goals are aligned withbroader company goals and are not selfserving
– Leads to conflicting allocation of resourcesand inefficient execution
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CTO
• Critical that CTO spends 80% of the timeoverseeing all aspects of the design, block toblock & in system to minimizes circuit design time – Must have vested interest and goal of seeing design
through to production/cash generation
– Design is NOT complete until STAC, Apps, BD,customers have vetted and qualified part for massproduction
• No next project until first one is complete – Owns checks & balances process to tape out such that
all risks are minimized towards a saleable product• Doesn’t mean their cant be impairments that are manageable
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Design Engineering
• Critical that chip is designed in context of thesystem it will operate in, including behaviorinfluenced by the implementation in a totalsolution, ie with baseband, RFFE
– Designing for chip bench performance only isnot an option
– Design verification processes must be inplace and adhered to insure design goals are
met before tape out – Need constant reminder that venture is forprofit production company not perpetual R&Dfacility
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Sales & Biz Dev
• Critical to have a voice/insight into thedesign process to act as a customeradvocate and insure the end product
substantially meets the MarketRequirements Document
– Selling in a vacuum and consistently resetting
expectations for customers erodes confidenceand credibility
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All
• Critical that a stakeholders operate inmanner consistent with a sense ofurgency, problem ownership and
accountability. – VC funded days are finite
• Efficient management of time and task required
– Problems need advocates who can efficiently
and effective create resolution consistent withcompany goals
– Needs to be penalties for failure
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Mutual Expectations
• Know the answer to these questions:
– What do I expect from employer?
– What does employer expect from me?
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