How I Started, How I Made It – The Socialutions Experience

• Introduction to Socialutions• Introduction to the HKSUA• ‘Founders Frustrations’ –the common problems facing Startups• Can Friends Be Business Partners?• Equal versus varying share ownership – is there a correct model?• Funding – Friends versus institutions – is there a standard approach?• Optimum Organization Structure – assembling your team• Targeting Your Investor & Market Base – what do they want to see?• Multiple versus single project focus dilemma • What can non-technical staff do as your product is being developed?• Visibility• Lessons Learned / The Future • Support for Startups

Communication Objectives

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Introduction To Socialutions• Who are we?

• How we started?

• Who comprises the management team?

• The evolution of Socialutions product focus – what do we do?

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Introduction To HKSUA

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Introduction To HKSUA• Who are we?• What Is the purpose of the HKSUA?• Who comprises the HKSUA management?• Achievements Workshops / University Tours Cyberport Venture Capital Forum/ Web 3.0 IT Industry Supporting Organizations CASBAA GSM Association Cyberport Micro Fund

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Founders Frustrations – Common Startup Perceptions & Problems

•Ideas? Enthusiasm!•We can and will execute.•My friends can deliver - I trust them •Our idea is niche, its fool proof•We have funding to last a few months – it will work based on our watertight budget and launch timing•I expect a decent salary to do this – we will raise X million $ to pay ourselves as we build this•Build it and they will come mentality

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Founders Frustrations – Common Startup Perceptions & Problems

•Reality Bites – I didn’t seize the moment•Execution ability realizations – beyond our depth•My business partners are not what they seem•Too late – there are a dozen clones on the market•Scramble for cash – at any cost! Budget is wide off mark, we were one year past estimated launch•Zero salary – could not raise funds need to make ends meet – I need a job•We didn’t engage our user base – UAT / User experience – the site looks and feels buggy and awful

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• No correct model – determinants of a successful management team:

• This is a business – it should be run as one• Look only at skillsets• Connections – what does each person bring to the table?• Balance: technical versus non technical• Funding connections• Credit where credit is due• Tendency to lapse into complacency – take each other for

granted• Maintaining motivation and drive

Can Friends Be Business Partners?

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• ‘It is my idea – I should have majority ownership’• ‘Lets settle ownership issues later’• ‘He contributed very little, he should have less’• No correct model – flexibility to change• Sacrifice should be commensurate with reward• Lay it on the table at earliest possible stage• Equal to begin with – roles and company will evolve

– maintain flexibility

Equal versus varying share ownership – is there a correct model?

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• Loans & savings – no strings attached – friends & family

• Convertible loan – some strings attached – meet targets

• Government funding – not much money – demands• Incubator funds – not much funds• Venture Capital – funds but lots of conditions – loss

of control – the door is opened• Asia’s uniquely underdeveloped startup

infrastructure

Funding – Friends versus institutions – is there a standard approach?

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• The right balance – case by case• Essential roles – commensurate with experience• Once roles determined, accept it for stability’s sake!• CEO needs to network, needs a vision, needs strong

communication skills – face of company to investors• CTO – needs to know his stuff• CFO / accounting – essential• Record-keeping / accounts• Market Research – importance of • Hiring versus internal resources – hiring sources

Optimum Organization Structure – assembling your team

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• Friends / Family: Solid Idea, a lending hand• High Net Worth Individuals: Return on investment –

bricks & mortars versus technology• Industry Figureheads: Interest / reluctance• Incubator Funds: Ideas• Government Sources: Don’t understand the business

- support Hong Kong• Venture Capital: Idea & Execution – is this unique

and in line with future trends? Management team, exit strategy

• Business Plan / Executive Summary

Targeting Your Investor & Market Base – what do they want to see?

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• No standard approach to fundraising• Asia constraints• Flexible approach• Identify key people, pursue, diversify network• Commitment required• Costs for travel, event attendance• Make it happen• Socialutions Experience

Targeting Your Investor & Market Base – what do they want to see?

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Competitor Analysis

Dominant player in the stock photography industry space, as well as film footage and music. Offers royalty free and rights-managed content.

Online photo management and community sharing focus. Has over 100 million CC licensed works.

Licensing solutions targeted at photographers, videographers and filmmakers. Adopter of CC licensing.

Stock photo agencies with subscription based model to access royalty free images.

Advantages

Focus on the growing CC community and the prosumer demographic; personalized, community based look and feel.

Allow for the monetization of CC-licensed images and building off of the CC community; more diverse products include photos, music, video, art. Also allows content creators to monetize their work and get additional exposure through CreationMix’s partners and tie-in events.

More user-friendly website design and online an offline events; focus on prosumer market and CC community. Social networking and community features to enhance brand value.

More diverse revenue streams, focus on quality and diverse sourcing of images through user created content and crawler retrieved content. Social networking features. Also offers users online and offline outlets for their creative works that increase users incentive to utilize CC and the project. 15

• Need funds – shall I take on extra unrelated projects?

• Risks of single product focus versus launch timing• Risks of over stretching• Flexibility – short term pain, long term gain or vice

versa?• Socialutions Experience• Budgeting – over budget? Be realistic – research the

costs. • Predictable versus unpredictable costs - Software /

hardware purchases, hosting costs, bills, salaries

Multiple versus single project focus dilemma

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• Building an infrastructure to support your product• Socialutions experience• Non-technical personnel roles during development• User testing• End user survey• Feedback, at early stage• Late stage developments, minor changes preferred• Communication between idea generator and

technical staff• Alliances & Partnerships – choose carefully

What can non-technical staff do as the product is being developed? Visibility

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Visibility – Alliances & Partnerships Current Partners• Creative Commons• Loftwork wishes to collaborate and use our technologies, via the API, for its Loftwork.com website.• 1 Minute Film Festival (originally started in Brazil in 1991) and now holding online and offline

events in South America, Europe is expanding into Asia as of end of March 2010, with a launch in HK at the end of March 2010 and the finals event on July 9, 2010, a finals event in Singapore in Sep/Oct 2010, Japan in Dec 2010/Jan 2011 and S. Korea in March 2011. The 1 Minute Film Festival (Asia) will promote use of CC-licensed work for 1 Minute film submissions as well as encourage creators of 1 Minute Films to license their work under CC and make them available on our platform. The CEO of Socialutions acquired the Asia rights to the 1 Minute Film Festival Brand in 4Q 2010 and Socialutions has a co-branding agreement for the platform with 1 Minute Film Int’l and also owns 10% of the HK Limited company (The Hong Kong 1 Minute International Film Festival) that owns the Asia rights to the 1 Minute brand.

• DotAsia is a sponsor and supporter of the 1 Minute Film Festival (Asia) and the platform.• Cyberport, a multi-billion dollar, technology and digital media institution that is owned by the HK

government is a sponsor and supporter of both the 1 Minute Film Festival and the platform.• AliveNotDead.com, a website started by the co-founder of Rottentomatoes.com, has partnered

with Socialutions and 1 Minute Film Festival (Asia) to tap into its base of celebrities, filmmakers and musicians, to drive content submissions and handle event promotion for the 1 Minute Film Festival (Asia) and the platform’s online and offline events.

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Support for Hong Kong Startups• HKSUA: www.hksua.com.hk• Government Sources:

http://www.gov.hk/en/business/supportenterprises/funding/

• Web 3.0 conference http://web3.cyberport.asia/• Startups HK: http://www.startupshk.com/• Cyberport Incubation:

http://www.cyberport.hk/cyberport/en/home/facilities_n_services/incu/

• HKSTP: http://www.hkstp.org/HKSTPC/en_html/en_full1_1.jsp

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How Can I Join The HKSUA?• www.hksua.com.hk• Google Groups• Facebook

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Conclusion

• Run your startup with the seriousness and dedication it deserves• Understand the risks and rewards, have the right mindset• Maintain flexibility in both founding partners and business model approach• Importance of networking and travel• Target your investor base carefully – risk & reward• Do not place value on your company at early stage• Talk to end users – what do they want? • User experience and feedback is king• Execution, execution, execution• Record-keeping and budget management is essential • Build a support infrastructure around your business model

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