Session 3: Turning your Passion into a Business

Opportunity

Master Agenda - Enterpreneurship 101Session 1 - January 10th - What is creativity? What sparked Facebook, Google etc? What is my passion?

Session 2 - January 17th - Behavior traits for a successful entrepreneur.

Session 3 - January 24th - Turning your passion into a business opportunity.

Session 4 - January 31st - Steps needed for your startup ... 1,2,3 GO.

Session 5 - February 7th - Financials of the business opportunity.

Session 6 - February 21st - Presentation skills, successful pitches, what ideas got funded.

Session 7 - February 28th - Filing your patent, patent gotchas, successes and failures.

Session 8 - March 6th - Pitch your business plan to VCs (only 12 spots will be available).

Week 1 and 2 recap

Week 1

Passion

Creativity

Problem

Week 2

Leadership

Hardwork

Integrity

Social Good

Example of Turning Passion to Reality

“… making the world more open and connected.”

Marc Zuckerberg

Wanted to make the world more open and connected….

Facebook now has over a Billion active users every day!

The Hacker Way

Quotes from Mark Zuckerberg IPO Letter:

“Facebook was not originally created to be a company. It was built to accomplish a social mission — to make the world more open and connected.”

“Simply put: we don’t build services to make money; we make money to build better services.”

The Hacker Way – Lot’s to Learn and Imbibe

“The Hacker Way is an approach to building that involves continuous improvement and iteration. Hackers believe that something can always be better, and that nothing is ever complete.“

• Focus on Impact• Move Fast• Be Bold• Be Open• Build Social Value

Real World Realities

Influence & Inspiration of Silicon Valley …

• Every field needs expertise in Computing (the ‘Digital’ Era is upon us and here to stay)

• It’s all about Data - Big Data

• Artificial Intelligence (Machine Learning) - where Computers think and act like humans

Silicon Valley – where VCs are your friends …

What / who is a VC?

Why is a VC important?

Name a VC firm …

Thin

k O

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Box

You have an idea …

Now What?

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…Th

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Business Plan Components – Problem, Solution.

Problem Statement

What problem are you trying to solve?

Why is it a big problem?

FFT (Food-for-Thought): What big problem are we facing with our health?

Solution to Problem

What is your solution?

Why are you uniquely positioned to solve the problem?

FFT (Food-for-Thought): What big problem did iPhone solve?

Business Plan Components – Product, Business.

Business Model

Who will be your customers?

How will you make money?

FFT: How does Facebook make money?

Product and Technology

What is the Product? What will it look like to your customers?

What is the ”special sauce” in your product? What technology will you build?

FFT: What is the product and technology that Google offers?

Business Plan Components – Market, Sales.

Marketing and Sales

How will you market and sell your product?

FFT: How and where is Coca Cola sold?

Competition

Who else is trying to solve the problem you are solving?

FFT: Who is competing with Tesla?

Business Plan Components – Team, Finance.

The Team

The Founding Team

The Management Team

FFT: Do startups get founded and run by a single person? Why yes or why not?

Financial Model

Profit = Sales (Revenue) – Cost

FFT: Why do startups fail (only 1 in 10 succeed)?

Class Exercise

Class Exercise

My passion: <explain what area(s) you are passionate about>

A problem to be solved in my area of passion: <uncover problem(s) in your area of passion that you think you can help solve>

My startup idea that addresses the problem: <what is the solution you propose that can help solve the problem(s)>

Homework

Homework

• Create a founding team – pick team members based on similarity of idea from Week 3 Homework• … or friends of similar age group – in which case pick one of

the ideas from the team• Start to convert your Week 3 Homework into a Business

Plan (you don’t have to finish it in 1 week)• First focus on your strengths – product, technology, marketing,

etc. - I will help you fill the rest …• Use Business Plan Template provided in this presentation

Appendix – Business Plan Template

Startup Business Plan TemplateFor Presentation to VCs

Adapted from Guy Kawasaki’s 10/20/30 Principle10 Slides, 20 Minutes, 30 Points Font

24

Before you Pitch to a VC!

• Uncover your audience’s “Hot Buttons”• Ask yourself the question:

“To make today’s meeting as effective as possible, what are the three most important things that you would like the audience to learn about your company at this time?”

• Adjust time & emphasis on sections accordingly

Executive Summary

• <Your Company> is a <what you are> specializing in <what you do> for <specific customers>.

• Our <special sauce> gives us a <unique advantage> that will capture ??% of this $??? M market.

• We will be looking for $?? M to build an <enabling function> that will generate $?? M over the next XX months.

<20% of presenters do this well

What’s the Problem?

• Describe the problem you are looking to address in simple, clear concise terms

• Current state, seriousness of problem• Desired future state, benefit to customer• Scale of the initial market• No more than 6 bullets• Graphics better than words

< 10% of presenters do this well

What’s your Solution

• Describe your solution in simple, clear, concise terms.• Key benefits, features• Product roadmap• No more than 6 bullets• Graphics better than words

> 70% of presenters do this well

What’s the Business Model

• Explain how you are going to make money - clear, concise (If you can’t describe your business model in 20 words or less, you probably don’t have a workable model)

• What’s the value to the customer? Customer Value =(Seriousness of Current State + Benefits of the Desired Future State) Cost of the Solution

• Bottom up is better than top down

< 10% of presenters to this well

What’s your “Special Sauce”

• What’s the proprietary, underlying “magic” that gives you a clear, defensible advantage?

• Patents on their own are rarely sufficient• What are you going to do particularly well that it will be difficult

to copy?• Graphics better than words

<30% of presenters do this well

How you are going to Market & Sell your product or Service

• Describe your Marketing & Sales strategies in simple, clear, concise terms.

• 1 or 2 marketing strategies• Sales cycle & strategy for initial market• No more than 6 bullets• Graphics better than words

< 50% of presenters do this well

Competition

• There is ALWAYS competition – even if it’s the way it’s done now.

• Provide a Competition Analysis– a table/chart comparing your solution to the current

approach and major competitors, by key benefit• The more realistic you are, the more believable your case

< 30% of presenters do this well

Who’s on the Team?

• Management Team– Why is this the Right Team?– relevant information only - shorter is better– include relevant company names & positions– include independent Directors, if relevant

• Identify holes that will need to be filled

< 10% of presenters do this well

• P & L (by Quarter for first year, annually thereafter, 3 years out)Past Year Q1 Q2 Q3 Q4 TOT 2nd Year 3rd Year

RevenueCOGSR&DS&MG&AEBITCash Flow

• Bottoms up better that top down• Assumptions more important than numbers – be prepared to

explain them< 10% of presenters do this well

Financial Projections

Status & Timeline

• Major Milestones, what’s been achieved to date, Current Status, what still needs to be done & how long it’s going to take.

• Include expected liquidity event.

<30% of presenters do this well