TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Fall 2010 Technology Entrepreneurship
Boot Camp
Sponsored by Jackson Walker
Dr. Cory R. A. Hallam
Director
UTSA Center for Innovation and
Technology Entrepreneurship
http://entrepreneur.utsa.edu
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
1
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Technology Entrepreneurship
• Technology
Entrepreneurship is a
major driver of our
economy and is
growing in San Antonio
U.S. Job Creation by Firm Size
< 100
100 - 499
500+
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
2
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
So Let’s Play Spot the
Entrepreneur
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 3
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
OK, That was easy – let’s make it a little harder
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
4
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
A) Oprah
B) Richard
C) Bill
D) Crazy Scientist
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
5
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Don’t get confused
Between inventors and entrepreneurs
• Inventors create new technologies (ideas)
• Entrepreneurs create new business (money)
• Which one has the better ROI?
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
6
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
UTSA Colleges of
Business and Engineering
The former have these
CITE BootCamp January 2010
7
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
UTSA Colleges of
Business and Engineering
The latter have these
CITE BootCamp January 2010
8
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
UTSA Colleges of
Business and Engineering
Do You Have The Courage?
CITE BootCamp January 2010
Slide 9
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Your Weapons: Elevator Pitch,
Slide Deck, and Business Plan
Dr. Cory R. A. Hallam
Director
UTSA Center for Innovation and
Technology Entrepreneurship
http://entrepreneur.utsa.edu
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
10
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Weapons you need
• Elevator Pitch
– 30 Second story that sticks
• Slide Deck
– 10-20 Minute story with nice pictures
• Executive Summary
– From the business plan, the words that describe your
slide deck in 5 pages
• Business Plan
– Detailed financials and answers to every question
ever thought of in the entire universe
– Or at least great financials and management
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 11
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
A Checklist for Opportunity Evaluation
(J. Picken UTD)
• You must begin by understanding the
basic transaction:
Why is someone (your customer) going to pay you
(substantially) more for the good or service you are
providing than it will cost you to produce?
• Opportunities can be evaluated one step
at a time – following a Checklist for
Opportunity Evaluation
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
12
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
CUSTOMER NEEDS
1. Who is the customers? What are their
needs? What are their alternatives?
– Who is the target customer?
– Can we identify a set of customers by name?
– What customer need would be satisfied by
our offering (do they realize they have a
need)?
– How important is meeting that need to the
customer (a “nice to have” or “essential”)?
– What are the customer’s alternatives
(competition, not spending!)?
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
13
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
COMPETITIVE ADVANTAGE
2. Competitive advantage: Why will
customers buy this product/service from us
rather than from one of our competitors?
– Better product at the same price?
– Same product at a lower price?
– Meets the needs of a particular group of
customers better than any other offering?
– Unique technology protected by patents?
STOP
UTSA Colleges of
Business and Engineering
– Is the competitive advantage sustainable?
How?
CITE BootCamp January 2010
14
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
The 9X Effect
A customer takes on a huge risk
in displacing a known solution
with a new and unproven
product/technology from a not
very well established company
Every entrepreneur’s “baby” is
beautiful in his eyes – often
blinding him to the possibility of
alternate solutions
Entrepreneurs
are often:
Consumers
are usually:
• Skeptical about a new
product’s performance
• Unable to see the need
for it
• Satisfied with the
existing product
• Quick to see what they
already own as the
status quo
Consumers
overweight the
incumbent product’s
benefits by a factor of
three
3X3
Entrepreneurs
overweight the new
product’s benefits by
a factor of three
9X
• Convinced the
innovation works
• Likely to see the need for
the product
• Dissatisfied with the
existing substitute
• Set on viewing the
innovation as the
benchmark
From: Gourville, J.T. Eager Sellers, Stony Buyers: Understanding the Psychology of New
Product Adoption . (HBR June 2006)
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
15
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
VIABILITY
3. Assessing Viability: Is there a business
(market) opportunity?
– Scope of target market (geographic/demographic)
– Potential (how many customers in target market?)
– Market penetration (how many potential customers will
buy?)
– Share of market (realized vs. potential)
– Competitors (how is the need currently being met?; is
our offering demonstrably better?)
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
16
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
SUCCESS FACTORS AND TIMING
4. Critical success factors
– What three or four things must go right in
order to succeed?
– Is our management team capable of making it
happen?
5. Timing considerations
– Is the window of opportunity broad or narrow?
– Is timing critical to capturing market share?
– Who else is trying to get there first?
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
17
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
BUSINESS MODEL AND PROFIT
5. Do we have a viable Business Model?
– How will we reach our customer (sales &
distribution)?
– How will we produce the product?
– How will we price the product?
– How will we support the product after the sale?
6. Can the business be profitable?
–
–
–
–
–
–
UTSA Colleges of
Business and Engineering
Selling price (to achieve target volume goals)
Cost to manufacture (function of volume)?
Cost to distribute, sell, service, support?
Other costs?
Cost/volume relationships?
Breakeven point?
CITE BootCamp January 2010
18
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Managing Risks
• Technical risk – will it work?
• Market risk – will they buy?
• Competitive risk – can we sustain a
competitive advantage?
• Implementation risk
– Leadership
– Resources
– A viable business plan?
• What could go wrong? (remember
Murphy’s Law)
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
19
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Elevator Pitch
You want to catch their attention and get
invited to give your pitch…
Start with a question to catch someone’s
interest?
Describe the “market pain”?
i.e. The problem you are trying to solve
Say your “value proposition”?
i.e. Why your product is better than others
Tell them the market size?
Tell them your projected revenues?
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 21
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Slide Deck
• Guy Kawasaki – The Art of the Start
• 10 slides
–
–
–
–
–
–
–
–
–
–
Title
Problem
Solution
Business model
Underlying magic
Marketing and sales
Competition
Team
Financial Projections
Status and timeline
• 10 slides, 20 minutes, 30 point font
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 22
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Executive Summary
• 5 Pages
– Put your slide deck into words
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 23
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Business Plan
A business plan is a document that describes the
opportunity, product, context, strategy, team, required
resources, financial return, and harvest of a business
venture.
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 24
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
UTSA Colleges of
Business and Engineering
The Elements of a Business Plan
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Top 10 Mistakes in B Plans
1. Solutions or technologies looking for a problem
2. Unclear or incomplete business model and value proposition
3. Incomplete competitor analysis and marketing plan
4. Inadequate description of the uncertainties and risks
5. Gaps in capabilities required of the team
6. Inadequate description of revenue and profit drivers
7. Limited or no description of the metrics of the business
8. Lack of focus and a sound mission
9. Too many top down assumptions like "we will get 1% market share"
10.Limited confirmation of customer demand or pain
UTSA Colleges of
Business and Engineering
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
Summary
• Entrepreneurial success takes more than a bright idea,
luck and hard work. You must also have:
–
–
–
–
A real customer need (recognized by the customer)
The best solution to meet the need (or close to it)
A viable business model
Timing, resources, management talent, partners and allies
• Too many would-be entrepreneurs start with a clever
technology or a bright idea and assume that the world
will beat a path to their doorstep
– Unfortunately, it rarely works that way
– Opportunities must be evaluated quickly, but carefully and
deliberately to avoid making the most common errors
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
27
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
The Growth “Rule of Ten”
•Who are my next 10 000 customers
•Who are my next 1 000 customers
•Who are my next 100 customers
•Who are my next 10 customers
• Who is my first customer
– Why will they pay me for my
product/service?
– How will I secure the deal?
– What resources do I need to
complete the transaction?
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Each growth by a factor of
ten requires the
entrepreneur to evaluate
how they will
do business
Without this vision forget
going into business
28
TAKE YOUR
TECHNOLOGY
TO THE
LIMIT!
TIME TO GET STARTED
UTSA Center for Innovation and Technology Entrepreneurship (CITE)
UTSA Colleges of
Business and Engineering
CITE BootCamp January 2010
Slide 29