Building success into a high-tech start

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Socrates – Greek Philosopher
Socrates and
young man
walking
towards the
river
Socrates
ducked
him into water
and boy is
struggling to
get out. But
he kept
him in water till
be turned blue
Young man gasp and takes a
deep breath of Air
Socrates – what
did you want the
most when you
where there?
Boy – “Air”
Socrates – that is
the secret to
success. “When
you want success
as badly as you
wanted air, then
only you will get it”
There is no other
secret.
A burning desire is the
starting point of all
accomplishment.
Just like a
small fire cannot give
much heat, a weak
desire cannot produce
great results.
Building success into a
high-tech start-up
– John T. Preston
How one organize a start-up company is
more important than the product in
determining the success or failure
Attitude
Management Teams
Passionate Behavior
Investors
Investment Timing
Securing patents
Attitude
James Utterback, his friend from MIT was
looking for radical innovation taken place in
past 100 years
And found no case in which market leader
pioneered radical innovation thinking that it
would cannibalize there existing products
Eg: Software program 1-2-3 designed by Mitch
Kapor, a student and offered to IBM but they
missed the opportunity & Paid 15000 times more
Eg: William Orton rejected an offer to buy
Alexander Graham Bell’s telephone patent for
$100,000 and described the invention as a
“scientific curiosity” that would never have
practical use.
Management Teams
Entrepreneurial behavior succeeds more
often
when performed by teams of
complementary skills
A 30 year study found success increases
dramatically with team size 4-5 entrepreneur
founding the company
He observed that first-rate managers hire
first- rate team but second-rate managers
hire third-rate
Passionate Behavior
Passionate people overcome barrier
One key difference between Japan or
European is that US company are much
generous in giving stock options to their
employee ie it gives sense of ownership
Eg: Southwest Airlines – pilot, copilot & flight
attendant clean the plane as they don’t want
to waste money by hiring cleaning crew.
Eg: Sanjeev Bikhchandani, CEO of Naukri.com
gave 5% to his brother while he wanted to
buy server, 7% to programmer to develop a
web-site and 9% to his friend for working with
him
Investors
Key determents:
1. The quality of investors and the pace at
which money flows
2.Venture capitalists and whether they can
provide adequate access to more money
downstream.
Investment timing
- A curve shows strategy of putting a small
amount of money into company over long
time and hoping it goes positive
[ radical innovation ]
2 problem
1. Management spends time raising money
instead of building money
2. A wide window of opportunity is opened for
competitors
- B curve enter and capture the market
[ incremental innovation ]
Thank You !!
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