ELEC 5701
Technology Venture Creation
Matt Barrie, CEO
CEO
Freelancer.com
matt@freelancer.com
Bill Bartee
Managing Director
Southern Cross Ventures
wbartee@gmail.com
Stephen Merity
Course Assistant
smerity@freelancer.com
Prerequisite
• Strong interest/passion in learning how to turn
an idea into a real company
Introduction
• In this class you will get the experience of starting a technology
company.
• You will form teams (3 - 4) and each assume the role of a founding
executive (CEO, CTO, CMO, CFO).
• You will start with an idea and over the course of the semester
evaluate the market opportunity for a business, design a profitable
business model, and put together a funding-reading business plan.
• You will then pitch this plan to real world financiers and
entrepreneurs.
Course Objectives
• Understand the real world aspects of
Entrepreneurship by getting out of the building
–
–
–
–
Analyze and assess an opportunity
Build the product
Get orders
Work with a team
• Learn whether entrepreneurship is for you
What Will you Learn?
• Opportunity/idea evaluation
• Search for a Business Model
• Customer Discovery and Validation
• Operating and decision making in chaos with
insufficient data
• Teamwork
“Is This the Right Course for Me?”
• If you are interested in
–
–
–
–
Following your passion
Starting a technology company
Joining a small technology company
Being a management team member of a larger technology
company then
• We hope to provide you with the tools, frameworks,
confidence and encouragement to go out and start the
next Google!
The Course ‘By the Numbers’
• Team building exercise
5%
• Class participation
20%
• Written business plan
25%
• Oral presentation of business plan
50%
5 -10 hours of work a week outside the classroom
Expectations
• All lectures are compulsory.
• Non attendance lectures is grounds for failure.
• Classes are intended to heavily interactive.
• You will be marked based on your class participation!
This includes on-time attendance, business plan
progress, and in-class participation (quality of questions
or comments).
• Culturally - if you need to make a call, tweet etc, please
be respectful and do it outside
Mechanics
• Two lectures per week (Friday 4-6pm)
• Guest lecturers from industry leaders each week
• No tutorials or labs however teams are expected to work
on their business plans each week.
• We will have a series of checkpoints throughout the
semester to ensure teams are working to speed.
• Course blog at http://techventurecreation.wordpress.com
– please check this regularly for updates!
This Class is Hard
• You can’t pass by just attending the class
• Your grade is largely determined by the work you
do outside the class
• There’s a lot of it
• You are dependent on teamwork and teammates
– communication is critical
Teams
• Suggested team size is 3 - 4 people
• Present regularly and for Final
– Weekly lessons learned
– Final is demo and summary
• Class is about teamwork, discovery and fast
iteration
Suggested Readings & Viewings
• Technology Ventures: From Idea to Enterprise
Richard Dorf and Thomas Byers, McGraw-Hill Science.
• Four steps to Epiphany -- Steve Blank
• The Art of the Start
Guy Kawasaki
• Crossing the Chasm -- Geoffrey Moore
• Business Model Generation -- Alex Osterwalder
• Techcrunch.com, Venturebeat.com
• FORA.tv, TED.com
• Stanford Entrepreneurship Corner http://ecorner.stanford.edu/
Introductions
Teaching Team
Matt Barrie
• Chief Executive, Freelancer.com, the world’s largest
outsourcing marketplace (and Australia’s biggest
website).
• Formerly CEO of Sensory Networks, and OEM hardware
company in high performance networks security.
• Prior to that, cofounded a telecoms hardware company
and worked in Silicon Valley.
• Stanford MSEE ‘98 and USyd Alumni.
Teaching Team
Bill Bartee
• Managing Director, Southern Cross Venture Partners
• Former CEO of Mantara -- transforming securities trading
• Division Director of Macquarie Bank
– Investor in Seek (ASX), Looksmart (Nasdaq), Altium (ASX),
Openwave (Nasdaq), etc.
• Founder/co-founder of 3 start-ups
• Operational roles of CEO, VP Sales, VP Operations, Chief Bottle
Washer
• Research Analyst
• BS, MBA, JD
Guest Lecturers 2011
(tbc)
• Ryan Junee, CEO of Omnisio (sold to Youtube/Google)
• Mike Cannon-Brookes, CEO & Co-founder of Atlassian
• David Rowe, Investment Manager, Uniseed
• Rich Richardson, Inventor & CEO of Uniloc
• Alan Liddle, CEO, Immune Systems Therapeutics
• John Young, Principal Advisor, KTM Capital
• And Others
Google Field Trip
• Alan Noble (Engineering Director for Google ANZ) has invited the
whole of ELEC5701 to a field trip to Google.
• Alan has a fantastic background including being a Stanford grad, cofounder of Netmind (acquired by Puma Technology, which was
acquired by Nokia) and CTO of Foursticks (management buyout to
found NetPriva, acquired by Expand Networks). Alan is on the board
of AIAA and co-founder of SA Angels.
• Alan will share some of his experience, provide a tour of Google’s
offices and talk over lunch about how Google approaches the
technology business.
• Trip tentatively in September – date TBD.
Expectations
• All lectures are compulsory.
• Non attendance lectures is grounds for failure.
• Classes are intended to heavily interactive.
• You will be marked based on your class participation! This
includes on-time attendance, business plan progress, and inclass participation (quality of questions or comments).
Entrepreneurship
Entrepreneurship
• “Entrepreneurs identify and pursue solutions among problems,
possibilities among needs and opportunities among challenges”
(Tom Byers)
• More than just creation of a business and wealth. It’s focused on the
creation of a new enterprise that serves society and the and makes
a positive change.
• Entrepreneurs respond to challenges:
“Ever since I was a teenager, if something was a challenge, I did it
and learned it. That’s what interests me about life – setting myself
tests and seeing if I can do it”
(Richard Branson)
Entrepreneurship is Hard
• Entrepreneurship requires getting out of your comfort zone.
• Entrepreneurship involves taking risks.
• Its about following your passion!
• “The vast majority of Plan As fail. The vast majority of the successes
we think about there, the Googles of the world, the Facebooks, the
Intuits, the Suns, the Apples; they didn’t succeed with Plan A. That’s
a little known fact. People talk about how these companies executed
well from idea to conception, from conception to product, from
product to customer and customer to business. That’s not how it
works.” (Randy Komisar)
• Only ~1/3rd of new ventures survive the first three years.
The 3 Magic Ingredients
1. You need an idea, however ideas by themselves are worthless. Lots
of people have ideas. You’d be surprised how many people around
the world have the same idea as you!
2. You need there to be an opportunity. Entrepreneurs look for
problems to solve where there is clear market need.
• What makes an opportunity attractive? Examples include:
– Market timing
– Knowing the right people
– Knowing how to solve a problem
– Having the right resources
– Economic climate
– Social change
The 3 Magic Ingredients
3. Finally, and most importantly, you need execution.
•
There needs to be interest, passion and commitment by the
entrepreneurial team, with matching- or who can assemble- the
right capabilities and skills.
Key Entrepreneurial Skills
• Talent, knowledge and experience within the industry
where the opportunity occurs.
• Can create vision for the venture and effectively
communicate it internally and externally.
• Can deal with uncertainty and risk, an ever changing
environment and active competitors; and actively work to
mitigate those risks.
• Identify an opportunities where there is a market the size
of Texas.
• Can convert the opportunity into a business.
Key Entrepreneurial Skills
• Can attract, train and retain a first class team with multidisciplinary
talent.
• Has internal self drive to pursue an great opportunity when everyone
around you tells you its bad.
• Can handle failing often, fail quickly, and bounce back.
• Can multitask.
• Can solve problems creatively.
• Can do all this with limited resources for potentially an extended
period of time.
Question
• If you had to compromise one of the three (disruptive
technology/product, large market and founding team),
which would you choose?
Question
• Most likely the product.
• If the market is small, no matter how good the product is,
its hard to make money.
• With a large market, one can make up for the product
with iterative product execution.
• Investors will consider an A grade team with a B grade
idea, but never a B grade team with an A grade idea.
More startups fail from
a lack of customers than from a
failure of product development
(focus on “who” more than
“what”)
Carpe Diem
• Entrepreneurship is incredibly rewarding
• It’s not easy to do, but its never been so easy
• Capital required to start many businesses has never
been lower (e.g. Internet, software, use of online
freelancers)
• The Internet has been an incredibly disruptive
technology which has allowed businesses to scale
quickly and cost effectively
Homework
• Watch “A Panorama of Venture Capital and Beyond” by
Marc Andreesson (May 12th, 2010 lecture for MS&E 472,
Stanford University on iTunes).
• Also on eCorner at
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=
2457
• Start to form teams
• Start to think about an idea for a business and what your
hypothesis is