Let's talk business (Technology can take care of itself)

Keynote at NZCSRSC 2012 - University of Otago, Dunedin, New Zealand (April 2012).

Transcript

1. Let's Talk Business (Technology can take care of itself) Nicolás Erdödy Director, Open Parallel NZCSRSC 2012 Keynote, April 13 University of Otago, New Zealand
2. Script 1- Introduction 2- Does research matter? 3- Due Diligence method 4- 10 Steps to start a New Venture
3. BEWARE: English is NOT my first language but this is my brand new KIWI accent I show passion, speak loud and use sarcasm, cynicism, euphemisms, and other isms to make my point. Most of them are PG but not necessarily PC I am a really happy guy and want to share that while you smile (i.e. NOW)
5. Who's this guy?
10. I'm RECRUITING!
11. Does Research Matter?
12. YES, BUT...
13. If everything seems under control, you are just not going fast enough. Mario Andretti (Formula 1 World Champion 1978)
14. Do you really understand... 1- The WORLD 2- PEOPLE 3- YOURSELF?
15. The World: A perfect storm
16. People Change... (clip 1)
17. Do you really know yourself? Why are you doing this? Are you doing it for the RIGHT reasons?
18. Due Diligence
19. How do you Learn? I do this: 1- Read (scope the project) - 10% 2- Understand (sentence x sentence) - 35% 3- Write (my own book about the project) - 25% 4- Practice (heart surgery with manual?) - 30%
20. My DD method • Understand • Have • Need • How • Champion • Markets • Figures • Dream • Idea • Project • Business
21. UNDERSTAND HAVE NEED HOW CHAMPION MARKETS FIGURES
22. 1- DREAMS (40%) 2- IDEAS (30%) 3- PROJECTS (20%) 4- BUSINESS (10%) (or less)
24. There is nothing wrong with dreaming Ideas need to be dreamed first Projects emerge from Good Ideas Business happens as consequence of the successful implementation of a Good Project
25. Emotional Investors in high risk ventures exist since centuries.
26. The problem is when you mix dreams with business It's even worse when you insist that your dream become a business pretty much overnight You should understand … that the world does not owe you gratitude for having discovered or developed a different way of doing XYZ
27. You have to understand … 1- How the world works around you 2- That people perhaps have other opinions about your dreams 3- That you are NOT a superhero that can do everything on your own
28. DUE DILIGENCE usually between 3 minutes and 3 months Between 2005 – 2008 3,000 proposals – 300 formal DD 3 INVESTMENTS
29. So, what are investors looking for? And what do they provide? (clip 2)
30. 10 Steps to Create a New Venture (Software or whatever)
31. 0) Name your Baby • Shouldn't take you more than 45 seconds for a codename • It's not a brand, you need expert help for that • Every baby needs to have a name
32. 0) Name your Baby
33. 1) What's this all about? • Explain it in a generic way • Is this software, hardware, rocket science? • Is software for retail, enterprise, IoT? • Would be online, SaaS, open source? • New technology or extension of an existent one? • Which is the core and which is the context?
34. 2) In summary... • What's this all about AGAIN? • Now we have a general view but can you give us a definition in ONE SENTENCE of what are you planning to do? • This is NOT a trivial exercise • Think that that sentence will go in your business card
35. 3) Why are you better than others?
36. 3) Why are you better than others? • You decided to start / do something new: why? • Why would someone talk to you? • Can you benchmark / compare yourself against others? • Successfully? With which metrics? • Let's be straightforward: you HAVE competitors • The question is how do you differentiate from them
37. 4) Are you AHEAD of others? • Is this a paradigm shift? • A disruption? • Can you provide an analogy, i.e. like invention of printing press? • Is everyone else still using handwriting? • How far ahead are you: 5 weeks? 5 years? • Don't fool yourself: the fact that you spent 20 years researching doesn't mean that 20 people together cannot replicate (or reverse engineer it) in less than one year
38. 5) Applications
39. 5) Applications • Who need this? • Why? • Have you actually asked them? • Will they pay for it? How much? • Name three industries (better if you know 10-15) or areas that are “waiting for you” to solve this problem • Can you find or imagine “new” uses of their core technology that will benefit from your development? • Name the (potential) BIG customers?
40. 6) How do you plan to do it?
41. 6) How do you plan to do it? Ok, we believe you so far: can you tell us now... • How would you transfer your know how? • Would you emerge from your shed with a turnkey solution? • Do you have your mix of developers – suppliers – testers – documentation writers? • Do you need special manufacturing? • Which are the best parts of the world to do it? Forget that you live “here”: tell us where the venture must “live”
42. 7) Who will be doing this?
43. 7) Who will be doing this? • Do you actually have a team? • Are they as committed as you? • Who will implement this? (different than development) • Don't wait to have funding to hire people, have you already identified potential members of your teams? • Have you discussed the idea and scope with them? • Do you have suppliers? • Why would “the employee #20” join you?
44. 8) How much money do you need?
45. 8) How much money do you need? • It's different of how much do you “want” • Also different from how much do you think “it is worth” • Personal expectations and founders' valuations are usually wrong • What for? (i.e. development, prototyping, expenses, marketing, overheads, salaries, travel, etc) • For whom? (i.e. are you paying yourself?) -This is different from stock: Do you know how much are normal market salaries?
46. 9) Time Herding cats Clip 3
47. 9) Time Tell us in “time units” how long will take to: • Become established • Operative • Able to generate revenue • Profitable • A competitor to eat part of your new customer base • How long will take your death valley? (then add at least another six months)
48. 10) HOW BIG will be this business?
49. 10) HOW BIG will be this business? • Do you have a clue about my expectations? • Do you have a basic idea of stock options? • Do you really believe that you can own a controlling share after 1-2 rounds of funding? • Have you read at least one article about managing high growth ventures? • Which is your ideal exit strategy? For you AND for me (and please don't say IPO as first option!)
51. The End (or the beginning?) Cheers! Let's Talk Business (Technology can take care of itself) Nicolás Erdödy Director, Open Parallel NZCSRSC 2012 Keynote, April 13 University of Otago, New Zealand