nwen and founder institute ideation bootcamp - week 1 - big idea, markets and problems

Ideation Bootcamp

About Mentors

Joel Espelien

• Entrepreneur & Founder

• VP Strategy & General Counsel

for Packet Video

• Mentor for Tech Stars and

Founder’s Co-op

Dave Parker

• Director, Seattle Founder Institute

• Entrepreneur

• Board Member Guidant Financial

• Former Board Member

Classmates.com

Agenda:

• Week 1- Big Ideas/Markets/Problems – Introductions – Market– Problems – Ideas– Q&A – Working Groups – Homework

Weekly Format

• 6:30 – Food/beverages • 6:45 – Introduction to topics & mentors • 7:00 – Content 1 • 7:30 – Content 2 • 8:00 – Q&A • 8:25 – Break • 8:45 - Working Groups• 9:15 – Home work

• Big Ideas – Big Markets – Big Problems – With Joel Espelien

• Venture Ready Research, Target Markets & Models– With David Bluhm

• Validating your idea: tools and methods – With Justin Wilcox

• Communicating your idea (without getting lost in the

details)– With Joanna Lord

Week 1

So You Have a Startup Idea?

Joel Espelien - @EspelienJB

Dave Parker - @DaveParkerSEA

#SEFI@Founding

Ground Rules:

• Don’t be afraid to share your idea!• Ideas don’t matter – feedback, execution and

iteration do• You have more to gain than to lose• Nobody is going to steal your idea• Don’t ask an Investor to sign your NDA

SurveyExisting Business?

Tech Business?

B2B?

B2C?

Seeking Investment?

What Investor Look For

• Big Market/Idea/Problems• Team that can execute • Scalable Product • Traction – Customer, revenue, users

Markets

• Who Buys from You?• Business to Business • Business to Consumer• Established vs. Immature • What is a Market?

Source: Dow Jones VentureSource

Am

ou

nt

Investe

d

($B

)N

um

ber o

f Deals

Investment Falls in 2012Deal Flow and Equity into Venture-Backed Companies

$23.6 $25.1

$31.1$34.5 $33.1

$24.3

$29.3

$35.1

$29.7

24622627

2859

3110 3049

2759

3116

35063363

0

1,000

2,000

3,000

$0

$10

$20

$30

$40

$50

2004 2005 2006 2007 2008 2009 2010 2011 2012

Amount Invested ($B) Number of Deals

Source: Dow Jones VentureSource

Industry Allocations Steady in 4Q’ 12 Deal Flow Allocation by Selected Groups

% D

eal Flo

w

Allocati

on

29% 25% 24% 22% 24%

34%34% 38%

38%

16% 21%23%

20%20%

17% 16% 18% 17% 15%

4% 5% 2% 2%

0%

20%

40%

60%

80%

100%

4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12

Energy &Utilities

Business &FinancialServices

ConsumerServices

InformationTechnology

Healthcare

Source: Dow Jones VentureSource

Software Loses Pace in 4Q’ 12IT Investment Allocation by Sector

% o

f D

ollars

In

veste

d

47%

65% 62%70%

59%

30%

12% 18%8%

22%

14% 14%

16%15%

15%10% 9% 5% 7% 3%

0%

20%

40%

60%

80%

100%

4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12

Semiconductors

Electronics &ComputerHardware

Communications& Networking

Software

Big Markets?

• Is the Market in Billions?• Specific Opportunity for VC >$100M • If you own the market how big would

your be• Market Leader vs. First Mover • Known or unknown

Big Ideas?

• Changes the world • Simple • “Aha” idea • Transformational

• Changes a market • Complex • Feature or tool • Incremental

Big Problems

• Pain Pill? Have to have it• Vitamin? Nice to have• Who wins if you win?• Do they “win big” or “save a little”?

It’s takes as long to build a small idea as big idea

• Passion!

• Ideas!

• Product

• Doesn’t make it a

great business• Execution

• Company

Explain Your Idea

I want to develop

to help

(solve a problem)

(with secret sauce)

(a defined offering)

(a target audience)

Idealibs for Startups

The Offering

• Be Specific– “a social utility" vs "an ecommerce website"

• Avoid Buzzwords– "mobile social CRM" vs "an iPhone application"

• Skip the Adjectives and Superlatives– "a revolutionary service" vs "backend software"

The Audience

• Identify Demographics– "female consumers" vs ”new mothers"

• Specify Your Market– "artists and musicians" vs "unsigned alternative bands"

• Clarify the Buyer– "large businesses" vs "purchasing managers at

multinational companies"

The Problem

• Make sure everyone can understand the offering.• Hint at a viable revenue model.

– "find deals online" vs "shop for hip baby products at wholesale prices"

The Secret Sauce

• Explain what makes your business unique.– "faster" vs "with automated ordering for diapers and other

staples”

Q&A

Working GroupsHomework

7 Rules to Judge Your Idea

7 Rules

1. Simple ideas win

2. You have one revenue stream

3. Name your customer

4. Make something explainable

5. Small markets suck

6. Mix in secret sauce

7. Be original

Contact Info

• Dave Parker – Dave@dkparker.com

@DaveParkerSEA• Joel Espelien – joelbespelien@gmail.com

@EspelienJB • Daniel Rossi – DRossi@nwen.org

@nwen-org • Caitlin Goetze – Cgoetze@nwen.org