lecture 05 bigpicture startupteam final
TRANSCRIPT
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BUS 102: Lecture No. 5The Big Picture & The Start-Up Team
Instructor: Didem AltopTAs: Asli Kurul, Firat İşbecer, Jason Lau, Sean Yu
Date: 16 March 2011
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Lecture #5 Agenda
• Housekeeping
• The Business Plan & Presentation
• Business Model Review
• External Factors
• The Start Up Team
• Assignment
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Housekeeping – Midterm Clarifications
• Due March 23rd before midnight• 3-4 page write-up, include:
– Background of entrepreneur (0.5 pages)– Opportunity identification (1-1.5 pages)– Entrepreneurial process (1-1.5 pages) – Measuring success (0.5 pages)– Your personal judgment (0.5 pages)
• Copy of your thank you letter to entrepreneur (1 page)• Details can be found on CMS under section and under
assignments• Questions?
• Next class meeting is March 23rd
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Purpose of a Business Plan
“A business plan is a formal statement of a set of business goals,the reasons why they are believed attainable
and the plan for reaching those goals”
• To thoroughly analyze the viability of any business idea– As you work through the exercise, you will better understand why your business idea might or
might not work, and how to make it work• To map out an executable “action” plan
– How do you plan to organize your entrepreneurial venture?– What is your marketing plan?– What is your operational workflow?– Etc…
• To communicate to co-founders, investors, employees– All players need to work from the same “game” plan
• To continually assess performance, identify opportunities for improvement and revise strategic direction
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Sections of a Business Plan
• Executive Summary (“Elevator Pitch”)• Products and Services• Marketing Plan• Operational Plan• Management & Organization• Financial Plan• Appendices
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Purpose of a Business Plan Presentation
• Similar to elevator pitch, the purpose of a business plan presentation is to win the attention of potential co-founders, investors, employees
• The skill of concise and persuasive communication is applicable not just to business plan presentations– Job interview– Sales pitch– Ph.D. dissertation– Wedding proposal
• http://www.nfte.com/why/multimedia/videos/mamma-nias-vegan-bakery
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Mamma Nia’s Vegan Bakery
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“I'm Nia, I'm seventeen years old and I'm the founder of Mamma Nia's Vegan Bakery! My job is to provide customers in the New York City Metro area, with delicious, organic, healthy vegan baked goods! I bake cookies, cinnamon rolls, and now, cupcakes, that are delivered to your location of choice, be it
your office, party, or house, all for great prices. All of my customers marvel at the fact that my baked goods don't taste like they are missing milk, butter, OR eggs, and you will too!”
- Nia, age 17, US high school junior
[Watch video]
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Class Business Ideas by Industry
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Business Services14%
Consumer Goods9%
Consumer Products5%
Consumer Services
55%
Food18%
Tastes DifferBakicim.comTaksiyollaEvleresenlik.comPayment HotspotOzU Entertainment Center…
FruitmaniaMobile CoffeeOzudurakTrain Restaurant…
Advert PanelKth CongressTire Recycling… Whereismypet.com
Second Hand Furniture
Bubbly Toothpaste
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Class Business Ideas by Channel
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Brick & Mortar59%
Internet41%
Whereismypet.comBakicim.comEvleresenlik.comDress Rental…
Mobile CoffeeAdvert PanelOzudurakTire Recycling…
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Class Business Ideas by Customer
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Businesses14%
Children9%
Men5%
Students23%
Women5%
Young Pro-fessional
45%
FruitmaniaTastes DifferPayment Hot Spot…
Advert PanelKth Congress…
Bubbly ToothpasteProje Dukkani…
Sports Social Network
Second Hand FurnitureStudent InternshipsOzudurak
Dress Rental
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Business Model Canvas Review
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KeyPartners
KeyActivites
ValueProposition
CustomerRelationships
CustomerSegments
MainChannels
KeyResources
CostStructure
RevenueStreams
Business Model Generation, 2009, written by Alexander Osterwalder & Yves Pigneur
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VALUE
EFFICIENCY
Building Blocks
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KeyPartners
KeyActivites
ValueProposition
CustomerRelationships
CustomerSegments
MainChannels
KeyResources
CostStructure
RevenueStreams
The Big PictureContext, Drivers & Constraints
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KeyPartners
KeyActivites
ValueProposition
CustomerRelationships
CustomerSegments
MainChannels
KeyResources
CostStructure
RevenueStreams
KEY TRENDSTechnology TrendsRegulatory Trends
Socio-Cultural TrendsSocio-Economic Trends
MACRO ECONOMIC FORCESGlobal Market Conditions
Capital MarketsCommodities & Other Resources
Economic Infrastructure
MARKET FORCESMarket SegmentsNeeds & DemandsMarket IssuesSwitching CostsRevenue Attractiveness
INDUSTRY FORCESSupplier & Value Chain Actors
StakeholdersCompetitors (Incumbents)New Entrants (Insurgents)
Substitute Products & Services
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MARKET FORCES
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MARKETISSUES
Identifies key issues driving & transforming your market from Customer & Offer perspective
Critical issues?Shifts are underway?Market heading?
MARKETSEGMENTS
Identifies major market segments, describes their attractiveness & seeks to spot new segments
Most important segments?Biggest growth potential?Interesting peripheral segments?
NEEDS &DEMANDS
Outlines market needs & analyzes how well they are served
Customer needs?Unsatisfied customer issues?Demand increase/decline?
SWITCHINGCOSTS
Describes elements related to customers switching business to competitors
Customer loyalty?Ease of & reason for switching?Importance of brand?
REVENUE ATTRACTIVENESS
Identifies elements related to revenue attractiveness & pricing power
Customer price sensitivity?Largest margins?Cheaper substitute availability?
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INDUSTRY FORCES
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COMPETITORS (INCUMBENTS)
Identifies existing competitors & their relative strengths & weaknesses
Who does What for Whom?Cost structure?Influence on marketplace?
NEW ENTRANTS (INSURGENTS)
Identifies new & upcoming players & explores basis of their business model
Innovation?Barriers?Value proposition & influence?
SUBSTITUTE PRODUCTS &
SERVICES
Describes potential substitutes for your offers – including those from other markets & industries
Overlap?Advantanges?Value proposition?
SUPPLIERS & OTHER VALUE
CHAIN ACTORS
Describes key value chain incumbents in your market & spots new, emerging players
Who does What for Whom?Dependencies?Profitability?
STAKEHOLDERS Specifies which actors may influence your organization & business model
Shareholders?Workers?Government or lobbyists?
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KEY TRENDS
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TECHNOLOGY TRENDS
Identifies tech trends that could threaten or improve your business model
Opportunities?Potential disruptions?Who’s adopting What?
REGULATORY TRENDS
Describes regulations & trends that may affect your business model
Current laws & regulations?Pending laws & regulations?Tax effect on customer demand?
SOCIO-CULTURAL TRENDS
Identifies major cultural traditions & challenges that may influence your business model
Shifts in values?Influence on buyer behavior?Need for customer education?
SOCIO-ECONOMIC TRENDS
Outlines major socio-economic trends relevant to your business model
Key segment description?Spending/lifestyle patterns?Urban vs rural comparison?
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MACROECONOMIC FORCES
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GLOBAL MARKET CONDITIONS
Outlines current overall conditions from macroeconomic perspective
Boom or bust economy?GDP growth rate?Unemployment rate?
CAPITAL MARKETS Describes current capital market conditiones as they relate to your capital needs
Availability of options?Ease of access to funding?Cost of funding?
COMMODITIES & OTHER
RESOURCES
Highlights current prices & price trends for resources required for your business
Availability of options?Ease of access to key resources?Cost drivers & trends?
ECONOMIC INFRASTRUCTURE
Describes economic infrastructure of market in which your business operates
Basic indicators for your market?NGO services/programs?Gov’t services/incentives?
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The Start-Up Team
• The start-up team is a collection of human resources with diversified skills who share a common passion and vision
• The common reason for start-up failure is not strategy or product, but the start-up team
• Many ventures get funded simply because of the team– Venture capitalists especially look for teams with prior success
• Challenges:– Do you start-up a company with someone you know well?– Do you start-up a company with someone in your field?– What do you look for in hiring?– How should the team evolve?
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Thomas Prescott on the Start-Up Team
• President & CEO of Align Technology• Everything starts with the right team
– “I’ll come up with a brilliant idea or the strategy, and then I’ll hire the right people to help me execute it. The answer is, it’s just the opposite”
• The start-up team must also evolve– “The people you started with may not be the people you can go
through the middle with, and may not be the people you can scale with”
• http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2537&fileId=8662
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Vinod Khosla on the Start-Up Team
• Founder of Sun Microsystems, general partner at Kleiner Perkins• The team is fundamental to start-up success
– “People are important and it is the only reason [Sun Microsystems] is around today”
• Talent can be more valuable than the business– “I offered him half the equity in [Sun Microsystems] when I could have
bought the license for $10,000…I got Andy to join me instead of saying the opportunistic and economic thing to do is to get a license”
• Partner with experts in areas you don’t know, not just your friends– “…engineering the gene pool to make sure all the weaknesses are accounted
for and we have expertise, because founding teams generally look at who they know as opposed to what they are missing”
• http://ecorner.stanford.edu/authorMaterialInfo.html?mid=30
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Bill Gross on the Start-Up Team
• Founder of Idealab, CEO of eSolar• Build a team with balanced innate skills
– “The entrepreneur, the producer, the administrator, and the integrator…you really need to have all of them”
• As company evolves, the balance of innate skills must change– “The companies that made it, had all these skills in balance; and the
companies that didn’t, didn’t”• A great team may be able to make diamonds out of coal
– “This team working together can take a not-so-decent idea and turn it into a decent idea…whereas a great idea will usually fizzle if it doesn’t have all this together”
• http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2663
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The Distributor
The Engineer The Time
Keeper
The Number Cruncher
The DesignerThe
Marketer
Defining Needs & Roles
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Sample Start-Up Team Skills
• The Time Keeper– Someone in the organization must drive the plan and keep people focused on a daily basis. This
person should be able to lead the group and ensure that all aspects of the project are covered• The Engineer
– Most likely your product or service requires some engineering. This could be website coding to baking a cupcake. This person possesses deep technical knowledge about the business
• The Designer– Good design can make or break a product so make sure you have someone who can think about
and drive all design aspects of your business• The Marketer
– Your business won’t go very far if no one on the team is good at talking about it. Make sure someone is thinking about overarching plans around PR and marketing
• The Distributor– Someone needs to be on the road, knocking on doors and making the sales. This person should
understand the customers and the distribution channels• The Number Cruncher
– Someone needs to pay attention to the money. You should have someone managing the books, keeping track of costs, and so on
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Looking Ahead
This Week’s Lab• Walk through business plan
template
• Examine all sections of a business plan
Next Week’s Lecture• Market Research &
Competitive Analysis
• SWOT Analysis
• Pieces of the Puzzle
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AssignmentStart Thinking About It
• Members of each team should divide into 1-3 person committees to address each of the four external factors
• For each factor, committees should define related research goals and potential research strategy– Each committee should share ideas with their whole team before submitting
summary of goals & strategy
• Due by midnight on Wednesday, April 6th (first lecture after Spring Break)– Cover page must include Name of Team Members, ID Numbers & Assigned
Section (as Jason, Firat/Sean, Aslı)– Find a name for your company and put it on the cover page– Submissions should be 12-font, single-spaced, max 4 pages
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Contact Info
• Didem Altop – Lecture Wednesday 17:40-19:30, Auditorium– [email protected]
• Aslı Kurul – Section Friday 12:40, Room 208– [email protected]
• Firat İşbecer – Section Friday 12:40, Room 202– [email protected]
• Jason Lau – Section Thursday 14:40, Room 201– [email protected]
• Sean Yu – Student Relations– [email protected]
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