Paul Hudnut AREC MECH 581 April 20, 2011

Building on BOPportunities: Strategies for Start-Ups

The Line Up2:00 On The Edge2:15 Becoming H.E.R.O.ic2:30 Swimming Lessons-

Envirofit3:00 Sam Baldwin at LSC

Ballrooms 4:00 Tim Bauer

ON THE EDGE (THEORY)

2:00- 2:15

My Pool

Business is about problem-solving, but it does not always have to be about maximizing profit..

Muhammad Yunus Business 2.0

“Most people look at a company like Apple and think, how could I ever make such a thing? Apple is an institution, and I'm just a person. But every institution was at one point just a handful of people in a room deciding to start something. Institutions are made up, and made up by people no different from you.”

Paul Graham, A Student’s Guide to Start Ups

Paul PolakDESIGN FOR THE OTHER 90%

2

3

BASE OF PYRAMID

90% Population; <10% of Effort

1 billon <$1/day

1

New Math for 2008-2020

1 Billion = 1.8 Billion

= BOPportunity?

4 Billion BOP1 US Consumer×

H.E.R.O.

BECOMING H.E.R.O.IC

2:15-2:30

Starting Up a “H.E.R.O.ic” Venture

• Pick 1 problem• Ask 2 questions• Solve for 3 S’s• Build on 4 foundations• Work 5 deals

1 Problem(BHAWG)

? ?

S S S

Goods & Services

Building a start-up: 4 Foundations

1) Market 3) Mgt. Team

2) Comp.Advantage

4) $$ Value

5 Deals in a Start Up

• Customer• Founders• Funders• Employees• Supply Chain

SWIMMING LESSONS-ENVIROFIT CASE

2:30-2:50

Envirofit Case

• What is the situation?• What sucks? What is EF going to do about it?• What is the opportunity?

– What challenges?• What does this team need to do to move this

venture adventure forward?

Envirofit: Technology Development

• In 2003, what stage of development was the DI retrofit?

• What were the major design constraints facing Envirofit?

• What are the 5 stages of product development they have planned? How long would this take?

• Any concerns? Suggestions?

Envirofit: Business Model• Who is the customer?

– Why would the customer buy the retrofit?– How did EF do market research?

• Would Paul Polak approve?

• Three S’s– Sustainable business model?

• What is the “triple bottom line” equation for EF?

– Scalable? How? When?– How significant an impact?

• For Profit or Non-profit?

Envirofit: Team and Network

Suppliers

Customer

Company-Founders

-Employees

Distributors

Investors

Customer Customer Customer

5 Deals

Envirofit Case: Final Thoughts• Start ups are messy.

– Lots of ambiguity– Many potential paths– Hard and soft issues– No heroes– Lots of work

• But to become a start up, you have to START UP. – Jump in the pool– Get going– Learn by doing

If you liked this…

• My blog is www.bopreneur.blogspot.com• Consider attending Jacqueline Novogratz

lecture tomorrow at 2 pm at LSC 228 – Non profit venture capital fund– Invests in start ups in India, Pakistan and East

Africa