Silicon Valley Entrepreneurs - West Message Board › Starting & Growing - Talk 3/21
San Jose, CA
Silicon Valley Entrepreneur Meet-up 3/21/13
Organizer: Peter Cikalo, Wiz4.biz, Startup Services
Speaker: Ben Park – CEO/Founder of Fosmo Med
Notes by: Soechgen Mulia, Data Ctr Mgr, Yahoo
A. Quick Tips of starting or growing a business:
1. Have a Better product – that people want?
2. Fund raising: get 2x of what you need for safety; structure how much Stock to be issued; use Convert Notes. 1st rd Series A ~ $2M
3. Checkout VC/Angel. Connected to your industry? They will be your channel
· your Idea should be narrow & specific, get to know the Angel Investor or VC and feel comfortable working with them.
· needs to be 1, 2 or 3 in your market
· should hav immediate reaction in market.
· ideally about 7-10% Q2Q growth.
· Need Plan B back up, just in case
· Check US Patent.gov use 3-4 keywords. Patent only to avoid getting law suit
· Important/focus: High Barrier to Entry for your competition: 1) make it difficult to reverse engineer your product, 2) get to market first & 3) get largest market share.
5. How big is the market? Market analysis: do both top-to-bottom & bottom-to-top
6. When does Investor getting 10x ROI? Typically 5 years. ROI is very important
7. Who are the people that can execute? Not always experience people, ones with passion
8. Difference between product vs. technology. Product can get funded. Tech idea no funding.
9. Pre-sell before development for Cash Flow.
10. Exit strategy. When VCs evaluate your business, if the value is 5x within 1 year, they may sell the technology out to other company for quick return. If your strategy is to get bought, need high barrier entry to slow down big boys in reverse engineering your product.
What’s most important:
· Expertise & Execution. Ideas are dime a dozen, execution is prime to succeed.
· Need to know the risk. Investor believes in Serial Entrepreneur.
B. How does a 1st timer Execute?
1. Bring in Experts on Start-ups + experienced CEOs to Board of Advisers, Board of Directors.
· Board of Advisers has no financial responsibility & no liability
· Board of Directors has financial responsibility & liability for fraud, etc. Hence, they need insurance package to protect them. This can cost over $10K/yr.
2. Here are the 1st Positions your team needs.
· Product Development, then Operations
· Networking & Fund Raiser
3. Marketing & Market Share
· High Barrier to Entry type of product - that is so disruptive, that it will take longer time for “the big boys” to reverse engineer or end up buying you out.
· Get Orders before getting into product development. Use Contingency PO. This approach will limit the equity given away.
· VC don’t like Consumer Products, because not predictable. VC favor B2B, then B2C.
C. Steps of Business Planning
1. Need Elevator Speech to summarize your business in 90 seconds, then tell everyone you meet
2. What Problem are you going to solve? What are the biggest pain points? What to avoid?
3. Who’s Problem are you solving? Get to know your customer. Who is willing to pay you? Use Survey Monkey.com
4. What are Demographics of your typical Cust.
5. How much do they pay for similar services?
6. How Big is the market?
7. How do I want to exit?
Join Smartsy.com CEO’s discussion on Starting a Biz 4/4/13 at Hobees in Sunnyvale.