E102 Lecture 2 Introduction (continued) Jan 10, 2012

Brief thoughts on choosing ideas

There are two types of people in the world. . .

There are two types of people in the world There are two types of people in the world. . . Those who divide the world into two types of people

There are two types of people in the world There are two types of people in the world. . . Those who divide the world into two types of people And those who don’t

There are two types of Businesses . . . Technology Push Vs Market pull There are two types of Businesses . . . Technology Push Market A Market B Market C Consumer need example Market Pull Technology A Technology B Technology C Market A

Types of ideas Technology – Driven An IP protected “cool technology” “Barrier” areas such as Batteries, more efficient turbines, solar power) Energy efficient devices Information Right data at the right time to the right person A product area you feel passionate about A product you can learn from

Funding Not necessary to be an Angel or VC idea as long as it can be self-funded. But what if you want some outside investment? What works . . .

Funding Not necessary to be an Angel or VC idea as long as it can be self-funded. But what if you want some outside investment? What works . . . And what doesn’t work

VC: “Thanks, but don’t call me- I’ll call you. . .” An idea which affords you no competitive advantage and no barrier to entry from competition Something that is “nice to have” rather than something which addresses a real market pain An idea which requires a large infrastructure as a core competence Something which is a “feature” on a present product Something which attacks an entrenched competitor

VC: “Great idea- but not in our space. . .” Something which requires a very large Capital Outlay Something where it is very hard to prove the business model quickly Something where the investment cannot be returned in <5-7 years Something where there is no “path to profitability”

VC: “What did you say your name was?” Something which is unmanufacturable using current technology Something where you are only 2X better than current product Something where you say your unproven idea is worth 5 million dollars Something which says that you will be successful in China if only you got 1% of the market Etc, etc.

The biggest barriers to building a successful technology-based business are

The biggest barriers to building a successful technology-based business are Poor Management

The biggest barriers to building a successful technology-based business are Poor Management Poor Marketing

. Success is the ability to go from failure to failure with no loss of enthusiasm      -Winston Churchill