How to Develop a Winning Concept Paper Charlie Baecker, Administrative Director January 20, 2015

Agenda Welcome, Introductions and Background What You Will Learn Purpose of a Concept Paper Planning Methodology and Challenges Judging Criteria Concept Paper Format Suggested Approach Q and A

My Background First peer-to-peer MS Windows networking solution, installed on over 1 billion desktops worldwide. First 128 bit symbolic processor, the InferStar, adapted for use by NASA as the primary CPU for the Space Station robotic arm control system. First X11 server for MS Windows, X11/AT by Integrated Inference Machines. First process manufacturing Man-Machine Interface (MMI) for MS Windows, InTouch, from Wonderware Software. First digital PBX exchange with integrated voic capabilities, the Delta 1, from Delphi Division of Exxon Enterprises.

What You Will Learn The basic process to be discussed: –Provide evidence of a market –Provide evidence of a solution –Management team A fundamental ingredient is passion

Purpose of a Concept Paper Used in the competition to select semi-finalists through offering evidence of a market and evidence of a solution It is a sales document; it is an exciting story It’s purpose is not to demonstrate how much you know Subset of full business plan for a company investment –Provides evidence of a market –Provides evidence of a solution –Management team Concept paper describes the “point of pain” and value proposition minus the financial projections section Organize your team’s thoughts, help you identify roles

Generic Planning Methodologies Waterfall Process Model Spiral Process Model

Business Concept Planning Financial Projections Management Team Product/Service Market Need

Typical Concept Paper Challenges Assigning roles –“ Getter, Doer, Counter” and Leader Collecting market data –Talk to prospective customers!! –Size, Growth rates –Segmenting Market –Identifying Competitors –Key differentiators for competitors –Identifying market gap –Fitting product to the gap Maintaining internal consistency in paper Deciding what are key differentiators Appealing to both the head and the heart

Judging Guidelines Is there a large, growing market Is the market opportunity compelling Is there a clear target customer? Is the solution realistic? Is the business proposition well thought-out? Can the business become a market leader? Is there proprietary technology? Is there team expertise? Evidence of a Market Evidence of a Solution

Concept Paper Format Length – maximum of three pages plus cover page Cover page – company name, team member names, school affiliations, and graduate/undergraduate status Due date – Feb 2, 2015, 11:59 pm via iStart.org

Concept Paper Approach

Basic Team Approach 1.Read Sahlman, How to Write a Great Business Plan 2.Team discussions focusing on the “nine questions” on page Develop alternative business models using the Business Model Canvas 4.Write concept paper covering: Evidence of a market Evidence of a solution Management team The context Market Solution

Sahlman’s Nine Questions 1.Who is the venture’s customer? 2.How does the customer make decisions about buying this product or service? 3.To what degree is the product or service a compelling purchase for the customer? 4.How will the product or service be priced? 5.How will the venture reach all the identified customer segments? 6.How much does it cost (in time and resources) to acquire a customer? 7.How much does it cost to produce and deliver the product or service? 8.How much does it cost to support a customer? 9.How easy is it to retain a customer?

Concept Paper Components Overview/Introduction to grab attention Market Need to create urgency Product or Service to develop interest Market Potential to substantiate claims Competitive Advantages to validate approach Management to provide confidence

Company Overview / Introduction What is your business proposition for solving the problem? Who will be your customers?

Company Overview Example Jeff Smith has a problem: for the last seven months, Jeff has attempted to contact qualified investors interested in funding his web services startup. After meeting over 150 contacts, he has made only 15 investment pitches and received only 2 offers; both of which were insufficient to meet his needs. After seven months and 150 meetings, Jeff is thinking there has to be a better way. SeekingCapital.com is an exciting new company that offers both entrepreneurs and investors a powerful and efficient web-based service for matching investors with pre-IPO companies.

Market Need Goal: offer evidence of a market Magnitude of the pain: vitamin or pain killer? What specific aspects or changes in the market have created the problem you are solving? How will your product or service take advantage of this opportunity? Who are your customers and what are their attributes? How well defined are your potential customers and why should they pay for your product?

Product or Service Goal: begin offering evidence of a solution. What is the problem you are solving, need you are satisfying or pain you are addressing? What is the product or service? Examples: –Software that enables… –A medical diagnostic device used for… –An automotive aftermarket accessory appealing to… –A programmable chip for the telecom market that… –Specialized business services targeted to… –An innovative beverage container that… What are its attributes, advantages? What is innovative about your product or service and how does it differ from the competition? Any “secret sauce” or intellectual protections

Market Potential What are the market characteristics? How big is the market – number of potential customers and annual sales Growth Segments What will be your niche in the market and why? How will dominate your market niche? How will you identify customers? How will you reach your market? How will you make money?

Competitive Advantage Who are your competitors? Segments they occupy What are their advantages and weaknesses/vulnerabilities? Why they can’t close the gap?

Management Maximum one paragraph Key members of the team – name, role, background, education, experience Emphasis on previous success working together in another company or context

Summary Advice: Tips: Use charts as “eye candy” Address only topics that are most relevant to your company Be concise and to the point ($5.00/word rule) Highlight your strengths 1.Read Sahlman, How to Write a Great Business Plan 2.Team discussions focusing on the “nine questions” on page Develop alternative business models using the Business Model Canvas 4.Write concept paper covering: Evidence of a market Evidence of a solution Management team The context

Where to Get Information Find rules and regulations at: Charlie Baecker, Administrative Director Don Beall Center for Innovation & Entrepreneurship Breanna Bremer Beall Center Program Manager Q&A Thank You and Good Luck!