E102 Lecture 2 Introduction (continued) Jan 06, 2011

Today More Introductory Comments Guest Speaker Fred Farina Guest Introduction Kristin Buxton Look again at ideas – Time runs out (tomorrow 9:00AM) for choice of Ideas

Event Announcement Stanford/Princeton national entrepreneurship conference April 7-10 A Bootcamp – Stanford – all-expenses-paid – brings together students with founders, entrepreneurs, and venture capitalists for an intensive learning experience.

Applications close Feb 1, 2011 Applicants will be evaluated – on idea – Student entrepreneurial potential Event will feature – small-group workshops – participants will competitively present business ideas – Apply at bases.stanford.edu/e-bootcamp!bases.stanford.edu/e-bootcamp

Grading HW presentations20% Midterm presentation 10% Midterm paper (5 pages)10% Criteria1. Depth of market research- especially primary research 2. Quality of understanding of the problem Quality of Final presentation 15% Quality of Final paper (20 pages)25% Criteria: 1. Convincing argument (logic, self consistency, flow) 2. Originality of thought 3. Depth of Understanding Class contribution 20% 1. Prepared, show up, volunteer opinions, extra credit “learnings”, attends TCA, Caltech-MIT enterprise forum, etc. 2. Individual differentiator (all other grades above are as a team)

Grading Extra credit for Individual: A 10 minute presentation on “New Learnings” At your volition, if you come across a subject of relevant entrepreneurial business interest to the class, you can research it and apply to the instructor to present it. The extra credit will be 0- 5% depending on quality of insight.

Market A Market B Market C Market A Technology A Technology B Technology C Technology Push Vs Market pull Market A Pull Technology Push Caltech spin-out example Consumer need example

Types of ideas An IP protected “cool technology” “Technical Barrier” areas such as – Energy 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.

Final take-away thoughts The biggest barriers to building a successful technology-based business are

Final take-away thoughts The biggest barriers to building a successful technology-based business are Poor Management

Final take-away thoughts The biggest barriers to building a successful technology-based business are Poor Management Poor Marketing

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