בסד Privacy Restored.™ 1 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. RESEARCH CONSULTING Entrepreneurial Computer Science Yonah Alexandre Bronstein, PhD Session 6

בסד Privacy Restored.™ 2 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Session Outline 1.Administrative Stuff 2.Homework Check… 3.Chapter 5: Art of Bootstrapping

בסד Privacy Restored.™ 3 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Administrative Stuff Final Project Schedule: Midterm: Thursday May. 2 nd, midnight Final: Wednesday July 17 th, midnight Present: Sunday July 28 th Bldg 37 Auditorium (Room 202) With Real Investors… (TBD)

בסד Privacy Restored.™ 4 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Homework check… Just a few TBDs from starting… For Next Session? “The Project”: Draft 1 (something > nothing) “The Art of the Start”: prepare Chapter 5 Students’ turn…

בסד Privacy Restored.™ 5 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Bootstrapping “Bootstrap”: a leather or fabric loop on the back or side of a boot for pulling it on (Collins English Dict.) Get up on your feet BY YOURSELF Think Big – Start Small Hewlett-Packard, Dell, Microsoft, Apple, eBay…

בסד Privacy Restored.™ 6 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Bootstrap Business Model “Someone was using the pencil.” Mrs. Parker – The New Yorker Manage for CASH-FLOW, not profitability (or market share or branding, or …) Ideally: –Low up-front capital requirements –Short (< 30 days) sales cycle –Short (< 30 days) payment terms (best: pre-paid, if you can get it…) –Recurring revenue (monthly or yearly subscription/royalty) –Word-of-mouth/web advertising / piggyback on existing product/service

בסד Privacy Restored.™ 7 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Bottom-Up Forecast Top-down forecast, e.g. Internet access in China: –1.3 Billion people, 1% want Internet access, we’ll get 10% –Each account yields $ 240/customer  $ 312 Million/Year !! Illusion: the % look so small and conservative… Bottom-up (with real-world constraints): –1 salesrep: 10 call/day that reach prospect, 240 workdays/year –5% of sales calls convert within 6 months, and brings $ 240 –We can afford 5 salesreps initially  $ 144 K in 1 st year

בסד Privacy Restored.™ 8 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Ship A.S.A.P. Kawasaki: “Ship, fix, ship, fix…unless biotech or medical.” –Pro: immediate cash-flow & real-world feedback –Con: tarnished image if there are quality problems YAB: ethical issues in cars, bicycles, food, even just information/advice… Nu? “Would I let my father/mother use it?”

בסד Privacy Restored.™ 9 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Unproven Team “Experience is the name everyone gives to their mistakes.” – Oscar Wilde Bootstrap  Focus on Affordability –Inexperienced & young vs. Famous industry veteran –Raw talent & energy vs. VC appeal (but odds are low anyway) “proof” is a tricky word… Ignorance can be empowering! Check: Bill Gates, Steve Jobs, Michael Dell, …

בסד Privacy Restored.™ 10 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: [Re-]Start as Service Consulting offers: –Hourly $$ –Immediate customer feedback –Tool developed to help can become Company Product Unfinished/Unsold product can become: –Tool for consulting –Opportunity to solve unexpected problems for other customers No Income (even if there are Savings) can be emotionally – even if not practically - hard…

בסד Privacy Restored.™ 11 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Sell Direct Multiple-tiered distribution seems tempting… But direct customer feedback is crucial early on, Lower margins  Higher volume (hard for a start-up to achieve right away) And no one else cares more than you!  Start direct, expand with channels later.

בסד Privacy Restored.™ 12 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Reality Checks… Top decision makers need an experienced critic (pleasant speaking style a plus…) 1.WHEN is product/service going to be ready for market? 2.WHAT are the true COSTS of operations? 3.WHEN is the business scheduled to run out of money? 4.HOW MUCH of the sales pipeline is “converting”? 5.WHAT is the COMPETITION doing that you can’t do? 6.WHO are your NON-PERFORMING employees? 7.…How WELL are YOU leading the organization?

בסד Privacy Restored.™ 13 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Understaff / Outsource Optimism is required in any start, but laying-off hurts: –Those who are let-go –The boss (and down the management chain) –Even those who remain… Outsourcing  no 100% dependencies –Much easier to adjust, turn-on/off, for both sides –Can still grow into a steady long-term partnership! People take time (M.A.U., communications, concensus,...)

בסד Privacy Restored.™ 14 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: CS Angle? Prototype or Mock-Up? Don’t forget the Spec/Architecture… (“later”  “never”) IP: Patent or Provisional or Just-do-it? (Postini,…) Physical arrangement matters… (Gain, Xerox DDS,…) This can be the MOST FUN part! –Start from Scratch –No bug fixes for Customers –(Almost) No Boss…  Most Creative Phase: Enjoy!

בסד Privacy Restored.™ 15 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: Small / Big Stuff Small Stuff: Office Space Furniture Computers Office Equipment Office Supplies Business cards Letterhead Bootstrapping  Penny-pinching Big Stuff: Develop product/service Sell product/service Collect $$ for product/service

בסד Privacy Restored.™ 16 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Ch.5: EXECUTION! “Can they execute?” (final question from investors, asked or not) Set & communicate Goals (simple act increases likelihood of success) Measure Progress (“What gets measured gets done.” at least every 30 days) Establish a single point of Accountability (“Who’s responsible?” <10s.) Reward the Achievers (and only them…) Follow through until an issue is done/irrelevant (exciting  important) Heed critic (denial is only useful in small doses) Establish a Culture of execution (by example)

בסד Privacy Restored.™ 17 ABUSE SUPPRESSION TECHNOLOGIES, ACTIVITIES, VISION. ©2008 ASTAV, inc. – Confidential & Proprietary – Contact for pricing. Q & A & HomeWork! START!! For Next Session? “The Project”: Take ONE ACTION / STEP! Taking at least 2 hours, before Friday noon. Report item & outcome in business log (.txt).