1. New Venture Competition 2018
Market Sizing
Reminder on Applying to the New Venture Fair

2. Agenda Announcements New Venture Fair - Application Deliverables
Upcoming Events
Market Sizing

3. In case you haven’t seen this 100 times
Dave Adornetto
TMP Lecturer and Entrepreneurship Program Director
Phelps 1314
NVC Office Hours: Mon 2:30 to 4:00PM and by appointment
Sarah Hilliard
Entrepreneurship Associate
Phelps 1333
* Slides are posted on TMP Website (“beyond the classroom” page)

4. Important Dates New Venture Fair New Venture Finals
Wednesday May 2, 2018
Corwin Pavilion
Plan to be available 3:30PM to 8PM (main event 5:00 to 8:00PM)
New Venture Finals
Thursday May 24, 2018
Plan to be available 1:30PM to 7PM (main event 3:00 to 6:30PM)

5. Resources NVC Seminars / Workshops Mentors MVP Grant
The Business Model Canvas
Market Sizing
Developing Financial Projections TBD
Legal: Business Formation, IP Strategies TBD
Developing an Investor Pitch TBD
Mentors
MVP Grant
Up to $300 for development of your Minimum Viable Product

6. Suggestions for Mentor Interactions
If you meet, be on time (5 minutes early)
Be prepared
Prepare questions in advance
Provide progress updates
Don’t expect a mentor to spend their time with you, if you don’t engage them
Take the initiative to provide / obtain contact information
Follow through: if you say you are going to connect – do it
Even if its just to postpone or delay a meeting
Always send a note of thank you

7. Application Deliverables
New Venture Fair
Application Deliverables

8. Applying for the New Venture Fair
Submit application no later than Sun, March 25, 2018
Preferably before March 18th
No exceptions
Text sections of application in MS Word or PDF format
1.5 spaced
Prepare financial projections on spreadsheet
Summary data (tables / charts) in PDF format
Attach complete spreadsheet file for support

9. Applying for the New Venture Fair
Application Contents - 4 Components
Summary Information (1 page)
Executive Summary of Business (3 pages max, 1.5 spaced, 12+ font)
Draft of Business Model Canvas (1 page)
Financial Projections
Summary (1 page)
Detail (attach spreadsheet file)

10. 1. Summary Information Business name & tag line (if you have one) Logo
Inspiration for your product / business idea
Team bios (used for data collection only)
Names, pictures, nationality / ethnicity
Major area of study, level (U1, U2, U3, U4, GM, GP)
Degrees earned, being pursued
Anything else you’d like us to know about you

11. 2. Executive Summary of the Business
Overview of the business / product / service
Problem being solved
Value proposition (why your customers will pay for it)
Benefits of your product, and how it differs from others
Revenue model - how your business makes money
Pricing, Upfront vs. Recurring Revenue, Product Sale, Subscription, etc.
How the product works (i.e. the technology), if appropriate
The market your business / product serves
i.e. market size, market growth rates, competition, etc…
Financial highlights
3-year revenue, product cost and gross margin projections

12. 3. Business Model Canvas Include a draft of your Business Model Canvas
What’s a Business Model Canvas?
A lean startup template for developing a business model
Critical elements:
Value proposition
Customers
Revenue model / cost structure
Infrastructure
Finances
Helps to align activities by illustrating potential trade-offs

13. Lean Launch: The Business Model Canvas7 4 1 6 2 8 3 9 5

14. 4. Financial Projections
Market size
Total, servable, target markets
Units and dollars
Proforma: Revenue, COGS, Gross Margin projections
Three years
Market penetration assumptions, projected unit sales, selling price
Product costs related to your sales assumptions
Optional: 3-year Pro-Forma Income Statement
Summary Revenue, COGS and Operating Cost projections
Templates / formats provided at upcoming workshops

15. Winter Quarter Events

16. Upcoming Winter Quarter Events
Winter Quarter Schedule
Date
Time
Event
Location
Done
6:00PM
Workshop: Business Model Canvas
TBD
Now
Workshop: Market Sizing
8 Mar
New Venture Fair Requirements review & Mentor Mixer
ESB 1001
Workshop: Financial Forecasting
Seminar Legal & IP
25 Mar
5:00PM
New Venture Fair Applications Due
Primary Objectives for Winter Quarter:
Form and finalize teams
Develop product / idea
Work with mentors
Develop business model
Refine “Elevator Pitch”
Apply for the New Venture Fair

17. After the Competition

18. The “Garage” Startup Incubator
After the Competition
The “Garage” Startup Incubator
1,500 sq. ft., Co-Working & Meeting Space
Garage Floor - Mosher Alumni House
Available to qualified UCSB students, alumni, affiliates
Work on the Garage began after the competition two years ago, but it became a reality when the Alumni Association began to partner with us and we receive funding from the state under AB Thanks to our friends at Alumni we’ve designed a 1500 foot space for co-working and events that will provide high-potential teams a place to to go AFTER the competition. I’d like to thank Sue Wilcox and George Thurlow for their support on this. Sue partner

19. The “Garage” Startup Incubator
After the Competition
The “Garage” Startup Incubator
Home of the “G2” Summer Launchpad
Mentor / Alumni Assistance Network
Angel Investor Contacts
Close Proximity to Key Campus Resources:
Makerspace
Development labs

20. “G2” Summer Launchpad
Summer program to facilitate transition from academic environment to the real world
Focus shifts from ideation and business model development… to
...product commercialization and business launch
As mentioned earlier, the Garage will be the home of the G2 Summer Startup Launchpad
A program designed to facilitate the transition - for high-potential UCSB startups - from the academic environment to the real world
Accordingly, the focus moves from idea creation and business model development, to business launch and product commercialization
The program is sponsored by the Goleta Entrepreneurial Magnet (GEM), which provides important funding

21. Quantifying Your Market Opportunity
Why?
Quantifying Your Market Opportunity
Highlight the business opportunity for your stakeholders
Display knowledge of your business and market
Establish credibility and confidence
Develop internal benchmarks

22. Identify / Quantify your Market
Total Available Market (TAM)
The total $$ potential within your market that your product/service serves
Serviceable Addressable Market (SAM)
The segment of TAM for which the value proposition of your product/service is strongest
Serviceable Obtainable Market (SOM) (Target)
The segment of SAM with the maximum potential given the current business model
Believe all are familiar with concepts shown here, but w/.review quickly. TAM – big picture view of all buyer/seller relationships in the market for your product/service.
SAM – that part of the TAM where your value proposition has the best fit
Target mkt – That portion of the SAM where you think you can most successfully target your product/service

23. Total Available Market (TAM)
The total $$ potential within your market that your product/service could theoretically serve
Usually broad
Not likely attainable
Distribution limitations, development timelines, breadth of product line, etc.
Important to capture only the market related to your business
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

24. Serviceable Addressable Market (SAM)
The segment of TAM for which the value proposition of your product/service is strongest
Sharpens the focus on a particular segment of the market
Theoretically 100% attainable, not practical to attain it now
Minimally attainable by a startup with limited resources
SAM – a narrower focus since your value prop likely doesn’t apply to an entire, broad mkt. Examples:

25. Serviceable Obtainable Market (SOM) (AKA - Initial Target Market)
Further refinement of the Servable Market
Might be a demographic or geographic sub-segment of a market
Fully attainable with 100% market share
Enables focus given limited startup resources
Your launch revenue forecast should be based on a percentage of your defined SOM!
Target mkt – further refinement of SAM; narrower focus, often specific demographic target

26. Total Available Market (TAM)
Example 1
New seatbelt for airplanes
What’s the TAM?
The air travel market?
The airplane market?
The airplane accessories market?
The seatbelt market for all types of vehicles
Total airplane seats X the price of your product?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

27. Serviceable Addressable Market (SAM)
Example 1
New seatbelt for airplanes
Initial design for luxury private jets jets
What’s the SAM?
The luxury private jet market ?
The luxury private jet accessories market?
The luxury private jet seatbelt market?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

28. Serviceable Obtainable Market (SOM)
Example 1
New seatbelt for airplanes
Initial design for luxury private jets jets
Only have resources for US distribution
What’s the SOM?
The US luxury private jet market ?
The US luxury private jet accessories market?
The US luxury private jet seatbelt market?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

29. Total Available Market (TAM)
Example 2
iPhone aftermarket camera accessory, fits only the 7
What’s the TAM?
The cell phone market?
The iPhone market?
The iPhone 7 market?
The iPhone accessories market?
Total iPhones in the world X the price of your product?
Total iPhone 7s in the world X the price of your product?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

30. Serviceable Addressable Market (SAM)
Example 2
iPhone aftermarket battery accessory, fits only the 7
Initial design is a bit large & heavy
What’s the SAM?
The iPhone market?
The iPhone 7 market?
The “heavy user” iPhone 7 market?
The “heavy user” iPhone 7 owners X the price of your product?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

31. Serviceable Obtainable Market (SOM)
Example 2
iPhone aftermarket battery accessory, fits only the 7
Initial design is a bit large & heavy
Have resources only for internet sales
What’s the SOM?
The on-line iPhone market?
The on-line iPhone 7 market?
The on-line iPhone 7 market for “heavy users”?
The on-line iPhone 7 market for “heavy users” X the price of your product?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

32. Total Available Market (TAM)
Example 3
New app for grocery food shopping
Transaction fee revenue model
What’s the TAM?
The food market?
The grocery market?
The grocery delivery market?
Transaction fee x number of grocery purchases?
Transaction fee x number of delivered grocery purchases?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

33. Serviceable Addressable Market (SAM)
Example 3
New app for grocery food shopping
Transaction fee revenue model
App targets premium grocery buyers
What’s the SAM?
The premium grocery market?
The premium grocery delivery market?
Transaction fee x number of premium grocery purchases?
Transaction fee x number of premium delivered grocery purchases?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

34. Serviceable Obtainable Market (SAM)
Example 3
New app for grocery food shopping
Transaction fee revenue model
App targets premium grocery buyers
Roll-out strategy starts with western states
What’s the SOM?
Transaction fee x number of premium grocery purchases in western states?
Transaction fee x number of premium delivered grocery purchases in western states?
TAM – again, the whole array of buyer and seller relationships in the market you’re targeting – 1st cut. Broad brush – often covers wide range of buyers, sellers, products.
Easiest to estimate and may find analyst reports or studies that can help.

35. BulbsRus makes high-efficiency low-cost non-dimmable LED light bulbs
Example: BulbsRus
BulbsRus makes high-efficiency low-cost non-dimmable LED light bulbs
TAM = worldwide LED lighting market
SAM = worldwide non-dimmable LED lighting market
SOM (Target) = non-dimmable commercial LED lighting in the US
Believe all are familiar with concepts shown here, but w/.review quickly. TAM – big picture view of all buyer/seller relationships in the market for your product/service.
SAM – that part of the TAM where your value proposition has the best fit
Target mkt – That portion of the SAM where you think you can most successfully target your product/service

36. What if we’re disrupting a market?
Believe all are familiar with concepts shown here, but w/.review quickly. TAM – big picture view of all buyer/seller relationships in the market for your product/service.
SAM – that part of the TAM where your value proposition has the best fit
Target mkt – That portion of the SAM where you think you can most successfully target your product/service

37. Example: NewKnee Therapeutics
NewKnee makes a drug that eliminates the need for knee replacement surgery
TAM
Knee replacement market?
Knee replacement patients X annual cost of the drug?
Will simplified remedy grow the market ($$)?
Will lower drug pricing vs. surgical option shrink the market ($$)?
SAM
Knee replacement patients that private pay X annual cost of the drug (insurance companies not yet reimbursing)
SOM (Initial Target)
Private pay knee replacement patients in teaching hospitals X annual cost of the drug
Believe all are familiar with concepts shown here, but w/.review quickly. TAM – big picture view of all buyer/seller relationships in the market for your product/service.
SAM – that part of the TAM where your value proposition has the best fit
Target mkt – That portion of the SAM where you think you can most successfully target your product/service

38. Takeaways
There is often times no one right answer
You have to develop a case, and support it
Ideal support is to perform analysis top-down and bottoms up
Bottoms-Up
Use customer lists, trade associations, and other sources of customer information
Identify how many customers there are, as well as how many end users each customer has
Use industry data and market validation feedback to determine pricing
Top-down
Utilize market research to determine how many users meet your different characteristics
What is the industry? What is its growth rate?
Resources
Thompson One (Thompson Reuters Database)
Lexis Nexis
Your assessment of market size (SOM especially) will change as you perform the market validation process and acquire new information from customers