The 2 Hour version of the Sixteen Ventures Start Smart seminar. This special version was created for the Feb. 2009 seminar in Anchorage, Alaska.

1. Start Smart
Positioning Your Software Venture for Success
http://sixteenventures.com

2. Agenda
• Pre-Game Prep
• Idea Due Diligence
• Technical Resource Engagement
• Raising Capital
• Missing Pieces

3. Ideas = $0.10/dozen
• ideas don’t matter; execution does
• people won’t steal your ideas
• you need feedback from others

4. Pre-Game Prep
mental
• Focus
• Failure IS an Option
• Fear
• Motivation

5. Pre-Game Prep
organizational
• Equity
• Software Ventures 101
• Does the Founder need to be a Programmer?

6. Pre-Game Prep
business
• Revenue Model
• Technology Has ZERO Value

7. Focus
• One Venture at a Time
• Don’t be greedy
• Don’t “hedge your bets”
• but <<famous entrepreneur>> has six ventures
going at one time
• he’s famous for a reason; you aren’t. Don’t worry
about what he is doing. Besides, he has people.
Mental Prep

8. Failure IS an Option
• Nobody wants to fail but you must know it is
possible
• don’t let the fear of failure keep you from trying
• If you do fail, fail fast
• do the “hard work” early to avoid failure later
• do not hold onto an idea that won’t work
Mental Prep

9. Fear is Okay
• without fear, you lose focus
• lack of fear breeds sloppiness
• fear is a very personal word, and at this point in your
venture, it is personal
Mental Prep

10. Motivation
• Desperation is the wrong reason to start a
business, especially a product-based business
• Looking for an “out”
• Consider Service-oriented business rather than a
product-based company
Mental Prep

11. Equity
• Understanding It; it is much more complex
than you think
• Two-Sides to the story
• Until you are ready to engage proper legal
counsel, you are not ready to discuss equity
Org Prep

12. Equity
your perspective
• Equity is NOT currency
• you are too early to be dealing in equity positions
• hold onto as much as possible for as long as
possible (this is not greed)
• entrepreneurs often feel like those they bring in
“need some skin in the game” as if that will get
more out of them
• pay cash whenever possible; it will save you money
in the long-run
Org Prep

13. Equity
their perspective
• you are asking them to invest in your venture
• equity only pays on exit or buy-back
• without control as well as equity, they are at the
mercy of your performance or whims
• cash is king
Org Prep

14. Software Ventures 101
• ISV defined
• On Premises vs. On Demand
• If its on the web, its a software venture,
right?
• Growth vs. Lifestyle
Org Prep

15. Founding Programmer?
• Not required
• Should be technical (or willing to learn)
• should not learn to program
• focus on the business
• you wouldn’t learn to weld just because
you wanted to open a body shop
Org Prep

16. Early Team Members
• Be Cautious
• Attorney
• Advisor(y board)
• Board of Directors?
Org Prep

17. Revenue Model
• what is a revenue model?
• 7 different ways to make money
• do startup software ventures need to have a
revenue model?
• You can’t know what revenue model(s) to choose
at this stage in the game, but you MUST be
thinking about it
Biz Prep

18. Technology = 0 Value
• the fact that you use Ruby on Rails or Java
to build your app means nothing
• Postgres vs. MySQL? Who cares
• Ajax UI? Android client? Nothing!
• Solved a problem? Aha! Now we’re onto
something
Biz Prep

19. Idea Due Diligence
• Goal: determine if the idea is a good idea,
or a good business
• Ideal Idea
• Validation
• Detailing your Vision
• Presenting your Vision

20. Ideal Idea
• It Solves a Real Problem in a Low-tech, fragmented
vertical market, with few relevant competitors and
a proven business model
• Deviating from this rule increases chance of failure
• Adhering to the rule does not guarantee success
• Whole Product Solution, not just a Feature
• No “Me Too” products just to be “in the market”

21. Market Validation
• is there a market for the product/service?
• Primary vs. Secondary Market Research
• Target Market Identification
• Competitive Research
• Sustainable Competitive Advantage
• Talking to Potential Users
• You Must Be Present to Win

22. Detailing Your Vision
• Extract it from your brain
• put it into a format that other people can make
sense of
• screen mockups, process flows, etc.
• You are not a Product Manager... forget UML, Req.
Docs, etc... just draw pictures!
• use this to get feedback, engage technical
resources, and/or raise capital

23. Presenting Your Vision
• Show trusted advisors, colleagues, friends,
and family your vision drawing
• make sure that they “get it” immediately
from your drawings... if they don’t, refine
• determine minimum features required for
version 1.0

24. Technical Resource Engagement
• Partner, Employee, Consultant or Software
Development Firm
• Protect your Intellectual Property (IP)
• Build vs. Buy
• Be True to your Vision
• Hosting / Platforms and Architecture

25. Raising Capital
• Go-to-Market vs. Raise Money
• Money Talks
• Choosing Investors
• Formal Business Plan
• Exit Strategy

26. Missing Pieces
• Patents
• Go-to-Market Strategy vs. Marketing Plan
• Corporate Structure
• Operations, Management, Staffing, etc.

27. Until Someone Pays You, Its Just an Idea
http://sixteenventures.com