Entrepreneurship & business modelling workshop

Cambridge University
Transferable Skill Workshop

Entrepreneurship & Business Modelling

Welcome & Content
Introduction – who we are
The KED Experience – a work in progress
The Innovation Agency
Entrepreneurs
Where to start
Testing the pitch (gathering intelligence)
IPR or TTM
Building a team
Business Modelling
Key elements for an Investment deck
Cambridge University Entrepreneurship & Business Modelling

Introduction
Entrepreneurs change the world one day at a
time.


Push – Pull
What - WHY

Technology Push
Versus
Market Pull

Pre-conceived ideas about commercialisation


The KED Experience

Evolving PhD research to Commercialisation

The KED Experience
At the beginning, there is nothing but problems.
Why do I even want to do something
entrepreneurial?
What is the product?
Who is the customer?
Do I understand the customer and what they want?
(probably not)
Admin issues?
More pressing issues, like “How am I going to eat?”


Better things to think about
Why am I doing what I do?
Why might other people be interested in what
I'm doing?
Why do (or don't) I enjoy research?
What do I want from life?

Crucially:
What are the motivations? – the WHYS?

Attacking the problem
Business is a lot like academic research, it is just a
different problem space
The right mindset just “clicks” - Like research, the
individual problems can be made easily
tractable.
Why is the risk of depending on yourself greater
than that of depending on others?
Talk to everyone, all the time.


KED's solutions so far
Knowledge Transfer Secondment
Working closely with Ian (and other people that
know what they're doing).
Finding several suppliers of ultrasound kit, and
then getting them interested.
Turning the research into a tech demo – which
took longer than expected.
Short term contract work to keep eating.


In general
Is there any way to draw on the expertise of
others?
This is the idea behind The Innovation Agency –
building on the skills and knowledge of those
that have gone before.
There is still a need to plant the seed, and
understand the methodology.


Summary
The Why? of doing anything
Building a Why? into a suitable How?: posing the
question
Technologists become entrepreneurs is a big ask.
In the next section we will Introduce The
Innovation Agency.


Explanations of the participants
research
2 examples focussing on WHY


A brief introduction

WHY?
Recognising the need to help Researchers, Inventors
and Innovators to develop their IPR without falling
down the usual traps
Based on an audit approach with a experienced and
critical eye on the outcomes of the process
Answering the questions partners, investors and
customers will ask
Providing a framework to develop an exploitation route
without the need to become an entrepreneur


But First...... The workshop
Framing the Problem

Commercialisation


Business Background
Business is a lot like Engineering, it is just a
different problem space
Problem definition is a key part of the path to
building a business
The “Team” aspects of a business are absolutely
crucial to the potential success of the business


Lets start with some really
basic questions
What stage is the Business at?
How much effort will it take to get it to a
saleable product/service/licensable solution?
Who are your target customers?
What is your product worth?
Is it protected?
Seems like a lot of questions...........


What Stage is your Business at?
Early Stage challenges
The “Valley of Death”

The Funding Gap


Once the gap is understood
how do you get across?
How determined are you?
What lengths will you go to to get your technology
commercialised?
Too late for research funding?
Too early for Angels?
Definitely too early for VC's?

Where else can you go?


Getting others to
believe in you
Evangelising about your technology.
There are probably few people who will get either
your vision or the capability of your technology
better than you.
Your challenge is to explain it in sufficiently simple
terms to excite people about what it is, what it can
do and the value in it.
OK – so how do you really do this?


A believable story

A succinct message, elevator pitch, or whatever you want to call it is
important. If that gets people interested then you can expand on the
description. Enthusiasm and Clarity are crucial.


Testing the pitch

Where? To Whom?

Networking
How many Networking groups are there in Cambridge?

General X21 Clean Tech X5 Entrepreneurs X5

Software + Apps Mobile & Wireless
Social Enterprise X1 X2
X12

Women X5 Life Science X1


Intellectual Property or Time to
Market?
A different viewpoint

Everybody wants Patents
This is an generally accepted view from
Academia, Investors, Industry Partners.
WHY?
Protection from competition
Something Tangible to “own” at the point of failure
Kudos of filing a patent
WHY Protect, does it actually help the
commercialisation efforts?


Everybody want Patents (2)
Patents are of little value if you can't sell the
technology
Patents are of NO tangible value if you don't
have funds to protect them
Patents come into their own when (if) you are
challenged for infringement of someone else's
patents – then a patent is a component for
negotiations


Patent Wars.....
Facebook had 58 patents – until they bought 1 thousand
patents from Microsoft for $550million.
Microsoft bought the pool 1 year ago from AOL for
$1bn
Google bought Motorola's patent pool for $12.5bn in
2011
Samsung, HTC, Acer, General Dynamics, Onkyo, Velocity
Micro, Wistron, & Viewsonic all pay Microsoft for
every Android phone they make!


The Importance of a Team

Why outsiders believe in a Team more readily
than an individual

The Importance of a Team
Understand your own strengths and weaknesses
Understand your position in a business
Are you a cornerstone?
Are you the Visionary?
Are you the Delivery specialist?
Are you the Financial specialist?

Interesting reading: The Beermat Entrepreneur,
Mike Southern & Chris West

Finding You
Myers Briggs Type Indicator – MBTI
DISC – Dominance, Influence, Steadiness,
Compliance

And Where you fit in a team....... or at least where
your preferences are
Belbin – Team Role Theory


Investors emphasise 'team'
Investors choose to invest on the basis of liking
and believing in the team almost as much as
liking the business
Team and culture (company culture) are essential
to enable success


Introducing the
Business Model Canvas

Developed as by Alex Osterwalder
www.businessmodelgeneration.com

Business Model Canvas


Intro Video


Guesstimates / Assumptions

Users/Customers 
Resources
 Number of monthly  Number of employees: 2k

active FB users: 500M (source: FB factsheet)
(source: FB factsheet)  Number of servers: ???
 Number of daily active 
Costs
FB users: 250M (source:  Average salary
FB factsheet) (guesstimate): 150k
 Average time users (source: glassdoor.com
spend on FB per FB salaries)
month: 1′400 minutes  HR costs: 300M
-> 46 min/day (deduction)
(guesstimate source:  IT costs (guess):????
FB factsheet)

Guesstimates / Assumptions

Revenue Streams 
How could its advertising
 Advertising – Average revenues (e.g. banners and
CPM: $0.625 (source: text advertising breakdown)
Blogpost) really be?
 Annual page views: 3.12 
What budgets are Fortune
Trillion (source: Blogpost) 500 companies putting into
 Facebook Credits: 30% Facebook advertising?
revenue cut (source: 
How many SMEs and micro-
TechCrunch) enterprises are using

OPEN QUESTIONS Facebook for advertising?

How high could Facebook’s 
How much could Facebook
costs for its IT infrastructure already be earning from
(capital expenditure and Facebook Credits, even if
operating costs be? this virtual currency is still in
BETA?

The Workshop

Develop a canvas.....

Get ready to pivot

Key insights come from talking to people

15 minutes with a customer beats 10 hours
hypothesising

Be flexible and willing to be wrong

Encourage criticism and use the feedback

Be aware of the limits of theoretical models

Talk to people – all the time

Be Humble

The ways the canvas gets used...

Different levels of mastery

Levels of Mastery

Level 0 Strategy – The Oblivious: Focus on products/value
propositions alone rather than the value proposition AND
the business model.

Level 1 Strategy – The Beginners: Use the Business Model
Canvas as a checklist.

Level 2 Strategy – The Masters: Outcompete others with
a superior business model where every one of the
business model building blocks reinforce each other (e.g.
Nintendo Wii, Nespresso, Dell).

Level 3 Strategy – The Invincible: Continuously disrupt
themselves while their business models are still
successful (e.g. Apple, Amazon.com).


The Investment Deck

Getting the message across in an
engaging way

Hockey Sticks!


Why, How, What

Engagement is best gained when the WHY is
explained first........ if you nail the WHY, the
How and What is straightforward

Investors are no different
 Why – what is the motivation, societal need,
benefit that your business brings
 How are you going to deliver the Why?
 What, in detail, are you going to do?


What the Investors say they want
to see in an investment deck

The Investment Deck

'The Perfect Pitch' using x7 slides:
Bindi Karia, VC Emerging Business lead for
Microsoft

The Investment Deck
1) Your Value Proposition
2) The Problem
3) Your Solution
4) The Marketplace
5) Your Team
6) Business Execution
7) Business Model


The Investment Deck

'The Perfect Pitch' using X10 slides:
Guy Kawasaki, former chief evangelist
Apple Inc

The Investment Deck
1) Problem
2) Your Solution
3) Business Model
4) Underlying magic technology
5) Marketing and Sales
6) Competition
7) Team
8) Projections and milestones
9) Status and timeline
10)Summary and call to action


The Investment Deck

'The Perfect Pitch' using X13 Slides:
Mark Suster, Entreprenuer turned VC

The Investment Deck
1) Team Bio

2) 100 Meter view of your company

3) Problem definition

4) How do you solve the problem: Demo?

5) Market Sizing

6) Warning: Market sizing pitfalls

7) Competition

8) Customer Adoption – Traction

9) Team

10) Financial Projections

11) Use of Proceeds

12) Fundraising process – next steps

13) Appenix Slides: Back up slides


The Investment Deck

'Top ten lies' of Entreprenuers

The Investment Deck
'Top ten lies' of Entreprenuers

1) “Our projections are conservative.”
2) “Jupiter says our market will be 50 billion in ten years.”
3) “Several Fortune 500 companies are set to do business with us.”
4) “No one else can do what we are doing.”
5) “Hurry up because other investors are about to do a deal.”
6) “The large companies in our market are too slow and too dumb to compete.”
7) “Our management team is proven.”
8) “We filed patents so our intellectual property is protected.”
9) “Our product will go viral.”
10)“All we have to do is get 1% of the market.”


The Investment Deck

'Top ten lies' of Investors

The Investment Deck
'Top ten lies' of Investors

1) “I liked your company, but my partners didn't.”
2) “We are patient investors who want to help you build a great company.”
3) “If you get a lead, we'll invest too.”
4) “There are no companies in our portfolio that conflict with what you're
doing.”
5) “Show us some traction, and we'll invest.”
6) “We love to co-invest with other firms.”
7) “We're investing in your team.”
8) “We have lots of bandwidth to dedicate to your company.”
9) “This is a plain, vanilla termsheet.”
10)“We will get other companies in our portfolio to work with you.”


The Investment Deck
Question:
Do you know the difference between the lies
of entrepreneurs and the lies of investors
?

The Investment Desk

Answer:
The Investors have money


Helping develop your business......

henry.gomersall@theinnovationagency.org
Ian.sharp@theinnovationagency.org

Entrepreneurship & business modelling workshop

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