Transcript Entrepreneurship - Minnesota Futurists

Entrepreneurship
Business Futures
Presented to the Minnesota Futurists
by
Duane Byron Carlson
David Keenan
[email protected]
Equity Investor
[email protected]
Technology Consultant
November 01, 2008
Entrepreneur
Some definitions
• a person who organizes and manages any
enterprise, esp. a business, usually with
considerable initiative and risk.
• A risk-taker who has the skills and initiative to
establish a business.
To start off, lets answer
some questions
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Why are you interested in ENTREPRENEURSHIP?
Do you have a dream?
Have you committed your idea to writing?
Have you done any market research? Past and future?
Have you ever experienced what market research is about?
What is your story? Can you articulate it?
Please tell us of your goals!
Is this personal endeavor?
Do you have associates who support
your dream?
• What motivates you?
More Questions
• Have you identified a market? Is there a Need?
• How do you know? Are you sure?
• Why are you sure?
– What research have you done?
– What have you researched recently?
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Internet searches, One on One visits
White papers, Talk with authors
Periodicals
Books
• Have you heard presentations? How do ideas develop ?
– Have you made physical visits to potential customers?
• Did you develop a interest or need? Did you create a report?
Market Research
• Market research demands the determination of real
customer wants, needs, opinions and perceptions of
customer future needs and wants.
• You’ll need to talk with the ultimate decision makers.
A market exists when a willing buyer and seller agree
to the terms and conditions of sale. The price, the
quantity, the quality & the delivery.
• Where and when is the need? Where is the supply?
• Reminder: Nothing happens until something is sold –
If you can’t sell it – It ain’t no good -- Park it for the
future.
Market Research Defined
“Market research is the process of systematically
gathering, recording and analyzing data and
information about customers, competitors and
markets. This data is used to create the business plan,
launch a new product or service, fine tune existing
products and services, or expand into new markets.
Market research can be used to determine which
portion of the population will purchase a
product/service, based on demographic variables like
age, gender, location, culture and income level.”
Can you translate your data into a sales forecast?
Market Research Continued
• What market research have you done? How did you do it?
– Market trends
The upward or downward movements of a market, during a period of time.
The market size is more difficult to estimate if you are starting with something
completely new. In this case, you will have to derive the figures from the
number of potential customers or customer segments. Can you forecast sales?
• What type of data have you collected?
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Who did you contact? Face to Face?
What type of data did you select?
Who did you interview?
Was their information of value?
Did you document your interview?
How did you document the data?
How to Do Market Research
Reading? One on One contact?
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FORTUNE MAGAZINE
FORBES MAGAZINE
BUSINESS WEEK MAGAZINE
INVESTORS BUSINESS DAILY NEWSPAPER
WALL STREET JOURNAL NEWSPAPER
ENTREPRENEUR MAGAZINE
SELLING POWER MAGAZINE
ONE ON ONE CONTACT WITH DECISION MAKERS
Market Analysis
Where is the need?
• A PUSH MARKET
– Do you plan to PUSH the product or service into an
existing market? Push markets sell on price!
• A PULL MARKET
– Do you plan to PULL a solution into a defined market
to solve a problem limiting successful production.
Pull markets sell on performance.
• AN UNDEFINED MARKET
– A market does not exist?
• How did you identify the demand.
• Can you create or define a need?
More marketing concepts
• Push marketing requires that one creates,
produces products/services and presents them
to potential buyers. Such products are often
commodities which sell on price. Sellers carry
finished goods in stock or use a distribution
channel to ensure prompt delivery.
• Pull Marketing is in response to a need in the
current or future markets. Buyer describes
problem and seller proposes a specific solution
to the problem which seller accepts.
Pull Marketing continued
• Upon acceptance, seller makes a limited
quantity production run of the product
or service. Seller makes the delivery and
collects upon acceptance. Upon reorder, seller
makes more product/services to fill the
customs order within lead time.
• When additional demand occurs and trends
up ward, product/service typically becomes a
commodity and sells at competitive prices and
typically produced by an outsource.
Additional Marketing Concepts
• A service market activity is the sale of a
unique product/service designed for a specific
customer and often delivered via the internet,
US Mail, a delivery service or in person. Heavy
personal service is often provided to specific
locations. Normal lead time does not exist!
Partial pre payment is often required. Final
payment is made after acceptance by buyer
Defining the Type of Markets
• Types of markets are often determined by the following
questions.
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What is it?
What is the need?
Who is going sell it?
Who is going to buy it?
Who is going to use it?
What problem will it solve?
Who is going to pay for it and when and how?
How quickly must the delivery be made for buyer acceptance?
What is the price point?
What is the desired quality level?
Will there be repeat business?
How frequent will the demand be?
Medical
Market
Example
• Bioabsorbable
Plastic stent
• Second generation
of drug coated
stent to address
the thrombosis
problem
Decisions
• What conclusions have you come to?
Options:
– Do not pursue idea, File research for latter review.
– Continue researching the identified market.
– What size is the market in volume, time and
dollars? How much can you capture?
– Have you created a business plan?
Business Plan Elements
– Executive summary, TWO Pages Maximum!
– Market, Sales and Earnings by periods, Week,
Month, Quarter, Year
– Team Members, Skills, Education & Experience.
– Facility, Location, Square feet, Special
requirements, adequate size and adaptable
for the future.
– Financing, Funding, Financial Statements
Intellectual property and Venture investments.
– Liquidation
The Executive Summary
of a BUSINESS PLAN
• The Executive Summary shall not exceed two pages!
• The Executive Summary’s purpose is to get the
reader to read the balance of the business plan.
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Example:
– WYZ corporation was organized by Mr. Jones to
address “the problem” in ABC market. XYZ
corporation/LLB has designed to“………….” and will
manufacture/produce it in their facility located at
“123 Front Street, Any town, State, 55110, with a
management team selected for their start up
experience and management skills developed in
other companies of similar nature.
Market Assessment
of a BUSINESS PLAN
• What size is the identified market? Can
you forecast its sales?
• If so how much sales/revenue by what time
periods?
• Please remember that, nothing happens
until something is sold.
• Describe your market research in detail.
How you did it? Who did it? How was
documented?
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Sales Plan
of a BUSINESS PLAN
Can you personally sell?
Can you walk away with the order?
Can you train others to sell?
Will you be willing to step aside for someone else
to take the business to the next level?
– If not, do you have an associate who can sell?
– Will you accept other’s skills where yours are short
suited?
• Are you a leader and a team member?
– Is the ultimate goal good for the team or do you need
to be the HERO? What is your management style?
Entrepreneur/ Chief Executive Officer
• What is your work experience? Sales/marketing?
What is your market vision? Can you see over the
horizon/around the corner?
• What do you bring to the table?
– What major objectives have you accomplished? Where and
how many. Are you a natural leader?
• What is your formal education?
– Degrees?, Industry Certifications?
• Do you have native ability to sell and lead?
– Do you know how to do things intuitively?
• Do you “Just know” what action needs be taken?
Team Members
of a BUSINESS PLAN
• Have you, the CEO, selected other team member
candidates to support your goals?
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What skills do you need from them?
What skills have they developed over what period of time?
Are they team players or they ego driven?
What is their home life and social background?
• In what geographical area did they develop their
marketing and management skills?
– Why are they in their location/will they relocate to
your area?
– Do they plan to stay in your location, if so how long?
– Do they have the skill to train junior staff?
Resumes & Biographical Sketches
• Sales & Marketing, Degreed, specific market
experience, Start up experience
• Design Engineering & documentation, masters
degree, patents, startup experience
• Operations, Process Control, Production, Gross
profit Maintenance, Process Engineer, Materials
& Outsourcing
• Finance, CPA, Intellectual Property
• Quality Assurance, MBA, Six sigma
• Human resources, Liberal Arts, MBA Psychology
• Regulatory Affairs, FDA Interface. Science
background
Example Story
for a BUSINESS PLAN
Our market research has identified the following
need………………. in the ……………………market.
We will pull our/solution/product/service into the
market to solve the market identified problem at a
gross profit of………….%.
We will maintain profit margins over the life of each
product to enhance cash flow for the next product
identified by marketing.
We plan to be successful in our chosen market by
implementing our sales and marketing plan based on
our market research.
Projected Financial Documents
for a BUSINESS PLAN
• Income statement, Projected Income and
Expenses by period for the next five years
produced on demand.
• Balance Sheet, Projected Assets & Liabilities
by period for the next five years produced
on demand.
• Cash Flow Statement, Projected cash flow by
period for the next five years produced on
demand
Fund raising
for a BUSINESS PLAN
• WYZ Corporation will raise operating funds
from……Initial Public Offering
• XYZ Corporation will obtain debt financing
from financial angels and venture capitalists
• XYZ Corporation will raise operating funds
from Private placements
• XYZ Corporation will raise initial start up
Funds from Founder, Friends and Family
Long term Liquidity Goals
for a BUSINESS PLAN
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Initial Public Offering.
Private Funding, Founder, Friends & Family.
Sale thru Private Funded Acquisition.
Privately Held, Entrepreneur Financed.
License Technology and Collect User Fees to
Create Cash Flow.
• Liquidation, sale, merger, acquisition.
• Continued operations.
Never stop learning
HP Memristor Team
• New electrical component invented
– memory resistor
• Theorized in 1971, to provide conceptual
symmetry Resistors, Capacitors and Inductors
• Developed 2008
• R. Stanley Williams' solid-state memristors can
be combined into devices called crossbar
latches, which could replace transistors in future
computers, taking up a much smaller area.
• They can also be fashioned into non-volatile solid-state
memory, which would allow greater data density than hard
drives with access times potentially similar to DRAM, replacing
both components. HP prototyped a crossbar latch memory
using the devices that can fit 100 gigabits in a square
centimeter
• What will its impact be on future circuits
• Who will use it first
Soruces: http://en.wikipedia.org/wiki/Memristor,
http://www.hpl.hp.com/news/2008/apr-jun/memristor.html
Crystal Pierz Marine
• How does one cope with reduced sales due to
limited financing?
• Sales are down. Fight sales fatigue with
– Training
– Reset incentives toward maintaining relationships
Abengoa Bioenergy
• State of Oklahoma is planting 1,100 acres of
switchgrass
• Abengoa Bioenergy, Hugoton KS, is building a
biorefinery nearby, online by 2010
• Listed on Madrid Stock Exchange
• #1 Ethanol producer in Europe 142 MG
(+ 66 MG under construction)
• #5 Ethanol producer in US 198 MG capacity
www.abengoabioenergy.com/
Abengoa Bioenergy
• Abengoa and OK realized… “Rising food costs
recently resulted in a pushback against
renewable fuels. However cellulosic ethanol
from sources like swithgrass and sorghum are
noncompetitive with food sources for animals
and humans and remove cellulosic ethanoll
from the discussion” David Fleishaker, OK Sec
of Energy
Source: News clipping
New Heart Team
• Doris Taylor & Harald Ott
University
of Minnesota scientists
will create a
better heart.
• Beat organ rejection by flushing a donor heart with
detergents to leave a matrix of protein fibers, the
extracellular matrix (ECM)
• Flowing stem cells and progenitor cells with oxygen and
nutrients through the heart allows growth of new,
compatible tissues and a beating heart
• Will the U of M see fit to commercialize their
achievement?
• How will they license it to entrepreneurs so it can be
marketed with earnings being returned to the
university?
Source: M magazine Spring 2008
Video https:mediamill.cla.umn.edu/mediamill/embed/7316
Konarka
• Developing nano-enabled polymer photovoltaic
materials that are lightweight, flexible and more
versatile than traditional solar materials.
• Proprietary materials and low cost manufacturing
processes, allow an entirely unique solar material.
• New breed of coatable, flexible, plastic photovoltaics
can be used in a wide range of applications where
traditional photovoltaics cannot compete.
• Founded 2001
• Over 70 staff in the US, Europe, and Asia
• Global headquarters in Lowell, Massachusetts
www.konarka.com
Konarka continued
• Based on the work of the late Dr. Sukant Tripathy, a
materials scientist and professor at UMASS Lowell, and Dr.
Alan Heeger, a 2000 Nobel Laureate in Chemistry.
• Research team discovered a new technology for materials
processing at relatively low temperatures that enabled
the use of a wide variety of low-cost polymers as the top
and bottom surfaces of the photovoltaic cell.
• It also enabled the photovoltaic cells to be manufactured
at high speed using coating and printing technologies.
• The technical innovations have led to investments of $104
million in private capital and $18 million in government
research grants to date.
Konarka’s Power Plastic
• Standard
products
Konarka continued
• Konarka Opens World’s Largest Roll-to-Roll
Thin Film Solar Manufacturing Facility with
One Gigawatt Nameplate Capacity
• Former Polaroid Facility in New Bedford, Mass.
Prepares Konarka for Large Scale Production of
Power Plastic® Thin Film Photovoltaics Lowell, Mass.
– Oct. 7, 2008
Startups, VC firms
turn to new
frontiers in
medical
technology
See next slides for detail
Source: Katharin Grayson, May 2008
http://twincities.bizjournals.com/twinci
ties/stories/2008/06/02/focus1.html#1
Startups, VC firms turn to new frontiers
in medical technology STROKE:
BRAIN:
Orasi Medical
Raised $2.4 Mil Q4 ’07
Developing tech to diagnose
Alzheimer’s disease
SINUS:
Intellus Medical Inc.
Raised $4.5 Mil Q4 ’07
Developing med. device
to treat sinus inflammation
CoAxia Inc.
VEINS:
GraftCath Inc.
Raised $11.9 Mil
Q1 ’08 Makes
devices for dialysis
patients
Cardiovascular
Systems Inc.
Raised $18 Mil in
Q3 ’07, pre IPO,
makes devices
that clear plaque
out of arteries
Raised $11.5 Mil Q1 ’08
Makes products to lesson
stroke severity
NeuroVasx, Inc.
Raised $8.5 Mil in Q4 ’07,
and more than $13 Mil
since founding in1997
Developing treatment for
a less common form of
stroke
LUNGS:
RespirTech Inc.
Raised $1.25 Mil Q1 ’06
Makes devices that treat
chronic lung disease
SuperDimension
Raised $21 Mil in Q4 ’07,
technology that helps with
early detection of lung
cancer
Startups, VC firms turn to new frontiers
in medical technology
STROKE:
Acorn Cardiovascular Inc.
Raised $21.6 Mil Q4 ’07
Devices to treat congestive heart
failure
Artitech Inc.
Raised $22 Mil in Q3 ’07,
treating atrial fibrilation
SPINE:
Anulex Technologies Inc.
Raised $37 Mil Q4 ’07
Developed device to treat back pain
GROIN:
Iasis Medical Inc.
Raised $1.5 Mil Q4 ’07
Developed device to
treat gynecological
disorders
Hot 100 Company 1-5
Rank Company Name/Description
Industry/Sales
1 Simply Self Storage Self-storage facilities
Industry: Miscellaneous Services 2007 Sales: $109.1 million
2 BlueStar Energy Services Electricity supplier
Industry: Miscellaneous Services 2007 Sales: $171.5 million
3 Bills.com Online personal financial information
Industry: Financial Services
2007 Sales: $43.5 million
4 HemCon Medical Technologies Inc. Medical products
Industry: Health
2007 Sales: $39.5 million
5 Global Water Resources Water and wastewater utility
Industry: Natural Resources
2007 Sales: $26 million
https://www.entrepreneur.com/hot100/rank/page1.html
Hot 100 Company 6-10
Rank Company Name/Description
Industry/Sales
6 MXenergy Natural gas and electricity supplier
Industry: Natural Resources
2007 Sales: $703.9 million
7 HealthTrans LLC Pharmacy benefit-management services
Industry: Business Services
2007 Sales: $182.2 million
8 Litle & Co. LLC Online payment processor
Industry: Financial Service
2007 Sales: $94.2 million
9 Deep Marine Technology Subsea services for the offshore oil
and gas industries
Industry: Natural Resources
2007 Sales: $55 million
10 SGIS Government contracting, IT and professional services
Industry: Government Contractors 2007 Sales: $62 million
https://www.entrepreneur.com/hot100/rank/page1.html
MN Fast 50 Company 1-5
1 Anytime Fitness Inc.
CEO Jeff Klinger
Co-ed health club chain
Founded 2002, 80 employees, 2007 $13.1 million (348%)
2 Tactile Systems Technology Inc.
CEO: Jeff Mattys
Home therapy products for lymphedema
Founded 1995, 63 employees, 2007 $6.1 million (341%)
3 Knowledge Infusion
CEO: Jason Averbrook Strategic Mgmt Consulting
Founded 2004, 25 employees, 2007 $5.1 million (228%)
4 LogiSolve Consulting
Partners: Kelly Wendt + 7 eRx, Ag, Mgmt and Technical Consulting
Founded 1999, 130 employees, 2007 16.5 million (218%)
5 White House Custom Colour Inc.
CoCEOs Michael Hanline & Webb White Photo and press printing for pros
Founded 1978, 225 employees, 2007 $33 million (204%)
http://www.bizjournals.com/twincities/stories/2008/10/20/daily46.html 27Oct08
MN Fast 50 Company 6-10
6 Natural Resource Group
CEO Emily Grothe, Public affairs support, permitting & compliance svcs to energy
industry
Founded 1992, 201 employees, 2007 $73 million (203%)
7 GetWireless
CEO Brian Tanney, cellular distributor AirLink & Telular
Founded 2001, 6 employees, 2007 $5 million (194%)
8 eCapital Advisors
Partners Jim Plantan, Lisa David, management consulting
Founded 2001, 28 employees, 2007 $6.2 million (190%)
9 Olson
CEO John Olson, branding, advertising and PR services
Founded 1992, 165 employees, 2007 $44.1 million (176%)
10 CotterWeb Enterprises Inc.
CEO Daren Cotter, consumer online loyalty Inbox Dollars.com, SendEarnings.com
Founded 2000, 30 employees, 2007 $12.4 million (173%)
http://www.bizjournals.com/twincities/stories/2008/10/20/daily46.html 27Oct08
Manny Villafana
Serial Entrepreneur
• Villafana claims he likes to start companies.
• At last count, the 50-year-old (now 67) had started four
businesses, which now employ more than 2,500 people.
• Villafana formed his first venture, Cardiac Pacemakers
Inc., in 1972. Now part of a division of Eli Lilly & Co.,
Cardiac Pacemakers posted sales of $200 million (1990).
When its board rejected an idea for an improved artificial
heart valve, he said, "OK, fine, I'll take it."
In 1976 St. Jude Medical Inc., now a $200-million (1991)
company, was born.
The Entrepreneur of the Year 1991, Inc. Magazine
http://www.inc.com/magazine/19910101/4407.html
Manny Villafana
• He's founded several other companies to develop and
manufacture health care products, including GV
Medical, ATS Medical and CABG Medical.
• In 2006 he founded Kips Bay Partners, a medical
technology venture capital firm that has closed.
• Currently he leads Kips Bay Medical, developing
cardiovascular products.
http://www.news-releases.uiowa.edu/2007/september/092007villafanaspeaks.html
Manny Villafana
• Manny Villafana is the best marketer I have met. He was born
poor in Spanish Harlem to immigrant parents.
• He has a limited formal education and relies on his native
ability. Even though he never completed college, he has been
honored as a Living Legend in Medicine Award recipient, the
National Medical Entrepreneur of the Year in 1990, and a
grand prize recipient of the Mediterranean Institute of
Cardiology.
• His market ability is so good that his sales forecasts were
within 90% each month when I did the master production
schedule at St. Jude Medical, Inc.
Alan Bignall
• CEO, ReconRobotics Inc.
– 1985 MBA St. Thomas, 2007 Entrepreneur in Residence
– Former CEO, Visual Interactions Inc, software
– Former owner, Consulting Advisory Group LLC
– Featured in a Star Tribune story about four former
Fingerhut executives, including Bignall, who launched
Growth Ventures Group, a Minneapolis-based
investment firm that partners with private investors to
buy retailers and turn them around.
Sources: St. Thomas Alumni page and ReconRobotics documents
Alan Bignall
• Alan immediately impresses you with his
knowledge of markets.
• He stands well over six feet tall, weighs over
300 pounds and speaks with an English
accent.
• He has multiple industry experience and
knows how to build corporate teams.
• His ultimate goal is to own a baseball team.
ReconRobotics Inc.
• Minneapolis-based ReconRobotics Inc. is a new
company that has been formed to commercialize
patented field-proven technology developed in the
University of Minnesota Distributed Robotics
Laboratory.
• The company designs, manufactures, deploys and
supports miniature robotic systems and distributed
robotic teams. These robots are specifically designed
to provide real time information in hazardous or
restricted space areas, for military, police and
commercial markets.
http://www.reconrobotics.com
ReconRobotics
• ReconRobotics Introduces
Throwable, Mobile Reconnaissance
Robot With Night Vision Capabilities
The Recon Scout is designed for a
broad range of military, police and
security applications. It does not
require any specialized training to
operate, and it may be carried on a
belt or tactical vest. Throw it into any
dangerous, hostile or confined
environment and you’ll instantly get
critical visual intelligence that can save
lives and reduce property damage.
http://www.reconrobotics.com
Gale Ward
• Gale Ward was born on the east coast. Her
maiden name was Italian and she had supper at
6:00 pm with her family
• Gale quit a marketing job when she found her
employer was using company funds for his
personal use.
• The product was a temperature control box.
I
said, “Good for organ transport.”
• She said, “No Duane, the market is for
transporting pharmaceuticals. Do you know the
cost of a drug shipment that becomes warm?”
• Focus
Bruce Thomson
Serial Entrepreneur
• Bruce Thomson, CEO
• Started - Proex, Title Wave, Movilla,
PemTom, Archiver's, Leonardo’s Pizza
and he's still coming up with ideas at age 75.
• Now Solo Pizza Cafe, in quick lunch pizza market.
– 65 employees, $2Mil revenue
– Locations: Inver Grove Heights and Plymouth
Sources
Star Tribune article - Dick Youngblood 2003
Minneapolis/St. Paul Business Journal Liz Riggs 17 Oct 2008
Solo Pizza Cafe
• National market research
– How much people typically spend for lunch
– How quickly they want their food
• Their edge
– Developed a fast-baking oven
– Former Pillsbury food scientist developed dough
Source
Minneapolis/St. Paul Business Journal Liz Riggs 17 Oct 2008
Botanic Oil Innovations, Inc.
• Spooner, WI
• 10 employees
• ImmunoViva nutritional supplements
– Recognized that the world of dietary supplements
was characterized by over-promise and dubious
claims. We wanted no part of that.
– Have not pursued FDA approval of product
benefits despite UM studies showing value
– Need help
http://www.immunoviva.com/
Tom Petters
• An example of what not to do!
• Do not engage in any activity which is morally
ethically or legally wrong.
• There is no personal gain worth compromising
my personal freedom, not to mention the
personal pain suffered by innocent
participants who did not make the bad
decisions
Entrepreneurial Tasks
• Identify the Market, with personal
contacts/face to face data collection.
• Build the Team. Select those skilled
team members who will implement
your product strategy.
• Sell / Communicate the “solution to a
problem” to your customer and your
team who will pull together with you to
create a successful venture. Garner the
sale and repeat orders.
Why am I involved?
• My personal goal is to help fund the formal
college education of five granddaughters. I
need capital gains to help reimburse their
expenses at well recognized private schools
who will enhance their native abilities.
• Photo of
Supreme Compliment
from an Associate
The phone rings and the speaker says,
“ I think you should know about this one “
THAT IS FULL PAYMENT