Transcript THE SILICON VALLEY WAY - BOOK REVIEW Mikko Jokela Jarkko Kosonen

THE SILICON VALLEY WAY
- BOOK REVIEW
Mikko Jokela
Jarkko Kosonen
Jussi Pihlainen
Janne Tikkanen
The Silicon Valley way
- Author & Book
Main Reasons for the Success of
Silicon Valley
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Stanford University and the University of
California
Venture Capital
The Concentration of High-Tech Companies
The Weather
Some Other Reasons for the
Success of Silicon Valley
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Workforce Diversity
Two-Income Families
Labor Laws
Government and Industry Cooperation
California´s Culture
Employee Ownership and Stock Options
California´s Public Colleges
California´s Pioneer Mentality
Seven questions executives ask
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The 45-second business plan
What is your product?
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Who is the customer?
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should contain measurable objective
be specific
Who will sell it?
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This helps determine product elements.
Seven questions executives ask
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How many people will buy it?
How much will it cost to design and build?
What is the sales price?
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Remember that prices come down over time.
When will you break even?
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forecast and calculate
Market research
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What does neighbors’ and media think?
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What's on the web?
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Web is a powerful market research tool.
What do the numbers/experts say?
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Ask neighbors opinions and listen them carefully.
Go to library!
Save all the number data.
Keep your open mind when listening experts.
Can you predict the future?
The Competition
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Who are your competitors?
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What are they doing?
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Organize your thoughts.
What is their value proposition?
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List toughest and most potential competitors.
Define your competitors value proposition.
What are their secrets?
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Trade shows, job postings on the web...
The Product
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Why would anyone buy your product?
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What will it look like?
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Use drawings to create a shared vision.
When it will be available for shipping?
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List your products values and benefits.
Product should have 3 to 10 milestones.
How different are you from the competition?
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Price, reliability, ease of use etc.
The Product
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Should you do product simulations?
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Some ways to simulate could be:
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paper and ink
PC simulations
phone simulations
What is your products name?
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Use brainstorming.
Name associates with: Quality assurance, Product vs.
company name, Geography and history, uniqueness
The Customer
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”It is so easy to get wrapped up in your product
and forget all about he customer”
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Do the customers think it is a good idea?
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Dale L. Fuller, Whowhere? Inc.
Ask about it from your potential customers.
Who is the real customer
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Specific buying habits?, Prerequisites?, Etc.
The Customer
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What are your customer’s secrets?
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Should you do focus groups?
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Age demographics, Income level, Method of
payment…
Focus group = Group of 6 to 10 people, who are
representing potential customers.
Focus group interviews should be done by some
professional.
How much will the customer pay?
The Marketing Strategy
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What are your objectives?
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How will you sell and support the product?
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Strategic and marketing objectives
Make buying process more simple.
Who will generate demand?
The Marketing Strategy
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Will you need marketing or sales?
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Sales representatives etc.
What is the marketing plan?
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“History teaches that the only thing that works in
marketing is the single bold stroke…”
Al Ries and Jack Trout, 22 immutable laws of marketing.
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How do you become front page news?
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Imagine what kind of strengths will be mentioned in
your future front page success story.
Confront the Truth
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"The best way to make a lot of money in a new
venture...is to be honest about the real risks in
the business.”
John Doerr, Partner, Kleiner Perkins Caufield & Byers, from
Going Global by William C. Taylor and Alan M. Webber
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Disasters do have warning signals --> trust
your instincts.
Confront the Truth
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Is this the right project for you?
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Why are you doing this?
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Consider it before making big decisions.
What is your motivation?
What is your core competency?
Confront the Truth
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Will the business work?
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A new business succeeds by focusing.
What skills are critical to your success?
What will make your business or product unique?
What do you enjoy doing?
Identify your competitive advantage and
concentrate on it.
Confront the Truth
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Are you telling yourself the truth?
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Be truthful
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How much will it cost to build it?
How much will customers pay?
Can you deliver what you promised?
Is there really need for the product?
If your employees don't want the product, it will not
succeed.
One of the biggest faults is not being truthful to
yourself.
Raising Money
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Should you invest your own money?
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There's something wrong if no one wants to invest.
Never:
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mortgage your house
use your kids college funds
don't take the risks you can't live with!
The Business strategy presentation
1. Project Name
2. Agenda
3. Executive Summary
4. Business Objective
5. The Opportunity
6. Demographics
7. Target Market
8. The Product
The Business strategy presentation
9. Product Schematic
10. Product's Benefits
11. The Competition
12. Competitor's Products
13. Competitive Feature Matrix
14. Marketing Plan
15. Channel Strategy
The Business strategy presentation
16. Development Schedule
17. Cost of Goods
18. Pricing
19. Demonstrations
20. Financials
21. Next Steps
22. Summary
The Business strategy presentation
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Common Pitfalls
1. Presenting with Your Back to The Audience
2. Avoiding Eye Contact with The Decision
Maker
3. Running Out of Time
4. Decision Maker "No-Shows"
5. Unknown Audience
The Product Development
Scorecard
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Predicts the likehood that you will produce a
great product
About ten questions which project manager
has to answer and give points
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Drawing and Pictures
Target User
Competitive knowledge
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The Marketing, Sales and
Distribution Scorecard
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This scorecard enables you to track activities
outside of R & D.
Predicts future success or failures.
Each business area should have their own
card (or report).
13 Questions.
Closing Arguments
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Surround yourself with people who tell the
truth.
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ask people's opinions
don't mind if your idea is getting ridiculed
criticism gives new ideas
be careful who you talk to, tough (inside/outside
your company)
sometimes best ideas come from unlikely sources
Closing Arguments
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Set the right questions
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answer truthfully
analyze your answers
"Back-of-a-Napkin”
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A Plan doesn't need to be fancy to work
Planning is important - not the plan itself
Closing Arguments: Strengths &
Weaknesses
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Strengths
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Cases - some good/interesting examples
List of questions needed to be answered
Offers a "toolbox" for unexperienced
Closing Arguments: Strengths &
Weaknesses
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Weaknesses
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Quite subjective view
No scientific argumentation
Very American - for Americans
Tries to cover all possible situations