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1 Sabin & Thorne Deadlines Sabin Prize Thorne Prize Letter of Interest Jan 31* Feb 23* Application Due March 24 March 30 Finalists Present April 16 April.

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Presentation on theme: "1 Sabin & Thorne Deadlines Sabin Prize Thorne Prize Letter of Interest Jan 31* Feb 23* Application Due March 24 March 30 Finalists Present April 16 April."— Presentation transcript:

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2 1 Sabin & Thorne Deadlines Sabin Prize Thorne Prize Letter of Interest Jan 31* Feb 23* Application Due March 24 March 30 Finalists Present April 16 April 26 * if you want a mentor

3 2 My Training Workshops Today: Researching your Business Today: Researching your Business Next Fri, Jan 31 st : Financial projections Next Fri, Jan 31 st : Financial projections Feb 21 st : Writing & Presentations Feb 21 st : Writing & Presentations

4 3 Researching Your Business Idea January 24, 2014 Sabin & Thorne Prizes

5 About Me Teach Entrepreneurship – SOM & FES Teach Entrepreneurship – SOM & FES Used to work on Wall Street Used to work on Wall Street Attended SOM, then consulted Attended SOM, then consulted Joined a Yale-funded “incubator” Joined a Yale-funded “incubator” Also, do consulting to start-ups Also, do consulting to start-ups 4

6 5 Past Sabin Judges Andrew Sabin, prize funder & investor Andrew Sabin, prize funder & investor Rosemary Ripley – NGEN – investor Rosemary Ripley – NGEN – investor Konstantine Drakonakis – Launch Capital - investor Konstantine Drakonakis – Launch Capital - investor Ralph Earle – Assabet, consultant to investors, investor Ralph Earle – Assabet, consultant to investors, investor

7 6 Judges are Investors by Day And Investors Want to: Hit a homerun (big financial upside) Hit a homerun (big financial upside) Avoid known losers (high failure rates) Avoid known losers (high failure rates) Minimize risks (pick the surest thing) Minimize risks (pick the surest thing) Back winners (proven track records) Back winners (proven track records)

8 7 Ideal Investor Characteristics Unique Product / Service Unique Product / Service Large potential market Large potential market Rapid growth prospects Rapid growth prospects

9 8 Unattractive Sectors Restaurants -- one location Restaurants -- one location > Too many cooks > Too many cooks > 80% bankruptcy rate > 80% bankruptcy rate Retailing -- one location Retailing -- one location > Too easy to enter > 80% bankruptcy rate > Too easy to enter > 80% bankruptcy rate

10 9 More Unattractive Choices Consulting Consulting > No economies of scale > No economies of scale > No need to raise $ from others > No need to raise $ from others Some International Businesses Some International Businesses > Depends on the judges / investors > Depends on the judges / investors

11 10 Avoid Competing with “love” or “ego” projects Competing with “love” or “ego” projects > Artists > Artists > Farmers > Farmers > Moviemaking > Moviemaking > Sports teams > Sports teams

12 11 Most Important Question If the idea is so great... If the idea is so great... Why hasn’t anyone done it before? Why hasn’t anyone done it before? Might be – Technology didn’t exist before Might be – Technology didn’t exist before Or – your unique combination of skills Or – your unique combination of skills Might be – it just won’t work Might be – it just won’t work Or – it can’t make $ Or – it can’t make $

13 12 The Best Ideas Come from your own experiences… A problem you’ve faced… School, jobs School, jobs Hobbies, family Hobbies, family

14 13 Application Issues to Address Idea (what is it – why is it appealing) Idea (what is it – why is it appealing) What is the Market? Customer interest? What is the Market? Customer interest? What is original (unique advantage) What is original (unique advantage) What is your strategy – to execute? What is your strategy – to execute? What environmental or social benefit? What environmental or social benefit? Who is on your team? Who is on your team? How much $ do you need? Use of prize? How much $ do you need? Use of prize?

15 14 Themes of the Day You want to communicate an idea that: Addresses a big, exciting opportunity Addresses a big, exciting opportunity In a new, unique, innovative way In a new, unique, innovative way That is feasible and believable That is feasible and believable With great people on your team With great people on your team To Win Contests (or Raise $)

16 15 Idea: Big, Exciting Opportunity

17 16 The Opportunity What are the annual sales $s? What are the annual sales $s? Are they increasing? Are they increasing? Important trends? Important trends? Problems that need fixing? Problems that need fixing?

18 17 Caution: You Need Data, Sources! Your opinion about a need has little value Your opinion about a need has little value You want to win contests…. You want to win contests…. Do research! Do research! Industry reports, articles, interviews, etc. Industry reports, articles, interviews, etc.

19 18 Caution: Look at the Right Market! GreenCleaning.com will sell all brands of environmentally friendly cleaning products – on one website. GreenCleaning.com will sell all brands of environmentally friendly cleaning products – on one website. Cleaning product sales in the US were $28 billion in 2013.

20 19 GreenCleaning’s Market Green cleaning products Green cleaning products  Say, 5% of all cleaning products  $1.4 billion Sell them (not make them) Sell them (not make them)  Say, for a 10% commission $140 million - not $28 billion!

21 20 Research Customer Interest Who are the customers? Who are the customers? How many are there? How many are there? What do they want? What do they want? What can you do for them? What can you do for them?

22 21 Caution: Don’t Assume! Your ideas about customer have little value Your ideas about customer have little value You want to win contests…. You want to win contests…. Do research! Do research! Specifically, do interviews & surveys Specifically, do interviews & surveys

23 22 Testing Customer Interest Develop a one page product description Develop a one page product description What does it do ? What does it do ? How does it work ? How does it work ? List the main features List the main features List main benefits -- to customers List main benefits -- to customers

24 23 Find Out: > Do they like your product ? > Do they like your product ? > What do they like best? Least? > What do they like best? Least? > Will they buy/use it when it is ready ? > Will they buy/use it when it is ready ? > Will they pay the price you’re asking? > Will they pay the price you’re asking? > Do they have any issues / concerns ? > Do they have any issues / concerns ?

25 24 Caution: Get the Customer Right! GreenCleaning will sell its own brand of environmentally friendly cleaning products – in retail stores. GreenCleaning will sell its own brand of environmentally friendly cleaning products – in retail stores. Who is the customer? Who is the customer?

26 25 Caution: Get the Customer Right! The customer = stores The customer = stores Stores’ customers = consumer Stores’ customers = consumer You must appeal to the consumers You must appeal to the consumers But you also must understand all customer needs – and meet them But you also must understand all customer needs – and meet them

27 26 Caution: Get the Customer Right GreenCleaning.com will sell all brands of environmentally friendly cleaning products – on one website – for a commission. GreenCleaning.com will sell all brands of environmentally friendly cleaning products – on one website – for a commission. Who is the customer? Who is the customer? Cleaning product companies Cleaning product companies

28 27 For Your Application Describe your venture (what will it do) Describe your venture (what will it do) Also, the Market need / opportunity Also, the Market need / opportunity And the Customer (who will pay for it) And the Customer (who will pay for it) Include your research data Include your research data Quote yourinterviews Quote your interviews Present your survey data Present your survey data

29 28 Unique: Innovative, Competitive Advantage

30 29 What is Innovative? How is your idea – unique? How is your idea – unique? Different from the competition? Different from the competition? Different – from alternatives? Different – from alternatives?

31 30 What is Innovative? Always more competition - than you think Always more competition - than you think Compare major features of your product Compare major features of your product > To all competitors’ products > To doing things “the old way” > To doing things “the old way”

32 31 Construct a Competitor Grid

33 32 Caution: Be Objective! You saying you are better = little value You saying you are better = little value You want to win contests...! You want to win contests...! Why, objectively, are you better? Why, objectively, are you better? Did customers say you were better? Did customers say you were better? Admit where you are not better Admit where you are not better

34 33 Don’t Cherry Pick!

35 34 Key Avenues For Investigation Why has no one done this before ? Why has no one done this before ?  Technology didn’t exist?  New regulations or incentives?  It won’t work for some reason….?

36 35 Unique, Big Idea: Example

37 36

38 37 Fresh farmed tilapia fillets Fresh farmed tilapia fillets Purified and filtered re-circulated water Purified and filtered re-circulated water “Seafood Safe” and Organic “Seafood Safe” and Organic 100% organic feed 100% organic feed

39 38 Evidence of Opportunity - over 3 years: US seafood consumption up 12% - $12 billion US seafood consumption up 12% - $12 billion US tilapia consumption up 110% - $400 million US tilapia consumption up 110% - $400 million Demand for organic meat & fish up 120% Demand for organic meat & fish up 120% Over 70% of Americans would by organic seafood if available; 60% ‘strongly prefer’ domestic

40 39 Customers Wholesale Suppliers of restaurants, grocery & fish stores Wholesale Suppliers of restaurants, grocery & fish stores Also, Trader Joe’s, Whole Foods Also, Trader Joe’s, Whole Foods

41 40 Talking to customers: 450 chefs and 150 retailers 450 chefs and 150 retailers  Most prefer environmentally friendly fish Local restaurant owner: “customers care” Local restaurant owner: “customers care” Wholesaler: “Not enough good farms” Wholesaler: “Not enough good farms” EcoFish: “I will buy all you have to sell” EcoFish: “I will buy all you have to sell”

42 41 Competition 96% of tilapia 96% of tilapia – imported, mostly frozen, not organic Most US farm-raised Most US farm-raised – small, not organic The Good Fish tilapia will be more expensive vs. competitors

43 42 Feasibility: Making it Happen

44 43 The Goal Show this isn’t “just an idea” Show this isn’t “just an idea” You have a plan You have a plan You’ve made some moves You’ve made some moves You know what the next moves are You know what the next moves are

45 44 Issues to Cover 1. How will you make your product? 2. How will you get customers to buy it? 3. How will you start – and expand? 4. Who will run your business?

46 45 Make a List What are your product “inputs”? What are your product “inputs”? What kind of facilities do you need? What kind of facilities do you need? How will you deliver to customers? How will you deliver to customers? How will you provide ongoing service? How will you provide ongoing service? Research the answers!

47 46  Inputs: series of tanks (“Pod System”), organic vegetarian fish food, ice for packing fish  Staff: Monitor equipment, move, clean, fillet fish  Facilities: heated warehouse space  Delivery: Customers pick up  Other: Waste and offal disposal

48 47 Sales (& Marketing) How do you get customers’ attention Advertising Advertising Sales force Sales force “PR” “PR” Partenerships Partenerships And Make the Sale?

49 48 Sales Force In-store Telesales Professional In-store Telesales Professional Track record Industry contacts Product Expertise Track record Industry contacts Product Expertise

50 49 Traditional Advertising Mailings Yellow Pages Print Ads Television Mailings Yellow Pages Print Ads Television Newspaper inserts Coupons Flyers Catalogs Radio Newspaper inserts Coupons Flyers Catalogs Radio

51 50 Internet Advertising Web Sites Key word search Sponsored Links Ads with online trade journals You Tube Ads Web Sites Key word search Sponsored Links Ads with online trade journals You Tube Ads Banner, pop-up ads Blogs Groupon Pinterest Facebook Twitter Banner, pop-up ads Blogs Groupon Pinterest Facebook Twitter

52 51 Web Sites Not a sales tool, on its own Not a sales tool, on its own Must drive people to it Must drive people to it Search engine optimization? Search engine optimization? Buying key words? Buying key words?

53 52 Develop Partnerships Get schools – to help sell to students Get schools – to help sell to students Get doctors – to recommend to patients Get doctors – to recommend to patients Churches, libraries, non-profits, etc. Churches, libraries, non-profits, etc. Keep in Mind: They will only partner with you if there is something in it for them!

54 53 Find Out: Will they partner with you? Will they partner with you? What do they want? What do they want? A share of your Sales? An exclusive deal? To do good? Another service for their customers?

55 54 Green Brides “Partnered” with the Wedding Institute Green Bride made an online course Green Bride made an online course Wedding Institute sells it to students Wedding Institute sells it to students Wedding Institute gets Free content Half the $ from the courses Green Bride gets Exposure to wedding planners Half the $ from the course Wedding Wire agreed to the partnership It’s clear what both sides get

56 55 Selling Strategy  Hire Sales Force  Visit customers, explain the benefits  List in organic seafood directories  Advertise with trade associations  Host events, tours, tastings

57 56 How will you Start – and Expand?  Start in New Haven  then go to Hartford?  Start with one product, then add?  Sell in one store, then more?

58 57 How will you Start – and Expand? Start small Start small Prove you can do it -- then expand Prove you can do it -- then expand CT

59 58 What have you done so far? If you’ve done something – risk is lower If you’ve done something – risk is lower Do you have a sample product? Do you have a sample product? A first customer? A first customer? A potential customer – in writing? A potential customer – in writing?

60 59 Your Team

61 60 Investors will Say: Keys to Success Œ Œ People   People Ž Ž People ! Œ Œ People   People Ž Ž People ! More important than everything else -- combined

62 61 Your Team Who are the Yale members? Who are the Yale members? What roles will they play? What roles will they play? What skills, experience do they have… What skills, experience do they have… Directly relevant to your business Directly relevant to your business

63 62 Admit gaps Who are you missing – but will hire? Who are you missing – but will hire? Advisory board or board of directors? Advisory board or board of directors?

64 63 Environmental or Social Benefit

65 64 Same Rule Applies Judges (investors) will want: To hit a home run (big upside) To hit a home run (big upside) Key Question: How do you quantify the Opportunity/Benefit? Key Question: How do you quantify the Opportunity/Benefit? Answer: It depends on your Unique Business! Answer: It depends on your Unique Business!

66 65 Hit on the Same Themes Big, exciting opportunity Big, exciting opportunity Unique, innovative Unique, innovative Feasibility – a plan of execution Feasibility – a plan of execution The right team – with knowledge, skills The right team – with knowledge, skills

67 66 Key Challenge Come up with a metric of benefit: …Lives saved – or water conserved …test scores improved – or energy saved …incomes raised – or emissions reduced Or, where no metric exists: …explain why the business will matter …what will be better – because of it?

68 67 Final Words of Advice Do your homework Do your homework  Use data, research – talk to customers  Not just your opinions Try to do something – now - to  risk Try to do something – now - to  risk Think like an investor! Think like an investor!


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