1. Business Studies for Computer Scientists, or "How to Start and Run a Company" A course of 12 lectures Jack Lang

2. Introduction History of Lab and spin-offs – The Cambridge Phenomenon Programming only a small part of success

3. Outline Synopsis 1.So you've got an idea... 2.Money and Tools for it's management 3.Legal aspects, contracts and copyright 4.People: How to organise a team 5.Project planning and management 6.Quality, maintenance and documentation 7.Marketing and Selling 8.Growth and Exit routes In addition to the above, four Guest Lectures will be organised

4. Reading list The High-tech Entrepreneur's Handbook Jack Lang Paperback - 224 pages (2 November, 2001) FT.COM; ISBN: 0273656155 Jack Lang

5. Reading list Brooks F. : The Mythical Man Month ISBN 0201006502 Addison-Wesley Geoffrey A Moore Crossing the Chasm ISBN 0-8870-519-9 Harper Business 1991/5 Inside the Tornado ISBN 1-900961-58-X Capstone 1998 (The Gorilla Game) Everett M Rogers; Diffusion of Innovation, 4 th Edition Free Press, New York 1995 ISBN 0-02-926671 Eric S Raymond: The Cathedral and the Bazaar ISBN 1-56592-724-9 O’Reilly 1999 Townsend, R. : Up The Organisation ISBN 0340149868 Hodder Fawcett 1971 2nd Edition: Further Up the Organisation, now sadly out of print, Its all Cobblers! Michael Carter ISBN 1-85252-469-3 Jeff Cox, Howard Stevens (2001 ) Selling the Wheel: Choosing the Best Way to Sell for You and Your Company Pocket Books ISBN: 0671033107

6. Reading list 2 Dyson J.R. : Accounting for Non-Accounting Students ISBN 027360435X Pitman 3rd ed 1994 Microsoft Project Microsoft Excel Paul Manser and Simon Walker: Startups: Law and Business Handbook Butterworth Tolley; TJG ISBN 0-754-51509-5 Buckle: Managing Software Projects ISBN 0354040677 Macmillan

7. Reading List 3 Drucker P.F: Innovation and Entrepeneurship ISBN 033294652 Pan Weinberg, G.M.:The Psychology of Computer Programming ISBN 0442292643 Van Nostrand William D Bygrave, Editor The Portable MBA in Entrepreneurship ISBN 0-471-16078-4 John Wiley 2nd edition 1997 Guidelines for Directors ISBN 090093980X Institute of Directors The Cambridge Phenomenon ISBN 095102020 Segal Quince and Partners

8. Reading List 4 Nokes: Startup.com FT/Prentice Hall ISBN 0-273-65091-2 WallStreet.com Andrew D Klein (founder of Wit Capital); Henry Holt ISBN 0-8050-5758-7 1998 Everett M Rogers; Diffusion of Innovation, 4 th Edition Free Press, New York 1995 ISBN 0-02-926671 Paul A Samuelson, William D Nordhaus Economics 16 th Edition McGraw Hill ISBN 0-07-115542-2 Klein, A.D. (1998) Wallstreet.com: fat cat investing at the click of a mouse. New York: Henry Holt Hal Varian, Carl Shapiro(1998) Intermediate Microeconomics: A Modern Approach W.W. Norton & Company Ltd Information Rules: A Strategic Guide to the Network Economy (Harvard Business School Press) ISO 9000:2000 available from http://bsonline.techindex.co.uk, as ishttp://bsonline.techindex.co.uk BS 7799-2:1999 Information security management.

9. 1.So you've got an idea... Introduction Why are you doing it? What is it? defining the product or service; types of company Who needs it? an introduction to market analysis How? Writing the business plan Futures: some emerging areas for new computer businesses

10. One of you will become a Billionaire l Most will be millionaires – And need to be – Pension issue Say household income of £50K @ 4% -> £1.25M Inflation for 40 year @ 3% -> x 3 -> £3.75M House, etc say £250K -> 750K Total £4.5M l You won’t save £4.5M from a salary – Trading – Starting an Enterprise

11. Why? Why now? Because I can: available time and resource Just graduated, or made redundant and nothing else to do Brilliant idea or market opportunity Why me? – Barriers to market entry What have you got to make it through? – Expertise, resource, relationships – Barriers to competition What stops others doing the same thing – IPR, network effect, niche – Unique advantages Know yourself – Know your motivation so you can motivate others What counts as success?

12. Never a better time to start than NOW l Money – Cambridge Angels, Cambridge Capital…. l Support – CEC, St Johns, Cambridge Enterprise…. l Infrastructure – Banks, lawyers, accountants – Office space l People – Cambridge Network, mentors… l Government – EIS Tax relief, SMART Awards, SFLGS…. – Princes Trust l Society attitude – OK to lose, “Better to have loved and lost than never loved at all” l “Dare to Begin” (Horace) – Nothing will be attempted if all possible objections must be overcome (Samuel Johnson)

13. Why are you doing it? l Wealth generation – You need £5M by the time you retire, for a modest lifestyle l Better toys l Make a difference – Social consequences Generation of employment Death of the nation state l Fun or profit? – Lifestyle or high growth? Funding Eventual size?

14. If you are not in business for fun or profit, what are you doing there?

15. What is it? Technology driven / market pull Product or service Specialist or mass-market Lifestyle or High-growth? Mass Market Bespoke Volume LowHigh Consultancy Cost of entry Game Battleship FMCG Movie Car

16. How? Writing the business plan l Business plan describes what you want to do l BVCA Handbook l KISS: Keep It Simple and Stupid! l Write for the target audience l Business Plan Competitions – Cambridge £1k and Cambridge £30K – Cambridge University Entrepreneurs Society (CUE) www.cue.org.uk

17. Investment Criteria l Global sustainable under-served market need l Strong management team l Defensible technological advantage l Believable Plans l 60% IRR

18. Market Need l Largest risk factor: everything else is process or resource l Who needs it? Why? – What are they doing now? – How much is it worth to them? How is it sold, or advertised? – Routes to market – Alliances – Branding – Under served need Competition What other solutions? – Sustainable or one-shot wonder? – Growing market Global potential

19. Who needs it? FAB: Features Advantages Benefits – Feature: This program runs really quickly – Advantages: Less waiting time Uses less resources – Benefits: Less frustration You can get more done Cheaper to run USPs: Unique Selling Points Market Research

20. Defensible technological advantage l IPR – Patent – Copyright – Trademark l Defensible technological leadership – against well-funded competition – Niche Market share

21. Strong management team l You can’t do it all by yourself – “Small” project >10 person-year – Team building – 1:3:10 rule l Alliances l Recruit experience – Financial Director – Sales & Marketing l Training & experience – Merchant bank/Management Consultancy – MBA

22. Senior Team USUK Chair Senior figure; Old wise head Experience and contacts; Major dispute resolution; part-time CEOManaging Director Finding money; Investor relations; Style setting; Keeping the peace CFOFinance Director Accounts etc. Office management; Administration, Legals, Quality control CTOTechnical Director Inventing new things; development COOProduction Director Running the factory and distribution VP Marketing Marketing Director Deciding what and how to sell; pricing Marcoms; Market information VP SalesSales Director Selling; CRM;

23. Believable Plans l Business Plan l Development Plan l Marketing plan – Adverts, mail shots, web-sites l Sales Plans – Distribution, Direct Sales l Quality Plans l Financial Projections – Budget 60% IRR – Pay back financing in third year – Cash flow

24. Writing the Business Plan Executive Summary and funding requirement 1. Concept 2. The Market 3.1 Global market size and need 3.2 Sustainability 3.3 Competition 3.4 Marketing plans 4. The Team 4.1 CEO 4.2 CTO 4.3 CFO 4.4 VP Sales and Marketing

25. Writing the Plan - 2 5. The technology and its IPR 6. Summary of plans 6.1 Development plans 6.1.1 Methodology 6.1.2 Milestones 6.2 Marketing 6.3 Sales and distribution 6.4 Quality and industry standards 7. Financials

26. Writing the Plan - 3 Appendices: Financial model Key staff Letters of support Correspondence re IPR Full development plan Full marketing and sales plan Examples and brochures

27. Futures: some emerging areas for new computer businesses l Pace of change: Factor of 2 every 2 years l About 10 years from Lab to mass product l We can predict the near future (10 years) – Futures: Processor performance – Comms: 100,000 bandwidth cost reduction – Multi media and moving pix; digital TV; 3-D models – 100 Ghz, 100Gbyte, photo realistic moving graphics, video mail, 100Mb/sec WAN, world-wide knowledge base, – Home networks; – Wifi / WLAN – ubiquitous access

28. The Trillion Dollar Market l Effect of electronic commerce l Customer pull, not advertising push l Merging of computing, entertainment, communications – Games now gross more than films

29. Internet Commerce l Works for – Established Brands – Specialist goods l 60% of accesses are to adult content – Driven factor: Hidden agendas – Communities of interest – Mostly male - men look at porn, women shop – Wide age range l Don’t believe the hype – Most internet ventures not profitable unless adjunct to existing business – Advertising model (mostly) doesn’t work – Micro payments don’t work

30. Predictions l Microsoft/Intel will remain dominant – Other chip manufacturers will continue to struggle – UNIX will remain specialist – Java will be increasingly minority interest l Internet/ WWW will dominate – AOL,Compuserve, E-world, Microsoft Network will become internet service suppliers l Differentiation – “Lean forward” or 3-foot experience Private e.g PC, phone, PDA, – “Lean back” or 10-foot experience Public Internet TV Passive Couch mouse; server pushed experience

31. More Predictions l Game machines will become PC based – Continue to lead low-cost graphics technology – Networked – VR – X-box -> “Home Station” l Video-on-demand specialist market only – Hotels, airplanes, BUT Internet TV widespread l No new major applications – But see.NET

32. Watch Points - a personal list l Internet and Digital TV l Freenet (http://freenet.sourceforge.net/)http://freenet.sourceforge.net/ l Intelligent agents (e.g EPG) l PDA’s/ Cell phones - what personal systems we will all be carrying? – WAP – GPRS, 3G l Voice recognition – Wristwatch systems l Embedded and SoHo systems – Luxury cars now have more compute power on-board than the moon lander – Home networks