0911 vce ccet presentation
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November 19, 2009 Operations Startup Presentation to Center for Commercialization & Entrepreneurial Training, Santa FeTRANSCRIPT
Operations Startup
Jim TaylorValue Creation Enterprises, LLC
www.valuece.com505-466-4247
Center for Commercialization & Entrepreneurial TrainingNovember 19, 2009
Jim Taylor Background
Worked “Both Sides of the Street”23 years Fortune 10 (Conoco Inc.)
Operations, Trading, New Product Commercialization
General Manager of “Weird Stuff”
7 years Fortune 1,000,000 (startups)Composite materials, heat exchangers,
microturbines, concentrated solar power
Wilson Heat Exchanger™
MCO™ Concrete
Forming Products
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Stage Gate® Product Development Process
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
®Stage Gate is a registered trademark of Product Development Institute Inc.
Winning at New Products, 3rd Edition, Robert G. Cooper, 2001
Product Development and Management Association (www.pdma.org)
How Do I Get From the “Garage” to the Market?
You have only three resources:
TimeSet by Competition
MoneySet by Investors
PeopleSet by your ability to attract and hire
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Focus on Two Aspects
Staffing and OrganizationSteps to Commercialization/Launch
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
“One Riot/One Ranger” Does NOT apply!
Customers’ Expectations Must Be Met or Exceeded
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
You Can’t Do It Alone
Honest Self AssessmentOffset your weaknesses
Functional BackgroundStyle of thoughtCustomer Industry
Experience
“Just Say No” to Yes Men
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Who should you hire and when?
Product DevelopmentEngineeringFinance/FundingAdministrationManufacturing
Business DevelopmentMarketingSalesDistributionTech ServiceCustomer Service
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Match Skills to Needs(and try not to mix them up!)
Example: Business Development vs. Sales
By definition, startups are riskyNeed a fit for the “startup
culture”Stereotypes are made to be
broken.“Recent grads work hard and
cheap, but they don’t know much.”
“Older workers are inflexible and need big company perqs.”
20 30 40 50 60 70
Assumed Appetite for Employment Risk
Age
←Lo
w
Hig
h→
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Cultural Fit with a Startup
Not too soonIncreases fixed costsMismatch of skills and
needs at that time
Not too lateLead time for hiringLead time for training &
effectiveness
Example: Staffing too Soon
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
When to Hire
BenefitsCan conserve cashCan be faster than
hiringCan reduce time to
effectivenessBest if used in “non-
core” activities
ConcernsQualityPublic face of the
company?Less controlUnclear metricsLoss of experience
when done
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
What about outsourcing/contractors?
Various StructuresHierarchicalMatrixFree Form
Span of ControlTitlesStructure not critical,
but role clarity is Customer responsive
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Organization Structure
R (Responsible)Does the work (may be multiple)
A (Accountable)Only one person
C (Consult)Involved with the process (may
be multiple)
I (Inform)Told of the decision after the
fact (may be multiple)
Example:
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Clarity of Roles: “RACI”
Task/Decision: Choose a contract manufacturer by January 30
R Joe, Gene, Sarah
A Jim
C Dave
I Ben, Susan, Frank
Summary: Startup Organization
• People are a key resource• Fill Gaps• Match skills to needs• Be careful with timing• Be flexible on structure but firm on roles
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
We have something good. Let’s start selling!!! We’ll be rich!!!
Wait a minute…ProductValueManufacturingCertificationsPricingSupportMarketing and Sales
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Operations Startup/Product Launch
Resist the urge to rush to market
Voice of CustomerConstant update
Alpha TestingStay close to home
Beta TestingMultiple times
You listen to the customer, but do you hear them??
What if your baby is ugly?
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Product
Value: The Customer’s and Yours
Customer’s Value
Versus Do NothingVersus “In-kind”
CompetitionVersus “Not-in-kind”
CompetitionQuantify it
There is ALWAYS competition!
Your ValueDirect CostsTotal CostsCosts versus QuantityCosts over TimeMarket size and
penetration rateIs the financial potential
still attractive?©Value Creation Enterprises, LLC
Entrepreneurial Passion with Operational Disciplinewww.valuece.com
At a given price…
ManufacturingBoth Early Stage and Long Term
In-house for all or some?InvestmentStaffingTime
Outsource/Toll Process?AvailabilityLocationCostQuality
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Know what applies and where
Lead time and costIn-house coordination
required
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Certifications
Pricing Strategy and Systems
Choose your pricing strategye.g. Premium, Penetration, Value-Based, etc.
Product FamiliesStandard Price?
Price Exception Request System
Terms and ConditionsWarranties
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Technical SupportIn-house?Contracted?Field ServiceField OfficesResponse Time
Customer SupportTelephone?24 X 7?Web Based?Invoice QuestionsResponse Time
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Technical and Customer Support
Meet or exceed customers’ expectations after the sale
DirectWarehousingLocationsShippingInvestment/Lease and
Staff
DistributorsAvailabilityLocationsImportance of your
product to themQualityCost
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Distribution
MarketingHow do your potential
customers know you exist?
MessageMediaTrade ShowsCost and Staff
SalesIn-house sales staffTechnical CapabilityAgentsContractCompensationManagement
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Marketing and Sales
Project Planning Software
Strongly suggest using a system (e.g. MS Project)Tie people to activities
Avoids “145% of Jim is committed in June”
Puts all three resources in one place (Time, Money and People)
Everything takes longer and costs more than you think!
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Example Product Launch Plan
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Summary: Operations Start Up
Try not to rush to marketPlan for time, money and
people to set up systemsAvoid “predictable” errors
after the launch Use a project management
system if possible
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com
Thank You
Jim TaylorValue Creation Enterprises, LLC
Entrepreneurial Passion with Operational Discipline505-466-4247
©Value Creation Enterprises, LLCEntrepreneurial Passion with Operational Discipline
www.valuece.com