nwen and founder institute ideation bootcamp - week 1 - big idea, markets and problems
DESCRIPTION
Ideation Bootcamp - Week 1. Big Ideas, Markets and Problems. Dave Parker and Joel Espelien, Feb 6, 2013. Graham & Dunn Seattle OfficeTRANSCRIPT
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Ideation Bootcamp
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About Mentors
Joel Espelien
• Entrepreneur & Founder
• VP Strategy & General Counsel
for Packet Video
• Mentor for Tech Stars and
Founder’s Co-op
Dave Parker
• Director, Seattle Founder Institute
• Entrepreneur
• Board Member Guidant Financial
• Former Board Member
Classmates.com
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Agenda:
• Week 1- Big Ideas/Markets/Problems – Introductions – Market– Problems – Ideas– Q&A – Working Groups – Homework
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Weekly Format
• 6:30 – Food/beverages • 6:45 – Introduction to topics & mentors • 7:00 – Content 1 • 7:30 – Content 2 • 8:00 – Q&A • 8:25 – Break • 8:45 - Working Groups• 9:15 – Home work
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• Big Ideas – Big Markets – Big Problems – With Joel Espelien
• Venture Ready Research, Target Markets & Models– With David Bluhm
• Validating your idea: tools and methods – With Justin Wilcox
• Communicating your idea (without getting lost in the
details)– With Joanna Lord
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Week 1
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So You Have a Startup Idea?
Joel Espelien - @EspelienJB
Dave Parker - @DaveParkerSEA
#SEFI@Founding
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Ground Rules:
• Don’t be afraid to share your idea!• Ideas don’t matter – feedback, execution and
iteration do• You have more to gain than to lose• Nobody is going to steal your idea• Don’t ask an Investor to sign your NDA
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SurveyExisting Business?
Tech Business?
B2B?
B2C?
Seeking Investment?
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What Investor Look For
• Big Market/Idea/Problems• Team that can execute • Scalable Product • Traction – Customer, revenue, users
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Markets
• Who Buys from You?• Business to Business • Business to Consumer• Established vs. Immature • What is a Market?
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Source: Dow Jones VentureSource
Am
ou
nt
Investe
d
($B
)N
um
ber o
f Deals
Investment Falls in 2012Deal Flow and Equity into Venture-Backed Companies
$23.6 $25.1
$31.1$34.5 $33.1
$24.3
$29.3
$35.1
$29.7
24622627
2859
3110 3049
2759
3116
35063363
0
1,000
2,000
3,000
$0
$10
$20
$30
$40
$50
2004 2005 2006 2007 2008 2009 2010 2011 2012
Amount Invested ($B) Number of Deals
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Source: Dow Jones VentureSource
Industry Allocations Steady in 4Q’ 12 Deal Flow Allocation by Selected Groups
% D
eal Flo
w
Allocati
on
29% 25% 24% 22% 24%
34%34% 38%
38%
16% 21%23%
20%20%
17% 16% 18% 17% 15%
4% 5% 2% 2%
0%
20%
40%
60%
80%
100%
4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12
Energy &Utilities
Business &FinancialServices
ConsumerServices
InformationTechnology
Healthcare
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Source: Dow Jones VentureSource
Software Loses Pace in 4Q’ 12IT Investment Allocation by Sector
% o
f D
ollars
In
veste
d
47%
65% 62%70%
59%
30%
12% 18%8%
22%
14% 14%
16%15%
15%10% 9% 5% 7% 3%
0%
20%
40%
60%
80%
100%
4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12
Semiconductors
Electronics &ComputerHardware
Communications& Networking
Software
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Big Markets?
• Is the Market in Billions?• Specific Opportunity for VC >$100M • If you own the market how big would
your be• Market Leader vs. First Mover • Known or unknown
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Big Ideas?
• Changes the world • Simple • “Aha” idea • Transformational
• Changes a market • Complex • Feature or tool • Incremental
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Big Problems
• Pain Pill? Have to have it• Vitamin? Nice to have• Who wins if you win?• Do they “win big” or “save a little”?
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It’s takes as long to build a small idea as big idea
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• Passion!
• Ideas!
• Product
• Doesn’t make it a
great business• Execution
• Company
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Explain Your Idea
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I want to develop
to help
(solve a problem)
(with secret sauce)
(a defined offering)
(a target audience)
Idealibs for Startups
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The Offering
• Be Specific– “a social utility" vs "an ecommerce website"
• Avoid Buzzwords– "mobile social CRM" vs "an iPhone application"
• Skip the Adjectives and Superlatives– "a revolutionary service" vs "backend software"
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The Audience
• Identify Demographics– "female consumers" vs ”new mothers"
• Specify Your Market– "artists and musicians" vs "unsigned alternative bands"
• Clarify the Buyer– "large businesses" vs "purchasing managers at
multinational companies"
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The Problem
• Make sure everyone can understand the offering.• Hint at a viable revenue model.
– "find deals online" vs "shop for hip baby products at wholesale prices"
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The Secret Sauce
• Explain what makes your business unique.– "faster" vs "with automated ordering for diapers and other
staples”
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Q&A
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Working GroupsHomework
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7 Rules to Judge Your Idea
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7 Rules
1. Simple ideas win
2. You have one revenue stream
3. Name your customer
4. Make something explainable
5. Small markets suck
6. Mix in secret sauce
7. Be original
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Contact Info
• Dave Parker – [email protected]
@DaveParkerSEA• Joel Espelien – [email protected]
@EspelienJB • Daniel Rossi – [email protected]
@nwen-org • Caitlin Goetze – [email protected]