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