Starting a Company

2. From idea to 100 customers Starting a Company

3. The Path Idea Due Diligence Prototype Operations Fundraising Sales Early Production Fundraising

4. Personal Goals • Do you want to build a billion dollar company? • Yes: Good! • No: Venture doesn’t like you • Do you want to remain technical? • Yes: You’re a CTO • No: You’re a CEO • Can you run scrappy for 1-2 years? • Yes: Good! • No: Work for a startup

5. Be passionate about it Solve a pain point (hypothesis) Make sure it appears solvable The Idea Dor • “If you have data that others don’t, it’s valuable” • Hypothesis: Store owners need data on foot traffic to optimize staffing and marketing

6. Due Diligence • Identify Customer • Business Model • Market Size • Competitive Analysis • Talk to Customers • Talk to Experts • Operating Plan ($$$)

7. Who’s cutting the check Is this a B2B or B2C business? Be Specific: Ages 25-35 who are interested in fitness and own a cat Identify Customer Dor • B2B: Retail small business owners • High margin, low conversion rate businesses: Clothing, Furniture, Home Improvement

8. Business Model • How do you make money • There should be some aspect of recurring revenue • Keurig > Coffee • Apple > App revenue • FaceBook > Data • Maintain high margins • Consumer hardware is brutal Dor • $200 for hardware, $50 per month per location

9. How big is the market Use reports and US census data Focus on the US first Where’s your entry point Market Size Dor • 4.5 million retail locations in the US • $3 Trillion • $100M in revenue: 150,000 locations • Entry point: Mom and pop; 30% of the market

10. No competitors is a red flag What is their business model How is your solution 10x better Cost Effectiveness Target Market Competitive Analysis Dor • Competitors: RetailNext, Shoppertrak, Trafsys, Traxsales • 10x cheaper ($2500 for the cheapest solution) • >10x faster (2-3 month installation process) • Can only target big box enterprise

11. Talk to Customers & Experts • Survey customers • Do online surveys • Sell your product • Splash pages • Pre-orders • Find CAC (Customer Acquisition Cost) • Find experts • Ex-employees from your competitors • Non-competitive products targeting the same market • Make them advisors!

12. Operating Plan • How much money will it cost to get to 100 customers • Should be in the $200k-$500k range • Timeline • Hardware production • Software development • Hiring • Sales • Focus on the next 12 months

13. Prototype • Start building! • Identify MVP (Minimum Viable Product) • Keep it bare bones • Don’t reinvent the wheel • Use off-the-shelf components and frameworks • Make mock ups and 3D renders • Show these to potential customers • Sell your prototypes • Working prototype is more important than cost • But make sure you can cost reduce later

14. Operations • Make a financial model • Incorporate • Find a Startup friendly lawyer • Example: Fenwick • Independant • Bank Account • Example: Silicon Valley Bank • Infrastructure • Google for Business • Slack • Quickbooks • HR • Payroll, insurance • Example: Gusto

15. Operations - Team • Get a co-founder • Someone you’ve worked with before (school counts) • Find the distribution of labor • Founding team members • Don’t forget about non-technical positions • Never too early to bring on sales/marketing

16. Fundraising • Make a list of investors • Pitch Deck • 10 Slides • Use your due diligence findings • Networking • Reach out to other founders (LinkedIn) • Get 2 meetings out of every one you go to • Be wary of investor -> investor intros • Accelerators • Bolt, Lemnos, Root, Hax, YCombinator, 500 StartUps • Pre-seed • SAFE or Convertible Note

17. Meeting Investors • Cold outreach doesn’t work • Get intros from other founders • If they decline, try to dig in on the reason • If they take too long, that’s probably a “No” • Use a CRM (Streak for gmail is great) • Most are in Silicon Valley (but not all)

18. Early Production • Stay scrappy • 3D print mechanicals • Build the first 100 units yourself • Electronics • Firmware Engineer, Electrical Engineer, Mechanical Engineer • Start talking to contract manufacturers (CM) • Get quotes • Treat them as investors and negotiate terms • 50/50 • Net 60+ • Stay in the US (Initially) • Avoid Tier 1 CMs (Foxconn) • Will most likely cost more than you were expecting (hopefully you have high margins!)

19. Early Production • Implement customer support • Zendesk • Intercom • Your first hardware will have lots of problems • Get customer feedback • Be prepared to change the product

20. Start with direct sales Identify your go to market strategy Digital marketing AdWords Facebook Content generation social media Inside sales Email drip Conferences Start selling immediately Have someone full time doing sales Sales

21. Sales - Infrastructure • Have someone doing sales full time • Sometimes this is the CEO • Get a CRM (Customer Relationship Management) • Hubspot is great (and free!) • Gather as much data as possible • Understand your pipeline and customer journey

22. Company Snapshot • $500k raised • $5k-$10k per month in revenue • Happy customers • Month over month growth • 4-6 employees • Understand customer acquisition • Ready to deploy $1M-$3M in venture capital

23. michael@getdor.comsean@getdor.comjason@getdor.com