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FIU’s Entrepreneur’s HOW TO Webinar Series

FIU’s Entrepreneur’s HOW TO Webinar Series. How to Develop the Business Concept ROBERT H. HACKER January 20, 2009. Sales 6 Years After Start-up. Out of Business in 5 Years. 55 %. Keys to Success. PICK RIGHT INDUSTRY AND OPPORTUNITY MENTORING CAPITAL. Stages of Development.

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FIU’s Entrepreneur’s HOW TO Webinar Series

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  1. FIU’s Entrepreneur’s HOW TO Webinar Series How to Develop the Business Concept ROBERT H. HACKER January 20, 2009

  2. Sales 6 Years After Start-up

  3. Out of Business in 5 Years 55 %

  4. Keys to Success • PICK RIGHT INDUSTRY AND OPPORTUNITY • MENTORING • CAPITAL

  5. Stages of Development • PROOF OF CONCEPT 0-$1MM • COMMERCIALIZATION $1-3MM • SCALING $3-10MM • GROWTH $10-30MM • PROFESSIONALIZATION $30-100MM

  6. The Process

  7. Austin on Creativity

  8. 1.Customer Needs Gerald Zaltman's seven metaphors for the subconscious that explain 70 percent of human behavior • Balance (equilibrium) • Transformation (changing states or status) • Journey (as in life) • Container (keeping things in and keeping things out) • Connection (feelings of belonging or exclusion) • Resource (providing survival) • Control As quoted from HBS Working Knowledge)

  9. 1. Customer Needs NINTENDO APPROACH • DO NOT FOCUS ON PRODUCT--GAMEBOY • DO NOT FOCUS ON COMPETITION--MICROSOFT, SONY • FOCUS ON DEFINING THE NEED--WHAT TO DO IN SPARE TIME

  10. STEP 1: Customer Needs New Business Types • Do something better (market exists) • Do something in a new way (disruptive technology) • Do something new (highest risk)

  11. A THOUGHT

  12. 2. Solution • Hypothesis • Iterative process • Evolving • Stalking horse

  13. STEP 3: Industry AnalysisPorter’s Strategic Analysis Source:http://www.quickmba.com/strategy/porter.shtml

  14. STEP 3: Deliverables • DIFFERENTIAL ADVANTAGE • UNIQUE, SUSTAINABLE OR PROPRIETARY • TARGET CUSTOMER • CHARACTERIZE IN DEPTH WHO YOU ARE GOING TO SELL TO

  15. Differential Advantage • Unique or • Proprietary or • Patentor • Barrier to entry or • Regulation

  16. Target Customer (Market Segmentation) METHODS • Demographics • Market research • Talk to customers • Alpha/Beta test • Profitability analysis • Use them all

  17. STEP 4: Business Model • REVENUE MODEL • PRICE MODEL • SALES & DISTRIBUTION • CAPEX • HEADCOUNT

  18. STEP 4: Business ModelRevenue Model • WHAT DRIVES THE BUSINESS AND CREATES THE GROWTH

  19. STEP 4: Business ModelPricing Model 18 PRICING MODELS

  20. STEP 4: Business ModelSales & Distribution • THE TACTICS FOR HOW TO GET A CUSTOMER AND CLOSE • CONFUSED WITH "MARKETING" • NOT TAUGHT IN SCHOOLS

  21. STEP 5: Financial Model • PURPOSE OF FINANCIAL MODELS • DEMONSTRATE MARKET OPPORTUNITY (SIZE) • CLARIFY/REINFORCE BUSINESS MODEL • DEMONSTRATE INDUSTRY KNOWLEDGE • PRESENT BUSINESS LOGIC • UNDERSTAND CASH FLOW

  22. STEP 5. FINANCIAL MODEL • PARTS OF A FINANCIAL MODEL • BUSINESS MODEL ASSUMPTIONS • SOURCES AND USES • P&L • BALANCE SHEET • CASH FLOW STATEMENT

  23. MY CONTACTS AND ON-LINE RESOURCES • rhhfla@mindspring.com • BLOG http://sophisticatedfinance.typepad.com • EXCEL SEARCH ENGINE http://tinyurl.com/6nw9c5 • LINKED IN • FACEBOOK • TWITTER (rhhfla) • DELICIOUS (rhhfla)

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