Launch a company

Most of you must have heard the term ‘ Do your home work’ ; when it comes to the world of start ups, this typically refers to researching the market, understanding your competition etc.

It is absolutely essential to understand if there is demand for your service, how much money is
spent in your target industry, barriers to entry and differentiate yourself from competition.

The key is to get a sense upfront if your ‘brilliant idea’ is really worth taking to the next step ..And not discovering this half way or worse when you are about to close shop..

Thats all well and good..but how do u really get this valuable data? I read that school libraries and local libraries have some free stuff..have to start there..ill let u know if i find anything worthwhile
this route..There are more expensive options available for those willing to shell out more moolah..such as Gartner reports, Lexis Nexis etc. You can also get some data from business mags such as business week or PC week.

I found a really good chapter in the book ‘ Harvard Business Review on Entrepreneurship’, which talks about how to write a great business plan.

This chapter highlights that most business plans focus on providing financial projections which are crafted out of thin air with no real analysis or backing.

This chapter talks about a framework for writing good business plans which states that every good business plan should include details related to the following 4 aspects:

a) The People: A great business plan talks about who the founders are, where they have worked, been educated, what skills and abilities they have that is directly relevant to the opportunity being pursued.

b) The Opportunity: In addition to some of the previous inputs on identifying the viability of a potential business, its important that entrepreneurs make sure that they are entering an industry that is large and or growing and detail how the company will build and launch its product or service in the marketplace. A great business plan also highlights how an opportunity can grow i.e expand its range of products or services, customer or geographic base. Bottomline, entrepreneurs need to understand that investors are looking for businesses in which management can buy low,sell high, collect early and pay late and a great business plan, highlights how the opportunity in question provides just this.

c)The Context: The big picture/macro economic environment such as regulatory environment, interest rates etc. This can have tremendous impact on opportunities, either create opportunities or make it difficult to convert the opportunity into a viable business. A great business plan should acknowledge the context in which it plans to operate and how the context helps or hinders the business. The business plan should clearly highlight how the management can handle an unfavorable context or how management can influence the context in a positive way.

d) Risk And Reward: Risk is part of every entrepreneurs life. Entrepreneurs need to acknowledge in the business plan how they can deal with moving targets such as people, context and opportunity. Similar to a well executed project, a good business plan is one which analyzes and identifies potential risks upfront and details its risk mitigation plan. As far as reward (for the investor) is concerned, multiple exit options should be presented.

My all time favorite start up success story.. Hats off to Larry Page and Sergey Brin

As you begin to do some market research and narrow down to specific business ideas, Heres some great questions to ask yourself on business viability of your product /service
(Reference: Software Product Management Essentials , Alyssa S.Dver
And Harvard Business Review on Entrepreneurship)

a) Why is the product unique?
b) What benefits does it bring to the people who use it? What happens if they don’t use it?
c) What other products are available that compete directly or indirectly with the product?
d) Are there other ways for potential customers to achieve the same results if they don’t use the product?
e) What type of people will buy the product? What other products do these people buy? How do they make decisions about buying this product or service?
f) How will the product/service be priced?
g) How much does it cost to produce the product (manufacturing cost), cost to acquire a customer?Cost to support a customer? Retain a customer?
h) Reach all identified customer segments (Marketing).

I have been busy reading up on a few articles and resources on how to start a software or high tech company and decided to share the resources i obtained :

Books:

a) High Tech Start Up, Revised and Updated: The Complete Handbook For Creating Successful New High Tech Companies

b) High-Tech Entrepreneur’s Handbook: How to Start & Run a High-Tech Company

c) Zero-to-IPO

d) Betting It All: The Technology Entrepreneurs

I will be posting reviews of these books shortly.

Also, here are some great articles from the web:

a) Building your own startup technology company part 1

b)Building your own startup technology company part 2

c) Building your own startup technology company part 3

d) Building your own startup technology company part 4

e) Business basics for Engineers-Great read

I created a new category ‘Tech Trends’ to post some of my findings of my market research. I may also share some business ideas in the tech space, my own as well as those posted by others.

To begin with, heres a great article on Venture Beat about Tech trends for 2009 and beyond Tech Trends

The key technology trends to watch for?

- PC and online gaming (currently 9.5 % of a $9.5 billion market). Can soon start effecting sales of
console games such as WII..
- Surface computing that provides a touch screen interface such as that provided by Hewlett-Packard’s touchsmart pc. I love the idea that i may have a touchscreen to place my order at a restaurant table : -)
- Increased online ad spending ..8.8 percent growth in 2009 and 10 plus percent growth in 2010 ..$25 billion increase or more in a $157 billion market (US only).. Get your share of this big pie..It definetly looks yummy…(Source: Emarketer).

I intend to focus on building enterprise software that will be leveraged by large companies, or on the other end of the spectrum, software that can be leveraged by individual users worldwide..Im still undecided on the potential for each, but heres some trends that CIOs are keeping tabs on:

6 Emerging trends CIOs should watch for

I came across an interesting post about the typical profile of the tech entrepreneur in the US
A Profile of the US tech entrepreneur

It highlights some interesting statistics about tech-entrepreneurs:

- Most start their companies around age 39
- 92 % received a bachelors degree, 30 % masters and 10 % ph.ds.
- 45 % start their firm in the same state that they received their degree
- Most start ups averaged a revenue of $5.7 million and employed around 42 workers.

I am in my early 30s, and hold a masters degree, but have moved away from the state where i earned my degree. I don’t live in the silicon valley, nor am i in a city well known for tech startups.

Whats your profile? I would love to hear your comments on your background, what age you started your company etc..

Heres a first stab at the various goals/milestones and time lines i have set for launching my company..Actual dates may change based on how things shape up.

Goal Target Date
Market Research 5/2009
Opportunity Validation 6/2009
Business Plan 9/2009
Software Prototype 6/2010
Incorporate 7/2010
Build Team 12/2010
Go to Market 12/2010
Get to $1 Million Sales 12/2012
Raise Angel Funding 1/2013
Expand Revenues to $10 Million Sales 1/2015
Raise Venture Capital 1/2015
IPO 1/2016
Expand Revenues to $100 Million Sales 1/2017

A business that offers valuable solutions to their customers is most likely to whether the competition.

Most successful tech companies such as microsoft, eds, sas have adopted the solution selling technique which provides a complete sales architecture and framework, helping companies interface better with their customers and with the members of their own organization

The new Solution Selling technique

Great resource:

The Business of Software: What Every Manager, Programmer, and Entrepreneur Must Know to Thrive and Survive in Good Times and Bad

offers a comprehensive overview of the software business and how the right approach is key to the success of technology companies