Should You Really Be A Startup Entrepreneur?

Nice read.

http://techcrunch.com/2011/01/30/should-you-really-be-a-startup-entrepreneur/

Problems with Pitching

I would have to agree with Brett about the problems related to pitching your idea. My problem, and I think it has probably always been this way for me, is that I don't want to distill my ideas down enough to make them easily to relate to someone who's only interested in a few moments of listening. This is complicated by the fact that, before now, I have never really had to limit, to distill what I have to say because I've been in an academic atmosphere where talking at length about your ideas (e.g. undergraduate thesis) is encouraged.

I also feel like, when I am forced to pitch an idea in a few words, I forget parts of what I wanted to say and really obscure my general idea. For presentations class last year I struggled with this: public speaking gets to me and in my first presentation I basically left out a section of my work that needed to be communicated.

To practice my elevator pitch, therefore, I have decided to focus on doing exactly what I did for the concept writeup. I basically have a four point operations plan which involves 1. acquisition
2. renovation 3. renting 4. funding. I think being able to put together a four word bulle point plan like that is essential because it serves as a decent takeaway for the person you are giving the pitch to. The goal in my elevator pitch will be to get that four point plan out of the way in about a minute, leaving another minute to explain the social worth of my venture.

What Do I Need?

[Posting by Barbara Nwaokobia]

I wanted to share with the class that relates to topics for this week.

1. 10 tips on pitching your social venture

http://www.nextbillion.net/blog/2008/10/17/social-capital-markets-10-tips-on-pitching-your-social-venture

2. Diary of a social venture start up, polishing your presentation

http://www.good.is/post/diary-of-a-social-venture-start-up-polishing-your-presentations/

I guess my question after doing the readings and reading these blogs would be basically, as a start up social venture, you really haven't proven anything, you are probably not worth very much and you want someone to invest in you, so what kind traits do you think you have as an individual that would help actually close the deal and get you your required funds and have the article helped you in anyway build your confidence if you really have to go and give a presentation or pitch an idea to an investor?

Electronic payment fees impacting profitability

http://money.cnn.com/2010/12/17/smallbusiness/small_business_swipe_fee_savings/index.htm

I found this article interesting as it represents an often overlooked stumbling block for many small businesses that rely on electronic financial transactions. For those considering the use of debit or credit card payments as part of their business model, the fees paid by stores for using the network each time a card is swiped can drastically reduce the profitability of a sale. This article highlights the struggle of a convenience store owner near my home who has struggled to remain profitable due to the current fee structure.

Although his business is likely very different than those we will be developing in class, I see one very key similarity. The fees tend not to weigh the actual transaction amount, but accrue each time a sale is processed. For a social venture endeavoring to meet the needs of many people, typically operating with narrow margins on low cost goods, careful considerations need to be made when considering how customers will pay for your business’ goods or services. While electronic payment is easy and flexible, causing it to be glorified as a superior solution for many businesses, the costs might not outweigh the benefits in some cases.

The article discusses how new legislation may be enacted in the near future to make these fees less burdensome on small businesses. If electronic transactions are a consideration in your business mode, payment methods may represent an important aspect of how your business will change over time. As laws change and the cost structure shifts, it may be a great example of how a business model can plan strategic transitions to best take advantage of the current market environment.

More about pitching

I agree with my classmates that the articles were interesting and useful.

I thought about what we discussed a couple of lectures back and could not help but wonder if there are any correlations between different pitcher types and Myers-Briggs attributes. I am an EXTJ in Myers-Briggs terms and could potentially see myself as a showrunner if I get enough experience.

I also found the concept of perceptual mapping very interesting. Last spring I took class called "Decision Tools for Engineering Design and Entrepreneurship" and some of the topics we handled overlapped with perceptual mapping. For those who are interested in product modeling, differentiation and optimization via econometric tools I'd suggest doing some readings on discrete-choice modeling ad conjoint analysis.

Mistakes to Avoid in Elevator Pitch

How to Make Your Case in 30 Seconds or Less and How to Pitch a Brilliant Idea both cover some good tips on how to make a pitch work. Maybe it’ll help us seal a deal by also looking at the mistakes that we should watch out when pitching an idea.

Cannan Partners, a venture capitalist, warns entrepreneurs of some mistakes not to make. For example, fail to explain clearly what your company does, too arrogant to let your teammates speak during the presentation, avoid questions from investors, insist that your venture is competition proof, not understand and describe the target market, not knowing the numbers of future financials.

They also suggest that during the first meeting, building a relationship with the potential investors is crucial, as it is a long-term relationship. I thought this is very interesting. Sometimes we may be too focused on the pitch itself to forget that we are building a long-term relationship with potential investors. Regardless of how the pitch itself works out, venture capitalists who usually have industry expertise can give us valuable feedback on where opportunity and weakness lie. For Cannan, they said that they are looking for a team that they can trust and work together. Thus they want to find out if both are a good fit for each other during the first meeting.

Back to the mistakes not to make. One was curious to me: avoid questions from investors. The questions may concern about risks or problems that impose challenges to have investors walk away from the venture. Or entrepreneurs do not have an answer for that question, either due to lack of preparation or lack of consideration. Hypothetically, what will you do under these circumstances?

Being a risk-adverse to neutral person and prone to telling the truth just for the sake of future trust, I personally tend to share the real story with investor. But it is a venture that we’ve worked on for so long and we can’t let it go away. Maybe there’s something we can do about it. Bending the rules? But how?

A side note: just came across another article on 10 Questions Venture Capitalists and Angel Investors Are Going to Ask. Hope it’s helpful.
http://www.instigatorblog.com/10-questions-venture-capitalists-and-angel-investors-are-going-to-ask/2007/07/20/

Positioning

This week’s readings focused on topics and tips related to “Building a ‘Support Magnet’: Pitching, Positioning, and Presenting.” Never having formally pitched an idea before, I found the articles quite interesting and informative. Although I appreciated all of the tips and tricks mentioned in the article, the most important take away I garnered from the readings was the notion of Product Positioning. Since companies currently exist that are similar to my proposed social venture, I recognize the importance of positioning my product correctly in order to positively differentiate myself from the current market.

In trying to discover additional tips on doing so, I came across the following article, which is full of tips and tricks for positioning your product correctly: http://www.adcracker.com/position/Positioning.htm. The site also offers the following advice:
• The positioning statement: It's all in your mind
• Workshop: How to create a positioning strategy
• 10 positioning strategies - from classic to cutting edge
• A positioning reality check
• Creative positioning tips

Unfortunately, these items are only accessible for a fee, but depending on the seriousness with which one is pursuing their social venture, the cost may be well worth it.

Realizing that the additional information available on the site was only available at a cost, I wondered if it would be worth it for me to purchase it down the line. Similarly, I contemplated whether the benefit of hiring a marketer to handle the positioning and other related marketing aspects of my venture would be worth the expense. After pondering this, I concluded that yes, it would be worth it based upon the possible added market share, public image, etc. Do you agree? Or do you think that a venture could be just as successful without bringing a costly marketer on staff? Is it worth the expense? Feel free to share your thoughts.

Reflections on Pitching

Boiling down a concept to a crisp and clear 30 second soundbyte has always been something very difficult for me. I always feel like those types of short pitches are really phony--whenever I've heard them delivered by others, they sounded rehearsed and artificial. The readings provide a lot of good insight into how to organize the pitch and deliver it, but the hardest part is to do it genuinely.

Personally, I've always found that the more I practice something, the less genuine it becomes. Maybe that just means I'm not a good actor, but I thing there's something more to it than that. To really be able to explain something very clearly, one must be very knowledgeable about it and truly be an expert. Perhaps the reason it's so hard is because when an idea is still developing in one's mind, one isn't truly yet an expert with it.

Like Enes, I'm presenting onlyinpgh at the New Ventures Competition this Friday, and I just had an experience that speaks a little to this. Last semester I completed a write-up of the business idea that ended up being around 15 pages (10 pages of text with 5 pages of appendices). Over the weekend all the people in the competition had to submit a business plan, but the maximum length was 5 pages total.

Cutting the plan down by two thirds was very difficult and really forced me to think about what was important to say and how to say it as clearly and concisely as possible. After finishing the 5-page document, I looked back at the 15-pager to see if I missed anything important or if key details had been lost by condensing it so much. Nothing was lost at all, and if anything the arguments were much stronger in the shorter version.

I think it's the same with pitching. When we get our pitches ready for class I'm going to write out what I want to say and then time myself. Then I'm going to force myself to figure out how to say the same thing in half as much time...and then probably try to halve it again because I have a tendency to ramble... :)

Week 4: About Pitch (Young-Suk)

I just read the articles regarding Pitch.

In few words:

30 seconds of opportunity can change your business, if you are an entrepreneur, always be prepared!

So elevator pitch can be really powerful.

It is about grabbing attention of listeners, convincing them with the promise of mutual benefit, and setting the stage for.

The article tells about key tips. For people that are not naturally eloquent (as I am), best thing to do would be to practice and practice.

I may not be an showrunner or artist but as a neophyte, I better practice, and be prepared.

Young-Suk.

How to pitch a brilliant idea

The article titled 'How to Pitch a Brilliant Idea' by Kimberly D.Elsbach is an article which I found to be persuasive and incisive. I appreciate & now understand the importance of making a good first impression on your investors. I also read through the way the author categorizes pitchers into three broad categories, 'The Show-runners', 'The Artist' and 'The Neophyte'. This is something, as an engineer, I am very uncomfortable with.  Why?
Well Lets look at this from the other end. Lets say you have an investor who gets blown away by a great pitch. Do you really want such an person to invest in you? Remember, you would be answerable to him probably for the time you have your company in existence. A true investor (and this is my personal opinion) is one who would not form hasty opinions and would judge an idea/concept for what it is. Of course, and your ability as a leader. I am for one, very very weary of Show-runners, Showmen and the likes.Creating stunts is not something I would be too comfortable doing. This does not downplay the importance of a good presentation and the energy that you must exude in order for the investor to be interested in you.
I guess in my view, to have a great idea, to have the passion and the know-how about your product/service would definitely get the right people to invest in you and not people who are swayed to the tunes of a show-runner.

The persuasive art of an elevator pitch

A number of articles usually talk about what we have to do in an elevator pitch, but never what can be avoided or what common mistakes people make. The article by Kimberly D.Elsbach in the Harvard Business Review provides much insight into the “art” of elevator pitches. I especially liked the section on how to kill your elevator pitch!

The different category types ‘the showrunner’, ‘the artist’ and ‘the neophyte’ are useful in understanding which category one falls into and identifying the strong and weak areas of one’s personality. The first time I gave an elevator speech was for a presentation skills class. The situation was to make a pitch to a client who would be a potential employer. Since, I find it very hard to talk about myself I decided to sing a song which described some of my qualities. I don’t think it was a great idea but it was a good experience. I think I fall in the category of Neophytes, I am too shy to talk about myself and want to involve the other person into the conversation too. This time when I work on my elevator pitch I plan to speak more openly and go beyond what I have been doing before. In my opinion one of the hardest thing to do is to talk and simultaneously convince someone about yourself and your idea in a few minutes!!!

I have been listening to a number of elevator pitches online and been pondering if an elevator pitch should be technical (depending on the audience) or just catchy enough to attract the attention of the audience? What do you guys think?

How to pitch an idea

I am pitching my venture idea at the Cross Campus Venture Competition at Tepper next Friday. This said we were provided some articles to better our pitch. I wanted to share them with you.

• http://www.slideshare.net/hnshah/mintcom-prelaunch-pitch-deck
• http://www.scribd.com/doc/19496540/MustHave-Slides-for-a-Venture-Capital-PowerPoint-Pitch-Deck
• http://navfund.com/blog/5-slides-we-see-in-every-pitch-deck-or-%E2%80%9Cthere%E2%80%99s-a-slide-for-that%E2%80%A6-%E2%80%9D
• http://www.capitalfactory.com/2009/07/2009-venture-capital-investor-pitch-deck-outline-example.html
• http://blogs.forbes.com/work-in-progress/2010/11/22/keys-to-crafting-a-winning-venture-capital-pitch/
• http://navfund.com/blog/tips-for-a-good-first-pitch

Here are the details of the event, I think it would be great to attend and watch some of the pitches and build some insight on what is being done right or wrong.

Date Friday - February 4, 2011

Location Posner Hall, Tepper School of Business

Time Coffee & Danishes: 8:30 am – 9:00 am (Main Lobby)

Competition: 9:00 am to 12:00 pm (Rooms 151, 152, 153, 146, Cooper)

Lunch & Winners Announced: 12:00 pm to 1:00 pm (open to competitors, judges, and sponsors only)

I haven't discovered any broad social innovation 'gold nuggets' to share here. Instead I feel value in sharing a few points of reflection I have come across in my market research. They may be a bit hard to digest but I hope my thought process could be seen as a 'mini-case study'

First, I came across a website that offers one of my marketable service points, an anti-theft tool

http://imidb.org/

They allow users in input information at their own will to register their instrument and provide details for it on the website. Additionally you can sell instruments on the website and it has vowed on its homepage to always be free. From there you can claim if it is stolen and flag it and alert authorities and you can sell instruments. One point of innovation I have found from this format is this format still has limited credibility. The database of instruments and their reliability is only as truthful as the reporters are, so in a way credibility isn't established much further than the status quo. In my reflection though, there is only so much more credibility in the data provided from receipts of past service records. So officially it would be sincerely hard to prove perfectly credible data, as only past services that were done commercially would be track able from a primary source.

Second I found a website that is tackling a specified market of musical instruments similar to my approach. Axe Fax

http://www.axefax.com/index.php

They offer anti theft protection in form of micro chips with easy install, which is viable for guitars. Additionally guitars can be frequently stolen so this service is pretty smart and they have all the products needed for protection for sale by them. They are the sole distributors of all this technology so they have dominated the guitar market. Once again a short finding I see is that they take data input from musicians themselves. That plays along the status quo exactly like instrument dealing works, word of mouth. They can seem credible, protecting the little guy, at a fair price but still data input is left up to narration from people.

One thing I think neither website tackle are valuation and credibility. The format very close to my original idea, especially on low budget, yet I do not foresee them going anywhere fast.

Still working on the social impact factor I think a possible easy target populations are: young talented poor musicians (I dare say that is most of them :) ) trying to start their major education or professional career and providing pertinent information to guide them to the best valued, best matching instrument with history reports and networking ( late high school and early college aged). Often a difficulty is connecting person A to seller B.

Bianca's Building Block #1

With this week's topic focusing on pitching, positioning, and presenting, the related articles provided much incite to these topics. What I found most useful was the information regarding pitching your idea. As I have never "pitched an idea," I identified and took away several characteristics that successful pitchers share:

-Succinctness: with only 30 seconds to essentially "sell yourself," a successful pitcher's idea is clear enough that the catcher can understand it and become interested

-An art of give & take: a successful pitcher must give the most important details of their venture while the now interested catcher will take the details and bring them to life

-Playing off emotions: this is key as the pitcher must interest the catcher with their idea; drawing from an emotional moment that pulls the catcher into this game of cat and mouse

-Engaging: the pitcher must successfullyand wholly engage the catcher in their idea in order to "make the sale"

-Adaptable: the pitcher must be quick to adapt themselves to the type of environment that they find themselves in with a potential pitcher. You never know who you may run into and where you may run into them. Just think, you may be the next person to just casually see Warren Buffet walking down the sidewalk!

-Storyteller: the pitcher must guide the catcher through the story of why their idea is important and what it could essentially do for the catcher

-Use of imagery: the pitcher must be creative in a way that makes the pitcher imagine their idea and make it come to life in their own heads!

-Creativity: no matter what "type" of successful pitcher you may be, in the end you creatively express your idea that "makes the sell" to the catcher

Now just ponder for a moment......do you think you possess these qualities that would make you a successful pitcher?

Australian of the year 2010

One of the professors at CMU-Australia just told me that a social entrepreneur was named Australian of the year, so I got excited and googled him. I thought should also share this info on our class website .

Simon McKeon , investment banker and recently appointed Chairman of CSIRO has been given the title of the Australin of the year - 2011 for his time to various charities and organizations. http://www.theaustralian.com.au/news/nation/give-more-and-feel-it-top-aussie/story-e6frg6nf-1225995097257.

Ted Talk : Solving Social Problems

I came across this talk and thought that I might share it here. The speaker covers a lot of examples and is not necessarily organized in thoughts. However what stood out from the entire talk is the portion between minutes 14:00 and 14:20. The speaker says that, "It is not sufficient if we solve the technology problem, but we need to solve the human problem as well". What he means to say is that we might have the best technologies available, what is equally or more important is to get people to adopt these technologies. This, says the speaker, is the 'Last Mile Challenge'.

http://www.ted.com/talks/sendhil_mullainathan.html

Welcome to CMU's Social Innovation Incubator!

Social innovation ventures are organizations that directly address a social need through their products and services and derive their financially sustainability through market-based activities rather than indirectly through socially responsible business practices such as corporate philanthropy, equitable wages, or environmentally friendly operations or through the “unrelated business” activities done by non-profits.  Like any entrepreneurial activity, social ventures require creative ideas, meticulous planning, focused execution, and the flexibility to withstand unanticipated challenges and competitive responses.  However, unlike a typical business start-up, they consider positive social impacts to be at least as important as financial returns.  As a result, social ventures can be distinctly different from “pure” business start-ups in a variety of ways including measures of performance, sources of investment capital, organizational form, and the ongoing attraction of talent and support.

This course is for students interested in learning how to start a social innovation venture.  While some participants may ultimately become social entrepreneurs, the course content is applicable to a wide variety of contexts in the public, private, and social sectors.  For example, future policy mavens, corporate bigwigs, nonprofit moguls, and “do good” investors will all find something to take away from topics covered during the semester.  

Since starting almost anything requires substantial effort and the need for financially sustainable solutions addressing the world’s (region’s, nation’s,…) most vexing problems is substantial, the primary mantra for this course will be “go big or go home” (and have fun at the same time), both financially and in the degree of potential social impact delivered by proposed ventures.