EUI 2024 - Dr Ahmed Abdelhamid Workshop PDF

STARTUP 101 Workshop Dr. Eng. Ahmed Abdelhamid MD W2, MD K1 PART 1: UNDERSTANDING A BUSINESS PLAN THE PROFESSOR PLAN … What do you think of when you hear the word business plan? What is it? Who writes it? Who/When reads it? WHAT IS A “BUSINESS PLAN”? §...

STARTUP 101 Workshop Dr. Eng. Ahmed Abdelhamid MD W2, MD K1 PART 1: UNDERSTANDING A BUSINESS PLAN THE PROFESSOR PLAN … What do you think of when you hear the word business plan? What is it? Who writes it? Who/When reads it? WHAT IS A “BUSINESS PLAN”? § Business Plan A business plan is a written narrative, typically 10 to 35 pages long, that describes what a new business plans to accomplish. § Dual-Use Document For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. PRACTICAL SAMPLE SlideShare: https://www.slideshare.net/PitchDeckCoach/airbnb-first-pitch-deck-editable SOME TOPICS TO COVER IN YOUR BUSINESS PLAN 01 02 Title The Problem/Opportunity 03 04 Value proposition The Technology 05 Market & Go-2-Market Plan 06 Business Model 07 Competitive Analysis 08 The team 09 The Financials 10 Current Status Source: KUL R&D Guidelines PART 2: WHO READS A BUSINESS PLAN? WHO READS THE BUSINESS PLAN—AND WHAT ARE THEY LOOKING FOR? There are two primary audiences for a firm’s business plan Audience What They are Looking For A Firm’s Employees A clearly written business plan helps the employees of a firm operate in sync and move forward in a consistent and purposeful manner. Investors and other external stakeholders A firm’s business plan must make the case that the firm is a good use of an investor’s funds or the attention of others.  WHO READS THE BUSINESS PLAN—AND WHAT ARE THEY LOOKING FOR? Other types? Grants Incubators/Accelerators Family offices Banks Crowd Funds Venture Debt Source: THE ENTREPRENEUR'S NEW CLOTHES (OR, DIFFERENT TYPES OF INVESTOR) LINK THE DATA ROOM MARKET NOTE: DIGITAL DATAROOMS Check them out… https://www.notion.so/Data-room-803bee16307d462bb2854109fd703d8d https://dealroom.net/blog/the-importance-of-a-virtual-data-room-index-and-folder-structure https://dataroom-rating.us/fundraising/ https://www.ycombinator.com/library/3h-series-a-diligence-checklist PART 3: GUIDELINES FOR WRITING A BUSINESS PLAN GUIDELINES FOR WRITING A BUSINESS PLAN 1 OF 5 Structure of the Business Plan ­ To make the best impression a business plan should follow a conventional structure, such as the outline for the business plan shown in the chapter. ­ Although some entrepreneurs want to demonstrate creativity, departing from the basic structure of the conventional business plan is usually a mistake. ­ Typically, investors are busy people and want a plan where they can easily find critical information. COPYRIGHT ©2016 PEARSON EDUCATION, INC. 6-15  GUIDELINES FOR WRITING A BUSINESS PLAN 2 OF 5 Structure of the Business Plan (continued) ­ Software Packages ­ There are many software packages available that employ an interactive, menu-driven approach to assist in the writing of a business plan. ­ Some of these programs are very helpful. However, entrepreneurs should avoid a boilerplate plan that looks as though it came from a “canned” source. ­ Sense of Excitement ­ Along with facts and figures, a business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture.  GUIDELINES FOR WRITING A BUSINESS PLAN 3 OF 5 Content of the Business Plan ­ The business plan should give clear and concise information on all the important aspects of the proposed venture. ­ It must be long enough to provide sufficient information yet short enough to maintain reader interest. ­ For most plans, 25 to 35 pages is sufficient? GUIDELINES FOR WRITING A BUSINESS PLAN 4 OF 5 Types of Business Plans GUIDELINES FOR WRITING A BUSINESS PLAN 5 OF 5 Recognizing the Elements of the Plan May Will Change ­ It’s important to recognize that the plan will usually change while written. ­ New insights invariably emerge when an entrepreneur or a team of entrepreneurs immerse themselves in writing the plan and start getting feedback from others. PART 4: OUTLINE OF A BUSINESS PLAN OUTLINE OF BUSINESS PLAN Outline of Business Plan ­ Most business plans do not include all the elements introduced in the sample plan; we include them here for the purpose of completeness. ­ Each entrepreneur must decide which elements to include in his or her plan.  SECTION 1: EXECUTIVE SUMMARY 1 OF 2 ­ The executive summary is a short overview of the entire business plan. ­ It provides a busy reader with everything that needs to be known about the new venture’s distinctive nature. ­ An executive summary shouldn’t exceed two single-spaced pages. Usually one is enough. ­ Even though the executive summary appears at the beginning of the business plan, it should be written last. ­ The plan itself will evolve as it’s written, so not everything is known at the outset. SECTION 1: EXECUTIVE SUMMARY 2 OF 2 Key LO In many instances an investor will ask for a copy of a firm’s executive summary and will ask for a copy of the entire plan only if the executive summary is sufficiently convincing. The executive summary, then, is arguably the most important section of a business plan. PRACTICAL NOTE Executive Summary Samples Source: https://www.valithea.com/portfolio/executive-summary/ SECTION 2: INDUSTRY ANALYSIS 1 OF 2 ­ This section should begin by describing the industry the business will enter in terms of its size, growth rate, and sales projections. ­ Items to include in this section: ­ Industry size, growth rate, and sales projections. ­ Industry structure. ­ Nature of participants. ­ Key success factors. ­ Industry trends. ­ Long-term prospects.  MARKET NOTE Porter's Five Forces is a framework for analyzing a company's competitive environment. Porter’s framework, is commonly used as an Industry Analysis guideline More info: LINK  MARKET NOTE 2 SWOT ANALYSIS is commonly used as well. SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential. More: LINK  SECTION 2: INDUSTRY ANALYSIS 2 OF 2 Key LO Bigger market or Niche? Before a business selects a target market it should have a good grasp of its industry—including where its promising areas are and where its points of vulnerability are. The industry that a company participates in largely defines the playing field that a firm will participate in. Market example: Amazon.com vs Amazon.eg source: Market Size and Why it matters: LINK  SECTION 3: COMPANY DESCRIPTION 1 OF 2 Company Description ­ This section begins with a general description of the company. ­ Items to include in this section: ­ Company description. ­ Company history. ­ Mission statement. ­ Products and services. ­ Current status. ­ Legal status and ownership. ­ Key partnerships (if any). SECTION 3: COMPANY DESCRIPTION 2 OF 2 Key Insights While at first glance this section may seem less important than the others, it is extremely important. It demonstrates to your reader that you know how to translate an idea into a business. SECTION 4: MARKET ANALYSIS 1 OF 9 Market Analysis ­ The market analysis breaks the industry into segments, with focus to the specific segment (or target market) to which the firm will try to appeal. ­ Items to include in this section: ­ Market segmentation and target market selection. ­ Buyer behavior. ­ Competitor analysis.  THE MARKET Describe market size, growth, trends and maturity Industry and market segment data Market challenges What market segment(s) are served? What is the potential of the product/service in the market? Locate the service in the ecosystem & value chain Estimated Revenue Growth in graphic or tabular form Market share projections are optional Source: Market segmentation: What it is, Types and Examples: LINK Source: How to Segment Customers A Step By Step Guide For Growth: LINK YOUR ADDRESSABLE MARKET Source: https://buildsuccessfulstartups.com/total-addressable-market/ COMPETITIVE ANALYSIS Competitive Matrix Feature 1 Feature 2 Feature 3 Feature 4 My product ü ü ü ü Competitor 1 ü û û û Competitor 2 û ü û û Competitor 3 û û ü ü Competitive positioning Your product Comp 1 Flexibility Comp 3 Comp 2 Functionality SECTION 4: MARKET ANALYSIS Key LO Most start-ups do not service their entire industry. Instead, they focus on servicing a specific (target) market within the industry. [Market Segmentation, Market Share] It’s important to include a section in the market analysis that deals with the behavior of the consumers in the market. The more a start- up knows about the consumers in its target market, the more it can tailor its products or services appropriately. SECTION 5: THE ECONOMICS OF THE BUSINESS 1 OF 2 ­ This section addresses the basic logic of how profits are earned in the business and how many units of a business’s profits must be sold for the business to “break even” and then start earning a profit. ­ Items to include in this section: ­ Revenue drivers and profit margins. ­ Fixed and variable costs. ­ Start-up costs. ­ Break-even chart and calculations.  MARKET INSIGHT Will Intel Eventually Buy IBM Electronics? Source: LINK SECTION 5: THE ECONOMICS OF THE BUSINESS 2 OF 2 Key Take-aways Two companies in the same industry may make profits in different ways. One may be a high-margin, low- volume business, while the other may be a low-margin, high-volume business. It’s important to check to make sure the approach you select is sound. Computing a break-even analysis is an extremely useful exercise for any proposed or existing business.  SECTION 6: MARKETING PLAN 1 OF 2 ­ The marketing plan focuses on how the business will market and sell its product or service. ­ Items to include in this section: ­ Overall marketing strategy. ­ Product, price, promotions, and distribution. ­ Sales process (or cycle). ­ Sales tactics. SECTION 6: MARKETING PLAN 2 OF 2 Key Insights The best way to describe a start-up’s marketing plan is to start by articulating its marketing strategy, positioning, and points of differentiation, and then talk about how these overall aspects of the plan will be supported by price, promotional mix, and distribution strategy. It’s also important to discuss the company sales process. SECTION 7: DESIGN AND DEVELOPMENT PLAN 1 OF 1 ­ If you’re developing a completely new product or service, you need to include a section in your business plan that focuses on the status of your development efforts. ­ Items to include in this section: ­ Development status and tasks. ­ Challenges and risks. ­ Projected development costs. ­ Proprietary issues (patents, trademarks, copyrights, licenses, brand names). SECTION 8: OPERATIONS PLAN 1 OF 1 ­ Outlines how your business will be run and how your product or service will be produced. ­ A useful way to illustrate how your business will be run is to describe it in terms of “back stage” (unseen to the customer) and “front stage” (seen by the customer) activities. ­ Items to include in this section: ­ General approach to operations. ­ Business location. ­ Facilities and equipment. SECTION 9: MANAGEMENT TEAM AND COMPANY STRUCTURE 1 OF 2 Management Team and Company Structure ­ The management team of a new venture typically consists of the founder or founders and a handful of key management personnel. ­ Items to include in this section: ­ Management team. ­ Board of directors. ­ Board of advisers. ­ Company structure. SECTION 9: MANAGEMENT TEAM AND COMPANY STRUCTURE 2 OF 2 Add a simple structure of your organization if needed  SECTION 10: OVERALL SCHEDULE 1 OF 1 Overall Timeline ­ A schedule should be prepared that shows the major events required to launch the business. ­ The schedule should be in the format of milestones critical to the business’s success. ­ Examples of milestones: ­ Incorporating the venture. ­ Completion of prototypes. ­ Rental of facilities. ­ Obtaining critical financing. ­ Starting production. ­ Obtaining the first sale. SECTION 11: FINANCIAL PROJECTIONS 1 OF 2 ­ The final section of a business plan presents a firm’s pro forma (or projected) financial projections. ­ Items to include in this section: ­ Sources and uses of funds statement. ­ Assumptions sheet. ­ Pro forma income statements. ­ Pro forma balance sheets. ­ Pro forma cash flows. ­ Ratio analysis. SECTION 11: FINANCIAL PROJECTIONS MARKET INSIGHT ­ The projections in early-stage startups are often un-realistic. But they give investors an indicator about the founder’s understanding of key drivers, and costs. ­ In Practice, for an early-stage startup, a simple excel sheet, is sufficient. Ex: Startup Financial Plan Template: LINK THAT’S ALL PART 5: PRESENTING THE BUSINESS PLAN TO INVESTORS MARKET NOTE: MEETING YOUR INVESTOR Executive summary is usually summarized even further to an “elevator pitch” Most tourists booking online care about price- and hotels are one of the highest costs for when traveling. On the other hand, platforms like Couchsurfing have proven that over half a million people are willing to lend their couches or spare bedrooms. We have created a platform that connects travelers with locals, letting them rent our rooms, or even entire places. Travelers save money, and locals can monetize their empty rooms- we just take a 10% commission. Source: https://slidebean.com/blog/elevator-pitch-examples-and-templates  PRESENTING THE BUSINESS PLAN TO INVESTORS 1 OF 2 Twelve PowerPoint Slides to Include in an Investor Presentation 1. Title Slide 7. Marketing and sales 2. Problem 8. Management team 3. Solution 9. Financial projections 4. Opportunity and target market 10. Current status 5. Technology 11. Financing sought 6. Competition 12. Summary PRESENTING THE BUSINESS PLAN TO INVESTORS 2 OF 2 The Oral Presentation ­ The first rule in making an oral presentation is to follow directions. If you’re told you have 15 minutes, don’t talk for more than the allotted time. ­ The presentation should be smooth and well-rehearsed. ­ The slides should be sharp and not cluttered. Questions and Feedback to Expect from Investors ­ The smart entrepreneur has a good idea of the questions that will be asked, and will be prepared for those queries.  WHAT TO INCLUDE IN ULTIMATE USE OF FUNDS? https://medium.com/alliedvp/how-to-create-the-ultimate-use-of-funds-slide-for-your-pitch-deck-e8150b759d3c VALUATION 2/5: MULTIPLE VC firms are usually more simple. Use a multiple of Revenue ORIGINAL SHOTS 10 HACKS FOR ORIGINALS AND INNOVATORS TRANSFORMING IDEAS TO INNOVATION II Dr. Eng. Ahmed AbdelHamid THIS LECTURE IS ABOUT THIS TRIP… YOUR NEXT BIG IDEA STORY YOUR 100S COMPANY KIT Workshop WHAT WILL WE DISCUSS TODAY? Original Shots  ORIGINALS DILEMMA Fix the status quo, or Build the Future? Heal the current world, or Dream a new one? Go with the Flow, or Scout a different future? Innovate or Imitate? Build or Acquire……  10 HACKS: 1. Conformity Vs Originality 2. Quantity Vs Quality 3. Procrastination and Productivity 4. Weakness and Leverage 5. Protect Your Downside 6. When the Radical Idea becomes Normal 7. Collaborating with Opposing Opinions 8. Disguise your Ideas to Gain Support 9. Domain Experience then Broaden 10. Tomorrow’s War is Different than Today’s War HACK 1: CONFORMITY VS ORIGINALITY HACK2: QUANTITY VS QUALITY Which one matters most for “Originals”? WHAT DO THEY HAVE IN COMMON? Studio albums 36 Plays 10 Music videos 40+ TV Shows 30+ Singles 90+ Movies 103+  HACK 2: IT’S NOT AN APPLE-TREE GAME. QUANTITY MATTERS Traditionally people work by saying ‘Quality over Quantity’, however dealing with ideas is different than this. Both matter. Pablo Picasso: 2800 Ceramics, 1800 Painting, 1200 sculptures, 1200 drawing Einstein: 147 articles between 1901 and 1955(50+ years). received 1,564 citations during his lifetime. In 1905 published four groundbreaking papers that revolutionized scientific understanding of the universe. Beethoven: disagreed with music experts 33% of the time when ranking his best and worst composition HACK 3: PROCRASTINATION AND PRODUCTIVITY  HACK 3: PROCRASTINATION IS A SOURCE OF CREATIVITY Procrastination is not an enemy if you are thinking Martin Luther King Jr.’s “I have a dream” line was partially improvised. Someone asked him to “Tell them about the Dream” Procrastination is part of your strategy in idea production Leonardo da Vinci was a massive procrastinator. He started painting the Mona Lisa back in 1503 but then abandoned the project to work on something else. He didn’t actually finish the Mona Lisa until 16 years later! During this time, da Vinci experimented with optical illusions and new painting techniques.  HACK 4: WEAKNESS AND LEVERAGE What is Leverage? Can you Leverage time, relations, people? Acknowledge your weakness and manage it: ­ Partnerships ­ Hiring ­ Avoidance ­ Honesty  HACK 5: PROTECT YOUR DOWNSIDE Do you like lottery tickets? Should you drop out of the University? Can you Build your idea in one shot or in stages?  HACK 5: PROTECT YOUR DOWNSIDE Can you Fake it? Can you copy it? Can you buy it?  HACK 5: PROTECT YOUR DOWNSIDE Should you leave your university/work and take the leap of faith? ­ No. 95% fails, 5% of the 5% makes it from good to great. Don’t leave your day job, or university ­ Pierre Omidyar worked in his day job even after founding eBay and only made it full time nine months after the company’s first auction launched ­ Larry Page tried to sell Google in 1997 and we wouldn’t know what would have happened if that had come through ­ Bill Gates who took a leave of absence from Harvard to work with Paul Allen and didn’t just quit straight ­ Richard Branson put it nicely when he said “It is only by being bold that you get anywhere. If you are a risk-taker, then the art is to protect the downside.”  HACK 6: WHEN THE RADICAL IDEA BECOMES NORMAL Introduce your idea in Stages (3-5) Scope the needs/questions between stages Understand work/system politics Use Time Keep it Simple and Familiar Keep pushing Being First does not mean Being Better HACK 7: COLLABORATING WITH OPPOSING OPINIONS Groupthink is a negative phenomenon that occurs when people within a group prioritize avoiding conflict by reaching consensus over making the optimal choice. One way to effectively challenge groupthink is to include individuals who are very different but are willing to work towards a common goal. You may also consider “Bridging” different people HACK 7: COLLABORATING WITH OPPOSING OPINIONS DIFFERENT TALENTS  HACK 8: DISGUISE YOUR IDEAS TO GAIN SUPPORT IQ is not only Technical Ex: When to Share an Idea?  HACK 8: DISGUISE YOUR IDEAS TO GAIN SUPPORT “You will need to win your peers over. Avoid horizontal hostility.” “Avoid trying to change people’s attitudes entirely. Instead, you should be aiming to connect with the values of others within your group and attach your idea to those values. Make them adopt your ideas.” “Keep people interested, but you must not go over the top.” “You may and should be sneaking your ideas into conversations, then projects.”  HACK 8: DISGUISE YOUR IDEAS TO GAIN SUPPORT “Meredith Perry is the inventor of wireless charging equipment. Upon presenting this idea to physics professors and engineers, she received very little support. Therefore, Perry changed her approach. Perry disguised her idea and just told them that she wanted to design a transducer, rather than one that sent power wirelessly. This idea obtained considerably more support, as it sounded less challenging. Perry obtained several funders. Subsequently, she started her company, uBeam, which now provides innovative wireless charging Source of Most of the solutions.” ideas in this lecture HACK 9: DOMAIN EXPERIENCE THEN BROADEN Magic Happens Here  HACK 10: TOMORROW’S WAR CAN NOT BE WON WITH TODAY’S WEAPONS! Ex1: Who Can win WWII? Ex2: How to build a transistor? Ex3: AI Data Scientists are paid USD 350K/Year, will it continue? Ex4: Data Networking + Security, WWIII? Your choices today must not be affected by your peers’ choices Read more to challenge your ignorance, Build a different future vision. Study German/Languages/SW!  HOMEWORK, YOUTUBE-WORK This Lecture: ­ Originals, Book Summary: Video: https://www.youtube.com/watch?v=utIMVnutzAk Text: https://www.getstoryshots.com/books/originals-summary/ ­ Loon Shots, Book Excerpt: https://www.youtube.com/watch?v=_S7tnHTncug ­ Competing Against Luck, Book Summary: https://www.youtube.com/watch?v=auedNplxnu8 Next Lecture: ­ Youtube: “Venture Capital  QUIZ: GOT SOME HACKS ? THANKS