Startup Notes PDF

Engineering startup starting CORRADO PRIAMI IGNITING INNOVATION, DRIVING GROWTH  21 NOVEMBER 2024 08:29 DRAFT 0.1 Contents Preface...

Engineering startup starting CORRADO PRIAMI IGNITING INNOVATION, DRIVING GROWTH  21 NOVEMBER 2024 08:29 DRAFT 0.1 Contents Preface 3 1. Basics 4 Company structure and roles 7 Business model canvas 10 Financials 11 Key players 12 2. Communication 16 Content 16 Public speaking 19 Prepare, prepare, prepare 23 Slides 24 3. Team and leadership 27 Team lifecycle 27 Team building 28 Leadership 29 4. Business model 31 Business model 31 Metrics 35 The three it and market test 37 The valley of death 42 Production 44 Cost and revenue Structure 45 5. preBP — Business plan revisited 46 Simulations of inancials 46 Timeline 50 SWOT analysis 51 The “algorithm” 52 6. X-thinking tools 54 Design thinking - revisited 54 1 Engineering Startup Starting  f f                               21 NOVEMBER 2024 08:29 DRAFT 0.1 Visual thinking 56 Computational thinking 57 Systems thinking 58 7. Investors 60 Valuation 60 8. Recruitment 63 2 Engineering Startup Starting         21 NOVEMBER 2024 08:29 DRAFT 0.1 PREFACE The purpose of these notes is to introduce the basic concepts and terminology to talk about startups. The notes are not intended to substitute references for each of the arguments discussed, but as a short introduction to what needs to be managed by founders when they decide to start a business. These notes can be used like a tool for a reality check before starting the entrepreneurial journey. Building a venture and making it successful is never an individual task because no one can have all the competencies and overall all the time needed to manage the thousands issues that need to be critically examined and solved daily to run a business. This is why the title of the notes stresses the multidisciplinary approach that is always a must to launch successful startups. 3 Engineering Startup Starting   21 NOVEMBER 2024 08:29 DRAFT 0.1 1. BASICS startup is a company at the beginning of its operations1 that sells innovative products2 and is designed to grow fast. The addressed market must be huge3 to grow fast and the sales must be as independent as possible from the number of employees of the startup, i.e., the business must scale up easily with limited costs. A startup is not created to survive! A new barbershop is not a startup because the service is not innovative (many barbershops already exists and most of them operates the same way) and it cannot grow fast (the shop can serve the local community and the growth is also limited by the number of barbers in the shop)4. A new social media can be considered a startup because it can grow almost independently of the number of employers of the company. Innovation is the product of an invention with its commercialization (the product rather than the sum because there is no innovation without both components)5. An alternative and more recent de inition states that innovation is the process that takes ideas from inception to impact and where ideas are considered a match between problems and solutions6. Both de initions highlights the needs of making the invention available and to create value. The irst de inition seems to be more oriented to economic value, why the newer one shows that impact can be any kid as long as it produces a positive e ect on the society. A great example of innovation is the mouse for computers: an invention by Xerox Park, commercialized by Apple after Steve Jobs visit to the Park. The merit of the invention is due to Xerox Park, but their luck of commercialization of the mouse would have generated no innovation and no value would have been generated.7 Another great example is ice business. In the early days, people waited for the winter and then harvested ice. The irst big innovation in the industry was the ability to froze water so that ice factory can be built and ice delivered, so that ice men did not to wait for winter. The last innovation that almost 1 Usually a company is considered in its startup phase for the the irst ive years from the incorporation. Each geographic region has its own legal requirements for a company to be considered a startup. For instance, in Italy a company is considered a startup its company established from no more than 5 years and incorporated in Italy or incorporated in EU but with at least one subsidiary in Italy, with an income lower that 5 millions per year, that do not distribute and never distributed revenues, its main purpose is to distribute a product or a service with an high technological value, it is not a public company and it is not originated by merging, splitting or spin-o of other companies. Additionally, one of the following three requirements is needed for being considered an innovative startup: a) it invests at least 15% of the higher between costs and production value in research and development; b) at least 1/3 of employees has a Ph.D. or at least 2/3 of the employees have a master degree; c) its IP comprises at least one patent registered or licensed or one registered software. 2 Hereafter we use the term product to mean also service. 3 Huge here means from hundreds of thousands to millions of customers. 4 Paul Graham Blog. https://paulgraham.com/growth.html?ref=review. irstround.com 5 Bill Aulet, What is innovation. MIT OpenCourseWare, 2013. https://www.youtube.com/watch?v=oD7X3KvJAVk&t=3s 6 Fiona Murray. MIT’s approach to innovation. 2020. https://www.youtube.com/watch?v=YslNXdUCow4 7 Malcom Gladwell, Creativity. Nordic Business Forum, 2013. https://www.youtube.com/watch?v=t_k7XRr-se4 — listen to the story of the mouse. 4 Engineering Startup Starting  ff f f f f f f f f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 swiped out the industry was the personal refrigerator so that anyone can have is own ice factory8. There are many types of innovation9: of course technology innovation, but also process innovation, business model innovation, position innovation, other innovations. More generally, whatever invention that can produce value. The types of innovation can each belong to one of four c a t e g o r i e s o f innovation : incremental (when a better version of an existing product is distributed on an existing market), disruptive (when a completely new product — not existing before — is launched on an existing market, e.g., Net lix or Uber), architectural, lateral or adjacent (when existing product is launched on a completely new market, e.g., smart watches), radical (when a new product is launched in a new market, e.g., Internet, blockchains, DNA sequencer). See the innovation matrix in the picture10. One of the most important approaches to implement innovation is the open innovation11. It happens when di erent companies collaborate to solve a common problem thus generating new solutions. This concept is more and more expanding to collaboration of entire ecosystems of companies and organizations, so that we frequently talk about ecosystems of innovation and co-creation of knowledge or value. It is a cultural change because companies more from a closed system in which all the solution were developed internally, to a situation in which outsourcing or collaboration are the main strategy. Alternative approaches can be frugal innovation12 (it is the result of reducing the cost of a product by using very limited resources — it is an approach typical of emerging economies or poor Countries), social innovation13 (it is the result of intentional system changes that positively impact people lives), eco innovation14 (it happens when 8 Guy Kawasaki. The art of innovation. TEDxBerkeley, 2014. https://www.youtube.com/watch?v=Mtjatz9r-Vc 9 Bill Aulet, Varieties of innovation. MIT OpenCourseWare, 2013. https://www.youtube.com/watch?v=1mw_Uo5ba58 10 https://www.youtube.com/watch?v=q4K5KQ--F9I&t=1s Henry Chersbrough. Open services innovation. Berkley Haas School of Business. 2011. https://www.youtube.com/ 11 watch?v=LbiJ_9W7UHM Interesting also the interview (2016) https://www.youtube.com/watch?v=LCyhFUecLYU Navi Radjou. Creative problem solving in the face of extreme limits. TED Talk, 2015. https://www.youtube.com/ 12 watch?v=cHRZ6OrSvvI 13 Social innovation generation Canada. What is social innovation? https://www.youtube.com/watch?v=1i7L6nOkQFo 14 UN Environment eco-innovation manual, 2012-2017. https://www.youtube.com/watch?v=6L_ipFvVtWE 5 Engineering Startup Starting  f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 companies produce products or services by also reducing environmental, social and economic burdens, mainly relying on the concept of circular economy15), cross- industry innovation (it happens when products or practices that are used in an industry are adopted by other industries thus making valuable changes). Innovation and research are di erent. Research is a creative process to produce new knowledge. It needs money to be performed and the output is new knowledge that allow us to understand phenomena or to solve unsolved problems. Research-based innovation is turning re s e a rc h n e w k n o w l e d g e i n t o something that has an impact on the society at large and produces money. The growth for a company is the increase in its size, market share, revenue, pro itability over time. Fast growth means that the above indicators are growing in a very limited amount of time. The term market in these notes is used to indicate the actual and potential buyers of a product or a service. A main di erence between products and services is that products are usually tangible items, while services are intangible and are realized through the work of people. According to this rough distinctions, services usually do not scale up. The Italian car market are the adult with a driving license. Depending on the car segment, the market is restricted accordingly. For instance the market of the luxury car are the adults with a driving license and with an income higher than 100.000 euro per year. The current market of Ferrari is the set of actual buyers of Ferrari out of all the potential buyers. Each startup must have a vision, a mission and a set of core values. The vision is the goal of the company and what it should be in the future, while the mission is the description of the business: who it serves, what it does and how it does it. The core 15Circular economy is a system (for instance a company) where the material never become waste and are continuously regenerated and reused. 6 Engineering Startup Starting  ff f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 values are what the company believes in and on top of which it builds: they should never change and represents the driving force of each strategy, action and decision. Google vision is “providing access to the world’s information in one click”, the mission is “to organize the world's information and make it universally accessible and useful” and the core values are “respect the user, respect the opportunity, and respect each other”. Tesla vision is “to become the most attractive automobile company of the twenty- irst century by spearheading the world's shift to electric vehicles”, the mission is “to accelerate the world's transition to sustainable energy by safely building, selling, servicing, and delivering all-electric vehicles, and in initely scalable, clean energy generation and storage products” and the core values are “doing the best, taking chances, respect, continuous learning, and environmental responsibility”. Apple vision is “to make the best products on earth, and to leave the world better than we found it”, the mission is “bringing the best user experience to customers through innovative hardware, software, and services” and the core values are “inclusion and diversity, education, accessibility, environment, supplier responsibility and privacy”. Illy ca è vision is “illyca è wants to be the reference point of co ee culture and excellence around the world. An innovative company that o ers the best products and places of consumption and, thanks to this, grows and becomes a leader in the high-end sector”, its mission is “Delighting everyone in the world with the best co ee nature can provide, enhanced by the best technologies and sustainable practices and the beauty of art” and its values are “Ethics: long-term value creation through sustainability, transparency, respect of human rights and personal development. Excellence: love for beauty and goodness”. Start Attractor vision is “igniting innovation to change people lives for the better”, its mission is “Attracting talents and capitals to elevate research to innovation” and its core values are “Start Attractor is person-centric, prioritizes equity, equal opportunities, and high standards. It streamlines processes for optimal e iciency, fosters growth for employees and partners, and is committed to ethical and sustainable practices”. Guy Kawasaki suggests to replace complex mission statements with a 2-4 words mantra. His example is Wendy’s mission statement Guy Kawasaki suggests to replace complex mission statements with a 2-4 words mantra. His example is Wendy’s mission statement “to deliver superior quality products and services for our customers and communities through leadership, innovation and partnerships.” Kawasaki arguments that the mission statements does not convey what Wendy’s really does and that a mantra like “healthy fast food” would be much more e ective.16 COMPANY STRUCTURE AND ROLES A company is owned by its shareholders. A shareholder is a person or an entity that has invested money in the company in exchange for shares (ownership of the company determined by the percentage of the owned shares with respect to the total shares emitted). Shareholders forms the shareholder assembly, sometimes called Assembly of Parties, that is periodically called (at least twice per year) to be informed on the state of the company and to approve the inal balance sheet. 16 https://www.youtube.com/watch?v=Mtjatz9r-Vc&t=1s 7 Engineering Startup Starting  ff ff ff f f ff ff ff ff f  21 NOVEMBER 2024 08:29 DRAFT 0.1 The business decisions of the company are made by the board of directors (BoD) that represents the interests of the shareholders. The members of the board provide advice and strategic directions to the CEO and other executives without being involved in day-to-day operations. A major role is approving the yearly budget, the balance sheet and the business plan to be presented to the shareholder assembly. The chairman of the BoD is the legal representative of the company, provides strategic directions to the board, call the meetings of the board, keeps relationships with the shareholders and manages the CEO. The BoD appoints a chief executive o icer (CEO) to run the business. The CEO is in charge of all the aspects of the company and connects the actual activities with the governing bodies of the company, i.e., the BoD and the shareholder assembly. The CEO builds a team of so-called C-suite executives that reports to and helps the CEO in the daily operations. The most common C-suite executives are: the chief technology o icer (CTO) is in charge of the technological stack of the company, both for the acquisition and the development of new technologies, and serves as a technological advisor to the CEO. If the CSO is not present, the CTO is also in charge of the research and development; the chief scienti ic o icer (CSO), sometimes coinciding with the CTO, is in charge of managing the research and development activities of the company; the chief inancial o icer (CFO), sometimes also called treasurer, has the responsibility of managing inances of the company, long-term budgeting and pro itability and pro it margins; the chief operation o icer (COO) is in charge of implementing the business plan and the strategies of the company; the chief information o icer (CIO), sometimes called chief information and security o icer, is in charge of the physical and digital security at organization level for the information and IP owned by the company. The CIO closely works with the CTO to select the appropriate technological solutions; the chief marketing o icer (CMO) is responsible for brand awareness, positioning of the company, designing marketing strategies to attract new customers and the communication towards the customers if a CCO is not in the C- level suite of the company; 8 Engineering Startup Starting  f ff f f f ff ff ff ff ff ff f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 the chief human resource o icer (CHRO) is responsible for all personnel matters, including recruitment, monitoring performance, establishing career paths, reward systems, training, etc.;the the chief communication o icer (CCO) is more and more relevant and is responsible for all the internal and external communications of the company. Recently other C-level o icers are emerging like the chief compliance o icer (CCO) in charge of overseeing and managing regulatory compliance issues in the organization, the chief innovation o icer (CIO) in charge of driving the innovation strategies of the company, and the chief data o icer (CDO) in charge of exploiting information as an asset at organization level. The CDO is closely related to the CIO. Each company decides the composition of the C-level suite according to its strategy and vision to optimize the operations of the organization. The business hierarchy is then continued with V-level management: vice president (VP) and senior vice president (SVP) that reports to C-level executives, and inally the D-level management (directors of departments) that reports to V-level management. The command chain is therefore BoD => CEO => C-level suite => V-management => D-management Goals are transmitted from left to right and reports on the activities are from right to left. Some organizations have very large C-level suites, other very small independently of the size of the company. For instance Apple has a very limited C suite with a clear hierarchy: CEO => COO => CFO. Beneath the C suite there are only ive major areas of activities (marketing, engineering, inance and admin, operations, China) lead by SVPs, some of whom manages VPs, all reporting to the COO. The main documents that establish how the company is structured and how it operates are the statute is drafted by a notary when the company is established. It sets the legal framework under which a company operates. It includes the name, the headquarter address, the purpose and scope of action, the distribution of the capital and the shareholder rights, and regulates the main bodies of the company including voting rights and management responsibilities. Any change to the statute involves a notary. It is also called articles of association; the shareholder agreements wants to protect shareholders’ interest and to ensure that shareholders are treated fairly. It de ines the terms and conditions of interaction of the shareholders with the company and among themselves. It includes regulation that are speci ic for the shareholders and that di er, as special cases, from the general rules set up in the statute. A company can have more than one shareholder agreement for di erent classes of shareholders; the code of ethics is a set of principles that the company believes in and shares with its employees and partners to perform tasks with integrity. It also contains the 9 Engineering Startup Starting  f ff ff ff ff ff f ff f f ff ff f  21 NOVEMBER 2024 08:29 DRAFT 0.1 company’s core values and procedure to prevent and resolve con licts within the organization; the corporate handbook is built on top of the code of ethics and de ines the day to day procedures and code of conduct in the most common situations that arise in the performance of the job. For instance, the statute de ines the rules to cal the shareholder assembly and the board of directors, how to vote and what are the responsibilities of the chairman. It also de ines the rules to include other shareholders in the company. The shareholder agreement might de ine how the company handles the intellectual property generated and that is in the scope of the shareholder. The code of ethics de ines for instance the principles like valorization of the human resources, impartiality, honesty and loyalty, con idential nature of information and intellectual property, etc. and declines these principles into actual working situations. The corporate handbook can describe how the travel of employees are handled, starting from the request and authorization up to the reimbursement of the expenses. BUSINESS MODEL CANVAS A business model is a set of assumptions and hypotheses about the business a company is going to run according to some authors, while it is what a company is get paid for.17 In particular, a business model must highlights the team, the value is created for the customers (value proposition), what activities, resources and partners are needed to create the product or service that is provided, what market is addressed and what channels are used to reach out customers and how relationships with customers are maintained. Additionally a description of the costs and expected revenues according to how the product is sold are expected. The value proposition communicates how a product solve a problem and states how the product is better than similar solution by highlighting the added bene its.18 Grammarly value proposition is “Great Writing, Simpli ied. Compose bold, clear, mistake- free writing with Grammarly's Al-powered writing assistant”. Net lix value proposition is “o ering high quality, personalized streaming to every user”. McDonald’s value proposition is “providing a ordable, convenient, and consistent fast food to customers worldwide”. Microsoft value proposition is “improve personal and corporate communications and productivity”. More important than the business model is the business modeling, the process through which the business model is generated and then transformed into a business plan. A canvas to support the process of business modeling has been proposed by Osterwalder and Pigneur19, a variant of which is in the Table. 17 A. Ovans. What is a business model, Harvard Business Review, 23 Jan 2015. 18 A. Osterwalder, et al. Value Proposition Design. John Wiley & Sons, 2014. 19 A. Osterwalder and Y. Pigneur. Business Model Generation. John Wiley & Sons, 2010. 10 Engineering Startup Starting  f f f ff ff f f f f f f f  21 NOVEMBER 2024 08:29 DRAFT 0.1 The business plan is document that reports the company’s goals and strategies, how the company is structured and what are the activities performed to achieve the goals. The document also describes in details the history of the company and its team and network of partners. It has detailed description of the costs and revenue streams, the products and services, the commercialization strategies and the market including a deep competitor analysis. The business plan is a long description of the entrepreneurial formula.20 The entrepreneurial formula is model of how a company interacts with the external world by distinguishing the competitive and social aspects. The competitive aspect relates to the market and customers, while the social aspects relates to the stakeholders and the value proposition of the company. The intersection of the two aspects relates to the organization and resources of the company. FINANCIALS The most important document to prepare is the revenue projection over 4-5 years because an investor decides whether to invest or not depending on the speed and amount of growth of the business. The projection cannot be perfect, but it should sound reasonable to the investors and at the same time appealing for going deeper into the details. The graph showing the growth of the revenues must be motivated by detailing where the revenues are coming from. For instance it is important to describe the price strategy of products or license strategy of technology. 20 S. Bianchi Martini, M. Bonti and A. Corvino. Startup: dall’idea alla exit, McGraw-Hill, 2024. 11 Engineering Startup Starting   21 NOVEMBER 2024 08:29 DRAFT 0.1 Another document to be prepared is the operating or operational expenses over the same time period of the revenue projections. The operating expenses (OpEx)21 are the expenses needed for the day-to-day operations of a company like rent, salaries, marketing, research and development, insurances, utilities, cleaning, stationaries, maintenance, etc. It is important to highlight the overheads of the production: all the cost that are needed to keep the company alive, but that are not directly related to the production and sales of goods. For example the salaries of administrative employees, the amount of cleaning and utilities expenses related to administrative employees, etc. are forming the overheads. Investors like companies with low overhead costs (at most 20% in the startup phase). The operating expenses are distinguished from the capital expenses (CapEx)22 that are the expenses needed for acquiring, maintaining and upgrading an asset of the company like buildings, shares in other companies, lands, vehicles, lab machines, etc. The breakeven point (BEP)23 is the point in time when the revenues matches the expenses and denotes the time point from which the company is starting generating a pro it. This is an important indicator for investors because tell them how much time they have to sustain an unpro itable company. The last document to be prepared is the cash low forecast that shows the in-out cash monthly for the company. This is important because shows if the company will need additional money to run the business in some periods that might be a ected by seasonal e ects. For instance, you have to produce the goods before selling them and you have to pay all these expenses before seeing any income, then it might be the case that your customer pays you after 30 or 60 days. Therefore in principle your company is having margins from the sales, but it could miss the cash in some periods. You have to show that you have the money to sustain the business during this periods. The same e ect appears when you grow your business by acquiring new customers because you have to increase the productions and the corresponding costs. KEY PLAYERS The key players in the lifespan of a start-up are the money provider, the entities that support start-up grow and the strategic partners needed to fully develop the product or to access the market (discussed in Chapter 3). The money provider can be clustered according to the development stage of the start-up that in turn depends on the development level of the product. The development level of products or technologies can be measured with the 21 https://www.investopedia.com/terms/o/operating_expense.asp 22 https://www.investopedia.com/terms/c/capitalexpenditure.asp 23 https://www.investopedia.com/terms/b/breakevenpoint.asp 12 Engineering Startup Starting  f ff ff f f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 innovation readiness level (IRL)24, an index spanning from 1 to 9 as follows: (1) idea, (2) business concept, (3) analysis of the idea, (4) actionable plan, (5) scaled testing or design of a prototype, (6) designed and tested support system, (7) full testing of systems and products, (8) systems/products adjustment, (9) full scale operation on the market. If the IRL is 1 or 2 is really di icult to ind someone willing to invest money in the project. This is the phase of bootstrapping in which the entrepreneurial journey must be funded by the time and money of the founders. IRL 3 is the entry level for the FFF investors (Family, Friends and Fools). This is a class of investors that is supporting the idea because the founders have strong extra-work relationships with them (or they are fool because there is still no evidence of the quality and potential of the business). The amount of money that can be collected is very limited (the order is about 50k euro). Business angels are usually successful people or ex-startupper that want to support the start-up system. They usually invest in the sector in which they operated or are expert of. The IRL they consider is usually 4 to 6 with small investments (the order is up to 100k euro). In this stage an alternative to business angels could be accelerators and incubators (see below). Professional investors and venture capitalists are investing when there are good possibilities that the business will be successful and expect in time span of about 5 years to get back 10x times what they invested. The IRL is usually 5 to 7 for professional investors and from 7 up for venture capitalists (the order is 250k - 1M euro for the entry point up to 100M at the end of the scale for venture capitalists). Sometimes professional investors and venture capitalists are backed up by large corporation that use the investment strategy to scout new technologies and talents useful to their core business or dangerous to their core business (to eliminate early possible competitors). In this case the investors are called corporate investors or corporate ventures. This is a schematic description of the investor world that might not apply to special cases, but is useful to start creating a mindset and understand who is the target of the money collection depending on the stage of the company and the amount needed. An alternative characterization of the development stage of the company is25: pre- seed (they have an idea that they analyze to turn it into an actionable business plan), seed (they are working on a minimal viable product and a preliminary market analysis and have a team of up to 10 people), early (they have an MVP and start to test the market it for adjusting the product an have teams up to 50 people), growth (they test 24It is an adaptation of the technology readiness index (TRL) originally developed by the US Department of Defense and NASA to evaluate the development stage of a technology related to lying vehicles. A reference to start with for deepening the understanding of IRL is Ming-Chang Lee, To Chang, and Wen-Tien Chang Chien. An approach for developing concept of innovation readiness levels. International Journal of Managing Information Technology (IJMIT) Vol.3, No.2, May 2011. 25 According to Y-combinator: https://www.ycombinator.com/library/Ek-stages-of-startups 13 Engineering Startup Starting  f ff f f  21 NOVEMBER 2024 08:29 DRAFT 0.1 the market and strategy the market share acquisition and have a team of up to 100 people), scale (they fully operate on the market and want constantly to acquire increasing share of their market or expand in new markets and ha a team of multiple of 100 people). Pre-seed is the phase of FFF immediately after ideation and business angels when the idea is better developed with an actionable plan. Seed and early is for professional investors (all of them state which is the stage they prefer so that the founder can target the right investors according to the company stage). Eventually, growth and scale is for venture capitalists. The last stages of a company is an initial public o ering (IPO) when the shares of the company are o ered to the public through a stock exchange market, or a merge and acquisition (M&A) when the start-up is acquired by bigger companies and possibly merged in the business of the buyer. These action are usually referred to as exit stage. All the investors we have mentioned so far provide companies with money in exchange of a percentage of the shares of the company, i.e., the founders are loosing part of the property of the company. This kind of operation is usually described as diluting capital collection, where diluting means that some of the shares of the company have to given to the money provider. Alternative ways of collecting money without diluting the social capital of the company with new shareholders are grants and open innovation projects. Grants are competitive calls for research or innovation activities usually proposed by governmental organization at national or European level. The advantage of grants is that they are not diluting capital, but they distract resources from the core business of the company. Additionally grants do not have the side e ect of getting onboard experienced people that can advise on the job to be done as it happens with investors. Remind that if an investor gives money to the company, its major interest is to make the company successful so that it can recover n-times the money invested in a limited amount of years. The supporting entities have various names that in principle should identify the type of services that are o ering and the stage of the companies they are targeting. Common names are incubators, accelerators, startup studios, startup factories, venture builder. Incubators were originally established to provide startup with programs that help them to better shape their idea and move towards a concrete plan including a preliminary market evaluation and pretotyping26 with pre-incubation programs (IRL 2-4) and to develop minimal viable product (MVP) with incubation program (IRL 4-6). The role of Accelerator was to help companies to test the market it of their products and to turn the MVPs into actual product prototypes with pre- acceleration programs (IRL 6-7) and to launch the product to acquire market shares 26 Pretotyping is strategy to check whether the product idea is good or needs to be tuned before really building it. Is a strategy for a reality check. This strategy was originally introduced at Google in 2010. The Stanford seminar of the Entrepreneurial Thought Leader Series by Alberto Savoia in 2019 is an excellent starting point to understand pretotyping. 14 Engineering Startup Starting  f ff ff ff ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 with acceleration programs (IRL 8-9). The borders from the di erent programs are fragile and each entity can decide di erent entry IRL for each program. Recently, entities with other names like startup studios, startup factories have appeared and their role is mixed: they can span from per-incubation to acceleration or even help research groups of team to establish the company, or even to prepare companies to apply to accelerator or other similar entities. Venture builder are a little bit di erent because they usually help large corporations to spin-o companies that will be in charge to run part of the business or to develop new risky projects that cannot be managed internally. All these entities support companies in fundraising, but accelerator sometimes provide direct money to the company to quickly reach the new IRL level the program is designed for. Accelerator can get shares for the money invested or the service provided, can get money back for the service provided or a mix of the two. 15 Engineering Startup Starting  ff ff ff ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 2. COMMUNICATION tarting and running a business imposes to talk to lot of people (investors, shareholders, employees, customers, media, analysts) and all of them has a di erent jargon and di erent interests. Therefore, communication must be planned and modulated according to whom you are talking to. The bad news is that if you do not perform well in communication even with only one of your groups of target audience, you are almost certainly out of business. This chapter will be much richer of examples and quotes than the others because they help improve communication by emulation. Each company tunes communication to the target audience and hence it is di icult to completely understand a company by looking at only one communication segment. A senior executive of Microsoft once told me that “what you read about a company in the public domain is carefully crafted to shape the perception that the leadership wants for the company and sometimes it is just a gray shadow of the true reality.” This does not mean that the information is false, but it may be selective or presented in a way that omits certain details, challenges, or internal struggles, for the company’s interests. Communication skills are fundamental to start a company and you have to work on them much more than on technical skills that you probably already have if you have a reasonable idea to develop a product. Nancy Duarte, a US communication trainer, says that “an idea is powerless if it stays inside of you”27 and the neuroeconomist Gregory Berns adds that “a person can have the greatest idea in the world — completely di erent and novel — but if that person cannot convince enough other people, it doesn’t matter”. Carmine Gallo states that “the ability to persuasively communicate your ideas is the single greatest skill that will help you accomplish your dreams in the next ten years”. Production and delivery of memorable presentations when ‘selling’ an idea starts from understanding that there are three types of learners: visual, auditory and kinesthetic. Visual learners learn best by connecting patterns and remembering videos, pictures and diagrams, auditory learners prefer to listen to information and kinesthetic learners are performing best when they are asked to do something even as simple as asking to raise hands for an instant polling in the room. In the general population, the distribution of the three learning styles is: 65% visual, 30% auditory and 5% kinesthetic28. You have to use tools to keep attention alive from all the three types of learners during your presentation. CONTENT The three basic actions of a successful presentation are: inform, inspire, entertain. Information and inspiration must be delivered together, by using a plain 27 https://www.youtube.com/watch?v=1nYFpuc2Umk&t=2s 28 Buşan AM. Learning styles of medical students - implications in education. Curr Health Sci J. 2014 Apr- Jun;40(2):104-10. doi: 10.12865/CHSJ.40.02.04. Epub 2014 Mar 29. PMID: 25729590; PMCID: PMC4340450. 16 Engineering Startup Starting  ff ff ff ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 simple, vivid and concrete language and avoiding completely technical jargon. Most of the target audiences are interested on the e ect on them of a product and not on the technical characteristics of a product. The Apollo Program could have been presented by stating “We want the best scientists and engineers of this Country to work together to build a spacecraft that makes us the undiscussed International leader in the space industry with a human-centered e ort and with the development of innovative technologies”, but President Kennedy decided to state “this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth”. The sense is the same, but Kennedy’s choice is much more inspirational and vivid. Simplicity is fundamental to convey messages. Recall the man on the moon by Kennedy or the one thousand songs in your pocket by Steve Jobs. Making things simple is much more di icult than presenting them technically. This is the reason why you have to work hard to simplify your communication at its essence. According to Leonardo da Vinci “simplicity is the ultimate sophistication” and according to Albert Einstein “if you can’t explain it simply, you don’t understand it well enough”. To increase simplicity, vest the numbers. In other words, do not give absolute numbers, but provide them related to unit of measures of everyday life that improve the sense of greatness of what you are saying. You can say that 38756 scienti ic publications about AI were published in 2022, but you can make it more impressive by saying that a scienti ic publication about AI has been published every 4 hours in 2022. Again, the 1000 songs in your pocket of Steve Jobs is a way of vesting the memory capacity of the iPod. An important concept to inspire is that the best inspiring leaders and organizations in the world use the patter why, how, what, and it is the complete opposite from most people that use the pattern what, how, why. The why refers to the purpose and belief of what one is doing, something that should not change frequently as the core values of the company. According to Simon Sinek, most companies communicate what they do, how they do it and very few say why they do it. People is recognizing themselves in the values of a company and therefore on the why. Communicating irst why, then how and eventually what is inspiring and much more e ective. Here it is the Simon Sinek example of how Apple communicate contrasted with standard communication practice. Apple could have a marketing message like “we make great computers (what). They are beautifully designed, simple to use and user friendly (how). Want to buy one?”. Instead the actual inspirational marketing message was “Everything we do, we believe in challenging the status quo. We believe in thinking di erently (why). The way we challenge the status quo is by making our product beautifully designed, simple to use and user friendly (how). We jus happen to make great computers (what)”.29 Watch also the video in which Steve Jobs presents the “Think di erent” brand advertising campaign to some Apple employees; he exactly communicates as stated by Simon Sinek30. 29 https://www.youtube.com/watch?v=fMOlfsR7SMQ 30 https://www.youtube.com/watch?v=4fcb8eu20SQ 17 Engineering Startup Starting  ff f ff f ff ff ff f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 Entertainment helps people remember situations in which they have fun. The presentation must be professional, but some fun moments help and they must be carefully planned and delivered. Improvisation never works. Steve Jobs presentation of the iPod is one of the best examples of information, inspiration and entertainment, He decided not to provide all the technical details of the iPod in terms of classical ICT industry parameters, but he focused on measures and weight (information) that everybody knows to stress the reduced size of the iPod and described the memory capacity by stating “one thousand songs in your pocket” (inspiration) by extracting an iPod from his own pocket (entertainment)31. Another great example of entertainment is when Steve Jobs presented the irst iPhone and called a local Starbucks for ordering 5000 co ee for the audience.32 Many studies show that emotions engage people and help them to remember because relate the information to the moment of the emotion. Maya Angelou states that “people will forget what you said, people will forget what you did, but people will never forget how you made them feel”. You should raise emotions when delivering your presentation. There are words that generate emotions (see the picture). These words create pictures in audience minds of what you are describing. The phenomenon of creating images in the mind of the listener is called transcendence by Carmine Gallo and uses a President Obama’s 2012 victory speech to illustrate this concept, and in particular to the sentences that Obama uses to thank his supporters during the winning presidential campaign: “you’ll see the determination of a young ield organizer who’s working on his way through college and wants to make sure every child has the same opportunity, you’ll hear the pride in the voice of a volunteer who’s going door to door because her brother was inally hired when the local auto plant added another shift, you will hear the deep patriotism in the voice of a military spouse working the phones late at night to make sure that no one that ights for this Country ever has to ight for a job or a roof over their head when they come home”. The vivid and descriptive narration and the amount of adjectives used make the picture of the supporters very concrete, much more than just mentioning them by category in a list like young organizers, volunteers and military spouses.33 When talking about science and technology, it is better to focus on the consequences and implications on everyday life of the results of that science and technology to raise emotions. It might not be of interest to the audience how you designed or produced the last version of your product or its technical speci ications, but people love to hear how that product can change their lives and this makes them feel something. One of the best tools to generate emotions is telling a story. The US writer Robert McKee states that “in a story, you not only weave a lot of information into the telling but you also arouse your listener’s emotion and energy”. Ben Horowitz, one of the most known venture capitalist in Silicon Valley behind Facebook and Twitter (now X) 31 https://www.youtube.com/watch?v=kN0SVBCJqLs 32 https://www.youtube.com/watch?v=MnrJzXM7a6o 33 https://www.youtube.com/watch?v=HKv9wYO5a9s 18 Engineering Startup Starting  f f f f f f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 among others, says that “storytelling is the most underrated skill” when it comes to entrepreneurship34. The story must have an antagonist and a hero. The antagonist is the status quo and the available products to solve the problem you are aiming at solving with your product. The hero is the audience that you have to get on your side. If you succeed in having the audience on your side they will kill the antagonist by using your product. When telling the story you also have to adhere to a structure that all the best communicators of all times are using when delivering their messages. According to Nancy Duarte, you have to start by describing the status quo (what is) and then building a gap as large as possible with what could be after the adoption of your product, and you have to oscillate between what is and what could be for a number of times until you get to the new world in the closing with the call to action35. The call to action does not need to be the last words of your speech because the listener after the call to action is thinking to himself what will happen if I join this call. Therefore, to answer his curiosity you have to depict how terri ic will be the world if everybody is answering positively to your call. If you want to categorize the parts of your speech according to this pattern you can say: contrast, solve, call to action. The same concept is expressed by Carmine Gallo that states you have to sell dreams (and emotions), not products. Quoting Carmine Gallo, “Steve Jobs did not sell computers, he was making tools to help people change the world”. And addressing an audience of inancial advisors he said that “promise me that you are not selling life insurances, you give people peace of mind, a secure retirement, the legacy they can leave their families. That is a story worth telling.”36 Starbucks is describing itself not as a co ee shop, but as a “third place between home and work where people can come together to enjoy the peace and pleasure of co ee and community”. What you have to do is to start from a headline to unite an idea with emotions within a story. When you plan your presentation follow 3 rules: the rule of 3, the rule of 10 minutes, the rule of repeating at least twice the key messages. Note that the rule of 3 applies also to the number of rules you have to remember! PUBLIC SPEAKING There are three fundamental rules to keep in mind. The rule of 3 says that no one remember more than three messages from your talk independently of the number of messages you are delivering. Therefore you have to prioritize what you want to say and you have to focus on those three key points that are more relevant for your target 34 https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.voicetube.com/videos/ 43332&ved=2ahUKEwiUuq-fpfmIAxUj1QIHHSkYIB8QtwJ6BAgLEAI&usg=AOvVaw1wakQeTjGXLf1gHN-Xqn1V 35 https://www.youtube.com/watch?v=1nYFpuc2Umk&t=2s 36 https://www.youtube.com/watch?v=cCIFKtB0kFE 19 Engineering Startup Starting  ff f f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 audience. This is why you have to prepare di erent presentations for di erent audiences, you have three messages available each time. The rule of 10 minutes says that no one keeps focused on what you are saying more than 10 minutes. If your talk is longer than 10 minutes, you have to do something at least every ten minutes to break the low like an instant poll, asking the audience to provide feedback about something, show them a video or a demo, let them touch something you distribute, completely (apparently) change the argument of your speech etc. The rule of repeating twice the key messages (they should be no more than 3 for the rule of 3) helps reinforcing the message and helps listeners to remember. Steve Jobs’ inspirational 2005 commencement address at Stanford University37 is probably the best example of application of the above rules as well as of the three pillars of communication inform, inspire, entertain while generating emotions through stories. The incipit is “Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories”. The rule of three (three stories). It is important to understand that are stories (repeated twice). He wants to leverage emotions and hence choose to tell stories, and in particular personal stories. The irst story is about “connecting the dots” and the morale is that everything you learn and you do is important and might make the di erence in the future by connecting the dots. During the story he includes a bit of entertainment: “ If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them”. The end of this irst story is “Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later. Again, you can't connect the dots looking forward; you can only connect them looking backwards.” He repeats twice the concept of connecting the dots. And close the story with a call to action for the students: “So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the di erence in my life”. The pauses between the three stories and the change in content is an application of the rule of ten minutes. The second storie is about “love and loss”. He immediately states the key message of the story and the morale is never stop looking for what you really like and want. The message is strongly delivered in call to action at the end of the second story: “Your work is going to ill a large part of your life, and the only way to be truly satis ied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you ind it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you ind it. Don't settle”. Note that he repeats twice don’t settle. Even in this story a bit of entertainment: “We had just released our inest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got ired. How can you get ired from a company you started?”. 37 https://www.youtube.com/watch?v=UF8uR6Z6KLc 20 Engineering Startup Starting  f ff f f ff f f f f ff f f f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 The third story is about “death” and the morale is that you have the courage to do what you love without constraints from the status quo. Even if the theme is dramatic, there are two entertainment moments “When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right"” and “No one wants to die. Even people who want to go to heaven don't want to die to get there”. The inal call to action of the speech repeats three time the concept he wants people to remember “Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed o. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you. Stay Hungry. Stay Foolish”. He also use the technique of transcendence by using vivid concrete language with many details to picture some part of the speech. An example is “It wasn't all romantic. I didn't have a dorm room, so I slept on the loor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple”. He provides the audience with detailed descriptions of the di iculties he stumbled into to make concrete the concept. Another example is “Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor”. He could have said simply I had a biopsy, but he wants the moment to be more dramatic and more concrete. An example of anaphora is the speech to the Kingdom of Winston Churchill in which he says (in italic the anaphora construction) “we shall ight in France, we shall ight on the seas and oceans, we shall ight with growing con idence and strengths in the air, …, we shall ight on the beaches, we shall ight on the landing grounds, we shall ight in the ields and in the streets, we shall ight in the hills” and the inal call to action “we shall never surrender”. Martin Luther King is also using consistently anaphora in his “I have a dream” speech: “I have a dream that one day this nation will rise up and live out the true meaning of its creed: We hold these truths to be self-evident, that all men are created equal. I have a dream that one day on the red hills of Georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood. I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression will be transformed into an oasis of freedom and justice. I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. I have a dream today. I have a dream that one day down in Alabama with its vicious racists, with its governor having his lips dripping with the words of interposition and nulli ication, one day right down in Alabama little Black boys and Black girls will be able to join hands with little white boys and white girls as sisters and brothers. I have a dream today. I have a dream that one day every valley shall be exalted, every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight, and the glory of the Lord shall be revealed, and all lesh shall see it together.” Note also how he constantly contrast the status quo with an ideal future. Another example is this Obama’s electoral speech “I believe that we can give our middle class relief and provide working families with a road to opportunity, I believe we can provide jobs to the jobless, homes to the homeless and reclaim young people across America from violence and despair, I believe that we have a righteous wind at our back and as we stand at the crossroads of history we can make the right choices and meet the challenges that face us”. 21 Engineering Startup Starting  f f f ff f ff f f f f f f f f f f  21 NOVEMBER 2024 08:29 DRAFT 0.1 The content of a speech can be made more e ective by using some rhetorical tools. The most e ective are anaphora (repetition) and analogy. Anaphora is the repetition of the same set of words at the beginning of consecutive sentences38 39. Analogy is the comparison of two di erent things for the purpose of explanation or clari ication. Analogy is very important to describe novel products or objects by hiding the technical details that could make the description boring or di icult to understand. Analogies are also very e ective in Here it is how Steve Jobs describes a computer: “That’s what a computer is to me: the computer is the most remarkable tool creating pictures that we’ve ever come up with. It’s the equivalent of a bicycle for in the minds of the our minds”. listeners40. Barack Obama compares the raising of public debt asked by a So far we talked political party to a dinner: “You don’t go out to dinner and then, about content and you know, eat all you want and then leave without paying the check. And if you do, you’re breaking the law”. structure of a speech. What add lot of value to what you say is how you say it (voice) and how you behave while speaking (body language). The voice is an important tool that you have to learn how to use it. There are many parameters of your voice that you can change while speaking: in lection, volume, pause, rate. The in lection or intonation is when you change the tone or the pitch (how high or low a sound is) of the voice to convey insights about what you are pronouncing. You can use in lection change as an highlighter of the key messages you are delivering. The volume can be modulated to keep attention alive by varying from low to high volume and vice versa. Pauses are sometimes more e ective than words. They help the audience think of what expecting next and keep attention alive. Silence sometimes is more powerful than sound. The same e ect of volume can be obtained with rate or speed (the number of words per minute you pronounce): variation in these parameters are perceived by the audience like a change in the speech and therefore keep people focused on what you are going to say. Avoid iller words like “you know” or similar because they interrupt the low of your narration with a negative e ect41. Barack Obama master all the four parameters in his speeches. Watch the video by Carmine Gallo that explains some of this techniques. According to Matt Abrahams from the Stanford Business School, the constant variation of all the voice parameters is one of the keys to makes a great presentation great. Watch Caroline Kennedy, U.S. Senate hopeful, to understand how disturbing iller words can be. In a 30 minute interview she pronounced “you know” more frequently than once every 18 seconds. 38 https://www.youtube.com/watch?v=MkTw3_PmKtc 39 https://www.youtube.com/watch?v=vP4iY1TtS3s 40 https://www.youtube.com/watch?v=ob_GX50Za6c 41 https://www.youtube.com/watch?v=ZT8G6Qf7Ngo 22 Engineering Startup Starting  f ff ff f f ff ff f ff ff ff f f ff f  21 NOVEMBER 2024 08:29 DRAFT 0.1 The body language is important to engage with the audience and make people feel comfortable. You have to connect with the audience by avoiding physical barriers between you and the listeners (stand in front of them by hiding nothing of you, avoid desks and podiums, if possible). Establish eye contact with most people in audience as you can (there is not only one sector that you have to ix your attention to, but all the space covered by people is equally important). Keep constantly an open posture to show your willingness to interact with the audience (avoid to put your hands in your pockets, do not cross your arms, step towards who is asking questions). Use hand gestures to reinforce the message you are delivering and to emphasize some words or concepts by mimicking them with gestures42. Use large and expansive gestures to help respiration and improve the quality of your voice, do not point to the audience and keep your ingers united, keep your hands palm-up when gesturing. Overall you have to look spontaneous and you have to practice for that. The dress code is also important. Try to be dressed as the most of the persons in your audience will be. If you are addressing an audience of inancial advisors you should probably wear a suit, while if your audience is made up of programmers you should probably dress business casual. This helps you to engage with the audience and create empathy. Eventually also colors matter. According to a survey performed on over 2000 human resource mangers, it emerged that blu is the safest choice. White is a good choice as well because it re lects organization and detail-oriented attitude. In general cold colors pass the message of self-con idence. Red is not a good choice because it might look like aggressive. Orange is not a good choice as well. The worst color is brown that denotes the need of hiding behind some protection. In general warm colors are not a good selection. Finally, black can be ok but it is usually associated with higher positions in a hierarchy and hence it depends on the situation and the message you want to pass. The very same reading applies also to the choice of slides colors, especially for the background color. PREPARE, PREPARE, PREPARE Everybody practices for important presentations. Steve Jobs was used to re ine and rehearse his presentations weeks if not months. Therefore you can practice as well. It is never enough. Initially you have to practice to be sure that you stay within your assigned time while delivering all the key messages you have planned for. Everyone time is extremely valuable, and if you end up using more time than the one assigned to you, you are not respecting the audience time and the other speakers’ time! Then you have to practice to avoid people thinking that you are repeating something you have memorized. In practice it should be the case, but people should not perceive that. They must see you as much spontaneous as possible. 42 https://www.youtube.com/watch?v=HKv9wYO5a9s 23 Engineering Startup Starting  f f f f f f  21 NOVEMBER 2024 08:29 DRAFT 0.1 You have to practice to synchronize your speech with your movements and gestures. It is important to plan the hand gestures for each sequence of words of your speech so that hands and arms look part of your performance rather than something you have to take care of. Eventually, you have to practice to optimize in lection, volume, pauses and rate of your speech to maximize the e ect. To communicate the bene its of your product or service list them in increasing order of impact and pronounce them with increasing volume and speed starting slow so that the maximum speed is still good for listeners to understand clearly. You can also plan for a quite large pause before starting the list of bene its so that it creates also a dramatic moment in which the audience has some time to infer what you are going to say and the people that are no more focused are captured back (is the same e ect that when you start sleeping with the TV on and someone is switching o the TV you wake up because you perceive a change in the environment). Each section of your speech should be optimize t praise the maximum of emotions and to be as much e ective as possible. It may happen that you loose your point while speaking. A couple of tricks can help you get back on track. Repeat the last sentence you just said and sometimes this is enough to remember what to say next. If it is not enough, have always a question prepared for the audience and ask that question to have some time to rearrange your thoughts43. Be prepared to answer though questions. There is a strategy you can implement to minimize the risk of not being able to provide the correct (for your strategy) answer to people. Convince yourself that you are talking about something you invented and developed and hence you are the greatest expert in the world of what you are talking about. This helps to show some self-con idence. Then, think of what are the weakest point of your pitch and try to play the adversary game by identifying the questions that highlights those weaknesses. Once you have these questions, prepare reasonable and convincing answers. SLIDES Sometimes you need digital support for your presentations. The design of the slides is as much important as the content of the presentation, the usage of the voice and the body language. Slides should have visual breathing (empty space), to avoid overwhelming the audience with information. The more information and the more text you include in a slide, the less the audience will listen to what you are saying. Therefore, the few, the better. Slides should be beautiful to look at and must not overload the eye to understand what they contain. It is important the contrast among the visual components of the 43 https://www.youtube.com/watch?v=Fsr4yrSAIAQ&t=5s 24 Engineering Startup Starting  f ff ff ff ff f f f  21 NOVEMBER 2024 08:29 DRAFT 0.1 slide. A mistake to avoid is to have picture with a background color di erent from the background color of the slide. There are tools to remove picture background that you can use to extract what you want to show and paste it on the slide background directly. Another common mistake to avoid is to add text to pictures that is not relevant to let the audience understand what the picture is about. If some text is needed, it should be placed close to the picture so that the eye has not to move to read it, but grasp the picture and the text together. Compare the two slides. The irst one has a contrast between the background of the picture of Henry Ford and the slide background, although not so strong. Think of what could be if the photo background was black. You also irst look at the picture and then your eyes have to move around to ind the name of the person in the picture that is reported as a sort of title of the slide. The second slide is much more e ective because the name of Henry Ford is close to his picture and can be seen immediately and also the background c o n t ra s t i s e l i m i n a t e d. T h e v i s u a l breathing provides a sense of peace and order and the minimal information on the slide leave time to the audience to listen to what you are saying. Finally, the blu color of the background and the white of the words match the two best choices of colors (see the end of the previous section). Excess of text in the slides distract the audience from listening you. The solution is to think of text as narration, i.e., what you are tempted to write in the slides will become part of your speech. Practice to use the slides as pointers to what you are going to say and use only keywords to ix the concept in people’s mind. Remember that a picture is worth one thousand words. Practice to identify pictures that explain the concept you want to deliver and use them in place of text. The slide shows how you can graphically express a concept without using words except for the name of what you are explaining. Complex data chart or complex formulas that might not be of immediate understanding make feel the audience inadequate for your talk and you loose their focus. The solution is to describe the impact of the interpretation of charts/ 25 Engineering Startup Starting  ff f f f f ff  21 NOVEMBER 2024 08:29 DRAFT 0.1 formulas without showing them directly. If you want, you might have backup slides with the data chart or formulas to answer questions. Compare the two slides below. Never overlay text and pictures. The result would be that someone will focus on the picture, someone will focus on the text, none will listen to you. If the picture is meaningful, just use the picture and move text to narration. If the picture was only there to let the slide look more beautiful, just remove it and reduce the size of the text extracting keywords. Compare the two slides below. Never use bullet points and lists, even more if you plan to have hierarchical lists index style. They are useful to remember what to buy at the grocery store, but kill the audience (remember the meaning of bullet). Alternatives are to use visuals or to spread the content of the list over more slides. 26 Engineering Startup Starting   21 NOVEMBER 2024 08:29 DRAFT 0.1 3. TEAM AND LEADERSHIP When you start planning for a startup the only tangible asset is the team of founders. Everything else is just hypotheses. Therefore, you should carefully select the skills to have in the team and you have to have a team rather than a group, even if in the end both are set of people. The di erences between a team and a group are the following Group Team Spontaneous participation Selection of members Super icial communication E ective communication No leadership, no role Leadership and role clarity Members act independently Members collaborate Individual responsibility Collective responsibility Individual goals Common, shared goals No relation among skills Complementary skills Con licts di icult to solve Strategies to solve con licts The team is a system of interacting components with a common goal and vision. A group might be some people that for the more diverse circumstances end up being in the same place at the same time.