Starting Companies in Turbulent Times (pt 2)

Other things Dr Kurzina touch on were:

Be bold or be cautious, ITS ALL UP TO YOU, but now is the time, IF you know what to do! (Dr. Kurzina)

he talked about different strategies; Twitter strategy: Grow first, monetize later. Value is created bu increased number of users, and

Yammer strategy: Grow slower, Monetize immediately. Values is created by sales ($) and hopefully profits. Two very different approaches, neither wrong but he pointed out “Choose your strategy carefully”.

The VC World of Today (in the US)

IPO and M&A activity is dead

$ to start ups was down 30% in Q4, 2008

VC’s are “gun” shy

The VC’s are telling companies… cut expenses, lay people off, preserve cash.. get real or go home.

SURVIVAL IS THE NAME OF THE GAME

Attitude of some companies, is to push now, buy now and grow later. Reap the benefits on ‘the other side” of this down-turn.

NOW IS NOT A GOOD TIME TO SELL ( in the most case)

The Troubles ahead

Every technology company hits a wall, the good one work around it. Don’t over or under react.
Don’t be too optimistic, build and work on a “sales pipeline” of customers.
Start small, meet targets. Then build up. “don’t set your sell up for a big fall”

He also talked about using three different sales strategies.

official sales plan - 100%
sales budget - 115%
operating plan - 80-85%

An entrepreneur has to wear two hats; enthusiastic charismatic leader who “Sells the dream” and Stark Realist

Windows 7 beta download ends Feb 10th

The public beta of Windows 7 is still available but only until the 10th February, after this Microsoft will be pulling links to its server. Click here to download it.

Life after Microsoft?

Interesting blog article on future of OS, and what life may be like after Microsoft. Click here.

Starting Companies in Turbulent Times

Today we attended a session ran by Peter Kurzina - Senior Lecturer at M.I.T. Sloan School of Management. In it he talked about a variety of things in and around starting companies in turbulent times. During he talked about the number one thing a CEO should do is manage “cash-flow”, in that he means make sure the business has a regular in-flow of cash. “Oh the mistakes you will make, the money you will waste, maybe you are moving, with much too much haste” (Dr. Kurzina).

Attackers and Defenders - building on from Bill Aulet’s session, Dr. Kurzina talked about the difference between the two. Small Firms (new tech, new ideas) vs Large Firms (stuck in their way).

He also touched on the pluses and minuses of starting a business in turbulent times:

+’s

Great time to recruit, takes two years to build produce anyway, if you can make it now, you’ll soar later! Defender companies cut back on R&D - will need to buy tech in a few years (great exist strategy for newer companies), “Cost effective” solutions resonate with careful buyers. less clutter - fewer competitors, defenders more ruled by “sales and marketing” than protecting franchise. Less employee turnover.

-’s

Tougher to raise money, angel investment dries up: VC rounds are harder, Valuations slip, buyers are more risk adverse, fewer restarts; no second chances. Financial risk, market risk, technology risk, all increase! Longer time to break even, technology advances have life cycles; longer time to develop possibly giving competitors opportunity to “leap-frog” you.

A Northerner in Kansas (cont)

So week one is over and what a week! The days have been long, and the meals have been large but I feel I have already been “nudged” further towards achieving the ambitions and goals I’ve set myself. Everyone at the Foundation and in Kansas City have been so welcoming, and I couldn’t of wished for a better group of people to be doing this with. Everyone’s so determined, bright and dynamic in the group, new ideas and potential collaborations are already being talked about.

Highlights of the week included talks from Bill Aulet, a successful entrepreneur and now academic at M.I.T. who discussed marketing and sales. He compared starting a new company, to that of a small country trying to invade a larger one. You don’t want to spread your army too thin, attacking at different ports. Rather, you focus your attention and efforts attacking one single port ceasing control and then going after one city at a time.

We also had the opportunity of attending the KTEC Pipeline awards. Pitches were held throughout the day, with an awards ceremony held on the night. It was a great chance to meet the entrepreneurs and business community in Kansas.

To round the week off Ted Zoller,  another seasoned entrepreneur but now works at the University of North Carolina, Chapel Hill. He delivered a “New Venture Boot Camp”, which included a host of really interesting topics including focused customer value propositions. The week included a lot of reading, both books and case studies.