How To Bootstrap Your Startup Wed-Mar-27-2013

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Presentation by Sean Murphy at ASLCPA Emerging Business Seminar on Wed-Mar-27-2013

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How to Bootstrap Your Start-Up:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) How to Bootstrap Your Start-Up Sean Murphy, SKMurphy Inc . An ASL Emerging Business Group Best Practices Seminar March 27, 2013 1

Key Take Aways From Today:

Key Take Aways From Today Two Examples of Successful Bootstraps 4 Key Elements in Their Approach Entrepreneurial vs. Employee Mindset How To Evaluate New Opportunities Team + Technology + Traction Social Capital & Social Navigation Markets are Conversations An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 2

Successful Bootstrapped SaaS Company:

Successful Bootstrapped SaaS Company Workers ’ Compensation SaaS SW Initially IT Consulting Team Partnered with Managed Care Provider Productized Internal Workflow Mgmt Tools Major Customer: Nationwide Grocery Store An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 3

Successful Cellular Spend Mgmt Firm Bootstrapping in San Diego:

Successful Cellular Spend Mgmt Firm Bootstrapping in San Diego Cell Phone Spend Management Reseller Who Added Bill Review Service Initially A Spreadsheet, Manual Bill Analysis Added PDF Reader to Eliminate Data Entry Contract Development in QuickBase Hired CTO to Build Full Cloud Stack Traction in Construction Industry An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 4

Why Bootstrap? / Outside SV: Why Start A Business?:

Why Bootstrap? / Outside SV: Why Start A Business? Why – Entrepreneur Mindset Autonomy Achievement Wealth Why Not – Employee Mindset Security My Time is Always Worth $X/Hour I Want To Retire (Move to Another Lifetime) An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 5

Successful Entrepreneurs Use Effectuation:

Successful Entrepreneurs Use Effectuation Sweat Equity + Relationships + Know How Ends Become Means Outcomes Become Building Blocks Affordable Loss Bets Don ’ t Go “ All In ” on One Strategy Gain New Knowledge & Lower Uncertainty Clarity on Business Model Identify and Lower Risks An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 6

Recap Two Examples:

Recap Two Examples Leveraged Expertise To Focus on a Niche They Sold What They Had Listen & Learn: Product Provoked Insights Picked a Problem with Enough Value Price Point Enabled Pay As You Go Continually Integrated Other Technologies Don ’ t Make What You Can Integrate An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. ( www.skmurphy.com ) 7

How to Evaluate an Opportunity?:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) How to Evaluate an Opportunity? It ’ s not Just the Problem (or the Market) It ’ s Also What You Bring: Team, Technology, Traction 8

Team::

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Team: Intellectual Capital Social Capital Financial Capital 9

Team: Intellectual Capital:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Team: Intellectual Capital Know-How, Experience, Methodology Enables Execution with Distinction Individual Skill Not Enough Demonstrated Ability to Deliver Projects Best: Carried an Idea to Revenue/Profit Unique Knowledge Drives Differentiation 10

Team: Social Capital:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Team: Social Capital Relationships & “ People Skills ” Prior Shared Success that You can Reactivate Social Navigation: Networking With a Goal Understand Cost and Transactions Founders Will Spend Social Capital On Trusted Feedback Early Sales Sourcing Advisors and Early Employees 11

Social Navigation Networking With a Goal:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Social Navigation Networking With a Goal Costs: Spending / Enhancing Trust Transactions Introductions Serious Conversation Follow-Up 12 12

How To Reach a Target Customer?:

How To Reach a Target Customer? An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 13 Target Customer You Suspects

Navigating To First Customers :

Navigating To First Customers An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 14

Team: Financial :

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Team: Financial Self-Funded Investment Sources Friends & Family Qualified Investors: Angels, VC, & Corporate Revenue is the Best Form of Financing Early Market Survival is All About Low Cost Exploration Low Cost Experimentation (Safe-Fail Probes) 15

Technology: Address Pain or Enable Possibilities:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Technology: Address Pain or Enable Possibilities Does Technology Address Customer Pain? Who has the Pain? Or Does It Enable New Capabilities? What is the Minimum Feature Set? Antibiotics More Compelling than Vitamins Q: How To Position Childrens (81mg) Aspirin? 16

Technology: 2 Week Test:

Technology: 2 Week Test Tend to Over Engineer MVPs Consulting – System Integration - Product What Can You Deliver In 2 Weeks? Audit Workshop Consulting Sign-Up List for Newsletter An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 17

Consulting – System Integration – System eMOBUS Example:

Consulting – System Integration – System eMOBUS Example Manual Spreadsheet PDF Scanner Intuit Quickbase Solution Full-time CTO and Cloud Solution An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 18

Traction: Set & Hit Targets:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Traction: Set & Hit Targets Getting Started Means: Developing a Pitch / Demo Writing a Business Operating Plan Writing a Product Plan Writing Code / Creating Technology Writing a Business Plan to Raise Money Pick Those That Reduce Key Risks First 19

Traction: Demonstrated Results:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Traction: Demonstrated Results Set and Hit Targets That Reduce Risk Internal Make Decisions: Irrevocably Commit Resources Define & Deliver: on Spec & on Schedule Get Others Excited Enough to Join Team External References from Paying Customers Revenue from Customers 20

Traction: Three Levels of Progress:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Traction: Three Levels of Progress Stopping Point: Limits to Current Effort Plan For When Try Something Else Avoid “ Little Engine that Could ” Nominal: Breakeven Operation High/Unexpected Success You Have a Plan That Merits Investment 21

How To Bootstrap Your Start-Up:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) How To Bootstrap Your Start-Up Team Map Intellectual, Social, and Financial Capital Technology Specific Skills that Drive Product Leadership Traction References & Revenue Ability to Set and Hit Targets 22

About SKMurphy , Inc.:

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) About SKMurphy , Inc. We Offer Strategy and Business Development Consulting & Products Our Focus is on High Tech Entrepreneurs We Help Them Find Early Customers / Early References Early Revenue 23

Bootstrappers Breakfast Monthly meetings in 12 Cities:

Bootstrappers Breakfast Monthly meetings in 12 Cities meetup.com /Bootstrappers-Breakfast-SV/ Palo Alto, Sunnyvale, and Mountain View Also Champaign, Chicago, Minneapolis, Oakland, Philadelphia, San Diego, San Francisco, Tampa, and Warsaw (Poland) BootstrappersBreakfast.Com An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 24

Sources of Innovation: How to Systematically Search for Opportunities :

An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) Sources of Innovation: How to Systematically Search for Opportunities The Unexpected The Incongruous Weak Link In Existing Process Industry Or Market Structure Change Demographics: Size, Age Structure New Zeitgeist: Perception, Mood, Meaning New Knowledge 25

Further Reading:

Further Reading “ You Have to Be a Little Crazy ” by Barry Moltz “ The E-Myth Revisited ” by Michael Gerber “ Managing Oneself ” by Peter Drucker (HBR Article) “ Effectual Entrepreneurship ” by Saras Sarasvathy et. al. An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 26

End of Backup:

End of Backup An ASL Emerging Business Group Best Practices Seminar March 27, 2013 by Sean Murphy, SKMurphy, Inc. (www.skmurphy.com) 27

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