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Starting and Scaling a Successful High-Tech Venture Michael L. Torto CEO “The Dumbest Guy in the Room”
Michael Torto CEO r. Path mtorto@rpath. com www. rpath. com 919 -861 -5716
My History • Born in 1962 • Joined the Navy Reserve 1981 • Emerson College Boston 1985 • 7 High-technology companies in 23 Years • Thin film research, medical manufacturing, scientific instruments, application and infrastructure software • All venture backed, 2 Public, 5 Private, France, Belgium • Investors all over the world Techgnosis = $0 to $100 million in 2 years Swan International = $0 to $1 billion in 5 years
2 Years ago
Start up Age Progression
Frustration • Frustration = The gap between idea and execution, inspiration and the practical reality of what it takes to start and scale a business.
Start-up Part 1 The “Science” Fundamentals of what it takes to: ① validate a vision ② build a differentiated product ③ partner early with customers ④ negotiate venture funding ⑤ attract a world-class team
Start-up Part 2 The “art” (Lessons) Value Topics/Top 10 Lessons 1. Always be the dumbest guy/gal in the room 2. Learn a little about a lot 3. Best “ideas” often suck? 4. Solve real world problems 5. Surround yourself with “motivated” people! 6. Improvise, adapt, overcome 7. Be your best sales person 8. Accept as much money as you can get. . early! 9. Above all else, achieve the objective! 10. One difference separates successful vs. unsuccessful, Entrepreneur vs. Wishepreneur
Questions to ask yourself? • Do I fail well? • Do I sell well? • If you have partners (founders) what will they contribute? • Am I a good communicator? Can I simplify things? • Am I good on the emotional rollercoaster?
What’s does it take? Q. It just takes a good idea followed by a lot of hands to make a successful company…right? Q. All it takes is the best product? A. This can’t be further from the truth! Building a technology startup is really tough.
What it Take is… • Think out your business well! • Successfully launch and continue to deliver! • You need to stay balanced -not get too focused into any particular stage or topic. • You need to reach out and discover what other successful entrepreneurs have done. • You need to have courage to focus…but willingness to adjust! • You need lots of help!
My First “full-time” Job! • Coulter Electronics
Wallace Coulter • Engineer, inventor, entrepreneur • The two great passions • applying engineering principles to scientific research • embracing the diversity of world cultures
Lesson 1 Always be the dumbest guy/gal in the room • • Ask more questions than give answers Formulate your products based on market needs, not your own statements of fact Don’t believe your own PR Do “real” market research and analyze trends and competitors
Validate Vision • Have a Product Vision – “Make it big” • Create a Minimal Marketable Product • Create a focus group (not your friends) early and offer them something tangible, real value • Market validates your vision
“Big”, Simple idea
Solving more complex problems
Lesson 2 Learn “a little” about “a lot”…of business. • Need to understand how your customers operate • Not just how the “geeks” consume technology • The CTO, Founder, has to be the evangelist
Lesson 3 Best ideas often “suck”… • Better “technology” doesn’t always come out on top! • Good enough to solve the problem often wins! • Buyers are emotional…. • “You can buy better…but you can’t pay more” – Harley Davidson Owners
Lesson 4 Solve a real world problem! • DON’T rely on “Ancedata” • Balance being ahead of the curve, without driving the company into the ditch! • r. Path… the transition… • Virtual Appliance Company…to the Company that helps IT manage entire systems in physical, cloud and virtualized environments.
Distribution • It’s all about distribution…without a channel, you have nothing. • Stage the distribution strategydirect to channel. • Users matter…but so does the model. Make money! Ways to build value: • Build Customers, Build Revenue, Build both! • Open source is a double-edged sword. • It’s all about distribution.
Lesson 4 A Don’t over think your business…. • Most think about all the reasons why it “won’t work” • Instead, try thinking about all the reasons why it will work! • Experiment with the business model
Roadblocks “Obstacles are those frightful things you see when you take your eyes off the goal!” Henry Ford
Build a Differentiated product • Not good enough to be a “me too” in technology • Not good enough to set you sights on an incremental change. . unless it has significant economic impact • When developing your value proposition and value statement… ask yourself … “So what? ” • Harder and harder to raise money on a “small idea”
Differentiated Products • Techgnosis • Swan International • Face. Book • Group. On
Lesson 5 Surround yourself with motivated people… • Find people with skills that compliment yours… and “use” them! • People that want to OWN IT! • People who don’t make excuses, but make things happen. • Negativity “kills” companies – Ask how do we achieve the objective, not why it wont work!
Attract a world Class Team • The “Market” and your “differentiated product” should bring out the best of the best • Sifting through the clutter is your challenge • Focus beyond their “technical skills” and build a team of well rounded people • Your company is NOT a charity…Get rid of the dead weight early • r. Path – everyone knows a little about a lot!
Lesson 6 Be flexible and prepared to improvise, adapt and overcome. • Initial assumptions can be wrong! Markets will shift! • Swan • Centive • r. Path
Lesson 7 Be your own best sales person… If you cant sell it, its unlikely anyone else can! • Inventors, Technologists, Geeks…You can and should sell!
Lesson 8 Accept as much money as you can get in! • Asking when you need it—reduces leverage. • It always takes more money than you think. • Choose a VC /Financial partners that you can trust and work with! • VCs expect more than one round. • Plan to prove market adoption with the first round.
Lesson 9! Above all else, achieve the objective! • Focus on the right Syllable • Do 10 things, 10, 000 times, not 10, 000 things once
Lesson 10 One difference separates the successful from the unsuccessful, the Entrepreneur and the Wishepreneur…
Lesson 10 The successful are willing to do what the unsuccessful are not!
10 Lessons Learned ① Always be the dumbest guy/gal in the room. ② Learn “a little” about “a lot” of businesses. ③ All it takes is a good idea and lots of people…right? ④ Think out your business well. Solve a real world problem – Don’t rely on “ ancedata” ⑤ No on has ever “made it” on their own. ⑥ Be flexible and prepared to improvise, adapt and overcome. Initial assumptions can be wrong! ⑦ Be your own sales person… It’s never too early to start selling! ⑧ Accept as much money as you can get! ⑨ Above all else, achieve the objective! ⑩ There is only one difference between the successful and the unsuccessful…