Start-Up: Personal Experience

1
Start-Up Personal Experience

• Amir Ofer
• ProSight / BRM

2
Presentation Structure

• Background
• Searching for a 1,000,000,000 idea
• Execution

3
Section 1
? Background ? Searching for a 1,000,000,000
idea ? Execution
4
Personal Background

• Reasonable success in former startup
• Lack-of-interest in current position (VP RD in
  software-testing company)
• Economical ability to risk few years

Conclusion Look for a new startup
5
Personal Guidelines

• Look for fare honest investors (based on former
  bad experience)
• No easy solutions. Real business takes time
• Walk against the stream
• Assumption it is too crowded there, and I am
  less smart than (at least some of) the others
• When identify an idea - do not waste time. TTM is
  the most expensive resource

6
The Story
A mandate from BRM to

• Identify a major problem
• Find a solution for the problem
• Establish a company that will implement the
  solution
• Lead the company to IPO and beyond

7
BRM Guidelines

• Market gt 1,000,000,000
• Emerging market
• High entry barrier
• Software-oriented product
• BRM must have added value (engineering /
  management / marketing / HR / ) - not only money

8
Section 2
? Background ? Searching a 1,000,000,000 idea ?
Execution
9
Overall Frame (1)

• Team of two - both veterans of former startups
  (One successful / One failure)
• 6 months time frame
• Absolute lack of supervision

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Overall Frame (2)

• Lot of support when needed
• Management time
• Help in ideas analysis
• Support in overseas connections and market
  validation
• No budget limit

11
Search Methodologies Techniques (1)

• Sitting together in the same room
• Flying to several important expos
• Gartner ITExpo
• Internet World
• Reading many books
• Important source Advertisements (PC Mag., etc)

12
Search Methodologies Techniques (2)

• Exposing ideas in their embryonic stage - no time
  to waste
• Distributing the rumor - inside and outside
• The winning card Attention to small details and
  personal experience

13
Validation Methodologies Techniques - In-house
(1)

• Massive use of patent repositories
• IBM (free)
• Others (expensive)
• Hundreds of hours of internet search
• Similar products
• Other solutions to the same problem
• Competitors

14
Validation Methodologies Techniques - In-house
(2)

• Internal reviews with BRM technical staff
• An expert in almost any area
• Internal reviews with BRM business-oriented staff
  managers

15
Validation Methodologies Techniques - Outside

• Reviews with BRMs friends and families
• Meetings with relevant Israeli managers
• Omri Padan (LEVIS, McDonalds) / Rami Belinkov
  (012 Kavei Zahav) / .
• validation trips in US
• 3Com, Data General, EDS, Bank Of America /...

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Search and validation phase The bottom line
Semi academic phase with a guillotine above our
head. Every passing day requires stronger
nerves as ideas reservoir is drained and back to
square 0
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Required Features During the inventive phase

• Creative / inventive nature
• Ego kaze katan
• Ability to listen to others
• fast context switching
• Broad understanding in many disciplines.
  Otherwise Looking for the coin under the lamp
• Understanding of business technology
• This is not academy - this is business

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Examples for rejected ideas (1)

• AVL (Ituran) based on short range interaction

Reason for rejection Need for standardization
before the system is efficient
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Examples for rejected ideas (2)

• Breaking the mediation gap - bypassing the food
  supermarkets by Internet-controlled orders

Reason for rejection It is marketing - nothing
to do with technology - no advantage - huge risk
- huge investments
20
Examples for rejected ideas (3)

• Compass-like device that shows direction to Mecca
  to 1,000,000,000 Moslems and the direction to the
  emperors palace to 120,000,000 Japanese

Reason for rejection Nobody is praying to the
Japanese emperor any more (and 1 other small
reason. Guess).
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Examples for rejected ideas (4)

• Internet based LCR - opening the telephony market
  to free competition.

1 for me if you translate it into a product
22
Results

• Breakthrough achieved within 3.5 months
• Two serious ideas
• Serious Worth evaluation outside the inner
  circle of entrepreneursBRM
• One of them is ProSight

Personal Note This should be regarded as an
exceptional success. I suspect my ability repeat
the same process again with such high-demanding
guidelines.
23
Idea 1 Fighting Against Faked Products

• Source accidental meeting with friend who wore
  faked shoes
• 10 of the world trade are faked products
• Damage caused to brand names by fakers is greater
  then by competitors

24
Idea 2 ProSight

• Source 1 Personal experience - hiding
  information from external project supervisor
• Source 2 Gartner ITExpo books

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Section 3
? Background ? Searching a 1,000,000,000 idea ?
Execution
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Step by Step(1) Identifying the Problem
Identifying a problem Recalling the lack of
supervisor's control when managing a software
project
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Step by Step (2) Comparing to Guidlines

• 1,000,000,000 Company? ?
• Emerging market? ?
• High entry barrier? ?
• Software oriented? ?
• Added value to BRM capabilities? ?

Conclusion Go ahead to serious market research
28
Step By Step (3) Concept Evolution
Initial concept Tool for improving software PM
After 3 weeks tour Application for portfolio and
PM. Focus on ERP applications
After 3 months Application for portfolio and PM.
Focus on financial institutes (banks, insurance
companies)
Today Aligning IT with business. Focus on
E-Commerce
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Conclusion 1 Never stick to your original idea

• It is new - you do not know much about the market
• The market is not static - It is moving all the
  time. The worst thing is to develop a system for
  yesterdays market.

Fact 80 of successful startups make their money
by changing direction. Examples BackWeb /
Mirabilis /
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Crisis During Development (1)

• Inventors are not necessarily good managers
• After the initial enthusiasm, switching to
  routinely development requires different skills
• Bitter conflicts on the product shape
• difficulties in recruiting the right team.
• Nobody did it before - so everybody is learning
  (and making mistakes)

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Typical Crisis During Development (2)

• Investors begin to lose money and become nervous
• Competitors emerges
• Communication problems with the American team.

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Conclusion 2 Leave Your Ego Outside the Office

• It is for your benefit to ask for help when you
  do not know what to do.
• Example Do not delay a marketing document if you
  never wrote one. Ask for help
• Find the niche that fits you. Ignore titles.

33
Reminders (1)

• You will win when the company goes public. Not
  when you are CEO and President of nothing.
• Startup today is not a 2-months garage
  development. These days are gone. It is a
  high-risk, industrial process which requires many
  skills, a lot of money (and a lot of luck).

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Reminders (2)

• None of you is a computer genius. At most you
  are good technicians. Ignore the social status.
  Do not flatter yourself.
• It is better to have 3 of 100,000,000 than 25
  of nothing.
• The idea is (may be ) 5 of the value. The rest
  of it are execution, marketing, sales, etc.

35
Reminders (3)

• Your chances to succeed when you are equipped
  with your university experience are minimal.
• Spend 2-3 years in a real startup environment
  before trying your own.
• Create interest of key-figures.
• In order to make love you must undress. Be
  confidential, not paranoid.