Hugh J. Rundle hjr47@hotmail.com

The Path to Become a

Successful Entrepreneur

University of Rochester

March 29, 2016

HJR background

Xerox Corp

PriceWaterhouse Coopers

Founded 8 technology & service businesses

Sold 5 businesses

The Path to Become a Successful Entrepreneur, (c) 2015 2

Entrepreneur’s Plan for Success

• Skills Inventory – Do you have the right personality?

• Understand Business – Sales & Marketing

– How to make $

• Investment criteria

• Summary

The Path to Become a Successful Entrepreneur, (c) 2015 3

Small business experience

Who has owned or run a small business?

The Path to Become a Successful Entrepreneur, (c) 2015 4

Small business experience

Who has owned or run a small business?

You have if you’ve

• Owned a check book • Great cash flow experience

The Path to Become a Successful Entrepreneur, (c) 2015 5

Who is an Entrepreneur

• Pursues a dream

• Creates value

• Makes life better

• Personal investment

– Time

– Money

– Other resources

• Has fun along the way

The Path to Become a Successful Entrepreneur, (c) 2015 6

Entrepreneurial assets

• Honesty … esp. with your self

• Biggest asset

The Path to Become a Successful Entrepreneur, (c) 2015 7

Entrepreneurial assets

• Honesty … esp. with your self

• Vision

The Path to Become a Successful Entrepreneur, (c) 2015 8

Entrepreneurial assets

• Honesty … esp. with your self

• Vision

• No fear of failure – learn by it

– admit when you are wrong

– move on

The Path to Become a Successful Entrepreneur, (c) 2015 9

Entrepreneurial assets

• Honesty … esp. with your self

• Vision

• No fear of failure … learn by it … move on

• Be passionate about your beliefs

The Path to Become a Successful Entrepreneur, (c) 2015 10

Entrepreneurial assets

• Honesty … esp. with your self • Vision • No fear of failure … learn by it … move on • Be passionate about your beliefs • Overcome the unexpected • Perseverance • Eliminate negative influences • OK to make mistakes • Good communications skills … esp. listening • Share the rewards with others

The Path to Become a Successful Entrepreneur, (c) 2015 11

Business startup basics

Get Agreements in writing early on • Who does what w/ defined expectations

Definition of Friendship • Changes as sales increase

“DON’T YOU TRUST ME” • “In God We Trust,” all others have contracts

• Contracts are for successors

The Path to Become a Successful Entrepreneur, (c) 2015 12

Approaches to solutions

• Thinker or Doer

DON’T OVERTHINK THE SOLUTION

• You won’t get it right the first time

• Consumers don’t care about 100%

• Get it to market

The Path to Become a Successful Entrepreneur, (c) 2015 13

Develop focused Marketing strategy

Apple strategy:

–hardware options, OS & support –Apple I

–Apple II

–MAC

–Lisa

– Understand how your market buys

The Path to Become a Successful Entrepreneur, (c) 2015 14

Business Development, Marketing & Sales

• Business Development – Develop sales infrastructure

• Marketing – Develop the value proposition

• Sales – Sell the value proposition

The Path to Become a Successful Entrepreneur, (c) 2015 15

Marketing value proposition

People buy on: • value perception • may or may not include facts

– How will it make my life better – Why do I need it – How have I lived without it – Value to me in $

The Path to Become a Successful Entrepreneur, (c) 2015 16

The Customer experience

“The customer is always right”

Actually they are not

• But without them, you have no business

• Ensure they feel the value and are valued

The Path to Become a Successful Entrepreneur, (c) 2015 17

Product Success Cycle is Endless

Listen to Customers

Develop Product

Market, Sell &

Distribute

More Market Research

Enhance Product

The Path to Become a Successful Entrepreneur, (c) 2015 18

Path to profit & success

• REDUCE ALL CYCLE TIMES – Sales

– Receivables

– Manufacturing & Distribution

– Investor ROI

– Time to make customer happy

• DEVELOP ANNUITY REVENUE

The Path to Become a Successful Entrepreneur, (c) 2015 19

Sourcing Cycle: US vs. Off-Shore

Which product has a lower total cost:

– Made Off-shore @ $2.75

– Made in Rochester, NY @ $3.25

The Path to Become a Successful Entrepreneur, (c) 2015 20

Sourcing Cycle: US vs. Off-Shore What’s my landed cost

• Cost of product • Freight to US port • Fees

– Insurance – Import duties & taxes – Bank – Brokerage

• Freight to distribution center • Every product touch = increased costs • Time = lost $

The Path to Become a Successful Entrepreneur, (c) 2015 21

What investors look for …

• Sales, sales & more sales …

• Concept: Validated or still an idea

• Scalable & Annuity opportunities

• Patents (US & PCT)

• Risk

• Competition

• High margins & Debt

• Inventor’s time & investment

• Management team & salaries The Path to Become a Successful Entrepreneur, (c) 2015 22

Company Valuation HIGHER if you have:

• Sales • Patents & IP • Experienced management team • Lower risk

LOWER if you have:

• No sales or pattern of acceptance • No IP or trade secrets • Inexperienced management team • Higher risk

The Path to Become a Successful Entrepreneur, (c) 2015 23

Summary for Success

• Sales, sales & more sales …

• Like a Golf swing: many paths to success

• Never fall in love with an asset

• Follow your dream

• Know your customers

• Know why they buy

• Get others to buy into your passion + share

Have fun

The Path to Become a Successful Entrepreneur, (c) 2015 24

Resources: Innovation Institute

http://www.wini2.com/ • Evaluates ideas for US $250 / $270 Int’l

–Good Go/No-Go evaluation report – Founded by Sam Walton (Walmart) – Formerly Wal-Mart Innovation Network

• Shark Tank The Path to Become a Successful Entrepreneur, (c) 2015 25

Questions

The Path to Become a Successful Entrepreneur, (c) 2015 26