chemical entrepreneurship #4 - business model analysis - how will your … · 2015-01-02 ·...

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“Everyone today must think like an entrepreneur whether it’s in your own

business, a large corporation or a nonprofit organization.”

Continues Thursday, June 20, 2013 @ 2PM EST

Learning how to develop the next big start-up has never been so entertaining!

ACS members who attend 7 out of 9 sessions get a Certificate of Completion.


Acknowledgement:

The 2013 Chemical Entrepreneurship Series is

co-produced by UC San Diego von Liebig

Entrepreneurism Center.

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“Success, failure, joy, pain and rejection. Neil

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Business Model Analysis:

How will your company make money?

Download the presentation ONE WEEK after webinar:


ACS WEBINARS™ May 16, 2013

Neil Senturia

CEO, Blackbird Ventures

Barbara Bry

COO, Blackbird Ventures

14 Co-produced with UC San Diego’s von Liebig Center

5/20/2013

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Developing a Viable Business Model

How will my company make money?

American Chemical Society

May 16, 2013

Barbara Bry and Neil Senturia

Definition of a Business Model

Summation of the core business decisions and trade-offs employed by a company to earn a profit (HBS Note on Business Model Analysis)

1. Revenue sources

2. Key expenses

3. Investment size

4. Critical success factors

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Question

Which is more important early on in your company?

1. Getting revenue early

2. Developing a complete product

Lean Business Model

• Build a minimally viable product defined by Eris Reis as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

• Get customer feedback quickly

• Pivot based on feedback

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Revenue Sources

• Customer: Who are you selling to? What are their problems/needs?

• Value Proposition: What value do we deliver that is better than other solutions?

Why Althea?

• Experience

• Flexibility

• Scalability

• Customized Solutions

• Reliability

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Proflowers.com

• A large market and the convenience of shopping online won’t cut it

• What is the problem you’re trying to solve?

– Flowers aren’t fresh: 7-9 days in transit

– Flowers are expensive: Inefficient middlemen

– Florists lack quality incentive

– What you see is not always what you get

If the supply chain’s broke – fix it

Grower

Importer/

Distributor

Wholesaler

Retailer’s and

Internet Order Takers

Consumer

Grower

2 days

2 days

2-3 days

2-5 days

1-2 days

Brick & Mortar Proflowers.com

INTERNET

Elapsed Time: 9-12 Days 2-3 Days

Consumer

5/20/2013

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Today’s ECG/EEG sensors, however: -Require adhesives and skin-irritating gels

-Number one patient complaint against mobile ECG/EEG devices

-Need for new, patient-friendly, sensor technologies

-Large usability barrier outside of laboratory environments

ECG/EEG: -Simple to build

-Inexpensive to use

-Non-invasive for the subject

-Widely used in clinical and research settings

-Diagnostically useful information

Motivation

Question

Is it better to develop a quicker smaller idea or a bigger idea that requires more time/$ ?

1. Work on a smaller idea– a feature– that you can develop quickly and cheaply

2. A bigger idea– complete product– that requires more time and money

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Revenue Models

1. Subscription – SalesForce.com, Netflix You can make it free for basic service, charge for premium– LinkedIn 2. Volume or unit based – customers pay a fixed price per unit– scientific products, restaurant, Proflowers– Razer/Razer blade model is common for some scientific products and medical devices 3. Advertising based – Google, Yahoo, TV, radio

Revenue Models continued

4. Licensing and Syndication – Big pharma pays licensing fees for your technology

5. Transaction Fee – Charles Schwab

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Expenses

1. Fixed – rent, management team, core scientists 2. Variable —materials, lab equipment, sales commissions 3. Non-recurring – buying a building, new computers Think about your core competencies– What do I need to do in-house? What can I outsource? *Photo Top Right -Experimenters taking an X-ray with an early Crookes tube apparatus, from the late 1800s. The upper man is examining the bones of his hand with a fluoroscope screen. The lower man is taking a radiograph of his hand with a photographic plate.

Major Costs

1. People – at what points in your growth curve do you need to add more scientists, customer service reps, administrative overhead?

2. Inventory —more important in manufacturing, what supplies do you need to keep on hand?

3. Rent

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Major Costs

4. Marketing-Advertising – How much is it going to cost you to acquire and retain a customer? How long is your sales cycle? How long before you get paid?

Customer Acquisition and Retention

How are you going to reach your customer? - Your own sales force - Someone else’s sales force - Distributors - Internet - Combination

How are you going to manage the long-term relationship with your customer so that they continue buying from you?

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Cost Analysis

1. Is business model based on fixed, semi-variable or non-recurring?

2. How much volume can we do with our starting fixed base?

3. What primary drivers could change over time?

4. What are the major costs?

Investment Size

• How much money do we need to raise until we reach break even?

• How long and how much money will it take to develop my product?

• How quickly can I sell the product to the customer? When will I get paid?

• What milestones can we achieve with X $$?

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Critical Success Factors

1. Timing and cash flows

2. Select 3-4 of the most important parameters– sales growth, new customer acquisition rate (and costs)

3. Look at what happens to your cash needs when you change the parameter, both up and down.

Keyword for today!

“Falafel”

Receive a Certificate of Completion! For more info visit:


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Resources

Why the Lean Start-Up Changes Everything

by Steve Blank, Harvard Business Review, May 2013

Note on Business Model Analysis

Harvard Business School

And now your chance to win!

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or

[email protected]

To be a successful entrepreneurial

scientist you need ___________ ?

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Questions & Answers

We want to hear what’s on your mind?

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urt

esy

of

Bre

vin

Bla

ch

Business Model Analysis:

How will your company make money?

Download the presentation ONE WEEK after webinar:


ACS WEBINARS™ May 16, 2013

Neil Senturia

CEO, Blackbird Ventures

Barbara Bry

COO, Blackbird Ventures

38 Co-produced with UC San Diego’s von Liebig Center

5/20/2013

20

Acknowledgement:

The 2013 Chemical Entrepreneurship Series is

co-produced by UC San Diego von Liebig

Entrepreneurism Center.


http://www.jacobsschool.ucsd.edu/vonliebig

How has ACS Webinars benefited you?

Be a featured fan on an upcoming webinar! Write to us @ [email protected]

Fan of the Week

40

“Your speakers are the best!! They are

subject matter experts, and these webinars

enrich my knowledge of a subject so much

in just one hour. The convenience of the

webinars is fantastic!"

Donna Bush, Ph.D.

Forensic Toxicologist, HHS

TM



5/20/2013

21

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The Transition from Graduation to a

Career in Industry









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“Everyone today must think like an entrepreneur whether it’s in your own

business, a large corporation or a nonprofit organization.”

Continues Thursday, June 20, 2013 @ 2PM EST

Learning how to develop the next big start-up has never been so entertaining!

ACS members who attend 7 out of 9 sessions get a Certificate of Completion.


44

International Center Webinar Series Free Webinar - May 22, 2013 at 2:00PM EST

Working abroad has many benefits…

• Work alongside scientists from across the globe

• Grow professionally and personally

• Gain a global perspective

• Brush up on your foreign language skills

• Experience a different culture

• Enhance your resume!

You will find more international opportunities at the International Center

www.acs.org/ic



5/20/2013

23

And now your chance to win!

45

Facebook.com/acswebinars

or

[email protected]

To be a successful entrepreneurial

scientist you need ___________ ?

If you enjoyed this ACS Webinar today…

please support the program!

Find the many benefits of ACS membership!

www.join.acs.org

ACS Network (search for group acswebinars)

www.communities.acs.org

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http://www.communities.acs.org/

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The Transition from Graduation

to a Career in Industry












chemical entrepreneurship #4 - business model analysis - how will your … · 2015-01-02 ·...

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