THE SILICON VALLEY WAY- BOOK REVIEW

Mikko Jokela

Jarkko Kosonen

Jussi Pihlainen

Janne Tikkanen

The Silicon Valley way- Author & Book

Main Reasons for the Success of Silicon Valley

Stanford University and the University of California

Venture Capital The Concentration of High-Tech Companies The Weather

Some Other Reasons for the Success of Silicon Valley

Workforce Diversity Two-Income Families Labor Laws Government and Industry Cooperation California´s Culture Employee Ownership and Stock Options California´s Public Colleges California´s Pioneer Mentality

Seven questions executives ask

The 45-second business plan What is your product?

– should contain measurable objective

Who is the customer?– be specific

Who will sell it?– This helps determine product elements.

Seven questions executives ask

How many people will buy it? How much will it cost to design and build? What is the sales price?

– Remember that prices come down over time.

When will you break even?– forecast and calculate

Market research

What does neighbors’ and media think?– Ask neighbors opinions and listen them carefully.– Go to library!

What's on the web?– Web is a powerful market research tool.

What do the numbers/experts say?– Save all the number data.– Keep your open mind when listening experts.

Can you predict the future?

The Competition

Who are your competitors?– List toughest and most potential competitors.

What are they doing?– Organize your thoughts.

What is their value proposition?– Define your competitors value proposition.

What are their secrets?– Trade shows, job postings on the web...

The Product

Why would anyone buy your product?– List your products values and benefits.

What will it look like?– Use drawings to create a shared vision.

When it will be available for shipping?– Product should have 3 to 10 milestones.

How different are you from the competition?– Price, reliability, ease of use etc.

The Product

Should you do product simulations?– Some ways to simulate could be:

paper and ink PC simulations phone simulations

What is your products name?– Use brainstorming.– Name associates with: Quality assurance, Product vs.

company name, Geography and history, uniqueness

The Customer

”It is so easy to get wrapped up in your product and forget all about he customer”

– Dale L. Fuller, Whowhere? Inc.

Do the customers think it is a good idea?– Ask about it from your potential customers.

Who is the real customer– Specific buying habits?, Prerequisites?, Etc.

The Customer

What are your customer’s secrets?– Age demographics, Income level, Method of

payment… Should you do focus groups?

– Focus group = Group of 6 to 10 people, who are representing potential customers.

– Focus group interviews should be done by some professional.

How much will the customer pay?

The Marketing Strategy

What are your objectives?– Strategic and marketing objectives

How will you sell and support the product?– Make buying process more simple.

Who will generate demand?

The Marketing Strategy

Will you need marketing or sales?– Sales representatives etc.

What is the marketing plan?– “History teaches that the only thing that works in

marketing is the single bold stroke…”Al Ries and Jack Trout, 22 immutable laws of marketing.

How do you become front page news?– Imagine what kind of strengths will be mentioned in

your future front page success story.

Confront the Truth

"The best way to make a lot of money in a new venture...is to be honest about the real risks in the business.”

John Doerr, Partner, Kleiner Perkins Caufield & Byers, from Going Global by William C. Taylor and Alan M. Webber

Disasters do have warning signals --> trust your instincts.

Confront the Truth

Is this the right project for you?– Why are you doing this?

Consider it before making big decisions. What is your motivation?

What is your core competency?

Confront the Truth

Will the business work?– A new business succeeds by focusing.– What skills are critical to your success?– What will make your business or product unique?– What do you enjoy doing?

Identify your competitive advantage and concentrate on it.

Confront the Truth

Are you telling yourself the truth?– Be truthful

How much will it cost to build it? How much will customers pay? Can you deliver what you promised? Is there really need for the product? If your employees don't want the product, it will not

succeed.

– One of the biggest faults is not being truthful to yourself.

Raising Money

Should you invest your own money?– There's something wrong if no one wants to invest.

Never:– mortgage your house– use your kids college funds– don't take the risks you can't live with!

The Business strategy presentation

1. Project Name

2. Agenda

3. Executive Summary

4. Business Objective

5. The Opportunity

6. Demographics

7. Target Market

8. The Product

The Business strategy presentation

9. Product Schematic

10. Product's Benefits

11. The Competition

12. Competitor's Products

13. Competitive Feature Matrix

14. Marketing Plan

15. Channel Strategy

The Business strategy presentation

16. Development Schedule

17. Cost of Goods

18. Pricing

19. Demonstrations

20. Financials

21. Next Steps

22. Summary

The Business strategy presentation

Common Pitfalls

1. Presenting with Your Back to The Audience

2. Avoiding Eye Contact with The Decision Maker

3. Running Out of Time

4. Decision Maker "No-Shows"

5. Unknown Audience

The Product Development Scorecard

Predicts the likehood that you will produce a great product

About ten questions which project manager has to answer and give points– Drawing and Pictures– Target User– Competitive knowledge– …

The Marketing, Sales and Distribution Scorecard

This scorecard enables you to track activities outside of R & D.

Predicts future success or failures. Each business area should have their own

card (or report). 13 Questions.

Closing Arguments

Surround yourself with people who tell the truth.– ask people's opinions– don't mind if your idea is getting ridiculed– criticism gives new ideas– be careful who you talk to, tough (inside/outside

your company)– sometimes best ideas come from unlikely sources

Closing Arguments

Set the right questions– answer truthfully– analyze your answers

"Back-of-a-Napkin”– A Plan doesn't need to be fancy to work– Planning is important - not the plan itself

Closing Arguments: Strengths & Weaknesses

Strengths– Cases - some good/interesting examples– List of questions needed to be answered– Offers a "toolbox" for unexperienced

Closing Arguments: Strengths & Weaknesses

Weaknesses– Quite subjective view– No scientific argumentation– Very American - for Americans– Tries to cover all possible situations