How start to success and sustain by STARTUP?
This report is made to make the reader understands about Startup Company. The details are consists of the interest many topics. They are the definition of Startup, how to success by joining startup, step to successful startup and the benefits of startup. In addition, there is case study about OOKBEE Company that is one of the successful startup company. The writer hopes that the reader would get the useful information from this report.
Startup is the new company that is located from few person but have a good idea. There are three factors that support to create a successful startup. The first is joining with good people. The second is making something customers actually want. Finally, that is spending as little money as possible. There is many successful startup company. For example, Apple, Microsoft, Yahoo, Google and Facebook. The objective of the study are: first, to study the definition, the concept and step to sustainable success of startup company; second, to study and analyze OOKBEE company that is one of the successful startup company and present an efficient guidelines to success.
This study use both primary information is interview and secondary information is documentary research. The efficient guidelines to success of startup company model are created by analysis the secondary information. In the part of survey research, use study and analyze OOKBEE Company by interviewing. This analysis found that OOKBEE has an efficient step in doing startup and according to an efficient guideline to sustainable success of Startup Company.
Introduction to topic
Startup is challenge for the new generation who would like to initiate IT business. Nowadays startup is interesting business because the growths of IT like smart phone, tablet or 3G Network. This is an opportunity for application developer. The advantage of startup is low capital and few partners.
However, not everyone will success in doing startup business because there are many factors that effect to the success for example, the wrong concept that creating application is difficult or the product does not response the customers ‘demand. Therefore, should to study that what factor is effect to the success of Startup Company and suggest the guideline of sustainable success of Startup Company for everyone.
Objectives of the study
1. To study the definition, the concept and step to sustainable success of startup company.
2. To study and analyze OOKBEE Company that is one of the successful startup company and present an efficient guidelines to success.
Data Collection Method
This study used two research methods: documentary research and survey research. The documentary research, using data and information from secondary sources. The survey research that use in case study is was conducted by interviewing the OOKBEE’s chief executive officer.
The information is collected from documentary research and survey research represents as below:
The definition of Startup
Startup is the compound words from start and up. Startup is the new company that is located from few person but have a good idea. There are many the successful startup company for example, Apple, Microsoft, Yahoo, Google, Facebook etc. ( Source : http://www.thairath.co.th/content/tech/309306 )
In 2001, the internet and website is popular so the startup is new trend. Although Bubble Economy is happen in this year but the startup is continuing for example, Amazon, Ebay, Yahoo and google. After that in 2006, there are web 2.0 technology and in 2009-2010, there are portable equipment trend that make the new IT company is establish for example, Facebook Twitters or youtube.
How does IT associate with Startup?
How? - The growth of startup business in Thailand recently one of the factors that supported is The internet growth, Smartphone growth and the 3G auction. All of these factors are help to startup success.
Why? - The startup is an It’s venture capital project so, the boomer of the technology, smartphone and internet has catalyzed to synthesis the startup idea as a result startup could never launch without the IT support
IT is a part of important factor for startup. There are many factors that make startup to success for example, people, money, Idea etc. The people who are partnership of startup need to have IT knowledge, Marketing knowledge and a good idea.
The details to supported this idea are as below.
This info graphic has shown the increasing of ookbee applications downloaded that correlated with the growth of smartphone has used (112% growth of smartphone user).
What?—— For example, the idea of Google is create an efficiency search engine website. The people who create website need to have IT knowledge. In addition, the product of Startup Company is application or website. The social network is channel in the launching of product to user. Therefore IT is associated with startup because it is a part of product and the important component of startup.
Evolution of a startup company
Startup companies can come in all forms. A critical task in setting up a business is to conduct research in order to validate, assess and develop the ideas or business concepts. In addition to opportunities to establish further and deeper understanding on the ideas or business concepts as well as their commercial potential. A company may stop to be a startup as it passes various critical event, such as becoming publicly traded in an IPO, or stop to exist as an independent entity via a merger or acquisition. Companies may also fail and stop to operate altogether.
Investors are generally most attracted to those new companies distinguished by their risk or reward profile and accountable. That is, they have lower bootstrapping costs, higher risk, and higher potential return on investment. Successful startups are typically more scalable than an established business, in the sense that they can potentially grow rapidly with limited investment of capital, labor or land.
Startups encounter several unique options for funding. Venture capital firms and angel investors may help startup companies begin operations, exchanging seed money for an equity stake. In practice though, many startups are initially funded by the founders themselves. Factoring is another option, though not unique to startups. Some new funding opportunities are also developing in crowd funding.
Co-founders are people involved in the developing of startup companies. Anyone can be a co-founder, and an existing company can also be a co-founder, but frequently co-founders are entrepreneurs, engineers, hackers, venture capitalists, web developers, web designers and others involved in the ground level of a new, often high tech, venture.
There is no formal, legal definition of what makes somebody a co-founder. The right to call oneself a co-founder can be established through an agreement with one’s fellow co-founders or with permission of the board of directors, investors or shareholders of a startup company. When there is no definitive agreement, disputes about who the co-founders were can arise.
Why Start a Company?
( Source: http://www.techtransfer.harvard.edu/resources/guidelines/startupguide/OTD_Startup_Guide.pdf )
These are the factor that why we should to start the business. Those factors have shown as below.
1. Demand: Potential of the core technology to provide a solid platform for multiple markets or product opportunities.
2. Competition: Identification of other companies that offer similar solutions.
3. Licensing: Likelihood of interest from existing companies in licensing the technology.
4. Funding: Availability of capital to build and grow the business, together with the interest, capabilities, and track record of likely investors.
5. Commitment: Level of commitment and involvement of the inventors.
6. Support: Presence of a true business champion for both the technology and the new venture.
7. Management: Experience, passion, and drive of the startup’s executive team.
( Source: http://www.techtransfer.harvard.edu/resources/guidelines/startupguide/OTD_Startup_Guide.pdf )
The items to consider when deciding whether or not to start a New Company are below:
1. Is the invention a disruptive technology? If not, how would it be categorized?
2. How soon can a commercial product come to market?
3. What is the level of risk associated with this startup?
4. Does the technology have clear applications and a definable market?
5. Who owns the intellectual property (IP)?
6. What will be my role in the new company: full–time employee, advisory board member, executive, or consultant?
7. What are the goals for the company? Is it to grow the company and position it for an acquisition or a possible initial public offering (IPO)? Or, is it to build a small, yet sustainable business?
8. Will capital from private investment companies be needed? If so, will the company eventually be sold or go public? Private investors rely on these exit strategies to get a return on their investments.
9. What is the current value of the company?
The valuations are based on several factors, including:
1. In what stage of development is the technology?
2. Is there proof-of-concept lab data?
3. Is there a working prototype?
4. Are there paying customers?
How to start a startup?
STEP 1: PLANNING
In particular, you do not need to have a brilliant idea to start a startup around. How to start making money to offer better technology than they have now. But what people have now is often so bad that it has the ability to do well.
Google's plan for example, to create a website is just not as bad . They have three new ideas : index more of the web use links for ranking search results, and has a clean, simple web page with ads by keyword, above all,they were determined to make a site that was good to use. No doubt there are great technical tricks on Google, but the overall plan is straight forward. And while they may have big ambitions this alone makes them a billion dollars a year.
There are plenty of other areas that are just reversing a Google search before we can think of several heuristics in generating ideas for startups. However, most of these reductions to look at what people are trying to do and figure out how to do it in a way that does not bad.
For example, dating site today worse than search did before Google, they all use a simple minded-model. They appear to have approached the problem by thinking about how to make the database matches instead of how dating works in the real world. An undergrad could build something better as a class project. And yet there’s a lot of money at stake. Online dating is a valuable business now, and it might be worth a hundred times as much if it worked.
The idea for startup, it is. Just beginning to be a lot of startup founders think. The key of the whole process is thought to begin and from that point, all you have to do is carry the venture capitalists know better if you go to a VC (Venture Capital) company with a great idea that you’ll tell them about if they sign a nondisclosure agreement, most will tell you to get lost. That shows how much a mere idea is worth. The market price is less than the inconvenience of signing an NDA (Non-disclosure agreement).
Another sign of how little the initial idea was that with the number of that change their plan enroot, Microsoft is creating sales revenue by programming language in business model. Their current business model didn’t occur to them until IBM dropped it in their lap five years later.
The idea of startups is worth something, certainly, but the problem is they do not transfer; they are not something you can delegate to someone else. Their value is mainly as starting points: as questions for the people who had them to continue thinking about.
The important thing is not to think, but people with how good people can fix bad ideas, but good ideas can’t save bad people.
The IDEA Stage
For some entrepreneurs have been thinking and imagining the possibilities is the easy part , it is a market research does not come so naturally .
Market research can prove invaluable in determining your idea’s po¬tential. You can gather information from search the web journals, industry associations, and state and federal agencies on a trip to the library or a few hours online. Can set you on your way to really understand your market , your aim is to get a general sense of the type of customer, product or service you provide , or at least it is the intention to find through the research process. “For example, if you don’t know if your product will appeal to the youth market, make sure you include a sample of that population in your research efforts.”
The research plan should spell out the objectives of the research, and so on. Data you want to go ahead with your idea,fine-tune it or take it back to the drawing board. Create a list ofthe question you need to answer in your research and create a plan for answering them. Utilize experts in plan¬ning and conducting research sessions. They can recommend what type of research is most appropri¬ate, help you develop statistically valid samples and write questionnaires, and provide you with an objective and neu¬tral source of information.
The type of information you’ll be gathering depends on the type of product or service you want to sell as well as your overall research goals. You can use your research to deter¬mine a potential market, to size up the competition or to test the usefulness and positioning of your product or service. For example, the product is a tangible item, letting the target audi¬ence see and touch a prototype could be extremely valuable. And for intangible products, exposing pro¬spective customers to descriptive copy or a draft website could aid in develop¬ing clear communications.
Assuming your research process can help you discover your competition. Now you need to find out what they’re up to.it is the core of your marketing program, and if when you’re ready for that step. It’s also going to be what sets you apart and lures customers your way.
An intro to business plans
A business plan is a description in writing of the future of business that's all there is to do, it is a document that describes what you plan to do. And how you plan to do it if you write a paragraph on the back of an envelope describing your business strategy, you will not write the plan, or at least the germ of a plan.
Business plans can help perform a number of tasks for those who write and read them they are using. By operator, seeking investment to convey their vision to potential investors that they may be used by companies who are trying to attractkey employees, prospect for new business, deal with suppliers or simply to understand how to manage their companies better.
So what is included in the business plan, and how do you put one together? Sim¬ply stated, a business plan conveys your company goals, the strategies you’ll use to meet them, potential problems that may confront your business and ways to solve them, the organizational structure of your business (including titles and responsi¬bilities) and finally, the amount of capital required to finance your venture and keep it going until it breaks even.
It may be possible,if put together properly. A good business plan follows generally accepted guidelines for both form and content. There are three primary parts to a business plan:
• The first is the business concept. That isto discuss Industry structure of your company product or service and how you plan to make your business a success.
• The second is the marketplace section, in which you de¬scribe and analyze potential customers: who and where they are, what makes them buy and so on. Here, you also describe the competition and how you’ll position yourself to beat it.
• Finally, the financial income and your cash flow statement and balance sheet and other finan¬cial ratios, like breakeven. This section may require help from your accountant and a good spread¬sheet software program.
About the only person who does not need a business plan was not to go into business, you do not need to plan. To start Hobby or moonlight from your regular job, but anybody beginning or extending a venture that will consume significant resources of money, energy or time, and that is expected to return a profit should take the time to draft some kind of plan.
TOP 10 BUSINESS PLAN MISTAKES
1. MISUNDERSTANDING THE PURPOSE: IT’S THE PLANNING THAT MATTERS, NOT JUST THE DOCUMENT. Planningis the process of setting goals and establishing specific measures of progress, then track your progress and following up with. The plan itself is just the first step will be to review and update often.
2. DOING IT IN ONE BIG PUSH; INSTEAD, DO IT IN PIECES AND STEPS. The plan is a set of connected modules, like blocks. Start anywhere and get going. Do the part that interests you most, or the part that provides the most immediate benefit.
3. FINISHING YOUR PLAN. If your plan is done, then your busi¬ness is done. That most recent version is just a snapshot of what the plan was then.
4. HIDING YOUR PLAN FROM YOUR TEAM. It’s a management tool. Do not share the goals and measurements, us¬ing the planning to build team spirit and collaboration.
5. CONFUSING CASH WITH PROFITS. There’s a huge difference between the two. Waiting for customers to pay can cripple your financial situation without affecting your profits. Load¬ing your inventory absorbs money without changing profits. You don’t pay your bills with profits.
6. DILUTING YOUR PRIORITIES. A plan that stresses three or four priorities is a plan with focus and power. A plan that lists 20 priorities doesn’t really have any.
7. OVERVALUINGTHE BUSINESS IDEA. What gives an idea value isn’t the idea itself but the business that’s built on it. Either write a business plan that shows you building a business around that great idea, or forget it.
8. FUDGING THE DETAILS IN THE FIRST 12 MONTHS. By details, we mean your financials, milestones, responsibilities and deadlines. Cash flow is most important, but you also need lots of details when it comes to assigning tasks to people, setting dates and specifying what’s supposed to happen and who’s supposed to make it happen.
9. SWEATING THE DETAILS FOR THE LATER YEARS. As impor¬tant as monthly details are in the beginning, they become a waste of time later on. How can you project monthly cash flow three years from now when your sales forecast is so uncertain? Sure, you can plan in five, 10 or even 20-year horizons in the major conceptual text, but you can’t plan in monthly detail past the first year.
10. MAKING ABSURD FORECASTS. Nobody believes absurdly high “hockey stick” sales projections. And forecasting unusually high profitability usually means you don’t have a realistic understanding of expenses.
STEP 2: MONEY
Monetary, a startup is only like measuring a pass or fail. The way to get rich from a startup is building up the opportunity to succeed as much as possible, not to get more the amount of stock you have. So if you can exchange stock with something that make you get more of successful opportunity. You don’t hesitate to do that.Most hackers often feel like funding from outside investors is daunting and mysterious process. Actually it just spends more time.
The first thing you must have a few tens of thousands of dollars to pay your expenses while you develop a prototype. This is called seed capital. It is just a little money so it easy to sourcing. At least you quickly the result yes or no from the investor.
The seed capital usually invest from the rich . Companies or organizations not but these people is angel which is a rich from the technology field before. At this stage, investors do not expect you to have a business plan conscientiously anything. Most rich know to decide quickly whether to give or not to give money. Normally Investment decisions do not spent time more than a week and using only half page only for contract.
Some angel investors (especially those who have a background in technology before) might just want you to show demos and lectures orally to him that we will do what. But many investors have always wanted our business plan document. (Although sometimes it only remind remind them that his investment in company only).
Some investors may be willing to invest when you set up company. The set up process of the company is not difficult. What’s hard is that you have to decide who the founder is. And its shares are much different if the two founders the ability to work as an equal is not difficult, but if you have a team that works differently. To determine the proportion of shares to start is difficult, however, if you agree that it holds much different. This proportion was then rarely changed.
If the company set up delay may soon create problems for you. Because the co-founder, some may decide to split the company do the same instead. This had been going on in the industry. So when you write the company and the proportion of shares already. You should catch cofounder everyone to sign a document that consent is everyone's idea of a company. And everyone will be working with this company only.
When company was set up successfully, it timeto went to knock on the door to the rich for asking them to invest tens of thousands of dollars to invest in small companies. Of young men who have just ideas may seem far beyond your wildest dreams. But if you look at it from the eyes of the rich, these are more encouraging. Because most rich people looking for opportunities to "invest” in order to expand their own property away. So if you think yourself to be successful business. I assume you are helping these people to have the opportunity for a great investment. When you went to them to ask for money. He may be unaware that they even think you will become the next Google or not?
Generally Angel investors have important financial parity with the company's founder. They will get the share in a same type of founder. And a chance to share - the stock with equal proportions on its investment in the next round. The question is how much should they share? That depends on how ambitious you feel.
The next round of funding is negotiation with the actual company's venture capital (VC), But youshould not wait until the first round was burned and then gradually to make the second round of the VC becausethis the decision will spend more time (This may take several months), you would not like to see money being run out while you’re trying to negotiate with them.
Getting money from VC firms is harder than getting from the angel. But if you getting from VC firms, the total amount will be increased a lot.For most of the millions of dollars that you get, negotiations will take youlose share a lot more. There are many restrictions and conditions
Sometimes in the VC may offer new CEO is one of them. The reason that the company need to have managers who are experienced, mature and basic business management. For this reason sometimes is correct, however, Bill Gates, who was very young, little experience And never do But he came through it well. While Steve Jobs was fired from his own company by experienced business man that manage Apple in poor performance management. So the benefits of mature and experienced administrators may be said to be overrated. We used to call these guys “newscasters” becausethey had neat hair and spoke in deep, confident voices, and generally didn’t know much more than they read on the teleprompter.
In VC world align to pyramid form. The top layer is a famous company like Sequoia and Kleiner Perkins, but beneath the floor, it has a lot of VC you've never heard the name before. But all of VC has something not different is fund whether the money from which company is the same. Although most VCs will tell you that they do not provide only the money but also provideadvice and Connection with them. So we’d advise you to be skeptical about claims of experience and connections. Basically, a VC is a source of money. You’d be inclined to go with whoever offered the most money the soonest with the least strings attached.
You may wonder that how much your information to VC because some VC may investment in your competitors in the future. So you should not tell them everything. In fact, most VC will tell you that they care about the team more than the Idea.
You should talk to a lot of VC as possible. Although some cases you would not like to get money from them because a) they may know or invest in companies that want to buy your property, b) if you are impressive enough, they may not invest in any of your competitors. The best way to approach VC for introduces and not investment is the seminar thatwill be held for startups to present to them.
When starting a company created to raise funds to support the business may be the single most important task at hand. Before starting operation, it is necessary to determine how much capital will be required, and from which it is taken. Here are some factors to consider in determining how much funding is needed
• Time to market (that is, how long before initial sales)
• Employee salaries and benefits
• Legal fees
Presenting to Investors
Presented the idea that we mentioned above, the investor is an important step in the startup process and one that must be thoroughly prepared . When scheduling a meeting with an investor who is very clear about its purpose meeting or investigation may be acceptable. But must ensure that investors have understood that this was the intention of the meeting. If the purpose of the meeting is to request funding and the presentation was not prepared properly after the meeting ( and funding ) are less likely. Include the following information
• What problem does the technology address?
• How does the technology provide a solution?
• What market is being pursued?
•What is the addressable market? Do not inflate data; if the idea is for a particular market segment; provide data for that segment only.
- Market size
- Target customer
- Market segment
• What is the state of the intellectual property? Is the technology well protected? Will IP be needed from other sources?
• Who is the competition? Investors expect that there is competition in every market area; claims of no competition are generally met with disbelief. What is the competitive advantage? Why would customers prefer the product or solution being offered over another?
• Who is on the executive team, and what are their roles? Why should someone invest in this team?
• How does the business model relate to the sales strategy and pricing?
• What are the expense and revenue projections for a five-year period?
• What are the key company milestones?
• How much money is being requested? How long will it last? How will the funds be spent?
Presentation should be interesting and engaging. Tell stories and use examples If potential customers or partners to provide feedback, including examples.Once you have decided on the type of business you want to open up the next step, where do you start to source of fund?
Most business startups use own fund to set up the company. Also, when you approach other funding sources such as banks, venture capitalists or government, they will want to know how much of your own money that you put into the venture, because if you do not have. Confident enough in your business to risk your own money, why should anyone else have their risks .People generally have more assets than they realize. Use as much of your own money as possible to start
People generally have more assets than they realize. Use as much of your own money as possible to get started; remember, the larger your own investment, the easier it will be for you to acquire capital from other sources.
5 Tips for raising money from informal investors
When you would like to raising money in the form of debt or equity funding, you’ll be faced with the prospect of financing agreements that are written to favor the investor over the entrepreneur. a few tips is following:
1. DON’T GIVE PRO-RATA RIGHTS TO YOUR FIRST INVESTORS.
If your first investor (or his or her attorney) negotiates pro-rata rights (which means the investor is given the right to maintain ownership in the company through future investment rounds), all the investors in the round are likely to also want those rights, even if most wouldn’t have otherwise requested them. Although anti-dilution provisions are in the interest of early investors, they’re off-putting to later investors. So you’ll need to balance the needs of your early investors to protect their stake in the company with how attractive your company will appear to later institutional investors.
2. AVOID GIVING TOO MANY PEOPLE THE RIGHT TO BE OVERLY INVOLVED.
The follow-the-leader mentality described above gets particularly problematic when you give up control of the venture and require investor consent for business decisions. If you’re not careful, you may find yourself in the tedious and time-consuming position of needing signatures from all or most of your shareholders to make future financing decisions or management choices—all because you gave these rights to your first investor.
3. BEWARE OF ANY LIMITS PLACED ON MANAGEMENT COMPENSATION.
In the past few years, angel investor groups have started to overreach by adding clauses to financing agreements that limit the salaries of senior management. While this type of restriction might make sense for businesses running out of money or ones in which the board of directors is too cozy with senior management, entrepreneurs should be wary about agreeing to such limits. Arbitrary limits on how much you can pay your top employees means you’ll be limiting your ability to attract the best people at the time you need them most.
4. REQUEST A CURE PERIOD.
To protect themselves, investors may want you to agree to covenants and representations about your company that might be difficult for an under-funded startup to swallow. Most agreements will indicate that you are in default of the agreement if you violate any of its provisions.
Agreeing to such sweeping provisions is often difficult for honest entrepreneurs. One way to deal with this is to ensure that you have a “cure period” in your financing agreements. You should negotiate a period of two to four weeks to allow yourself time to remedy your errors. This cushion will give you the time you need to find a solution or a “white knight” investor if you’re ever vulnerable.
5.RESTRICT YOUR SHARE RESTRICTIONS.
While it’s unlikely that founders’ shares have much street value during the early rounds and it’s unlikely that anyone will want to buy them, it’s still not a good idea to agree to such restrictions. If you know that you plan to raise additional capital, having unrestricted shares is often one of your only bargaining chips with future investors.
When raising money from any type of investor, it’s a good idea to speak to your attorney about whether he or she is seeing an investor-friendly or entrepreneur-friendly capital market. If it’s not friendly, then be patient—recent experience shows that the tide will always turn.
6. MISTAKES ENTREPRENEURS MAKE WHEN SEEKING VENTURE CAPITAL
When investor to launch your business is a delicate process, so you need to tread carefully. To take your best shot and avoid these six common blunders:
1. DON’T CONTACT EVERY VC IN SILICON VALLEY. Blindly reaching out to VCs with a generalized pitch is not going to improve your chances of getting funded, according to Brian O’Malley of Battery Ventures in Menlo Park, Calif. Not all investors are interested in the same kinds of companies, nor do they all invest the same amount of money or at the same time in a company’s life cycle. Research the VC you plan to pitch, figuring out the kind of companies it has invested in and at what stage in a company’s growth.
2. DON’T OVERDO THE POWERPOINT PRESENTATION. Some entrepreneurs create lengthy Power Points that leave investors bored and with little time for questions and answers. John Backus, founder and managing partner at New Atlantic Venture Partners in the Washington, D.C., area, recommends a maximum of 15 slides for a one-hour meeting. That number of slides will take up about half the meeting, he says, leaving 30 minutes for questions. Also, make the slides as visual as possible. “We are not going to remember a list of data,” Backus says.
3. DON’T DISREGARD QUESTIONS THAT COME UP. VCs will likely have questions that interrupt your presentation, and you may be tempted to hurry through them to get back to your rehearsed pitch. Instead, always answer questions as completely as possible. After all, if you secure funding with a VC, it’s likely going to be a long-term relationship—and communication is the key.
4. DON’T EXAGGERATE. While VCs are hunting for the next Google, Facebook or Twitter, they don’t want to hear unrealistic pitches. “There are probably five companies out there in the world that have gotten to $10 billion, $20 billion, $30 billion,” Backus says. “Be realistic and tell me how you are going to win.”
5. DON’T TRY TO RAISE MONEY JUST FOR THE SHORT TERM. O’Malley often hears entrepreneurs say they’re trying to raise cash to cover expenses for a period of time, usually 12 to 24 months. But he discourages short-term thinking. Instead, he urges entrepreneurs to raise money to hit milestones. Also, raising a bit more money than you’ll need is better than too little.
6. DON’T RUSH TO DISCLOSE WHAT YOU THINK YOUR COMPANY IS WORTH. You will need to discuss how much money you are seeking, but don’t immediately share what percentage of your company’s value that represents. Instead of putting your estimated valuation in the presentation, allow it to come up naturally in conversation.
NOT SPENDING IT
When you get money from the investors, what should you do with it? The answer is "do not use". Almost failed new company as a result in the same cause is running out of money. Of course, if you consider it a deep sense of failure over it. But everyone should avoid aggravating factor is initially out of money anyway.
During the dot-com bubble. Most companies try to grow the fastest. In theory, it means finding many customers in a short time. In practice often become employed many people in a short time instead.
Everyone wants to have many customers in a short time . However, its benefits may be exaggerated a bit . This way of thinking is to get the product out first, customers came and swept us out by not opening up to rival it. But I think the benefits of being first to market are not like that. Google is a good example in this regard. When Google appeared, search the market seems to be saturated and dominated by major players like Yahoo, Lycos, Excite, Info seek, Altavista,Inktomi is spending a fortune to build a brand. The situation in 1998 may be too late for Google to penetrate this market.
But the Google founders knew that a brand does not have any value. In the world of search Someone might create a better search. And users are gradually Move to your own. In fact, Google does not advertise itself at all.
Google competitors were felled should use those ads to the development of their own software rather than by paid advertising. Star up in the future should learn from this mistake. If you are not in the industry, products, brands used interchangeably (e.g. cigars, vodka or detergent) to spend to advertise their own brand is a sign that you 're going to lose. The web site itself has only a few are used interchangeably for example, web dating, spending enormous amounts of advertising. That means they're bad. (I really can smell that they are managed by web marketers).
This is a factor of the success of Starup. There is nothing more important than understanding your business. You might think that everyone in this business should understand their own business already. But in reality it’s not that. Google's secret weapon is that they understand the business search engine.
Google understand what other companies do not understand,you need to focus on users before advertisers. Although the ad is making money for you and your users will never pay them. If we create a large number of users at any one time. Ads will follow you should design products to usersbefore. Then think of ways to make money from it later. If you do not mention on the customers first. You will open the gap to snatch customers to your competitors instead.
Creating products that customers love. You need to understand the customer before. More the company is bigger, you are harder to understand customers more difficult. So I suggest you grow slowly. The more you run out of money much slower. You will have time to learn the market.
Another reason to pay out as little as possible is to create a culture of saving up in the organization. So when you have paid millions of dollars from a VC firm already, then chances are high that you will feel that "I'm already rich," then you should know that you are not rich. Its rich mean that there are a lot. But money is not income It is money that the investor paid to you, hoping that you will make money back. So even if you have money in the account for millions of dollars. But in practice, you still broke
For most startups should hold up lifestyle graduate students. Not a law firm giantyou should pour extravagant budget, instead of behaving expensive. One of the tests that Starr up in our understanding of this matter. Is that these companies have used Aeron chair, or chair, this brand is on sale during the dot-com bubble up and are very popular among cranked up. In particular, the group set up by young people. The financial support from the VC and buy toys like building a house. As our company is cheap office chair. Use your arm out. We feel ashamed about it but when I look back now. Atmosphere of our students is what we are doing right now. By now, we know about it.
When you look for a place for the company. Do not try to find a place that looks professional too. The true meaning of the word "professional" is” working well " does not mean that offices need a lift or a wall is glass. I always recommend cranked up to avoid rental office. And turned to renting an apartment instead. Because you will be boarding in office during the eye up. So you should look for a place designed to make housing office.
The apartments will have the advantage on price. And is the ideal place to work. The apartment is located in a better rental office. For Startup, location is very important . To work effectively, employees should return to work after dinner. Because this time, no one calling. No interference Work done easily Plus employees out to dinner as a group. Exchange of ideas on eating. And returned to the office to act as the idea is to hold an extraordinary thing. You should have a restaurant located in the lot. Not in leased office buildings that became deserted after six o'clock . Traditions, values will start to disappear when the company began to grow. Because every employee to drive back home to eat themselves out . If you start a business with it. You just have to rely on God for help.
The best way to save money is. "Do not hire" concept, I may be a bit extreme . But I think that hiring employees is the worst thing a company can do. Because employees are the ongoing costs of the company. This cost is the cost of the worst. The staff also means your office is getting cramped and need widening to a bigger place. But the atmosphere is not suitable for software development. The worst thing is that a lot of employees who will run slower. When people are young, you may just sit and talk with someone at his table until finished. But if someone just eight people would have held a meeting to discuss the same subject. So are the smaller the better.
During the dot-com bubble. Startup a lot of the policies to the contrary. They want to increase the number of staff as soon as possible. As if you will never run anything successfully if you do not have someone to sit in that position. Here is how the idea of a large organization that should be avoided. Do not hire people just because of where it should be incorporated in the organization chart. The only reason you should hire someone to add. Is hired for the job you want to do but do not.
If hiring people in positions that are not required to hold a waste of money and make decisions slowly. The question is why most companies to do that. I think the main answer is that most people feel better if the employee lot. This weakness often associated with them, if you had been the CEO of the company. Question you are always asked about. What is you have employees that is how to evaluate the value of the CEO. Everyone asks this question, even the press. And they would be more impressive if you had a thousand employees. Not tens
If hiring unnecessary people is expensive and slows you down, why do nearly all companies do it? I think the main reason is that people like the idea of having a lot of people working for them. This weakness often extends right up to the CEO. If you ever end up running a company, you’ll find the most common question people ask is how many employees you have. This is their way of weighing you. It’s not just random people who ask this; even reporters do. And they’re going to be a lot more impressed if the answer is a thousand than if it’s ten.
Number of employees, it is the same office. It was a decision that you choose. "It's cool" or "really cool yourself" thing if you were a nerd in high school. You will understand these lifestyle choices. So do the same when you start your own company.
STEP 3: WEBSITE
Whether you are launching any way. Your business must have a website offers. You may need to hire expensive programmers. Fortunately, these days there are programs make website affordable for people who know nothing about programming.
You should feel that your website are doing for your business. As long as you think it is the best service that lets you navigate. In addition, you will find that the simplicity of the data connection is incredibly powerful for example, Facebook pages, Twitter profiles, YouTube channels and PayPal accounts.
10 things that every small business needs a website.
The web is full of places are awesome and we're not just talking about bad design . There are many other elements besides how your website look into making customer friendly , not to mention something that inspires them to actually do business with you . This is the essence that every small business website should have in order to effectively help you do business with .
1. Clear description of who you are.
2. Simple webpage where appropriate.
3. Easy to navigate website.
4. Easy -to-find contact information.
6. Clear call to action.
7. SEO Basics
8. Fresh quality content
9. A secure hosting platform .
10. Designs and patterns that are friendly to online readers .
STEP 4: MARKETING
(Source : http://www.entrepreneur.com/downloads/instantstartup.pdf)
This step is creating the marketing plan. There are 5 steps to developing a marketing plan as below:
1. LOOK INWARD
Consider about the character of company in aspect of strength weakness organization’s culture or human capital.
2. LOOK OUTWARD
Consider about the external environment, oppunities or treats.For example, Opportunities can include new markets, new products and trends. Threats include competition and advances in tech¬nology.
3. FOCUS ON STRATEGY
this step is the combine the unique identity and the target market
4. SET MEASURABLE STEPS
Combine all of factors which are the qualitative data convert into the measurable data (quantitative analysis).
5. REVIEW OFTEN AND REVISE
The marketing plan should to revise and adjust to be compatible with the modern trend
5 SOCIAL MEDIA MISTAKES YOUR STARTUP MUST AVOID
1. STARTING WITHOUT A PLAN. If you’re tempted to skip creating a social media strategy for your business that outlines your goals and the resources you’ll need to accom¬plish them, don’t do it. By developing a plan, you create a critical foundation on which the rest of your social media efforts are based.
2. TIMING SOCIAL MEDIA POSTS POORLY. One of the biggest mistakes I’ve seen startups make does not know who the customer is and how he or she behaves on the social web. A report from my marketing analytics firm KISS metrics shows that tweets posted at about 5 p.m. have the highest chance of being clicked on and shared.
3. BREAKING SOCIAL MEDIA RULES OF ETIQUETTE. Don’t start a social media campaign without having at least a basic under¬standing of some of the rules. Here is a simple list I follow: 1. Start conversations by asking thought-provoking questions. 2. Don’t follow someone on Twitter, and then unfollow them when they unfollow you. 3. Promote other people as well as your own brand. 4. Don’t spread yourself too thin.
4. FAILING TO MEASURE SOCIAL MEDIA SUCCESS. Although it might not be easy to measure something like a conversation, you are able to measure factors such as your total online community size, the number of mentions of your brand across the social web and all the traffic referred to your business’s website. These useful tools can help: Page Lever, Simply Measured and Social Mention.
5. IGNORING YOUR COMPETITORS. Know¬ing who your competitors are and what they are doing is just as important as knowing everything about your own business. To keep an eye on your competitors over social media, look at their website, locate their social media icons, sign up as a fan and start watching what they do. It’s just as important to see what their fans are saying and use those reactions to improve your own business.
STEP 5: NETWORKING
Tips on how to create a strategy to create a network.
While you try to get your business up and running, the incident which network to join and can be tricky to cross. It's all about return on investment. How it can benefit your business , where you join up with the time and resources it takes to be there.
This is when the strategic network will come in handy. Here are three important questions you should answer in order to create a network plan will work for you.
1. WHO ARE MY BEST PROSPECTS?
Often businesses find themselves trying to attend every networking event that comes down the pike the usual result is that they do not wind up the business as much as the efforts of a network of them are.
There are strategies to help eliminate this problem. If you are not sure who the appropriate contact for your business to look at the customer list of your past. What industry they may require? How long have they been in business? Be your customers, even businesses to begin with, or have you worked mostly with consumers?
2. WHERE CAN I MEET MY BEST PROSPECTS?
If you are trying to meet the needs of small business owners, the more you will want to take a room of commerce, business associations, your local or reference not only these groups that this type of audience. you want to meet a system in place that allows you to help others get more referrals for you.
If you are looking to meet representatives of large companies in your area, I encourage nonprofit groups, service clubs and volunteer work. Another great way is by attending homeowner association. It's a great way to connect with the people who work in the business world. But did not participate in the general network.
3. OF MY PROSPECTS, WHOM EXACTLY DO I WANT TO MEET?
The principle behind the right kind of connection is summed up in the aphorism ." You do not know what they know," ably stated by expert Wayne Baker networking business networking consulting firm in the network Humax reference tool they call their ring . Boiled down to the essentials of the idea that the greater the number of networks you connect to the occasion with a short line of contact between you and the person you would care to name. All you need to do is to accept the fact that a few people and ask specific questions or two. The answer may be that you are in direct contact or lead you in the direction of networking events you want to attend. How to meet a contact that is not known to be as specific as possible without shutting out all possible forms .
Finally, remember that it’s impor¬tant to surround yourself with quality business contacts. Often, the best way to your ideal contact is through another contact.
STEP 6: CUSTOMERS
What Customers Want
It's not only just starting to worry about this. I think that most businesses do not do because they did not give customers what they want. Looking at a restaurant, a large percentage fails, about a quarter in the first year. But you cannot think of one restaurant with very good food and go out of business.
The restaurant has good food seem to succeed no matter what. Restaurant with good food is expensive, crowded, noisy, dirty apart and have bad service and people will keep coming. It is a fact that a restaurant with mediocre food sometimes can attract customers through gimmicks. But how much risk. It is more straightforward to make good food.
It's the same with technology You hear all kinds of reasons why startups fail. But you can not think of one that has a massively popular product and still failed.
In nearly every failed startup, the real problem was that customers didn’t want the product. For most, the cause of death is listed as “ran out of funding,” but that’s only the immediate cause. Why couldn’t they get more funding? Probably because the product was a dog, or never seemed likely to be done, or both.
The other approach is the “Hail Mary” strategy. You make elaborate plans for a product, hire a team of engineers to develop it (people who do this tend to use the term “engineer” for hackers), and then find after a year that you’ve spent two million dollars to develop something no one wants. This was not uncommon during the Bubble, especially in companies run by business types, who thought of software development as something terrifying that therefore had to be carefully planned.
No matter what kind of startup you start, it will probably be a stretch for you, the founders, to understand what users want. The only kind of software you can build without studying users is the sort for which you are the typical user. But this is just the kind that tends to be open source: operating systems, programming languages, editors, and so on. So if you’re developing technology for money, you’re probably not going to be developing it for people like you. Indeed, you can use this as a way to generate ideas for startups: what do people who are not like you want from technology?
When most people think of startups, they think of companies like Apple or Google. Everyone knows these, because they’re big consumer brands. But for every startup like that, there are twenty more that operate in niche markets or live quietly down in the infrastructure. So if you start a successful startup, odds are you’ll start one of those.
Another way to say that is, if you try to start the kind of startup that has to be a big consumer brand, the odds against succeeding are steeper. The best odds are in niche markets. Since startups make money by offering people something better than they had before, the best opportunities are where things suck most. And it would be hard to find a place where things suck more than in corporate IT departments. You would not believe the amount of money companies spend on software, and the crap they get in return. This imbalance equals opportunity.
They’re the more strategically valuable part of the market anyway. In technology, the low end always eats the high end. It’s easier to make an inexpensive product more powerful than to make a powerful product cheaper. So the products that start as cheap, simple options tend to gradually grow more powerful till, like water rising in a room, they squash the “high-end” products against the ceiling. Sun did this to mainframes, and Intel is doing it to Sun. Microsoft Word did it to desktop publishing software like Interleaf and Frame maker. Mass-market digital cameras are doing it to the expensive models made for professionals. Avid did it to the manufacturers of specialized video editing systems, and now Apple is doing it to Avid. Henry Ford did it to the car makers that preceded him. If you build the simple, inexpensive option, you’ll not only find it easier to sell at first, but you’ll also be in the best position to conquer the rest of the market.
It’s very dangerous to let anyone fly under you. If you have the cheapest, easiest product, you’ll own the low end. And if you don’t, you’re in the crosshairs of whoever does.
The practice is especially important for new business owners who tend to not only have more limited means, but also don’t generally register a profit from a new customer until the fifth or sixth purchase. And without a stable of customers to tap for repeat purchases, being more careful about where you play your limited resources can only serve you. Here are four simple ways to “buy” new customers:
The key to advertising successfully is to generate promising leads in exchange for the money you spend. To do so, it helps to offer a message that not only hits on your target customers, but also showcases the value you can offer them.
Landing referrals isn’t just a cheap way to pick up some initial business, it’s also a way to pick up customers with the high¬est retention rates. What’s more, referral customers tend to purchase more over time and in turn become a source of ad¬ditional referrals.
How do you find referrals? Ask for them from satisfied customers. Be sure to also find ways to continually thank your sources for their ongoing advocacy of your business.
3. TEAMING UP.
Another way to leverage available resources is through what’s known as a host-beneficiary arrangement. In
this arrangement, another business with the same target customer will use their database to promote your
4. STRATEGIC ALLIANCES.
You might take that partnership a step further and form what’s known in the industry as a strategic alliance.
While a host-beneficiary relationship is gener¬ally a one-time or short-term commit¬ment, strategic alliances
can sometimes last for many years. For instance, a web designer and an ad agency might send each other
referrals for clients who need added services.
As long as there’s continued value to the shared audience, strategic alliances produce streams of referral business, which is ultimately what will benefit you most over time.
In addition, there are two important factors to consideration. That is People and Foundation Company
What do I mean by good people? One of the best tricks I learned during our startup was a rule for deciding who to hire. Could you describe the person as an animal? It might be hard to translate that into another language, but I think everyone in the US knows what it means. It means someone who takes their work a little too seriously; someone who does what they do so well that they pass right through professional and cross over into obsessive.
What it means specifically depends on the job: a salesperson who just won’t take no for an answer; a hacker who will stay up till 4:00 AM rather than go to bed leaving code with a bug in it; a PR person who will cold-call New York Times reporters on their cell phones; a graphic designer who feels physical pain when something is two millimeters out of place.
Almost everyone who worked for us was an animal at what they did. The woman in charge of sales was so tenacious that I used to feel sorry for potential customers on the phone with her. You could sense them squirming on the hook, but you knew there would be no rest for them till they’d signed up.
If you think about people you know, you’ll find the animal test is easy to apply. Call the person’s image to mind and imagine the sentence “so-and-so is an animal.” If you laugh, they’re not. You don’t need or perhaps even want this quality in big companies, but you need it in a startup.
For programmers we had three additional tests. Was the person genuinely smart? If so, could they actually get things done? And finally, since a few good hackers have unbearable personalities, could we stand to have them around?
That last test filters out surprisingly few people. We could bear any amount of nerdiness if someone was truly smart. What we couldn’t stand were people with a lot of attitude. But most of those weren’t truly smart, so our third test was largely a restatement of the first.
When nerds are unbearable it’s usually because they’re trying too hard to seem smart. But the smarter they are, the less pressure they feel to act smart. So as a rule you can recognize genuinely smart people by their ability to say things like “I don’t know,” “Maybe you’re right,” and “I don’t understand x well enough.”
It’s no coincidence that startups start around universities, because that’s where smart people meet. It’s not what people learn in classes at MIT and Stanford that has made technology companies spring up around them. They could sing campfire songs in the classes so long as admissions worked the same.
If you start a startup, there’s a good chance it will be with people you know from college or grad school. So in theory you ought to try to make friends with as many smart people as you can in school, right? Well, no. Don’t make a conscious effort to schmooze; that doesn’t work well with hackers.
What you should do in college is work on your own projects. Hackers should do this even if they don’t plan to start startups, because it’s the only real way to learn how to program. In some cases you may collaborate with other students, and this is the best way to get to know good hackers. The project may even grow into a startup. But once again, I wouldn’t aim too directly at either target. Don’t force things; just work on stuff you like with people you like.
Ideally you want between two and four founders. It would be hard to start with just one. One person would find the moral weight of starting a company hard to bear. Even Bill Gates, who seems to be able to bear a good deal of moral weight, had to have a co-founder. But you don’t want so many founders that the company starts to look like a group photo. Partly because you don’t need a lot of people at first, but mainly because the more founders you have, the worse disagreements you’ll have. When there are just two or three founders, you know you have to resolve disputes immediately or perish. If there are seven or eight, disagreements can linger and harden into factions. You don’t want mere voting; you need unanimity.
In a technology startup, which most startups are, the founders should include technical people. During the Internet Bubble there were a number of startups founded by business people who then went looking for hackers to create their product for them. This doesn’t work well. Business people are bad at deciding what to do with technology, because they don’t know what the options are, or which kinds of problems are hard and which are easy. And when business people try to hire hackers, they can’t tell which ones are good.
Moreover there is one reason you might want to include business people in a startup, though: because you have to have at least one person willing and able to focus on what customers want. Some believe only business people can do this—that hackers can implement software, but not design it. That’s nonsense. There’s nothing about knowing how to program that prevents hackers from understanding users, or about not knowing how to program that magically enables business people to understand them.
If you can’t understand users, however, you should either learn how or find a co-founder who can. That is the single most important issue for technology startups, and the rock that sinks more of them than anything else.
SHOULD YOU START A COMPANY?
Should you start a company? Are you the right sort of person to do it? If you are, is it worth it?
More people are the right sort of person to start a startup than realize it. And there could be ten times more startups than there are, and that would probably be a good thing.
So who should start a startup? Someone who is a good hacker, between about 23 and 38, and who wants to solve the money problem in one shot instead of getting paid gradually over a conventional working life. It can’t say precisely what a good hacker is. At a first rate university this might include the top half of computer science majors. But you don’t have to be a CS major to be a hacker.
The other reason it’s hard to start a company before 23 is that people won’t take you seriously. VCs won’t trust you, and will try to reduce you to a mascot as a condition of funding. Customers will worry you’re going to flake out and leave them stranded. Even you yourself, unless you’re very unusual, will feel your age to some degree; you’ll find it awkward to be the boss of someone much older than you, and if you’re 21, hiring only people younger rather limits your options.
Some people could probably start a company at 18 if they wanted to. Bill Gates was 19 when he and Paul Allen started Microsoft. (Paul Allen was 22, though, and that probably made a difference.) So if you’re thinking, I don’t care what he says, I’m going to start a company now, you may be the sort of person who could get away with it.
The other cutoff, 38, has a lot more play in it. One reason I put it there is that I don’t think many people have the physical stamina much past that age.
Also, startups are a big risk financially. If you try something that blows up and leaves you broke at 26, big deal; a lot of 26 year olds are broke. By 38 you can’t take so many risks—especially if you have kids.
The final test may be the most restrictive. Do you actually want to start a startup? What it amounts to, economically, is compressing your working life into the smallest possible space. Instead of working at an ordinary rate for 40 years, you work like hell for four. And maybe end up with nothing though in that case it probably won’t take four years.
During this time you’ll do little but work, because when you’re not working, your competitors will be. Working was often fun, because the people I worked with were some of my best friends. Sometimes it was even technically interesting, but only about 10% of the time. And the other 90% that seem so boring perhaps it may not be boring as you think because it may have the event was not unexpected.
Working with a startup seems like a hard work because it’s compressed into a short period. So mainly what a startup buys you is time. That’s the way to think about it if you’re trying to decide whether to start one. If you’re the sort of person who would like to solve the money problem once and for all instead of working for a salary for 40 years, then a startup makes sense.
For a lot of people the conflict is between startups and graduate school. Grad students are just the age, and just the sort of people, to start software startups. You may worry that if you do you’ll blow your chances of an academic career. But it’s possible to be part of a startup and stay in grad school, especially at first. There are few sources of energy as powerful as a procrastinating grad student.
If you do have to leave grad school, in the worst case it won’t be for too long. If a startup fails, it will probably fail quickly enough that you can return to academic life. And if it succeeds, you may find you no longer have such a burning desire to be an assistant professor.
If you want to do it, do it. Starting a startup is not the great mystery it seems from outside. It’s not something you have to know about “business” to do. Build something users love, and spend less than you make. How hard is that?
Risk Factor to Minimize for Startup Success
(Sources: Martin Zwilling, 2013: http://blog.startupprofessionals.com/2013/04/10-key-risk-factors-to-minimize-for.html )
When you start the business may be you have driven by the plenty of any ideas this thing could motivated you, but indeed the factor that you never might be overlook is the risk. Here is my own priority list of key risk drivers that every entrepreneur and every investor should evaluate and minimize in starting a business:
1. Team experience and depth risk. Here I’m talking about both the experience and track record of the founders in starting a business, as well as their experience and knowledge of the business domain. Like most professionals, when I get a business plan, I flip first to the founders section to see if it is a balanced team who has been there and done that.
2. Market and opportunity risk. There is always less risk with a well-defined problem in a large and growing market. All the people in China are a large and growing market, but all the people with cancer is much more well-defined. It’s hard to make money in a shrinking market, or with a solution that is “nice to have” versus painfully needed.
3. Competitive risk. Think seriously about the number and clout of your competitors. Having none is a red flag (may mean no market), but having more than a couple of large ones may mean this is a crowded space. Even in an open space, you need intellectual property, like patents, to keep potential competitors from overrunning you.
4. Financial risk. Very few businesses can be started without money. You as the founder will be expected to put your own “skin in the game.” The business plan should be realistic about how much cash will be required to break-even, and how big the return will be for investors in the first five-year timeframe.
5. Market entry strategy risk. The selection of an inappropriate pricing, marketing, or distribution strategy is a large potential risk. For example, many new social websites proclaim that they will offer a free service, and live on ad revenues (not likely in the first year without a huge marketing investment).
6. Political and economic risk. Sometimes founders are just in the wrong place at the wrong time. Recessions are a tough time to sell luxury goods. Under-developed countries may have a strong need for your product, but are often unstable and dangerous. Four specifics include tax rates, tariffs, expropriation of assets, and repatriation of profits.
7. Technology risk. New technologies, especially those characterized as “paradigm shifts” or “disruptive” may have long and costly acceptance cycles, or may run into unpredictable performance or manufacturing problems. Medical technologies have costly legal testing requirements, approval processes, and insurance validation.
8. Businesses with high attrition rate risk. Certain business sectors have historical high failure rates and are routinely avoided by investors and many founders. These include food service, retail, consulting, work at home, and telemarketing. On the Internet, I would add new social networking sites, and new matchmaking sites.
9. Operational risk. Some businesses require huge support or administrative infrastructures. For example, vehicle fuel improvements require service stations and maintenance shops nationwide, before they are viable. Even small operations can have breakdowns of specialized equipment and complex support processes.
10. Environmental risk. A nuclear reactor built on an earthquake fault line is a huge risk. Evaluate your business and location for sensitivity to floods, hurricanes, and catastrophic pollution problems, like an oil spill in the Gulf of Mexico.
This guide provides an overview of the startup process and the relevant aspects of starting a business. Of course, there are many additional sources of information.
Be sure to:
• Obtain trusted advice and mentorship.
• Talk to customers.
• Bring on the right team members.
• Be passionate.
• Prepare a one-minute elevator pitch that will grab someone’s attention and motivate him or her to ask for more information.
• Practice the company pitch.
• Network with other entrepreneurs and representatives in the industry.
We don’t just need change. We need breakthrough, paradigm-shifting, transformative, disruptive ideas.
The owner got Bachelor degree in Aerospace engineering and Masters in Industrial engineering. However, programming is his hobby along those years. Back in 2000 after Masters Degree, he started his first company, IT WORKS. During his Masters degree, he was doing some programming jobs for many Japanese companies in Bangkok and was making more money than most of his friends. His initial thought was that it could be a good business doing programming work for these companies so he started his first company. In reality, it was not as smooth as he thought and there were many lessons learn along the way. Anyway, the company had expanded and pivoted many times during the course of 12 years. They were doing many customization projects on PCs then Biometric package software (which is still a good business to date) and later mobile programming outsourcing for foreign customers in Japan and US. It was this mobile outsourcing units which introduce us to the business that turned out to be OOKBEE today.
Khun Nattawut Pungjarernpong (Moo): Chief Executive Officer OOKBEE Co., Ltd.
Q: What is OOKBEE?
A: OOKBEE is spoonerism word from E-book. OOKBEE will change the book from the publisher or the writer to the digital form. The channel of distribution is the tablet and smart phones.
Q: How many of market size of book market and e-book market?
A: The market size of book market is about twenty billion baht. The market size of e-book market is two hundred million baths. OOKBEE has about 4 million users. The market shares of users are about 90% of e-book market in Thailand.
Q: Who are competing firm?
A: physical book store for example, SE-ED, Asia Book or NAIIN
Q: What is strength of company?
A: 1. OOKBEE is a first mover advantage. That mean OOKBEE is the first company in Thailand that change the book to the digital.
2. OOKBEE has more many publishers. Therefore OOKBEE have book and magazine more than competing firm.
3. OOKBEE has the continuous launching application.
4. OOKBEE use promotion associate with partner, AIS, B2S for increasing market share.
Q: How many books are sold on OOKBEE?
A: 1. Magazine - all heads are 400 heads.
3. Pocket book over 10,000
Q: What is the best seller?
A: The best seller on paper books will be best seller on the e-books.
Q: What is your marketing company?
A: Free trial and promotion. E-Book is cheaper than paper book about 30%-50%
Q: How does the company growth trend?
A: The value of application Market is 544,000 million. The market value of smartphone and tablet in Thailand is about ten million. It divided to tablet 1 million and the others are smartphone. The growth rate is 20% per year. The increase users have continuously every year.
Q: What is revenue streaming?
A: book buyer.
Q: What got you started with OOKBEE and how is it changing the way consumers behave in Thailand?
A: Three years ago, when the first tablet just came out (iPad), I thought it would be nice if we could read all these local books and magazines on these tablets so we don’t have to carry them around. We also want them to be more than just plain old text and picture. We did market research and evaluate the opportunity of building the business on this idea. And in the end, we built OOKBEE to make the wish come true.
One of the things we considered in that time was, will Thai people willing to spend money on digital content especially e-magazines and e-books considered that there are so many piracies going on with Thai movie and music content. We decided that the only way to know this is to try the market by offering the best experience from the supply side and see if there are any sales coming up on the demand side. After several months, luckily, we found out that there is actually the market selling these digital publications in Thailand. Since then, we have grown our user-base constantly. Over 4 million users have experienced the new way to consume their favorite magazines and books during the 3 last years.
Q: You come with an extensive entrepreneurial background, share with us what you have worked on before OOKBEE?
A: I got my Bachelor degree in Aerospace engineering and my Masters in Industrial engineering. However, programming is my hobby along those years. Back in 2000 right after my Masters, I started my first company, IT WORKS. During my Master’s degree, I was doing some programming jobs for many Japanese companies in Bangkok and was making more money than most of my friends. My initial thought was that it could be a good business doing programming work for these companies so I started my first company. In reality, it was not as smooth as I thought and there were many lessons learn along the way. Anyway, the company had expanded and pivoted many times during the course of 12 years. We were doing many customization projects on PCs then Biometric package software (which is still a good business to date) and later mobile programming outsourcing for foreign customers in Japan and US. It was this mobile outsourcing unit which introduces us to the business that turned out to be OOKBEE today.
Q: What is the proportion of system that people use?
A: Users have ios,android,window8,window phone and the most popular is android but IOS is the system ,that users pay most money in all system such as Ipad, iPod and iPhone, There are 70% of all revenues more than revenues from android and window phone. Android is more than user than other system because Android has more devices.
Q: What is your business model?
A: We use the repeat of revenue concept it mean doesn’t seek out for everyday new customer. That’s the simple.
Q: How many employees in OOKBEE?
A: In the present we have 70 employee 10 employees in Vietnam and Malaysia.
Q: How does INTOUCN join with OOKBEE?
A: Since release application name AIS book store with AIS which online book store on mobile. We work together all the time and business was growth in each years. One day we have met with INTOUCH for create Venture capital arm and INTOUCH invested in related business or business had high growth rate. We considered the offer from INTOUCH and we agreed with them because we wanted capital for expansion business along to near country such as Vietnam and Malaysia. Nowadays we have 60 million magazines in OOKBEE app store.
Q: How many stocks Shin corps group holding?
A: Shin corps holds stocks around 25% (58 million Bath) now corporate valuation is 240 million Bath.
Q: How Venture Capital does effect on your business?
A: We think it was more useful for people who want to start business now start up is trend in Thailand and they want capital for expand their business.
Q: In your opinion, INTOUCH is only one of venture capital right?
A: In my opinion, so there are many of venture capital firms in Thailand such CHIN, corporate VC, or the capital from foreign for example Japan, China that has regional office in South east Asia where tech startup has flavor of next wave. So if you think you are ready you can approach them. For instance, in case OOKBEE, we have negotiate with vary venture capital firms-around 5-6 vendor before agree with INTOUCH because the core business of two firms are similar the user group e.g. mobile phone.
Q: How does it difficult to meet Venture Capital?
A: In actually we ask yourself, why venture capital is need. Then the conclusions that if I would like to expand the business up country, so may be take a tremendous of capital and risk. If we waiting for accumulated retain earnings to investment it had too late. As a result, we were looking for venture capital firms as leverage to get it done.
Q: How does OOKBEE see opportunity in other country?
A: The opportunity in Asian market has disclosure. So I think that the market size of has risen to 4-5 times in sooner. It impossible which OOKBEE to be the first in every country where invested, but in comprehensive growth it better than staginess in only Thai.
Q: How does OOKBEE manage people in your organization?
A: “We give freedom to our staff” that is our values. In addition we committed on result which served the customer need.
Q: How do you find professional for your organization?
A: In the present we find programmer. We teach them and trend almost we use refer from older programmer.
Q: What is OOKBEE Vision?
A: OOKBEE is the leadership in digital magazine, e-book in South East Asia.
Q: What do you talk to Tech start up?
A: I think respect everyone fear no one sometime we got inspiration from Tech entrepreneur such as Facebook Twitter they look big may be I feel it’s far from we, but we built business create business plan and follow this plan. In the last I think you have get success in this business. I want everyone get in and do to the utmost.
Q: What are some of the challenges and failure you have faced to date? Why did it happen and what are the key lessons you can draw from it?
A: The following are the challenges I faced and lessons learned throughout my experience with startups. Stay focus and find your product-market fit. When I was starting out in the early years we were trying every way to make ends meet. There were always the next big projects coming up and we have to do them because it would bring in the next several months of income to keep things afloat. The problem is all these things won’t really related to what we really want to do. By accepting these projects we didn’t have time to work on our real product. In the end, we have to say no to all un-related work and really focusing on finishing our product. It was a difficult decision to make but once you pass through it things were much easier. We were growing at a much faster rate after we really have our own product and we can scale the company accordingly. Another one is that I learnt that you should fire someone immediately who isn’t working out because they’re hurting your team’s culture. What happened was it is much easier to know than really acting on it. There was time when I knew but kept it too long. In the end, you have to do what you have to do and it’s your job as an entrepreneur to do anything necessary to keep things rolling.
Q: From your experiences, what are your own 3 Golden Rules of entrepreneurship and how is this applied to OOKBEE?
A: Hire great people, Build a core team — you need a core team whom you can depend on creating something significant. The team should be able to adapt to changing market conditions. And it’s always a good idea to hire great people even though you still don’t know what role they will fill in your team. There were many times at OOKBEE when the good people we hired ended up doing a totally different thing from what we initially hire him for. Great people are an asset and will definitely contribute solutions to problems wherever you put them in.
Be creative and find time to think — “But that’s what everyone else is doing” It is easy for everyone in the startup community to get tied up to that thinking. While it’s true that doing so will get things done, it would probably also put you in the same position as everyone else. In order to achieve something different, we need to do things differently. Find some alone time to think. When you are working hard and meeting people, replying e-mails, talking on the phone. Suddenly, a week has gone without time to actually think. In some case, new ideas come from doing or experiencing something different. For example, some of my best ideas have come from visiting new places or meeting people from a different field of work.
Know what makes you happy and commit to doing it — being an entrepreneur is difficult. There are never-ending lists of things to be done. You are giving up steady pay check and resources of a large organization. Still it means you have control over what you are making and doing. You are your own boss. In the end if you know what make you happy and commit 100 percent to doing it, things will be much easier. Building your startup, doing something you love and building product you are passionate about, I believe, is one of life’s greatest rewards.
Discussion (Data Analysis)
Part 1: Business model canvas analysis
1. Customer segment
Key customer of startup could begin with the boarded market which activated the download via smartphone or web browser. In initial phrase could penetrated into the user favored free download overlook the short run profit but oversee the profit in the long run.
2. Value position
You could to focus on the localization strategy. We can success with your startup had you proposed the things that favored the local such as copying a business model of the success in foreign but adapt into the local language which could better the local touch.
OokBee sales product via AIS book store and Appstore.
4. Revenue stream
Sailing digital books product and digital content.
5. Key resources
The core key resource is only the human idea because the others resource has few consumed.
6. Key partner
7. Key activities
In dairy Ookbee ought to monitoring the system and developing the new content for ups.
8. Cost structure
The information has been disclosure. But we assumed that the core cost has spend on Salary cost, Marketing cost and R&D cost (Programming).
9. Customer relation
Ookbee try to keep connection with customers in many ways, for example payback the free content to customer who has reached the download target.
Part 2: The above steps to create a successful startup company, OOKBEE Company, the company that we
have been studied as a case study, have stepped the same as follow:
STEP 1: PLANNING
OOKBEE get their idea from creating and finding time to think.But that’s what everyone else can do. It is easy for everyone in the startup community to get tied up to that thinking. While it’s true that doing so will get things done, it would probably also put you in the same position as everyone else. In order to achieve something different, they need to do things differently. Find some alone time to think. When you are working hard, meeting people, replying e-mails, talking on the phone. Suddenly, a week has gone without time to actually think. In some case, new ideas come from doing or experiencing something different. For example, some of the best ideas have come from visiting new places or meeting people from a different field of work.
Business plan concept is to make platform easy to use for customer. The customers can use it on their own. The company doesn’t need to explain how to use to the customer. It can help to save times and costs to access the customers.
STEP 2: MONEY
The owner thought about venture capital. If we want to expand into other countries we have to open the office and copy business in Thailand to neighbor countries. If we wait for profit from business then took the money from Thailand, we may lose the opportunity, which we may have time for 3-5 years. If we don’t make it happen right now, it will have other company open in these countries. We will use customer and program in Thailand to expand. That is cause of co-investment.
STEP 3: WEBSITES
OOKBEE has built their own website. Because the company has programmers that can build own website and they have a page on Facebook (https://www.facebook.com/Ookbee). Moreover, they have made application for mobile phones that support both IOS and Android system.
Ookbee and AIS bookstore application are publishing magazines, newspapers, e-books, catalogues
that offer digital publication live in the multi mobile platforms such as Apple iOS, Google Android, Windowphone. AIS bookstore can use with other carriers and has special offer for AIS customer.
Ookbee website offer magazine, books, newspaper, catalogues, or a brochure, it's pretty easy that local reader to get digital publication live in the multi platforms app store with Ookbee via www.ookbee.com.
STEP 4: MARKETING
OOKBEE is the First Mover in E-book Market in Thailand. OOKBEE create free application for publisher in B2B2C format and create platform of magazine to customer. More 90% of magazines can purchase in OOKBEE. Moreover they make exclusive contract with publisher to sell book only OOKBEE for 2 years.
The second reason is strongly promote from AIS and B2S that use OOKBEE is platform a book. For example, the customer that purchase mobile phone from AIS store can free receive the book from AIS Bookstore application or when they buy the book from B2S application, they receive point of The 1 Card. The two reasons above, make OOKBEE has market share 88% of E-Book market in Thailand. The market shares of OOKBEE are more than the large digital bookstore like SE-ED or NAIIN. Moreover, the writer views that OOKBEE is the first source that bring the book in this site because reach to many reader.
And the last reason, the switching costs are high. And promotions that apply member 1 year free 1 year every week although make lower revenue but the customers and publisher is still member in the past two years. That make customers and publishers is difficult to change from OOKBEE to others
STEP 5: NETWORKING
The Company’s network is publisher’s magazine and freelance writers.
STEP 6: CUSTOMERS
The company must focus and find the product that fits the market in the early years, and try to make the larger project all the time. They try to do everything in order to survive that will make revenue to support the next several months. The problem is not all that what they want to fix it. So they must reject all the irrelevant and focus to make our products to successful. It was a difficult decision, but you have to step over it. Everything is easier. After we have time to make our product, the growth rate is high much faster and we can see the direction in the future of the company correctly.
OOKBEE Hire great people, Build a core team. They need a core team whom you can depend on creating something significant. The team should be able to adapt to changing market conditions. And it’s always a good idea to hire great people even though they still don’t know what role will fill in their team. There were many times at OOKBEE when the good people we hired ended up doing a totally different thing from what we initially hire him for. Great people are an asset and will definitely contribute solutions to problems wherever you put them in.
SHOULD YOU START A COMPANY?
The owner started his first company, IT WORKS. During his Masters degree, he was doing some programming jobs for many Japanese companies in Bangkok and was making more money than most of his friends. His initial thought was that it could be a good business doing programming work for these companies so he started his first company. In reality, it was not as smooth as he thought and there were many lessons learn along the way. Anyway, the company had expanded and pivoted many times during the course of 12 years. They were doing many customization projects on PCs then Biometric package software (which is still a good business to date) and later mobile programming outsourcing for foreign customers in Japan and US. It was this mobile outsourcing units which introduce us to the business that turned out to be OOKBEE today.
The study provides benefits as below:
1. The readers understand about Startup for example, the definition of startup that is the compound words from start and up. It is the new company that is located from few person but have a good idea. Step to startup success that have 6 steps are Planning, Money, Website, Marketing, Networking and Customers.
2. The study is guidelines for person who is interested in joining startup and supports them to execute in accurate procedure. For example, the items to consider when deciding whether or not to start a New Company and the details about each step for doing the startup company.
3. The readers understand about the problems and the solutions about joining startup. For example, risk factor to minimize for startup success that the person who is interested in joining startup need to consider and find the solution to avoid from this risks.
Paul Graham: วิธีการเริ่มต้นเปิดบริษัทของตัวเอง. Retrieved on October 28, 2013, from blognone website: http://www.blognone.com/node/31630
How to start the startup. Retrieved on October 20, 2013, from Paul Graham website: http://paulgraham.com/start.html
10 Key Risk Factors to Minimize for Startup Success. Retrieved on October 20, 2013, from Paul Graham website: http://blog.startupprofessionals.com/2013/04/10-key-risk-factors-to-minimize-for.html
Article “INSTANT STARTUP GUIDE” ENTREPRENEUR MAGAZINE
Article “Startup Guide” HARVARD UNIVERSITY OFFICE OF TECHNOLOGY DEVELOPMENT
Article “Startup Success Strategies” By Marshall Bird LL.B LL.M
Article “Think like a STRATUP-Facing the future” By Brian Mathews
Group 2: MARA (R70)
5510211002 Jirapha Visitsakvasin
5510211005 Pasakorn Wangvivatchareon
5510211023 Sudarath Yayong
5510211030 Siriwut Pitipornprakarn
5510211037 Pakorn Yiengsakulpaisal
5510211043 Boossarapun Sirirungreaung
5510211066 Pharawee Doonyapinyo