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What Startup Will You Build? How to Identify Market White Space
• Founder Institute New York (three times) • Harvard Club of New York Tech & Entrepreneurship Group • Harvard Graduate School of Arts & Sciences Business Club / Harvard
Graduate School Council • Limmud NY / Limmud FSU • National University of Singapore Techno Venture Forum (Entrepeneurship
Centre) • New York Business Expo • OCE Discovery (Canadian innovation conference) • Princeton University Keller Center • Thought Leaders in Business series (Yale Club of New York) • Womensphere (twice)
• Early-stage technology venture capital fund • Founded 1999, with over 180 investments in over 70 companies • 20 employees in Manhattan and Hoboken • First investments typically $100-$500K at valuations of <$5m pre-money • Follow on in later rounds for best-performing startups • Prominent investments include:
Cornerstone OnDemand (IPO); Quigo Technologies (sold to AOL for reported $340m); Indiegogo; Klout; 500px; HowAboutWe
Intro Tools Signals Network Next Steps
ff Venture Capital: Over 180 investments in over 70 companies
Investments as of July 17, 2013 Only logos of active companies whose investment from ff VC is publicly disclosed are shown.
Intro Tools Signals Network Next Steps
David Teten (teten.com) • Partner, ff Venture Capital, early-stage technology venture capital fund • Founder and Chairman, Harvard Business School Angels of New York . Co-founded
Venture Capital Access Program, introducing women and minority entrepreneurs to Harvard-affiliated angels
• Lead author, The Virtual Handshake: Opening Doors and Closing Deals Online (TheVirtualHandshake.com)
• Lead author of first-ever research study on best practices in private equity/venture capital deal origination
• Lead author of first-ever research study on best practices of venture capitalists in increasing portfolio company value through operational support
• Harvard MBA 1998, Yale BA, both with honors. • @dteten
Harvard Business School Angels of Greater New York (HBSAlumniAngels.com/NY) • Second largest angel group in tri-state area. • Members are Harvard affiliates from all industries. • We invest in companies regardless of any Harvard affiliation. • $52K average individual check size per company per angel. • Launched Venture Capital Access Program, focused on helping women
and minority investors raise capital from our network.
Market mapping is a powerful way to identify white space. Sample Market Mapping Approach
# Stage Example from Klout.com 1 Choose industries and geographies of initial interest Lean entrepreneur in US.
2 Define your proprietary point of view. Thesis: People will care about their influence on social media networks, just as they care about their dress/appearance in face-to-face networks.
3 Translate into investment theme for specific industries and/or geographies of interest.
Expect growth of analytics companies analyzing social media influence.
4 List major players in target industries/geographies, and how each will be impacted by investment themes.
Recruiters and marketers will use social media influence as a filter for identifying candidates with whom they want to work.
5 Iteratively improve market map based on feedback from industry
Discuss elements of the market map with key sector players through industry forums and mass media.
6 Determine which activities along the value chain offer the highest return (typically the proprietary ones).
A large database of information about social media influence is difficult to build and can be branded.
7 Identify areas of future growth. People will care about their influence in niche markets, e.g., who are the influencers in the fashion industry.
8 Assess fit with your strategy. Examine how people are using the product.
9 Regularly update the market map based on market feedback and lessons from investment prospects.
Signals Network Next Steps Character – Competence – Relevance – Strength – Information – Number – Diversity
Intro Tools
Network Valuation Formula
= D * ∑ (Chn*Con *Rn* Sn*In)
Ch = Character Co = Your Firm’s Competence R = Relevance of the contact S = Strength of your relationship I = Information N = Number of people D = Diversity
Further resources • Baron, R.A. Opportunity Recognition as Pattern Recognition. Academy of
Management Perspectives. Feb 2006 • Drucker, P.F. 1993. Innovation & Entrepreneurship. HarperBusiness. New York. • Bhide, A. 1996. The Questions Every Entrepreneur Must Answer. Harvard Business
Review. Nov-Dec 1996. • Gourville, J.T. 2006. Eager Sellers, Stony Buyers: Understanding the Psychology of
New Product Adoption. HBR June 2006 • Teten, David, and Allen, Scott 2005. The Virtual Handshake: Opening Doors and
Closing Deals Online. AMACOM, 2005. Free copy at TheVirtualHandshake.com • The Institute for Innovation & Entrepreneurship at UT Dallas:
http://innovation.utdallas.edu • ff Venture Capital Business Plans Requirements:
1: Define Marketing Problems and Opportunities 2: Set Objectives, Budget, and Timetables 3: Select Research Types, Methods, and Techniques 4: Design Research Instruments 5: Collect Data 6: Organize and Analyze the Data 7: Present and Use Market Research Findings
• A survey of small business managers in Texas revealed that 84% of those who conducted formal marketing research projects in the past three years felt that the information obtained was worth the money spent.
• Overall, 58% said that they were able to incorporate the research findings into their decisionmaking process.
• Only 6% reported that they were not able to implement the results.
Darren Luo (NUS), http://flickr.com/photos/foundphotoslj/1134148114/
Intern Sources in Singapore
Universities: • NUS Business School Career Services: http://bit.ly/9GOqAb • NUS Career Services Center: www.nus.edu.sg/osa/career/employer/index.html • NUS Overseas Colleges (NOC) www.overseas.nus.edu.sg/
! The ilead Program: www.nus.edu.sg/nec/ee/ilead/index.html ! NOC Alumni: www.nocalumni.org/site/index.php
• NTU Business School: www.nbs.ntu.edu.sg/careerservices/index.asp • NTU Career Services Center: www.nbs.ntu.edu.sg/careerservices/index.asp • SMU: www.smu.edu.sg/students/career_services/for_employer/recruit.asp • Singapore Institute of Management: www.sim.edu.sg Polytechnics • Singapore Polytechnic: http://bit.ly/aPGxwu