Ideation Bootcamp - Week 1. Big Ideas, Markets and Problems. Dave Parker and Joel Espelien, Feb 6, 2013. Graham & Dunn Seattle Office

1. Ideation Bootcamp

2. About Mentors
Joel Espelien Dave Parker
• Entrepreneur & Founder • Director, Seattle Founder Institute
• VP Strategy & General Counsel for • Entrepreneur
Packet Video • Board Member Guidant Financial
• Mentor for Tech Stars and • Former Board Member
Founder’s Co-op Classmates.com

3. Agenda:
• Week 1- Big Ideas/Markets/Problems
– Introductions
– Market
– Problems
– Ideas
– Q&A
– Working Groups
– Homework

4. Weekly Format
• 6:30 – Food/beverages
• 6:45 – Introduction to topics & mentors
• 7:00 – Content 1
• 7:30 – Content 2
• 8:00 – Q&A
• 8:25 – Break
• 8:45 - Working Groups
• 9:15 – Home work

5. • Big Ideas – Big Markets – Big Problems
– With Joel Espelien
• Venture Ready Research, Target Markets & Models
– With David Bluhm
• Validating your idea: tools and methods
– With Justin Wilcox
• Communicating your idea (without getting lost in the
details)
– With Joanna Lord

6. Week 1

7. #SEFI
@Founding
So You Have a Startup Idea?
Joel Espelien - @EspelienJB
Dave Parker - @DaveParkerSEA

8. Ground Rules:
• Don’t be afraid to share your idea!
• Ideas don’t matter – feedback, execution and
iteration do
• You have more to gain than to lose
• Nobody is going to steal your idea
• Don’t ask an Investor to sign your NDA

9. Survey
Existing Business?
Tech Business?
B2B?
B2C?
Seeking Investment?

10. What Investor Look For
• Big Market/Idea/Problems
• Team that can execute
• Scalable Product
• Traction – Customer, revenue, users

11. Markets
• Who Buys from You?
• Business to Business
• Business to Consumer
• Established vs. Immature
• What is a Market?

12. Investment Falls in 2012
Deal Flow and Equity into Venture-Backed Companies
3506
3363
3116
3110 3049
$50
2859 3,000
2759
2627
2462
$40
$34.5 $35.1
$33.1 2,000
$30
$31.1
$29.3 $29.7
$25.1 $24.3
$20 $23.6
1,000
$10
$0 0
2004 2005 2006 2007 2008 2009 2010 2011 2012
Amount Invested ($B) Number of Deals
Source: Dow Jones VentureSource

13. Industry Allocations Steady in 4Q’ 12
Deal Flow Allocation by Selected Groups
100% 2% 2%
4% 5%
Energy &
17% 15% Utilities
17% 16% 18%
80%
20% Business &
16% 21% 20% Financial
23%
Services
60%
Consumer
Services
34% 38%
40% 34% 38%
Information
Technology
20%
29% 25% 24% Healthcare
24% 22%
0%
4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12
Source: Dow Jones VentureSource

14. Software Loses Pace in 4Q’ 12
IT Investment Allocation by Sector
100% 3%
9% 5% 7%
10%
15% Semiconductors
16%
15%
14% 14%
80%
8%
12% 18% 22%
Electronics &
30% Computer
60% Hardware
Communications
40%
70% & Networking
65%
62% 59%
47%
20%
Software
0%
4Q09 2Q10 4Q10 2Q11 4Q11 2Q12 4Q12
Source: Dow Jones VentureSource

15. Big Markets?
• Is the Market in Billions?
• Specific Opportunity for VC >$100M
• If you own the market how big would
your be
• Market Leader vs. First Mover
• Known or unknown

16. Big Ideas?
• Changes the world • Changes a market
• Simple • Complex
• “Aha” idea • Feature or tool
• Transformational • Incremental

17. Big Problems
• Pain Pill? Have to have it
• Vitamin? Nice to have
• Who wins if you win?
• Do they “win big” or “save a little”?

18. It’s takes as long
to build a small
idea as big idea

19. • Passion! • Doesn’t make it a
great business
• Ideas! • Execution
• Product • Company

20. Explain Your Idea

21. Idealibs for Startups
I want to develop (a defined offering)
to help (a target audience)
(solve a problem)
(with secret sauce)

22. The Offering
• Be Specific
– “a social utility" vs "an ecommerce website"
• Avoid Buzzwords
– "mobile social CRM" vs "an iPhone application"
• Skip the Adjectives and Superlatives
– "a revolutionary service" vs "backend software"

23. The Audience
• Identify Demographics
– "female consumers" vs ”new mothers"
• Specify Your Market
– "artists and musicians" vs "unsigned alternative bands"
• Clarify the Buyer
– "large businesses" vs "purchasing managers at
multinational companies"

24. The Problem
• Make sure everyone can understand the offering.
• Hint at a viable revenue model.
– "find deals online" vs "shop for hip baby products at
wholesale prices"

25. The Secret Sauce
• Explain what makes your business unique.
– "faster" vs "with automated ordering for diapers and other
staples”

26. Q&A

27. Working Groups
Homework

28. 7 Rules to Judge
Your Idea

29. 7 Rules
1. Simple ideas win
2. You have one revenue stream
3. Name your customer
4. Make something explainable
5. Small markets suck
6. Mix in secret sauce
7. Be original

30. Contact Info
• Dave Parker – Dave@dkparker.com
@DaveParkerSEA
• Joel Espelien – joelbespelien@gmail.com
@EspelienJB
• Daniel Rossi – DRossi@nwen.org
@nwen-org
• Caitlin Goetze – Cgoetze@nwen.org