How to Really Get your New Enterprise Off the Ground (It Doesn’t Take Many Entrepreneurs to...

How to Really Get your New Enterprise Off the Ground(It Doesn’t Take Many Entrepreneurs to

Reshape a Community)

Prepared for: Y Enterprise Centre | Centre d'entreprises du YBy: @ProfBruce

Date: Dec. 6, 2012

Professor Bruce Murray FirestoneB. Eng. (Civil), M. Eng.-Sci., Ph.D.

Founder Ottawa Senators, Ottawa Senators Foundation and Scotiabank Place; Entrepreneurship Ambassador, Telfer School of Management, University of Ottawa;Executive Director, Exploriem.org, Learn By Doing School Novelist, Quantum Entity Trilogy; Writer, Entrepreneurs Handbook II; Columnist, Ottawa Business Journal; Broker, Century 21 Explorer Realty

•Follow him on Twitter at @ProfBruce •Find his books at: www.brucemfirestone.com •Read his blogs at www.EQJournal.org and www.DramatisPersonae.org •Current motto: “Making Each Day Count”

Teamwork in the 10th Millennium B.C.

Synergy is a fancy word for teamwork According to Jane Jacobs all human

economic development stems from development of villages, towns and cities

From proximate co-habitation learn about strengths and weaknesses and learn to share and divide tasks according to individual skill sets


But many people have view: ‘More pie for you means less for me’

Wrong! Economic growth derives from multiplying

options, from specialization, from comparative advantage, from development of standards, from network effects, disintermediation and scalability


Let’s go back in time! Ugh and Nnn Family of Ugh lives by themselves in

savanna Ugh expert antelope hunter provides four

antelopes a month


Ugh’s carving skills poor, producing only one set of flint knives per month

One mile away, family of Nnn hungry, bagging only one antelope a month

But Nnn good flint knife producer, producing three sets of flint knives per month

Ugh and Nnn meet– decide not to kill each other

Co-lo instead


At first, for mutual defence But then, through observation due to

proximity, Ugh see what beautiful flint knives Nnn makes

Ugh spends all his time hunting/Nnn carving What happens?


Explosion in (primitive) village productivity GDP jumps!


Phenomenal increase in wellbeing of two families

Village producing goods surplus to needs Sets up possibility of trading with third

family (family of Zll), expert producers of textiles (animal skins)

Results in further substantial increase in value for emerging regional economy

People Need People

People need people like no other animal on planet

Uniquely co-dependent Skill sharing is fundamental The most important decision you make other

than to actually start a new enterprise is who you hire, so hire up

People Need People

Lesson No. 1:

GET THE RIGHT PEOPLE ON THE BUS WITH YOU

Choose the Right Idea

Grade A Techs Four original founders Two engineers, one IT guy and a Biz Dev

person 5 original concepts The fourth was SILENT ALARM CLOCK Fifth one was Grade A


Get a trusted mentor Verbalize like Tom Hanks in Castaway (to

Wilson) ‘Don’t worry, Wilson.’

http://www.youtube.com/watch?v=lv_LfXcjWew&feature=endscreen&NR=1

‘I’m sorry, Wilson.’ http://www.youtube.com/watch?v=LHtgKIFoQfE


Lesson No. 2

SELECT THE RIGHT IDEA

AND

MENTOR

Get the Business Model Right

Sam Palmisano (former IBM CEO) and Steve Jobs (former Apple CEO) spent up to 40% of their time on Biz Models

Not Business Plans Not Products or Services You competitors can copy a product or service

but not so easy to do with Biz Model


Plans are out of date before you can complete them

Always change when you come into contact with RL

It was the biz model of the iPhone that made Apple the most valuable co on the planet


Share of carrier fees each month Revenues from app store Revenues from iTunes and iBooks Revenues from rights fees (to be featured on

Apple iPhone or iPad homescreens) Revenues from Apple’s share of content

created by others Ad revenues from iOS platform Search fees


App developers make money Encourages more apps to be created More apps means more iPhone buyers More iPhone buyers means more developers 288% p.a. return to Apple (est.)


Lesson No. 3:

GTBMR

YOUR COMPETITORS MAY BE ABLE TO COPY WHAT YOU’VE ALREADY DONE BUT NOT WHAT YOU GOING TO DO

ONCE YOU CREATE A COMMUNITY AORUND YOUR BIZ, YOU’RE HARD TO KNOCK OFF

Add Some Differentiated Value

Your new idea doesn’t have to be e = mc2

Or Priceline (consumer names price) Or Fed/Ex (overnight parcel delivery/hub and

spoke system)


Can be BHSC– no minimum lease terms Or Zappos– excellent customer service Or Amazon– ‘would you like to see what other

people who bought this [CD/DVD/Book] also bought?’


Imaginative reuse of Petrol Station Good sandwiches Use outdoor canopy to shelter picnic tables Can do more!


Can do more with big empty parking lot!


Add leisure element! Add programming! Start a volley ball league/ladder!


Lesson No. 4:

ADD DIFFERENTIATED VALUE, AKA ‘PIXIE DUST’

Self-Capitalize

Get capital from clients, suppliers, strategic partners– it’s often FREE!

Clients/customers will give you deposits/retainers

Suppliers will give you time to pay

Self-Capitalize

Be strategic Ask, ‘Who Benefits?’ Then ask for their help Eg, starting Fed/Ex? Who benefits? Aircraft Manufacturers, Airports Get investment from them…

Self-Capitalize

Lesson No. 5:

BOOTSTRAP YOURSELF

So that a VC firm or other investors, partners or creditors don’t end up owning your biz instead of you

Use Smart Marketing

If you can’t reach customers and clients in a cost effective manner, you are DEAD

Guerrilla Marketing is the art of substituting brains from money in the Marketing Wars

Use Smart Marketing

‘If any part of de-orbiting Mir space station hits our target in the Indian Ocean, we’ll buy everyone in the continental USA a free taco,’ TACO BELL

Use Smart Marketing

Free communication with worldwide audience through Twitter, Facebook, YouTube, Email, Skype

What a great time to be an entrepreneur Use Social Media (it’s not Social Marketing) Be authentic

Use Smart Marketing

Lesson No. 6:

USE GM

Remember, if it requires heroic efforts to sell, you are DEAD

Mass Customize Products

For first time in history, can get custom outputs from standard inputs

Reverse out some work to clients, customers and suppliers using the Internet

Can now create scalable enterprises that produce more value than if you simply had a JOB


‘You can have color of car you want as long as it is black,’ Henry Ford

Only 2 choices– custom inputs (artisan) for custom outputs or standard inputs for standard output– Model T Fords


Now can allow, say, homebuyer to semi customize their homes (lighting, flooring, kitchen, plumbing packages etc.) on a website

Reverse out the work to clients And to suppliers who can come on website

and bid for jobs, submit invoices for payment and keep schedules up to date


Lesson No. 7:

MASS CUSTOMIZE

‘THERE IS NO INVENTION MORE IMPORTANT IN THE LAST 40 YEARS THAN THE INTERNET,’ JACK WELCH

Find Launch Clients

Find pre-launch and launch customers Sell, sell, sell Or as Ben Affleck said in the film Boiler

Room: “ABC”—always be closing If you have cashflow, you will probably

survive Ever hear of a company with fast rising

revenues folding?

Find Launch Clients

Minimum number of launch clients is three Why? Cuz you may be able to fool one or possibly

two clients but probably not three Gives you confidence you are on right track Will critique your offering and often improve

it for free

Find Launch Clients

Sens launch clients? 10,000 season tickets sold in ten days and

collected $22 million in cash

Lesson No. 8:

ALWAYS BE CLOSING

Execute Expertly

Ideas are nice but you have to be able to execute

Every Biz needs the entrepreneur (leadership and sales), the manager (organization and check/check/check everything) and the technician (the doer) [Michael E Gerber, The E Myth]

Execute Expertly

You have to be all three in a startup You can’t delegate sales or leadership, EVER

Lesson No. 9:

BE AN EXPERT AND EXECUTE FLAWLESSLY

Set Goals

Democratize them Achieve goals—people are excellent at

achieving goals if they remember to set some!

Successful, fast growing startups track their metrics and hold themselves accountable

Set Goals

Lesson No. 10:

N = ?

Smart Pricing

Mini offices, our price was $650 + $115 ‘facilities charge’

Much less expensive than competition who was charging $765

Hotel lowered prices in last recession/occupancy rates went down not up

How come? Safety concerns

Smart Pricing

Lesson No. 11:

TELL THE TRUTH, THE SMART TRUTH

COCA COLA AND THE SODA POP DISPENSER THAT INCREASED PRICES ON HOT DAYS

Wilderness Tours, Beachburg + DV

Three hour river ride becomes all-day North American success story

How? Programming! Stop and swim the rapids; stop and have lunch Wild ride versus family ride– different channels Kayak School, bungee jump, mountain biking,

rock climbing, hot tub… Whitewater Village, range of accommodation

Saunders Farm– Not just locally grown Halloween frights + DV

Pedal Cart Track Captain Aidan’s Playful Pirat

e Ship Witch Mountain Slide Puppet Shows Mile Maze Wagon Rides Farmer Bill's Barnyard

Treehouse Water Spray Zone

Saunders Farm– Not just locally grown Halloween frights

Giant Jumping Pillows Farm Garden Saunders Hampton Court

Maze The Classical 7 Ring

Labyrinth Maze Children’s Discovery Barn Fairy Gardens Maze Lookout Tower Trike Trail

Startup Plan

Of course, Wilderness Tours, Saunders Farm, Red Pine Camp, Sandy’s Deli… all financing by GOVERNMENT, VCs and BANKS

Right? Wrong! And, they all asked for approval before

they started Right? Wrong!

Startup Plan

If Joe Kowalski or Bill Saunders asks Canada, Ontario, Quebec and local cities/townships/counties for permission there would be no WT or SF

If Joe or Bill wait for gov’t funding, they might still be waiting

Got funding from clients/customers/suppliers and sweat equity

Startup Plan

Last Lesson No. 12:

‘Entrepreneurs would rather ask for forgiveness than beg for permission,’Anon

@ProfBruce@Quantum_Entity

How I Beat My CompetitionCase Study– Ottawa Senators and the Palladium

Canderel and others enter the Ottawa marketplace and out compete the locals

Office rents go from $18 in 1982 to $6 in 1987 We were constantly trading up in terms of business size and

complexity Move to a market with fewer competitors and some more

DV– get out of the way of the elephants “What does TO have that we don’t have?”

How I Beat My CompetitionCase Study– Ottawa Senators and the Palladium (Cont’d)

A Zoo, the Princess of Wales Theatre, a NHL Team NHL is getting ready for expansion again Randy, MBA from Clarkson: “Let’s do it.” Cyril Leeder, CA: “How much is it going to cost?” Estimate: $35 million (then going rate for NBA expansion

team)


Franchise cost: $50,000,000 USD in 1990 Pre-sold 15,000 PRNs for $25 each for a team that

does not yet exist Pre-sold 500 Corporate sponsors for $500 each Pre-sold 32 Original Corporate Sponsors for $15,000

each Pre-sold media rights for radio and TV for $250,000

and $4,000,000, respectively


Pre-sold 30-year arena management contract for $15 million + a corporate guarantee

Pre-sold pouring rights for $3 million Pre-sold product rights for $1 million Pre-sold 10,000 season tickets 22 months before the

first game for $22 million in cash Pre-leased 100 suites at $100,000 per suite per year or

$10 million per year for 5 years = $50,000,000


Bought 600 acres for $12k per acre, won a NHL franchise, built a MCF (Major Community Facility– aka, Scotiabank Place) in the middle and sold extra 500 acres for $112k per acre to make $50,000,000

You get the picture… PRE-SELL, PRE-SELL, PRE-SELL… find ‘launch clients’ before you launch


Howard Darwin: “If anyone should be bidding for a NHL team for Ottawa it should be me. But you have the only site for a MCF, you have 500 corporate sponsors tied up, you have 15,000 reservations for season tickets, you have the relationships with the NHL BOG.”

Me: “That’s right, Howard.”


Having launch clients (pre-sales) changes everything– it gives everyone involved confidence that you are on the right track, it increases your credibility and is an important source of (cheap) capital

The minimum number of launch clients you need is three: you can convince one fool to buy any product or service, maybe two but probably not three


Meet with each member of the BOG at least twice Meet with the President of the NHL Go to Palm Beach with 120 followers including the

Ottawa Fire Department Marching Band Slogan: “Bring Back the Senators” Name things like: “The Palladium”– give it the breath of

life (like the Elves did in Middle Earth)


Prioritize Lobby Know what you are doing (learn from Bill Torrey/Glen

Sather/Sam Pollack) Media proclaims: ‘Milwaukee/Seattle’ Stand your ground– “You will NEVER, EVER get a NHL

Team in… Ottawa.”


Plaster Palm Beach Airport with Bumper Stickers Make your presentation a conversation Never stop Last thing they see is your happy, smiling face Be someone others can have trust in; trust is the

foundation of a successful life in business and in your personal situation

“Go where hockey is known and loved and we’ll take care of your franchise.”

Beat Milwaukee, Portland, Seattle, Houston, Hamilton and St Petersburg


Dec. 6, 1990, the NHL awarded franchises to the cities of Ottawa and Tampa

But really they awarded them to Phil Esposito (for Tampa) and Bruce Firestone (for Ottawa)

They trusted us Our theme song– Tom Petty’s DON’T BACK DOWN We get a unanimous vote from the NHL! In entrepreneurship, results count and results come from

a fundamental source: trust— remember this— “People like to buy from people they like and trust.”

How I Beat My CompetitionCase Study– Ottawa Senators and the Palladium LESSONS LEARNED

Set your goals, internalize them, democratize them and publicize them

Outwit, outplay and out execute the competition Know who your real audience is There’s the published hierarchy then there is the one that

really makes things happen– not all owners are created equal– know the business ecosystem

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