Competitive Strategy

Ray McConnell

Startup: Is it like this? No

Startup: More like this!

Who I am Founder of Four Start-ups, Focused on Semicon

2 IPOs (LSE, AIM), 3 Plcs (high net worth network) Managed strategic patent portfolios

Blu Wireless Technology Just filed 15 patents (Thanks ElementOne IP) Market is potentially huge: Now part of WiFi 1B parts/year

Larger Strategic Technology Theme Built up a community of expertise over the years Embedded high volume applications are opening up

The Silicon Cluster is the bigger picture

Competitive Strategy; What is it? Optimising and mitigating risk

Risks are hard to quantify even if they are known Protecting yourself is mandatory

No clear single method It's always different , you will know best Seek the experience of repeatability Avoid “Black Swan” advice

Be familiar with the basics There is a lot of analysis, it might not feel relevant Take your time to understand it

Startup Focus: Duel Strategy Put some thought to understanding potential Exits

For investment direction Useful to figure this and work the plan backwards

An acquisition maybe your biggest customer Understand any potential conflict with your market strategy

Your market Core competence

Does your team have enough technology knowledge and skills? Product

Does your team have enough market knowledge and skills? Engage early, it may feel like its slowing your development Much easier to sell a relevant product

Competitive Advantage; Michael Porter

Cost Leadership

Differentiation

Focus

Fairly obvious, mainly for established business

Disruptive Technology; Clayton Christensen

Don’t try selling features alone Sell low cost + value add

The Hype Cycle; Gartner Research

Actually many curves Investment expectation, you must time this right! Market uptake, plan your spend appropriately!

Crossing the Chasm; Geoffrey Moore

Crossing the Chasm Focus value proposition on single market sector

Show the real £$ value in your customers terms Reduce market USP and communication to “two sentences”

Establish your beach head Don’t be fooled by early market success Wider non focused activity can overwhelm and confuse Bowling pin analogy

Hit the pin that propagates best

Be crystal clear on sales channel

Don’t get caught up in your own hype Keep a clear head

Careful! Your investors might abandon you Try to get ‘Smart Money’

Hype with Chasm

Milestones

Team/IPValue

PromiseValue

Valley ofDeath

FinancialValue

InitialFunding

Build Team &Product Dev.

Samples(Launch)

Production Shipping Revenue

Ramp

Reve

nue

Valu

ation

Semicon Valuation Lifecycle

Partnering Can lower R&D Cash spend Can help you get funding Help you get to market

Help define product Provide validation Intro to customers

“the thing that typically kills you is not technology, or

there wasn’t that gap in the market, it’s simply the

fact that you could not achieve enough scale to service that gap in the market

and a larger vendor can come along and apply more resource to it…the scale

that is required just to service these market opportunities is too big and a lot

of times that’s why companies end up getting bought out”

Patents Good

Protecting the technology Validating originality Increase valuation

Adds value to your exit Can be marketed Helps clarify USP Good for CV Even if not granted,

Prevent others patenting it

Bad Takes a lot of time Granting even more time Costly Exposure

None before priority date Then broadcast to everyone

Too small to leverage Ever?

Patent story #1 (not recommended) Created large UK filing for priority date Many claims US filing, UK priority date Took 7 years for UK and US patent office not process it! Modified UK to single claim for grant US rules allowed claims re-vamp

Targeted specific companies products with new claims With original priority date!

Most/all patent attorneys in US have conflict in interest! Litigation costs were estimated to be many $M Patents sold recently (multiple £M, still cheap though!)

Patent story #2 Created abstract for filing date in UK Added claims within 1 year US filing within that same year UK patent office feedback:

Not valid as a Software or Business process Continued in US Expecting US grant

Startup Competitive Strategy You have to ‘see’ it early

If you are tech savvy this will be instinctive Has to be a ‘big’ opportunity, need to see where it fits on the hype curve

Bring a different technology into the established market The ‘joining’ will bring new value and patentable IP Know your market and create the USP

Market downturns are your friend Incumbents R&D is first to go! Incumbents will be left out if not partnering or acquiring

Build your case Seek specialists, build team, offer equity Seek partners, offer equity Patent key concepts

Build route to market Find localised biz development expertise, offer equity

Verify Market This will take time, build credible numbers

Seek funding

Some Tips The start-up fear is addictive! Don’t pick a niche market:- or a market that is post hype. Write a good business plan Think about the investors’ perspective:-

Smart money helps Take time to pick your team:-

Don’t grow too Fast - a poor hire hiring is a disaster. Find partners, they are out there somewhere. Get early customer engagement:-

But don’t launch an immature product The market always takes longer to develop:- Spend appropriately Protect intellectual property

NDA, copyrights, trademarks and licenses.