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IDEAS AND

PURPOSEKEN DAVENPORT

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ABOUT MEStarted first company straight out of UCSD in 1991.

Since then, started 4 others in healthcare, software/servicesand social sector.

• 

One went belly up (Chapter 11)

•  One had a $100+mm exit

• 

One is now 7 years in

•  One is still early stage

•  One is now 4 years in -- no exit possible (501c3)

Raised capital at all stages from all sources.

Mentored dozens of start-ups and founders.

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IT ALL STARTS WITH

A BIG IDEA…

Right?

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YES, BUT…Ideas are great.

The problem is -- everyone has them.

In fact, you should assume that 10 otherpeople somewhere on the planet have your

EXACT same idea and are working on

bringing it to market.

Ideas are necessary. But not sufficient.

Success requires more.

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AHH, IT’S ABOUT

EXECUTION!It’s trendy in the “Valley”to poo-poo the importanceof ideas.

(After all, since everybodyhas them, how good canyours really be?)

So what differentiatessuccessful start-ups fromnon-successful is beingable to execute.

Right?

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YES, BUT…Execution is necessary, but (again) not sufficient.

I believe you also need purpose.

Purpose is personal. It’s yours. It intertwines twokey elements that go to the core of who you are

and what you are trying to create:

•  Vision for changing the future in some way.

•  Passion for why you want to change it.

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START WITH WHYWhat is driving you?

• The promise of riches? (ha)

• 

Freedom from having a boss? (ha, ha)• Because it seems cool? Fun? (for the firstmonth, maybe)

Or do you have a true passion and purposefor what you are doing?

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WHY IS PURPOSE SO

IMPORTANT?Because you are embarking on a difficult and oftensoul-sucking endeavor.

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PURPOSECritical for three reasons:

• It will sustain you when you face adversity

(every day).•

 

It will enable you to build a team based onshared values – buy-in is more importantthan stock options.

• 

It will enable you to effectively sell toinvestors, customers and employees.

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PURPOSE• Early stage

investments aremore about YOUthan the businessmodel.

• 

Remember: GoodVC’s and long-terminvestors getmarried to you. It’s

not casual dating,and they will look toyou to staycommitted.

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PURPOSE

How do you know

what you are

passionate about?

Only YOU  know.

I had to answer the

same question!

 (This book might

help.)

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NOW, BACK TO THE

IDEA Yes, the idea

DOES matter.

Or, rather, theproblem matters.

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WHAT MAKES A GOOD

IDEA?Great business ideas have 4 components thatanswer 4 key questions:

1. A Problem that needs solving.

• 

“What’s the pain?”2. Creates value to customers.

• 

“Who will benefit and pay to relieve it?”3. An executable model.

• 

“Can I reach the customer (affordably)?”4. Good market timing.

•  Why now?

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WHERE DO GOOD

IDEAS COME FROM?The best ideas come

from your personal

experience – solving

a problem you know

well because you

deal with it every

day.

But! 

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Not all ideas turn into a business.

Key question:

• 

Is it a idea for a product? Or can it be thecore of a company?

What’s the difference?

• 

Addressable market size, channels,follow-on products, etc.

PRODUCT OR COMPANY?

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Do love your technology.

But don’t let it become the substitute forreal strategy.

BEWARE THE “DOG WAG”

SYNDROME

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THE “LEAN IDEA”

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LEAN IDEA TOOL KIT

Do relentless market research – on yourcompetitors (yes, you have them)

Get relentless market feedback – from yourtarget customers.

• 

Craft the idea statement as clearly aspossible. Don’t be afraid to disclose.

• 

Focus Groups can be valuable – but bewareof selection bias and confirmation bias.

Present, listen, modify. Present, listen,modify.

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LUCK: THE X FACTOR

Dustin Moscovitz

Eduardo Saverin

Left Facebook 2008

Net worth: $8.8B

Left Facebook 2005Net worth: $2.6B

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CAN YOU MAKE YOUR OWN

LUCK?

Maybe more than you think*

“Chance favors a prepared mind”-- Louis Pasteur

*Marc Andreesen “Luck and the Entrepreneur Part 1”http://pmarchive.com/luck_and_the_entrepreneur.html