Thursday, September 30, 2010
1. Explain what you're doing.
Investors' main question when judging a very early startup is whether you've made a compelling product. Before they can judge whether you've built a good x, they have to understand what kind of x you've built. They will get very frustrated if instead of telling them what you do, you make them sit through some kind of preamble.
Say what you're doing as soon as possible, preferably in the first sentence. "We're Jeff and Bob and we've built an easy to use web-based database. Now we'll show it to you and explain why people need this."
If you're a great public speaker you may be able to violate this rule. Last year one founder spent the whole first half of his talk on a fascinating analysis of the limits of the conventional desktop metaphor. He got away with it, but unless you're a captivating speaker, which most hackers aren't, it's better to play it safe.
2. Get rapidly to demo.
A demo explains what you've made more effectively than any verbal description. The only thing worth talking about first is the problem you're trying to solve and why it's important. But don't spend more than a tenth of your time on that. Then demo.
When you demo, don't run through a catalog of features. Instead start with the problem you're solving, and then show how your product solves it. Show features in an order driven by some kind of purpose, rather than the order in which they happen to appear on the screen.
If you're demoing something web-based, assume that the network connection will mysteriously die 30 seconds into your presentation, and come prepared with a copy of the server software running on your laptop.
3. Better a narrow description than a vague one.
One reason founders resist describing their projects concisely is that, at this early stage, there are all kinds of possibilities. The most concise descriptions seem misleadingly narrow. So for example a group that has built an easy web-based database might resist calling their applicaton that, because it could be so much more. In fact, it could be anything...
The problem is, as you approach (in the calculus sense) a description of something that could be anything, the content of your description approaches zero. If you describe your web-based database as "a system to allow people to collaboratively leverage the value of information," it will go in one investor ear and out the other. They'll just discard that sentence as meaningless boilerplate, and hope, with increasing impatience, that in the next sentence you'll actually explain what you've made.
Your primary goal is not to describe everything your system might one day become, but simply to convince investors you're worth talking to further. So approach this like an algorithm that gets the right answer by successive approximations. Begin with a description that's gripping but perhaps overly narrow, then flesh it out to the extent you can. It's the same principle as incremental development: start with a simple prototype, then add features, but at every point have working code. In this case, "working code" means a working description in the investor's head.
4. Don't talk and drive.
Have one person talk while another uses the computer. If the same person does both, they'll inevitably mumble downwards at the computer screen instead of talking clearly at the audience.
As long as you're standing near the audience and looking at them, politeness (and habit) compel them to pay attention to you. Once you stop looking at them to fuss with something on your computer, their minds drift off to the errands they have to run later.
5. Don't talk about secondary matters at length.
If you only have a few minutes, spend them explaining what your product does and why it's great. Second order issues like competitors or resumes should be single slides you go through quickly at the end. If you have impressive resumes, just flash them on the screen for 15 seconds and say a few words. For competitors, list the top 3 and explain in one sentence each what they lack that you have. And put this kind of thing at the end, after you've made it clear what you've built.
6. Don't get too deeply into business models.
It's good to talk about how you plan to make money, but mainly because it shows you care about that and have thought about it. Don't go into detail about your business model, because (a) that's not what smart investors care about in a brief presentation, and (b) any business model you have at this point is probably wrong anyway.
Recently a VC who came to speak at Y Combinator talked about a company he just invested in. He said their business model was wrong and would probably change three times before they got it right. The founders were experienced guys who'd done startups before and who'd just succeeded in getting millions from one of the top VC firms, and even their business model was crap. (And yet he invested anyway, because he expected it to be crap at this stage.)
If you're solving an important problem, you're going to sound a lot smarter talking about that than the business model. The business model is just a bunch of guesses, and guesses about stuff that's probably not your area of expertise. So don't spend your precious few minutes talking about crap when you could be talking about solid, interesting things you know a lot about: the problem you're solving and what you've built so far.
As well as being a bad use of time, if your business model seems spectacularly wrong, that will push the stuff you want investors to remember out of their heads. They'll just remember you as the company with the boneheaded plan for making money, rather than the company that solved that important problem.
7. Talk slowly and clearly at the audience.
Everyone at Rehearsal Day could see the difference between the people who'd been out in the world for a while and had presented to groups, and those who hadn't.
You need to use a completely different voice and manner talking to a roomful of people than you would in conversation. Everyday life gives you no practice in this. If you can't already do it, the best solution is to treat it as a consciously artificial trick, like juggling.
However, that doesn't mean you should talk like some kind of announcer. Audiences tune that out. What you need to do is talk in this artificial way, and yet make it seem conversational. (Writing is the same. Good writing is an elaborate effort to seem spontaneous.)
If you want to write out your whole presentation beforehand and memorize it, that's ok. That has worked for some groups in the past. But make sure to write something that sounds like spontaneous, informal speech, and deliver it that way too.
Err on the side of speaking slowly. At Rehearsal Day, one of the founders mentioned a rule actors use: if you feel you're speaking too slowly, you're speaking at about the right speed.
8. Have one person talk.
Startups often want to show that all the founders are equal partners. This is a good instinct; investors dislike unbalanced teams. But trying to show it by partitioning the presentation is going too far. It's distracting. You can demonstrate your respect for one another in more subtle ways. For example, when one of the groups presented at Demo Day, the more extroverted of the two founders did most of the talking, but he described his co-founder as the best hacker he'd ever met, and you could tell he meant it.
Pick the one or at most two best speakers, and have them do most of the talking.
Exception: If one of the founders is an expert in some specific technical field, it can be good for them to talk about that for a minute or so. This kind of "expert witness" can add credibility, even if the audience doesn't understand all the details. If Jobs and Wozniak had 10 minutes to present the Apple II, it might be a good plan to have Jobs speak for 9 minutes and have Woz speak for a minute in the middle about some of the technical feats he'd pulled off in the design. (Though of course if it were actually those two, Jobs would speak for the entire 10 minutes.)
9. Seem confident.
Between the brief time available and their lack of technical background, many in the audience will have a hard time evaluating what you're doing. Probably the single biggest piece of evidence, initially, will be your own confidence in it. You have to show you're impressed with what you've made.
And I mean show, not tell. Never say "we're passionate" or "our product is great." People just ignore that—or worse, write you off as bullshitters. Such messages must be implicit.
What you must not do is seem nervous and apologetic. If you've truly made something good, you're doing investors a favor by telling them about it. If you don't genuinely believe that, perhaps you ought to change what your company is doing. If you don't believe your startup has such promise that you'd be doing them a favor by letting them invest, why are you investing your time in it?
10. Don't try to seem more than you are.
Don't worry if your company is just a few months old and doesn't have an office yet, or your founders are technical people with no business experience. Google was like that once, and they turned out ok. Smart investors can see past such superficial flaws. They're not looking for finished, smooth presentations. They're looking for raw talent. All you need to convince them of is that you're smart and that you're onto something good. If you try too hard to conceal your rawness—by trying to seem corporate, or pretending to know about stuff you don't—you may just conceal your talent.
You can afford to be candid about what you haven't figured out yet. Don't go out of your way to bring it up (e.g. by having a slide about what might go wrong), but don't try to pretend either that you're further along than you are. If you're a hacker and you're presenting to experienced investors, they're probably better at detecting bullshit than you are at producing it.
11. Don't put too many words on slides.
When there are a lot of words on a slide, people just skip reading it. So look at your slides and ask of each word "could I cross this out?" This includes gratuitous clip art. Try to get your slides under 20 words if you can.
Don't read your slides. They should be something in the background as you face the audience and talk to them, not something you face and read to an audience sitting behind you.
Cluttered sites don't do well in demos, especially when they're projected onto a screen. At the very least, crank up the font size big enough to make all the text legible. But cluttered sites are bad anyway, so perhaps you should use this opportunity to make your design simpler.
12. Specific numbers are good.
If you have any kind of data, however preliminary, tell the audience. Numbers stick in people's heads. If you can claim that the median visitor generates 12 page views, that's great.
But don't give them more than four or five numbers, and only give them numbers specific to you. You don't need to tell them the size of the market you're in. Who cares, really, if it's 500 million or 5 billion a year? Talking about that is like an actor at the beginning of his career telling his parents how much Tom Hanks makes. Yeah, sure, but first you have to become Tom Hanks. The important part is not whether he makes ten million a year or a hundred, but how you get there.
13. Tell stories about users.
The biggest fear of investors looking at early stage startups is that you've built something based on your own a priori theories of what the world needs, but that no one will actually want. So it's good if you can talk about problems specific users have and how you solve them.
Greg Mcadoo said one thing Sequoia looks for is the "proxy for demand." What are people doing now, using inadequate tools, that shows they need what you're making?
Another sign of user need is when people pay a lot for something. It's easy to convince investors there will be demand for a cheaper alternative to something popular, if you preserve the qualities that made it popular.
The best stories about user needs are about your own. A remarkable number of famous startups grew out of some need the founders had: Apple, Microsoft, Yahoo, Google. Experienced investors know that, so stories of this type will get their attention. The next best thing is to talk about the needs of people you know personally, like your friends or siblings.
14. Make a soundbite stick in their heads.
Professional investors hear a lot of pitches. After a while they all blur together. The first cut is simply to be one of those they remember. And the way to ensure that is to create a descriptive phrase about yourself that sticks in their heads.
In Hollywood, these phrases seem to be of the form "x meets y." In the startup world, they're usually "the x of y" or "the x y." Viaweb's was "the Microsoft Word of ecommerce."
Find one and launch it clearly (but apparently casually) in your talk, preferably near the beginning.
It's a good exercise for you, too, to sit down and try to figure out how to describe your startup in one compelling phrase. If you can't, your plans may not be sufficiently focused.
Sunday, September 26, 2010
An income statement, otherwise known as a profit and loss statement, is a summary of a company’s profit or loss during any one given period of time, such as a month, three months, or one year. The income statement records all revenues for a business during this given period, as well as the operating expenses for the business.
You use an income statement to track revenues and expenses so that you can determine the operating performance of your business over a period of time. Small business owners use these statements to find out what areas of their business are over budget or under budget. Specific items that are causing unexpected expenditures can be pinpointed, such as phone, fax, mail, or supply expenses. Income statements can also track dramatic increases in product returns or cost of goods sold as a percentage of sales. They also can be used to determine income tax liability.
Income statements, along with balance sheets, are the most basic elements required by potential lenders, such as banks, investors, and vendors. They will use the financial reporting contained therein to determine credit limits.
1. Sales The sales figure represents the amount of revenue generated by the business. The amount recorded here is the total sales, less any product returns or sales discounts.
2. Cost of goods sold This number represents the costs directly associated with making or acquiring your products. Costs include materials purchased from outside suppliers used in the manufacture of your product, as well as any internal expenses directly expended in the manufacturing process.
3. Operating expenses These are the daily expenses incurred in the operation of your business. In this sample, they are divided into two categories: selling, and general and administrative expenses.
5. Net income before taxes This number represents the amount of income earned by a business prior to paying income taxes. This figure is arrived at by subtracting total operating expenses from gross profit.
6. Taxes This is the amount of income taxes you owe to the federal government and, if applicable, state and local government taxes.
Saturday, September 25, 2010
Tuesday, September 21, 2010
- Learn basic accounting before you go into business. Go to school if necessary.
- Consult and retain an accountant familiar with your industry before you start.
- Determine what accounting software program works best for your business.
- In the beginning, do your own bookkeeping to gain knowledge of your accounting.
- Set up inventory policy and internal controls including safeguards against dishonesty.
- Reconcile your bank account at least once a month when your bank statement is received.
- Maintain and update your cash flow control spreadsheet monthly.
- Plan to outsource your payroll and payroll reporting to a payroll service provider.
- Prepare financial statements at least monthly.
- Keep your business records separate from your personal records.
- Delegate the authority to sign checks to anyone.
- Use money withheld for payroll taxes or sales taxes for other purposes.
- Commingle personal assets with your business assets.
- Delegate cash flow projections--your lifeline to liquidity.
- Be optimistic in sales projections or conservative in expense projections.
- Rely on verbal agreements on any important matter including purchases.
- Pay an invoice without matching it to your purchase order.
- Delegate your relationship with your lending sources.
- Wait to establish credit sources until you have a need for financing.
- Overlook seeking advice from your accountant and lawyer on important financial matters.
Monday, September 20, 2010
Then don't wait anymore ..try to invest in Indian stock market.
If you don't know the basic funda, don't get worried about the same...
You can learn about the terms and jargons from any website which deals with stocks...
All you have to do is to realise that the investment in stocks is not gambling,but a scientific and safe investment.
From a fixed deposit the maximum yield may be 8-9% a year whereas you can easily and safely acquire 20-30% from stock market if you invest it wisely...and if you are so lucky it can be more than 100% even..
Here are some tips to succeed in stock market...and if you have more doubts and thoughts call or contact me!
Sunday, September 19, 2010
There are other reasons that a good way to track inventory is necessary. A good inventory tracking system will allow you to easily see what merchandise is in stock, what is on order, and what needs to be ordered. It will also show you what items move quickly, and what items need to be marked down, or promoted more heavily.
There are many different methods for tracking inventory. You can set up your own system, or you can ask your accountant to set up a workable system for you. The Tag System is one of the easiest systems to use. Simply use a record book, and list all of the inventory that you have on hand. Put a special tag, with a unique tracking number on each piece of merchandise, and record that tracking number in the book. When the merchandise is sold, remove the tag, and stick it next to its entry in your inventory record book. At least once a month, go through and check your merchandise. Make sure you have that tag for all the merchandise that you no longer have.
Another manual method of keeping up with your inventory is to compare sales receipts to delivery receipts. Then, you simply check the inventory that you still have. If it is on the delivery receipt, there is no sales receipt, and the inventory is no longer in the store, it is missing.
Point of sale (POS) systems can also be used to track inventory. These systems record each sale as it happens, which allows your inventory records to constantly be up-to-date. You can print reports - daily, weekly, or monthly - to compare your sales to your stock.
The use of barcodes is another way to keep track of inventory. This works with computer software, and tends to make inventory checks go more quickly. A barcode is placed on each item in your inventory, and when you check your inventory, you simply scan the barcode with a handheld scanner.
If you find, through your inventory tracking system, that inventory is missing, you will need to find out why. You may want to consider installing video cameras, both in the customer areas, as well as in employee only areas, such as storerooms. If inventory is missing, discuss it with your accountant right away. Sometimes, evidence of what became of missing inventory will appear in the financial paperwork.
Don't limit the inventory that you are tracking to just merchandise that you sell. Be sure to include all office supplies as well, including cleaning supplies. These items cost you money to replace, and if you have to replace them more often than necessary, you will be losing money quickly.
Make it a habit to check your inventory often, but don't check inventory on a set schedule. Employees and suppliers can easily learn your inventory tracking schedule, which will make it harder for you to catch them if they are stealing. Let your inventory checks be a surprise to everybody. Work with your accountant to find the most effective form of inventory tracking for your specific business.
We wandered here and there and at last could manage to meet the collector himself at 2.30 pm who was continuously attending different meetings from morning 7.30.He looked at us in a strange manner and asked us to wait outside.After 2-3 minutes he called us inside and asked to sit in front of him. From his facial expression, i could derive that he got a clue about the new consultants from somewhere.He asked us about our qualifications and experience in the field...and told us that the biggest concern in our district is the primary education and we should concentrate on anganwadis.Hearing that we assumed ourselves as education ministers and gave him the word that we will manage the issue and develop the anganwadis to a level where everything will be digital!!!! I still don't know whether the collector was testing or teasing us! If he was serious, i really have concerns about the selection methods of civil service examinations...!!!!
Saturday, September 18, 2010
Your million dollar is not getting off the ground, though you have tried from company to company, till your money and went in vain. At the end, nothing is left in your hand. This happens if you don’t get a little . are comprised of that , and in their earlier. Today’s some of the such as, , and relied onin their early stages.
Studying the Competition:
To apply for venture capital, you have to present your idea with paper filing, business plan writing and demographic analysis. Usually these firms receive almost 5,000 businesses plans every year, so your business plan, will be having strong competition with others’ business plans for funding consideration. From all those plans only 10% plans are considered seriously, out of those only 1-2% are actually picked up and funded. Sometimes this process takes years.
When there are already so many files submitted, even the smallest part of documentation like punctuation, accurate book keeping and sentence structure counts a lot to get attention of the receiver.
Criteria for Eligibility:
Individual firms are having their own criteria for funding, while venture capitalists are private investors and boards which are free to alter conditions in order to suit their own phenomena. Venture capital funding are same as you apply for any educational grant, for which you have to meet certain benchmarks, reach the level to attain thefunding.
The volume of business plans which venture capitalists weed every year often have low points rather high points that stand out. Punctuation, grammar, appealing graphics and to the point writing won’t bring your plan at top of the pile, but at least it won’t wind up in the recycle bin right off the bat.
Before sending the resume to the prospective employer update and revise it, and see properly you have included all the updates. Usually business plans are 25-50 pages long, and it’s easy to put a typed slip in it. It’s better to hire a professional editor for making a proper document.
When you write a business plan, don’t think about the page count determined length. Any good story with irrelevant words never meant to be over. Make it sure that you had put all the business related information on it and also answers of the questions that may arise. Make the business plan thorough and clean so that you can gain the firm’s trust in your abilities.
Before making business plan cover all the areas of research, make sure that they fully understand and get the answers to the questions that may arise. But there is possibility that venture capitalists grasp the concept without thinking or speculating.
If similar business plan already exists then focus on those points which can make your plan different.
Ideas or plans about technology do need explanation, so it’s important you represent it in such way that the plan carries its uniqueness.
Keep in mind venture capitalist firms mostly focus on one type of business or product such as wireless technology, health care, alternative energy, etc. so be sure if you are having unique idea to send it to a right firm.
If you are planning solo its good, but being with a team behind an idea is best. When you are with a group, then it can be more creative as possible. Never think as profit sharing, think as a group of co-workers acting as a bouncing wall for ideas.
Keep in mind that face to face meetings between young inventors and venture capitalist boards are impossible on day one. If the idea is good and you are having right time then it takes a moment to get attention of the right person. If not then wash, rinse and repeat. In simple words it means that all depends on luck also, if you are having good luck then you will get it.