Focus, Flexibility and Market Validation , Lecture by Stephanie Keller-Bottom / Nokia (2006)

Video Lectures

Displaying all 8 video lectures.
Lecture 1
Collaborate to Enter Markets
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Collaborate to Enter Markets

Stephanie Keller-Bottom, Director of Nokia Innovent, discusses how companies need to collaborate to bring their products to the market. She talks about the value that entrepreneurs bring to large companies as they understand the importance of collaboration in order to leverage resources.




Transcript



One of the most important things is that we do not believe there is any company in today's market that can move quickly enough to create a product and control the market. We believe that you must collaborate today. You have to have an ecosystem of players that you will share incentive with. What that means is nobody gets a hundred percent of the pie anymore. If you're going to go to market you need to go to market with an understanding that negotiations are no longer about control. They're about collaboration. And entrepreneurs understand that very well. They understand that sometimes better than most corporations. And they also understand how to leverage resources. What that means is in large corporations, there's a lot of money. And so ideas tend to keep going even when perhaps there's no merit. Because people are intellectually invested in the idea. Now what that means for the entrepreneurs is that they bring a ruthless market discipline to a large corporation like Nokia. Think about it. If you're an entrepreneur and you're not getting market attraction because you don't understand your customer. And you have nobody that goes into prototype with you. You have nobody that's going to pilot with you. You're never going to get to revenue. Now, large companies would have a tendency to keep going and keep burning money to get the idea for wishing. Entrepreneurs can never do that. So they move quickly and what it does is it forces the hand of the corporation to move at the speed of an entrepreneur. And so that's an enormous amount of value that is brought.

Lecture 2
Separation from Nokia's Core Business
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Separation from Nokia's Core Business

According to Keller-Bottom, when you are in a big company and trying to do something that differs with the core business of the company, then you are going to face a lot of resistance early on. Innovent faced this when it differentiated itself from the core business of Nokia, she says.
Lecture 3
Building Your Business
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Building Your Business

Keller-Bottom shares some of the lessons learned while Innovent was growing. She says it was very important to work with competitors as collaborators as well as lead a very passionate team effectively during the development of the business.
Lecture 4
Picking Your Partners and Your Team
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Picking Your Partners and Your Team

Keller-Bottom advises entrepreneurs to find partners who share the same values and direction that you and your management team have. Also, she emphasizes how vital it is to have an exit strategy and aligned assets.




Transcript



So if you're an entrepreneur, keep these things in mind as you start to pick your partners in your team. You need to align yourselves and the most important thing is that you share the same values and direction. Now, that means that if you believe that people are your most important asset, don't partner with somebody that measures you by your head count and the amount of money that you're going to burn doing things that are important to people like Pizza Friday. Ok? You will learn that those things build your business very quickly. Some companies don't agree with that. Some do. Find the companies and the partners that most match the values that you and your management team have. That is the most important element of success. Make sure that you have an exit strategy. And we're going to look at a few numbers in a while that are going to tell you why today that's probably as important as it was in 2000 and 2001. And make sure that your assets are aligned. Meaning don't replicate competencies. If you have the technology and you don't have the marketing, don't find a company that actually has competing technology. Find one that has marketing. So make sure you're bringing to the table complementors versus people that share your skills. And then you will be able to move forward much more quickly. Get a very broad set of perspectives. The first thing any entrepreneur should do whether they're going to partner with a corporation or not, get an advisory board. Not your Board of Directors yet. Get an advisory board. You need people of varying interests - legal, technology, finance, governance and audit. Make sure you get people that are seasoned. That ultimately may become your board. But today, they will help guide you in dealing with very large companies like Nokia, like Oracle. You need that kind of seasoning. They're one of the most important things you can have.

Lecture 5
Focus, Flexibility and Market Validation
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Focus, Flexibility and Market Validation

Keller-Bottom recommends entrepreneurs to stay focused and be flexible. Find partners who complement and will add value to your business, she says. She talks about the importance of doing a market validation study to determine the market and design a pricing strategy.




Transcript



Get focused. I don't know how many business plans we've seen where entrepreneurs are going to develop seven products at the same time and go to three different markets. Don't boil the ocean. Find a beachhead strategy, get focused and go for it. Because that will control your burn rate. And that is absolutely critical when you're going to have a long cycle time to develop your market. Assume the capital that you get is the last that you're ever going to have. So if you get a half a million dollars on your pre-series A round, assume that that's the last you're going to ever get. Because I guarantee you if you look at it from that perspective, you'll never waste your money. Be flexible and take coaching. When we meet with entrepreneurs, when we sit in the room with them, if they're uncoachable or they're not flexible about their ideas, it goes to our values. We will not deal with people that think they have all the right answers because nobody does. And if you spend more time coaching the entrepreneur about their style, you have less time to coach them about the really important things like how to define your market. Who's your customer? What's your financial structure? And what's your growth plan? And then finally, the first thing that you need to do. The first investment that you make with the capital that you get should be a market positioning study. Every entrepreneur I know says they know who their customer is and they know how to get to market. And when you ask them to create a market positioning strategy, guess what? They can't give it to you. Or they'll bounce from one market to the next. The best investment that you can make straight up front is to get a market validation study done which will help you define who your first market should be. What your pricing strategy should be? Trust me. Adequate pricing is not margin plus. And it's also not the idea that you're competitors' pricing at this, so you'll price at this last why. Who knows what the famous saying is about pricing? Pricing has one way to go. And that's down. And that's a truism. So your market validation study will help you determine what your initial and your on-going pricing strategy should be. And you need to also understand sustainability. One product does not create a sustainable revenue company.

Lecture 6
Creating Commercial Value for Your Product
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Creating Commercial Value for Your Product

Keller-Bottom demonstrates how the trajectory of a new company appears. She says that a product has to iterate several times from the product development stage until it enters the market.
Lecture 7
Working with Your Investor
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Working with Your Investor

Keller-Bottom advises that while working with investors it is important to pay attention to the valuation methodology, as that will determine the amount of money an entrepreneur will make.
Lecture 8
Learning from History
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Learning from History

Keller-Bottom gives entrepreneurs some tips and asks them to learn from history and understand the market to help shape their businesses.