Managing Tech StartUp - Wrap Up

Well here we are, finally at the end of our last semester at IE Business School and this means of course the end of Enrique Dans pilot class "Managing The Tech Startup". Its been a very unique classroom experience and one that should be emulated across the IE curriculum in order to drive more practical experience and access to decision makers throughout the MBA.

As a wrap up to this course, I will be providing an overview of me, Jan Willem and Nir Yeshaya's new business concept, "Battle Chip Poker" and try and give a clear and resounding explanation as to why this course e

nabled me to change the way I view start ups and how I think Batt

le Chip Poker will change as a result.

First of all...here we are...the picture of health, creativity and entrepreneurial spirit:

Battle Chip Poker (BCP) is essentially an onine poker platform for the undergraduate college market. Now I hear the criticism already, "why poker? that's a crowded space!". But BCP isn't your average poker game. Our business begins with three simple concepts:

1) Human beings (and especially college students) are by nature competitive

2) Online poker is enormously successful when their is an incentive to play & this incentive is usually cash prizes - currently illegal in the US

3) Social gaming companies like Zynga are phenomenal at user acquisition -the have acquired over 300 million first time sign ups - but terrible at retention - only 2%.

Ok, so now you have 3 relatively smart MBA students who want to solve a problem: How do you create a highly competitive online poker game for the college market that incentives players to play without cash prizes and is able to attract and RETAIN users more effectively than the competition. Our answer is simple.

Team Play

"College students are at a fundamental stage in their growth and maturation. Psychologically, the need to identify with a group is strong, thus the massive turn out for college sporting events, pep rallies, fraternity pledge weeks and social gatherings. Previous attempts to build “social games” have missed the mark because their products target individual users. By offering a team based poker game, in which players enter tournaments as individuals, but win prizes and score points ON BEHALF of a team or society, players become an integral part of a unique online group comprised of their own friends and colleagues. At BattleChipPoker students are playing for themselves, and their team, giving them a stronger incentive to win." -Extracted from BCP Business Plan, April 2011

BCP & Managing High Tech Start Ups

When I first began this course I was focused on raising money for this new venture. I felt the internal drive to sell, succeed and conquer and I wanted to make it happen fast. However, having listened to numerous entrepreneurs, venture capitalists and start up gurus throughout this course, I began to shift my long held perception that "cash is king".

Now don't get me wrong, I still love the power of Mr. Green and I fundamentally believe that raising money successfully is ultimately a key step in the growth of most businesses. But my idealogical shift occurs not with regards to whether raising money is a good thing (it is!) but when to raise it. The concept of Smart Money, given by investors who can provide you with more than just the money itself, is critical to me now. As is the idea of going our and building this business ourselves (without outside cash) and then raising funds once the concept has been tested in the outside market place.

So now the question goes like this, "ok Simon, if someone hands you a check tomorrow, will you turn it down?" and the answer is NO! However, I will think long and hard about the amount of time that is going into fundraising for the business versus time spent actually building it.

Thats a wrap!

Enrique pulled of a great coup in offering this class and I sincerely hope that IE Business School uses this as an opportunity to provide the budget needed to get more international business leaders into the classroom. This kind of hangs on advice is critical and important.

Best Regards,

Don Simon

Rodolfo Carpintier: Internet Investment Guru

Saving the best for last, blog master Dans introduced today's class to internet investment guru and founder of Spains only incubator, Rodolfo Carpintier. Going well beyond a standard presentation, Mr. Carpintier laid out a clear strategy for analyzing potential internet investment opportunities. This blue print for investment success looks as follows:

Y1) List the owners / key personnel and equity stakes / Revenue / Traffic / Marketing

Y2) Repeat

Y3) Repeat

Y4) Repeat

Y5) Revenue / countries / users

SMART MONEY 3/6/3 Month Strategy

DAD uses a unique oversight strategy that involves a complete business review at the 3, 9, and 12 month mark during year 1. By leveraging this strategy DAD aims to be a strategic partner and advisor to their portfolio companies without becoming an additional burden to them. Effectively working out the kinks without killing the magic. Love that.

Two Types of Businesses

1) Innovative: Young managers with good brains and NO experience

2) Copying Business Model: Experienced manager who can grow something themselves

"I don't look at the figures (business plan) they are never right...."

"When they ask about the competitors, do they know who the competitors are?"

"I want to see how they get to the Sales figures."

"Show me WHY people will pay."

"I haven't found anything the reinvented e-commerce.That's what I'm looking for."

Minube Rocks!

Now here is something I feel uniquely qualified to comment on...a new alternative to trip advisor and other travel recommendationsites. For years I have struggled with the lack of relevant information on tripadvisor and have had to sort through thousands of reviews on hotels, restaurants and night clubs that were posted by people that have nothing in common with me, and are not qualified to provide recommendations on the type of restaurant and lodging that I am typically searching

for. Minube intends to change all that by developing a new kind of site, instead of helping travellers to answer questions about a trip they have already planned, Minube seeks to INSPIRE travellers and provide informative suggestions about where they would like to go.

To understand how Minube's "inspirational" platform works, founder Pedro Jareno starts by taking us through the process of the typical trip planning lifecycle:

1) Inspiration 2)Planning 3) Comparison Shopping 4) Booking 5) Travelling 6) Sharing Memories.....

And its these memories that ultimately inspire the next cycle of travellers to go to a particular destination!

Targeting

Next Jesus walked us through the difference between a "Tourist" and a "New Traveler"....we all know the tourist, our moms and dads, who go to a travel agent and have a "vacation". I don't do vacations, I want a life time of experiences and I search them out....I'm a new traveler.

Business Model

Ok, back to MBA mode, lets talk about how these guys make money. So you have a site where people go learn about new inspirational travel destinations. They research where to go, what to see and what to do when they get there (accommodation/restaurants/bars/clubs etc). All of these unique segments provide extremely targeted promotion and advertising opportunities for local partners. The company builds agreements with partners and then in the sponsored section of the website, provides its own "minube" travel recommendations from which they then receive a commission.

[The following screenshot advertising Minube's quality programme acts a registration page for new partners.]

Technology

So what else, well the company is doing most of its development in house, and (as is clear from the website) has a strong in house designer.

So the BILLION DOLLAR QUESTION:

Does this site fix my problem with Trip Advisor? ....not yet. I still cant find recommendations for people like me. But its taking another shot at influencing my buying behaviour in a comfortable and unique format that I find appealing.