Bruce Benson, President and CEO of Augmented Traveler, is an award-winning former feature storywriter and science writer for daily newspapers in California and Hawaii; for many years he was the Hawaii correspondent for the Washington Post. He studied energy issues at Stanford as a Professional Journalism Fellow.
Today he shared with the class his experience as a start-up founder in the US, raising some important points.
First, the importance to have a brilliant idea, to believe in it and have the courage to invest on it. As usual, the first people which invest on your business are Family and Friends…but this is of course not enough for launching a business idea into the market. Some business angels must believe your idea is worthy to be supported through fresh capital injection.
An angel investor or angel (also known as a business angel, informal investor, angel funder, private investor, or seed investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors invest online through equity crowdfunding or organize themselves into angel groups or angel networks to share research and pool their investment capital, as well as to provide advice to their portfolio companies. A good deal for a start-up company is to give back to the investor 7% of the total shares of the company.
A business plan is necessary to set the business and go in search of funds. There is not a shared standard for preparing a business plan. Some investors require few pages, others a more detailed work. Nevertheless, a business plan is a helpful tool for founders in order to understand the core value of the product and identify the revenue streams. The business model canvas can help writing down your business plan.
An elevator pitch of 30 to 120 seconds is also required in order to caputre the attention of the investors and stakeholders at large. The name (of course born in Silicon Valley), precisely describes the idea that every startupper must be able to present their ideas in a time of an elevator ride.
The NPV (Net Present Value) is the forecast financial outcome of a new product initiative. Calculating it will firstly tell the business if the product initiative will return a benefit to the business relative to the cost of financing the investment, and secondly the NPV provides a standard yardstick by which to measure one initiative against another. Angels need to have as much information as possible in order to estimate the NPV of a new initiative.
As it is wellknown, one of the top causes of failure for a start-up is not knowing the customers and not reaching a real customer need. It is therefore fundamental to do marketing research for evaluating the market potential of a new technology/product. For founders, is crucial to define the traction of the new business. The moment a startup gets traction is the moment everyone starts wanting to know what they are doing. Investors are now interested, tech blogs write articles about them, the valuation goes up, the funding pours in. What is traction? It is a massive adoption of a startup product by users. Real users, not just people who left their email on your site. When we talk about traction, we are talking about at least 10,000 users. That is roughly the point at which the startup become interesting.
The Augmented Traveler (AT) was born in Bologna, Italy, when co-founder Bruce Benson learned that da Vinci had spent several months there in the early 1500’s.Wondering what it would have been like to see the renaissance master stride across the medieval square of Piazza Maggiore, Benson imagined someone saying “Welcome to the 16th century. We don’t know whether any of the events you are about to see happened, but very likely they could have.”
AT is a high-tech startup company, incorporated in Delaware, U.S., which will use augmented reality for cultural story-telling. The company is a pre-seed startup, looking for its first investors, also known as angels, to build out its first story and begin sales.
The Advanced Marketing class this fall will provide hints for shaping a marketing campaign for AT! Nothing can be more real than working on the augmented reality…
Stay tuned.
Advanced Marketing 