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Review Of The DC Startup Week 2019

Last week, I had the opportunity to attend the Washington DC Startup
Week 2019 which was from September 9th to the 13th. During this week, the DMV (DC, Maryland, and Virginia) startup community came together to learn and grow from each other and from experts around the world. Following are some of the things I learned as I attended the various talks, pitches, and workshops:

Financial Projections for SaaS Companies from GSP

  • Most SaaS companies charge the client(s) everything upfront for the services
  • Freemium model should be used only to figure out what the actual pricing might be
  • Customer services should be a cost so gross profits look good
  • 15% of base salary is a good measure to determine employee benefits
  • When you add customers then you need to add employee (Sales and Marketing) too
  • Sales and Marketing projections should not be constant over the years
  • To get Venture Capitalist (VC) funding:
    • Keep financial projections until year 3
    • Determine if money will last for what you want to build
  • Know your industry’s Customer Aquisition Costs (CAC)
  • My Thoughts:
    • Determine the likely cost (money, reputation) of a data breach
    • Create a checklist of what to do and not to do when making projections

Accounting Procedures for Startups

  • Investors look at accrual accounting
  • Investors will compare your gross profits to your industry
  • Projects should be positive and show a real picture
  • My Thoughts:
    • Except googling there seems to be no place to look at various industry gross profits for various industries at one centralized location

Fundraising

  • There are three major main sources of funding:
    • Government Grants
    • Angel Investors
    • Venture Capitalists
  • Keep in mind what you are building towards and the specific milestones
  • Provide monthly (or sooner when needed) updates to investors:
    • Summary of what happened
    • Challenges
    • List of Ask(s)
  • Ask investors what is their investing process
  • Pay yourself minimum (initially) to enough (when a company becomes self-sustaining)
  • Avoid these common mistakes:
    • Asking for more money isn’t always better
    • Don’t be afraid to negotiate
    • Focus on product/service and customer service
    • Show the landscape of the market, trends and where you fit in

Best Practices for Corporate and Startup Partnerships

  • Startups bring freshness to the organization
  • 3 things corporations care about when looking at startups:
    • A problem needs to solve
    • See something incidental
    • If this scales up, we will have problems
  • Nurture partnerships overtime
  • Transparency and timing is important
  • Always do due diligence before taking on a partner
  • Help people think outside the box
  • Corporations need mechanisms to speed things up
  • Figure out corporations pain points
  • Have a champion internally in the corporation that can pitch for your product or service
  • Corporations look at their internal capabilities vs. external capabilities of startups
  • 75% of USD $100B Venture Capitalist money goes to California, New York, and Massachusetts

Using Design Thinking for Products and Services

  • Design for simplicity
  • Design to make things easier

Finding Product/Market Fit

  • Have a focus on who your client is going to be
  • Sometimes your products/services might be ahead of its time
  • Don’t lie
  • Don’t assume success in one market will translate into another
  • It is best when the majority of the sales are inbound
  • Show/have evidence of traction
  • The lifecycle of a Startup Funds:
    • Ideation – friends and family, crowdfunding, bootstrapping
    • Seed Stage – minimum viable product (MVP)
    • Series A – real revenue
    • Liquidity – exit
  • To iterate on your MVP go to different groups to see what works and why it works
  • Be self-aware
  • Show repeatable product/service and then figure out how to get customers
  • Customer Aquisition Costs (CAC) strategy is very important
  • Think about your exit strategy and who would buy your company
  • Validate the market
  • Have a conversation with your competitors
  • Develop relationships with potential acquirers
  • Always have a domain experience
  • Watch a customer go through the product
  • To get a product/service market fit:
    • Who are you trying to help
    • Make it your priority to know pain points
    • Listen to negative reviews
  • As investors, they care more about the numbers (money) than the story
  • Figure out your why
  • Focus on the revenue model
  • Give real-world examples of pain points

Startup Pitches

1. Guardian Savings – a digital savings bank for children

2. JSkills – providing career transition skills training for journalists

3. Forget me not AI – personalized automated customer interaction

4. Akku – portable battery pack pickup and drop-off

5. Tabitha – Restaurant payment processing app for customers

6. Mully Lingua – Language and culture immersion app

7. Co-Tripper – Single mom group travel

8. Koin Street – A place to manage digital assets

9. Please Assist Me – Chores completion services when you are out of the house

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How Do You Create A Seamless Channel From Offline/Physical To Online/Digital And Vice Versa?

In the video below on CxO Talk, I asked Charlie Cole, Chief Digital Officer (CDO) of Tumi about how to create cohesion between offline/physical and online/digital customer experiences.

In my view, organizations of all sizes also have to be cognizant of the following:

  1. People’s attitude can affect your customer experiences
  2. Process/Flow/Organization/Order can affect your customer experiences
  3. Products of lower quality can affect your customer experiences
  4. Services that are not friendly can affect your customer experiences
  5. Technology that does not keep the customer as the focus can affect your customer experiences

5 Questions To Ask About Your Business-Information Technology (IT) Alignment

In the context of an organization,

  • Business is the activity of making, buying, or selling goods or providing services in exchange for something (e.g., money, services, barter, etc.).
  • Information Technology (IT) is the use of any type of technology to achieve the current and future goals of the business.
  • Alignment is the ability of two or more individuals/teams/groups/departments to be in agreement with each other as to what needs to be accomplished.

Thus, Business-IT Alignment is an agreement between IT and Business (non-IT) parts of the organization to use data and various computer systems to make/buy/sell things and provide services. These things and services can be provided internally (e.g., purchasing enterprise hardware and software, help desk services, etc.) and externally (e.g., selling enterprise hardware and software, cloud services, etc.).

Ideally, when an organization is being run like a well-oiled machine where all parts know their goals, roles, and responsibilities and know how to frictionlessly collaborate with each other there would not be any need for Business-IT Alignment. Unfortunately, most organizations aren’t run like a well-oiled machine. Most organizations are usually misaligned in terms of People, Processes, Products, Services, and Technology. To understand why Business-IT Alignment happens, here are a few things that can happen in organizations from a Business (non-IT) perceptive:

On the flip side, there are a few things that can happen in organizations from an IT perspective:

  • IT strategy is late and misaligned with business strategy
  • Depending on where/who IT head reports determine what say/respect (if any) IT has
  • IT in-house innovative solutions can be costly to maintain
  • IT culture makes fun of non-IT folks in regards to Business’ lack of IT knowledge
  • IT forgets that execution requires relationship-building and nice communications

Now that the dirty laundry of both Business and IT has been revealed, let’s move on to what questions we need to ask to begin in the journey of Business-IT Alignment:

Today Tomorrow
1. Who is responsible for Business-IT Alignment? Business? IT? Both? No one? Who should be responsible for Business-IT Alignment? Business? IT? Both? No one?
2. What is Business-IT Alignment achieving? Operational Excellence? Faster to Market? Better Services? What should Business-IT Alignment achieve? Operational Excellence? Faster to Market? Better Services?
3. Where does Business-IT Alignment start and end? Where should Business-IT Alignment start and end?
4. When is Business-IT Alignment considered? Hiring? Process Improvement? Purchasing? Selling? When should Business-IT Alignment be considered? Hiring? Process Improvement? Purchasing? Selling?
5. Why Business-IT Alignment (not) happening? Lack of resources? Lack of objective? Ambiguity? Why should Business-IT Alignment be (not) happening? Lack of resources? Lack of objective? Ambiguity?

If it is not clear by now, Business-IT Alignment is, directly and indirectly, the responsibility of Business, IT and all the individuals/teams/groups/departments led by all levels of leadership (executive, middle and front-line). 

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5 Questions To Ask About Your Digital Transformation

Digital Transformation is the process of using technology and data to do Business Transformation. Nowadays, every business article you read has something directly, indirectly or implied related to transformation, business transformation, and digital transformation. The problem is that everything that is done to improve the organization is said to be some sort of transformation. Even small changes. They are not.

To be clear, while there are many levels of digital transformation ranging from disrupting/rethinking industries to drastically improving customer experiences, making small incremental changes does not mean you are doing a digital transformation. Additionally, there are organizations that claim that they are doing some sort of digital transformation but in reality, they might be just upgrading/introducing software, deciding between on-prem, off-prem, SaaS, etc.

As I see it, the fundamental problem of Digital Transformation is not only the over-hype use of this cool buzzword but also the fact that Digital Transformation is hard to do. It is hard because it is misunderstood and most of the time its boundaries are kinda vague. To illustrate this point, try to think of who do you think is responsible for Digital Transformation, now go ask your peers in other departments and compare. If someones come up and say that since its Digital Transformation it has to be somehow related to the Information Technology (IT) department or maybe even the Marketing department that uses the term Digital Experience.

In either of the above cases, the answer is not a simple one. In the case of the IT department, it could be them:

  1. if the Chief Information Officer (CIO) is part of the executives,
  2. if CIO’s name is published in annual reports,
  3. if the CIO doesn’t report to CFO,
  4. if the CEO considers CIO to be a crucial differentiator,
  5. if CIO has responsibility for operations and innovation,
  6. if CIO is supported across middle management and front-line employees of all departments
  7. if…

Too many ifs to answer and there is not enough time/resources in organizations for people to be thinking about these ifs. But to at least get the ball started, I would encourage people to ask the following:

Today Tomorrow
1. Who is responsible for defining and managing the organization’s Digital Transformation? Who should be responsible for defining and managing the organization’s Digital Transformation?
2. What is being accomplished with Digital Transformation? What do you want to accomplish with Digital Transformation?
3. Where does the Digital Transformation start and end? Where should the Digital Transformation start and end?
4. When is Digital Transformation relevant? When should Digital Transformation be relevant?
5. Why Digital Transformation is happening? Why should the Digital Transformation happen?

When you ask the above question to yourself or others, bear in mind that answers can be fluid, misaligned or just simply wrong (yes that can happen!) and that Strategy, Politics, Innovation, Culture and Execution (SPICE) can really mess-up or enhance your recipe(s) for success.

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Most Companies Are Thinking About Video For Their External Audiences. Is There A Difference If You’re Creating A ​Video For An Internal Audience?

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