01 Jul WeekWise: Five and Six
This week began with a change of pace, as the startup founders began considering their go-to-market strategies. Our morning session was led by Roberto Moctezuma, an angel investor, serial entrepreneur, and Fortune 50 executive who grew a telecommunications company to $50M in revenue by the age of 23. He introduced the founders to the 4D Market Model, which analyzes markets by understanding a customer’s view, a process view, a structure view, and a financial view. Over the next two hours, Roberto taught our founders where and how to most effectively penetrate their target market.
Monday afternoon followed with another guest speaker, Peter Foster, a senior partner at Qittitut Consulting. Peter, with expertise in developing company growth strategies, went over his 6 key selling principles with our founders. His formula has allowed him to help companies rapidly increase their sales for decades, primarily in the energy sectors.
The next morning, we began with another branding session led by our very own, Jessica Fleenor. Jessica went over the basics of translating a brand to customers. With her deep knowledge of design and branding strategies, Jessica helped our teams understand the key points and subtleties in developing a brand that consumers can both understand and trust.
Later that day, Melanie Jones, a Rice alumnus and founder of Marketing Interface, came in to share her expertise on marketing technologies with the startups. After leaving her role as the director of marketing at Surge Ventures in Houston, Melanie was inspired to found Marketing Interface, which helps companies increase their marketing presence with the use of the right marketing technology.
Tuesday finished up with our weekly Founders Dinner. All of our teams shared their biggest accomplishments, challenges, and needs, as well as their plans for the following week. Probably the most important part of our program Founders Dinner allows our community to come together and leverage one another’s resources to add to everyone’s overall success.
Wednesday began with a Disciplined Entrepreneurship session from Hesam, going over the Customer’s Decision-Making Unit (DMU), the part of the Full Life-Cycle Use Case where customers make the crucial decision to acquire and potentially purchase your product. Understanding exactly how a customer will come to acquire the product is absolutely vital in determining a go-to-market strategy. After session, the cohort visited Station Houston, Houston’s newest co-working space and entrepreneurial hub.
We were first met by Station Houston co-founder, John Reale, who began his career in investment banking and left the industry to successfully lead several startup companies. John’s session focused on the art of the pitch. He worked with the startup founders to explain their businesses into the simplest possible terms, and clearly establish how and why the companies create value.
After meeting with John, we were met by one of Station Houston’s other co-founders, Emily Keeton. After a long career in the finance industry, Emily co-founded a restaurant-locating app that saw a successful exit and was featured as one of Apple’s “best new apps” in 2014. Emily shared her story and experiences in the tech startup world, focusing on the tactics that worked for her and key mistakes to avoid.
Following the discussions, many of our founders stuck around for Station’s Open House. In addition to introducing guacamole to their mouths, many of our founders were introduced to developers looking for work. As the most sought after future addition to many of our teams, the opportunity provided a valuable networking opportunity for our founders.
Thursday included weekly 1-on-1 meetings with the leadership team, along with Leadership Lunch in the afternoon with Kaz. With a focus on negotiations, Kaz led our founders through a mock-scenario, pitting land investors against the heirs to a valuable property. Knowing their position in a negotiation scenario and knowing how to leverage it will become very important for our founders throughout their growth.
Friday was a big day for our founders—after a DE session with Hesam on mapping the customer acquisition process, our teams presented their ideas to the Advisory Board for the first time. Compiled of mentors, successful founders, and industry experts, our Advisory Board provides an invaluable resource to our founders, with each expert having their own unique skillset and experience. The advisory board meeting gave our founders a chance to receive critical feedback to help steer them in the right directions. Many of our teams walked out of the meetings with brand new ideas which they could use to tweak and improve their business plans.
We moved Yoga with Maya to Monday mornings, rather than evenings, to start the week feeling refreshed. After changing out of our sweaty clothes, we made our way to the board room for a Disciplined Entrepreneurship session with Hesam. Keeping the general focus on devising a plan to address a beachhead market, Hesam instructed the founders to begin considering their follow-on markets, the potential markets accessible after capturing the beachhead. Although he stressed it is important to keep focus on the beachhead, doing small amounts of TAM analysis of follow-on markets will be important to show investors the business’s long-term potential.
After lunch, we all gathered back in the boardroom for a session from Danielle Supkis Cheek, Founder and President of the accounting firm D. Supkis Cheek, PLLC. Danielle went over accounting basics with our founders and squeezed about a semester’s worth of material into a little over an hour. From assets to liabilities, Danielle led our founders through key principles they will have to deal with in starting their own businesses.
The next day, Jessica Fleenor and Adam Wulf held optional office hours with our founders in the morning, Jessica focusing on branding and Adam helping with strategy. These opportunities for interactive mentorship consistently provide some of the most important feedback for our founders, giving them a chance to work one-on-one with mentors who have specific expertise to fulfill their needs.
Tuesday afternoon began with another session in which Hesam talked to our founders about establishing the ‘guts’ of a business, creating a business model, and setting up a pricing framework. For the business model, the key is not to focus on a pricing strategy but to focus on the Lifetime Value of a Customer and the Cost of Customer Acquisition. This is usually the key differentiator from the competition, and is difficult to change once it has been established. Only once a business model has been defined should one try to develop a pricing strategy. After the afternoon session, we all gathered for Founders Meeting—again, giving our founders a chance to share their successes, struggles, and asks for help from the rest of the group.
Hesam started the next morning with more Disciplined Entrepreneurship curriculum, teaching our founders how to calculate the Lifetime Value of a customer. In determining the amount of profit a customer will bring, it is much more important to be realistic than to be optimistic. In a successful business, your Lifetime Value of a customer should be about three times greater than the cost of acquiring the customer.
Hesam’s morning session was followed by a guest speaker in the afternoon, Patrick Taylor from General Electric. As a sub-sea flow-business expert, Patrick has been delivering pricing strategies, methodologies, training, and tools for the oil and gas industry. Patrick spoke to our founders about developing a pricing strategy for their businesses and understanding pricing model basics. From market-based pricing to “pricing triggers”, Patrick gave our teams a crash-course to help them develop their business model.
We were then joined by Rice alumni and SnapStream founder, Rakesh Agrawal, for our Startup Founders Series. Rakesh spoke with our founders about his experience as an entrepreneur and how he created a business out of his novel, video-recording technology. Rakesh’s technology has been used by news shows like The Daily Show with Jon Stewart, professional sports teams, and even federal agencies like the DEA. As an active member in Houston’s entrepreneurial community, Rakesh has stayed involved as an interactive mentor with many OwlSpark teams.
Wednesday evening was one to stick around for: graced by a margarita machine, 20-gallon bags filled with chips and buckets of guacamole, the TMCx was in full-on fiesta mode for our Nacho Average Happy Hour. We invited our mentors, founders, and other community members interested in networking to join us for drinks and good cheer. After stuffing our faces with the delicious food, everyone finally headed home after the extra long day.
On Thursday, we resumed our weekly one-on-one meetings with the founders to get feedback on the program and give them an opportunity to make specific asks of the leadership team. For Week 6, what we typically refer to as the ‘Trough of Sorrow,’ spirits were in relatively good shape. Many of the founders had hit major obstacles, but all were ready to start conquering them.
In between the morning and afternoon 1-on-1 sessions, Kaz from RCEL came for the last installment of his Leadership Lunches. Touching on the topic of ethics in business, we discussed moral absolutism and the spectrum of “wrong”. Rather than giving the founders a lecture or presentation, Kaz facilitated a discussion on moral dilemmas that may not seem obvious, but that you are likely to run into in the business world.
After a longer week than usual, Friday rolled around. We gathered for a morning yoga session with Maya before diving into another branding session with Jessica Fleenor. As our founders start to establish their brand, the need for a website or landing page becomes increasingly necessary, and Jessica helped to advise our teams on important things to consider in creating them. In the afternoon, Jessica also opened up the floor for an optional workshop for our founders to continue brainstorming ideas for their website or landing page.
The past two weeks have been filled with countless challenges and pivots. The startup founders left the TMCx Friday afternoon for a well-deserved three-day weekend to celebrate Independence Day. Happy ‘Murica Day!