Starting Starups 2008

Starting StartUp’s
Creating Value across the Globe

George T. Haber
Chairman & CEO

www.CrestaTech.com

 2008 George T. Haber All rights reserved

Agenda

Introduction (some Shameless Bragging)
Change “The only Universal Constant”
I agree with:
Charles Darwin
Albert Einstein
Abraham Maslow
Knowledge & Technology
Starting Startup’s
Markets and Marketing
Putting a Team Together
Business Plan basics

 2008 George T. Haber All rights reserved Page 2

About myself
In Motion with Love and Emotion
Born in Romania, Oradea
Rock & Roll and Disco
Studied Israel, Haifa
Technion Bs.EE
Living in USA, California
Founder & CEO George Haber
1993 – 1997 CompCore Multimedia Video and DVD
$70M M&A with Zoran 12/1997
1997 – 2000 GigaPixel 3D Graphics (visual communication)
$186M M&A with 3Dfx 03/2000
2000 – 2005 Mobilygen H264 Video (Low Power Video)
$33M M&A with Maxim 10/2008
2005 CrestaTech RF and Software (SDR)

About myself
In Motion with Love and Emotion
Board Member Public Companies (NASDAQ) :
Zoran
3Dfx
InterVideo
Board Member Private Companies
Class Data Systems Acquired by CISCO
InterAKT Acquired by Adobe Romania
Avangate Romania
BitDefender Romania
Lucid 3D Israel
NoBug Romania
Investments
Silicon Spice Acquired by Broadcom $1.2B
Magma Design IPO in 2001
Kagor Networks Acquired by Juniper $67M
Aristo M&A with Monterey Design

Change
The only Universal Constant

Change is everywhere and in everything
actually it’s the Only Universal Constant
What is Possible now was Impossible in
the past
Impossible now may be Possible in future
Change is Driven by:
Evolution (or Devolution)
Revolution
Disruptive Technology (Accidents)

Evolution
Cost, Performance, Quality
Pushing the limits of what is Possible
Improving and fine-tuning the platforms
fine-
Cheaper, Faster, Better etc…
The Big Companies become bigger !
Intel (CPU Mainframes -> PC -> Mobile)
Audio (from scratched to digital surround)
Turn Tables -> CD
Radio -> AM-> FM -> Digital Radio -> IPod
AM-
Video (from not so good to perfect)
Aerial TV -> Cable TV -> Digital TV -> HDTV
Video Tape -> Video CD -> DVD

Revolution
New ideas create new realities
Breaking the limits of what’s Possible
Creating new platforms and technologies
The Big Companies brake up!
Breaking up Monopolies
Bell
IBM
Microsoft
Stone Age -> Bronze Age -> Industrial Age ->
Information Age
Software Sold -> Licensed -> For Free


Disruption
WOW & Accidents
Destroying the “Old” rewriting the rulers
Breaking the rules of the game
The Big Companies in denial !
Yahoo Organizing the Internet’s Chaos
Amazon Buying Books OnLine
Ebay Sell and Buy anything anywhere
Skype Free Phone
Google Making money on Relevance
YouTube Content Distribution
FaceBook New ways to socialize

Darwin is right
Thriving on Change = adopt or die ;)
Surfing on Change = Resilience, Respect,
Luck, Intuition, Strategy and Humility
Timing is crucial => Crossing the Chasm
Too Early (No Market, No Competitors)
In time (Perfect Market, Few Competitors)
Too Late (Why bother ?)
Resilience + Luck or Strategy + Tactics
Be prepared for errors and disaster
Prepare for worst and hope for the best
When faced with problems focus on Action and
predict the Reaction
May the “Force be with you”

Einstein is correct!
E=mc2
E=mc2 True for organization and people
• E = Energy
• m = Mass of knowledge (Education & Experience)
• c = Speed of reaction (Leadership & Attitude)

Hire only the best
1. Leadership and Attitude
2. Relevant Experience


Maslow's Hierarchy of Needs
Survival, Safety, Desire, Status, Progress

Self Progress: Create, Learn,
Propel Innovate, Teach Others

Ego Status: Importance, Image,
Self Esteem Aesthetics, Recognition,
Prestige
Desire & Understand Desire: Understand, Accept,
Social Belonging Belong to Successful Team

Safety & Security Safety: Peace, Order, Laws,
Order, Laws, Limits Limits, Financial Security

Existence & Physical Survival Survival: Life, Food, Health,
Sleep etc.


Knowledge thru the ages
Communications and Speed
Knowledge & Platform & Client
Historic Period Bits Propagate Knowledge Platform Client
Stone Age 1 100K Years Survival Rocks Cave Man
Dark Ages 1K 100 Years Stories Verbal & Stone Small Groups
Stories The Nobles
Middle Ages 10K 10 Years Papyrus
Folklore Clergy
News Papers Industrial Elite
Information
Industrial Age 100K 1Year Morse Code Military
News
Radio Working Class
News Papers
Industrial
Post Industrial 10M 100 Days Radio Consumers
Propaganda
TV
Data Scientists
Information Age 1G 1 Day Computers
Entertainment Professionals
Media Rich Computers Everyone!!
Web Based 100G 1 Minute
Data Mobile Everywhere!!

The future is Green => Energy efficient Self sustainable living


Technology
Capture, Create, Process, Store & Deliver
Knowledge like everything else is:
Created
Shared
Consumed
Technology helps capture, process, store and
deliver Knowledge on Platform to Client
Computers are a Platform
Hardware (body)
Software (soul)
Knowledge is quality, not quantity size, location
irrelevant few resources can create a lot of $$$

Haber’s Law
“If something can be done in Software it will”

Wireless Communication

Demodulation

HD Video

Communication

Video

Audio

1995 2000 2005 2010


Why start a StartUp ?
It’s the best thing one can do

Simple “in theory” ;)
IDEA for a PRODUCT or SERVICE
LEADERSHIP and ATITUDE to make it
DISCIPLINE and APTITUDE to stay focused on
EXECUTION
Creating value from ideas is an amazing
journey and a Godly feeling
More fulfilling than anything else
Better than SEX and lasts a loooot longer ;)


Why not?
Survival of the Strongest & Fastest

Very hard work many sleepless nights
Huge stress on every aspect of life
Lots of pressures and isolation from family,
friends and social life
10% Survive the first few years
2% are Big successes IPO or M&A
5% go on in some “Corporate Coma”
Very few companies get out of this
The worst possible outcome

What is your Business ?
Essential for your survival
The most important question to answer
Focus on markets and clients not technology
Ice Blocks -> Refrigerators
Few companies realize what business they
are in!
Candles -> Light Bulb -> LED’s
Main Frames -> PC -> Cell Phones
OS -> Browser
Record player -> iPod


Who Cares ?
Define Market and Client
Those who care are your clients!!
How many “caring Clients” = TAM
How much do they care = ARPU
If you have to Evangelize you are in trouble
Markets need a very powerful incentive to change
“Client and Market is right” until proven otherwise
People and companies are self-interested
self-
If you do not provide the solution your competitor will
Should only sell what you can deliver
Not everything you build can be sold


The “Unfair Advantage”
Essential for success

The key for long term survival and success
Unfair Advantage can be:
Technology
Marketing
Sales Channels
Engineering
Manufacturing
Personal charm & Resilience
Financial Strengths
Etc….


Market and Marketing
Is Marketing Sales & Advertising?
In large Corporations separate functions

In StartUp's everyone must be involved

Legal

Manufacturing Sales
Market Research

Product Specification
QA Marketing PR
Product Planning

Business Development
Accounts/Finance R&D
HR


Holistic Marketing
Strategic analysis
1) Who is involved?
CUSTOMERS CORPORATION COLLABORATORS

MARKET
SPACE 2) How can we define relevant market space?

POTENTIAL 3) What potential opportunities are emerging
OPPORTUNITIES from the market space?

BUSINESS
4) What business capabilities and infrastructure
INVESTMENT are required?
CUSTOMER CORE COLLABORATIVE
FOCUS COMPETENCIES NETWORK


Resources Planning
Tactical planning
Market and Clients (ROI)=ARPU / Cost
Team and Competency
Engineers to create (Energy)
Management and Corporate Culture for (Focus)
(Focus)
Money = to make it happen (Funding)
Money is difficult to find when needed :(
Money is plenty if you don't need it :)
Balance between Greed and Fear


Leadership
You have it or you don't !
Leadership is the sum of two virtues:
Competence (your specialty, skills, know-how)
know-
Authenticity (your identity, character, education)
The best leaders operate in four dimensions
Vision => Predict the future
Reality => Make sure it’s possible (No Madness)
(No Madness)
Ethics => Make it happen ethically (No Crime)
(No Crime)
Courage => It is going to be hard (Survival)
(Survival)
The challenge is to have these contradictory
modes of thinking and behaving at once


How to Fund it?
It takes money to make money

Funding Strategy = Getting money from:
Smart Money => Investors, VC’s
Self Funding => Bootstrap
Colored Money => Clients, Corporate Partners
Stupid Money => Credit Line, Bank Loans
This is what the Business Plan is all about
Company and Market 4 - 6 slides
Product and Competitors 4 - 6 slides
The Financial Plan 3 - 7 slides
The world is always changing and so should
your plan and Strategy

Business Plan
1) Company and Market
Mission Statement
Company's business (should fit on a business card)
The Company
Basic facts (year established, # of employees, location, major
milestones, …)
Team
Background of management and founding team
Board composition
Market
What problem is the company going to solve
Trends, historic and projected Market size
Product match to market needs and shifts


Business Plan
2) Product and Competitors
Product and Technology
Product description
Development schedule
Differentiation
Price point
Go to Market Strategy
Sales channels
Partnerships
Customers
Competition
Competitors and positioning
Barriers of Entry
How does the company intends to keep its advantage over
the competition

Business Plan
3) The Financial Plan
ROI
Cost of acquisition
ARPU
Cost of support / renewal
Projected cash flow
Product Pricing strategy
Current balance sheet
Projected head count by functional area
Historic and projected P&L
Optimistic
Pessimistic
The Deal
Cap table
Amounts raised before and now
Valuation asked

Management
Measured by results
Managers are ultimately measured by results
depth of their convictions,
strength of their commitment -- and the power of their
results
Have leaders who can keep everyone moving in
the same direction, at a sustainable pace
The leader must be the one to grab the flag and
charge up the hill with everyone following.
A good leader is one who can ensure that others
will take the over the flag and continue to charge


Attitude
We all chose our attitude

Attitude is the ability to manage conflict (polarity). In
every aspect of life, polarities are inevitable they are in
the nature of things. How we act, how we respond
what separates greatness from mediocrity
Greatness comes with recognizing that our potential is
limited only by how we choose to use our freedom,
how persistent and resolute we are - in short, by our
attitude.
attitude.
Talent, Education, Family and Financial Privileges are
different for everyone. But we all have the capacity
and the duty to be great in what we do.
We are all free to choose and change our attitude.
attitude.


Corporate Culture
Keeping it together
People must be included in decisions and process
Success tied to willingness and ability to take ownership
Companies depend on people. You can't ignore it or try to
get around it
Don't ask people to set their egos aside for the good of the
team. Feed their egos.
Give each person an area in which to excel, and you'll find
that you have a team that really pulls together.
Make one person team leader of communications, another the
team's leader of technology, a third the client-services leader etc…
client-


Thank You


Starting Starups 2008

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