Vision and Values

The Founder Institute

Chuck Ehredt
CEhredt@CurrencyAlliance.com
@ChuckEhredt
• The key to success is execution. I co-founded VF, but only made
$1.8M in spite of 7B people on the planet watching videos via
browser
• Testing Assumptions quickly. Does not mean MVP will work in the
marketplace
• Culture is important – can come from Mission, Vision, Values – but
today need to execute
• El business plan as document has little value, but the process to
write a business plan is extremely valuable
 My Portfolio / Experience
Charles Ehredt Score Card:
• Handy Industries ( + $167,000 y despues - $50,000)
• PocketDBA ( - $100,000)
• TouchCredit ( - $20,000)
• United Community Bank ( + $155,000)
• Nucleus Consulting ( + $4,000,000) • RaceFansTV ( - $115,000)
• Providential Bancorp ( - $30,000) • TopSherpa ( - $20,000)
• Konaware ( - $23,000)
• Baker500 ( + $80,000) • Donkey Republic ????
• VideoFurnace/Haivision ( + $2,200,000) • Currency Alliance ????
• Exchange Cubed ( + $240,000) • Kampoos ????
• Investination.com ( - $280,000)
• Bernáldez y Asociados ( - 10.000€)*
• Murocel SL ( - 12.000€)
• 6 otras inversiones ( + $40,000 y – $65,000)
 Communication is Key
Comment A

Comment B

Investor / Customer Entrepreneur

Response B

Response A

Everyone wants:
• Respect
• Simplicity
• Convenience
 Business Model Planning
• Planning should take months or years (not days)
• Customers are a key input (find the pain)
• Think deeply about the Eco-System:
– Who are my potential customers
– Who are my potential partners
– Who are my current competitors What we don´t know
– Who are my potential competitors that we don´t know

• Draw many life-cycle diagrams:

– Customer Journey What we
– Sales Process know that we
don´t know
– Marketing/Conversion What we
– Service know

➢ Find the Friction/Gaps

 Travel Example

Global Travel-related Expenditure is $3,463B

Flights Lodging Auto In-destination Spend
$425B $581B $351B $2,106B

Food Local Transit Local Activities Travel Retail

$803B $598B $351B $346B
 The Eco-system
OTAs are not involved in some of the biggest areas of travel spending

Local Activities
Local Transit

Online
Restaurants/Bars
Travel
Agency
Flights
Accommodation

Rental Cars

Darker blue circles indicate services that would be Mobile-friendly. Offering such services makes Mobile
solutions much more sticky/useful, i.e., the smartphone will be the in-destination device of choice for
discovery and booking.
 Travel Life-cycle (example)

Travel Spending Today – by Phase of Travel

Excell in online flight sales Leverage into new fields

$ $ $ $$$$$ $$$$$$$ $

Travel Spending in 2-5 years based on new Aggregators & Smartphones

Planning/Shopping/Booking
will blur together in Social
Excell inTravel (standalone
online Meta and
flight sales Leverage into new fields
Booking sites will still exist)
$ $$$$$$$$ $$$ $$$$$$$$$$$$ $
Google, Apple, Facebook, and others will Mobile booking on the smartphone will
fiercely compete for the attention of customers be the transaction vehicle of choice
 The Eco-System (Customer View)
Payment Systems
Itinerary Management

Facebook Adventure
Google Social Travel Local Activities Travel

International Meet New

Medical People
Services Inspiration

Travel
Planning/
Travel Diaries
Restaurants/Bars OTAs Parking
Cruises
Crowdsourced
Reviews Meta Search Airports

Destination Photos FlashSales

Travel Bureaus
Maps & Insurance
Navigation Hotels &
Travel
Resorts
Media
(Guides/
Magazines) Flights
Rental Cars
Industry Applications (GDS, Linguistic Traditional
Hotel Mgmt, Channel Mgrs, Camping Driving Services
Travel
Ad Networks, etc.) Trips & Apps
Agencies

Internet Connectivity
 The Evolution of Innovation

Prior to 1915 +/- 1920 - 1970 +/- 1970 – 2018 2015 – ???

Corporate Venture-Backed Corporate Catalysts

Lone Innovators (Business Model
Laboratories Startups Breakthroughs)

• Cotton Gin • Computers • Software • Last Minute Hotels

• Printing Press • Telecommunications • Services • Cancer/HIV Cures
• Radio Transmission • Pharmaceuticals • Assembled Products
• Light Bulb • Lubricants/Coatings • Just-in-Time Mfg.

Bell / Marconi IBM / DuPont Microsoft / Cisco / Intel Procter & Gamble / GE

Inventing to Solve Massive Research Break-out of Corporate Easy & Cheap to Innovate/Copy
a Problem and Collaboration Bureaucracy & Short-term Hyper-connected Global Mkts
Focus on Quarterly Results Frenzied Pace to Maintain Lead
Size, Global Reach, Relationships
Institutional Knowledge and
Operational Excellence Matter

Technological Breakthroughs New Business Models

 Business Planning Tools
• SWOT Analysis (DAFO)
• Business Model Canvass
• 5-Forces Model

➢ A Business Model is NOT a Business Plan

 What the Investor is Measuring
Problemas típicos con Emprendedores
• No creer que tenemos competencia
• Enfocado en desarrollo y no en ventas (producto/servicio nunca esta terminado)
• Demasiado ocupado para informar inversores de como va la empresa
• Demasiado ocupado para hacer pruebas y medir las iniciativas del negocio
• No tener mucho interés en Market Research
• Querer resolver todos los problemas sin pedir ayuda
• No invertir en la capacidad/conocimiento de los directivos y otros empleados
• Preferir construir soluciones y no comprarlas
• Tener días de altibajos emocionales (no ser equilibrado)
• Muy dispuestos a asumir riesgos (con su dinero)
• Cambiar la estrategia y/o no terminarla y/o cambiar las prioridades
• Mantener empleados/socios que no están contribuyendo (no poder despedirles)
 Closing Remarks
• Problems during Previous FI Class
– Not thinking deeply about the eco-system (Research)
– Changing the business plan/model based on any input
• Startups can represent Incremental Change, Disruptive, or
Something Totally New
• B2C, B2B, B2B2C are very different models (Useful or Cool)
• If your service is merely ¨cool¨ you will compete with apathy
• The Future is probably a Virtual Company
• People are remarkably willing to help if they feel appreciated
• Many Partnerships are like marriage (be sure before you
commit) – others are like a one-night-stand
Good Luck