Quarterly Newsletter: October 2006

What does it take to win?
For starters, disruptive innovation. From the beginning of the computer age until the present, there have been an estimated 800 million personal computers sold. That spans about thirty years. Compare this to cell phones that have now surpassed 2.5 billion units in less than 10 years!

How does a small company take advantage of this?
Judd Bowman and his high school friend thought it would be a neat idea to develop a search engine for cell phones. At 18 and fresh out of high school they set about developing a business, in 1999. "Developing the algorithm was the easy part", according to Judd. They spent 3 years developing business models and rewrote their business plan five times and finally developed a model that not only made sense but also was convincing enough to attract the money needed to establish their presence. Sales for this year will be $600,000,000.00. That’s right! Judd Bowman is now 24. He saw an opportunity before anyone else realized it existed. He didn’t invent the cell phone; he found a way to use them to suit his own vision. www.motricity.com

Where is all this heading?
According to the latest thinking and expert information, your personal device of the very near future will combine the ingredients of a cell phone, PDA and iPod. It will have vast amounts of computing ability with multiple communication and transmission channels such as video, audio and data that will fit in your shirt pocket.

What are the chances of hitting it big?
Intellectual Asset Management magazine states that approximately 5% of research efforts result in patentable technologies. It goes on to estimate that 50% of patent applications are eventually issued as Utility Patents.

The United States Patent & Trademark Office estimates that only 3% of patents ever return more money to the owners than was invested in their development and prosecution. The statistics are as follows:

For every 100 ideas:

• 5 are patentable
• 2.5 will become patents
• .1875 will return a profit

What does it take to get attention?
How many times have you heard “you only have one chance to make a good impression?’’ It’s true! The importance of image and first impressions in selling yourself cannot be overstated, according to Sue Morem, lecturer and author of How to Gain the Professional Edge. Morem stresses that image is not about looks. It reflects how well you control verbal and non-verbal signals such as voice, choice of words, enunciation, attitude, rate of speech, appearance, posture, clothing, hair and gestures.

According to Reuter’s Newswire, scientists have reported evidence–which was long suspected–that people unconsciously gesture with their voices. Referred to as "analog acoustic expression", people unconsciously modulate their voices in ways that provide an additional channel of expression understood by others. "This is an aspect of language that has never been explored, and one that could shed insight into the way that people think," according to Howard Nusbaum, chairman of the Department of Psychology at the University of Chicago.

There are three essentials to obtaining success according to a recent article by Ben Stein, author and lecturer. In his article, How Not to Ruin Your Life published in Yahoo Finance, Stein says:

• There is no quitting time. If you work for the Post Office, there is a quitting time. If you are developing a business, there is none. Your business is your life.
• Connections are everything. You have to meet the “movers and shakers.” Make connections any legitimate way you can and nurture them.
• There’s no such thing as being too likeable. Friendly, encouraging and smiling people attract other people. Your likeable self is the self who gets ahead.

Why is all this important?
According to Steve Nelson, partner at Wakefield Group, they receive about 1,000 business plans each year. From that total, they select 10 in which to invest. An investment by itself does not insure success. Assuming $1 million is invested in each of 10 companies:

• 2 yield 10 X
• 1 yields 5.5 X
• 1 yields 3.0 X
• 2 yield 1.5 X
• 1 yields 1 X
• 1 yields .5 X
• 2 yield 0 X

Venture Capitalists as well as Angel Groups make money by spreading their risk. The cumulative return on the above is 33 X.

How can you develop an edge?
When presenting yourself and your company to an investor, that person or firm has to make several judgments during your meeting time.

• Do they believe in you?
• Do they believe in your idea?
• Does your idea represent a real opportunity?

If the answers are yes then you need to be able to motivate the investor as quickly as you can, there is a lot of competition for investment dollars. In the vast majority of situations your business plan will be suspect and your projections will be heavily discounted or even completely disregarded. Every investor will need to decide if they are willing to put the time and effort into researching your plan and idea in order to complete their due diligence. Nothing happens until they perform this task. At best, you have a 1% chance of succeeding. You know your idea is good. On the other hand, the investor sees a lot of good ideas every day. He has to be selective in what he chooses. How do you stay ahead of the curve? Simple, have a third party objective assessment completed and prepared to show him. It will speak volumes about you and your business savvy. It will also give the investor a strong incentive to choose your plan to study. Why? Because you took the time to make certain to the best of your ability that it makes sense and is viable. Which plan would you choose? One that has a third party validation or one that does not?

Technology Resource of the Southeast, Inc. is an objective, third party analyst of new discoveries and emerging technologies. We specialize in

• Disclosure Evaluation Analysis,
• Market and Licensing Potential,
• Analysis of Factors Affecting Valuation,
• Commercialization Assistance,
• Technology Valuation Analysis,
• Market and Valuation Analysis, and
• Value aproposition Development

Call us anytime for assistance. (423) 929-0380

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