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19.04.23
MOTEPPCABE
Getting the Business Plan Right
Presented bySteven R. Kopits
Slide 2 of 17
Common Problems
Business plans and information memoranda often fail to
address critical issues regarding the investment, and
often considerable effort is invested in the wrong
activities. Many of these problems can be overcome
with MOTEPPCABE analysis.
Slide 3 of 17
Investment Criteria
MOTEPPCABE
MO: Market Opportunity
TE: Team
PP: Profit Potential
CA: Comparative Advantage
BE: Barriers to Entry
Slide 4 of 17
Who is your customer?
What do they want?
How much will they pay?
Market Opportunity
Define and describe an archetypical customer
Slide 5 of 17
Market Opportunity
Size: $50 million revenue in Year 5
Your company has to have significant size potential
Market Communication
Can you communicate with your potential clients cost-
effectively?
Credibility: Will they believe you?
Slide 6 of 17
Market Opportunity
Market Access Will your potential clients let you in the door?
Can you distribute your product?
Are the channels open?
Are they available at low cost?
Can you bill for your product and control client payment risk?
How long is the purchasing cycle?
Slide 7 of 17
Management Team
Three Attributes Integrity (Attitude)
Experience (Knowledge)
Competence (Skills, Drive, Energy)
Two Questions from VC’s Do I trust them with my money?
Can they perform the functions required?
Slide 8 of 17
Management Team
Complete Management Team
General management capability
Sales and Marketing
Operations
Technology (IT)
Strategic finance
Slide 9 of 17
Management Team
Strong understanding of market & competition current products/services, prices and costs
organizations and business models
sales and distribution (existing and proposed) obtain specific LOI’s (term sheet) from potential
customers
tricks of the trade
Slide 10 of 17
Profit Potential
Can I serve my clients at a profit?
Refers to implementation Business Model
Organization & Structure
Factor costs
Cash Flow Issues Payment risk
Timing of payments
Slide 11 of 17
Comparative Advantage
Product or service must be materiallyBetter or Cheaper
”Materially” is defined from the client’s perspective Difference has to be big enough to induce a switch
from his current supplier 50% is not a bad number
Slide 12 of 17
Barriers to Entry
How will I hold on to my market share in the future, especially when bigger and better capitalized companies enter my market?
Barriers to Entry Unique technology, patents or know-how Economies of scale
Manufacturing, purchasing, sales, marketing, cross-selling, R&D, personnel utilization or specialization, customer inertia, ‘first mover’ (but with care!)
Slide 13 of 17
Case Study 1 - SuperScan Monitors
After six years of research and development with a team of PhD scientists, SuperScan has developed a monitor with 10 times the capabilities of ordinary monitors at only three times the cost. The technology has many potential applications at the advertising, medical, and entertainment fields and has great potential to take market share in the $56 billion monitor market.
Why won’t SuperScan be funded at this stage?
Slide 14 of 17
Case Study 2 - Portal.hu
Portal.hu is a leading Hungarian internet portal, with over
1 million visitors per day. Along with Other.hu, Portal.hu
dominates the internet advertising market in Hungary.
How strong are Portal.hu’s barriers to entry?
Slide 15 of 17
Materials
You can find the presentation at
www.firsttuesday.com/budapest
and
www.hvca.hu
