Mini-Mag - Issue 07

ISSUE

Nō �7

TALK TO US Comments/questions phase3editor@dawnbreaker.com dawnbreaker.com

20 19

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EXECUTIVE EDITOR Jenny Servo, Ph.D.

MANAGING EDITOR Julie S. Krull

DESIGNER Danielle Palumbo

This mini-mag is a companion to the Phase III magazine that Dawnbreaker has produced since 2008. We felt that another publication that shared information regarding the Small Business Innovation Research (SBIR) program would help those who aspire to Phase III commercialization success. As Commercialization is also a metric of success for organizations involved with technology transfer, topics of interest to universities and federal labs will also be included.

FEATURES

2

TRENDING Social Media Trends to Try Right Now

6

STRATEGY Why Is Market Research Important?

11

DIVERSITY Hispanic Population

12

INVESTMENT KNOWLEDGE Pitching Your Opportunity

14

SUCCESS STORY Hydronalix

CURRENT SBIR SOLICITATIONS

NSF

National Science Foundation STTR Phase I

NSF

National Science Foundation SBIR Phase I

DoD

Department of Defense 19.B STTR Pre-Release

DAWNBREAKER®

DoD

Department of Defense 19.2 SBIR Pre-Release

Social Media Trends TR E N DI NG

to Try Right

Now

BY JULIE S. KRULL

2018 was a difficult year for social media. Trust issues and data breaches set the stage for many to wonder if all the hype was even worth it, or if we should just hang up our hashtags and call it a day. From a small business standpoint, the need for high-quality content has never been greater. With users being more selective on which platforms they are using and with whom they are interacting, the necessity of journalistic integrity and reputable brand journalism is at its high point. How does all this affect the small business looking to utilize social media to interact with potential customers? Just as users are strategically selecting certain channels, the small business must also think strategy. Here are five social media trends to try right now, all of which focus on that overarching goal of quality engagement and interaction.

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MINI-MAG

MINI-MAG

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Social Media Trends TR E N DI NG

to Try Right

Now

BY JULIE S. KRULL

2018 was a difficult year for social media. Trust issues and data breaches set the stage for many to wonder if all the hype was even worth it, or if we should just hang up our hashtags and call it a day. From a small business standpoint, the need for high-quality content has never been greater. With users being more selective on which platforms they are using and with whom they are interacting, the necessity of journalistic integrity and reputable brand journalism is at its high point. How does all this affect the small business looking to utilize social media to interact with potential customers? Just as users are strategically selecting certain channels, the small business must also think strategy. Here are five social media trends to try right now, all of which focus on that overarching goal of quality engagement and interaction.

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T R E N DI NG

1.) FIND YOUR HASHTAGS

3.) GET A STRONG STORY GAME

You don’t need some super catchy hashtag that is going to go viral. That’s not your goal (though of course, you wouldn’t mind). Your goal should be aligned with the original intent of the hashtag — to group content into certain categories so your users can see everything that is going on within that particular subject. Hashtags also work to create brand awareness and get your audience involved. Twitter, Instagram and Facebook all still utilize the hashtag to accomplish the goal of content organization.

Many social media platforms are investing heavily in their “story” structures. Modeled after the success of Snapchat, stories are a way of showing up-tothe-minute content, as it is happening. They can be published as either a photo or video, or a compilation of the two. Maybe your company is accepting a prestigious award, or maybe it’s something casual like a pizza party at the office. Once again, you don’t have to get bogged down with “what will really wow people?” The goal here is to play with structure and content and find out what works for your company.

Let’s say you’re a small start-up that manufactures parts for UAVs. You know there is broad applicability in both the government and commercial sectors, but you just need to ramp up your visibility. Any content you produce on social media should utilize all of the popular hashtags within your industry. How do you know which ones to use? Go right to the platform and see what your competitors are using.

A quick search on Twitter for “#UAV” reveals the following corresponding hashtags: #drone, #drones, #dji, #uas, #autonomous, and #aerial to name just a few. Type in some of these and your competition will flood your feed. How are you stacking up?

With 300 million active daily users, Instagram stories is a great place to start. And although Facebook stories isn’t anywhere near that in terms of users, there’s nothing lost in sharing on both platforms.

Easy sharing features allow you to instantly transfer your Instagram story onto your Facebook story. If

you want to get even more savvy, add a UTM button to your story, which allows the user to “swipe up” to learn more. The swipe up feature could take viewers to your website, a URL where an article or press release is posted, or any site you choose.

4.) SHARE LIVE EVENTS Have a demo coming up that makes for an interesting video clip? Are you at a trade show showcasing your product to various end users? Any event where you are engaging with others is the perfect opportunity for some quick promo! Places to post clips include story sections as mentioned above, Facebook Live, and YouTube to name a few. Side note — If a “live” broadcast is a bit too nerve-wracking, just take a video with your cellphone and upload it as a post after. It will still show your audience where you are and what you’re doing.

5.) YOU HAVE TO GIVE TO GET – BE ON THE OTHER END OF SOCIAL MEDIA AS WELL It’s not all promote, promote, promote. Being an active member in your industry’s social media arena will also help your positioning in the long run.

Be sure to participate in Twitter chats. Join some Facebook groups that are geared toward your industry. Follow some chosen hashtags on Twitter and Instagram to stay up to the date on news within your sector, and to keep an eye on the competition.

Congratulate a leader in your industry on LinkedIn. There are so many ways to engage. Stay active and stay aware, and before you know it, you will have inside access to all that is going on in your industry!

For more tips and tricks on how to leverage social media for your small business, contact Dawnbreaker Design today!

2.) UTILIZE SUBJECT MATTER EXPERTS Whether your company is a one-person operation or comprised of a few dozen individuals, chances are somebody on your team is an expert on your innovation. Right there, an opportunity exists for those interested in your product to get information straight from the source. Perhaps you host a Twitter chat once a month (don’t forget to tie in that aforementioned hashtag) where users can directly interact with you, or maybe you publish an original content piece on your blog and post a teaser from your LinkedIn page.

Just keep one thing in mind: Nobody is closer to your technology than you are, so it will be tempting to use a lot of technical terms. Refrain. Try to write for a broader audience and paint a picture of the applicability of your innovation. Try to focus on the problem your technology solves, and why people should care. Save the tech brief for any follow-up interest you receive.

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T R E N DI NG

1.) FIND YOUR HASHTAGS

3.) GET A STRONG STORY GAME

You don’t need some super catchy hashtag that is going to go viral. That’s not your goal (though of course, you wouldn’t mind). Your goal should be aligned with the original intent of the hashtag — to group content into certain categories so your users can see everything that is going on within that particular subject. Hashtags also work to create brand awareness and get your audience involved. Twitter, Instagram and Facebook all still utilize the hashtag to accomplish the goal of content organization.

Many social media platforms are investing heavily in their “story” structures. Modeled after the success of Snapchat, stories are a way of showing up-tothe-minute content, as it is happening. They can be published as either a photo or video, or a compilation of the two. Maybe your company is accepting a prestigious award, or maybe it’s something casual like a pizza party at the office. Once again, you don’t have to get bogged down with “what will really wow people?” The goal here is to play with structure and content and find out what works for your company.

Let’s say you’re a small start-up that manufactures parts for UAVs. You know there is broad applicability in both the government and commercial sectors, but you just need to ramp up your visibility. Any content you produce on social media should utilize all of the popular hashtags within your industry. How do you know which ones to use? Go right to the platform and see what your competitors are using.

A quick search on Twitter for “#UAV” reveals the following corresponding hashtags: #drone, #drones, #dji, #uas, #autonomous, and #aerial to name just a few. Type in some of these and your competition will flood your feed. How are you stacking up?

With 300 million active daily users, Instagram stories is a great place to start. And although Facebook stories isn’t anywhere near that in terms of users, there’s nothing lost in sharing on both platforms.

Easy sharing features allow you to instantly transfer your Instagram story onto your Facebook story. If

you want to get even more savvy, add a UTM button to your story, which allows the user to “swipe up” to learn more. The swipe up feature could take viewers to your website, a URL where an article or press release is posted, or any site you choose.

4.) SHARE LIVE EVENTS Have a demo coming up that makes for an interesting video clip? Are you at a trade show showcasing your product to various end users? Any event where you are engaging with others is the perfect opportunity for some quick promo! Places to post clips include story sections as mentioned above, Facebook Live, and YouTube to name a few. Side note — If a “live” broadcast is a bit too nerve-wracking, just take a video with your cellphone and upload it as a post after. It will still show your audience where you are and what you’re doing.

5.) YOU HAVE TO GIVE TO GET – BE ON THE OTHER END OF SOCIAL MEDIA AS WELL It’s not all promote, promote, promote. Being an active member in your industry’s social media arena will also help your positioning in the long run.

Be sure to participate in Twitter chats. Join some Facebook groups that are geared toward your industry. Follow some chosen hashtags on Twitter and Instagram to stay up to the date on news within your sector, and to keep an eye on the competition.

Congratulate a leader in your industry on LinkedIn. There are so many ways to engage. Stay active and stay aware, and before you know it, you will have inside access to all that is going on in your industry!

For more tips and tricks on how to leverage social media for your small business, contact Dawnbreaker Design today!

2.) UTILIZE SUBJECT MATTER EXPERTS Whether your company is a one-person operation or comprised of a few dozen individuals, chances are somebody on your team is an expert on your innovation. Right there, an opportunity exists for those interested in your product to get information straight from the source. Perhaps you host a Twitter chat once a month (don’t forget to tie in that aforementioned hashtag) where users can directly interact with you, or maybe you publish an original content piece on your blog and post a teaser from your LinkedIn page.

Just keep one thing in mind: Nobody is closer to your technology than you are, so it will be tempting to use a lot of technical terms. Refrain. Try to write for a broader audience and paint a picture of the applicability of your innovation. Try to focus on the problem your technology solves, and why people should care. Save the tech brief for any follow-up interest you receive.

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MINI-MAG

5

Why Market Research is Important

S T R AT E G Y

BY JENNY C. SERVO, Ph.D.

If you have participated in an I-Corps type program or a field experiment such as the Joint Interagency Field Experimentation (JIFX), then you know the importance of verifying that a need exists with potential customers and end-users. So why do you need to understand the market? Isn’t verifying that a need exists sufficient?

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Why Market Research is Important

S T R AT E G Y

BY JENNY C. SERVO, Ph.D.

If you have participated in an I-Corps type program or a field experiment such as the Joint Interagency Field Experimentation (JIFX), then you know the importance of verifying that a need exists with potential customers and end-users. So why do you need to understand the market? Isn’t verifying that a need exists sufficient?

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S TR AT EG Y

A market is a way of aggregating customers into groups or segments and representing that opportunity in units or dollars. The opportunity is not just for you, but for you and your competitors — all of whom are trying to meet the needs of the identified market segment. To develop a defensible model for scale-up you will need to gain insight into the size of the opportunity, understand how and when customers buy and what your competitors are likely to do when you enter the market in order to maintain their market share. Armed with this information you can develop a defensible plan for product introduction and sales projections.

There are many methods which can be used to derive the size of an emerging market. The approach that Dawnbreaker recommends is referred to as a market build-up method, also referred to as a bottom-up method. This method yields a hypothetical construct which defines the size of the served available market. Successful use of this approach requires that you build upon and extend the information gathered previously regarding

customers — their need, their degree of interest in your solution, their price point, their ability to pay for the product and accessibility. In other words, you are looking for customers that are MAD — i.e, they have money (M), access (A), and desire (D). Engineers are often uncomfortable with sizing market segments, as the result is not exact.

However, this approach can provide a good approximation upon which you can make decisions.

A Market Build-up Approach: An Example One starts with commonly available data points and then looks for or collects more difficult information to refine the model. In the example which follows, information from a resource called A Statistical Abstract of the United States was used as the starting point. These data were then combined with other information gathered from industry experts by phone and from potential end-users (who also happened to be potential customers) in a mall intercept.

One begins the market build-up method with a product concept. In the example which follows the product is a “warm suit for stranded motorists”, a lightweight piece of outerwear that could be tightly rolled and conveniently stored under one’s car seat in a vacuum sealed bag. The concept was that in a cold weather emergency situation, the stranded motorist could pull this out, put it on, and remain warm for an extended period of time. The need addressed was protection for stranded motor-

“ THE CHALLENGE [IS] TO DEFINE THE AVAILABLE MARKET BASED ON MONEY, ACCESS, AND DESIRE “

Sorry…although need verification is important, it is not sufficient! — not if you are trying to determine the rate at which you should scale up production, not if you are trying to secure equity investment, not if you are trying to estimate the cost of your own investment for the next stage of commercialization. These tasks require market research! So, let’s explore what that means.

the mall intercept a table was set up at an exhibit and men and women of driving age were asked if they kept cold weather emergency gear in their car. Ten percent of the sample did. Using this data point, we reduced the size of the potential market, currently discussed in terms of registered vehicles in cold climates to 10% of 67,611,000 or 6,761,100.

Result: 6,761,000 were inferred to have a desire for this type of product

ists whose car had broken down during a severe snowstorm in a remote area. The warm suit provided protection from potential hypothermia. It was assumed that the selling price would be $25.95.

The obvious potential market for this product is comprised of car owners that reside in snowy regions. The challenge was to define the available market based on money, access, and desire — the criteria mentioned earlier which qualify potential customers. This required more data from both primary and secondary sources.

STEP 1: Obtain data from the Statistical Abstract of the United States regarding automobile registration by state and tally the number of automobiles registered to people in those states with considerable snowfall.

STEP 3: Determine what % of this group had the money to spend on this product.

STEP 2: Determine what percentage of this group The Statistical Abstract of the United States includes information on car registrations broken would have a desire for this product.

It would be wrong to conclude that by virtue of down by age, income and gender. Given the initial owning a car and living in a cold climate that one conceptualization was that the product would rewould have a desire for a warm suit. The premise tail for $25.95, it was assumed that this would be adopted was that those individuals who carry some of greatest interest to those which had an income sort of emergency gear in their car have demon- above $35,000. Forty-five percent of the sample fit strated an interest in protection from the cold and into this category. Therefore, the figure that was obwould be a potential customer. Various approach- tained previously (6,761,000) was further reduced es were used to try and get a handle on the size to reflect income. 6,761,000 x 45% = 3,042,450. of this subset. Methods used included contacting Result: 3,042,450 was inferred to have the disTriple A, as well as various associations, and editors posable income to spend. The potential size of of journals and catalogs which specialized in emerthe niche was 3,042,450 units over the life of gency gear. Ultimately the decision was made to the product conduct a mall intercept in a number of cities. In Result: 67,611,000 motor vehicle registrations

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MINI-MAG

9

S TR AT EG Y

A market is a way of aggregating customers into groups or segments and representing that opportunity in units or dollars. The opportunity is not just for you, but for you and your competitors — all of whom are trying to meet the needs of the identified market segment. To develop a defensible model for scale-up you will need to gain insight into the size of the opportunity, understand how and when customers buy and what your competitors are likely to do when you enter the market in order to maintain their market share. Armed with this information you can develop a defensible plan for product introduction and sales projections.

There are many methods which can be used to derive the size of an emerging market. The approach that Dawnbreaker recommends is referred to as a market build-up method, also referred to as a bottom-up method. This method yields a hypothetical construct which defines the size of the served available market. Successful use of this approach requires that you build upon and extend the information gathered previously regarding

customers — their need, their degree of interest in your solution, their price point, their ability to pay for the product and accessibility. In other words, you are looking for customers that are MAD — i.e, they have money (M), access (A), and desire (D). Engineers are often uncomfortable with sizing market segments, as the result is not exact.

However, this approach can provide a good approximation upon which you can make decisions.

A Market Build-up Approach: An Example One starts with commonly available data points and then looks for or collects more difficult information to refine the model. In the example which follows, information from a resource called A Statistical Abstract of the United States was used as the starting point. These data were then combined with other information gathered from industry experts by phone and from potential end-users (who also happened to be potential customers) in a mall intercept.

One begins the market build-up method with a product concept. In the example which follows the product is a “warm suit for stranded motorists”, a lightweight piece of outerwear that could be tightly rolled and conveniently stored under one’s car seat in a vacuum sealed bag. The concept was that in a cold weather emergency situation, the stranded motorist could pull this out, put it on, and remain warm for an extended period of time. The need addressed was protection for stranded motor-

“ THE CHALLENGE [IS] TO DEFINE THE AVAILABLE MARKET BASED ON MONEY, ACCESS, AND DESIRE “

Sorry…although need verification is important, it is not sufficient! — not if you are trying to determine the rate at which you should scale up production, not if you are trying to secure equity investment, not if you are trying to estimate the cost of your own investment for the next stage of commercialization. These tasks require market research! So, let’s explore what that means.

the mall intercept a table was set up at an exhibit and men and women of driving age were asked if they kept cold weather emergency gear in their car. Ten percent of the sample did. Using this data point, we reduced the size of the potential market, currently discussed in terms of registered vehicles in cold climates to 10% of 67,611,000 or 6,761,100.

Result: 6,761,000 were inferred to have a desire for this type of product

ists whose car had broken down during a severe snowstorm in a remote area. The warm suit provided protection from potential hypothermia. It was assumed that the selling price would be $25.95.

The obvious potential market for this product is comprised of car owners that reside in snowy regions. The challenge was to define the available market based on money, access, and desire — the criteria mentioned earlier which qualify potential customers. This required more data from both primary and secondary sources.

STEP 1: Obtain data from the Statistical Abstract of the United States regarding automobile registration by state and tally the number of automobiles registered to people in those states with considerable snowfall.

Result: 67,611,000 motor vehicle registrations

STEP 3: Determine what % of this group had the money to spend on this product.

STEP 2: Determine what percentage of this group The Statistical Abstract of the United States inwould have a desire for this product. cludes information on car registrations broken It would be wrong to conclude that by virtue of down by age, income and gender. Given the initial owning a car and living in a cold climate that one conceptualization was that the product would rewould have a desire for a warm suit. The premise tail for $25.95, it was assumed that this would be adopted was that those individuals who carry some of greatest interest to those which had an income sort of emergency gear in their car have demon- above $35,000. Forty-five percent of the sample fit strated an interest in protection from the cold and into this category. Therefore, the figure that was obwould be a potential customer. Various approach- tained previously (6,761,000) was further reduced es were used to try and get a handle on the size to reflect income. 6,761,000 x 45% = 3,042,450. of this subset. Methods used included contacting Triple A, as well as various associations, and editors Result: 3,042,450 was inferred to have the disof journals and catalogs which specialized in emerposable income to spend. The potential size of gency gear. Ultimately the decision was made to the niche was 3,042,450 units over the life of conduct a mall intercept in a number of cities. In the product 8

MINI-MAG

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S TR AT EG Y

STEP 4: Determine the size of the available market, by taking into account “access” which is determined by a company’s marketing communication strategy.

The decision was made to market this product strictly through catalogs. After talking with industry experts, it was determined that 40% of this income group made purchases from this medium. The market size was further reduced to take into account the distribution channel selected — 3,042,450 x 40% = 1,216,980 units.

Result: Using this method, 1,216,980 people were inferred to have access to this product through widespread use of catalogs. Thus, the available market size was 1,216,980 units.

Translating this into a dollar value was accomplished by multiplying the total number of potential purchasers by the selling price of $25.95

D I VE RS I T Y

= $31,580,631. It is important to realize that the marketer of this product would then need to determine what might be the annual market for the warm suit and any current or potential competing products. The actual market demand in any given year would be substantially less than $31.5 million, the figure which would exhaust all current, potential buyers in the U.S..

Conclusion: The market build-up method uses a combination of data and assumptions which are reasonable and clearly articulated to determine the size of a market niche. As you can see, the conclusion is as good as the assumptions, the product definition, pricing, and the marketing communication plan. A different configuration of these variables would yield a different result. However, in all cases the conclusion drawn would be reasonable, defensible and clear.

| Entrepreneurs: Did You Know? |

According to the most recent Census Bureau,

Hispanics represent the single largest ethnic group in this country.

18.1% of the U.S. population / 58.9 million Hispanic-owned businesses: 4.4 million | Total revenue: $700 billion

WA ME

MT

ND

VT

NH

MN

OR ID

WI

SD WY

IL

UT

OH

KS

DC

IN

CO

CA

CT

RI

PA

IA

NE

NV

MA

NY

MI

WV

MO

NJ DE

VA

KY

NC

AK OK

NM

AZ

TN SC

AR MS

AL

GA

TX LA

Pacific Region

1,057,301

Need market research? – Contact Dawnbreaker today!

FL

companies

HI

PR

South Atlantic Region

Back to top

Back to top

West South Central Region

921,000

964,000 companies

companies 10

MINI-MAG

MINI-MAG

11

S TR AT EG Y

STEP 4: Determine the size of the available market, by taking into account “access” which is determined by a company’s marketing communication strategy.

The decision was made to market this product strictly through catalogs. After talking with industry experts, it was determined that 40% of this income group made purchases from this medium. The market size was further reduced to take into account the distribution channel selected — 3,042,450 x 40% = 1,216,980 units.

Result: Using this method, 1,216,980 people were inferred to have access to this product through widespread use of catalogs. Thus, the available market size was 1,216,980 units.

Translating this into a dollar value was accomplished by multiplying the total number of potential purchasers by the selling price of $25.95

D I VE RS I T Y

= $31,580,631. It is important to realize that the marketer of this product would then need to determine what might be the annual market for the warm suit and any current or potential competing products. The actual market demand in any given year would be substantially less than $31.5 million, the figure which would exhaust all current, potential buyers in the U.S..

Conclusion: The market build-up method uses a combination of data and assumptions which are reasonable and clearly articulated to determine the size of a market niche. As you can see, the conclusion is as good as the assumptions, the product definition, pricing, and the marketing communication plan. A different configuration of these variables would yield a different result. However, in all cases the conclusion drawn would be reasonable, defensible and clear.

| Entrepreneurs: Did You Know? |

According to the most recent Census Bureau,

Hispanics represent the single largest ethnic group in this country.

18.1% of the U.S. population / 58.9 million Hispanic-owned businesses: 4.4 million | Total revenue: $700 billion

WA ME

MT

ND

VT

NH

MN

OR ID

WI

SD WY

IL

UT

OH

KS

DC

IN

CO

CA

CT

RI

PA

IA

NE

NV

MA

NY

MI

WV

MO

NJ DE

VA

KY

NC

AK OK

NM

AZ

TN SC

AR MS

AL

GA

TX LA

Pacific Region

1,057,301

Need market research? – Contact Dawnbreaker today!

FL

companies

HI

PR

South Atlantic Region

Back to top

Back to top

West South Central Region

921,000

964,000 companies

companies 10

MINI-MAG

MINI-MAG

11

IN V E STM E NT K N O W L E D G E

There’s that word again — passion — smack dab in the middle of the slide about the company founders. “We’re passionate about what we do.”

— stated boldly as if that magic word purged all fears from the potential investors mind. Clearly, angel investors will be impressed with our pitch because we are passionate! What blarney!

Another pet peeve — don’t prepare 50+ slides for your pitch filled with lots of small print that no one can read, using colors that no one can stand to look at. You need to be succinct and use your slides as the backdrop for telling your story. Aim for 25 words or less per slide and use images and figures to support your story.

However — don’t confuse succinct with simple.

Making money with an opportunity is not simple, so for heaven’s sake, don’t generate financials that show a 5x return on an investment within 5 years — simply because you know that is what investors are looking for. Your financial model must be based on information that is hard to gather and synthesize.

How often do your customer’s buy? Who makes the purchase decision? Have they recently made investments in a competitive approach? Is the market saturated? How much will it cost to promote your product? How will you handle customer support?

When will you be able to add staff? What will your competitors do when you enter the market? If they drop their price, what will that do to your projections? These questions are not simple to address.

When you are ready for investment, your knowledge needs to be far greater than what you represented at the outset in a business model canvas. When you are investment ready, your knowledge will be hard earned. The 15-20 slides you present in a 15 minute pitch will represent the tip of the iceberg.

However, when an interested investor asks you questions and digs below the surface — you will be ready to share your knowledge and competence in greater detail. So throw out the passion and bring on a short pitch that demonstrates your ability to grow your business and make money for both you and your investors. Let competence rule the day!

WHEN YOU ARE “ INVESTMENT READY,

“

There’s no doubt that equity investors care about the management team, after all it is the management team that bears the responsibility for realizing the opportunity — that is, for making money with their investment. However, equity investors want to know about the skills, experience and commitment of the team, not their passion. Peppering a presentation, devoid of substance with words like “passion” is a poor substitute for being prepared — so don’t talk about how passionate you are — instead show your competence. Talk about the need, the market, the competition and your strategy for making money with their investment.

YOUR KNOWLEDGE WILL BE HARD EARNED

Don’t Substitute Passion for Knowledge

BY JENNY C. SERVO, Ph.D.

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IN V E STM E NT K N O W L E D G E

There’s that word again — passion — smack dab in the middle of the slide about the company founders. “We’re passionate about what we do.”

— stated boldly as if that magic word purged all fears from the potential investors mind. Clearly, angel investors will be impressed with our pitch because we are passionate! What blarney!

Another pet peeve — don’t prepare 50+ slides for your pitch filled with lots of small print that no one can read, using colors that no one can stand to look at. You need to be succinct and use your slides as the backdrop for telling your story. Aim for 25 words or less per slide and use images and figures to support your story.

However — don’t confuse succinct with simple.

Making money with an opportunity is not simple, so for heaven’s sake, don’t generate financials that show a 5x return on an investment within 5 years — simply because you know that is what investors are looking for. Your financial model must be based on information that is hard to gather and synthesize.

How often do your customer’s buy? Who makes the purchase decision? Have they recently made investments in a competitive approach? Is the market saturated? How much will it cost to promote your product? How will you handle customer support?

When will you be able to add staff? What will your competitors do when you enter the market? If they drop their price, what will that do to your projections? These questions are not simple to address.

When you are ready for investment, your knowledge needs to be far greater than what you represented at the outset in a business model canvas. When you are investment ready, your knowledge will be hard earned. The 15-20 slides you present in a 15 minute pitch will represent the tip of the iceberg.

However, when an interested investor asks you questions and digs below the surface — you will be ready to share your knowledge and competence in greater detail. So throw out the passion and bring on a short pitch that demonstrates your ability to grow your business and make money for both you and your investors. Let competence rule the day!

WHEN YOU ARE “ INVESTMENT READY,

“

There’s no doubt that equity investors care about the management team, after all it is the management team that bears the responsibility for realizing the opportunity — that is, for making money with their investment. However, equity investors want to know about the skills, experience and commitment of the team, not their passion. Peppering a presentation, devoid of substance with words like “passion” is a poor substitute for being prepared — so don’t talk about how passionate you are — instead show your competence. Talk about the need, the market, the competition and your strategy for making money with their investment.

YOUR KNOWLEDGE WILL BE HARD EARNED

Don’t Substitute Passion for Knowledge

BY JENNY C. SERVO, Ph.D.

12

MINI-MAG

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MINI-MAG

13

S U C C E S S S T O RY

Hydronalix | Success Story |

BY JULIE S. KRULL

ramics Research, grew from a small Phase I SBIR to generating $135M in revenue before its acquisition

by BAE Systems. Mulligan often speaks of his successful journey through the SBIR program to help and inspire other small high-tech companies. One of his tips — be willing to change your business plan.

“The original idea for Hydronalix was to create a windmill kite where people could charge their cell phones at the beach,” he reflects. Obviously, we’re in a completely different place than where we thought we’d be. So, the message is, always focus on your technology and its development and building your company, but stay open minded on where your revenue stream and customers may come from.”

Today, several versions of EMILY serve a variety of customers. The beachside version is used in lifeguard operations across the United States, while

WORLDWIDE SALES

$3 million

EXPORTS

to over 23 countries

the swift water version of EMILY is used in fast water/high sea state applications. SONAR EMILY is the company’s newest model and it is being used to map the Lake Bryan dam and send the results to the structural engineers and the Incident Commander.

The goal is to provide a capability to monitor the integrity of the dam and other water structures in earthquake disaster response missions.

Hydronalix maintains their “Made in America” philosophy and uses local suppliers in the Tucson area, where the machines are assembled using American workers within an American plant. They were selected as one of six companies out of over 150 by the Arizona Commerce Authority and awarded the Arizona Innovation Challenge Grant, along with a 2015 Tibbetts Award from the U.S. Small Business Administration.

AVERAGE RESCUES

1.5 per day

IT

is often said the best way to measure success of an SBIR initiative is to look at Phase III dollars.

That is, how much resulting revenue has the company taken in, outside of the SBIR program? But such a restrictive definition doesn’t capture the whole picture. With a technology that is saving lives everyday — how does one begin to quantify that value? In the case of Arizona-based Hydronalix, the term success embodies both concepts. With worldwide sales reaching $3 million, exports to over 23 countries, and a proven record of saving 1.5 lives every single day, it’s safe to say the small business bred from the Department of Defense SBIR program is at the top of their game.

Hydronalix’s flagship product is the Emergency Integrated Lifesaving Lanyard, or EMILY for short. It is an autonomous, amphibious vehicle that has a wide range of applicability for private industry, local municipalities, first responders and the U.S. government. The company’s largest customer — the Los Angeles County Fire Department — boasts a fleet of EMILY vehicles and uses the device daily for its rescue missions. Hydronalix has also developed USVs for the US Navy to be used for Intelligence, Surveillance and Reconnaissance missions that until previously, only larger manned craft could accomplish.

Search and rescue missions are more efficiently executed with the help of EMILY. In the Netherlands, 14

MINI-MAG

EMILY was deployed to help find a long-lost boat that had been periodically searched for without success over five years. EMILY located the vessel within a half an hour. EMILY can transit through riptides at a speed of 24 MPH and is ideal for rescuing swimmers human lifeguards cannot reach. At just 4 feet long and made of durable lightweight fiberglass, the remote-controlled robotic vehicle is propelled by an electric motor-powered pump-jet.

Want to hear other inspiring success stories from SBIR businesses? Join us for our SBIR Small Business Success Webinar Series! Each month, we will hear from a new company on challenges, lessons learned and best practices. View the Hydronalix webinar and learn more at: http://bit.ly/2HEh3Fm

CEO Anthony Mulligan can be found showcasing EMILY around the world, from Rescue Week in Paris to trade shows in Dubai. Mulligan is his own success story, to say the least. Hydronalix is his third successful SBIR company. His first company, Advanced Ce-

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MINI-MAG

15

S U C C E S S S T O RY

Hydronalix | Success Story |

BY JULIE S. KRULL

ramics Research, grew from a small Phase I SBIR to generating $135M in revenue before its acquisition

by BAE Systems. Mulligan often speaks of his successful journey through the SBIR program to help and inspire other small high-tech companies. One of his tips — be willing to change your business plan.

“The original idea for Hydronalix was to create a windmill kite where people could charge their cell phones at the beach,” he reflects. Obviously, we’re in a completely different place than where we thought we’d be. So, the message is, always focus on your technology and its development and building your company, but stay open minded on where your revenue stream and customers may come from.”

Today, several versions of EMILY serve a variety of customers. The beachside version is used in lifeguard operations across the United States, while

WORLDWIDE SALES

$3 million

EXPORTS

to over 23 countries

the swift water version of EMILY is used in fast water/high sea state applications. SONAR EMILY is the company’s newest model and it is being used to map the Lake Bryan dam and send the results to the structural engineers and the Incident Commander.

The goal is to provide a capability to monitor the integrity of the dam and other water structures in earthquake disaster response missions.

Hydronalix maintains their “Made in America” philosophy and uses local suppliers in the Tucson area, where the machines are assembled using American workers within an American plant. They were selected as one of six companies out of over 150 by the Arizona Commerce Authority and awarded the Arizona Innovation Challenge Grant, along with a 2015 Tibbetts Award from the U.S. Small Business Administration.

AVERAGE RESCUES

1.5 per day

IT

is often said the best way to measure success of an SBIR initiative is to look at Phase III dollars.

That is, how much resulting revenue has the company taken in, outside of the SBIR program? But such a restrictive definition doesn’t capture the whole picture. With a technology that is saving lives everyday — how does one begin to quantify that value? In the case of Arizona-based Hydronalix, the term success embodies both concepts. With worldwide sales reaching $3 million, exports to over 23 countries, and a proven record of saving 1.5 lives every single day, it’s safe to say the small business bred from the Department of Defense SBIR program is at the top of their game.

Hydronalix’s flagship product is the Emergency Integrated Lifesaving Lanyard, or EMILY for short. It is an autonomous, amphibious vehicle that has a wide range of applicability for private industry, local municipalities, first responders and the U.S. government. The company’s largest customer — the Los Angeles County Fire Department — boasts a fleet of EMILY vehicles and uses the device daily for its rescue missions. Hydronalix has also developed USVs for the US Navy to be used for Intelligence, Surveillance and Reconnaissance missions that until previously, only larger manned craft could accomplish.

Search and rescue missions are more efficiently executed with the help of EMILY. In the Netherlands, 14

MINI-MAG

EMILY was deployed to help find a long-lost boat that had been periodically searched for without success over five years. EMILY located the vessel within a half an hour. EMILY can transit through riptides at a speed of 24 MPH and is ideal for rescuing swimmers human lifeguards cannot reach. At just 4 feet long and made of durable lightweight fiberglass, the remote-controlled robotic vehicle is propelled by an electric motor-powered pump-jet.

Want to hear other inspiring success stories from SBIR businesses? Join us for our SBIR Small Business Success Webinar Series! Each month, we will hear from a new company on challenges, lessons learned and best practices. View the Hydronalix webinar and learn more at: http://bit.ly/2HEh3Fm

CEO Anthony Mulligan can be found showcasing EMILY around the world, from Rescue Week in Paris to trade shows in Dubai. Mulligan is his own success story, to say the least. Hydronalix is his third successful SBIR company. His first company, Advanced Ce-

Back to top

MINI-MAG

15