Startup & Venture Lessons: Pittsburgh Tech Council

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I gave this presentation at the Pittsburgh Technology Council on September 26, 2011.

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Startup & Venture Lessons: Pittsburgh Tech Council

  1. 1. Startup & Venture Lessons<br />Jay Jamison<br />Venture Partners, BlueRun Ventures<br />jjamison@brv.com | @jay_jamison | jayjamison.com <br />
  2. 2. Agenda<br />Introduction<br />Top 10 Lessons<br />Q&A<br />
  3. 3. Introduction<br />Logistics: 30 minute talk, then Q&A <br />About me<br />Wharton MBA ’98<br />Microsoft ‘98-’07<br />Founder, Moonshoot ‘07-’10<br />Venture Partner, BlueRun Ventures, ‘10-Present<br />3<br />
  4. 4. About BlueRun Ventures<br />Over $1.0B under management<br />Investing out of Fund IV ($240M)<br />Focus: Mobile & consumer internet<br /> Seed & Series A<br />Representative investments<br />4<br />
  5. 5. Stuff that surprised me <br />Having nearly 10 years at MSFT didn’t matter at all.<br />Having an MBA from Wharton mattered even less.<br />Both were actually seen as basically negatives. <br />But, several of the skills from both really helped.<br />5<br />
  6. 6. Top 10 Startup Lessons<br />Today’s Golden Age For Founders & Its Double-Edge Sword.<br />What’s #1: Markets, Team, or Product?<br />Picking Co-Founders & How to Split the Baby.<br />The “Whatever Works” Principal. <br />Getting used to “No,” and Being a Meat Eater<br />Hire Slow, Fire Fast<br />Distribution is Really Hard & Really Important<br />If You Stop Loving It, Make a Change. <br />Integrity and Value Add<br />Pitching & Fund-Raising<br />My go-to resources<br />6<br />
  7. 7. It’s a Golden Age for Entrepreneurs….<br />Cheaper than ever to start a company.<br />Better resources (Y-Combinator, Founder Institute, Startup Digest, 500Startups, StartupCompanyLawyer, TechCrunch, etc.).<br />Technology is easier to learn, access, &c.<br />
  8. 8. … And Investors Understand This.<br />I’m seeing lots of great companies that are:<br />Capital efficient<br />High velocity in coding and releasing.<br />Product in market with traction<br />Clear customer insight on what works.<br />Battle-tested founding teams.<br />Clear, concrete ask on what $$$ they need.<br />
  9. 9. Implication<br />While we’re in a Golden Age for Entrepreneurs, it is raising the bar for most very early stage companies… <br />You need to prove more on very little money, because so many other start-ups are already doing so. <br />
  10. 10. What’s #1: Markets, Team, or Product?<br />Which is most important?<br />Market<br />Product<br />Team<br />
  11. 11. Which is most important?<br />Market<br />Product<br />Team<br />
  12. 12. Analysis<br />75 pitches / quarter<br />0-2 get to term sheet<br />Score each<br />Multiple regression<br />12<br />
  13. 13. How I think about Markets <br />Choose Any 4 Companies, Stack Rank Vision<br />World’s largest store<br />Redefine social<br />Organize & access information<br />Reinvent money<br />????<br />Your Company<br />
  14. 14. How I think about Markets <br />Choose Any 4 Companies, Stack Rank Vision<br />World’s largest store<br />Redefine social<br />Organize & access information<br />Reinvent money<br />Teach English to children everywhere<br />
  15. 15. How I think about Markets <br />Choose Any 4 Companies, Stack Rank Vision<br />Internet Radio<br />Flash retail sales<br />User generated video & tv<br />Social local food media<br />
  16. 16. Co-Founders<br />What a tech founder needs in a business co-founder…<br />Someone who sells what you build<br />Someone who can do all the important stuff that’s not coding<br />Leadership and vision<br />Potentially you can raise money, while you code.<br />What a business co-founder needs in a tech co-founder…<br />Someone who writes code and gets technical stuff done, and who ideally understands how to hire and expand the technical team over time. <br />Technical chops, CS/EE degree<br />Nice to have: a track record building stuff<br />Very nice to have: Ideas on how to hire devs<br />16<br />
  17. 17. Finding a Technical Co-Founder<br />17<br />More important than fund-raising<br />Requires almost the same skills<br />Pitching and salesmanship<br />Capacity to speak enough geek<br />Resourcefulness<br />
  18. 18. Default founder split: equal<br />18<br />
  19. 19. Whatever Works<br />19<br />You never get a second chance to make a first impression. – Anon.<br />If you’re not embarrassed with your first launch, you’re waiting too long. – Reid Hoffman<br />Lean Startup<br />Never stealth!<br />Revenue from Day 1<br />Building for Scale<br />Scrum<br />Everything Inhouse<br />Offshore<br />Minimum Viable Product<br />StealthCo<br />HTML5<br />Customer Development<br />Native Apps<br />
  20. 20. Whatever Works<br />20<br />You never get a second chance to make a first impression. – Anon.<br />If you’re not embarrassed with your first launch, you’re waiting too long. – Reid Hoffman<br />My Advice & Learning:<br /><ul><li>Absorb all this stuff
  21. 21. Listen to people you trust
  22. 22. Use what works for you
  23. 23. The key is work fast & economically</li></ul>Lean Startup<br />Never stealth!<br />Revenue from Day 1<br />Building for Scale<br />Scrum<br />Everything Inhouse<br />Offshore<br />Minimum Viable Product<br />StealthCo<br />HTML5<br />Customer Development<br />Native Apps<br />
  24. 24. Getting Used to No<br />As Founder: Heard “No” a lot, especially fund-raising<br />At least 150 times<br />From 5 different countries<br />As an Investor: I say “No” a lot, especially to fund-raisers<br />Probably 1%<br />21<br />
  25. 25. What’s weird about this…<br />These numbers are probably about average<br />Generally “No” coming from smart, polite person<br />(Not always the case, so be careful)<br />Under 10% of founders really follow-up and stay after it<br />Lesson: build a plan to deal with “No”…<br />22<br />
  26. 26. Be A Meat-Eater<br />Speed <br />Swagger<br />Persistence<br />Follow-through <br />Showcase progress<br />23<br />
  27. 27. Hire Slow, Fire Fast<br />Hire Slow<br />Wait for real pain<br />Everyone interviews<br />Share feedback<br />Do reference checks<br />Dinner w/ SO<br />Fire Fast<br />When perf lags, speak up<br />Set clear expectations<br />Set a crisp timeline<br />Fire<br />Ensure lawyer is in loop<br />24<br />
  28. 28. Distribution<br />This is by far the weakest part of your business at this point<br />And, it is also one of the most important…<br />
  29. 29. Love It or Leave It<br />26<br />
  30. 30. Values & Value-Add<br />Values are key from day 1<br />Set them & talk about them constantly. <br />No “right” way to do this, but doing it is important<br />Value-Add is also a key from day 1<br />If someone stops pulling their weight, deal with it<br />27<br />
  31. 31. Fund-Raising & Pitching<br />
  32. 32. Logistics : Pre-Meeting<br />Arrive 15 minutes early every time<br />Have back-ups (2nd PC, Dongles, USBs)<br />Treat everyone you meet politely<br />Setup & preflight ppt & demo before meeting starts<br />Bring ideally 2-3 people<br />Remember: You are SELLING<br />
  33. 33. Logistics: During Meeting<br />Give everyone who attends a role<br />Script which person handles which slide(s)<br />Assign a scribe, every time<br />
  34. 34. Logistics: Q&A During Meeting<br />Often badly managed, and very important<br />Answer questions directly<br />Script answers on the obvious questions<br />How much are you raising?<br />How long does this last?<br />What beachhead markets do you think are most promising?<br />What holes exist in your team?<br />Why won’t Google, Facebook, Twitter, or someone else eat your lunch?<br />What makes you the right team to do this?<br />
  35. 35. Logistics: Post Meeting<br />Scribe: Write down all new QA for FAQ<br />Follow-up in email that dayw/ thanks, etc.<br />Do what you need to handle rejection<br />Keep positive & keep in touch<br />
  36. 36. Go To Resources<br />TechCrunch, VentureBeat, TechMeme, etc. <br />JoelonSoftware (MUST READ!!! Esp on functional specs)<br />Startup digest <br />Netflix on Culture<br />Compstudy.com<br />Igor International Naming Guide<br />Paul Graham’s blog. <br />http://www.startuplessonslearned.com/ (Eric Ries’ blog)<br />33<br />
  37. 37. Thanks!<br />34<br />

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