Hacker News London - 2012-06-27
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Hacker News London - 2012-06-27

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My presentation given to the HNLondon meetup on lessons learned from the failure of the first startup I co-founded, Radik Software.

My presentation given to the HNLondon meetup on lessons learned from the failure of the first startup I co-founded, Radik Software.

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Hacker News London - 2012-06-27 Hacker News London - 2012-06-27 Presentation Transcript

  • My First Startup Was A Failure Lessons Learned from Radik Software Kirk Wylie kirk@[opengamma|kirkwylie].com @kirkwy
  • Who Am I?Why Are You Listening To Me?• Started my career in Silicon Valley• Moved to London 8 years ago• Worked in pure tech, hedge funds, Ibanks• Co-Founder and CEO of OpenGamma
  • Shameless Plug Time• World’s first Open Source platform for quantitative finance – Trading, Risk Management – Data Management, Analytics Computation – APLv2 Licensed• Founded in 2009• $8.25MM investment (so far) – Accel Partners (London) – FirstMark Capital (New York)
  • February 2002 – I’m on holiday in Hong KongRadik decides to liquidate
  • The Radik Investment Thesis(Founded Feb 2000)• Open Source is huge RHAT, LINX have massive IPOs• MySQL is getting really popular It was (is?) a pile of garbage• Get smartest DB guys in Silicon Valley to build an Open Source RDBMS Target more sophisticated users than MySQL couldFeb2000
  • Founding Team• Kirk Wylie – CTO 23 year old Berkeley grad DB whiz kid• Roy Goldman – President 27 year old Stanford DB PhD candidate• The Other Guy – CEO? CFO? We thought we needed a “business guy”
  • Mistake #1: Don’t Be Too YoungWe’re not all Zuck, no matter what Pete Thiel and Paul Graham would have you believe
  • Mistake #2:Every co-founder needs to bringsomething concrete to the table Adding a co-founder to your team in an ill-defined role you don’t know you need is excess baggage you don’t want
  • Sweet, Sweet Angel Funding• Raised a 2x oversubscribed round Feb 2000 Raised $2MM at $10MM pre-money valuation• Darn impressive angels Ram Shriram (Google), Rajeev Motwani (Stanford), Greg Gretch (Sigma), etc.• Story was Simple: Build v1 $2MM was enough to build a fully functioning prototype ready for seeding to the marketFeb2000
  • 1.0 ReadyRadik Conceived
  • Enter: The Pivot• Situation: 1.0 ready, running low on money• Problem: Open Source stocks well out of favor with wall street• Solution: Let’s become an apps company!Feb Jan2000 2001
  • Mistake #3:When in doubt, ship it!Real organizations ship code.Even if it’s not your new focus, ship the code already!
  • Mistake #4: Pivot small, not big Make sure your pivot is withinyour investment thesis and core competencies
  • Mistake #5:Know what you’re pivoting to Don’t pivot to an amorphous area: make sure you know what you’re going to do before the pivot
  • Mistake #6:Get whole team buy-in for a pivot Don’t allow a long-term schism to develop between founders. Everybody needs to be convinced!
  • Mistake #7:Pivot based on evidence Don’t pivot on a hunch.Pivot on concrete evidence from multiple sources.
  • The Big Guns Come To TheTable• Story: We built what we said we’d build Money is for commercialization• Raised $10MM at $18MM Pre Led by Redpoint Ventures January 2001 – Post Bubble Burst• Grew the team dramatically in all areas We still didn’t know what app(s) we were buildingFeb Jan2000 2001
  • Mistake #8:Staff up when you know what you need Don’t add headcount just because other firms have. Know your precise needs before increasing burn.
  • Situation Mid-2001• We’re half-heartedly working on the DB• We still don’t know what app to build• Our burn rate is astronomical• Developers are inventing problems to stay busyFeb Jan Jun2000 2001 2001
  • Mistake #9:A new CEO won’t fix a broken company Executive team changes can be helpful but first determine what the problems are.
  • Mistake #10: Communicate strategyconsistently to everybodyInvestors, employees all need to be on the same page. Never give different stories.
  • Mistake #11:Board governance matters Have your lawyers involved with every board meeting and call.
  • The Valley of Darkness• “What are we building?”• “Do we have the right people to build/sell it?”• “Do we have enough money to build it?”• “Are we building the right precursor technology for whatever it is?”Feb Jan Jun2000 2001 2001
  • The Liquidation• We had an idea for an application• It required none of our existing technology or talent to build• We didn’t have enough money to get to cash-flow positive• Nobody wanted a down roundFeb Jan Jun Feb2000 2001 2001 2002
  • Mistake #12:Communicate future inflection points to executive team If there are major board decisions coming up, tell your executives. Hire adults and treat them as such.
  • The Aftermath• We returned 40% of the Series B investment The single best investment Redpoint made in 2001• All employees got jobs by the time we shut Google hired quite a few Alumni: Google, Facebook, LucidEra, HortonWorks, Duke University, VMWare, etc.• Kidar, the database, is in IP Purgatory No advantage in allowing its release Portions are now in LucidDB/EigenbaseFeb Jan Jun Feb Apr2000 2001 2001 2002 2002
  • 1. Don’t be too young2. Every co-founder needs to bring something concrete to the table3. When in doubt, ship it!4. Pivot small, not big5. Know what you’re pivoting to6. Get whole team buy-in for a pivot7. Pivot based on evidence8. Staff up when you know what you need9. A new CEO won’t fix a broken company10. Communicate strategy consistently to everybody11. Board governance matters12. Communicate future inflection points to executive team
  • Mistake #13: Don’t be wrongIt hurts when the company youwere founded to kill gets bought for $1Bn. Trust me.