Founding A Tech Startup       by Raj Kapoor   Founder & Managing Partner, cofounder.co        Venture Partner, Mayfield Fund
Trending Topics : ) • Lessons from Snapfish • What Investors Look For • Silicon Valley or Not? • cofounder.co
The Snapfish StoryRole Models Are Critical – especially early on…
The Snapfish StoryBuild Networks first…sometimes by chance…                      Household Internet Connections (M)       ...
The Snapfish StoryKnow when to cut the cord…timing does matter
The Snapfish Story  Cofounders are recommended – fill the gaps Product/Ops                       Leadership/ProductBD/Schm...
The Snapfish StoryEarly – Its 100% Funding, Product, and Recruiting
The Snapfish StoryRaise Money (yes $36M) Whenever You Can….
The Snapfish Story                  The Harsh Reality of the Marketplace…                                       Projected ...
The Snapfish Story                                              Dealing With Failure….300250                              ...
The Snapfish StoryHunker Down, Pivot…and Hope to Catch A Wave
The Snapfish Story                                                  When Its Working…Step On It50,000,00045,000,00040,000,...
The Snapfish StoryAnother Tough But Fortunate Choice…
The Snapfish StoryCapitalize on Luck and Timing…
10 Takeaways from Snapfish1.   Don’t Wait for Inspiration – Position So It Falls on Your Head2.   Data Changes and Its Nev...
What Investors Look For
Waves of Disruption Create Opportunity                                                   Mobile                           ...
Other Big Trends• Connected TVs   – Similar to mobile disruption in 2007 with the iPhone• Professionals Platforms   – Indi...
Two Types of Consumer BusinessesDisruptive New Media             Vertical Destinations• “Youthful” Founders            •  ...
B2B/Infrastructure Criteria• Experienced Internet-focused Team• Pain Killer vs Vitamin• Frictionless deployment   – SaaS, ...
Looking for Great Founders • They know them or know of them WELL via network • Product/user obsession • Founders who can c...
General Tips Pitching VCs• Know your Real TAM – Bottoms Up   – Is $100M revs realistic?   – Is VC or Angel funding better?...
Silicon Valley Or Not?
The Good46% of VC dollars in Q2 went to        Silicon Valley (Only 12% went to the second place – here)
The Good75% of ALL returns in venture are in           Silicon Valley
The GoodMindset vs Location• Change the World vs make a buck• Pay It Forward vs look out for yourself• Massive information...
The Ugly• Cost of Living• Talent War• Relationship-driven*   * unless you have amazing momentum• Weather….NOT!
The Bottom Line Silicon Valley if….• You are thinking BIG• You Like Swimming with SHARKS• Product/Service Excellence matte...
What’s cofounder.co?
What’s Missing?• Entrepreneurs Looking for help – not just money   • Accelerators, incubators, angels, mentors advisors, V...
The Solution• Standardize part-time cofounder role   • time and experience for the critical decisions• Day A Week cadence ...
Long Term Vision  • Build Network of top notch operators/investors  • Some full time, some part-time  • Pool equity to giv...
Founders I’m Looking For• Awesome in all ways except experience/network• Evidence of Excellence in your life• Ambition to ...
Thank You!  www.cofounder.cofounders@cofounder.co
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Founding tech co talk

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This is a talk by Raj Kapoor (Founder & Managing Partner of www.cofounder.co and Venture Partner, Mayfield Fund) that he presented at MIT and Harvard. It's best accompanied by voice over but you can get the gist of it from the slideshow.
The talk is about:
1) The Snapfish story - lessons learned
2) What VCs look for from internet/mobile entrepreneurs
3) Should you base your company in Silicon Valley
4) How the new cofounder.co model will work

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  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • 75% of inc 500 founders started their company in a different city than their last degree46% of VC dollars in Q2 went to silicon valley - vs second best at 12% (new england)75% of ALL returns in venture business in bay areaHow much do you know about the market?SV – mindset vs just a locationFollow Mark’s lead – faster and smarterPay It Forward – way of lifeNormal is to do a startupStart anywhere, scale hereSuccess breeds success“if you just move to silicon valley, all this will be solved”How to succeedWhyThe Ugly
  • Founding tech co talk

    1. 1. Founding A Tech Startup by Raj Kapoor Founder & Managing Partner, cofounder.co Venture Partner, Mayfield Fund
    2. 2. Trending Topics : ) • Lessons from Snapfish • What Investors Look For • Silicon Valley or Not? • cofounder.co
    3. 3. The Snapfish StoryRole Models Are Critical – especially early on…
    4. 4. The Snapfish StoryBuild Networks first…sometimes by chance… Household Internet Connections (M) 20 15 10 5 0 1998 1999 2000 2001 2002 Cable ADSL Total Broadband
    5. 5. The Snapfish StoryKnow when to cut the cord…timing does matter
    6. 6. The Snapfish Story Cofounders are recommended – fill the gaps Product/Ops Leadership/ProductBD/Schmoozing Tech w/ Business
    7. 7. The Snapfish StoryEarly – Its 100% Funding, Product, and Recruiting
    8. 8. The Snapfish StoryRaise Money (yes $36M) Whenever You Can….
    9. 9. The Snapfish Story The Harsh Reality of the Marketplace… Projected Snapfish New Customers 3500 3000 2500 The SnapfishNew Customers 2000 1500 Solution: Free 1000 Processing 500 0 4/23/2000 4/30/2000 5/7/2000 5/14/2000 5/21/2000 5/28/2000
    10. 10. The Snapfish Story Dealing With Failure….300250 iVillage The S treet.Com200 The Globe Marketwatch150 Priceline Etoys100 Drugstore Egghead50 Ashford 0 11/1/1999 2/1/2000 5/1/2000 8/1/2000 11/1/2000
    11. 11. The Snapfish StoryHunker Down, Pivot…and Hope to Catch A Wave
    12. 12. The Snapfish Story When Its Working…Step On It50,000,00045,000,00040,000,00035,000,00030,000,00025,000,00020,000,00015,000,00010,000,000 5,000,000 0 00 00 01 01 02 02 03 03 04 04 Q Q Q Q Q Q Q Q Q Q 2 4 2 4 2 4 2 4 2 4
    13. 13. The Snapfish StoryAnother Tough But Fortunate Choice…
    14. 14. The Snapfish StoryCapitalize on Luck and Timing…
    15. 15. 10 Takeaways from Snapfish1. Don’t Wait for Inspiration – Position So It Falls on Your Head2. Data Changes and Its Never Enough – Invest In Your Gut3. Passion is Infectious – You Gotta Really Have It4. Be Crisp and Confident When Selling5. Sell What They Want, Not What You Want6. Hire People Better Than You7. You’re Always Raising Money8. Hypothesize, Get To Market Quick, Iterate Often9. Plan, But Be Open to Change10. Balance IS Possible (well, sometimes)
    16. 16. What Investors Look For
    17. 17. Waves of Disruption Create Opportunity Mobile Video Social Networking UGC Search PortalsEcommerce
    18. 18. Other Big Trends• Connected TVs – Similar to mobile disruption in 2007 with the iPhone• Professionals Platforms – Individuals become the brands vs organizations• Services Marketplaces• E-Commerce as mainline commerce in BRIC• New Relationship Graphs• Education Disrupted
    19. 19. Two Types of Consumer BusinessesDisruptive New Media Vertical Destinations• “Youthful” Founders • Experienced Founders• Product Driven • Execution driven• Network effects • Marketplace Model• Viral loops for customer • Organic Traffic Advantage acquisition • Highly Monetizable Vertical• Broad based adoption - 100M+ user scale• Momentum vs Black Swan
    20. 20. B2B/Infrastructure Criteria• Experienced Internet-focused Team• Pain Killer vs Vitamin• Frictionless deployment – SaaS, few lines of javascript, widgets, ad tags• Grass Roots Sales Model – open source, social media, sell to employees – Avoid the CIO• Provides immediate benefit or cost reduction• Leverages new features of internet – Data targeting, social, video, RTB, mobile• Future Platform opportunity vs. “Feature/Tool”• Recurring revenue business
    21. 21. Looking for Great Founders • They know them or know of them WELL via network • Product/user obsession • Founders who can code and move quickly • Deep understanding of business, metrics, and product • Big vision AND solid execution • Well connected to get talent, advice, etc • Demonstrate they know what an A+ Player Looks Like • Don’t need perfect CEO – but need to be “self aware”
    22. 22. General Tips Pitching VCs• Know your Real TAM – Bottoms Up – Is $100M revs realistic? – Is VC or Angel funding better?• Proof Team is Product and Business Savvy• Is there a true competitive advantage vs execution? – Show network effect or why model is disruptive vs incremental to incumbents• Map out Serial Risk Reduction• Raise at least 18 months of capital if its early stage• Control The Process and Timing – Create relationships with VCs well in advance of fundraise – Try to get everyone on same timetable
    23. 23. Silicon Valley Or Not?
    24. 24. The Good46% of VC dollars in Q2 went to Silicon Valley (Only 12% went to the second place – here)
    25. 25. The Good75% of ALL returns in venture are in Silicon Valley
    26. 26. The GoodMindset vs Location• Change the World vs make a buck• Pay It Forward vs look out for yourself• Massive information advantage• People-driven transactions• Talent has DNA to Go Big and Scale• Competition to Push You Hardest• Product Rules
    27. 27. The Ugly• Cost of Living• Talent War• Relationship-driven* * unless you have amazing momentum• Weather….NOT!
    28. 28. The Bottom Line Silicon Valley if….• You are thinking BIG• You Like Swimming with SHARKS• Product/Service Excellence matters• You Have the Relationships – or – momentum• You like good weather and wine : )
    29. 29. What’s cofounder.co?
    30. 30. What’s Missing?• Entrepreneurs Looking for help – not just money • Accelerators, incubators, angels, mentors advisors, VCs• Time is more precious than capital for the best• Where do they get time, experience, and deep help? • 100+ key decisions every year! Time is Right for a New Model…..
    31. 31. The Solution• Standardize part-time cofounder role • time and experience for the critical decisions• Day A Week cadence – 4-5 co’s max• Experienced founder/CEO/investors only• Deep relationships • capital, talent, partnerships & exits• Alignment as cofounder vs investor• Minority vesting equity - skin in the game• Join at point of cofounder decision
    32. 32. Long Term Vision • Build Network of top notch operators/investors • Some full time, some part-time • Pool equity to give fund economics • Take it GlobalAngel.co for money - for a partner
    33. 33. Founders I’m Looking For• Awesome in all ways except experience/network• Evidence of Excellence in your life• Ambition to create a massive disruptive company• Strong Desire to be CEO but self-aware• Product obsessed builders fit best• Passion for a sector, not wed to a solution• Started anywhere but move to build co in SV• Open to spending quality time together first
    34. 34. Thank You! www.cofounder.cofounders@cofounder.co

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