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#FounderHacks by Raj Kapoor - cofounder.co

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  • 1. #FounderHacksRaj KapoorFounder & Managing Director, cofounder.coVenture Partner, Mayfield Fund Investing in Relationships
  • 2. #TrendingTopics Lessons from Snapfish What Investors Look For Silicon Valley or Not? cofounder.co
  • 3. The Snapfish story
  • 4. Role models are critical
  • 5. The Aha Moment Household Internet Connections (M) 20 15 10 Cable ADSL Total Broadband 5 0 1998 1999 2000 2001 2002
  • 6. Build people networks
  • 7. Know when to cut the cord;timing matters
  • 8. Cofounders recommended–fill the gaps Product/Ops Leadership/Product BD/Schmoozing Tech w/ Business
  • 9. Early it’s 100% funding,product & recruiting
  • 10. Raise money wheneveryou can... ...either before launch or way after
  • 11. The harsh reality of themarketplace 3200 2560 The Snapfish Solution: 1920 Free Processing Customers 1280 640 4/3/2000 4/30/2000 5/7/2000 5/21/2000 5/28/2000
  • 12. The harsh reality of themarketplace 3200 2560 The Snapfish Solution: 1920 Free Processing Customers 1280 640 4/3/2000 4/30/2000 5/7/2000 5/21/2000 5/28/2000
  • 13. Dealing with failure300 iVillage The Street.Com225 The Globe Marketwatch Priceline Etoys Drugstore150 Egghead Ashford75 0
  • 14. Hunker down, pivot &hope to catch a wavePresent Future
  • 15. When it’s working, step on it50,000,00037,500,00025,000,00012,500,000 0 00 01 01 02 03 04 04 2Q 1Q 4Q 3Q 2Q 1Q 4Q
  • 16. Another tough butfortunate choice Investing in Relationships
  • 17. Capitalize on luck & timing
  • 18. Top 10 takeaways from Snapfish
  • 19. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it
  • 20. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut
  • 21. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious
  • 22. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident
  • 23. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident 5. Sell what THEY want, not what YOU want
  • 24. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident 5. Sell what THEY want, not what YOU want 6. Hire people better than you
  • 25. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident 5. Sell what THEY want, not what YOU want 6. Hire people better than you 7. You’re always raising money
  • 26. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident 5. Sell what THEY want, not what YOU want 6. Hire people better than you 7. You’re always raising money 8. Hypothesize, get to market quickly, iterate often
  • 27. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident 5. Sell what THEY want, not what YOU want 6. Hire people better than you 7. You’re always raising money 8. Hypothesize, get to market quickly, iterate often 9. Plan, but be open to change
  • 28. Top 10 takeaways from Snapfish 1. Don’t wait for inspiration – grab it 2. Data only goes so far; invest in your gut 3. Passion is infectious 4. Be crisp and confident 5. Sell what THEY want, not what YOU want 6. Hire people better than you 7. You’re always raising money 8. Hypothesize, get to market quickly, iterate often 9. Plan, but be open to change 10. Balance IS possible (well, sometimes)
  • 29. What investors are looking for
  • 30. Tectonic shifts createopportunity Mobile Video Social UGC Search
  • 31. Other big trendsConnected TVs Professionals Platforms Services Marketplace(Similar to mobile with the iPhone) (Individuals become the brand)Ecommerce is New Relationship Education Disruptedmainstream in BRIC Graphs
  • 32. Two Consumer Founder TypesDisruptive New Media Destinations• Youthful founders • Experienced founders• Product driven • Execution-driven• Network effects • Marketplace model• Viral loops • Organic traffic• Broad based adoption –  advantage 100M+ user scale • Highly monetizable• Momentum vs black swan vertical
  • 33. B2B/Infrastructure criteria
  • 34. B2B/Infrastructure criteria• Experienced internet-focused team
  • 35. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin
  • 36. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment
  • 37. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• Grass roots sales model
  • 38. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• Grass roots sales model • Open source, social media, sell to employees
  • 39. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• Grass roots sales model • Open source, social media, sell to employees • Avoid the CIO
  • 40. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• Grass roots sales model • Open source, social media, sell to employees • Avoid the CIO• Provides immediate benefit or cost reduction
  • 41. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• 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
  • 42. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• 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
  • 43. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• 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”
  • 44. B2B/Infrastructure criteria• Experienced internet-focused team• Pain killer vs vitamin• Frictionless deployment• 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”• Recurring revenue business
  • 45. Looking for great founders
  • 46. Looking for great founders• They know or know of them WELL via network
  • 47. Looking for great founders• They know or know of them WELL via network• Product/user obsession
  • 48. Looking for great founders• They know or know of them WELL via network• Product/user obsession• Founders who can code and move quickly
  • 49. Looking for great founders• They know or know of them WELL via network• Product/user obsession• Founders who can code and move quickly• Deep understanding of business, metrics and product
  • 50. Looking for great founders• They know 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
  • 51. Looking for great founders• They know 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
  • 52. Looking for great founders• They know 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• Know what an A+ player looks like
  • 53. Looking for great founders• They know 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• Know what an A+ player looks like• Don’t need a perfect CEO, but need to be “self aware”
  • 54. General tips pitching VCs
  • 55. General tips pitching VCs✓ Know your TAM – bottoms up
  • 56. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic?
  • 57. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?
  • 58. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product savvy
  • 59. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product savvy✓ Is there a true competitive advantage vs execution?
  • 60. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product savvy✓ Is there a true competitive advantage vs execution? ✓ Show network effect or why model is disruptive vs incremental to incumbents
  • 61. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product 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
  • 62. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product 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 it’s early stage
  • 63. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product 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 it’s early stage✓ Control the process and timing
  • 64. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product 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 it’s early stage✓ Control the process and timing ✓ Create relationships with VCs well in advance of fundraise
  • 65. General tips pitching VCs✓ Know your TAM – bottoms up ✓ Is $100M revenue realistic? ✓ Is VC or angel funding better?✓ Proof team is business & product 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 it’s early stage✓ Control the process and timing ✓ Create relationships with VCs well in advance of fundraise ✓ Try to get everyone on the same timetable
  • 66. Silicon Valley..... or not?
  • 67. 46% of VC dollars in Q2 went to Silicon Valley (Only 12% went to the second place)
  • 68. 75%75% of ALL venture returns are in Silicon Valley
  • 69. The good
  • 70. The good • Change the world vs make a buck
  • 71. The good • Change the world vs make a buck • Pay it forward vs look out for yourself
  • 72. The good • Change the world vs make a buck • Pay it forward vs look out for yourself • Massive information advantage
  • 73. The good • Change the world vs make a buck • Pay it forward vs look out for yourself • Massive information advantage • People-driven transactions
  • 74. The good • 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
  • 75. The good • 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
  • 76. The good • 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
  • 77. The good • 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 • Not just a location; it’s a mindset
  • 78. The ugly
  • 79. The ugly• Cost of living
  • 80. The ugly• Cost of living• Talent war
  • 81. The ugly• Cost of living• Talent war• Relationship driven*
  • 82. The ugly• Cost of living• Talent war• Relationship driven* • *unless you have amazing momentum
  • 83. The ugly• Cost of living• Talent war• Relationship driven* • *unless you have amazing momentum• Weather...... NOT!
  • 84. The bottom line
  • 85. The bottom line• Silicon Valley if:
  • 86. The bottom line• Silicon Valley if: • You are thinking BIG
  • 87. The bottom line• Silicon Valley if: • You are thinking BIG • You like swimming with SHARKS
  • 88. The bottom line• Silicon Valley if: • You are thinking BIG • You like swimming with SHARKS • Product/service EXCELLENCE matters
  • 89. 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
  • 90. 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
  • 91. What is Cofounder.co?
  • 92. What’s missing?
  • 93. What’s missing?• Entrepreneurs looking for help, not just money
  • 94. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs
  • 95. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder
  • 96. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder• Time is more precious than capital for the best
  • 97. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder• Time is more precious than capital for the best• Where do they get time, experience and deep help?
  • 98. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder• Time is more precious than capital for the best• Where do they get time, experience and deep help? • 100+ key decisions every year
  • 99. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder• Time is more precious than capital for the best• Where do they get time, experience and deep help? • 100+ key decisions every year • Provide help longer than 3 months
  • 100. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder• Time is more precious than capital for the best• Where do they get time, experience and deep help? • 100+ key decisions every year • Provide help longer than 3 months • Expertise to avoid mistakes
  • 101. What’s missing?• Entrepreneurs looking for help, not just money • Accelerators, incubators, angels, mentors/advisors, VCs • 95% of entrepreneurs want a cofounder• Time is more precious than capital for the best• Where do they get time, experience and deep help? • 100+ key decisions every year • Provide help longer than 3 months • Expertise to avoid mistakes The time is right for a new model...
  • 102. The solution
  • 103. The solution• Standardize part-time cofounder role
  • 104. The solution• Standardize part-time cofounder role • Time & experience for critical decisions
  • 105. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max
  • 106. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only
  • 107. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only• Deep relationships
  • 108. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only• Deep relationships • Capital, talent, partnerships & exits
  • 109. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only• Deep relationships • Capital, talent, partnerships & exits • Curated service provider to help right away
  • 110. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only• Deep relationships • Capital, talent, partnerships & exits • Curated service provider to help right away• Alignment as cofounder vs investor
  • 111. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only• Deep relationships • Capital, talent, partnerships & exits • Curated service provider to help right away• Alignment as cofounder vs investor• Minority vesting equity – skin in the game
  • 112. The solution• Standardize part-time cofounder role • Time & experience for critical decisions• Day a week cadence – 4-5 companies max• Experienced founder/CEO/investors only• Deep relationships • Capital, talent, partnerships & exits • Curated service provider to help right away• Alignment as cofounder vs investor• Minority vesting equity – skin in the game• Join at point of cofounder decision
  • 113. If you joined a hands-on model, whatinvolvement would you expect? Factor Avg. Rank (out of 12) Top 3 Ranking Finding talent 3.90 52% Getting to product/market fit 4.38 45% Product and Business Strategy 4.50 45% Financing 5.48 25% User Acquisition and marketing 5.57 12% Introductions and network building 6.21 10% Sales and business development 6.62 32% CEO/mgmt team mentorship 6.98 24% Hiring process 7.29 10% Prioritizing objectives 7.95 3% Being an active board member 9.36 32% Helping make an Exit Happen 9.76 10%
  • 114. Which factors are the most important when looking for a cofounder? Overall Very Important Somewhat Not Factor Rating Important Important Important (4) (3) (2) (1)Commitment to startup 3.90 93% 5% 2% 0%Complimentary skill set 3.78 83% 12% 5% 0%Align with my vision 3.59 64% 32% 5% 0%They think strategically 3.25 37% 50% 13% 0%The network they bring 3.12 31% 50% 19% 0%Technical abilities 3.05 29% 50% 19% 2%Amount of relevant experience 2.98 25% 47% 28% 10%Their credibility/reputation 2.71 22% 29% 46% 3%Willing to invest their own money 2.48 17% 29% 41% 14%I am or can be friends with them 2.46 12% 34% 41% 12%Worked together in the past 2.41 19% 27% 29% 24%
  • 115. Long term vision
  • 116. Long term vision• Build network of top notch operators/investors
  • 117. Long term vision• Build network of top notch operators/investors• Some full time, some part-time
  • 118. Long term vision• Build network of top notch operators/investors• Some full time, some part-time• Pool equity to give fund economics
  • 119. Long term vision• Build network of top notch operators/investors• Some full time, some part-time• Pool equity to give fund economics• Take it global
  • 120. Long term vision• Build network of top notch operators/investors• Some full time, some part-time• Pool equity to give fund economics• Take it global Embed an unfair advantage alongside the best entrepreneurs
  • 121. Founders I’m looking for
  • 122. Founders I’m looking for• Awesome in all ways except experience/network
  • 123. Founders I’m looking for• Awesome in all ways except experience/network• Evidence of excellence in your life
  • 124. 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
  • 125. 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
  • 126. 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
  • 127. 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
  • 128. 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 company in SV
  • 129. 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 company in SV• Open to spending quality time together first
  • 130. Thank youwww.cofounder.cofounders@cofounder.co

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