Aaron Patzer - How to Take Your Start-up to the Next Level
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Aaron Patzer - How to Take Your Start-up to the Next Level

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Aaron successfully grew Mint.com from a small bootstrapped team to a large team that was acquired for $170M. In this session Aaron shared how he knew it was time to raise venture capital and grow his ...

Aaron successfully grew Mint.com from a small bootstrapped team to a large team that was acquired for $170M. In this session Aaron shared how he knew it was time to raise venture capital and grow his team aggressively. He also shared important lessons he's learned which you can directly apply to your business, whether you're raising venture capital or not.

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  • - Elevator pitch: Give Mint pitch - A LARGE market (at least $1b potential): Counter point - college classifieds. Convinced Matt to give up 40% for 2%. - Real revenue potential: Put us ahead of 95% of our competition - Sustainable advantage: patents, expertise, first mover advantage
  • (Size in millions) Auto: Cars $750K Financial Services Banking $250K Payday Advance $10K Real Estate: Real Estate (including MTG) 1250K Insurance: Ins. - Auto 9K Ins.- Life, Health 500K Ins.- Property-Casualty 415K Services: Public Storage 43K Tours, Cruises 20K Law 160K Home Impr. Contractors 340K Communications: Satellite/Cable 55K Mobile Phone/Long Dist. $200K
  • - Most companies hire haphazardly: Nascentric "How did you feel about him?" - Train yourself to hire: TopGrading - Hire better than you...then let them work: Sometimes still surprised these people work for me. Also helps fund raising - your job as CEO is hiring the right team and choosing the right market.
  • - Started blog to build ecosystem: More traffic than leading competitor - Private beta builds demand: Got 30k email addresses before day 1 - Use exclusivity: "I want Mint!" badges on hundreds of blogs, SEO, free acquisition - Gives you valuable user feedback: Hardest thing ever, like being kicked in the chest
  • - Venue: TechCrunch 40 - Aggressive press is key - hire an agency: Best customer acquisition, builds brand, and far less expensive - Have a presence: We rented a room, served Mint mojitos to all. --> Mint wins!

Aaron Patzer - How to Take Your Start-up to the Next Level Presentation Transcript

  • 1. Aaron Patzer, Founder & CEO [email_address] February 23, 2010 How to take your startup to the next level Idea to $170m exit in three years +
  • 2. Aaron = Geek … with accounting skills Duke: EE / Comp. Sci. Princeton: PhD Dropout Financial + Managerial Accounting
  • 3. 3 Phases of Startup Life
    • 1. Garage (<$100k)
      • Validate an idea
      • Create a prototype
    • 2. Seed (<$1m)
      • Launch an alpha product
      • Trial customers
    • 3. Funded (>$1m)
      • Scale system
      • Scale users
      • Scale revenue
  • 4. Garage: Rapidly Validate an Idea
    • Original Idea: Goal setting software
    • Money component resonated...
    • Talked to 50-80 people (don’t be secretive)
  • 5. Garage: Goal = Prototype
    • Prototype development
    • Idea
    • Market Research
    • Business Plan
    Pre-revenue Valuation: +$500k / engineer -$250k / business guy
  • 6. Result: Mint UI in July 2006
  • 7. Garage  Seed: Raising Funds
    • Solve a real problem
    • In a large market
    • Real revenue potential
    • Sustainable advantage
  • 8. Seed: Proving revenue… before you have any
    • Revenue projections will be bullshit (see below)
    • Per transaction / per user rev is more important
    • And a huge market opportunity…
    2007 2008 2009 2010 $1m $10m $50m
  • 9. Mint - Money Intelligence Competition: Quicken & LowerMyBills
    • Difficult to use
    • Costs money: $30-70
    • Does not save or make user money
    •  4 of 5 quit within one month
    • Save money, but…
    • Manually search for deals
    • No insight into your finances
    Original Mint late 2006 slide Consumers
  • 10. Lead-Gen & CPA Opportunity: $30+/user/yr Original Mint 2007 slide Category Where on Mint CPA Revenue Frequency Of Action User Adoption Rate (%) = Goal Rev User / Year  Credit Score WTS $36 2 yr 20% $3.60  Credit Cards WTS $60 2 yr 10% $3.00  Check/Save WTS $30 2 yr 10% $1.50
    • IRA
    Center $100 3.5 yr 5% $1.40
    • Brokerage
    Inv/WTS $200 Once 5% $2.00  CDs WTS $30 Once 10% $0.60 Daily Savings Txn $1.50 1 mo 20% $3.60 Insurance WTS $15 2 yr 10% $0.75 Comm. Services WTS $50 2 yr 10% $2.50 Mortgage Refi. WTS $200 Once 5% $2.00 Travel Goals $50 2 yr 10% $2.50 Home Improve Goals $200 Once 5% $2.00 Edu & 529 Goals $200 Once 5% $2.00 = $30
  • 11. Business Model: Referrals & Lead Generation
    • 7% of $16B online ad market
    • Fastest growing ad segment
      • Up 160% from 2004 to ’05 (Source: IAB)
    • $1.0B in mortgage lead-gen, to triple by 2008 (Experian)
    Mint - Money Intelligence Original Mint late 2006 slide 20 – 65 M x $30 = $0.6 – 1.8 B User base Rev/user/yr Mint Opportunity Advertisers
  • 12. Seed Result: Mint Alpha Seed Result: UI in April 2007
  • 13. Funded: Scaling People
    • Most hire haphazardly
    • Train yourself to hire
    • Hire better than you…then let them work
  • 14. Funded: Beta  Big Launch
    • Started blog ecosystem
    • Private beta builds demand
    • Use exclusivity
    • User feedback is key!
  • 15. Beta Product: Jul – Sep 2007
  • 16. Funded: The Big Launch!
    • Venue: TechCrunch 40
    • Aggressive PR – hire an agency
    • Have a presence
    •  Mint wins!
  • 17. Mint Today