Challenges In The Startup Ecosystem - Stanford Innovation Group (March 2010)

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Challenges In The Startup Ecosystem - Stanford Innovation Group (March 2010)

  1. 1. Challenges in Startup Ecosystem<br />For Stanford Innovation Group<br />3/29/2010<br />
  2. 2. Why am I talking?<br />Co-Founder of [Startup Digest]<br />20k+ subscribers in less than 3 months <br />Insight into 32 local startup hubs worldwide <br />
  3. 3. Unsolved Problems in Ecosystem<br />VC<br />Branding problem<br />VC Math Problem<br />Platform exits<br />Startups<br />Co-Founder matching problem<br />Speed to monetization<br />Mentor advisor problem <br />
  4. 4. VC<br />
  5. 5. VC: Branding Problem<br />Source: http://www.entrepreneur.com/vc100/stage/early.html<br />
  6. 6. VC: Branding Problem<br />
  7. 7. VC: Math Problem<br />VC’s paid thru (2%) mgmt fee + carry<br />Incentive to be larger = $<br />Risky so 3x gross returns. Ie $600m fund needs to generate $1.8b return<br />Investor owns on avg 20% of company<br />Assume most companies will fail (7/10)<br />Need to assume $1b+ exits <br />Source: http://www.avc.com/a_vc/2009/04/the-venture-capital-math-problem.html<br />
  8. 8. VC: Math Problem<br />Source: http://paul.kedrosky.com/archives/2006/03/22/no_more_billion.html<br />
  9. 9. VC: Math Problem<br />Point: Traditional VC is<br />a hard game.<br />
  10. 10. VC: Platform Exits (tangential)<br />Creating industries vs. Platform Exits<br />New focus on $50-$150m deals <br />Platform buys working model then adds distribution <br />New focus product risk, minimize customer risk, relationships with acquirers <br />
  11. 11. Startups<br />
  12. 12. Startups: Co-Founder Matching Problem<br />Consistently most clicked items in Digest<br />No real market solution out their right now<br />Source: http://entrepreneurialactivism.com/2010/03/25/the-co-founder-matching-problem/<br />
  13. 13. Speed to Monetization<br />You have $25k investment per founder. <br />At $2k a month that’s 12 months <br />NOT including travel, dev, exp, etc<br />
  14. 14. Speed to Monetization<br />We need to think of creative business models<br />Subscriptions<br />Transactions<br />Job Boards<br />Events<br />T-Shirts<br />ETC<br />
  15. 15. New Words to Live By<br />"Make money don't stop.“<br /> <br />- Krutal Desai, aka "Brutal with a K"<br />
  16. 16. Mentor/Advisor Problem<br />Mentors and Advisors are the most consistently asked question <br />How do you find great mentors with experience in your space? <br />Operational vs. Experiential advice <br />No market mechanism for this <br />
  17. 17. Contact / Q&A<br />How to I come up with a business idea?<br />How do I get more involved at Stanford?<br />Where can I meet cool people?<br />Best sources for funding?<br />Contact: Chris@thestartupdigest.comTwitter: @cmccann7Signup at: www.thestartupdigest.com<br />Have you heard of Startup Waffles?<br />Why should I go to in person events?<br />What are some of the most exciting platforms?<br />How do I meet a business co-founder<br />How do I get people to use my product?<br />

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