Best Strategy Is Speed (Startup2Startup May 2008)

  • 81,613 views
Uploaded on

"SPEED: The Ultimate Startup Weapon", presented by Mike Cassidy to Startup2Startup entrepreneur dinner (May 2008)

"SPEED: The Ultimate Startup Weapon", presented by Mike Cassidy to Startup2Startup entrepreneur dinner (May 2008)

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
No Downloads

Views

Total Views
81,613
On Slideshare
0
From Embeds
0
Number of Embeds
44

Actions

Shares
Downloads
0
Comments
8
Likes
152

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Speed As THE Primary Business Strategy Mike Cassidy
  • 2. Speed Brings Great Advantages
    • Rapid product rollout/updates makes it extremely difficult for competitors to gain traction against you (2 weeks vs. 18 months)
    • Rapid success builds strong team morale (which leads to more success)
    • Rapid success generates more PR (which leads to more revenue, strategic partnerships, key hires, etc.)
    • Fast growth drives higher company valuations when fundraising or using equity for strategic deals
    June 3, 2009 Confidential and Proprietary
  • 3. Typical Start-up Timeline? June 3, 2009 Confidential and Proprietary Explore ideas 3 months? Raise money 3 months? Hire core team & open office 2-3 months? Build product 12 months? Initial marketing / awareness-building / early customers 3-6 months? “ Launched” = 23-27 months?
  • 4. Lightning Speed Start-up Timeline June 3, 2009 Confidential and Proprietary Explore ideas 2 wks Raise money 1 day Hire core team & open office 2 wks Build product 3 months “ Launched” = 4 months
  • 5. Example 1: Stylus Innovation
    • Stylus Innovation: Computer telephony software
    • Entrenched competitors
      • Owned 95% of market with DOS-based tools
      • 300 customers/year per competitor
    • Visual Voice
      • 1st Windows based tool, Visual Basic custom control
      • 3,000 shipped in 1st year
      • Dominant market player within 6 months of Visual Voice launch
    June 3, 2009 Confidential and Proprietary Sold 2 years after launch for $13M (10,000x founders investment)
  • 6. Example 2: Direct Hit
    • Direct Hit: Internet search engine
    • Entrenched competitors
      • Owned 95% of market (AltaVista, Excite, Infoseek, Lycos, Yahoo)
      • Used traditional text-based inverted index algorithms
    • Direct Hit
      • 1st search engine based on tracking user voting (like Digg, YouTube, etc.)
      • Provided search for AOL (ICQ), Microsoft, Lycos, etc.
      • AOL deal within 5 months of company start
    June 3, 2009 Confidential and Proprietary Sold 500 days after launch for $500 million
  • 7. Example 3: Xfire
    • Xfire: Instant messenger for PC videogamers
    • Entrenched competitors
      • Owned 95% of market (AIM, Yahoo Messenger, MSN Messenger)
      • Focused on traditional IM (not gaming)
    • Xfire
      • 1st IM to track and connect videogamers
      • Grew virally from 100 users to 3 million in 2 years
      • Dominated market segment within 5 months of “Xfire” start
    June 3, 2009 Confidential and Proprietary Sold just over 2 years after launch for $110 million
  • 8. Speeding Up All Parts of Startup
    • Fundraising
    • Opening an office
    • Hiring
    • Getting new employees started
    • Product development
    • Business development
    • Marketing/PR
    • Changing direction
    June 3, 2009 Confidential and Proprietary
  • 9.
    • Fundraising
    June 3, 2009 Confidential and Proprietary
  • 10. Speed and Capital
    • Stylus: $1,500 initial capital; no VC
    • Direct Hit: $1.3M (DFJ) – through launch, HotBot, AOL, Apple spent $400K; through MSN, Lycos spent another $600K
    • Xfire: $1M Series A
    June 3, 2009 Confidential and Proprietary Biz school: Single, consistent strategy; not “ lowest cost and best customer service,” etc.
  • 11. Raising VC Money Quickly
    • What are the best ways to raise VC money quickly?
    June 3, 2009 Confidential and Proprietary
  • 12. Four Keys to Raising VC Money Quickly
    • Raise when conditions in your favor
      • Direct Hit Series A: 1998, portals growing rapidly
      • Direct Hit Series B: as AOL deal is closing
      • Direct Hit Series C: as MSN/Lycos deals are closing
      • Xfire Series C: Social networking “hot”, steep growth curve established
    • Get all decision makers in room
    • Synchronize timing of competing VC offers
    • Bring “if/then” contracts with customers to your VC meeting
    June 3, 2009 Confidential and Proprietary
  • 13.
    • Opening an Office
    June 3, 2009 Confidential and Proprietary
  • 14. Every Day, Every Hour, Every Minute Counts June 3, 2009 Confidential and Proprietary 4/21 8:15am pitch DFJ; 4:30pm get term sheet; dev team gives notice at current jobs 4/22 Fly back to Boston 4/23 Negotiate lease on office space; order Dell computers 4/24 Order network software, phone system, office alarm system, DSL, office LAN/phone wiring 4/27 Incorporate, set up bank account, Paychex, desks/chairs 4/28 Source control software, property insurance 4/29 Hardware arrives, set it up 4/30 Set up LAN, phones, desks 5/4 Open office, first day team has been hired, have C++, email, PC, LAN, payroll, etc. (13 days after term sheet received)
  • 15.
    • Hiring
    June 3, 2009 Confidential and Proprietary
  • 16. Think Speed in Everything You Do
    • Experience level:
      • Stylus : 4 sr. product managers (5+ years) -> CEO, VP Eng, VP Mkt, VP Sales
      • Direct Hit : 5 th product manager ->VP Eng; 10 year dev; 15 year dev
      • Xfire : 10 year dev; 10 year dev; 10 year dev
    • Known talent:
      • Stylus : 13 out of first 15 had worked with before
      • Direct Hit : 12 out of first 15 had worked with before
      • Xfire : 2 out of first 3 top devs came from absolutely trusted source
    • Close:
      • Group huddle during last interviewer
      • Offer letter ready before interviewee arrives
      • Make offer on same day
    June 3, 2009 Confidential and Proprietary
  • 17.
    • Getting New Employees Started
    June 3, 2009 Confidential and Proprietary
  • 18. Speed Starts the First Day a New Hire Arrives
    • What do YOU do when a new employee comes on board?
    June 3, 2009 Confidential and Proprietary
  • 19. Speed Starts the First Day a New Hire Arrives
    • Before the first day
      • Give her material to read the day she accepts the job
      • Give mundane “first day” paperwork before arriving
    • First day
      • Absolutely have desk, phone, email account, etc., set up in advance
      • Absolutely have goals/projects/deliverables written down; give to new hire immediately
    June 3, 2009 Confidential and Proprietary Set tone for speed
  • 20.
    • Product Development
    June 3, 2009 Confidential and Proprietary
  • 21. Which Is Faster?
    • A. Incremental development. Build 1 module/feature at a time and then launch. Add features as you go. Figure out over time what features users want and then try to add them.
    • OR
    • B. Spec your product CAREFULLY. Make sure you do great customer research! Hit the market with a rich, compelling product because you only get ONE first impression. If the product is lame, people will never come back.
    June 3, 2009 Confidential and Proprietary
  • 22. Journey of a Thousand Miles Begins with a Single Step
    • Stylus Innovation
      • Visual Voice 1.0 let people build a 2-line IVR system
      • Added digital 32-line capability within 6 months (plus fax, a dozen other features)
      • 3.5 months from “go” to launch
    • Direct Hit
      • Patented algorithm included two dozens variables (time spent at a URL, related searches, time of year)
      • Launched with small subset of this feature set
      • 3.5 months from “go” to launch
    • Xfire
      • Launched with 2 features: presence detection and 1-click join
      • Added a new feature every 2 weeks 1st year and every 3 weeks 2nd year
      • 3.5 months from “go” to launch
    June 3, 2009 Confidential and Proprietary
  • 23.
    • Business Development
    June 3, 2009 Confidential and Proprietary
  • 24. Biz Dev Deals – Fast or Never
    • “ Probability of a deal ever closing declines by 10% each day it doesn’t close”
    • Use calendars/maps with “limited supply”
      • Sponsorships for July, Aug, and Oct already sold…
      • Map of USA with certain regions already controlled by competitors
    June 3, 2009 Confidential and Proprietary
  • 25.
    • Marketing/PR
    June 3, 2009 Confidential and Proprietary
  • 26. Fastest Way To Get the Word Out?
    • PR is faster than Marketing
    • Stylus
      • No marketing budget
      • Editorial in CT Mag (including cover)
    • Direct Hit
      • No marketing budget (until Q4 ’99)
      • Cover of Industry Standard
    • Xfire
      • No marketing budget
      • Extensive coverage in Fortune, CNN, GameDaily, Forbes, WSJ, USA Today, Marketwatch, Wired, Red Herring, SJ Mercury, etc.
    June 3, 2009 Confidential and Proprietary
  • 27.
    • Changing Direction
    June 3, 2009 Confidential and Proprietary
  • 28. If Something Is Broken, Fix It - Immediately
    • Stylus Innovation
      • Original name = “Dial-a-Fish”
      • Changing the way Americans shop for groceries, with $1500 in capital
      • Decision to change to Visual Voice took less than 2 weeks
      • Once decided, 100% of company effort immediately shifted
    • Xfire
      • Original name = “Ultimate Arena”
      • Play to win $$
      • Decision to change to Xfire took less than 2 weeks
      • Once decided, majority of company effort immediately shifted
    June 3, 2009 Confidential and Proprietary