Silicon Valley 2.0: The Lean VCPresentation Transcript
Silicon Valley 2.0 The Lean VC Dave McClure http://500startups.com ( @DaveMcClure ) London – Sept 2011 http://slideshare.net/dmc500hats Re-Inventing Venture Capital through Innovation, Incubation, & Iteration
Changes in Tech & VC
Platforms = Distribution + Monetization ( not Tech)
Social (Facebook, Twitter, LinkedIn, YouTube)
Mobile (Apple, Android)
Venture Capital = Fewer, Smaller Funds (<$100M)
Decline of Large Funds (> $250m), except for HUGE ONES (>$1B).
Birth of “Super Angel” / “Micro-VC” seed funds (<$100M)
Market Changes: a Few Big IPOs (>$1B), Lots of Small Acquist’ns (<$250M)
Incubators, Metrics = Many Small Experiments (most FAIL )
Y-Combinator, SeedCamp, 500 Startups
The “Lean Startup”, Design/UX, Distribution
Lots of Little Bets; Incremental Investment
Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome
A cquisition: users come to site from various channels
A ctivation: users enjoy 1 st visit: " happy ” experience
R etention: users come back , visit site multiple times
R eferral: users like product enough to refer others
R evenue: users conduct some monetization behavior
(note: If you ’re in a hurry, Google “Startup Metrics” & watch 5m video) AARRR !
AARRR! : 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds
One Step at a Time.
Make a Good Product : Activation & Retention
Market the Product : Acquisition & Referral
Make Money : Revenue & Profitability
The “Lean” VC: Lots of Little Bets, Incremental Investment
Method : Invest in lots of startups using incremental investment, iterative development. Start with many small experiments, filter out failures, and expand investment in successes… ( Rinse & Repeat) .