The Business of (Tech) Startups featuring Paul Singh

The Business of (Tech) Startups
Paul Singh, Entrepreneur, Investor, & Speaker
@paulsingh
#HighAlphaIdeas
HIGH ALPHA SPEAKER SERIES
Thanks to our partners at

@paulsingh #RJTechTour
THE BUSINESS OF
(TECH) STARTUPS
MONEYBALL FOR STARTUPS. AND CITIES.

angel.co/paulsingh
twitter.com/paulsingh
old school: paul@resultsjunkies.com

WHY?
1. Technology is the fundamental driver of
growth in the industrialized world.And it’s
changing the way we work.
2. Private market investing is (one of) the few
remaining ways for the average person to
create significant wealth.

500 STARTUPS

I BOUGHT A TRUCK.
AND AN AIRSTREAM.

2016 TECH TOUR
Tallahassee, FL
Vancouver, BC
Kelowna, BC
Shreveport, LA
Pittsburgh, PA
Tulsa, OK
Los Alamos, NM
LasVegas, NV
Lincoln, NE
Waterloo, ON
Helena, MT
Syracuse, NY
Columbus, OH
And 17 more…
more info: www.resultsjunkies.com/tech-tour

more info: www.resultsjunkies.com/tech-tour

API TO VENTURE CAPITAL
& FUNCTIONAL EXPERTISE
THE BIG OPPORTUNITY IN EARLY STAGE TECH INVESTING:
(FOR FOUNDERS. FOR INVESTORS. FOR GOVERNMENT.)

TECHNOLOGY IS THE
FUNDAMENTAL DRIVER OF
GROWTH IN THE
INDUSTRIALIZED WORLD

OPPORTUNITIES HAVE NEVER BEEN GREATER

MOBILE IS EATING THE WORLD

INNOVATION WILL COME FROM VENTURE CAPITAL

MONEYBALL FOR STARTUPS
IT’S NOT SPRAY AND PRAY. IT’S A PROCESS.

EARLY STAGE STARTUPS
HAVE CHANGED

STARTUP COSTS
LOWER THAN EVERBUT SCALING STILL COSTS MONEY
CLOUD, OPEN SOURCE AND ONLINE DISTRIBUTION DRIVING

September12,2014

WEB GETS BIGGER.
WORLD GETS SMALLER.

TRACTION IS THE NEW
INTELLECTUAL PROPERTYPLATFORMS (SEARCH, SOCIAL & MOBILE) PRIMARILY DRIVING THE CHANGE.
NO LONGER “GOOD ENOUGH” TO DEPEND ON TECH DIFFERENTIATION.

CAPITAL
INCREASINGLY
COMMODITIZEDRISE OF THE ANGELS, YO!

NEW REALITY:
MONEY FOLLOWS
FOUNDERS
RISE OF THE ENTREPRENEURS, YO!

SIGNALS ARE
EVERYWHERE
BIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

TRANSPARENCY IS
SIGNALS ARE
EVERYWHEREBIG DATA + OPEN SOURCE ANALYTICS = NEW TECHNIQUES FOR VC

WALL STREET
BEAT US TO IT

UBS PROPRIETARY
SATELLITE PARKING LOT
FILL RATE ANALYSIS
POINTS TO AN
INTERESTING CADENCE
INTRA-QUARTER AND
POTENTIAL UPSIDE TO
OUR VIEW.
“

TWICE A WEEK A SMALL
HELICOPTER CIRCLES
OVER CUSHING’S TANK
FARMS ON AN OIL
INDUSTRY SPYING
MISSION.
“

WALL STREET
ISN’T ALONETHESE TECHNIQUES ALREADY USED TO UNDERWRITE IN-VITRO
FERTILIZATION LENDING, PAYDAY LOANS, SUBPRIME AUTO LENDING,
HOME/PERSONAL/AUTO INSURANCE AND MORE.

WE CAN DO IT, TOOSURPRISE!
IT TURNS OUT,

+ “GUT” + TRUSTED MENTORS + MUCH, MUCH MORE DATA.

WE CAN DO IT, TOO.

WE’RE DOING IT, TOO.

VENTURE CAPITAL IS
OPEN TO ATTACK BY
DISRUPTIVE NEW
BUSINESS MODELS AND
TECHNOLOGY.
“
-- NAVAL RAVIKANT (@naval)

MONEYBALL FOR CITIES
START MORE COMPANIES. WATCH YOUR FUTURE JOBS APPEAR.

ECONOMIC
DEVELOPMENT
HAS CHANGED

THE AGE OF THE
INDUSTRIAL CITY
IS OVER

NOW POSSIBLE TO BUILD
BILLION DOLLAR
COMPANIES IN T-SHIRTS
FROM A COUCH

FROM ANYWHERE*

MORE THAN TRADITIONAL INDUSTRIES, THE
KNOWLEDGE ECONOMY HAS AN INHERENT
TENDENCY TOWARDS GEOGRAPHIC
AGGLOMERATION. IN THIS CONTEXT, INITIAL
ADVANTAGES MATTER, AND THE FUTURE
DEPENDS HEAVILY ON THE PAST.
THE SUCCESS OF A CITY FOSTERS MORE
SUCCESS, AS COMMUNITIES THAT CAN
ATTRACT SKILLED WORKERS AND GOOD
JOBS TEND TO ATTRACT EVEN MORE.
“
-- ENRICO MORETTI

NEAR PERFECT
CORRELATION BETWEEN
URBANIZATION AND
PROSPERITY

NEAR PERFECT CORRELATION
BETWEEN PRESENCE OF SMALL
FIRMS AND THE LATER
GROWTH OF A REGION*

PROXIMITY IS
VALUABLE

TECH COMPANIES WILL
NEVER CREATE THE
MAJORITY OF JOBS

TECH COMPANIES HAVE A
DISPROPORTIONATELY
POSITIVE EFFECT ON THE
ECONOMY

WHAT HAPPENS IN THE TECH
SECTOR DETERMINES THE
SALARY OF MOST PEOPLE,
WHETHER THEY WORK IN
TECH OR NOT

ALTHOUGH JOBS IN LOCAL SERVICES
CONSTITUTE THE VAST MAJORITY OF JOBS,
THEY ARE THE EFFECT, NOT THE CAUSE, OF
ECONOMIC GROWTH.
“
-- ENRICO MORETTI

MODERN ECONOMIC DEV
PEOPLE > STRUCTURES

KEY IDEA
GET MORE PEOPLE TO
*START* COMPANIES

A FEW IDEAS...

(500) CHECKLIST
Product solves a problem for a specific target customer
Capital-efficient businesses - operational @ <$1M funding
Primarily internet-based distribution - search, social, mobile, local
Simple revenue models - transactions, subscriptions or affiliate
Functional prototype before investment (or previous success)
Small but measurable usage - some customers, early revenue
Small but cross-functional team - engineer, design/UX, marketing

Demo DayVideos ⟹ livestream.com/500startups
Sample Pitch Decks ⟹ slideshare.net/500startups
Venture Capital 101 ⟹ venturehacks.com/archives
Investor Thoughts:
Brad Feld ⟹ feld.com
Fred Wilson ⟹ avc.com
Chris Dixon ⟹ cdixon.org
Mark Suster ⟹ bothsidesofthetable.com
angel.co/valuations and angel.co/salaries

LOOK AT WHAT OTHER CITIES
ARE DOING (AND COPY THE
RELEVANT PARTS)

INVESTORS:
INVEST OUTSIDE YOUR
REGION, BRING THE BEST
FOUNDERS TO YOUR CITY

HUGE OPPORTUNITY
AT THE POST-SEED,
PRE-A LEVEL

EVEN MORE TAKEAWAYS
Focus on Traction.
Learn to Communicate and Inspire.

ALSO...
Distribution > Product
Tactics > Strategy
Notability > Credibility
Get on AngelList
Raise 12-18+ months of funding
Learn the basics of VC economics
Don’t confuse due diligence with progress & probability...
Shameless plug: resultsjunkies.com

The Business of (Tech) Startups
Paul Singh, @paulsingh
Kristian Andersen, @kristianindy
#HighAlphaIdeas
HIGH ALPHA SPEAKER SERIES
Thanks to our partners at

The Business of (Tech) Startups featuring Paul Singh

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