Geoff Allen on Startups

Geoff Allen on Startups Mistakes, Learnings and other Musings www.ziplist.com

Attitude First www.ziplist.com

Build Companies on Fundamentals “Built to Flip” •  Crazy, irrational valuations are anomalies –  For every YouTube and Bebo, there are innumerable of money-losing, hype-driven failures •  Just focus on building a great business –  Based on a solid business model with long-term earnings potential www.ziplist.com

Use (and love) your Own Offerings •  Use it as a consumer –  Don’t make excuses for your own products •  Don’t be afraid to scrap components –  Nothing is sacred •  If you don’t who will? –  If you can’t, ﬁnd someone who isn’t afraid to be critical www.ziplist.com

Don’t (always) Listen to your Customers •  After all, you’re the entrepreneur –  If they knew better, they would have invented it themselves www.ziplist.com

Beware of Glamour •  “Rock Star” execs –  Trust but conﬁrm •  “Sexy” customers aren’t always great customers –  Be careful what you give away…It could be the market (precedent) •  Awards are a tactic –  Important, yes – but not the end goal www.ziplist.com

Listen to Analysts/Media with a Grain of Salt •  Again, you’re the entrepreneur –  If you believe an analyst knows the market better than you do, you’re in real trouble •  They are called “stories” for a reason –  Write your own www.ziplist.com

Be Capital Ef cient •  Know your core competency –  Focus, focus, focus on that •  Make quick, small bets –  Iterate quickly before scaling –  Data wins •  Invest in Great People •  Outsource everything else –  HR/Payroll (Administaff), Hosting (Amazon), Mail/Docs (Google), Bugs/Schedule (Jira/ Pivotal), Accounting (Quickbooks Web), 800# (PhonePeople), etc. •  Capital = stored choices www.ziplist.com

Clean Cap Table & Balance Sheet •  Avoid early pitfalls –  Trading equity for professional services –  Poor (or no) shareholder agreements; messy/unclear rights –  Arbitrary ownership stakes –  Lack of documentation –  Lots of individual angels (use an LP) •  Important to be “investment easy” –  Don’t underestimate the value of being easy to ﬁnance –  Investors have only so much time www.ziplist.com

Know that Dilution & Value are not Equal •  Don’t’ be dogmatic –  The focus is on value •  Control rests with those who generate success –  This is irrespective of ownership •  IPOs are dilutive by nature –  Bring on the dilution! www.ziplist.com

Understand your Investors’ Businesses •  They have investors, too –  They are in a speciﬁc asset class – know it •  They don’t want to run the company –  So don’t fret about it –  Investors want ﬁnancial leverage, not to be operators •  #1 Goal – Keep your interests aligned –  Understand their objectives, expectations, timelines and capital reserves •  Not all investors are alike www.ziplist.com

Mediocrity leads to “The Living Dead” •  Indecision is the Enemy –  Slow decision is worse than no decision •  Often from unclear bets –  Unmeasurable, murky feedback •  Failure is a temporary state –  Just another data point •  “The Living Dead” –  Won’t succeed, but won’t fail www.ziplist.com

Be Honest & Open •  “I don’t know” is OK –  That’s why you have a team •  You only have one reputation –  The market is ruthless •  Investors are on your side –  “Good news, bad news, just give me the news” www.ziplist.com

Thank You! www.ziplist.com

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Geoff Allen on Startups

by Joe Medved on Sep 19, 2010

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Geoff Allen on Startups — Presentation Transcript