Puerto Rico Venture Forum 2009 Keynote

MISSION: Austinpreneur Joshua Baer Founder & Managing Director @joshuabaer Sunday, December 20, 2009

Today ! My entrepreneurial journey ! $500,000 is the new $5,000,000 ! Capital Factory ! Startup Lessons ! Talk about your idea ! Fail Quickly ! Distribution is harder than development Sunday, December 20, 2009

Austin a great city for tech startups ! Youngest city, growing fast ! University of Texas ! Strong economy and job pool ! Low cost of living ! Outdoor lifestyle, creative class Sunday, December 20, 2009

Austinpreneur Austin Entrepreneur ! Texas ! Creativity ! Education ! Control my destiny ! Live Music ! Create jobs ! Capitalist Hippies ! Create value ! Geeks ! Create wealth Sunday, December 20, 2009

Sunday, December 20, 2009

Family Jack Resnick Sam Baer Al Alter Robert Baer Grandfather Grandfather Great Uncle Father Retail Store Owner Retail Store Owner Apparel Company Photographer Linda Baer Cindy Baer Amy Mathews Mother Sister Sister Wedding Invitations Actress & Movie Producer Catering Sunday, December 20, 2009

1,000+ jobs Sunday, December 20, 2009

The Rules Changed ! Open Source ! Cloud Computing ! New Distribution Channels ! Facebook ! Twitter ! iTunes App Store Sunday, December 20, 2009

“$500,000 is the new $5,000,000” Mike Maples, Jr. Maples Investments Sunday, December 20, 2009

The Rules Changed ! More is expected of entrepreneurs ! Not just an idea ! Working prototype ! Feedback from real customers ! Get as far as you can without money Sunday, December 20, 2009

Case Study: Traﬃc Spike 125,000 400 100,000 300 75,000 200 50,000 100 25,000 0 0 Sep 1, 2009 Sep 8, 2009 Sep 15, 2009 Sep 22, 2009 Sep 29, 2009 Oct 6, 2009 Oct 13, 2009 Users Servers Sunday, December 20, 2009

Lets do the math ! 300 servers x $3,000 each = $900,000 ! 300 servers x 2 hours each = 2 months ! Hardware maintenance = at least 1 FTE ! Software? ! What else? Sunday, December 20, 2009

Funding Gap 1980 1990 2000 2010 2020 $$$ Entrepreneurs need $$$ VC’s want to invest * take this with a grain of salt, it is meant for illustrative purposes only. Sunday, December 20, 2009

Now is the time ! It’s always best to start at the bottom ! Turmoil means opportunity ! The fluff gets weeded out ! Average venture lifespan is 7 years ! Lots of capital looking for a home Sunday, December 20, 2009

(3 minute video) Sunday, December 20, 2009

up to $20,000 in cash ! Not valuation setting ! You decide how to spend it ! Quit your day job ! Keep it lean * Exact amount based on # of founders Sunday, December 20, 2009

$20,000 in free stuff (probably closer to $50k, but who’s counting?) Sunday, December 20, 2009

20 mentors ! Customers ! Partners ! Investors ! Employees ! “Scar tissue” Sunday, December 20, 2009

10 week program ! Weekly group mentoring event ! One-on-one office hours with mentors ! Demo day at the end ! Focus on cash flow ✓ First customers ✓ Angel or VC funding Sunday, December 20, 2009

Who did we pick? ! Cubit Planning ! Famigo Games ! Hourville ! PetsMD ! Sparefoot and why? Sunday, December 20, 2009

Who didn’t we pick? ! Not a good fit for the mentors ! Not ready to commit ! Not receptive to feedback ! No technical co-founder ! Great idea, wrong team ! Lots of great ideas, but no focus Sunday, December 20, 2009

2009 Curriculum ! Fail Quickly: You are ! Cheerleaders: 1% of wrong. Start acting like your customers could it. be 90% of your success. ! Rivers of Revenue: Building a marketing ! Business Development machine. for Startups ! Converting Sign-ups to ! Mentor Roundtable: your website Regrets and Lessons ! Raising Money ! Mentor Roundtable: Hiring and Firing Sunday, December 20, 2009

Demo Day ! 300 investors and entrepreneurs ! Keynote by Mike Maples, Jr. ! Presentations by 5 companies ! Panel discussion with VC’s ! Standing room only ! Energized Austin entrepreneurship Sunday, December 20, 2009

Startup Lessons Sunday, December 20, 2009

Talk about it “Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.” – Yoda, Star Wars Sunday, December 20, 2009

Fail Quickly ! Your idea is probably wrong ! The only way to find out how it’s wrong is to get feedback from real customers ! It usually takes many, many iterations ! The faster you iterate, the faster you get to “right” Sunday, December 20, 2009

Distribution ! Building it is the EASY part ! Getting anyone to do anything is hard ! Don’t “figure that out later” ! Partnerships can help ! Previous relationships can help Sunday, December 20, 2009

Angel Returns ! Angel investors want to find the next Google, not the next small business ! Think 10x returns, not 30% ! Think big and small ! Paint the vision for how this can get big ! Then focus on how you get the first $$$ Sunday, December 20, 2009

Valuations ! Valuation doesn’t matter ! Focus on control and board seats ! 51% of the company doesn’t matter ! 2 out of 3 board seats matters Sunday, December 20, 2009

Most advice is BS ! In an ideal world... ! But you’re not in that world. ! Most entrepreneurs don’t have options ! A lot of deals are “take it or leave it” ! If you want leverage, you need to have termsheets from more than one VC Sunday, December 20, 2009

Your Mission ! Get Puerto Rico excited about entrepreneurship ! Consider entrepreneurship for you ! Talk to others about your ideas ! Talk to me on Twitter @joshuabaer ! Apply for EnterPRize Competition ! Apply for Capital Factory ! Focus on the opportunity, not the idea ! Don’t give up! Sunday, December 20, 2009

My Mentors Brett Hurt @bazaarbrett ! Founder & CEO, Bazaarvoice ! Founder & former CEO, Coremetrics Kip McClanahan @kipmcc ! Former CEO, Tipping Point ! Former President, Motive ! Founder & former CEO, BroadJump Sunday, December 20, 2009

More information ! http://austinpreneur.com ! http://www.capitalfactory.com ! http://www.youtube.com/capitalfactory ! info@capitalfactory.com ! @capitalfactory on Twitter Sunday, December 20, 2009

Puerto Rico Venture Forum 2009 Keynote

by Joshua Baer on Dec 20, 2009

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Puerto Rico Venture Forum 2009 Keynote — Presentation Transcript

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