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Five Questions You Must Answer Today   Richard Rosenblatt   Startonomics La 2009
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Five Questions You Must Answer Today Richard Rosenblatt Startonomics La 2009

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  • One of the things I really enjoy is spending time with other entrepreneurs talking about start-up life. And because of some of the high profile success I’ve had with deals like iMall and MySpace – I get a approached by a lot of entrepreneurs looking for advice. At the moment, I am currently teaching a course on New Media at UCLA with Peter Gruber – and this is another place that these kinds of questions come up. But today I decided to turn the tables a bit – and ask you guys the questions. These are questions that I haven’t always had good answers for in previous start-ups, but in retrospectiturn out to be more important than just about anything else that determines start-up success.

Transcript

  • 1. Five Questions You Must Answer Today Richard Rosenblatt CEO and Founder Demand Media
  • 2. Q1.) Why Are You Doing This ?
  • 3. A. Because I am in love with this idea What does this kind of passion look like ?
  • 4. I’m passionate about lots of things…
    • Elements I focus on:
    • Consumer products that are made possible by the Internet
    • Models that leverage and exploit the network effect
    • Media models that can be reinvented
    • Opportunity to work with amazingly smart people
    • Ability to make money for my investors, teams, and friends
    None of these are why I like to start companies
  • 5. My passion is Self-Publishing 1994 2003 2007
  • 6. Q2.) Do you have the best crew?
  • 7. Your Crew is Bigger than You Think Founders Executive Staff Board of Directors Service Providers Investors Functional Staff Advisory Board Don’t settle on any of these groups; pick the best
  • 8. Q3.) Who Will You Take Money From ?
  • 9. Anyone
  • 10. It Really Pays To Think This Through Savings Account Friends & Family Angels Strategic Partner Early Stage VC Later Stage VC Private Equity Venture Debt Distinguishing Characteristics Compatibility Sector experience Temperament Explicit Value Fund position
  • 11. Q4.) What is Plan B for Your Company?
  • 12. Things Rarely Go According to Plan Many start-ups have to run a broken play
  • 13. Program in “Optionality”
    • Know “what else” this could become
    • Always be testing alternative things
      • Business models; segments; product offerings
    • Let passionate staffers pursue their pet ideas
    • Good place to use partners
    • Killing these off is OK too…
  • 14. Q5.) What Outcome Do You Want ?
  • 15. A.) The right one
    • King of my hill.
    • Colbeck
    • HillClimb Media ($10mm)
    • $300k bootstrap
    Get what the market gives you. Panos Pluck ($70mm) $17m VC raise Go big or go home. Rosenblatt Demand Media (Outcome TBD) $355m PE raise
  • 16. Many Factors Will Play A Role in the Answer
    • Timing
    • Size of the idea
    • Financial partners
    • Quality of the team
    • Stamina
    • Your spouse
    Be honest – and organize accordingly
  • 17. Let’s Review the Test
    • Why are you doing this?
    • Do you have the best crew?
    • Who would you take money from?
    • What is Plan B for your company?
    • What outcome do you want?