Montreal Startup Camp 2011

My Mistakes.Some advice from a well-worn path. Startup Camp Montreal #7January 20, 2011
Perry Evans

I’m not a startup junkie.
I just reject working for someone else, or working on someone else’s ideas.
I could stop anytime.
If only I could turn off those little voices inside my head.

I hope I can help you deal a little better with your little voices.
Been where, done what?
Led raising of $80M in capital
$1.5B cumulative investor value creation
Closely, Inc.
A personal angel network
7-person team
Collaborative work space
A pristine cap table <insert angelic voices>

I started late on start-ups…
Marketing Mgr. for consumer trial.
Home shopping
Home banking
Online yellow pages
Interactive games
Product Management,
Enhanced Communication Services
Envoy 100
iNet 2000
Displayphone
VP/GM New Media
CD-ROM & Apple Newton
Travel, Local Directory

Behind every success…
I left MQ pre-IPO to do my own thing, leaving 2% unvested equity.
12 months later MQ exited to AOL for $900M, all vesting accelerated.
I exchanged a 6-month old 2-person start-up for 4% of a $80M public company.
I agreed to lock up my shares for 12 months: $6 > $24 > $2
I let a company shift from a product business into a services-driven business: customer driven, easy revenue
Reduced exit value and narrowed choices
I bought into the strategy of growth via acquisition
In most cases, this is an excuse for not fixing your current business
I didn’t force a shift from platform to application stack when a golden opportunity presented itself

Failure and success are intertwined.
Indecision and success are incongruent.

Missed opportunity is the biggest tragedy

To some degree your start-up
idea is fatally flawed.
Failure is imminent.
An entrepreneur’s job is to fix the idea and convert it into value.

VALUE
ACHIEVED
START-UP
DEVELOPING

the path to failure is on the exact same terrain as the path to success

Equipment for the journey
Your navigation dashboard
Adapting to the elements
ADAPT
NAVIGATE
EQUIP

People Are Your Equipment
EQUIP
The single biggest lever to value creation
Balance “known teams” and critical knowledge
Quality of attitude trumps
Share values

The [overlooked] Inner Circle
EQUIP
You will have moments of:
doubt & fear
personal exposure
You have to fearlessly lead the team, you are afraid to show weakness to investors, where do you turn?
Build your inner circle:
Mentors, Advisors, Independent Board Members

Your capital structure will determine the quality of your exit.
The terms of EVERY round impact your choices on the next one.
Take a moment of time to sanity test the relationship before you take money.
Disconnect the capital from the person on the other side of the table.
Don’t be embarrassed by what you don’t know. Don’t sign until you understand.
Love your lawyer.
Capital Equipment
EQUIP

Your Value Navigation Dashboard
NAVIGATE
A large share of start-up decisions are “off map”, unintentionally
Document the assumptions you’ve made that drive your value creation
Build your value dashboard, record your proxies
Write it on a piece of paper, and attach it to your monitor
Circle the 2-3 things you (down deep) worry about the most
Ruthlessly test and evaluate their achievement
Connect it to your resource priorities
Convert proxies to data

NAVIGATE
Consumers will check-in in great numbers when the right discount offers are available.
Proxies
Existing stats on check-in growth
People love deals, see GroupOn
The network effect of critical mass
Test:
Observe, track behavior at a dozen actual restaurants when deals are present
Iterate on how consumers get to know, dive into characteristics of best performance
Refine and optimize
Resource Connection
Define sweet spots for product priority
What if results don’t impact check-in behavior?

Customers
Competitors
Market Actions
Investors
Adapting to the Swirling Elements
ADAPT

ADAPT
Stubbornness and passion are not the same.
Proving yourself right is the enemy of value creation.
Center your team on agility.
Ears are the most attractive start-up body part.

Fast Failure & Pivoting
ADAPT
Make mistakes early, cheaply
Listen very closely
Absorb the input
Gather as much data as you can for your value dashboard before you ask for money
Don’t follow blindly, customer research is one verycritical signal, but not the only one.

ADAPT
Pivoting
A medicine for chest pain, sildenafil, was ineffective in treatment during the market trial, and exhibited certain side effects.

the incredible [& annoying] rightness of venture capital
ADAPT
Extract yourself, think for your business.
As annoying as it can be: listen, learn, adjust
They may not know your business, but you often ARE missing something.
Usually it’s on a critical value driver
Attractiveness of market
How you fit in the food chain
Ill-conceived go-to-market blueprints
Unproven or incomplete team
Exit visibility or practicality

Homework?
Audit yourself:
Check your equipment
Sketch out your value dashboard
Check how well your resources and priorities map to your value drivers
How well are your equipped for the journey
How well have you de-risked the deal for your investors?

Connect Anytime:
Follow: twitter.com/perryevans
Email: perry.evans@gmail.com

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Montreal Startup Camp 2011

by perryevans on Jan 22, 2011

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