Wave Theory of Startups: Braving the funding, sales and hype cycles
Report
Share
•
5 likes•10,602 views
Different parts of the startup ride - sales, funding and hype - follow cycles. While the overall startup journey is high risk and high reward, these three cycles are predictable in many startups and always in the most valuable. Entrepreneurs can position for success in these cycles by knowing what to expect.
Wave Theory of Startups: Braving the funding, sales and hype cycles
•
5 likes•10,602 views
Report
Share
Different parts of the startup ride - sales, funding and hype - follow cycles. While the overall startup journey is high risk and high reward, these three cycles are predictable in many startups and always in the most valuable. Entrepreneurs can position for success in these cycles by knowing what to expect.
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Wave Theory of Startups: Braving the funding, sales and hype cycles
Similar to Wave Theory of Startups: Braving the funding, sales and hype cycles (20)
Recently uploaded
Recently uploaded (20)
Wave Theory of Startups: Braving the funding, sales and hype cycles
- 1. Wave Theory of Startups @guyhturner
- 2. Why “wave theory”? Get ready for abstraction 2 Waves are repeatable and predictable … … so are startups!!! (at least the valuable ones)
- 3. Universal startup truth: Time is oxygen 3 Innovate, test, sell………. QUICKLY!!!!
- 4. Law 1: 18 month runway cycles in three acts with your fluctuating excitement 4 Act 1 Execute Plan A Act 2 Execute Plan B Act 3 Raise more $ Sign TS 18 Mos Sign TS for next round Hire!!! Fire!!! 6 Mos 12 Mos Figure it out YourExcitement Kind of like dramatic arc…!!!
- 5. Law 2: hype = f’(your excitement) 5 Seed Series A Series B Hype maximized when your excitement is changing the most – in upswing because others see you talk, hire, talk, hire… Max hype
- 6. Law 3: sales is a cycle too 6 Qualify RFP, Proposal Document ContractValue(ACV) Time (sales cycle) Win! Sales repeatability and predictability drive outsized value in startups
- 7. Customer size and software type drive sales cycle ACV and length 7 EnterpriseSB MB Infrastructure (database, stack) Systems (ERP, Acctg) Revenue (CRM, marketing)
- 8. Software that generates revenue is twice as easy to sell and often stickier than cost reducing software This is why we focus on revenue creating SW… speed matters Core Seed Marketing Technology 8 Sales Enablement
- 9. Law 4: runway must be >> than sales cycle 9 FAILURE SUCCESS!!! Thelma & Louise
- 10. What’s an entrepreneur to do? 10
- 11. 11 Design,lifeandsalescycles Compression of adoption and sales cycle Pick your vertical carefully Very hard to compete as a startup in long design cycle, life cycle and/or sales cycle industries. Example: Ford is going to integrate your product into their next model… 2 years from now. How do you survive in the mean time ?!?!
- 12. Raise a longer runway! 18 months 30 months Find patient investors or hug a strategic investor You must raise enough runway to have time for a Plan A and a Plan B. This doubles your chances of success for only 5-10% more dilution!
- 13. Underprice and sell SMBs first á laACV Small Biz Medium Biz EnterpriseThen Then Over time, seek larger fish
- 14. Raise money when hype > performance 14 Seed Series A Series BStory telling Bad early evidence Plan “B” works Better evidence Plan “A” fails Replace VP Sales Scaling works Hype is more volatile than performance. Investors like performance, but hype creates scarcity and investor action.
- 16. 16 A quick bit about HPVP and me Happy to chat any time16 •Twitter: @guyhturner •Blog: vcwithme.co •Mgmt Consultant •Angel •Engineer •Twitter: @hydeparkvp •Seed or Series A, $1-4M rounds •Early-stage SW at $0-2M rev rate •Midwest focus