Presentation at Wharton West


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Presentation at Wharton West

  1. 1. Startup & Venture Lessons Jay Jamison Venture Partners, BlueRun | @jay_jamison | CONFIDENTIAL
  2. 2. Agenda Introduction Top 10 Lessons Q&A CONFIDENTIAL
  3. 3. Introduction Employee Founder Investor CONFIDENTIAL 3
  4. 4. About BlueRun Ventures• Over $1.0B under management• Investing out of Fund IV ($240M)• Focus: Mobile & consumer internet• Seed & Series A CONFIDENTIAL 4
  5. 5. Stuff that surprised me• Having nearly 10 years at MSFT didn’t matter at all.• Having an MBA from Wharton mattered even less.• Both were seen as basically negatives.• But, several of the skills from both really helped. CONFIDENTIAL 5
  6. 6. Top 10 Startup Lessons1. Today’s Golden Age For Founders & Its Double-Edge Sword.2. What’s #1: Markets, Team, or Product?3. Picking Co-Founders & How to Split the Baby.4. The “Whatever Works” Principle5. Getting used to “No,” and Being a Meat Eater6. Hire Slow, Fire Fast7. Distribution is Really Hard & Really Important8. If You Stop Loving It, Make a Change.9. Values and Value Add10. Pitching & Fund-Raising11. My go-to resources CONFIDENTIAL 6
  7. 7. Lesson 1:It’s a Golden Age for Entrepreneurs…. Cheaper than ever to start a company. Better resources • Incubators: Y-Combinator, 500Startups, … • Resources: Startup Digest, Lean Startup, TC, VB Technology is easier to learn, access, &c. • Codecademy • RoR • AWS CONFIDENTIAL
  8. 8. … And Investors Understand This. I see lots of great companies that are: • Capital efficient • High velocity in coding and releasing • Product in market with traction • Clear customer insight on what works • Battle-tested founding teams • Clear, concrete ask on what $$$ they need CONFIDENTIAL
  9. 9. Implication While we’re in a Golden Age for Entrepreneurs, it is raising the bar for most very early stage companies… You need to prove more on verylittle money, because so many other start-ups are already doing so. CONFIDENTIAL
  10. 10. Lesson 2:What’s #1: Markets, Team, or Product? Which is most important?A.MarketB.ProductC.Team CONFIDENTIAL
  11. 11. Which is most important?A.MarketB.ProductC.Team CONFIDENTIAL
  12. 12. Analysis• 75 pitches / quarter Market• 0-2 get to term sheet Team• Score each Traction• Multiple regression Product CONFIDENTIAL 12
  13. 13. How I think about MarketsChoose Any 4 Companies, Stack Rank Vision • World’s largest store • Redefine social • Organize & access information • Reinvent money Your Company • ???? CONFIDENTIAL
  14. 14. How I think about MarketsChoose Any 4 Companies, Stack Rank Vision • World’s largest store • Redefine social • Organize & access information • Reinvent money • Teach English to children everywhere CONFIDENTIAL
  15. 15. Lesson 3:Picking Co-Founders & Equity SplitWhat a tech founder needs in a business co-founder…• Someone who sells what you build• Someone who can do all the important stuff that’s not coding• Leadership and vision• Potentially you can raise money, while you code.What a business co-founder needs in a tech co-founder…• Someone who writes code and gets technical stuff done, and who ideally understands how to hire and expand the technical team over time.• Technical chops, CS/EE degree• Nice to have: a track record building stuff• Very nice to have: Ideas on how to hire devs CONFIDENTIAL 15
  16. 16. Finding a Technical Co-FounderMore important than fund-raisingRequires almost the same skills• Pitching and salesmanship• Capacity to speak enough geek• Resourcefulness CONFIDENTIAL 16
  17. 17. Default founder split: equal 33% 33%50% 50% 33% CONFIDENTIAL 17
  18. 18. Lesson 4: The Whatever Works PrincipleYou never get a second chance to If you’re not embarrassed with your make a first impression. – Anon. first launch, you’re waiting too long. – Reid Hoffman Lean StartupRevenue from Day 1 Never stealth! Building for Scale Scrum Everything Inhouse Offshore Minimum Viable Product StealthCo HTML5 Native Apps Customer Development CONFIDENTIAL 18
  19. 19. Whatever WorksYou never get a second chance to make a first impression. – Anon. If you’re not embarrassed with your My Advice & Learning: you’re waiting too long. – first launch, Reid Hoffman • Absorb all this stuff Lean Startup • Listen to people you trustRevenue from Day 1 Never stealth! • Use what works Building for Scale for you Scrum Everything Inhouse • The key is work fast & economically Offshore Minimum Viable Product StealthCo HTML5 Native Apps Customer Development CONFIDENTIAL 19
  20. 20. Lesson 5:Get Used to NoAs Founder: Heard “No” a lot, especially fund-raising• At least 150 times• From 5 different countriesAs an Investor: I say “No” a lot, especially to fund-raisers• Probably 1% CONFIDENTIAL 20
  21. 21. What’s weird about this…• These numbers are probably about average• Generally “No” coming from smart, polite person(Not always the case, so be careful)• Under 10% of founders really follow-up and stay after it• Lesson: build a plan to deal with “No”… CONFIDENTIAL 21
  22. 22. Be A Meat-Eater• Speed• Swagger & optimism• Persistence• Follow-through• Showcase progress CONFIDENTIAL 22
  23. 23. Lesson 6:Hire Slow, Fire FastHire Slow Fire Fast• Wait for real pain • When perf lags, speak up• Everyone interviews • Set clear expectations• Share feedback • Set a crisp timeline• Do reference checks • Fire• Dinner w/ SO • Ensure lawyer is in loop CONFIDENTIAL 23
  24. 24. Lesson 7:Distribution, distribution, distribution This is by far the weakest part of your business at this point And, it is also one of the most important… CONFIDENTIAL
  25. 25. Love It or Leave It CONFIDENTIAL 25
  26. 26. Lesson 9Values & Value-AddValues are key from day 1• Set them & talk about them constantly.• No “right” way to do this, but doing it is importantValue-Add is also a key from day 1• If someone stops pulling their weight, deal with it CONFIDENTIAL 26
  27. 27. Lesson 10Thoughts on Fund-Raising CONFIDENTIAL
  28. 28. Logistics : Pre-Meeting • Arrive 15 minutes early every time • Have back-ups (2nd PC, Dongles, USBs) • Treat everyone you meet politely • Setup & preflight ppt & demo before meeting starts • Bring ideally 2-3 people Remember: You are SELLING CONFIDENTIAL
  29. 29. Logistics: During Meeting• Give everyone who attends a role• Script which person handles which slide(s)• Assign a scribe, every time CONFIDENTIAL
  30. 30. Logistics: Q&A During MeetingOften badly managed, and very importantAnswer questions directlyScript answers on the obvious questions – How much are you raising? – How long does this last? – What beachhead markets do you think are most promising? – What holes exist in your team? – Why won’t Google, Facebook, Twitter, or someone else eat your lunch? – What makes you the right team to do this? CONFIDENTIAL
  31. 31. Logistics: Post Meeting• Scribe: Write down all new QA for FAQ• Follow-up in email that day w/ thanks, etc.• Do what you need to handle rejection• Keep positive & keep in touch CONFIDENTIAL
  32. 32. Go To Resources• TechCrunch, VentureBeat, TechMeme, etc.• JoelonSoftware•• Startup digest• Netflix on Culture•• Igor International Naming Guide• Paul Graham’s blog. CONFIDENTIAL 32
  33. 33. Thanks! CONFIDENTIAL 33