Startups #FAIL & VCs #SUCK.
But You Knew That Already• Play Blackjack, Not Roulette. (Count Cards. Make Lots of Little Bets.)• Don’t Be An Arrogant, Insufferable Prick.• Don’t Assume Your Diligence is 4 Shit.• Don’t Assume You. or They are Smart.• Build a Fucking Brand That Matters.• Increase Sample Size.• Don’t Make Big Bets Too Early.• Simplify Revenue Model. (as in: HAVE ONE, you fucking idiot)• Bet on Hackers, Hustlers, Designers.• Create a Community.• Invest after they have a functional prototype.• Be early and contrarian, or late and right.• Use The Tools (you fucking idiot): Twitter, Facebook, Quora, Instagram, Pinterest, etc• Talk / Blog / Present about something u know about, care about.• Admit Your Faults Frequently.• Laugh a little bit. (at yourself, not others).• Don’t worry too much about legal structure.• Worry a SHIT TON about valuation. (because your exits will be SMALL)
Early-Stage Risk Reduction• Intro: Crazy,
Liars or crooks? Fucking idiots?• Product: does it work? (crappy, not perfect)• Market: are people using it? (not their mom)• Revenue: will people pay for it? (just a few)• Growth: how will it/they scale?• Finance: what will it cost – Q1: cost to get a customer? – Q2: how & when do you make money?
Your [up-front] Diligence Is An
Illusion (Real Diligence = Quick Check + 3-6 mo’s)• You Might Be Able to Detect Idiots & Assholes.• You Probably Can’t Figure Out Winners (Yet).• Your Network is Better Than Your Homework.• Trusted Referrals >> Diligence• Functional Prototype >> Team.• Customers/Revenue >> Market.• You’ll Be Wrong 4x out of 5x. (If U Don’t Suck).• In 6 Months, You’ll Know If They Don’t Suck.• In 1-2 Years, You’ll Know If They’re Awesome.
Making Incubators Work Better(This is
Actually Pretty HARD.) Find & Fund Potential. Help Them Improve. Education & Community. Access to Mentors. Access to Investors.If You’re Lucky, Discover *a few+ Winners.
It Takes A Village• Physical
Space.• People = Tribe.• Mentors (Advise 1st, Invest 2nd)• Events, Foods, Awesome.• This is YOUR FAMILY. Make Them AWESOME.• This is also YOUR BRAND. So Don’t SUCK.• Make a Big Tent. (Collaborate, don’t Compete).
Outlier Competition + Modeling Success
Behaviors• You want min 3-5 “rockstars” to compete• Rockstars to model success for others• You can’t assume >20% rockstars• Therefore, pick 5x5 = 25 teams• 3-5 rockstar teams emerge, compete, win• 5-10 *other* non-rockstars learn• Prune losers quickly
Product, Market, Revenue• Product: assess
functional use, improve design/UX• Market: test usage, distribution channels• Revenue: test cust acq cost, revenue, *timing*• Work on Pitch, Help Find Co-Investors, etc
Winners, Losers, Tweeners• Winners #WIN
(with or without you)• Losers #LOSE (with or without you)• Tweeners #TWEEN – They might win with your help – They might lose with your help – Be helpful, but don’t dally – Note: you might be wrong about the losers & tweeners, so don’t be a fucking arrogant asshole.