Fractal Labs @ the Norwegian Venture Capital Conference - June 2014
NORWEGIAN VENTURE CAPITAL CONFERENCE.
the playbook for david dating goliath and the psychology of numerology
Trondheim, Norway | June 2014
ME.Co-founder and CEO of Fractal Labs
DATA.Lower barriers to company creation; innovative crowd financing; exponential growth of data.
● 34% (and growing) of data in the digital universe is useful
● but only 7% is tagged
● and only 1% is analysed
Source: Mary Meeker, KPCB, Internet Trends 2014
UNDERSTANDING GIANTS.There are methods, motivations and metrics to the madness.
Source: Eddie Izzard, Death Star Canteen, YouTube
BUILD. Keeping the intellectual property in-house as a valuable strategic asset.
● there is always a resource trade off
● the strategic payoff is high
● don’t forget to dogfood and iterate
metric to keep in mind >> short term revenue versus long term strategic objectives
BUY. Acquire talented teams; intellectual property; or market share.
● human resources are the engine
● speed and focus matter
● story tell with data
metric to keep in mind >> cost of building in-house versus acquisition cost per head
PARTNER.Support the ecosystem and cement a position in the market.
● ecosystem development is paramount
● be cautious of changing tides
● understand partner’s metrics and motivations
metric to keep in mind >> opportunity cost of resource allocation
xxxINVEST. Venture groups are increasingly using quantitative investment tools in the private market.
● data driven decisions
● metrics matter
● timing is everything
examples of data driven investors >> include Google Ventures, Andreessen Horowitz, Greylock Capital
UNICORN CLUB. Shoot for the stars, and you might hit the moon.
● 8 of 30 european unicorns are Nordic
● average Nordic valuation $3b v $3.6b in the US
● Skype $8.5b, King Digital $5.1b, Spotify $4b,
Rovio Entertainment $4b, Supercell $3b, Just-
Eat $2b, Klarna $1.2b, Mojang $1b
Source: The Nordic Web, June 2014
Source: Inc, December 2011
Length of Time Since Customer Registration
1 Year 2 Year 3 Year
DATA.Different business models have different key-performance-indicators.
● longer term success metrics
● customer lifetime value
● evernote.com example
● 110% revenue growth in the last 12 months
Source: Tomasz Tunguz, March 2014
STRATEGY.Cash is king, and different kingdoms require different coffers.
● box.com example
● profitability is -136%; burn rate is ~10x industry average;
average customer value is $3,653, industry median is $59,600
CASH IS KING.Accurate forecasting and cash management equates to greater success.
● financial literacy
is a must
● 7 engineers; ~$70k
● capital efficiency prolonged company life;
provided enough time to be acquired
● Early stage start-up
FRACTAL LABS. Infrastrastructure and tools for data driven decisions.
● business simulation
● adaptive KPIs
● performance benchmarking
● predictive analysis
● actuals vs budget
● company scoring
● red flags