FMI Happy Hour Startup Presentation (in Seattle)

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A presentation for the FMI Happy Hour attendees in Seattle.

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  • This presentation is largely based on or built upon content that Alistair Croll has produced.\n
  • I’ve got some opinions on that. Here’s why I think you should pay attention to me instead of the Internet for the next 50 minutes.\n
  • \n
  • Bits are frictionless. So things that used to cost something don’t cost anything any more.The stuff we invented to deal with the coefficient of friction of atoms is unnecessary—but the institutions we built don’t want to face that fact.\n
  • Mark Andreesen recently said that software eats everything. By which he means that the whole world is moving to a digital one in which programs can replace much of what people do. Whenever I see an industry with digital inputs and digital outputs, everything in the middle inevitably becomes software in the long run.\n
  • Mark Andreesen recently said that software eats everything. By which he means that the whole world is moving to a digital one in which programs can replace much of what people do. Whenever I see an industry with digital inputs and digital outputs, everything in the middle inevitably becomes software in the long run.\n
  • Mark Andreesen recently said that software eats everything. By which he means that the whole world is moving to a digital one in which programs can replace much of what people do. Whenever I see an industry with digital inputs and digital outputs, everything in the middle inevitably becomes software in the long run.\n
  • Mark Andreesen recently said that software eats everything. By which he means that the whole world is moving to a digital one in which programs can replace much of what people do. Whenever I see an industry with digital inputs and digital outputs, everything in the middle inevitably becomes software in the long run.\n
  • Like the travel agency\n
  • Or the record store\n
  • Or the video store\n
  • Now consider manufacturing, and the Makerbot.\n
  • These things eat extruded filament or corn starch\n
  • This Filabot even eats plastic bottles and makes new filament\n
  • Then what happens to UPS?\n
  • These connectors were created by the The Free Art and Technology (F.A.T.) Lab. They allow any construction kit to connect to any other.\n
  • This is a fascinating way to link different construction projects.\n
  • In a world where we can print anything we want, what happens to Toys R Us?\n
  • This is the worlds first printable speaker on paper. \n
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  • FMI Happy Hour Startup Presentation (in Seattle)

    1. 1. Building a Startup Empire Music Tech edition http://www.flickr.com/photos/booleansplit/3330228604/
    2. 2. A wee bit of narcissism. Yell at me here
    3. 3. ONE ISSUE TO CONSIDER ...
    4. 4. #1 Bits arefrictionless
    5. 5. Software eats everything.
    6. 6. Software eats everything.Digitalinputs
    7. 7. Software eats everything.Digital Digitalinputs outputs
    8. 8. Software eats everything.Digital Digitalinputs Software outputs
    9. 9. Software eats everything.Digital Digitalinputs Software outputs
    10. 10. THE TRAVEL AGENCY http://www.flickr.com/photos/
    11. 11. THE TRAVEL AGENCY http://www.flickr.com/photos/
    12. 12. THE RECORDING INDUSTRY http://www.flickr.com/photos/saucysalad/364
    13. 13. THE RECORDING INDUSTRY http://www.flickr.com/photos/saucysalad/364
    14. 14. DVDS http://www.flickr.com/photos/
    15. 15. DVDS http://www.flickr.com/photos/
    16. 16. http://fffff.at/free-universal-construction-kit/
    17. 17. SO YOU WANT TO BUILD A STARTUP ... ... yolo?
    18. 18. #1 SHOULD YOU? (aka - why building a startup sucks)
    19. 19. Common attributes of entrepreneurs• Not very status-oriented• Doesn’t follow rules very well and questions authority• Can handle high degrees of ambiguity or uncertainty• Can handle rejection, being told “no” often and yet still have the confidence in your idea• Very decisive. A bias toward making decisions – even when only right 70% of the time – moving forward & correcting what doesn’t work• A high level of confidence in your own ideas and ability to execute• Not highly susceptible to stress• Have a high risk tolerance• Not scared or ashamed of failure• Can handle long hours, travel, lack of sleep and the trade-offs of having less time for hobbies & other stuff
    20. 20. ARE YOU SURE YOU WANT TO DO THIS ... ? “9 out of 10 startups fail”http://www.quora.com/What-is-the-truth-behind-9-out-of-10-startups-fail
    21. 21. According to the NationalVenture Capitalists Association3 startups fail, have gone bankrupt or business wereclosed3 startups are worse than average, aren’t very profitable,returning less than the invested capital, but are still active3 startups are a moderate success, are profitable, returningjust the invested capital, were not acquired yet and are stillactive1 highly successful startup that will pay the investor amultiple return on all of his 10 investments; that startup hadan IPO or were a target of a significant acquisition
    22. 22. “I DIDN’T REALLY HAVE A CHOICE”
    23. 23. #2 FINDING YOUR IDEA
    24. 24. BUILDING AN ECO SYSTEM DIAGRAM The people, the processes
    25. 25. Most startups don’t evenknow what problem they solvePaypal first built for PalmpilotsFreshbooks was invoicing for a web design firmWikipedia was to be written by experts onlyMitel was a lawnmower companyHotmail was a database companyFlickr was going to be an MMO (it’s back to being one now)Twitter was a podcasting companyAutodesk made desktop automation software
    26. 26. FROM NETWORKSHOP TO CORADIANT And learning to pivot quickly
    27. 27. #3 FINDING THE RIGHT PEOPLE “It’s like dating all over again, and I can’t wait to find the meat markets”
    28. 28. BUILDING THE RIGHT TEAMhttp://solveforinteresting.com/the-three-kinds-of-ceo/http://steveblank.com/2011/12/13/the-startup-team/
    29. 29. HACKER, HUSTLER,DESIGNER, VISIONARY
    30. 30. YOU’RE SELLING YOURSELF Your idea, your culture, your people.
    31. 31. If this is a sea, wtf are the fish?Founder Dating (http://founderdating.com/about/)Startup WeekendStartup DrinksMusic Startup Events Decibel Festival Conference (full disclosure: I run it) SF MusicTech EDMBiz Mutek C/O Pop BandwidthMake Your Own (no music tech meetup exists in Seattle yet)Tell your friends you’re in the market
    32. 32. WHOLE LOT OF TALENT, WHOLE LOT OF DEMAND (shit.)
    33. 33. #4 THE LEGAL SHITIANAL (sounds worse than it is - it just means that I’m not a lawyer)
    34. 34. THANKFULLY, THIS PART IS EASY Enter Dave Weekly
    35. 35. http://dweek.ly/stock/Stock OptionsThe Board PricingEquity PoolsLiquidity OwnershipInvestors AdvisorsFundraising Acceleration & Allocations
    36. 36. #5 THE PROTOTYPE
    37. 37. LEARN FASTER WITH CUSTOMER DEVELOPMENT by Hiten Shah http://www.slideshare.net/startuplessonslearned/hiten-shah-the- leanstartupsxsw-7365813
    38. 38. #5 THE PRODUCT or Finding Product/Market Fit
    39. 39. 20
    40. 40. 20Followers
    41. 41. 20Followers 700,000s
    42. 42. Seed ratio: 20 35,000:1 Followers 700,000s
    43. 43. Seed ratio: 20 35,000:1 Followers 700,000s 2
    44. 44. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing
    45. 45. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 RT
    46. 46. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 2,000 RT
    47. 47. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: 2,000 RT 2.9%
    48. 48. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: 2,000 RT 2.9% 1,642
    49. 49. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23%
    50. 50. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23% 32
    51. 51. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23%Conversions: 1.95% 32
    52. 52. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23% 7Conversions: 1.95% 32 10 15
    53. 53. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23% 7 x $100Conversions: 1.95% 32 10 x $20 15 x $7
    54. 54. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23% 7 x $100Conversions: 1.95% 32 10 x $20 15 x $7
    55. 55. Seed ratio: 20 35,000:1 Followers 700,000s 2 Repurposing 150 Amplification: Visitors: 2,000 RT 2.9% 1,642 0.23% 7 x $100 Revenues:Conversions: 1.95% 32 10 x $20 Average: $39.54 Median: $20 15 x $7 Total: $1,005
    56. 56. 5,000 $10,000 Revenue (total sales) Unique page views 0 $0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Conversions >4s or error 2-4s <2s
    57. 57. #6 THE MONEYWhat you need to know about fundraising
    58. 58. BEFORE YOU DO ANYTHING
    59. 59. Some rules of thumbYou have paying flagship customers or loyal highprofile individual evangelistsYou’ve reached 10k registered / active users (if you’reb2c)Fundraising takes about a year and gives you about ayear
    60. 60. Some rules of thumbBegin to get to know investors in the Seattle area now(Madrona, TechStars, Founders Co-Op, etc)Spend as much time as you can in the valley, and getvalley interest firstCome back to Seattle investors with something toshow
    61. 61. #7 DON’T DO IT ALONE AKA My Pledge
    62. 62. GREAT MENTORS & ADVISORS ARE KEY ross.typepad.com/blog/2006/02/advisorship.html
    63. 63. MY PLEDGE
    64. 64. THANKS!seanpower@dbfestival.com to reach me

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