This document provides advice on starting a successful company. It recommends recruiting a board of advisors from different areas like technology, marketing, and industry. It also stresses the importance of co-founders who have complementary skills but get along well. The document emphasizes thoroughly researching competitors, finding customers who want your product, and making a profitable business. It warns against betting everything on one idea and advises pruning ideas that don't work to make room for better opportunities.

1. Secrets of Starting
or Picking
a Successful Company
Elton B. Sherwin
Stanford
2017

2. Elton B. Sherwin
Venture Capitalist
www.EltonSherwin.com
Venture Capitalist
Environmentalist
Author
创业投资,环保人士,
Eight patents
Twelve company board of
directors
八项专利
十二公司董事会
作者,

3. Do’s and Don'ts
• Getting Started
• Superbasics
• Your Career and Leadership Skills
• Tips
• Two Common Fundraising Mistakes
• Advice From Hollywood

4. Starting a New Business

5. Steps #1 and #2
• Recruit Board of Advisors
– 3 to 8 people, informal
– 1 x-Founder, 1 technology, 1 marketing, 1 industry
– Coffee/lunch once a month
• No contracts, no group meetings
• CoFounders
– 1 or 2 people
– Passionate, but with different skills

6. Avoid Kamikaze Co-founders
Some people enjoy
• Making life hard
• Cheating
• Lying
• Breaking the law
• Gossiping
• Withholding information
Any ONE of these will cause you great pain

7. Don’t Start a Business with People
You Don’t Like

8. Work with People You Like
• You will be spending a lot of time with them
• Successful founding teams like each other
80% of the time

9. Think Soccer, Not Tennis
Entrepreneurship is Not a Solo Sport
Takes a team to refine the product
– The idea is important, BUT
– Original idea is rarely the winning product
One person is rarely great at:
– Finance, Marketing, Product management and
technology
MSG: Build a Team First

10. Your Roster
Season One
If no one joins your team:
think about
joining someone else's team
Advisors (minimum: 3)
___ Industry expert
___ Technology expert
___ Finance/legal expert
___ Sales/marketing expert
___ Founder, another company
___ Someone famous
Co-founders (minimum: 1)
___ Technology
___ Marketing/Product management
___ Finance/Administration

11. Your Roster
Season One Season Two
Advisors (minimum: 3)
___ Industry expert
___ Technology expert
___ Finance/legal expert
___ Sales/marketing expert
___ Founder, another company
___ Someone famous
Co-founders (minimum: 1)
___ Technology
___ Marketing/Product management
___ Finance/Administration
Board of Directors (min: 2)
___ Rich person
___ Rich person
___ Someone loyal to you
___ Someone loyal to you
Early employees
___ Developers
___ Product management
___ Admin/Office manager

12. Work on Things You Are Interested In
• It is not all about profit.
God gave you interests and passions for a reason

13. Research the Competition
I see entrepreneurs who have not Googled their
business ideas or don’t know who their
competitors are

14. It Is Shocking!
I see entrepreneurs who have not Googled
their business ideas
• They invent a wheel 20 years after
someone else.
• Don’t know about other’s failures
• Don’t know about other’s successes
• Don’t know who is friend or foe
• Miss opportunities to partner
Forget
to
use

15. Research the Competition
• Investor presentations
• Customer presentations
• Videos
• Marketing materials
• Open jobs
• Technical presentations & white papers
• All documents ending with: .pdf; .ppt; and .mp3

16. Summary of Getting Started
• Work with people you like to work with and
who aren’t pathological
• Work on stuff you are interested in
• Research the competition
• Recruit:
– Board of Advisors
– Cofounder

17. SuperBasics
of Business
Sometimes even experienced people forget

18. Need Customers
Before you build your business ask prospective customers:
• If we build this product/service would you buy it?
• How much would you pay?
Talk with a minimum of 30 potential users/ customer. 75 is better

19. Early Customers
Early customers:
• Difference between success and failure
• Clarify goals
• Credibility with investors
• Fund development

20. Make Money
• Positive gross margin (usually above 40%)

21. SuperBasic Summary
Find Customers
Make Money
*** Find and join an incubator or accelerator ***

22. Your Career and Leadership Skills
• Work in a restaurant before you start one
– Run a restaurant before you buy one
– Join a team before you start one (usually)
• Write down your best idea every day
– In Notes or Dropbox
• Try different jobs
– Which position is right for you: Coach, pitcher,
second base or right field? Which is right for you?
– Babe Ruth started as a pitcher
• Join a winning team

23. Two Common Fundraising
Mistakes

24. “Uncompelling”
PowerPoint Presentations
No compelling reason to invest

25. Look at the Outline in
The Silicon Valley Way
The complete business plan presentation is attached in the appendix and
all The Silicon Valley Way worksheets are available on Slideshare

26. No Elevator Pitch
• Start with an elevator pitch
– VCs make up their minds in the first 30 seconds
– The first three sentences really matter
– Don’t start with Bios
• It should be COMPELLING
– One to three sentences
– Practice it everywhere
– When people offer to invest in the grocery store
checkout line: You have a compelling story

27. Examples of Effective First Sentences
“GE has asked us for 1,000 units and we are here
today to raise money for our…”
“Our applet is currently one of the ten most
downloaded applications on the iPhone…”
“In our lab we have successfully used sunlight to
create hydrogen and…”

28. Should You Raise Money?
• Not every business should
be financed by venture
capital
• Some businesses should be
“bootstrapped”
• Hard to be successful with
low margin business

29. Entrepreneurship
Is Like
Gardening

30. Don’t Bet Everything on
One Seed

31. Diversify
Myth: Great Entrepreneurs Bet
Their Careers On One Idea

32. Prune
• Deadwood
• Diseased
• Twisted
• Failed

33. Prune Healthy Things
Make Room
for Greater
Things
For more on this topic, see:
Henry Cloud, Necessary Endings

34. Advice from

35. Americans Watch 16,000 hours of
Television
(before college)
----------------------------------------------- Video

36. We Learn
On a great team:
• Everyone is an extrovert
• Everyone interrupts
• Everyone talks without thinking

37. Leaders
• Take bold action
– Risk everything daily
• Plan on the fly
– Group decisions are a waste of time
• Do it all themselves
– Do it their way
• Don’t tell anyone the plan
• Ignore the law

38. American Leadership “Training”
Risk everything
Do it yourself
The law is irrelevant

39. • Risk everything
• Do it yourself
• Ignore the law

40. The ABC’s of Success
A. Think boldly – be innovative
B. Take frequent, small steps
– Minimize risk
– Be frugal
C. Play well with others
For more information, see:
Len Schlesinger, Action Trumps Everything

41. Success
Product Idea
Founding Team
– Experience
– Skills
– Teamwork
– Leadership
Myth
90%
10%
Reality
30%
70%

42. Myth
All about having great idea
Reality
Joining or assembling the right team

43. Conclusion
• Focus on more than the idea
– Usually 6 to 50 companies have similar ideas
• Thoroughly research “competitors”
– Consider joining a winning team
• Don’t let failure discourage you
– Winners have lots of failures
– Failures get discouraged and give up
• Be reluctant to borrow money
– Personally and professionally

44. Next Steps

45. Research the Competition
• Investor presentations
• Customer presentations
• Videos
• Marketing materials
• Open jobs
• Technical presentations & white papers
• All documents: .pdf; .ppt; mp3, etc.

46. • Recruit Board of Advisors
– 3 to 8 people, informal
– Don’t need a group meeting; no contract
– 1 x-Founder, 1 Tech pro, 1 marketing type
– Coffee/lunch once a month
• CoFounders
– 1 or 2 people
– Passionate, but with different skills

47. Appendix