Silicon Valley 2.0: The Lean VC

Silicon Valley 2.0 The Lean VC Dave McClure http://500startups.com ( @DaveMcClure ) Chicago – July 2011 http://slideshare.net/dmc500hats Re-Inventing Venture Capital through Innovation, Incubation, & Iteration

Changes in Tech & VC ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Read Geoffrey Miller Sex + Evolution + Consumer Mktg = Awesome

Dave McClure ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

500 Startups – “Super-Angel” Fund Mountain View, CA – Founded 2010 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Platforms 2.0 Search, Social, Mobile

Web 2.0 : Good Times . ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],R.I.P. *BAD* TIMES

Platform Viability Successful Platforms have 3 Things: 1) Features 2) Users 3) Money Users . . Money Features Growth Profit Profitable Growth Nirvana

Distribution Platforms ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Web 2.0 Business Model: KISS (“Keep It Simple, Stupid”) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Venture Capital 2.0 (smaller / bigger, faster, better? ) Venture Capital 1.0 “ Super” Angel (aka Micro-VC)

Silicon Valley Investor Ecosystem True Ventures First Round Capital Founders Fund Accel SoftTech (Clavier) Felicis (Senkut) SV Angel (Conway) Angels & Incubators ($0-10M) “ Seed” Funds ($10-50M) VC Funds ($50-250M) VC Funds (>$250M) Y-Combinator TechStars

Big VC: Still Necessary? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

More & Smaller Acquisitions ,[object Object],[object Object],[object Object],[object Object],[object Object],* Mint acquired by Intuit in Sept 2009 for $170M ,[object Object],[object Object],[object Object],[object Object],[object Object]

Startup Incubators & Metrics Lots of Little Bets. Most FAIL . (but a few succeed :)

Incubator 2.0: Fast, Cheap, FAIL ,[object Object],[object Object],[object Object]

Incubator 2.0: Education, Collaboration, Iteration ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

fbFund REV ,[object Object],[object Object],[object Object],[object Object]

Lean Startup, Lean VC Customers , Metrics, Iteration. Invest BEFORE Traction; Double Down AFTER .

The Lean Startup ,[object Object],[object Object],[object Object],[object Object],[object Object]

Discover Customers (Steve Blank, SteveBlank.com)

Iterate : Learn, Measure, Build. (Eric Ries, StartupLessonsLearned.com) LEARN BUILD MEASURE IDEAS CODE DATA

Startup Metrics for Pirates ,[object Object],[object Object],[object Object],[object Object],[object Object],(note: If you’re in a hurry, Google “Startup Metrics” & watch 5m video) AARRR !

AARRR! : 5-Step Startup Metrics Model Website.com R evenue $$$ Biz Dev Ads, Lead Gen, Subscriptions, ECommerce A CQUISITION SEO SEM Apps & Widgets Affiliates Email PR Biz Dev Campaigns, Contests Direct, Tel, TV Social Networks Blogs Domains R etention Emails & Alerts System Events & Time-based Features Blogs, RSS, News Feeds

One Step at a Time. ,[object Object],[object Object],[object Object]

The “Lean” VC: Lots of Little Bets, Incremental Investment ,[object Object],[object Object],[object Object],[object Object]

Investment Stage #1: Product Validation + Customer Usage ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment Stage #2: Market Validation + Revenue Testing ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Investment Stage #3: Revenue Validation + Growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Going Local, Going Global web gets bigger -> world gets smaller

Global Trends ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Local Hacks ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Summary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Silicon Valley 2.0: The Lean VC

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Silicon Valley 2.0: The Lean VC

Editor's Notes