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How to Run, Grow, and Move your Startup to the 
Silicon Valley 
© 2013 Gartner, Inc. and/or its affiliates. All rights res...
#GartnerSYM 
Gartner 
Social 
Software 
Sharetronix 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
Com...
Why the Silicon Valley? 
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We have VC money! 
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
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24 
Gartner 
US VC investments for the last 4 quarters 
$47,800,000,000 
4,729 deals
Total US VC investments 
25 
1,600 
1,400 
1,200 
1,000 
800 
600 
400 
200 
Gartner 
$6.5 
$7.8 
$6.6 
$6.7 
$10.6 
$9.8 ...
26 
Gartner 
Median Quarterly Valuat ions by Series 
$6.8 $5.9 $7.5 $6.7 
$3.2 
$4.1 
$11.8 
$18.6 
$23.1 
$18.8 
$21.5 
$...
Investments breakdown per sector Q1-2014 
27 
$2,500,000,000 
$2,000,000,000 
$1,500,000,000 
$1,000,000,000 
$500,000,000...
Investments breakdown per location Q1 - 2014 
28 
$6,000,000,000.00 
$5,000,000,000.00 
$4,000,000,000.00 
$3,000,000,000....
29 
Gartner
30 
Kickstarter Stats 
$1,182,342,895 Total dollars pledged to projects 
64,258 Successfully funded projects 
6,453,397 To...
Angel List Stats: 4,421 startups 
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Gartner
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
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Gartner
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
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34 
Gartner
What’s Driving This? 
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
35
Analogue Web E-Business D-Marketing D-Business Autonomous 
Focus 
Build 
relationships that 
drive business 
or lower cost...
Driver: Digital Business is a Strategic Imperative for all 
Organizations to… 
Compete Globally 
A source of competitive d...
…and CEOs are ready to invest on IT, Digital and R&D! 
• 2014 Gartner CEO and Senior Executive Survey reveal: 
- Top three...
The MegaSuite Vendors Cannot Keep Up 
Yesterday Today/Tomorrow 
Wish (IT dominant) 
• One Suite 
• One Instance 
• One Ven...
Enterprises Looking for Innovation Beyond The Usual 
Suspects 
• “Other” - the most influential vendor in 10 years for +30...
Much lower costs of production and distribution mean 
lower barriers to entry 
• Innovative technologies coupled with conv...
The Road to Digital Business Starts 
With 
Ubiquitous 
Smart Things 
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliat...
Horizon: 2020 
Ten billion connected Things 
shipped in one year 
Excluding smartphones, tablets, PCs 
Gartner
The Virtuous Circle Driving Smart Things 
The 
"Virtuous 
Circle" of 
Smart 
Things 
Falling Costs 
Increasing 
Connectivi...
Wearable, Injested and Embedded Things 
Gartner
Locally-Designed-and-Made Things 
Gartner
"Industrial" Things 
Source: General Electric
Expect Many Types of Things; Highly Fragmented 
Market 
By 2017, 50% of Internet of Things solutions will originate in sta...
Market Opportunities Extend Well Beyond "Things" 
Consumers Enterprises 
Level 1: 
"Things" 
Big data, user analytics 
Dat...
Mobile Devices + IOT = Smart Home 
50 
Security 
Sports & fitness Lighting Smart clothing 
e-cigarette 
Plant care Pet fee...
Mobile Devices + IOT = Smart Office 
51 
Proximity 
services 
Security & 
access 
control 
Lighting 
Environmental control...
52
My Startup Graph 
Gartner
54 
Gartner
Your Startup needs Smart Money! 
• Find the right VC’s 
• Know the VC’s you are talking to and their portfolio 
• Do a due...
What does your VC deck needs to cover?! 
• The Problem 
• The Market Opportunity 
• Your Solution/Technology 
• Biz Model ...
Top Rules for successful VC Pitch Deck 
• Tell a story 
• Show, don’t tell 
• 10-15 slides max 
• 5 Sec Rule 
• 5-7 Bullet...
Avoid Common Mistakes 
58 
No 
Experienced 
Advisors 
Wrong 
Business 
Wrong 
Investor 
Weak 
Business 
Plan 
Top-down 
Ma...
“Unfair” Competitive Advantages 
• Functionality 
• Patents 
• References 
• Sales Channels 
• Business Model 
• Community...
60
61
A “Good Enough” Management Team 
• Done it before (successfully) 
- This stage of company 
- This team 
- This market 
- G...
Real Traction 
Product Customers Channels Financials 
Seed Prototypes Pre-sold 
customers 
Channel pre-commitments 
Contai...
Key Takeaways 
1. Make sure VC is right for you and your company 
- Think like an investor 
2. Sell the investment; not th...
Silicon Valley is all about Tech… 
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
65
66 
Gartner
67 
Gartner
68 
Gartner
69
70
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The Gartner Startup Curve – Assessing 
& Managing Startups 
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All r...
The Startup Curve 
Gartner
Sales Startup 
74 
Product & 
Technology 
People 
Capital Market 
Timing 
Startup forces affecting the Curve: 
Gartner
75 
The Startup Forces: People 
• VCs invest in People 
• The founding team makes or break a company 
• Team: 
- Founders,...
76 
The Startup Forces: Capital 
• How much money do I need? 
• Do I need smart money, corporate funding, or a load? 
• Ho...
77 
The Startup Forces: Market 
• What is the rate of customer or user growth? 
• Who is the target customer and how big i...
The Startup Forces: Product &Technology 
• Is the startup using the right technology for their target customers? 
• What a...
Secondary Startup Forces: Timing, Sales, location 
• Where should I setup my startup: San Francisco, NYC, London? 
• Where...
80 
Key Takeaways: 
• Think Big, Global, Scale, Cloud, Mobile, IOT, Future 
• Stay Focused 
• Build a Great Team and Advis...
What do you need to do next?! 
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
81
#GartnerSYM 
© 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 
KEEP 
CALM 
AND 
CREATE YOUR 
STARTUP 
83
Vassil Mladjov 
twitter: @vassko 
Linkedin, Facebook, G+, Yahoo, 84 
Flickr… :vassko
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  1. 1. How to Run, Grow, and Move your Startup to the Silicon Valley © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity." Vassil Mladjov Research Director Startups, Incubators & Venture Capital @VASSKO
  2. 2. #GartnerSYM Gartner Social Software Sharetronix © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. Comp Lab Admin Apple II BASIC 1st paid Soft program Worked On Military Computers 84 82 87 88 Immigrated to USA Air Force e-learning 88-90 91 High School Air Force Aidellsausage.com my 1st E-commerce Network Admin @ PCX 1st Web Site Baby Sitter 92 Autobodyparts.com VassTech 94 95 96 Finance 99 AlwaysOn ABN AMRO Streaming Marketplac e.com ITN CIO 02 WiredResidence .com & SUN Micro 03 04 Blogtronix Startup Mentoring 05 05 13 10 14 Bulgaria HiTech Gartner Startups & VC Funding Diabimo Gartner
  3. 3. Why the Silicon Valley? 2
  4. 4. 3
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  23. 23. We have VC money! #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 23
  24. 24. 24 Gartner US VC investments for the last 4 quarters $47,800,000,000 4,729 deals
  25. 25. Total US VC investments 25 1,600 1,400 1,200 1,000 800 600 400 200 Gartner $6.5 $7.8 $6.6 $6.7 $10.6 $9.8 $10.2 $9.1 $9.1 $10.3 $8.7 $8.4 $8.8 $9.3 $9.1 $9.8 $12.5 $16.4 954 1,003 938 993 1,277 1,202 1,229 1,175 1,484 1,469 1,355 1,301 1,437 1,383 1,294 1,162 1,155 1,117 0 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2010 2011 2012 2013 2014 Capital Invested ($B) # of Deals Closed Source: PitchBook
  26. 26. 26 Gartner Median Quarterly Valuat ions by Series $6.8 $5.9 $7.5 $6.7 $3.2 $4.1 $11.8 $18.6 $23.1 $18.8 $21.5 $33.6 $40 $35 $30 $25 $20 $15 $10 $5 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Series Seed Series A Series B * As of 6/30/14 Source: PitchBook $38.4 $44.9 $40.8 $77.9 $67.9 $85.5 $66.8 $190.6 $250 $200 $150 $100 $50 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Series C Series D or Later * As of 6/30/14 Source: PitchBook
  27. 27. Investments breakdown per sector Q1-2014 27 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $- Gartner
  28. 28. Investments breakdown per location Q1 - 2014 28 $6,000,000,000.00 $5,000,000,000.00 $4,000,000,000.00 $3,000,000,000.00 $2,000,000,000.00 $1,000,000,000.00 $- Gartner
  29. 29. 29 Gartner
  30. 30. 30 Kickstarter Stats $1,182,342,895 Total dollars pledged to projects 64,258 Successfully funded projects 6,453,397 Total backers 1,926,208 Repeat backers 16,010,198 Total pledges Gartner
  31. 31. Angel List Stats: 4,421 startups 31 Gartner
  32. 32. #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 32 Gartner
  33. 33. #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 33
  34. 34. 34 Gartner
  35. 35. What’s Driving This? #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 35
  36. 36. Analogue Web E-Business D-Marketing D-Business Autonomous Focus Build relationships that drive business or lower cost Extend relationships into new markets/ geographies Transform sales channel into a global medium to drive efficiencies Exploit "Nexus" to drive greater efficiency Extend potential customers from people to things Smart, semi-autonomous things become the primary "customer" Outcomes Optimize relationships Extend relationships Optimize channels Optimize interactions Build new business models Maximize retention of and relationships with things Entities People Disruptions Emerging technologies People Internet and digital technologies People Automation of business operations People Deeper customer relationships, analytics People Creation of new value and new nonhuman customers People Smart machines and things as customers Technologies CRM CRM Web EDI Mobile BI Big data Social Sensors 3D printing Smart machines Robotics Smarter machines Automation The Road to Digital Business (and Beyond) Business Business Business Business Things Business Things Change of Kind Change of Degree
  37. 37. Driver: Digital Business is a Strategic Imperative for all Organizations to… Compete Globally A source of competitive differentiation and advantage Attain Operational Excellence Improve the Efficiency and Effectiveness of Business Operations Implement Business Diversification Allows to embrace new business opportunities, reach new targets Physical Digital The creation of new business designs by blurring the digital and physical worlds Gartner
  38. 38. …and CEOs are ready to invest on IT, Digital and R&D! • 2014 Gartner CEO and Senior Executive Survey reveal: - Top three investment areas to be: IT up from 3rd place in 2012, 2013 Digital Capabilities (New Entry) R&D ranks 3rd up from 7th - Topmost Technology-Enabled Capability Investments Over the Next Five Years: Digital Marketing; e-Commerce; Customer experience management; Business Analytics - CEOs See Digital as a Team Game, and the CIO Still Has the Highest Visibility 38 Gartner
  39. 39. The MegaSuite Vendors Cannot Keep Up Yesterday Today/Tomorrow Wish (IT dominant) • One Suite • One Instance • One Vendor/Contract • One Architecture Vendor Promise • Buy into my Vision • Suite Centric • Solves the Integration Issue #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. Wish (Business Dominant) • Business Agility Dominates • Happy Users Consuming • Speed to Use: SeeITBuyITUseIT • Architectures is IT’s issue Vendor Promise • Buy into my Brand & Ecosystem • Multi Product/Service Centric • Provide Integration Tools
  40. 40. Enterprises Looking for Innovation Beyond The Usual Suspects • “Other” - the most influential vendor in 10 years for +30% of enterprises (more than Google, any other named vendor, more than Microsoft / SAP/ Oracle combined* • • Corporate VC investments grown 100%+ YOY to Q1 2014 and to 30% of total VC investment (up from 20%) • • “Rethink and extend supplier, vendor, and partner and service provider relationships, including the use of smaller, faster, more innovative partners, and working with partners in new domains such as mobile, design, etc” * *Gartner 2014 CIO Survey Gartner 40
  41. 41. Much lower costs of production and distribution mean lower barriers to entry • Innovative technologies coupled with convenient mass consumption models favor cheaper, faster and easier web app development - Examples of client-side development technologies: HTML 5; CSS ; JavaScript; Ajax (Asynchronous JavaScript and XML); jQuery ; MooTools ; Dojo Toolkit … - Examples of server-side development technologies: PHP; Zend Framework; ASP ; ASP.NET; ColdFusion; Ruby on Rails; Perl; Python… - Examples of Mass Consumption Models: Freemium, OSS, Subscription-Based, Free Redistribution, Developer Communities … Gartner
  42. 42. The Road to Digital Business Starts With Ubiquitous Smart Things #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
  43. 43. Horizon: 2020 Ten billion connected Things shipped in one year Excluding smartphones, tablets, PCs Gartner
  44. 44. The Virtuous Circle Driving Smart Things The "Virtuous Circle" of Smart Things Falling Costs Increasing Connectivity Greater Functionality Growing Diversity Rising Ubiquity Gartner
  45. 45. Wearable, Injested and Embedded Things Gartner
  46. 46. Locally-Designed-and-Made Things Gartner
  47. 47. "Industrial" Things Source: General Electric
  48. 48. Expect Many Types of Things; Highly Fragmented Market By 2017, 50% of Internet of Things solutions will originate in startups less than three years old. Connected LED Lamps Smart meters Smoke alarms Security cameras Point of sale terminals Smart household appliances Toys Digital signage Consumer door and window locks Vending machines Smart weighing scales Parking meters Hotel door locks Digital set top box The Internet of (Very Different) Things Bluetooth peripherals Anti-theft tags Wearables Selected items for illustration Gartner
  49. 49. Market Opportunities Extend Well Beyond "Things" Consumers Enterprises Level 1: "Things" Big data, user analytics Data centers, servers, storage M2M Communications: cellular, mesh, WiFi, ZigBee, TV White Space, … Gateways, data compression, aggregation and security Baby monitor, home automation devices Level 4: Apps and services Baby monitoring service or app; home security service Vending machine refilling and maintenance service Level 5: Analytics Level 3: Computing and storage Level 2: Comms & networking Revenue (2020) $ Billions* 262 18 17 31 Vending machine refilling and maintenance service Gartner
  50. 50. Mobile Devices + IOT = Smart Home 50 Security Sports & fitness Lighting Smart clothing e-cigarette Plant care Pet feeding Cooking Media & entertainment Garden irrigation Environmental control Smart assistants and avatars Gartner
  51. 51. Mobile Devices + IOT = Smart Office 51 Proximity services Security & access control Lighting Environmental control Refreshments Media and display Window blinds Smart furniture Find equipment & resources Industrial automation & monitoring Gartner
  52. 52. 52
  53. 53. My Startup Graph Gartner
  54. 54. 54 Gartner
  55. 55. Your Startup needs Smart Money! • Find the right VC’s • Know the VC’s you are talking to and their portfolio • Do a due diligentce on the VC, they will be your boss! • Strategic money is now more important than ever before. • Create Custom VC decks for different VC’s • Talk to Corporate VC’s and your customers 55 Gartner
  56. 56. What does your VC deck needs to cover?! • The Problem • The Market Opportunity • Your Solution/Technology • Biz Model • The Competition • Your Team/Advisors • Traction/Case Studies • Financial Projections • Why Should the VC invest • Funding Needs and Use 56 Gartner
  57. 57. Top Rules for successful VC Pitch Deck • Tell a story • Show, don’t tell • 10-15 slides max • 5 Sec Rule • 5-7 Bullets max, Font 22+, 25-30 words max per page • One Picture per page • Your Title is a message • Don’t make things up • Know the Ricks • Explain the Funding needs and the deliverables 57 Gartner
  58. 58. Avoid Common Mistakes 58 No Experienced Advisors Wrong Business Wrong Investor Weak Business Plan Top-down Market Estimate Weak Competitive Knowledge Selling the Product Unrealistic Valuation Control Issues Gartner
  59. 59. “Unfair” Competitive Advantages • Functionality • Patents • References • Sales Channels • Business Model • Community • Network • Scale 59 Versus Current Competitors Versus Big Companies Versus Commoditizers VCs don’t invest in fair races Gartner
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  62. 62. A “Good Enough” Management Team • Done it before (successfully) - This stage of company - This team - This market - Generated returns for VCs • Trustworthy • Passionate • Realistic • Think like an investor 62 Prove it out Take it public Scale it Your investment is bigger than any investor’s Gartner
  63. 63. Real Traction Product Customers Channels Financials Seed Prototypes Pre-sold customers Channel pre-commitments Contained expenses Early Production releases Lighthouse customers First sales and channel agreements Fast revenue growth Mid Products at scale Customer growth Deal size and channel growth Fast, break-even growth Late Successful expansion products New market segments Whole market sales success Fast, profitable growth 63 Gartner
  64. 64. Key Takeaways 1. Make sure VC is right for you and your company - Think like an investor 2. Sell the investment; not the product a) $1 billion market b) Unfair competitive advantages c) Good enough management team d) Traction 64 Gartner
  65. 65. Silicon Valley is all about Tech… #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 65
  66. 66. 66 Gartner
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  72. 72. The Gartner Startup Curve – Assessing & Managing Startups #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 72
  73. 73. The Startup Curve Gartner
  74. 74. Sales Startup 74 Product & Technology People Capital Market Timing Startup forces affecting the Curve: Gartner
  75. 75. 75 The Startup Forces: People • VCs invest in People • The founding team makes or break a company • Team: - Founders, developers, marketing, sales, support, finance • Compensation and equity, titles and ego management • Experience and networking connections • How to hire and attract the right people • Team players, Ex-athletes, Ex-Military, MBAs, out of school… Gartner
  76. 76. 76 The Startup Forces: Capital • How much money do I need? • Do I need smart money, corporate funding, or a load? • How should I used the money to get the most out of it? • How can I get a better evaluation and when should I get funding? • Why do companies care about my funding? • What is your go –to- VC strategy • Is my pitch deck telling the right story • What mistakes should I avoid? • How to find the right VC? What should I ask them? Gartner
  77. 77. 77 The Startup Forces: Market • What is the rate of customer or user growth? • Who is the target customer and how big is that market? • Where are the customers (EU, US, verticals…)? • What is the forecast for this market? • What is the best pricing model for the solution? • What do CIO’s demand and what is their budget? • How do they compare with their competition growth? • What is your GTM strategy? • Competitive Landscape Gartner
  78. 78. The Startup Forces: Product &Technology • Is the startup using the right technology for their target customers? • What are the implications of the NEXUS of forces? • Startups know best their technology, but many CIO’s many not be ready for them yet. • What are the best practices for delivering the solutions from business point of view, lowest cost, highest revenue. • Where is the startup solution on the Hype Cycle? 78 Gartner
  79. 79. Secondary Startup Forces: Timing, Sales, location • Where should I setup my startup: San Francisco, NYC, London? • Where can I find qualified developers? • Where will my developers cost less, but will be happy too? • Is the market ready for my technology yet? • What is my marketing strategy? • What is my Social Media strategy? 79 Gartner
  80. 80. 80 Key Takeaways: • Think Big, Global, Scale, Cloud, Mobile, IOT, Future • Stay Focused • Build a Great Team and Advisors • Get Smart VC money • Find a Mentor • Move to Silicon Valley when ready. • Don’t worry about valuations. • Just do it! • Learn from the mistakes of others! Gartner
  81. 81. What do you need to do next?! #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. 81
  82. 82. #GartnerSYM © 2013 Gartner, Inc. and/or its affiliates. All rights reserved. KEEP CALM AND CREATE YOUR STARTUP 83
  83. 83. Vassil Mladjov twitter: @vassko Linkedin, Facebook, G+, Yahoo, 84 Flickr… :vassko

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