If you've been following OnStartups.com
for any period of time, you likely know that I'm not a big advocate of startup
founders going out and trying to raise venture funding in the early stages.
My argument boils down to two things:
1) Most folks don't need venture funding in the early stages
2) the odds of first-time entrepreneurs actually raising VC is pretty low.
Oh, and 3) it's one of the least fun activities an entrepreneur can take.
Raising funding is often harder than building a product/business -- and
much less fun!
So, given my general disposition, it will come as a surprise to many that
know me that my startup, HubSpot, announced
today that it has closed a Series B round of funding of $12 million. This is in
addition to the $5 million Series A funding we raised less than a year ago. So,
the total capital raised is now over $17 million. The news was big enough that
TechCrunch
wrote about HubSpot today.
So, back to the question. Why would a seemingly reasonable and modestly
successful bootstrap entrepreneur raise venture funding of this magnitude?
Insanity? Maybe...
How A Bootstrap Entrepreneur Winds Up Raising $17 Million In Venture
Funding
1. I seed funded HubSpot with $500,000. To do this, I used
some of the proceeds from the sale of my prior startup (which I had bootstrapped
with $10,000). The seed funding was an easy decision, because I mostly had to
convince myself, and I'm pretty convincing when I talk to myself.
2. The seed funding was enough to build our SaaS product
for internet marketing and get it out into
the market (i.e. start charging real companies real money to use to it). People
bought it. Sure, the product was "pre-alpha" and crappy, but it was useful. We
also improved it every day (literally) so it got less and less crappy
over time. More and more people bought. This gave us some evidence that there
was actually some sort of market demand out there. Interesting.
3. The fact that things were headed in the right direction
led us to raise another $1 million in angel funding. For us, that was a fair
amount of money (we're capital efficient). Raising the angel funding was
reasonably efficient because we had the inside track. The fact we had
paying customers was helpful. So, no we're up to $1.5 million in
capital raised. Cash in the bank. Life is good.
4. Then, the VC community starts to get interested in HubSpot (this is weeks
after we have our angel funding finalized). "Not really interested," we say.
We've got a $1 million of fresh cash in the bank. We don't need VC money. As
it turns out, one of the best times to raise venture funding is when you don't
need the money.
5. My co-founder, Brian Halligan and I have lots of interesting discussion
and debate. We'd both debated the whole VC thing while grad students at MIT
(where we met). For HubSpot, we had confidence that the market opportunity was
big enough to warrant venture-funding, we just didn't think we needed it quite
yet. (This is June-ish of 2007). But, we knew we were on to a potentially
really big idea. We'd both made some money and weren't really looking for a
"modest outcome". We wanted a big, significaint, immodest outcome.
So, on the VC front, we figured with the right set of terms and the right
partner, we'd consider raising it sooner rather than later. We got the right
set of terms and the right partner. So, we raised another $4 million in VC
bringing our "Series A" to $5 million. We're off to the
races.
6. We did what I think is the best possible thing a startup can do with lots
of cash: Not spend it too quickly. No advertising, no
marketing, no high-flying salaries for high-flying executives. We hired the
smartest, most passionate people we could find. People we knew and respected
immensely. People fanatically focused on building a real business and who were
constitutionally incapable of spending money willy-nilly. We behaved a lot like
we were spending our own money. Because, we were. [Note to self: Write a
future article about why VC money is as much yours, once you've given up the
equity to get it].
7. Life is good. Sales are ramping steadily. Every month is a record
month. Not in terms of visitors, eyeballs or some other proxy for future
revenues, but in terms of actual revenues. The business is
growing fast. By the time we officially launch the product in
November, 2007, we have 100+ paying customers.
8. As it turns out, success attracts more capital. We started getting some
"pre-emptive" interest in the company from VCs. "We don't need more money right
now," we say. We hadn't even spent half of the last round and lots of cash in
the bank. But, we're practical guys and willing to listen. As it turns out,
one of the best times to raise venture funding is when you don't need the
cash... (see point #4 above).
Fast-forward to today: We've closed a $12 million Series B round.
But, seriously, why did I raise VC funding? Did I change my mind?
The simple answer is no, I have not changed my mind on VC. I still
don't think most early-stage entrepreneurs should go out on the venture
fund-raising circuit. They should maintain the option of a modest exit. Focus
on solving the customer's problem (not the VC's problem). My situation with
HubSpot was special. I had already done the bootstrap thing (multiple times)
and made money. I had above average odds of raising money for HubSpot.
So, why did I raise funding? Because, this time around I wanted to
take a shot at the big leagues. Sure, any success (even a modest one) is nice.
But a modest success is not going to change my life much at this point. I want
to swing hard. It's not about the money. It's about the fun and excitement of
pursuing a really big idea, working with really smart people and doing what I
love. [And, of course, the money won't hurt either]
And that, my friends, is why I raised $17 million in venture funding.
If you have questions, feel free to ask them. I'll do my best (within
reason) to answer them. Otherwise, I'll keep you posted with future articles as
things progress.
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I'm becoming an increasingly big fan of infrastructure services like Amazon's
EC2 and S3. The reason is simple: You pay for what you need at around the time
that you need it. This is the point I made when recently interviewed by Erica
Naoone of MIT Technology Review in an article aptly and succinctly titled "Cheap
Infrastructure".
In the interview I was my usual, highly opinionated self,
but this particular statement that made it into the article jumped out at me:
"There's no correlation between the amount of money an entrepreneur actually
needs and the money a venture capitalist puts into the business." Of course,
there are some qualifiers here: I'm talking about software companies and I'm
talking about the Series A investment (first institutional money). Also, if I
had done the interview in writing, I likely would have said there's
little correlation instead of no correlation. But, my larger
point still stands. The way the system works, you often don't raise what you
need, you raise what you can.
But lets shift gears just a little bit, before we get deeper into the VC
funding stuff.
In the early stages of an internet startup, one thing that's always difficult
is predicting the level of infrastructure that is needed to support the
volume of users/customers. Entrepreneurs often overestimate how popular their
software is going to be. There's also the notion that too much infrastructure
is better than to little because "you only have one chance to make a first
impression." Finally, there's that whole nagging thing about reliability and
uptime.
The net result, before EC2/S3 and similar services, there were few
options. Costs were relatively high and somewhat "spiky" (you bought a few
servers, threw them into a co-lo, bought more servers, etc.). There wasn't a
good way to handle this common situation: "Hey, we only have X users right
now, and we expect to grow by Y%, but we need to make sure we can handle Z users
just in case we get written up on TechCrunch or get on the front page of digg."
You ended up compromising somewhere. Either you spent little (and
dealt with spikes if/when they came as best you could) or spent too much,
resulting in a fair amount of "unused capacity".
Now, back to the VC funding part. When my co-founder, Brian
Halligan first kicked off HubSpot, we
thought a lot about the capital needs of the company. I funded the seed round.
We later successfully raised some angel funding -- about $1 million. We felt
that was enough to get us to the next "milestone" (product launch). The
rationale we had was reasonable: Raise a little money early, raise more
money later. By raising money "closer to when we needed it", we felt we could
continue to reduce the risk, increase the value of the company, and ultimately
dilute less. And in fact, this is how the VC process sort of works. You raise
a Series A, Series B, etc. and each round is targeted at getting a company to
the next "milestone". The problem is, it's awfully "spiky" . This led us to
ponder the other side of this spectrum. In theory, the "optimal" path would be
for us to sell just enough shares every month based on the cash needs of the
company at whatever the right "price" is at that time.
In a way, the Y Combinator folks do
this as the first step. They give founders just enough to get through the first
few months and build a prototype. Many of the YC startups then go on to raise
follow-on funding from VCs. But at that point, the funding process looks like
the usual -- it becomes "spiky" again. We don't have a pure incrementally
scaling model for startup funding anywhere.
Of course this scalable funding model probably only works in theory -- and
even then, it's a stretch. There are lots of reasons why this doesn't work in
practice. Here are just a few:
1. There's no efficient way to appropriately "price" the shares that
frequently.
2. Entrepreneurs don't want to worry about whether they'll have the cash
they need next month.
3. There's likely not going to be agreement on how much cash should
be burned month-to-month.
4. There'd likely be some friction and transaction costs.
There are ways to mitigate some of these challenges, but I still don't think
it's practical and would work. My VC friends (and yes, I do have those), would
likely agree.
But, the geeky and analytical side of me still finds the purity of this model
appealing for the same reason I like Amazon's EC2. You get what you need and
grow incrementally instead of spikily (yeah, I made the word up).
What do you think? Yes, the idea is crazy and wouldn't work, but just
how crazy is it?
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I'm looking forward to BarCamp Boston coming up on May 17th and 18th. If you're in
the Boston area, and reading this, you're probably just the type that should be
attending.
1. How To Run ASP.NET Apps on Google App Engine
2. Why RoR Doesn't Rock: Productivity Is For Pansies
3. How To Install and Run Firefox on Windows Vista SP2
4. How To Tie a Tie Without Strangling Yourself
5. Careers in COBOL: Not An Oxymoron
6. Learning RSS: Because It's Really Not So Simple
7. Stylesheets? We don't need no stinkin' stylesheets: If Al Gore wanted
us to separate content from presentation, he would have included CSS when he
invented the Internet.
Yes, I know, humor is not a talent of mine. Don't worry, I don't plan to quit
my day job. In any case, register and attend BarCamp Boston 3. I promise there
will be funnier people there.
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I did the opening presentation at MIT's Underground 2008 event yesterday for
student entrepreneurs. My hat's off to Albert Park and his colleagues for
organizing a great event. We need more of this kind of stuff in the
Boston/Cambridge area to bring student entrepreneurs together with others.
Here are some quick notes and points that I made from my presentation. My
favorite part about it was the fact that there were no PowerPoint presentations
allowed. When the organizers told me that, it made my day. [For
reasons, see "Why I Hate PowerPoint"].
Note: If you were at the event, please note that I didn't get to all of
these points during my talk (just wasn't enough time), but this is all the stuff
I wanted to say.
Some Ideas for Student Entrepreneurs
1. It's alright if your idea is sort of crappy: Most
startup ideas start out kind of crappy. The good news is that once you get
started, you'll start learning more and your ideas will get better. But you
have to get into the game and start doing things in order for your idea/startup
to get better. Don't sit on the sidelines waiting for the perfect idea. Get
started early and improve the idea.
2. Don't try to raise VC funding too early: Most student
entrepreneurs (or recent grads) with early stage companies should not try and
raise venture capital. The odds of succeeding are low and for most, it'll be a
waste of time and energy. Instead, work on the product/offering and work on
finding some great people you'd love to do something spectacular with.
3. If you do hit the VC circuit...remember that there are
two possible outcomes: One. You spend months being miserable and depressed
instead of doing what you love (working on the company). Or two, you spend
months being miserable and depressed and you get some cash.
4. Modest goals are just fine. Too many folks think that
startups are all about buying your ticket in the $1 billion outcome lottery (and
be the next Facebook or YouTube). You don't have to do that. I think it's
sub-optimal for a first-time entrepreneur. Look for successive wins -- even if
they're modest. The only people that tell you that you have to build a huge
company are VC investors. The reason is that they need all of their
entrepreneurs building gigantic businesses (so that at least one or two will
actually do that and give them the gains they need). The example I used: If
this is your first company (you haven't had a "liquidity event" yet), then
shooting for a 10% chance at a $50 million outcome (E.V. = $5 million) is much
better than a 1% chance at a $1 billion outcome (E.V. = $10 million). The
reason is that for you personally, the value of the extra millions above a
certain point diminishes quickly. Trust me.
5. Find Your Co-Founders: Student entrepreneurs are in a
unique position in their careers where not only are they starry-eyed optimists
(we all should be), they're around other starry-eyed optimists. Find
the best and brightest of these folks and start something. Join
up!
6. You don't need a business plan: Nobody cares about
business plans. Investors won't read them. They take a lot of time. Just work
on the idea, work on the team and work on getting customers (or understanding
why you're not getting customers).
7. Don't overestimate the risk: If you're just about to
graduate (or have recently graduated), you might tend to overestimate the actual
risk in a startup. Sure, it's not going to pay you what you'd get at a big
company, but the odds of you being able to find some job later, if
things just go horribly are pretty high.
8. GET STARTED NOW: It doesn't take much effort to get a
company started (though granted, actually growing one successfully is
non-trivial). But, the first step is really, really easy and there's no reason
not to take it. Your best lessons, ideas and opportunities will start showing
up after you've started a company. So go do it.
That's it. If you made the event, thanks for coming. If not, hopefully the
above notes helped. In either case, I encourage you to join the two startup
communities I (loosely) manage online and connect with other folks (you might find your co-founder there):
LinkedIn: http://linkedin.onstartups.com (7,000+
members)
Facebook: http://facebook.OnStartups.com (900+
members, but more features)
Looking forward to connect with you folks. And Albert, if you're reading this,
hit me up to be one of the sponsors next time. It's a good cause that I'm
passionate about.
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Ok, it's late (2:07 a.m. here in Boston), so please forgive my
snarkiness.
I'm going to presume that most startups would like to be found
online by people (you know, like potential users or -gasp- customers) .
People try really hard to get their internet marketing "right" so as to increase
their chances of being found by the right people online. There's a whole
industry based on this need. I should know, I'm in the business of helping
businesses get found.
That's why this particular example really struck a chord with me.
Lets start at the beginning.
I was catching up on some of my reading when I came across an article on the
Under The Radar Blog. The article made reference to an
upcoming conference they're holding where a series of startup companies present
and a panel of judges...um...judge. One of the companies on the list is Aviary
described as a startup that has a "suite of web applications for people that
create content". Fair enough. The article even provided a link to the company
website: http:/aviary.com.
Just one problem. Aviary.com doesn't go to the startup's website. It goes
to Avalon Aviary which is (drumroll), an aviary in Loveland, Colorado.
Ok, me thinks, they got the website wrong. No big deal. It's probably
something like AviarySoftware.com or AviarySomethingElse.com. Nope, no
luck.
Given that I'm an obsessive kind of guy, I start doing Google searches. I
know the company exists. I start using search terms that I think might
work. Things like "aviary software" don't deliver the company's website. Tried
"aviary web suite" too. No go. I'll spare you the gory details. Ultimately, I
found the website.
Here's where it is: http://a.viary.com
Ah, clever. But, I never would have thought of it. Sure, del.icio.us (now,
delicious.com works too) pulled this off. But, why would you
intentionally do this and make life hard on yourselves. In any case,
I'm not a big fan of clever domain names. I like easy domain
names. Ones that are easy for people to pass around and distinctive.
Now, this story would have ended here. Fine, sub-optimal domain name, no big
deal. But, there's more.
The Aviary website has a high Google PageRank (PR7). This means its
got some decent authority. So, why didn't the site turn up for all the searches
I did? I was trying to find them. Reason? Their page title is
"Aviary - Creation On The Fly". Somehow, I don't think that people are going to
search for "creation on the fly" unless they become so big and popular that
people actually remember the tag-line.
Quick Tips On Being Found Online:
1. Try to use a domain name that's not too clever and is easy
to convey.
2. Get your page title right. Google cares about page
titles. By "right", I mean something that actually contains terms that people
searching for you might use.
By the way, Aviary does have some really, really slick tools. I just wish I
didn't have to try so hard to find their website.
End rant.
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I'm going to be giving the keynote presentation at an upcoming event
organized by and focused on student entrepreneurs being held on the MIT campus this
Saturday (May 3, 2008) from 12:00 - 4:00 p.m.. Student entrepreneurs from MIT,
Harvard, Babson, Olin and Boston University and other Boston area academic institutions will gather to talk about startups.
I could not hope for a better group to interact with.
If you're in the Boston area, you can check out the event (and RSVP) at the
Facebook event page for Underground 2008. It's free and open, but seating is limited
so please RSVP on the Facebook page so the organizers can plan accordingly.
Having been a student entrepreneur myself, I'm a strong proponent of current
students and recent grads starting companies. I wrote about this in an earlier
article titled "Why Student Make Great Entrepreneurs".
One of my points in the earlier article was the value of the network students
build (or have the opportunity to build). Personally, I'm not a particularly
social guy and networking is one of my weaknesses, not my strengths. But even
then, I've ended up working with over a dozen people that I met during my
undergraduate days (University of Alabama, Birmingham) or my more recent
graduate school program at MIT. If I could turn back the clock, I'd make a
concerted effort to try and connect with even more of my academic peers --
regardless of how uncomfortable it might have been to hang out at "networking
events".
The Boston area has some of the best academic institutions in the world.
Even then, I don't think we're yet doing enough to encourage student
entrepreneurs. Scott Kirsner, who writes for the Boston Globe, recently wrote
about this on his blog in an article titled "How Do We Better Connect Students to Boston's Innovation
Economy?" Scott's been doing a great job himself helping interconnect the
Boston entrepreneurial community. He was even nice enough to post recently
about the upcoming Underground 2008 student entrepreneur event mentioned
above.
If you're a student entrepreneur, UNITE! Connect with your peers --
particularly those not in your immediate circle or discipline. You'll be
thankful you did.
If you're going to be attending this Saturday's event, leave a comment and
let me know (or grab me at the event). If you have topics you'd like me to
cover during my presentation, let me know what's on your mind.
Also, if you're looking for online networking with fellow entrepreneurs, I encourage you to request access to the OnStartups Group on LinkedIn or join the OnStartups Facebook group. It's a great way to find entrepreneurs in your area or at your school.
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I'm a regular reader of Fred Wilson's blog. Fred posted an article today
that he is planning to clean
house on his blog. He will remove many (if not most) of the widgets that
adorn his site.
There was much rejoicing!
I can understand why Fred installed all these widgets in the first place.
He's got a natural curiosity and he's a venture capitalist by trade -- and
invests in this stuff. There's no better way to get to understand a technology
or trend than to actually use it.
But, I'd argue that very few of his blog readers appreciate the widgets (except,
perhaps the people that developed them).
Benefits Of Widget Removal And A Cleaner Blog
1. It focuses readers on the core content, which is
(hopefully) why they're there.
2. It makes pages load faster. Think of the bandwidth
saved across the web!
3. Search engines like Google appreciate fast-loading sites
(and possibly reward them with higher rankings).
4. It makes things simpler and more likely to load
across a variety of browsers. (Yes, yes, I know things are supposed to
work -- but they often don't)
So, if you're a blogger, follow Fred's lead and clean things up a bit. Your
readership will thank you.
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Apologies in advance for using the term wanker. It's probably the most
pejorative word I've ever used in an article title. I'm likely going to
regret this someday, but it's been a long week and a little venting never hurt
anybody (famous last words).
On with the show.
I've never been a big fan of the term "Web 2.0". I have no issues with some
of the underlying concepts, I just don't like the term.
I wrote an article about why:
Web 2.0, Web 3.0 and Beyond: Villainous Version Numbers
I disliked the term so much, when I spoke at the MIT Venture Capital conference back in 2006, I began my opening remarks with: "Personally I think the Web 2.0 label
sucks...". (the title of the panel had the term "Web 2.0" in it). Once I got
that out of my system, I felt better and had a pretty good time.
So, you can imagine my chagrin when I found a reference to the term Web 4.0 on TechCrunch recently in an article by Erick
Schonfield. Now granted, the article wasn't about Web 4.0. But
still...The reference in the article even puts an approximate date on the Web 4.0 movement. We
should expect to see it around 2020 (so says the visual in the article). Oh,
and in case you were wondering, Web 2.0 was the "social web", Web 3.0 is the
"semantic web" and Web 4.0 is going to be the "intelligent web". (No, I'm not
making this up).
I guess the web community better get cranking on all the point releases in
between Web 2.0 and Web 4.0. We've got some work to do.
People, can we please all stop the madness with trying to put version
numbers on the web?
(And yes, I see the irony in the fact that my call to action itself
propagates the term Web 4.0 by using it -- CURSES!).
Update: A couple of other articles on the related topic of Web X.0 as a label:
Charles Cooper (CNet): Time to dump the Web 2.0 sobriquet
An alternate view from Stowe Boyd: Another voice calling for the end of Web 2.0
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The following is a guest article by Philip Crissman.
OnStartups partially sponsored Philip's trip to Startup School 2008 in exchange for sharing some of key lessions for those of us that could not make it. -Dharmesh
---
David Heinemeier Hansson's Startup School talk was probably one of the most
popular, and the most out of sync with the rest of the day's talks.
Where most speakers took for granted that the entrepreneur would be
seeking VC funding, David took the opposite approach; he wanted to talk
about how you could start making money on your own, growing your
company without needing to go look for funding.
David opened with the canonical "business model joke", made famous on Slashdot:
1. Brilliant Product
2. ???
3. Profit!
His answer to this, was:
1. Brilliant Product.
2. Price.
3. Profit!
He
went on to argue against the Venture Capital model, in general, in
favor of simply building a business by the somewhat revolutionary idea
of just charging money for your products.
Ironically,
he was immediately preceded by Greg McAdoo of Sequoia Capital. McAdoo,
naturally, was telling the audience what VCs were looking for and how
to build a presentation or a company which would get their attention.
Following this, Hansson's message seemed nearly the opposite.
I enjoyed both talks, and thought that they were simply talking about two very different ideas.
McAdoo
is a venture capitalist, so a large slant of his perspective is going
to lean towards the investors. This is not to say that Sequoia or other
VCs are not interested in the entrepreneur's best interest --
obviously, VCs need entrepreneurs in order to do what they do. However, they also need to represent
their investors. Without capital, they would simply be business
consultants, whose attention and advice the entrepreneur would need to
pay for. Since their beholden to their investors, it's well known that
they are looking not just to double or triple their investment, but
quadruple or quintuple their initial investment.
Heinemeier
Hansson, on the other hand, is thinking about the developer. He's
asking: wouldn't you rather simply run a profitable company with a
product you enjoy? Why do you need to be a billion dollar company when
you can more easily be a million dollar company?
From
where I sat, they were both saying some of the same things. Both acknowledged
the same odds -- how relatively few startups would be those huge
winners, the billion dollar ideas.
The difference is,
- McAdoo and the
VCs are specifically, on purpose, looking for those top few percent;
that's their role. That is what they do.
- Heinemeier Hansson is looking
at all the other successful-but-not-necessarily-world-changing
businesses you could start, and asking "Why not just build something like this?"
We
do want to be realistic; it's important to acknowledge the risk we
might be getting ourselves into. It may be that, like Hansson suggests,
we'd rather take a 1:10 chance of making a million versus a 1:10,000
chance of making a billion.
What seemed to
have been skipped is that the nature of the idea will have a lot to do
with which path you decide to pursue. It's difficult to see how a
business idea like Google, for example, could have succeeded without
seed capital. It's hard to imagine Google starting and succeeding with
a 37Signals-style subscription model; especially in the time when
Google launched, having to "pay" for the privilege of searching the web
would likely have been a recipe for failure.
On
the other hand, it's just as hard to see Basecamp as a ubiquitous piece
of software that simply everyone uses -- not everyone needs to manage
projects. There's a much smaller pool of people who would need to do
that, but they are much more likely to pay for a good way to do it.
What
I took from the contrast between Heinemeier Hansson's talk, and the
majority of the other talks, was the importance of having a healthy
dose of realism.
Some
ideas might well have that billion-dollar potential, and may need that
VC funding to get going. A lot more ideas really can be put together in
10 hours per week (as Hansson mentioned Basecamp was built), and then
run as a profitable business. The
important thing is having the ability to tell one sort of idea
from the other.
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The following is a guest article by Philip Crissman.
OnStartups partially sponsored Philip's trip to Startup School (hosted by Y
Combinator) in exchange for capturing some key insights from the session to
share with those of us that could not make it. -Dharmesh
Startup School Takeaways
This is
my attempt at a broad overview of the whole day; what I took away from each
speaker. You'll notice that some of the takeaway's may contradict each other.
Well, a few of the speakers seemed to contradict each other, which is a topic
for another post. Here's a very broad summary of the
day.
David Lawee, VP
Corporate Development, Google; founder, XFire.
Main take-away: Hurry Up. David emphasized the role of speed in a startup,
and how the modern timetable is considerably shorter than a more traditional "2
years until product launch" strategy. Your ability to turn on a dime and do
things quickly is highlighted as a major advantage for the startup.
Sam Altman, Founder, Loopt.
Main take-away: If you can avoid having to raise money,
then don't do it. If you do need to raise money, get it out of the
way and get back to work; many startups have been sidetracked by the
money-raising process, even fizzling out along the way.
Jack Sheridan, Lawyer, Wilson Sonsini.
Main take-away: Some legal decisions that you may make
early on never go away; pay close attention to these sorts of issues.
Know:
- Who owns the company
- Who owns the technology (IP)
- Who controls the company
- Who gets what in a liquidity event (sale, IPO, etc.)
Paul Graham; Founder, ViaWeb,
YCombinator.
Main take-away: Build something people
want + Don't worry too much about money = Non-profit. Doing "good" is
a strategy. The "Tamagotchi" effect -- making
something that attracts users and a community gives you something to take care
of; this can be a powerful motivator.
Greg McAdoo, Partner, Sequoia Capital.
Main
take-away: Greg's wave & surfer metaphor. It takes a great surfer
(entrepreneur) to ride a great wave (business/social/technology trend). The surfer has to pick the wave, but can't control the
wave.
Know your market; as
much about it as possible.
Have a market "whose hair is on fire" --
who needs your product badly, now.
David
Heinemeier Hansson, creator, Ruby on Rails, partner, 37Signals:
Main take-away: Your odds are better to not try to be the next Facebook/YouTube/billion
dollar acquisition. You can do very well just creating a great
product and charging money (gasp!) for that product.
Don't be in such a hurry, don't try to be so big, don't look for a wave.
Paul Buchheit:
creator, Gmail, founder, FriendFeed.
Main take-away: On listening to
users; listen != obey. Listening to your users, you
don't necessarily do exactly what they tell you they want; interpret their feedback to try to determine what the real problem
is. Then find a solution to that problem.
Jeff Bezos, Amazon.
Main
take-away: Cloud computing will be increasingly important, and doesn't need to be an industry with a single winner.
Unfortunately, aside from this, his talk was largely a commercial for Amazon Web
Services. The insight into why cloud computing could be important
was more interesting than the commercial; would have been nice to have more of
that, or more practical entrepreneurial advice.
Mike Arrington, blogger, TechCrunch.
Main
take-away: Getting press for your startup: have a compelling
story. Stand out; stand out in a different way than other people have
stood out (used Seth Godin's purple cow analogy).
Marc Andreesson, Founder, Netscape, Ning, etc.
Main take-away: Be so good they can't ignore
you (via Steve Martin).
Be prepared for everything to
look like it will fail... and nearly doing so. Don't quit.
Have a
business model that doesn't depend on a great economy (especially right now).
Peter Norvig, Director of
research, Google.
Main take-away: Start small, go fast, iterate
rapidly. Leverage data; especially other people's
data. A challenge: anyone can go out onto the web and get 1.7 billion words. Go
get them and do something (analysis, algorithms, searching, etc.) with them.
Of course, there was much more in each talk. But
those were the highlights, the main points, from where I sat. Full recorded
talks can also be found at Omnisio.
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