Part communications - surprising number meet criteria - but they are not necessarily traditional finance CFO, but they are entrepreneurs, but not great technically.
- What investors look for
Zain: Started co. Felt they undervalued business - how do you value future sales.
Quick answer - risk basis. Risk element is wildly underestimated by entrepreneurs.
Unlikely you will come near projections.
I say, either guarantee me or accept my risk projections.
- Integrity, Passion, Experience, Knowledge, Skill, Leadership, Commitment (you better not walk away), Vision, Realism, Coachability (listen and take advice)
Things we know about e.
- Starting is easy. Running is hard
- Takes a lot of money
- All get seeded
- achieve goals
- most succeed.
Once you get it going, becomes easier.
Operating exec - 2/3 years.
Google guys brought in Eric Schmidt.
Those guys could not have started it.
Guys who started are not good day-to-day managers.
First internet company.
In second iteration, multinational - headed to Asia.
No background in multinational operations.
Went out to find CEO.
Experience in mobile arena.
Guy at IBM. #3 guy. Raised - IBM.
Got this guy. He comes in. Leaves 17 year career.
700 people reporting to him.
Fascinating to see him run this. Did things I never would have thought.
Could Mark have started this? No.
He had big co. operating skills. Not CTO of Symantec.
Ever going to start a business - completely different skill set.
In terms of taking money for starting business.
Costs are dropping like a rock.
IT enabled - not heavy duty - web services.
Angel investors would love to fund every business, but they don't.
Only 2-3%. 97% will have to find money somewhere else.
VCs only fund 1 in 400 businesses. That is the exception rather than the rule. Tiny tiny tiny percentage.
Last year - founded 1000.
600 000 started last year.
You see something new, really risky.
Not getting appropriate valuation based
Not one company has come within a country mile of hitting
If you perceive how risky it really is, we'd all be in a different business.
We don't cut down what you are doing.
Based on what I know, what might you actually get.
I have idea what numbers really are.
Anders: Top 4% that wins or worst?
In reality, investors - ultra-capitalist, blog posts.
They are not evil. Not out to screw you. Not stupid.
If you were a VC, what would you do.
Best VCs have both
Do they always get it right? Many have lost money.
IDEAS: Product / Market Strategy
Talent: Team and Culture
CAPITAL: Cash Flow and Venture Finance.
Here's the key.
Managing the T - the time.
First things first: Assess the Venture's Vision.
7 Questions. Step through them.
Where is the water team?
2. What is your competitive positioning and how are you developing your partners and customers while developing the product and service?
3. As a focused and lean startup, what is the \"white hot\" risk to reduce as soon as possible?
1. Why true opportunity?
Juan: Huge need.
Time out- if team does not have idea yet, make one up . 3 min.
Emem: 2 bn people.
JG: because of the technology
Alex: not so aware of it
Gary: Everybody knows.
Let's go down the list.
What could be true opportunity.
: Providing accurate real time information.
Need clean water - need information.
Remotely controlled humanoid robots - for inhospitable environments
Business opportunity is? What are they doing?
EBAY for waste
True, growing market.
Accountable for how using waste.
Barrier: get on board.
$1 bn opportunity.
Increased transparency. Be very disruptive.
Waste stream trading - more on platform, better it gets.
Hear that one - big problem. Specific on solution.
VCs like that speak.
Big pain, here we come with specificity.
So, we have 6 there.
Stop at 12:30 the formal stuff. Continue into lunch. What have you.
Real delicate dance.
As you - the entrepreneur -
- Global Business Recession
Very aware of externalities
Which of those statements grabbed you and why?
Big fan of David's here - not function - saving human lives.
More broadly believable why.
Liked Aaron's quantifiable.
What if I gave you a $10 m fund. Which to have further conversation with.
Which one appealed to you?
: Desal. Most profitable. Unidimensional VC.
: Financing energy. Really interesting. Finding appropriate scale of energy for third world.
: Who would you chose?
I'm all about the team.
3. \"white hot\" risk.
Back me up or disagree. Certain vocabulary.
From why care, why us.
More granular - which risk? Focus of cash - team - key resources.
Notion of greatest risk - that's the one that has to be looked at.
What is greatest risk to address right now.
Do you have the people to pull this off?
Emem: Market risk?
Let's check back in.
Energy Emem: Market Risk (2x) Can we make money?
So getting out of the building is key there.
Upcycle Steve C: Willing to share what their waste streams are?
and tech risk.
Desal: Capital risk.
Water: Right team. Capital low. Significant Market Risk.
Space launch: Capital - far from product, need lots of investments. Markets are uncertain.
Space2: Mainly market risk. Need to mass produce.
Step back - Market, market, market.
If you'd asked me this morning, big picture thinking - I'd have guessed we'd say technology risk.
If market is there,
Team - every company has that. Filter that out.
Most tech can be addressed.
Alex: We have assumptions of tech.
Tony: We all believe in tech.
Ronen: Marketing is the most important. If done well, then everything follows.
Give me that camera. I need to film this.
Javier: Broad vision. Have not tried to break through.
: Would say -most market risk in breakthrough.
Anticipating that market.
NYSE - most amazing financial literacy program.
cannot get districts to adopt it.
I'm woefully behind.
Give yourself a round of applause.
I'm going to hit the accelerator.
Thinking going on in SV just blowing me away.
YOUR e thinking.
I'm going to take
- High growth startups.
Changing my whole view.
write plan - would be fiction.
Steve Blank - HG startups
Ones here meant NOT to be startup.
Looking for replicable business model.
What are you doing out there - not just talking, but
economic business model to let co go to scale.
If just a small bus, you failed.
So, let's hear from Randy Komisar \"Getting to Plan B\"
April 7, 2010
Could you build a business plan before there was a customer?
Vast majority of successes out there - Google, intuit, sun, did not succeed with Plan A.
Leap ahead in the time machine.
This book is one of the few tools I have seen
I'm a numbers person. I need something I can chew on.
Why called Symantec. What grew us was anti-virus software.
Analogs / Antilogs / Leaps of Faith / Hypothesis
Where is the leap of faith?
Might be technical.
Identify, come out with hypothesis. Better to go measure it
in terms of as much data as possible.
Have framework for these discussions.
David had brought you curriculum.
Why so hard for people in industry / public service, don't know how much cash is in their bank account.
If you were 20 entrepreneurs, you'd know.
That is the blood pressure of startups.
Sahlman's Concept of Fit
PEOPLE / DEAL / OPPORTUNITY / CONTEXT
Harvard B school 1997.