Presentation at Wharton West
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Jay Jamison from BlueRun Ventures shares lessons from his experience as both an entrepreneur and investor. He outlines 10 key lessons including that today is a golden age for founders but competition is high; the most important factors for success are the market opportunity, team, and product traction; carefully selecting co-founders and splitting equity equally; and that distribution is extremely important but also difficult. He emphasizes the importance of values from day one and being prepared to hear "no" during fundraising.
Presentation at Wharton West
- 1. Startup & Venture Lessons Jay Jamison Venture Partners, BlueRun Ventures [email protected] | @jay_jamison | jayjamison.com CONFIDENTIAL
- 2. Agenda Introduction Top 10 Lessons Q&A CONFIDENTIAL
- 3. Introduction Employee Founder Investor CONFIDENTIAL 3
- 4. About BlueRun Ventures • Over $1.0B under management • Investing out of Fund IV ($240M) • Focus: Mobile & consumer internet • Seed & Series A CONFIDENTIAL 4
- 5. Stuff that surprised me • Having nearly 10 years at MSFT didn’t matter at all. • Having an MBA from Wharton mattered even less. • Both were seen as basically negatives. • But, several of the skills from both really helped. CONFIDENTIAL 5
- 6. Top 10 Startup Lessons 1. Today’s Golden Age For Founders & Its Double-Edge Sword. 2. What’s #1: Markets, Team, or Product? 3. Picking Co-Founders & How to Split the Baby. 4. The “Whatever Works” Principle 5. Getting used to “No,” and Being a Meat Eater 6. Hire Slow, Fire Fast 7. Distribution is Really Hard & Really Important 8. If You Stop Loving It, Make a Change. 9. Values and Value Add 10. Pitching & Fund-Raising 11. My go-to resources CONFIDENTIAL 6
- 7. Lesson 1: It’s a Golden Age for Entrepreneurs…. Cheaper than ever to start a company. Better resources • Incubators: Y-Combinator, 500Startups, … • Resources: Startup Digest, Lean Startup, TC, VB Technology is easier to learn, access, &c. • Codecademy • RoR • AWS CONFIDENTIAL
- 8. … And Investors Understand This. I see lots of great companies that are: • Capital efficient • High velocity in coding and releasing • Product in market with traction • Clear customer insight on what works • Battle-tested founding teams • Clear, concrete ask on what $$$ they need CONFIDENTIAL
- 9. Implication While we’re in a Golden Age for Entrepreneurs, it is raising the bar for most very early stage companies… You need to prove more on very little money, because so many other start-ups are already doing so. CONFIDENTIAL
- 10. Lesson 2: What’s #1: Markets, Team, or Product? Which is most important? A.Market B.Product C.Team CONFIDENTIAL
- 11. Which is most important? A.Market B.Product C.Team CONFIDENTIAL
- 12. Analysis • 75 pitches / quarter Market • 0-2 get to term sheet Team • Score each Traction • Multiple regression Product CONFIDENTIAL 12
- 13. How I think about Markets Choose Any 4 Companies, Stack Rank Vision • World’s largest store • Redefine social • Organize & access information • Reinvent money Your Company • ???? CONFIDENTIAL
- 14. How I think about Markets Choose Any 4 Companies, Stack Rank Vision • World’s largest store • Redefine social • Organize & access information • Reinvent money • Teach English to children everywhere CONFIDENTIAL
- 15. Lesson 3: Picking Co-Founders & Equity Split What a tech founder needs in a business co-founder… • Someone who sells what you build • Someone who can do all the important stuff that’s not coding • Leadership and vision • Potentially you can raise money, while you code. What a business co-founder needs in a tech co-founder… • Someone who writes code and gets technical stuff done, and who ideally understands how to hire and expand the technical team over time. • Technical chops, CS/EE degree • Nice to have: a track record building stuff • Very nice to have: Ideas on how to hire devs CONFIDENTIAL 15
- 16. Finding a Technical Co-Founder More important than fund-raising Requires almost the same skills • Pitching and salesmanship • Capacity to speak enough geek • Resourcefulness CONFIDENTIAL 16
- 17. Default founder split: equal 33% 33% 50% 50% 33% CONFIDENTIAL 17
- 18. Lesson 4: The Whatever Works Principle You never get a second chance to If you’re not embarrassed with your make a first impression. – Anon. first launch, you’re waiting too long. – Reid Hoffman Lean Startup Revenue from Day 1 Never stealth! Building for Scale Scrum Everything Inhouse Offshore Minimum Viable Product StealthCo HTML5 Native Apps Customer Development CONFIDENTIAL 18
- 19. Whatever Works You never get a second chance to make a first impression. – Anon. If you’re not embarrassed with your My Advice & Learning: you’re waiting too long. – first launch, Reid Hoffman • Absorb all this stuff Lean Startup • Listen to people you trust Revenue from Day 1 Never stealth! • Use what works Building for Scale for you Scrum Everything Inhouse • The key is work fast & economically Offshore Minimum Viable Product StealthCo HTML5 Native Apps Customer Development CONFIDENTIAL 19
- 20. Lesson 5: Get Used to No As Founder: Heard “No” a lot, especially fund-raising • At least 150 times • From 5 different countries As an Investor: I say “No” a lot, especially to fund-raisers • Probably 1% CONFIDENTIAL 20
- 21. What’s weird about this… • These numbers are probably about average • Generally “No” coming from smart, polite person (Not always the case, so be careful) • Under 10% of founders really follow-up and stay after it • Lesson: build a plan to deal with “No”… CONFIDENTIAL 21
- 22. Be A Meat-Eater • Speed • Swagger & optimism • Persistence • Follow-through • Showcase progress CONFIDENTIAL 22
- 23. Lesson 6: Hire Slow, Fire Fast Hire Slow Fire Fast • Wait for real pain • When perf lags, speak up • Everyone interviews • Set clear expectations • Share feedback • Set a crisp timeline • Do reference checks • Fire • Dinner w/ SO • Ensure lawyer is in loop CONFIDENTIAL 23
- 24. Lesson 7: Distribution, distribution, distribution This is by far the weakest part of your business at this point And, it is also one of the most important… CONFIDENTIAL
- 25. Love It or Leave It CONFIDENTIAL 25
- 26. Lesson 9 Values & Value-Add Values are key from day 1 • Set them & talk about them constantly. • No “right” way to do this, but doing it is important Value-Add is also a key from day 1 • If someone stops pulling their weight, deal with it CONFIDENTIAL 26
- 27. Lesson 10 Thoughts on Fund-Raising CONFIDENTIAL
- 28. Logistics : Pre-Meeting • Arrive 15 minutes early every time • Have back-ups (2nd PC, Dongles, USBs) • Treat everyone you meet politely • Setup & preflight ppt & demo before meeting starts • Bring ideally 2-3 people Remember: You are SELLING CONFIDENTIAL
- 29. Logistics: During Meeting • Give everyone who attends a role • Script which person handles which slide(s) • Assign a scribe, every time CONFIDENTIAL
- 30. Logistics: Q&A During Meeting Often badly managed, and very important Answer questions directly Script answers on the obvious questions – How much are you raising? – How long does this last? – What beachhead markets do you think are most promising? – What holes exist in your team? – Why won’t Google, Facebook, Twitter, or someone else eat your lunch? – What makes you the right team to do this? CONFIDENTIAL
- 31. Logistics: Post Meeting • Scribe: Write down all new QA for FAQ • Follow-up in email that day w/ thanks, etc. • Do what you need to handle rejection • Keep positive & keep in touch CONFIDENTIAL
- 32. Go To Resources • TechCrunch, VentureBeat, TechMeme, etc. • JoelonSoftware • http://www.startuplessonslearned.com/ • Startup digest • Netflix on Culture • Compstudy.com • Igor International Naming Guide • Paul Graham’s blog. CONFIDENTIAL 32
- 33. Thanks! CONFIDENTIAL 33