Stanford etl series (oct 2010)

Lessons on Starting a Company

From Both Sides of the Table

Mark Suster

Stanford ETL, October 2010

@msuster

Me

Software development at Andersen Consulting

BuildOnline, CEO in London at 31(sold to SwordGroup)

Koral, CEO in Palo Alto(sold to Salesforce.com)

VC in Los Angeles

Getting Started

Have an idea

You don’t have to be a genius

You just need to get started

You need to be passionate about it

And you need to do research

Get a prototype built

The Team

Assemble a diverse team

Biggest dilution comes before you start

Huge premium for taking the first leap

Co-founder myth reinforced by selective bias

Make sure technology is part of your DNA

Raising Capital

Raise capital, but not too much

Start Lean

1. without much flesh or fat; not plump or fat; thin

2. of edible meat containing little or no fat

3. lacking in richness, fullness, quantity, etc.; poor: a lean diet; lean years.

4. spare; economical

You Can “Go Fat” Later in Life

Once product / market fit are clear

Many markets are winner take most

Big tech firms compete much more quickly these days

Believe me – venture capital isn’t dead

Why The ‘Fail Fast’ Mantra Must Fail

1. to fall short of success or in something expected

2. to receive less than the passing grade or mark

3. to be or become deficient or lacking

4. to dwindle, pass, or die away

A Lesson in Branding

Name = URL

Name doesn’t box you in a corner

Be careful about words that mean something else

If possible avoid the three F’s

(Friends, family & fools)

Angels vs. VCs?

The people you work with matters more than the classification of

investor

How do you access investors?

Intros: portfolio, entrepreneurs, lawyers, etc

Getting their money is hard

You need an anchor investor

If you show proof the rest usually follows

Critical Success Factors

Skate Where the Puck is Going

Ship Product

The death of many companies is the inability to ship frequently enough

Test monetization early

The Sausage Factory is Never Pretty

From the outside it looks pretty. From the inside? Not so much

Have fun

Startups are roller coasters, enjoy the ride!

Q & A