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This is a must-read book for every business owner and entrepreneur. If you haven’t ordered your copy yet, here is the link to Amazon page: http://amzn.com/B006C9EM1Q“Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes” by Tarang Shah This is the presentation I recently gave to a group of 300 small business owners and it was received extremely well. The audience found it to be quite informative and inspiring. And so will you!What can small businesses learn from Venture Capitalists and their huge startup successes like Facebook, Groupon, Youtube and 70 other top startups of our time? In this presentation I will show you three easy steps to build successful small businesses and how you can incorporate key success characteristics of great entrepreneurs to change success potential of your business manifold.All the best! May success be with you in every step of your entrepreneurial journey!Tarang Shah & Sheetal ShahAuthors
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Introducing…..
22 TopVC
Funds
28 TopVCs
Roelof BothaSequoia Capital
Mike MaplesFloodgate Fund
George ZacharyCharles River Ventures
Sean DaltonHighland Capital
Howard MorganFirst Round Capital
Tim DraperDFJ
Harry WellerNEA
David CowanBessemer Venture
Mitchell KertzmanHummer Winblad
Scott SandellNEA
Gus TaiTrinity Ventures
Steven DietzGRP Partners
Ann WinbladHummer Winblad
Jim GoetzSequoia Capital
Roger LeeBattery Ventures
Ken HoweryFounders Fund
Eric HippeauSoftBank Capital
David LeeSV Angel
Ted AlexanderMission Ventures
Robert KibbleMission Ventures
Jim BoettcherFocus Ventures
Kevin McQuillianFocus Ventures
Mike HodgesATA Ventures
Alan PatricofGreycroft Partners
Rich WongAccel Partners
Vish MishraClearstone Partners
Randy KomisarKleiner Perkins
Peter WagnerAccel Partners
8 Amazing
Founders
Alex MehrZoosk
Osman RashidChegg
Michael BirchBebo
Paul ScalanMobiTV
Alfred LinZappos & Sequoia Capital
Kevin HartzXoom & Eventbrite
Rajiv LaroiaFlarion
Ben ElowitzBlue Nile & Wetpaint
70+ Most
SuccessfulStartups
One Question:Why so many startups fail while few defy all odds to
become billion dollar successes?
What’s their secret sauce?
35 Experts Answer:
Straight from the gut talk on startup successes & failures…….. war stories
behind top startups
What you will learn:1. Why startups fail?
2. What are the most common pitfalls you can avoid?
3. How to pick winning ideas and markets?
4. How to build winning teams?
5. How to pick investors?
6. When to ramp up or down?
7. When to sell or grow to IPO?
8. How to recover failing startup?
Five Must-Know Facts for Entrepreneurs
1. Big & Bold Idea (Non-consensus idea)
2. A.I.M. (Authenticity, Integrity, Motivation)
3. A+ DNA (Winning Team)
4. R.I.P. (Rapid Iterations & Pivoting)
5. Objectivity & Adaptability
1. Big & Bold Ideas
Non-consensus and unconventional ideas are in fact less riskier and more likely to succeed…….
So Dream Big, Be Bold & Go For It
2. Authenticity, Integrity & Motivation
Purity of your passion and integrity combined with 10k hours leading to authenticity serve as talent
magnet to attract best in business to join you
So A.I.M. high
3. A+ DNA
Startup success is all about people. Passionate and authentic entrepreneurs attract “A+” team and
build winning cultural DNA
So never settle for anything less than A+
4. Rapid Iteration & Pivoting
Hardly any original business plan made it to final winning product. Fast trial and error is key to land
product-market fit.
So iterate and pivot at very high RPM & with Small Turning Radius
5. Objectivity & Adaptability
Be passionately disinterested by actively looking for truth without bias about outcome. Then accept
and adapt.
No idea is worth billion dollar so listen to the data and market
What’s one most important thing that’s common among all Successful Companies?
Apple Google Facebook Amazon
They Delight their customers
The one’s that don’t suffer and eventually disappear
Copyright VCs At Work Tarang Shah
Zappos Netflix Southwest Airlines YouTube
Blockbuster Circuit City
MCI Xerox
What Should be your Mission Statement?
I want to Delight my customers
Forget about: I want to build the best mouse trap in the universe I want be known as best innovator in the galaxy I want to be the technology of choice And other blah, blah, blah
Copyright VCs At Work Tarang Shah
How to Delight your Customers?
Step 1: Understand their “Pain Point” or Need
Copyright VCs At Work Tarang Shah
Step 2: Validate the Need
Step 3: Find the Product-Pain Fit
Anatomy of Successful Entrepreneurs
Authenticity – Product view informed by 10k hours of tinkering; deep experience that provides insights into the fine nuances of market and customer
Passionate Disinterest – Passionate to seek out the truth but not biased about the outcome – highly objective
Genuine & Avid Passion to solve the problem and make a difference -> A Missionary
Iterative – Not afraid of failures but like Edison enjoys discoveries through methodical trial and errors
Big & Bold Head – “The World is Not Enough” ; Not afraid of non-consensus view
High Integrity – Transparent
and Trustworthy
Balanced Ego – Big ego to pursue unconventional ideas but in-check ego to surround with people smarter than him
Real Visionary – Can see the whole company beyond current product
Personal Relevance to the pain point being solved – motivation beyond making money
Extremely Focused – breaking vision into short-term metrics and single-mindedly pursuing it.
Big Ears – Listens actively and intently to customers and analytics
Copyright VCs At Work Tarang Shah
Step 1: Understanding the “Pain Point” or “Need”
Henry Ford: “If I had asked my customers what they wanted, they would have said faster horse”
Copyright VCs At Work Tarang Shah
Henry Ford: “What they really wanted was a faster way to get from point A to point B”
Steve Jobs would have never launched iPod, iPhone or iPad if he had asked us what we wanted
Message: Customers are not very good at telling you want they want and they are very cryptic about what they really want
Message: You have to get into psyche of your customer to understand her real need.
Key to get there is your Authenticity & Genuine Passion
Copyright VCs At Work Tarang Shah
You got to get so good that you not only know what they need but you can
anticipate what they may need
Step 2: Validate the Need
Is this a huge and universal pain point?
Copyright VCs At Work Tarang Shah
Is this pain point here to stay and expand?
You may find needs from being close to your current or potential customers or simply by trying to solve a problem for yourself
But need to have huge market need to build a big business
Youtube is a great example of this. Sequoia partner Roelof Botha provides great insights about this in the
book.
Changing Customer Behavior
• P2P Video sharing as a new customer behavior was reaching a tipping point in 2005
• 2004 Asian Tsunami UGC video sharing showed market timing was right
New Technology
• Availability and mass adoption of handheld camcoders
• Flash made is easy to watch videos right into internet browsers
Supporting Infrastructure
• Broadband and PC penetration provided widespread infrastructure for creation and sharing of UGC videos
Highly Attractive
Market
• Creation of billion dollar UGC video sharing market
Step 2 : Validate the Need
Disrupting Established Markets
Creating 10x advantage with new technology
Fat Cats New Technology
New Lean Mean Cat
• Stagnant, Non-innovative and Non-responsive lazy cats
• Leveraging Technology to create 10x value-add over incumbents
Fat Telcos P2P Sharing Skype
Blockbuster Internet Netflix
Shrinking a dollar to make 10 cents (e.g. internet ads)
Identifying New Promising Markets
Every new platform that embeds itself becomes a fertile ground for sprouting next group of billion dollar
startups
Transistors
Chips
1950 1960 1970 1980 1990 2000
Micro Computers
PCsIntel
AppleMicrosoft
3ComCisco
NetscapeeBayAmazon
???
IBM LANsWANs
Internet
Mobile
What are some of the Emerging Platforms Today?
Smartphone iPad/ Tablet
PayPal Amazon ???
Facebook Twitter
???
ProductPain
To succeed you got to design the right product for your customer pain…
Copyright VCs At Work Tarang Shah
Step 3: Find the Product-Pain Fit
Step 3: Find the Product-Pain FitCopyright VCs At Work Tarang Shah
Your Goal: To create a product that resolves the customer pain in a delightful way
What’s common among best products?
1. They focus on solving core need better than anyone else– Forget all those extra features (Google with search)
2. They do all heavy-lifting for the customer (YouTube)
3. They are extremely simple to use and easy to learn (iPad)
4. They are able to anticipate hidden needs (Facebook with desire to know what friends are up to)
5. They put customer experience above everything else (Zappos)
Your Challenge..
1. You have some idea on customer pain but you need to zero-in on exact pain point
Copyright VCs At Work Tarang Shah
2. Market can be quite unpredictable – it can develop very slowly
Copyright VCs At Work Tarang Shah
Your Challenge..
3. Market can be quite dynamic – it can move and develop in adjacent space
Copyright VCs At Work Tarang Shah
Your Challenge..
Copyright VCs At Work Tarang Shah
Your Tool - R.I.P. (Rapid Iteration & Pivoting)
Why Iterate & Pivot? - Most original business plans don’t become final success.
The best way to land the right customer need and create right product for is through rapid test and fail or iteration
It’s a scientific formula that any business can apply
Edison was probably the first inventor to use this method of scientific dogged trials and errors
They change and morph multiple times before becoming successful (Facemash vs Facebook, ThePoint vs Groupon, Angry Birds, etc.)
Authenticity helps in determining range of motion of your hypothesis
R.I.P. (Rapid Iteration & Pivoting)
Passionate Disinterest allows you to look at results objectively and without any bias
Copyright VCs At Work Tarang Shah
High RPM & Small Turning Radius
1. Small turning radius allows you to turn inside your competitor
2. High RPM allows you to figure new things faster and cheaper than competition
Copyright VCs At Work Tarang Shah
Time and money are your two most important resources
Bonus Tip: Building World Class Team
1. Surround yourself with people smarter than yourself – key is not to get intimidated or feel insecure around smarter people
Hire for Cultural fit as much as
functional skills
Hire People you have worked
with well before
Lift the quality of team with each hire and
fire
Hire people who can start adding value day 1 – No time for training
Hire unfettered passion without
ego & restrictions of past learning
Fire promptly and amicably
someone who is not fitting well
2. Six rules of smart team building…
Copyright VCs At Work Tarang Shah