Startup & Venture Lessons

Jay Jamison Venture Partners, BlueRun Ventures

jjamison@brv.com | @jay_jamison | jayjamison.com

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Agenda

Introduction Top 10 Lessons Q&A

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Introduction
Employee Founder

Investor

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About BlueRun Ventures
• Over $1.0B under management • Investing out of Fund IV ($240M)

• Focus: Mobile & consumer internet
• Seed & Series A

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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.

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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
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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
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… 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

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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.

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Lesson 2: What’s #1: Markets, Team, or Product?

Which is most important?

A.Market
B.Product C.Team

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Which is most important?

A.Market
B.Product C.Team

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Analysis
• 75 pitches / quarter

Market Team

• 0-2 get to term sheet
• Score each • Multiple regression

Traction
Product

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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

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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

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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

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Finding a Technical Co-Founder
More important than fund-raising

Requires almost the same skills
• Pitching and salesmanship • Capacity to speak enough geek • Resourcefulness

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Default founder split: equal

50% 50%

33%

33%

33%

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Lesson 4: The Whatever Works Principle
You never get a second chance to make a first impression. – Anon.

Lean Startup
Revenue from Day 1 Building for Scale Scrum

If you’re not embarrassed with your first launch, you’re waiting too long. – Reid Hoffman

Never stealth!
Everything Inhouse

Offshore

Minimum Viable Product
HTML5

StealthCo
Native Apps
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Customer Development
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Whatever Works
You never get a second chance to make a first impression. – Anon.

My Advice &
• Absorb all this stuff

If you’re not embarrassed with your first launch, Learning: you’re waiting too long. – Reid Hoffman

Revenue from Day 1 • Use what works Building for Scale for you Scrum Everything Inhouse • The key is work fast & economically

Lean Startup • Listen to people you trust
Offshore

Never stealth!

Minimum Viable Product
HTML5

StealthCo
Native Apps
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Customer Development
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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%

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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”…

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Be A Meat-Eater
• Speed

• Swagger & optimism
• Persistence • Follow-through • Showcase progress
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Lesson 6: Hire Slow, Fire Fast
Hire Slow • Wait for real pain • Everyone interviews • Share feedback • Do reference checks Fire Fast • When perf lags, speak up • Set clear expectations • Set a crisp timeline • Fire

• Dinner w/ SO

• Ensure lawyer is in loop

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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…

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Love It or Leave It

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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

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Lesson 10 Thoughts on Fund-Raising

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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

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Logistics: During Meeting

• Give everyone who attends a role

• Script which person handles which slide(s)
• Assign a scribe, every time

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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?

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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
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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.

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Thanks!

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