Download - How To Build A Cockroach Startup
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Building a CockroachHow to survive and thrive in 2016
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Recap of last 12 months
• Public markets killed some Private market valuations (thank you Box, Square, Twitter, Linkedin, Alibaba)
• Series B, C, D valuations affected
• Series A bar much higher (fewer deals)
• Flurry of angel and seed deals
• More copy-cats than innovations raised money
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Is it all Gloom & Doom ?
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Current Environment
• Valuation correction and markdowns in larger companies
• Round-size shrinkage• $100 Mn rounds in Series A / B stage will be history for a bit
• Pre-Series A & Series B extension rounds
• Strategics more active• Many Angel / Seed funded businesses will get acq-hired
• Cash-flow and profitability
• Unit-Economics & Sustainable Growth
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Enter the cockroach
• Lasted the dinosaur extinction millions of years ago
• Can live for six weeks without food
• Not choosy about what they eat
• Move fast and can hide during storms
• Adapt to environment / surroundings
• Lack glamour and do not look for limelight
• Can Fly when needed
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The ixigo story
• Started in 2006, Bootstrapped, Launched 2007.
• All Indian investors say No despite 100k+ non-paid visitors in 6 months
• Lost a co-founder in late 2007
• Seed round in Feb 2008 from Singapore-based fund
• Series A deal fell through weeks before Lehmann Brothers did
• Survived the downturn with team’s, landlord’s & investors support
• Continued innovating & growing through difficult times
• Raised Series A in 2011, Series B in 2015
• 90% users non-paid, growing user-base 2x YoY and revenue 3x YoY
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Lessons from every downturn
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Money buys a company
time but not the ability to executegrowth but not product-market fit
revenue but not viable business modeltraction but not real customer love
techies but not innovationVPs & AVPs but not passion
schwag but not culture
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Focus on the core value to users
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Hire Great PeopleSet Lofty Targets
Get Out of the Way
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Spend very little on marketing till organic growth & monetization
take off
(Do not fake growth)
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Unit-level economics matter(Don’t discount more than what you earn)
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Growth Hacking(mix of art & science, intuition & data)
Creative engineers not MarketersStory tellers not content writers
FB videos not TVSEO not SEM
Killer Product & Content = #1 Growth HackWord of Mouth = #1 Marketing Channel
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Learn to use PR & Media(but don’t waste time reading competiton’s PR –
only track why people use their product)
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Raise money whenever you can(Don’t overdilute for your stage though)
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Right-size sooner rather than later
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Revenue is VanityProfit is SanityCash is Reality
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Build a great culture(it lasts the test of times)
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Macro : India still rocks !
• In the next 15 years, India will see more people come online than any other country in the world
• Smartphone penetration is still at 20%
• Only 40 Mn transacting users on e-commerce => 10x upside in next 10 years
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“The very best companies get built in a down market”
Facebook, AirBnB, Uber, Tesla