startup weekend ghent

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© 2014, iText Group NV, iText Software Corp., iText Software BVBA © 2014, iText Group NV, iText Software Corp., iText Software BVBA Startup Weekend Ghent iMinds December 5-7, 2014

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My slides for the Startup Weekend Ghent (December 5-7). It's also kind of a "Best of BizCamp" overview. Three really short, provocative, 10-minute talks about doing business.

TRANSCRIPT

Page 1: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend GhentiMinds December 5-7, 2014

Page 2: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie2

Who is Bruno Lowagie?Original developer of iText®, an open source PDF libraryAuthor of “iText in Action” books published by Manning PublicationsFounder / CEO of the iText Group

iText Group NV (Belgium)iText Software BVBA (Belgium)iText Software Corp (USA)

AwardsBelCham Entrepreneurship Awards 2014: Winner “Most Promising Company of the Year”

Deloitte’s Technology Fast 50 2013: 3rd in Belgium, 10th in Benelux, 53rd in EMEA 2014: Winner (Belgium)

Page 3: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Part 1

Three Things watching House MD taught me about doing business

Page 4: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie4

Fact #1There are as many diagnoses as there are specialists.

The developers say: “Your product needs more features!”The salespeople say: “Your product needs to be less technical!”The VCs say: “You need more funding to grow faster!”

Page 5: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie5

Conclusion #1

Do not follow any advice, before you know the background and motives of your adviser!

Page 6: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie6

Fact #2

Page 7: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie7

The Four Innovation LiesLie #1: Target customer: “Of course I’ll buy that!”Lie #2: Product developer: “We’ll be ready to ship in six months!”Lie #3: Salesperson: “Of course I can sell that!”Lie #4: Senior executives: “We’re open to anything!”

Page 8: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie8

Conclusion #2

Don’t be angry with people who lie, just make sure you don’t lie to yourself!

Page 9: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie9

Fact #3Tests take time, treatment is quicker.We treat it:

If he gets better, I’m right;if he dies, you’re right!

Page 10: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie10

Conclusion #3

The treatments don’t always work, but symptoms never lie!

Page 11: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie11

Epilogue

You don’t always get what you want,But if you try sometimes

you get what you need…

Page 12: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Part 2

The Founder’s Dilemmas

Page 13: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie13

Why this book?

IT’S UNFORTUNATE BUT TRUE: IF ENTREPRENEURSHIP IS A BATTLE, most casualties stem from friendly fire or self-inflicted wounds.

Page 14: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie14

Making decisionsCofounders (Chapter 3-7)

Solo vs. TeamRelationshipsRolesRewards

Hires (Chapter 8)RelationshipsRolesRewards

Investors (Chapter 9)Self-fund vs. Outside capitalSources of capitalTermsBoard of Directors

Successors (Chapter 10)Trigger of successionOpenness to successionDesired role after succession

Other factorsPreferred rate of startupCapital intensityCore founder’s capitals

Page 15: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie15

Pick your Quadrant

Complete control

< $$$

Little control

> $$$

Page 16: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie16

Control decisionsCofounders (Chapter 3-7)

Solo (or weak cofounders)Relationships: immediate circleRoles: be the CEORewards: maintain most equity

Hires (Chapter 8)Relationships: close personal networkRoles: keep control of key decisionsRewards: hire less expensive juniors

Investors (Chapter 9)Self-fund: “bootstrap”Friends, fools, familyResist investor-friendly termsAvoid official board

Successors (Chapter 10)Avoid succession until forcedResist giving up CEO positionPrefer to leave

Other factorsGradual to moderate growthLow capital intensityCan build startup without help

Most likely outcome:• Maintain control• Build less value

“KING”

Page 17: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie17

The “King” Quadrant

Complete control

< $$$

Little control

> $$$

KING

Page 18: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie18

Control decisionsCofounders (Chapter 3-7)

Build teamRelationships: find the best foundersRoles: delegate decision-makingRewards: share equity

Hires (Chapter 8)Relationships: hire experienced staffRoles: delegate decision-makingRewards: incent with cash or equity

Investors (Chapter 9)Take outside capitalTarget angels or VCsBe open to termsBe open to losing control

Successors (Chapter 10)Initiate succession “in time”Be open to giving up CEO positionRemain executive (expertise)

Other factorsFast to explosive growthHigh capital intensityFill gaps by involving others

Most likely outcome:• Imperil control• Build financial value

“RICH”

Page 19: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie19

The “Rich” Quadrant

Complete control

< $$$

Little control

> $$$

KING

RICH

Page 20: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie20

Chances at successIf you go for being King

Maintain control: 80% x 80% x 80% = 51% probabilityBuild fullest value: 20% x 20% x 20% = 1% probability

If you go for being RichMaintain control: 20% x 20% x 20% = 1% probabilityBuild fullest value: 80% x 80% x 80% = 51% probability

If you go for something in-betweenMaintain control: 80% x 80% x 20% = 13% probabilityBuild fullest value: 20% x 20% x 80% = 3% probability

Page 21: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie21

The “Exception” Quadrant

Complete control

< $$$

Little control

> $$$

KING

RICH

EXCEPTION

Page 22: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

22

The “Failure” Quadrant

Startup Weekend Ghent: Bruno Lowagie

Complete control

< $$$

Little control

> $$$

KING

RICH

EXCEPTION

FAILURE

Page 23: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie23

Try for yourself!

Page 24: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Part 3

One more thing

Page 25: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie25

The pie seen from your side

$1,000,000,000

YOU INVESTORS

$1,000,000

YOUINVESTORS

Page 26: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie26

The pie seen from a VCs side$1,000,000,000

YOU INVESTORS

$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS

$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

Page 27: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie27

Think before you decideDo you really need a VC?

Page 28: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie28

Closing thought

Page 29: Startup Weekend Ghent

© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Questions?