vc & startup success lessons for small businesses

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


How to Delight your Customers?

Step 1: Understand their “Pain Point” or Need


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


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”


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


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?


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…


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


2. Market can be quite unpredictable – it can develop very slowly


Your Challenge..

3. Market can be quite dynamic – it can move and develop in adjacent space


Your Challenge..


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


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


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…


vc & startup success lessons for small businesses

Business

small turning

rapid iteration

big amp

objectivity

copyright

customer pain

pain point

dna