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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

Logistics: 30 minute talk, then Q&A

About me

Wharton MBA ’98

Microsoft ‘98-’07

Founder, Moonshoot ‘07-’10

Venture Partner, BlueRun Ventures, ‘10-Present

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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

• Representative investments

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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 actually 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” Principal.

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. Integrity and Value Add

10. Pitching & Fund-Raising

11. My go-to resources

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It’s a Golden Age for Entrepreneurs….

• Cheaper than ever to start a company.

• Better resources (Y-Combinator, Founder Institute, Startup Digest, 500Startups, StartupCompanyLawyer, TechCrunch, etc.).

• Technology is easier to learn, access, &c.

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… And Investors Understand This.

I’m seeing 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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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

• 0-2 get to term sheet

• Score each

• Multiple regressionMarket

Traction

Team

Product

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• World’s largest store

• Redefine social

• Organize & access information

• Reinvent money

• ????Your Company

How I think about Markets Choose Any 4 Companies, Stack Rank Vision

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• World’s largest store

• Redefine social

• Organize & access information

• Reinvent money

• Teach English to children everywhere

How I think about Markets Choose Any 4 Companies, Stack Rank Vision

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• Internet Radio

• Flash retail sales

• User generated video & tv

• Social local food media

How I think about Markets Choose Any 4 Companies, Stack Rank Vision

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Co-Founders

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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Whatever Works

Lean Startup

Scrum

StealthCo

Never stealth!

Customer Development

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

Reid Hoffman

Minimum Viable Product

Revenue from Day 1

Building for Scale

OffshoreEverything Inhouse

HTML5

Native Apps

You never get a second chance to make a first impression. – Anon.

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Whatever Works

Lean Startup

Scrum

StealthCo

Never stealth!

Customer Development

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

Reid Hoffman

Minimum Viable Product

Revenue from Day 1

Building for Scale

OffshoreEverything Inhouse

HTML5

Native Apps

You never get a second chance to make a first impression. – Anon.

My Advice & Learning:

• Absorb all this stuff

• Listen to people you trust

• Use what works for you

• The key is work fast & economically

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Getting 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

• Persistence

• Follow-through

• Showcase progress

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Hire Slow, Fire Fast

Hire Slow• Wait for real pain

• Everyone interviews

• Share feedback

• Do reference checks

• Dinner w/ SO

Fire Fast• When perf lags, speak up

• Set clear expectations

• Set a crisp timeline

• Fire

• Ensure lawyer is in loop

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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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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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Fund-Raising & Pitching

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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 (MUST READ!!! Esp on functional specs)

• Startup digest

• Netflix on Culture

• Compstudy.com

• Igor International Naming Guide

• Paul Graham’s blog.

• http://www.startuplessonslearned.com/ (Eric Ries’ blog)

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Thanks!