Category Archives: Venture Capital

Top Start Up Tips from Mark Cuban

Well this Mark Cuban has seen it, done it and got the t-shirt..

12 Rulles for Start-Ups

Anyone who has started a business has his or her own rules and guidelines, so I thought I would add to the memo with my own. My “rules” below aren’t just for those founding the companies, but for those who are considering going to work for them, as well.

1. Don’t start a company unless it’s an obsession and something you love.

2. If you have an exit strategy, it’s not an obsession.

3. Hire people who you think will love working there.

4. Sales Cure All. Know how your company will make money and how you will actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but aren’t as expensive to pay.

6. An espresso machine? Are you kidding me? Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keep everyone in tune with what is going on and keep the energy up. If an employee is about privacy, show him or her how to use the lock on the bathroom. There is nothing private in a startup. This is also a good way to keep from hiring executives who cannot operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over a personal secretary, run away. If an exec won’t go on sales calls, run away. They are empire builders and will pollute your company.

8. As far as technology, go with what you know. That is always the most inexpensive way. If you know Apple, use it. If you know Vista, ask yourself why, then use it. It’s a startup so there are just a few employees. Let people use what they know.

Never Listen to Your Customers

A great quote from technology luminary Alan Kay that every entrepreneur needs to remember: “The best way to predict the future is to invent it.”

I’m working with a company that at one point had a product that was not only best in its class, but also technically far ahead of its competition. It created a better way of offering its service, and customers loved it and paid for it.

Then it made a fatal mistake. It asked its customers what features they wanted to see in the product, and they delivered on those features. Unfortunately for this company, its competitors didn’t ask customers what they wanted. Instead, they had a vision of ways that business could be done differently and, as a result, better. Customers didn’t really see the value or need until they saw the new product. When they tried it, they loved it.

So what did “my” company do when it saw what its competitor had done? It repeated its mistake and once again asked its customers what they wanted in the product. Of course the customer responded with the features that they now loved from the other product.

The company didn’t improve its competitive positioning. It put itself in a revolving door of trying to respond to customer requests. To make matters worse, resources and brainpower that could be applied to “inventing the future” were instead being used to catch up with features that locked the company into the past.

Entrepreneurs need to be reminded that it’s not the job of their customers to know what they don’t. In other words, your customers have a tough enough time doing their jobs. They don’t spend time trying to reinvent their industries or how their jobs are performed. Sure, every now and then you come across an exception. But you can’t bet the company on your finding that person among your customers.
Instead, part of every entrepreneur’s job is to invent the future. I also call it “kicking your own ass.” Someone is out there looking to put you out of business. Someone is out there who thinks they have a better idea than you have. A better solution than you have. A better or more efficient product than you have. If there is someone out there who can “kick your ass” by doing it better, it’s part of your job as the owner of the company to stay ahead of them and “kick your own ass” before someone else does.

Your customers can tell you the things that are broken and how they want to be made happy. Listen to them. Make them happy. But don’t rely on them to create the future road map for your product or service. That’s your job.

Source: http://www.entrepreneur.com

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London vs Silicon Valley…..on the VC trail

Great post from Andrew Scott on venture capital, funding and growing your start up

The Myth Of Silicon Valley

Posted on July 29, 2011

Recently the on-going discussion of London versus the Valley has got a higher profile again thanks to articles like this and the fact European VC’s still seem unable to evolve let alone revolve: Even Fred Destin say’s European VC’s need revolution not evolution. Here here to that.

While the average London start-up’s dilemna* is should I go to Silicon Valley or stay in Silicon Roundabout? (which I touched upon last week) and takes the mind share of the European tech-elite, I don’t think the Americans give two hoots. Why would they? Silicon Valley is where it’s at, right?

What did catch their attention was Hermione Way’s post The Problem With Silicon Valley Is Itself on The Next Web, which prompted a response from Robert Scoble on Google+, both worth reading by the way.

Has Silicon Valley Lost It’s Way?

Loosely, Hermione complains that The Valley no longer truly innovates and it is full of fluff. Robert says it is still the only place really changing the world and no-one else does in the same way or to the same extent.

Naturally as I’m writing a retort, I must have a different view: I think they’re both wrong; but there is an element of truth in both claims.

With a long history of game changing technologies and innovation, has Silicon Valley had it’s day?

With Silicon Valley, it’s the iceberg problem. You only see the tip of what’s going on underneath. Even I have grown tired at times of the sometime obsessions (and many say poor journalism) of platforms like Techcrunch; but you have to be realistic about what they represent. They are not trying to be the BBC or a broadsheet. They are for mass market consumption by the geeks, the early adopters, the DiggNation kids and Appleheads. At this they excel.

As a tabloid Techcrunch will write what sells impressions – they are not representative of the depth of Silicon Valley.

The problem is surely that inevitably, like the general news on TV and in most tabloids, it skews to easily consumed, often banal, content. The lowest common denominator.

The masses are selfish; they don’t care about new window material technology for the Empire State Building, they care about Big Mac $1 Burgers, Foursquare checkins, saving 50% via Groupon on their next t-bone steak. They care about themselves (see: FacebookGoogle+Flickr ..they are all about your ego, about your life).

This is why Techcrunch.com doesn’t shout about the other low level technologies (or indeed publish much about things outside of the USA) and instead you get 3 posts a week for 9 months straight about a company like Foursquare. Well, good for Foursquare. Gaming location, the system and MG all in one go!

Of course, I’m simplifying the argument, but one has to, to make a salient point.

These publishers publish that stuff because people consume it. They don’t care about a new silicon chip design, even if it does save lives or save money. It’s too abstract for most people. 

The Myth Of Silicon Valley

So let’s look back for a moment. Why is Silicon Valley (and it’s venture capital ecosystem) Silicon Valley?  Actually, it has a far longer history of entrepreneurship than most other centres of technology.

Silicon Valley started growing toward it’s present day nearly 100 years ago. During the war, the government funded innovation for large military and cold-war driven contracts with radio related technology, radar and later, other electronic warfare.

This graph is NOT true. Silicon Valley grew gradually since the war, it’s taken decades. Click for more information and Steve Blanks excellent -and accurate- history.

Frederick Terman from Stanford played a pivotal role in the 40′s and 50′s pushing students out of education encouraging them (instead of doing PhD’s or masters) to start-up innovative technology firms to serve the country and defend against the Nazis and then the perceived Communist threat.

The 60′s brought transistors, the 70′s microchips, then Microsoft, Apple and the other leviathons we all know today. At the end of the 70′s deregulation in the investment markets enabled Venture Capital to begin in earnest.

London, Berlin, Amsterdam nor Tel Aviv has had any of this history. A few cycles of Silicon Valley computer and internet boom later and there are:

  • 100′s and 100′s of VC’s thus a huge pot of money
  • A tech ecosystem which is bigger than anywhere
  • There is a bubble cycle of hype driving investment and belief in the next big thing
  • and a lack of understanding of the outside world (actually sometimes useful when building a company which every normal person says nobody will ever use: see Twitter).

Add to this a huge early adopter crowd which can test-bake the next crazy Twitteresque idea to see if it’s real – all 2 years in advance of the rest of the western world being ready to use it – and you have a compelling place to create some seriously game changing products and services.

These advantages are why we in Europe are behind with consumer internet, why we don’t have a Google, a Cisco and now with mobile phone software it is the valley where innovation is getting funded in way which will give the start-ups longevity to get their new services right. It’s why Facebook and Google grew in the Valley.

I feel innovation in Silicon Valley – both whether hardcore tech or social media – is alive and well. Hermione should have cause to be worried about her native land though, for the same reasons she moved to Silicon Valley rather than continue in Silicon Roundabout or move to Silicon Alle or Silicon Valley! (do keep up ;-)

European Unadventure Capital

The history and experience in the Valley, also contribute to why European Venture Capital is behind and why our ecosystem is behind. We simply don’t have it.

Had visionaries in Cambridge (and government people in charge of technical innovation) pushed harder during the first dot com boom to make Silicon Fen more than a running joke, then Cambridge England might have had a 10 years start on Silicon Roundabout.

Cambridge was and is about the right size to become a town all about tech. It remains an important centre for science and biotech, but it is no centre for internet start-ups and with the growth of Old Sreet never will be.

The rooftops of Cambridge, including Kings College Chapel. More Fen than Silicon.

I started a localized web portal in Cambridge (wanting to scale to 140 towns and cities) in 1998, but couldn’t get funding. Arguably a lack of vision from investors -rightly or wrongly- prevented access to capital. I pivoted to B2B and a web development company which I later exited.

It’s a hugely wasted opportunity; possibly contributed to by the all suffocating Cambridge University which essentially controls the city and most certainly because of a lack of available investment capital for start-ups.

There’s something going on though, as New York is hardly a small city yet seems to be catching up with it’s Boston neighbour, touting Silicon Alley.

Cities like London and New York are almost too diverse, with lots of other history and other industries, meaning “Tech” will never be elevated to the focus which San Francisco and Silicon Valley enjoys.

Small means focused.

Where else would you be able to start Square and have tech-savvy iPad owning shop keepers and cafe owners clammer for the service with open arms? Once it’s proven, bug fixed and entrenched in Palo Alto and San Francisco, where everyone carries an iPhone, they’ll raise another 1/2 billions dollars and take over the world.

Old Street is more than a “hotspot”, it’s burgeoning; but without follow on finance and better skills in the VC community, start-ups are being left as start-ups.

So Silicon Valley Is The Centre Of World Innovation?

In essence I agree with Robert Scoble that the depth of innovation is SV is astounding; however he is wrong to say world changing technologies don’t come from elsewhere.

That ARM processor in nearly every mobile phone you’ve touched in the last 2 years? That’s from Cambridge, England (my home town in fact).

The computer? invented in England.

The jet engine? England (and if our government had funded it to the extent the US government funded innovation in Silicon Valley, WW2 would have been a lot shorter!)

OK so you see where this is going…

For me problem with the UK and Europe compared to America and Silicon Valley, is we’re not good at scaling.

Sure, the financial industry seems to do it just fine – raping and pilleging it’s way literally to the top of the global finance world; but taking good technologies and funding them, patiently nurturing them, growing them, having faith in them and their young founders, to become truly global players seems to be something in the UK and Europe we’re not very good at.

THAT is the big question.

The question is not why can’t we innovate, for we don’t lack of innovation. The question is why are we unable to scale our innovations rapidly to become the global market leader?

Back in Europe, where the history comes from…

One problem  in London and Europe for technology innovation to scale (aside from these), is certainly finance.

This is grossly ironic, given London’s pre-eminence London is the world’s global financial capital, with New York in second place and Hong Kong in third.

The discussion of the problems with European VC’s, the lack of Googlesque companies and whether a start-up should start, or move, to The Valley, is a persistent topic in the London tech scene. The UK versus US funding debate is always threatening to popup on tech conference panels; to some extent for good reason but it also becomes boring and negative, though I entirely understand why the conversation needs to be had.

The ecosystem in London is less developed and the VC’s (with a few exceptions) are guilty of much of what Nic Halstead (and many more behind closed doors) will tell you: tech venture capital in London is run by financiers. This, is a problem; may be our biggest problem in Europe.

It perhaps underlies other knock-on effects, which is a lack of understanding of early stage capital requirements, what it really takes, to run and scale an internet business and being risk averse.

Read it and weep. I don’t agree with the crazy $1 billion invested in the likes of Groupon, but you can’t make butter with a toothpick. My own last start-up was expected to compete with our US counterparts of one fifth of the funding. The numbers seem pretty clear.

With little hands on experience, many European VC’s treat a start-up like an investment on the stock-market. Short termist, they undervalue Founders, don’t understand -or invest in- bold long term visions and they often under-capitalise (largely for all the reasons I’ve just listed). Facts seem to back this up (see graph above).

It is also claimed that European venture capitalists more commonly have a background in finance, while US venture capitalists tend to be scientists and ex-entrepreneurs. The implication is that the lack of scientific expertise among European VCs means they are less able to identify investments with high potential, than their counterparts in the US.

Bottazzi, Da Rin and Hellman (2004) undertook a survey of European VC and noted:

‘What may come as a surprise is that less than a third (of VC partners) actually has a science or engineering education.’

Half of all partners in their survey have some professional experience in the financial sector with ~40% having corporate sector experience. The recent European Investment Fund report by Roger Kelly, says that:

“Hege, Palomino and Schweinbacher (2009) observe that US VCs are often more specialized, and note that there is evidence that US venture capitalists are more sophisticated than their European counterparts, which contributes to the explanation for the difference in performance”

So Everything Is European VC’s Fault? Obviously not. I just personally feel it is the biggest single issue.

Entrepreneurs also have to up their game; pitches from many European founders are frankly terrible. Poorly delivered, unfocused product and ill-thought out business case. Both entrepreneur’s and employees need a more “can-do” attitude, to network better and think bigger.  I’m not saying it’s easy, it’s not. I’ve been there many times and made many mistakes myself.

Some people say local culture doesn’t always help, that it’s not fashionable in many countries to be an entrepreneur or want to make millions. I’m not so sure this is an issue – doens’t seem to phase the stockbrokers.

The size issue probably doesn’t help; tax systems, incentives and finance rules are not consistent for VC across Europe – but then again the Finance industry has managed certainly in London (to disastrous results in 2008!) so why not tech VC?

European early stage VC is laughably low compared to the US, in European VC’s efforts to invest in later stage supposedly “safer” companies. All capital, little venture.

What to be done?

As an ecosystem, as a government and as a Venture Capital community, we should then now focus more on how to scale our businesses and fund the existing innovation from the many good entrepreneurs, encouraging a drive for global domination and find a way to teach European venture capitalists how to be more entrepreneurial and visionary, rather than only get more people to start a tech-business, without the proper mid and late stage finance, skills and infrastructure in place.

* Seems to be a world or argument raging about dilemna or dilemma. OED says Dilemma, but then why does the Times write dilemna? I’m sure I was taught dilemna, but the odds seem to be on the side of dilemma.

More reading on European VC’s:


Four Reasons Index Ventures Invested In Grey Area

Earlier this week Grey Area announced a whopping 1.9 million euro series A round from Index Ventures, London Venture Partners and Initial Capital. This is one of the largest single rounds into the Finnish gaming companies in the recent years for sure. What makes this all the better for the whole country and Northern Europe for that matter, is that the financing came from overseas from globally respected investors. Ben Holmes from Index Ventures outlined four reasons why they invested in Grey Area. I think this is a good read for all entrepreneurs to keep in mind if they are looking for venture capital.

The four reasons Ben outlined in the Index Ventures blog post are also shown below:

* Exploding market – The iPhone and Android ecosystems have transformed and democratised mobile gaming. I have written in the past about how fragmentation and the operator channel made the whole mobile app business a nightmare. This is no longer the case, entrepreneurs can access vast audiences by being creative around marketing rather than using the traditional brute force approaches.

* The right monetization model – We have seen with existing investments in Stardoll, Moshi Monsters and Playfish as well as other companies such as Gameforge and Zygna that free-to-play with in-game purchase is probably the most lucrative business model in gaming currently. In-game purchases were rolled out by Apple last year and now a few of the “Top Grossing” titles in the iPhone appstore charts are free-to-play games. I would predict that over the next year that the majority of mobile gaming revenues will shift to free-to-play games.

* Positive early traction. One of the challenges with finding investments in this sector is that there are literally hundreds / thousands of developers writing for iPhone and Android. Those with substantial traction and monetisation tend to be valued stratospherically. Finding something which was early but was already showing its potential was what we were looking for. Shadow Cities fitted this criteria precisely. The early beta data from Finland showed very promising metrics around both engagement and monetisation. The app fairly quickly became the Top Grossing game in Finland soon after launch. Now just the rest of the world to conquer …

* Great team – Just four people when we first met, but already achieved a lot in a short timeframe and on a shoestring budget. If you want to see how effective entrepreneurs will be once they have money, see how much they can achieve without financing – that is always the best pointer.

From: http://www.arcticstartup.com/2011/02/25/four-reasons-index-ventures-invested-in-grey-area


Can a start-up raise too much money?

Some wise words from a VC guys and a games industry guy on money, money, money….read on…

“Together with Nic Brisbourne of The Equity Kicker / DFJ Esprit, I am writing a series of 50 questions you should ask when raising venture capital. We expect the series to run for a year, after which we will collate the answers into a book. We view this as a collaboration, so please comment to help make this series even more useful.

Can there really be such a thing as a startup raising too much money?

Of course there can. The history of investment is littered with example of companies that raised too much capital, were feted by the press, government and investors and then imploded before their products had made a dent on the market.

From the games industry, the most recent example is RealTime Worlds, which raised $104 million and closed a few weeks after it launched its magnum opus, APB. During the dot com boom, there were many examples, but perhaps the most egregious was Boo.com, which raised $135 million, spent it all within 18 months and went bust without having really launched a product at all.
Why is having too much money bad?

Having too much money is bad because it stops a startup from fulfilling its primary function: to iterate its way to product/market fit.

In a previous post, I explained what product/market fit means, and why it is so important to a startup. I hope it will quickly become apparent why too much money is detrimental to the process.

Finding product/market fit is about iterating. It is about changing the product, the business model or even, in its most radical form, the entire target market, in response to feedback from customers.

I’m not for a moment suggesting that a startup CEO needs to respond to every crazy idea of every customer. He or she needs to use face-to-face conversations with customers, detailed analytics, feedback from the sales and marketing teams and every tool in the workshop to understand where the perfect confluence of product, market and team occurs.

He or she then needs to reshape the company to deliver on that confluence. That can be a very scary process.

ngMoco CEO Neil Young pivoted away from paid-for games on the AppStore because he believed that he could not achieve meaningful scale as a games business given the rapid downward trend in pricepoints. He abandoned a business model that was currently profitable for his company based on his belief (and copious evidence) that transitioning to a business model that was free with microtransactions satisfied the market need much better – and would be much more profitable. Eighteen months later, he sold ngMoco for $400 million to DeNA of Japan.

The concept of pivoting may be overused in 2011 (see this New Yorker cartoon), but it is a useful one. It is a phrase that allows startup entrepreneurs to say not “we failed” but “we tried, and learned, and are trying again.”
Change is scary, and money makes it unnecessary

Companies with lots of money don’t need to pivot. They can tell themselves that the problem is with the sales team, or with customers not understanding the product, or with usability issues.

They tinker under the hood instead of understanding the market. They spend money on a sales force to pitch, instead of forcing the CEO into the marketplace to hear from his prospects why they are not buying. They execute, execute, execute.

Against a business model that does not work.

Raising money is a great thing. Having lots of it is a wonderful comfort. But for a startup trying to find its place in the market, it can be disastrous.”


Start-up Advice from Mark Suster

Some wise words on start ups courtesy of Mark Suster (sucessful entrepreneur you know!)…

“I usually tell people that everything I learned about being an entrepreneur I learned by F’ing up at my first company.  I think the sign of a good entrepreneur is the ability to spot your mistakes, correct quickly and not repeat the mistakes. I made plenty of mistakes.”

Below are some of the lessons I learned along the way.  If there’s a link on a title below I’ve written the post, if not I plan to.  The summary of each posting will be here but the full article requires you to follow the links.

For now it’s mostly an outline for me to follow (in no particular order).  I’ve now started so be sure to look for links.  If you want me to do one sooner rather than later leave a comment.  If the topics seem interesting to you please sign up for my RSS feed or email newsletter on the home page.

Disclaimer: I ran two SaaS software companies.  My experiences come from this.  I can’t say they’re applicable to all businesses but I think many of the lessons will be applicable to most tech firms.

1 – Should you start a company or go work for someone else? – In this post I talk about whether it’s time to “earn” or to “learn” – a guide on thinking about when to start a company.

2 In the Beginning (most common early mistakes) – Many founders make mistakes in the first 12 months of business that cost them dearly as they build their companies.  These mistakes revolve around intellectual property, founding team members, initial product that is built and market validation.

You also need to consider founder scenarios, ownership, prenuptials and stock options.

Learning to work with lawyers.  Start early, build relationships, make them a part of your business.

Do you still need a business plan to start a company?  Conventional wisdom amongst uber-startup CEOs and VCs is that you don’t need a business plan.  Just launch and iterate.  They’re wrong.  While you shouldn’t write a Word document, a good financial model is a must.  This post tells you why.

4 Choose your investors carefully.  There are many bad investors out there – I call them VC Seagulls.  Read here to see some of the signs to be careful about.

5 Hiring at a Startup or Looking for a Cofounder? Know thy Weaknesses –  Before you build out your senior (or even junior) team you need to inventory your strengths / weaknesses.  Be honest with yourself.  And don’t hire 5 clones.  Plug your weaknesses.

6. Don’t Drink Your Own Kool Aid – There is a hype curve in any company.  Press, journalists, analysts, friends and family can reinforce the sense that you’re “killing it.”  As Public Enemy says .. Don’t Believe the Hype.  The only way to build a sustainable customer is to listen to customers, partners, suppliers and employees.  This post talks about how the Kool Aid effect happens.

7 Save Your Spin for Someone Who Cares – How should you best use your PR with VCs or business development partners?  This post covers the topic of why PR is so important but so often misplayed.

8. Good Judgment Comes from Experience, but Experience Comes from Bad Judgment – You can read lots of books or blogs about being an entrepreneur but the truth is you’ll really only learn when you get out there and do it.  The earlier you make your mistakes the quicker you can get on to building a great company.

9. Beware Rocket Fuel

10. Naked in the Mirror – Most companies have growing pains and moments of intense self doubt.  It is compounded because you read your competitors press releases yet you still stand naken in the mirror every morning.  This post talks about this issue and how to get over it.

11. Punch above your weightclass – Startup founders are often tempted to bring in the heavyweights early.  This is very frequent in sales because it seems like the easiest solution when you’re not hitting your numbers.  I argue that you should always hire people who aspire to be one level above their last job (e.g. one “weight class” higher).

12. Turn your Organization Inside-Out – Many companies are too insular.  You need to get all of your input from the outside and have that inform your company and product direction.

13. JFDI – What separates entrepreneurs from those the offer tons of advice but sit on the sidelines?  Entrepreneurs guide themselves by the Nike slogan, “Just Do It.”  They know that they need to move the ball forward everyday and make decisions with incomplete information.  They know that at best 70% of their decisions are going to be wrong and they find ways to correct their direction.  They JFDI.  This post explains.

14. MVP

15. Elephant, Deer and Rabbits – Many companies make the mistakes that I made in trying to serve multiple customer segments early in your company’s existence.  In this post I argue that most companies should be Deer Hunters but at a minimum narrow your range and hunt in one segment.

16. Embrace Losing – I hate losing.  I really hate losing.  But you need to embrace losing if you want to learn.  Channel your negative energy.  Revisit why you lost.  Ask for real and honest feedback.  Don’t be defensive about it – try to really understand it.  But also look beyond it to the hidden reasons you lost.  And channel the lessons to your next competition.

17. You’re Most Vulnerable Just After You Win a Deal – Competitors have nothing to lose.  Internal enemies at your client play their cards more openly.  Thing can get ugly.  Never celebrate until the ink on the contract is dry and the check is in the bank.

18. Crossing the Chasm

19. When you’re a Hammer Everything Looks like a Nail

20. Flipping Burgers – In some companies the CEO does not have the complete grasp of every function of his/her company.  They essentially outsource the thinking on technology, sales, customer service, whatever.  This is always a warning sign to me.  This post covers the lessons I learned the hard way, from trying to run a burger chain without first flipping burgers.

21. Crocodile Sales

22. The End of the Mexican Road

23. Beg for Forgiveness

24Lies, Damn Lies and Statistics

25. Cutting into Muscle

26. Rolling out the Red Carpet on the Way Out the Door – Many companies wait until their star performers quite before offering up serious incentives to stay.  There are only 4-5 great people who make a difference in any startup.  Know who yours are and roll out the red carpet while they’re still inside the castle.

27. Boards & Board Meetings

28. Advisory Boards – Many first-time entrepreneurs form advisory boards and grant 0.25-0.5% equity to each adviser.  Should you?  This post talks about why equity for advisers should only come if they write a check and if you do set up an advisory board what the best way to run it is.  Also a quick note on how VCs view advisory boards (summary answer is – we’re cynical).

29. The Burning Platform – There are 3 steps you need to solve to effectively sell your products. 1) Why buy anything? 2) Why buy mine? and 3) Why buy now? The first two are easy – it’s the third that drives faster sales conversions. This post covers the three questions of sales.

30. Avoiding Death by a Thousand Cuts

31. Easy Money vs. Pure Strategy

32. Missionaries vs. Mercenaries

33. The Fallacy of Channels

34. Demo booths

35. International Licensing

36. Founders taking money off of the table.  Controversial topic but in many scenarios this aligns the incentives of founders and VCs allowing both parties to “swing for the fences.”

37. Do you need an MBA to work in a start-up? Many careers require MBAs (investment banking, strategy consulting and private equity to name a few), but my opinion is that if you want to follow a start-up career an MBA isn’t necessary and considering the cost and debt you’d incur could actually make you more risk averse and a less likely entrepreneurs.  The post talks about the “5 C’s” of an MBA.

38. Give in graciously

39. Swim with the Sharks without Being Eaten Alive

40. How to (re) approach people at conferences – Many people swarm a panelist after he/she finishes speaking.  Other people turn up at conferences and just “wing it.”  In this post I talk about how to maximize your attendances at conferences or trade events and meet the right people.

41. How to present at big meetings without going down a rat hole.  Big meetings are hard to manage.  Unless you have a sponsor to help you manage the process and know how to deal with detail merchants, naysayers and silent partners you’ll find yourself in big trouble.

42. The Yo-Yo Life of a Tech Entrepreneur: We all find ourselves in the habit of working late, traveling too much and eating like crap.  In your twenties it’s manageable.  In your thirties it starts to catch up with you.  When you hit 40 life changes.  You need to get serious about finding a way to bring health & fitness into your life as an entrepreneur.  This is MY story.


Does there need to be a pain point for an investor to invest?

I recently met with Nic Brisbourne at DFJ Esprit and pitched him for investment into a company that I am involved with; so was interested to see his view on whether something can be fun, meet no ‘pain point’ and raise investment. After all life should be fun…

The pleasure principle – companies shouldn’t only focus on pain points

Perna Gupta is the CEO of Khush, the developer behind the music creation iPhone app LaDiDa – an app which has been downloaded 270,000 times and is unashamedly about having fun.  She wrote a guest post on Techcrunch on Sunday complaining about how her company had got to the final stages of two prestigious start-up competitions, been the audience favourite, but been dismissed by judges because she isn’t solving an obvious pain point.  In her words:

Earlier this year, my company advanced to the final stages of two prestigious start-up competitions. Both times, I got up on stage and belted out my prezo in C Major (our product is LaDiDa, an iPhone app that helps bad singers make music), and then backed up the singing with solid growth metrics on our business. The audience loved it, and LaDiDa was a crowd favorite to win in both contests. But when it came time for the judges’ feedback, I was frustrated to hear a familiar refrain: “Your demo is great, really cool app,” they said, “but we can’t give you this award because your product doesn’t solve any obvious pain point.”

In the rest of the post she goes on to argue that investors’ focus on pain points is resulting in a lot of worthwhile companies not getting funded.  As she points out, Twitter and Facebook weren’t about solving pain points when they started.  Nor are the pornography, sports and coffee industries.

As an investor I love a business that solves a clear pain point as much as anyone.  When pain is being removed it is much easier to be sure that a market is there, but I think our major pain points have largely been solved, and targeting pleasure, or happiness is increasingly going to be where the action is.

For most consumers the burning question is ‘how can I be happier’ rather than ‘I wish I could get rid of XYZ irritant’.  And LaDiDa makes people happier, it is fun, it promotes togetherness and sharing, and it makes you a better singer.  What’s not to like?

Check out this promo video from their iPad app to get a flavour (and this is a fun experience too…)


50 questions: What does an LP look for in a venture capital fund manager? – Games Brief

Few entrepreneurs take the time to realise that VCs are often under the same pressure as startups: they have to find capital, satisfy their investors and keep up with a changing market.

In this week’s 50 questions post, Nic Brisbourne explains what Limited Partners, the source of funds for many venture capital firms, look for before they will invest in a VC team.

Read the full answer at The Equity Kicker.

50 questions: What does an LP look for in a venture capital fund manager? – Games Brief.