Lessons on starting a company

							Lessons on Starting a Company

From Both Sides
of the Table

Mark Suster

Stanford ETL, October 2010

@msuster
Me
  Software development
   at Andersen Consulting

  BuildOnline, CEO in
   London at 31
   (sold to SwordGroup)

  Koral, CEO in Palo Alto
   (sold to
   Salesforce.com)

  VC in Los Angeles
Getting Started
Have an idea
You don‟t have to be a genius
You just need to get started
You need to be passionate about it
And you need to do research
Get a prototype built
The Team
Assemble a diverse team
Biggest dilution comes before you start
Huge premium for taking the first leap
Co-founder myth reinforced by selective bias
Make sure technology is part of your DNA
Raising Capital
Raise capital, but not too much
Start Lean
      1. without much flesh or
         fat; not plump or fat; thin

      2. of edible meat
         containing little or no fat

      3. lacking in richness,
         fullness, quantity, etc.;
         poor: a lean diet; lean
         years.

      4. spare; economical
You Can “Go Fat” Later in Life

                  Once product / market fit
                   are clear

                  Many markets are winner
                   take most

                  Big tech firms compete
                   much more quickly these
                   days

                  Believe me – venture
                   capital isn’t dead
Why The „Fail Fast‟ Mantra Must Fail

                   1. to fall short of success or
                      in something expected

                   2. to receive less than the
                      passing grade or mark

                   3. to be or become
                      deficient or lacking

                   4. to dwindle, pass, or die
                      away
A Lesson in Branding

             Name = URL

             Name doesn’t box
              you in a corner

             Be careful about
              words that mean
              something else
If possible avoid the three F‟s




  (Friends, family & fools)
           Angels vs. VCs?




The people you work with matters more
   than the classification of investor
      How do you access investors?




Intros: portfolio, entrepreneurs, lawyers, etc
Getting their money is hard
You need an anchor investor
If you show proof the rest usually follows
Critical Success Factors
Skate Where the Puck is Going
                   Ship Product




The death of many companies is the inability to ship
               frequently enough
Test monetization early
 The Sausage Factory is Never Pretty




From the outside it looks pretty. From the inside?
                  Not so much
                  Have fun




Startups are roller coasters, enjoy the ride!
Q&A