Tagging entrepreneurs at Startup School
Startup School this weekend was by far the best entrepreneur event this year. By amount of energy floating around and amount of applause from the audience it may well surpass rock concerts in New York.
Interestingly enough it was not as much about mechanics of razing startup money or even building a viable business, but rather about common sense and a choice that entrepreneurs need to make. The choice is between going to venture capital firms in hope of building next great Googles and Facebooks with very little odds and building successful money-making companies with much bigger odds. People interested in later should checkout great speech by David Heinemeier [http://omnisio.com/startupschool08/david-heinemeier-hansson-at-startup-school-08] (creator of the Ruby on Rails framework), others may continue to read my boring notes.
Suggestions for startups to raise money
What to do:
Talk only to “good” investors
Tell existing story
Do deals in parallel
Thech founders are the key in SV
Create San Hill Buzz
Do not be distracted by fundraising process (no more than ½ person assigned to the process)
What all investors look for:
Market (big & growing fast). Startup cannot create markets. Customers with “hair on fire”. Unfair advantage.
Story that all investors want to hear:
Suggestions and observations
Get twice $$ what you think is needed
Avoid “super pro rata” in terms – makes hard to get second round
Deal making is about alternatives – more the better
Talk to CEOs of potential investors
Evl0-ery company has a rocky beginning
Tagging developers from Fortune 500 to fortune 5M. Different rules in that world – NO VC. No sales cycles – just solving one problem may be at little better than someone else
-“listen to your users”
Amazon, Cloud computing
· AWS bandwidth passed Amazon retail bandwidth worldwide
· Flexible payment service
· Mechanical Turk
Google app engine. Will it be real competitor to EC2? Time will show.