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10. 22 . 2011

Quick and Dirty Startups Ted Tanner Jr @tctjr LinkedIn My Blog. 10. 22 . 2011. Who Am I?. Charleston SC Native Have been a part of several startups Worked as an architect at Apple (OSX) and Microsoft (a bunch of stuff) Skewlz : Umiami , Berkley, Stanford, UC Davis Livermore.

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10. 22 . 2011

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  1. Quick and Dirty Startups Ted Tanner Jr @tctjr LinkedIn My Blog 10.22.2011

  2. Who Am I? • Charleston SC Native • Have been a part of several startups • Worked as an architect at Apple (OSX) and Microsoft (a bunch of stuff) Skewlz: Umiami, Berkley, Stanford, UC Davis Livermore

  3. Agenda • What? • Why? • How? • When? • Next?

  4. What is a StartUp?

  5. What is a Startup? “A startup is an entrepreneurial driven organization that is continually searching for a repeatable and scalable business model” ~ Mark Babbitt

  6. WOW – An Idea! • Guess what? • SO DOES EVERYONE ELSE.

  7. WOW – An Idea! • A real time chat/msgr with 140 char limit (interest graph) • A search engine based upon summing probability distributions over hyperlinks • PR(A) = (1-d) + d(PR(t1)/C(t1) + … + PR(Tn)/C(Tn) • Affinity Graph that allows you to connect friends based upon network theory: • (if A~ B) then (B~A) and (if A~B and B~C then A~C)

  8. WHY?! • Here are some reasons NOT to do it: • You want to help people - there are a number of worthy charitable organizations out there • You want to be as rich as the Facebook guy or some other rich person.

  9. WHY?!    Here are some reasons NOT to do it: • You want a job where you get to hang out with your engineering friends -- form a hacker's club

  10. WHY?!    Here are some reasons NOT to do it: • You want a small business to support a nice lifestyle for you and your family and you know your buddy's IT shop nets $2M a year. 

  11. WHY?!    Here are some reasons TO do it: • You've always wanted to build your own company from the ground up -- you were that kid selling lemonade

  12. WHY?!    Here are some reasons TO do it: • You've been working on what you believe to be a great idea that will make money and you've gotten some smart people interested in doing it with you • PASSION.

  13. WHY?!    Should You? • Willing to devote 100% for 0-5 years? • Everything you do revolves around moving NewCo forward: • Take Care of you and others • Cut out all extraneous BS • Willing to live on reduced income etc

  14. WHY?!    Should You? • Take NO for an answer? • That is basically all that happens • Passionate? • Do you lay in bed thinking about it? • Stay up trying to code the idea? • Are you honest with yourself? • Otherwise you and everyone else will find out – pronto.

  15. Still with me? Ok lets look at some s t e p s

  16. Steps • Secure domain name • Familarize yo’sef with corp docs and process • Get a great lawyer • Form company (c-corp)

  17. Steps • Educate yourself on funding • Read Brad Felds book and Founders at Work blog • Start working VC network • Do not form a board of directors • Iterate on everything code/ideas/money • Raise round while scaling • Close the round and keep raising

  18. Three T’s • A Ranked list: • Talent – Who ? • Tech – How ? • Timing – When ?

  19. Talent • AKA THE CREW • A great team will turn a grade B idea into • a grade A idea and EXIT • (Also companies buy startups for the team)

  20. Talent • AKA THE CREW • At least TWO founders: • One Operational or Business • Other technical • Initial team needs to be a mix: • Nowadays KILLER front end and User Experience • Backend just as important • Some type of DataScience

  21. Talent • Some words on Co-Founders • Get a great co-founder. This is too hard to do alone. • If you're not technical but have good domain knowledge in something you're passionate about, get a technical co-founder. 

  22. Talent • Some words on Co-Founders • Spend time up front learning if you can trust this person because you will have to trust them, with everything.  • Second only to your spouse or partner, this is one of the most important relationships you will have.

  23. Talent • “The only mistakes I regret are people mistakes.” ~ Brad Feld • “Steve hires the best people.” ~ Bill

  24. Talent • Create Advisory Board • Knowledge of funding process • Domain expertise • Track record of building startups • Able to listen to crying for hours 

  25. Tech • We know it We LOVE it… • Sorry we cannot just code we have to THINK • Nowadays no one really cares about the tech • Framework coding has ushered in a new era • Patents are still important • REALLY Novel algorithms and methods

  26. More Than Code • from numpy import * • from numpy.linalg import norm • from time import time • from sys import stdout • def DoMyStartup (V,Winit,Hinit,tol,timelimit,maxiter): • """ • (W,H) = DoMyStartup(V,Winit,Hinit,tol,timelimit,maxiter) • W,H: output solution (exit matrix) • Winit,Hinit: initial startup state • tol: tolerance for not being able to take it anymore (tolerance) • timelimit, maxiter: limit of time and iterations • #MajikHappens here… (eg rapid gradient descent to exit) • return (H, grad, iter)

  27. Timing • Everything in life is timing • Time is money ~ Money is Time • Kill bad ideas fast and furious • Apply to all incubators • Apply to all angel venture lists • Start prototyping - yesterday

  28. Process Stuff • Yagotta do it to make it • C-Corp Filing • NDAs • Offer Letters • One Pager • Convertible Note • CAP Table • Pitch Deck • Biz Plan

  29. C-Corp Filing • Ok for some I can hear the groans Why not an LLC? • I am continually asked by VCs of whom I make intros: • Are they Del Corp C • Just get the 250.00 and do it

  30. CAP Table • This is who has what equity and at what price • Equity is the name of the game in a startup • Must be VERY simple • Allows you and others to put in various amounts of money raised and address dilution • Lists types of stock and outstanding shares

  31. Convertible Note • Standard method for early stage • Angels understand it, good for friends/family • Converts to institutional round stock • Get enough to complete customer validation • Know the market: read blogs books toilet paper rolls - everything

  32. Non Disclosure Agreement • Or NDA: • Have one and attempt to have everyone sign it • VCs wont so don’t • Board members/advisors/janitors • Although I have never seen anyone enforce one

  33. Offer Letters • There are various types • Above all do not make it complicated! • Complicated equals legal crap • Legal crap equals time • Time equals money • You don’t have any of the above

  34. One Pager • This document is your faceplate • Discusses company snapshot • Founders • Industry • Business • Accountants • Current Investors • Market and Product • Board of Directors • Logo and Address

  35. The Pitch Deck • This is the focus • Know it love it sleep with it • Important items: • Team up front • Opportunity – Why your doing it • Market • What makes you novel • Competition • Amount of ask • 8-10 slides

  36. Business Plan • While not that important in a seed/angel round • Will come in handy to help you figure out what the hell your making and how to make money. • Nowadays no one really reads them.

  37. Last words on Docs • Please do not get fancy or make them overly complicated. • You don’t have time. • Most who have done this before are not going to screw you • They are in it to make money with a team as well as change the world • If you run into someone who grinds on these items – Drop them. They are not focused on the correct items.

  38. Now what? • Test your idea • If its consumer then talk to “regular” people about it • If they don’t get it in two sentences or less refine the idea or explanation

  39. Now what? • Test your idea • Prototype – liquid code • Backend or heavy laden systems take deeper research • Kill it early if its not working

  40. Now what? Test your idea • Test early and often • Do not fall in love with tech • Fall in love with company • Do Customer validation through prototype

  41. Now what? Test your idea • Make some mockups (iMocks is killer) • Also wireframes via a great Ux person • Get feedback fast and hard

  42. Someone Loves Me! • OK so lets say you raised 50k: • Get incorporated • Set up a HQ in an Epicenter • Buy a domain if you haven’t • Get a lawyer • Get a team hopefully for equity • Think simple. • Go Big.

  43. Someone Loves Me! • When speaking with other angels VCs: Two sentences or less Be prepared to give pitch • (e) subject: email from ted tanner (no canned emails) • If you are getting traction be choosy • Your lead investor is important

  44. GO BIG OR GO HOME • You are what you build • Think BIG – bigger seperates the average from cutting edge • Watch pennies except for talent • Iterate Iterate Iterate • Love to hear NO • .

  45. GO BIG OR GO HOME • FOCUS FOCUS FOCUS FOCUS • Listen to your customer • Market your company and products • Simplicity is key: everything you do must reduce friction • Sell something legal

  46. GO BIG OR GO HOME • Fail Once Fail Many • WTF? • Yea guess what - Everyone fails • As a matter of fact if you haven’t failed and tried again you’re not trying hard enough • In The Valley its expected • .

  47. Thank you for your time. • @tctjr

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