Challenges In The Startup Ecosystem - Stanford Innovation Group (March 2010)
17
Challenges in Startup Ecosystem For Stanford Innovation Group 3/29/2010
-
Upload
chris-mccann -
Category
Education
-
view
1.776 -
download
0
Transcript of Challenges In The Startup Ecosystem - Stanford Innovation Group (March 2010)
Challenges in Startup Ecosystem
For Stanford Innovation Group3/29/2010
Why am I talking?
• Co-Founder of [Startup Digest]
• 20k+ subscribers in less than 3 months
• Insight into 32 local startup hubs worldwide
Unsolved Problems in Ecosystem
VC1. Branding
problem2. VC Math
Problem3. Platform exits
Startups1. Co-Founder
matching problem
2. Speed to monetization
3. Mentor advisor problem
VC
VC: Branding Problem
Source: http://www.entrepreneur.com/vc100/stage/early.html
VC: Branding Problem
VC: Math Problem
• VC’s paid thru (2%) mgmt fee + carry• Incentive to be larger = $• Risky so 3x gross returns. Ie $600m fund needs
to generate $1.8b return• Investor owns on avg 20% of company• Assume most companies will fail (7/10)• Need to assume $1b+ exits
Source: http://www.avc.com/a_vc/2009/04/the-venture-capital-math-problem.html
VC: Math Problem
Source: http://paul.kedrosky.com/archives/2006/03/22/no_more_billion.html
VC: Math Problem
Point: Traditional VC isa hard game.
VC: Platform Exits (tangential)
• Creating industries vs. Platform Exits
• New focus on $50-$150m deals • Platform buys working model
then adds distribution • New focus product risk, minimize
customer risk, relationships with acquirers
Startups
Startups: Co-Founder Matching Problem
• Consistently most clicked items in Digest• No real market solution out their right now
Source: http://entrepreneurialactivism.com/2010/03/25/the-co-founder-matching-problem/
Speed to Monetization
1. You have $25k investment per founder. 2. At $2k a month that’s 12 months 3. NOT including travel, dev, exp, etc
Speed to Monetization
• We need to think of creative business models– Subscriptions– Transactions– Job Boards– Events– T-Shirts– ETC
New Words to Live By
"Make money don't stop.“
- Krutal Desai, aka "Brutal with a K"
Mentor/Advisor Problem
• Mentors and Advisors are the most consistently asked question
• How do you find great mentors with experience in your space?
• Operational vs. Experiential advice • No market mechanism for this
Contact / Q&A
Contact: [email protected]: @cmccann7
Signup at: www.thestartupdigest.com
How to I come up with a business idea?
How do I get people to use my product?How do I meet a business co-founder
How do I get more involved at Stanford?
Where can I meet cool people?
What are some of the most exciting platforms?Why should I go to in person events?
Have you heard of Startup Waffles?
Best sources for funding?
