the traps, pitfalls, mistakes, and best practices on the journey towards the

summit

Startup Secrets

blockbusters, successes, and failures

There are 3 types of startups

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NO! But avoiding stupidity is easier than seeking brilliance

Is there a formula for success?

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team issues, market issues, resources issues, and growth issues are determinant

But there is a clear pattern

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Team Issues

winners are 38 years old at founding (average), and 80% are second-timers with experience in tech

Experience is a key ingredient

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winners that have mentors, use OKRs, are knowledge seekers raise 7x more capital and have 3.5x

better traction

Learning agility is a secret weapon

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winners are typically 3-founders with history of working together

It is a team game

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business-heavy are 6.2x better at enterprise software, technical-heavy are 3.3x better at product-centric startups,

and balanced teams are 2.9x better at marketplaces, ecommerces

Picking the right battle

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lack of flexibility on cap-table and understanding of how to slice the pie

But 1 in 4 fails due to founder conflict

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Market Issues

~50% of new product launches fail. Winners spend 41% of their time deciding what goes in products

Product no one wants

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most of the times, first mover is a curse

Bad timing

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1 in 6 fails for bad CAC, churn, gross margin, working capital

Bad unit economics

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two types: david x goliath or the gorilla fight

Competitive fine tuning

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Money Issues

1 in 3 startups fails for lack of cash. It takes 2-3x longer to validate than expected

Too much optimism

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Seeds have 25% chances of raising Series A, which have 50% chances of getting to Series B

It is a funnel (multi-turn game)

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less money reduces in 70% chances of next round, more money reduces in 25% chances of next round

Too much or not enough money

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fat startups ends up with less than 10% of equity, lean startups ends up with more than 40% of equity

Dilution kills

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Growth Issues

1 in every 10 startups fails due to premature scaling (traffic no conversion, product, no sales, sales no margin, CAC no

LTV, people no sales)

False positive (out of synch!)

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1 in 5 fails when transforming from family to tribe, to village, to city, to nation

Organizational breaking points

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1 in 10 fails for carrying too much weight (several personas, products, markets, and channels)

Lack of focus

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Wrong talents reduce 2.6x the speed of startups (cultural fit x technical fit, generalists x specialists, scope x autonomy, do

best x do worst)

Garbage in, garbage out

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Summing up

There are no formulas, but there are patterns

Stages can be measured with specific milestones

Learning is a fundamental unit of progress for startups

Most startup advice is wrong

The score takes care of itself (skill & luck)

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Sources

https://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/http://avc.com/2011/06/there-arent-many-exits-over-100mm/https://www.cbinsights.com/blog/startup-failure-reasons-top/http://paulgraham.com/startupmistakes.htmlhttp://paulgraham.com/startupideas.htmlhttps://codingvc.com/startups-are-risk-bundles/https://www.quora.com/Is-the-80-product-failure-rate-statistic-actually-truehttps://speckyboy.com/2014/09/18/building-minimum-viable-products-spotify/http://pmarchive.com/guide_to_startups_part4.htmlhttp://startupmanagement.org/2013/08/23/productmarket-fit-is-a-continuum/http://labs.openviewpartners.com/product-market-fit/http://mediafiles.pragmaticmarketing.com/pdf/PragmaticSurvey2016.pdfhttp://paulgraham.com/ds.htmlhttps://techcrunch.com/2016/10/15/overdosing-on-vc-lessons-from-71-ipos/https://mattermark.com/too-much-startup-seed-funding-bad/https://mattermark.com/startup-graduation-rate-surprisingly-low/

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