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Key Takeaways from a Serial Entrepreneur and Investor
José Marín
3 Confiden)al -‐ Kinnevik 2013 THE IDEA
4 Confiden)al -‐ Kinnevik 2013
THE AND VISION ARE IMPORTANT.
5 Confiden)al -‐ Kinnevik 2013
PURSUE AN IDEA FOR THE RIGHT REASONS: • FREEDOM • GLAMOUR AND FAME • BE YOUR OWN BOSS • MONEY
6 Confiden)al -‐ Kinnevik 2013
DO IT BECAUSE:
YOU CANNOT NOT DO IT!
“GREAT COMPANIES ARE LED BY MISSIONARIES, NOT MERCENARIES” -John Doerr, KPCB
8 Confiden)al -‐ Kinnevik 2013 THE TEAM
It’s a long journey to the top.
Don’t do it by yourself.
9
10 Confiden)al -‐ Kinnevik 2013
Team Diversity Matters
Biggest dilution happens before you even start
Clear terms among founders is key. Vesting
matters a LOT
12 Confiden)al -‐ Kinnevik 2013
Bad Developers cost more
Bad Developers
Good Developers
Get Lousy Work Done
Fire Bad Developers
Hire Good Developers
Get Work Done Right
Get Work Done Right
BUILD A HIGH PERFORMANCE TEAM, NOT A FAMILY
LEAD BY EXAMPLE
PEOPLE WORK FOR PEOPLE, NOT FOR COMPANIES
“CULTURE EATS STRATEGY FOR LUNCH” -PETER DRUCKER
16 Confiden)al -‐ Kinnevik 2013 MARKET
17 Confiden)al -‐ Kinnevik 2013
Go after a large market and
confront competition
18 Confiden)al -‐ Kinnevik 2013
If…
everybody is a potential
customer you are probably
WRONG!
19 Confiden)al -‐ Kinnevik 2013 EXECUTION
Maybe not $100, but Really Cheap
Confiden)al -‐ Kinnevik 2013 20
Domain:
Hosting:
Infrastructure:
E-Commerce Template:
Test Marketing Campaign
$12
$7
$0
$50
$200
$269
Starting a Startup is a LOT Easier
Confiden)al -‐ Kinnevik 2013 21
Website Web Services Outsourcing
ROI Marketing Infrastructure Payments Hosting
Matisse vs
Picasso
USA vs
LATAM
It’s not about Ideas. It’s about making Ideas happen. “1% INSPIRATION 99% PERSPIRATION” - Thomas Edison
25 Confiden)al -‐ Kinnevik 2013
Tenacity
& > Passion
26 Confiden)al -‐ Kinnevik 2013
• Don’t Overthink
• Iterate from Plan A
to Plan that Works
• Avoid Paralysis of
Analysis
26 Confiden)al -‐ Kinnevik 2013
27 Confiden)al -‐ Kinnevik 2013
Lean Startup
Product /
Market Fit
& Tested UE
Fat Startup
28 Confiden)al -‐ Kinnevik 2013
W O W Yo u r C u s t o m e r s
29 Confiden)al -‐ Kinnevik 2013
Don’t launch
until your core
business is
functional
Don’t wait until
you don’t feel
embarrassed of
the product
FUND RAISING
Don’t take money from investors you don’t trust
Investors should be your mentors
Reach out often and for concrete help
Make them happy by making a great business!
Investors play for your team
31 Confiden)al -‐ Kinnevik 2013
32 Confiden)al -‐ Kinnevik 2013
Spend too much
≠
Raise too little
33 Confiden)al -‐ Kinnevik 2013
THE BEST MOMENT FOR
FUNDRAISING IS WHEN
YOU DON’T NEED IT
34 Confiden)al -‐ Kinnevik 2013
User Growth is Important
But…Building a Profitable
Company is ImportantER
Set Realistic Expectations
35
0
20
40
60
80
100
120
140
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
> $100 million Exits
Few Exits > $100M
Most Exits < $30M
Most Exits > 5 years
Series A Crunch
36 Confiden)al -‐ Kinnevik 2013
Source: PitchBook
As there are increasingly more
companies funding Seed
Rounds, there is a crunch at the
Series A stage that threatens
survival
37 Confiden)al -‐ Kinnevik 2013
MANAGING GROWTH
VC-Backed Growth is faster
38 Confiden)al -‐ Kinnevik 2013
Source: “Building Sustainable High-‐Growth Startup Companies” – A. Davila, G. Foster, N. Jia
Growth can bring problems
39 Confiden)al -‐ Kinnevik 2013
• Operational complexity • Dealing with increasing SKUs, new logistics requirements, etc, increase the complexity of
running larger businesses efficiently • Personnel structure is rarely prepared for rapid growth before growth occurs (timing is key)
• Overspend • Capex increases require new funding • Companies that raise more capital than is required have a tendency to overspend • Hiring is expensive (make every hire count)
• Capital needs • Need to deviate attention away from operations into fundraising • More complicated rounds that might backfire the entrepreneur
Discipline makes you better prepared
40 Confiden)al -‐ Kinnevik 2013
Businesses that adopt
professional management
systems earlier are more able to
raise VC funds and grown into
successful companies
Source: “Building Sustainable High-‐Growth Startup Companies” – A. Davila, G. Foster, N. Jia
The Power of Ecosystems
41 Confiden)al -‐ Kinnevik 2013
Top 3% of entrepreneurs have an influence on 80% of the local ecosystem
There are 65 million companies in the World but only 200k create 60% of total Value
Source: Endeavor
The PayPal Mafia
42 Confiden)al -‐ Kinnevik 2013
Total Valuations:
Total Money Raised:
Jobs Created:
VC Money Raised:
$67.5 Billion
$813 Million
+10,000
$2.5 Billion
Source: Endeavor, Crunchbase
43 Confiden)al -‐ Kinnevik 2013
GENERAL ADVICE
44 Confiden)al -‐ Kinnevik 2013
Remember, Relationships
Are Really Important
45 Confiden)al -‐ Kinnevik 2013
Success
What people think it looks like
What it really looks like
Success
46 Confiden)al -‐ Kinnevik 2013
In the Right Place
At the Right Time
And Get Lucky
47
FOCUS On What Really Matters
48 Confiden)al -‐ Kinnevik 2013
When you go All-In
Put your heart in it
49 Confiden)al -‐ Kinnevik 2013
JUST DO IT
50 Confiden)al -‐ Kinnevik 2013
CEO’s LESSONS
51 Confiden)al -‐ Kinnevik 2013
Jon Uriarte Ander Michelena
52 Confiden)al -‐ Kinnevik 2013
Leer mails
Key Learning Don’t do everything yourself – Delegate!
Prioritization is very important
Focus on one revenue stream and make it profitable
before considering diversification
Best Practices Act local and adapt to every market
Use local payment methods to have higher
penetration
LATAM is much more than Brazil. Great opportunities
in Mexico, Colombia, Argentina and Chile.
Key Challenges
Different cultures for every market
Things move slowly in certain markets
Red Tape: 6 months to create a company in Brazil
Success Drivers Fast expansion – Actively seize opportunities
Fast execution – Operating in 20 countries in 3
months with limited funds
Right team – Know your limitations and hire talent for
areas you are not an expert
53 Confiden)al -‐ Kinnevik 2013
Xenios Thrasyvoulou
54 Confiden)al -‐ Kinnevik 2013
Leer mails
Key Learning Hire slow, fire fast – No senior people needed early
Hire hungry young talent at the beginning to reach
product / market fit and then senior talent to scale
Focus and define goals for every employee
Have a long-term vision but don’t plan too far ahead
Best Practices Iterate, iterate, iterate
Talk to your customers often and do it authentically
Set defined goals and attract the best people
Key Challenges Understanding that the original business model might
not be the best one.
It’s hard to get to product / market fit
Success Drivers Picking the right market
Perseverance and resilience. You only fail once you
stop trying
Not being afraid to be wrong
55 Confiden)al -‐ Kinnevik 2013
Kevin Ryan
56 Confiden)al -‐ Kinnevik 2013
Leer mails
Key Learning Don’t do too many things at the same time! Amazon
only sold books for 4 years before expanding
Focus on things that matter the most. As the CEO you
need to set the example
Best Practices Hire the best team and more importantly, think about
upgrading the team all the time. Just because
business is doing well does not mean every executive
is doing well too.
Key Challenges
Success Drivers Product, product, product. It is really hard to make a
product stand out in the market and that solves the
problem better than the alternatives.
Having the best team.
Building a great product is hard
Keep the dynamism within the team and the
company
57 Confiden)al -‐ Kinnevik 2013
Alec Oxenford
58 Confiden)al -‐ Kinnevik 2013
Leer mails
Key Learning Overestimated market growth at early stages. As a
consequence over invested in Marketing
Underestimated market growth once the ‘S’ curve
ramped up.
Best Practices Hire the best people. Ideally with a combination of
local knowledge and global mindset.
Build robust technology from day 1, otherwise you
will pay more later.
Common Pitfalls Entrepreneurs think too small and lack global
experience.
Don’t create a ‘hunger culture’ in the company. You
need to transmit your enthusiasm and ambition.
Success Drivers Focus on getting a AAA team on board. All successful
company have amazing teams.
Replicate a proven model to reduce overall risk of the
venture
Get relevant backers, investors and mentors early on.
59 Confiden)al -‐ Kinnevik 2013
Kamil Kurmakayev
60 Confiden)al -‐ Kinnevik 2013
Leer mails
Key Learning Cash determines survival and scale for ecommerce
If you need cash early on, then fundraise aggressively
Manage cash balance professionally and responsibly
Having more cash in the bank will give you more time
to figure things out.
Best Practices Great people drive great operational success
Make super stars form an ‘all-star’ team. Companies
run on teams and not individualities.
Hire for the next 12 months and not next 5 years
People in Emerging Markets value cash more than
stock options. Keep it simple.
Key Challenges
Success Drivers Bet on the long run and set ambitious objectives.
Transmitted same mindset to key employees who
had the same vision as founders.
Build trust with early investors
Investor relations is a full time job and it is really hard
to manage that and operational duties at the same
time.
Bring together people from different big companies
because the team becomes dysfunctional.
61 Confiden)al -‐ Kinnevik 2013
KEY TAKEAWAYS
62 Confiden)al -‐ Kinnevik 2013
LESSONS LEARNT
Get Informed Do it with Passion Stay Focused
63 Confiden)al -‐ Kinnevik 2013
“Every morning in Africa, a gazelle wakes up. It knows it
must outrun the fastest lion or it will be killed.
Every morning a lion wakes up. It knows it most outrun the
slowest gazelle or it will starve to death.
It doesn’t matter whether you are a lion or a gazelle.
When the sun comes up, you better be running.”
- African Proverb
Thank you!
José Marín jmarin@fjlabs.com
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