6 startup lessons learned(One more than promised )
Allan MartinsonManaging Partner
MTVP
Background
Baltic
Valley of DeathThe Death Valley?
• 3000 companies and business plans reviewed in 2004-2010• incl 12 companies invested or launched by MTVP
• Out of 3000: • Only 2-3 home-runs (valuations >$1b)• ~15 companies with valuation potential >$100m• Only ~25% of companies show some growth and progress
6 lessons on how to grow your stupid little startup
into SOMETHING
Lesson 1: It’s all about people
It’s all about people
• People, not business plans or technologies• 2 founder rule (Leader & skeptic)• Multi-skilled talents• Values and teamwork are more important
than business plan• Successful companies have bias towards
action
Lesson 2: Incubation takes years
Incubation takes years
• Most successful teams have been together 3-5 years…
• … working on some rubbish• Phoenixes rising from ashes are possible
• Most successful companies are launched by people aged 30+ …
• … but truly disruptive companies need the young
Lesson 3: Why elevator pitch?
The What
• 30 seconds to tell (your mum)– Who is your customer– What does your company do for this customer– Why are you better than competition
• Do the “Google test”• Most great companies:– Copy existing business model to new markets– Seek better solution to existing problems– Seek unknown solution to unknown problems
• Most new ideas come on cross-roads of trends and disciplines
Lesson 4: The art of pivot
The art of pivot
• Not a single great company follows its original business idea
• You shall turn back when:– Your solution seeks a problem, not vice versa– Nobody wants to use your product – even you– You have ceased to believe into your company for >1
month• Don’t be afraid of failure but try to fail fast!• Importance of milestones– One year, one million principle
Lesson 5: Need for speed
Need for speed
• A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty (Eric Ries)
• Startups, by very definition, are probabilistic• Success seems intentional only in retrospective
– impossible to compute• Speed is the best factor to increase success rate• Hunger is the best speed-boost
Lesson 6: Importance of right signals
Importance of the right signals
• With whom do we compare ourselves?• What do our customers, investors, partners really think?• Are we insiders or foreign?• Nothing replaces human interaction even in internet era• Silicon Valley is the focal point of information, emotions
and ideas• Finnish (or Estonian) references are wrong and negative
information• It is not only place. It is mental state• Go West.
Extra free lesson: pick the right investors
Thank you!