Upload
kirkwylie
View
3.433
Download
4
Tags:
Embed Size (px)
DESCRIPTION
My presentation given to the HNLondon meetup on lessons learned from the failure of the first startup I co-founded, Radik Software.
Citation preview
My First Startup Was A Failure
Lessons Learned from Radik Software
Kirk Wyliekirk@[opengamma|kirkwylie].com
@kirkwy
Who Am I?Why Are You Listening To Me?
• Started my career in Silicon Valley
• Moved to London 8 years ago
• Worked in pure tech, hedge funds, Ibanks
• Co-Founder and CEO of OpenGamma
• World’s first Open Source platform for quantitative finance– Trading, Risk Management– Data Management, Analytics
Computation– APLv2 Licensed
• Founded in 2009• $8.25MM investment (so far)– Accel Partners (London)– FirstMark Capital (New York)
Shameless Plug Time
February 2002 – I’m on holiday in Hong Kong
Radik decides to liquidate
The Radik Investment Thesis(Founded Feb 2000)
• Open Source is hugeRHAT, LINX have massive IPOs
• MySQL is getting really popularIt was (is?) a pile of garbage
• Get smartest DB guys in Silicon Valley to build an Open Source RDBMSTarget more sophisticated users than MySQL could
Feb 2000
Founding Team
• Kirk Wylie – CTO23 year old Berkeley grad DB whiz kid
• Roy Goldman – President27 year old Stanford DB PhD candidate
• The Other Guy – CEO? CFO?We thought we needed a “business guy”
Mistake #1:Don’t Be Too Young
We’re not all Zuck, no matter what Pete Thiel and Paul Graham would have you
believe
Mistake #2:Every co-founder needs to bring something concrete to the table
Adding a co-founder to your team in an ill-defined role you don’t
know you need is excess baggage you don’t want
Sweet, Sweet Angel Funding
• Raised a 2x oversubscribed round Feb 2000Raised $2MM at $10MM pre-money valuation
• Darn impressive angelsRam Shriram (Google), Rajeev Motwani (Stanford), Greg Gretch (Sigma), etc.
• Story was Simple: Build v1$2MM was enough to build a fully functioning prototype ready for seeding to the market
Feb 2000
Radik Conceived
1.0 Ready
Enter: The Pivot
• Situation: 1.0 ready, running low on money
• Problem: Open Source stocks well out of favor with wall street
• Solution: Let’s become an apps company!
Feb 2000
Jan 2001
Real organizations ship code.Even if it’s not your new
focus, ship the code already!
Mistake #3:When in doubt, ship it!
Mistake #4:Pivot small, not big
Make sure your pivot is within your investment thesis and
core competencies
Mistake #5:Know what you’re pivoting
toDon’t pivot to an amorphous
area: make sure you know what you’re going to do before the
pivot
Mistake #6:Get whole team buy-in for a pivot
Don’t allow a long-term schism to develop between founders.
Everybody needs to be convinced!
Mistake #7:Pivot based on evidence
Don’t pivot on a hunch.Pivot on concrete evidence
from multiple sources.
The Big Guns Come To The Table• Story: We built what we said we’d
buildMoney is for commercialization
• Raised $10MM at $18MM PreLed by Redpoint Ventures January 2001 – Post Bubble Burst
• Grew the team dramatically in all areasWe still didn’t know what app(s) we were building
Feb 2000
Jan 2001
Mistake #8:Staff up when you know what you
need
Don’t add headcount just because other firms have. Know your
precise needs before increasing burn.
Situation Mid-2001
• We’re half-heartedly working on the DB
• We still don’t know what app to build
• Our burn rate is astronomical
• Developers are inventing problems to stay busy
Feb 2000
Jan 2001
Jun 2001
Mistake #9:A new CEO won’t fix a
broken company
Executive team changes can be helpful but first determine
what the problems are.
Mistake #10:Communicate strategy
consistently to everybody
Investors, employees all need to be on the same page.
Never give different stories.
Mistake #11:Board governance matters
Have your lawyers involved with every board meeting and
call.
The Valley of Darkness
• “What are we building?”
• “Do we have the right people to build/sell it?”
• “Do we have enough money to build it?”
• “Are we building the right precursor technology for whatever it is?”
Feb 2000
Jan 2001
Jun 2001
The Liquidation
• We had an idea for an application
• It required none of our existing technology or talent to build
• We didn’t have enough money to get to cash-flow positive
• Nobody wanted a down round
Feb 2000
Feb 2002
Jan 2001
Jun 2001
Mistake #12:Communicate future inflection
points to executive team
If there are major board decisions coming up, tell your
executives.Hire adults and treat them as
such.
The Aftermath
• We returned 40% of the Series B investmentThe single best investment Redpoint made in 2001
• All employees got jobs by the time we shutGoogle hired quite a fewAlumni: Google, Facebook, LucidEra, HortonWorks, Duke University, VMWare, etc.
• Kidar, the database, is in IP PurgatoryNo advantage in allowing its releasePortions are now in LucidDB/Eigenbase
Feb 2000
Feb 2002
Jan 2001
Jun 2001
Apr 2002
1. Don’t be too young2. Every co-founder needs to bring something
concrete to the table3. When in doubt, ship it!4. Pivot small, not big5. Know what you’re pivoting to6. Get whole team buy-in for a pivot7. Pivot based on evidence8. Staff up when you know what you need9. A new CEO won’t fix a broken company10.Communicate strategy consistently to everybody11.Board governance matters12.Communicate future inflection points to
executive team
Mistake #13:Don’t be wrong
It hurts when the company you were founded to kill gets
bought for $1Bn.Trust me.