BossTalks.com Tag: combinator

white on "Colorado based seed funders for startups!"

white — Thu, 29 Mar 2007 18:37:48 +0000

Welcome Colorado based seed investors for startups.

http://www.techstars.org

They successfuly cloned Y Combinator's business model and ask for less money (5% vs 2-10%).

http://www.ycombinator.com

The same investement calculation, $5,000 per founder, however, the Y Combinator gives $5,000 + $5,000 per founder.

Sounds like it's a crime not to start a startup now. :)

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white on "The Startup School 2007 review. Notes on event."

white — Tue, 27 Mar 2007 08:47:04 +0000

Oh, yeah, it was really great, one of the best seminars which I have attended during 2006-2007, and it definetly worths my time and sleepless night driving back home. :)

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ngolovin on "The Startup School 2007 review. Notes on event."

ngolovin — Tue, 27 Mar 2007 06:48:59 +0000

Seems to be an interesting conference.

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green on "The Startup School 2007 review. Notes on event."

green — Mon, 26 Mar 2007 21:27:34 +0000

Another review by Matthew Mullenweg here http://photomatt.net/2007/03/24/kapor-vs-zuckerberg/

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:37:28 +0000

Michael Fischer notes at http://www.scribd.com/doc/18290/Y-Combinator-Startup-School-2007-Notes

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:34:31 +0000

Matthew Mullenweg raised discussion about two speakers' opinions from Startup School here at http://photomatt.net/2007/03/24/kapor-vs-zuckerberg/

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:32:00 +0000

Startup School recap by Peter Loyal at http://osi.fotap.org/2007/03/25/startup-school-recap/. Looks like he didn't like the Facebook' guy, Mark. Me neither anyway.

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:29:19 +0000

Finally, a video of Paul Graham's presentation by Larry Kubin is here http://video.google.com/videoplay?docid=-8113251929727785438&hl=en. The sound and video quality are poor, but acceptable, if you really eager to see it.

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:27:20 +0000

One more link, Kent Bye's notes of the event are available at http://docs.google.com/Doc?id=dczgjp36_7c78dgn

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:26:12 +0000

There are also audio recordings by Robert Shedd available at http://www.robert.shedd.us/content/2007/03/26/startup-school-2007-2/ but they are barely hearable. Maybe somebody recorded some video of presentations, but as far as I remember there was no one doing this, at least with professional equipment.

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white on "The Startup School 2007 review. Notes on event."

white — Mon, 26 Mar 2007 19:21:25 +0000

More high quality photos by Zeno Crivelli are available here at http://www.zeno.name/startupschool07/. I think I remember the guy who has made them. He had a nice camera with huge lenses.

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white on "The day before Startup School 2007. The reception at Y Combinator."

white — Sun, 25 Mar 2007 14:47:30 +0000

The day before the Startup School 2007

We've been invited to a reception for speakers, press, and some of the attendees the night before Startup School. It was happening in Y Combinator's place in Mountain View, CA.

We decided to get a car for rent from Budget, but they screwed up and gave us an old Ford Taurus, which was too big for me and too fuel inefficient.

The drive was safe, but very boring.

It was very exciting when we've got closer to Silicon Valley and a lot of IT companies' buildings are showed up.

We stayed in the hotel Lodge, which is about 1 mile from the Y Combinator. I like beer and was pretty sure they should have some, so it wasn't worth driving.

Mountain View's downtown really sucks. Sorry, but it just a big village. We came from Pasadena, which is close to Los Angeles, and I thought that it's pretty boring place. I was very wrong.

We had a lunch before visiting Y Combinator and visited some Teriyaki place. It wasn't good at all. Unfortunetly, the sushi place which we found was closed and we should to wait for an hour before opening. That was really surprising that sushi restraunt is opening only after 5 pm.

The networking was cool. Well, I was really surprised that the most part of the people were thinking or already doing some startup, and the most ideas were not unique. The were trying to change something or to improve something minor, were too positive about hitting the market and sometimes too blind about competitors. Anyway, the most of them were pretty young, so my concerns are pretty understandable. I had a chance to meet and introduce myself to Jessica Livingston, the author of Founders at Work.

There were two robots. Pretty fun.

After some networking we decided to take a walk in some nice place. Unlikely, it was more then one hour drive to San Francisco, so we decided to visit San Jose. It's was really cool and we really liked it.

I've got some videos from the event. You can see them at http://www.youtube.com/profile_videos?user=bosstalks They may not be available, yet, but as soon as YouTube updates the database, you'll see them there.

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white on "The Startup School 2007 review. Notes on event."

white — Sun, 25 Mar 2007 14:00:27 +0000

Startup School 2007
Saturday, the 24th of March, 2007

We arrived to Kresge auditorium around 8.30am, but already a plenty of people are walking around. There is some food and snacks and three coffee machines near the building, people can eat who'd not get chance to have breakfast.

Inside the Kresge. No Wi-Fi and it really sucks. Actually, the only one network exists, it's a Stanford and it's open, but it requires username and password (the same like last year) and unlikely I don't have either one. Somebody already created a computer to computer wireless networks with attractive names like Free Wireless, free stanford Internet, etc. or something like this, the Internet still doesn't pass through. However, it looks like somebody is just having fun with sniffing passwords or just kidding.

Not much seats have a power outlets on the floor and it makes a big problem. We were lucky enough to get two seats with two plugs, but the most of the people are missing them badly. A lot of power outlet extenders and extra wires, but still doesn't help a lot. About 70% of people has got different kind of Macs. It's a pretty impressive how popular are these computers among the students.

It's a bit more then 9, everything is supposed to start already, the Kresge auditorium already looks overcrowded, but people still come and come. Oh, okay, Jessica already starts to talk.

The first speaker is Mark Macenka, Partner at Goodwin Procter LLP, does corporate work for years. I liked his first thesis which says not to underestimate the competition. Among other points is forget friends and relatives/the value of Board of Directors. Most of the time relatives in your business can become a bigger problem then you can ever expect, however, there are some exceptions. Few words about Capital Structure -- the first note is KISS principle. Then comes the choice of entity -- partnership vs LLC vc corp. He didn't go into details, but just says that this is very important, however at some point you may want to change this. Next big question is IP -- do you own it? Mark speaks about importance of rights of former employers, like IP ownership rights, NDA (nondisclosure agreements), NCA (non-competition agreement), NSA (non-solicitation agreement): you are in risk when you are doing development on company-owned laptop in company-owned time and from company-owned premises. Wells, it's pretty straightforward. Other interesting thing was joint ownership. Mark sounds really against of it. Next, open source parts in you product. Don't be afraid of it, but you've got to use it at right time and in proper way. Be sure to protect your secrets and be consistent in it. Otherwise, you can loose your secrets either in business or in a judge. Next topic was founders issues and it started from who owns what. You've got to be specific from the very beginning. Then goes the founders stock restriction agreement issues: vesting, transfer restrictions - right of first refusal, drag-along, right of co-sale, IPO lock-up; other rights of repurchase, I.R.S. Section 83(b), loans. Mark didn't stop too much here, except on several points.

Okay, a few minutes delay and new speaker is almost ready. This is Paul Buchheit, the creator of Gmail. He looks pretty young, he quit Google last year and on the way to his startup. He starts from joking in a pretty specific way. Limited life experience + overgeneralization = advice. His advice sounds like quit your jobs! His advice sounds pretty useful. The same like the next one -- if you don't have a success, redefine success. Did you expect for a lot of money, but got a few pennies? Redefine the goal -- I want to get a lot of experience -- and now you can reach it easily. Startups are a great place to learn. Things happen there a lot faster. And you have more opportunities to do things that you aren't really qualified to do. Oh, okay, now he starts to talk about the Gmail and... iPods. Being useless in new ways does not make your fundamentally different from the previous useless products.

Chris Anderson, editor in chief, Wired Magazine. His presentation is starts with Long Tail Companies title, thelongtail.com (I wish I can check what's that, but there is still no Wi-Fi). The next page is Nsync's "No strings attached" album, dated March 21st 2000. Well, interesting what's the connection? Oh, I got it. He goes into marketing thing, the most of his notes are pretty clear, however, it looks like he is make a lot of people sleepy over here. Not much notes to reproduce because the most of the time he just shows a lot of diagrams with making some comments. Nice statistics, though. Internet changes an already predefined landscape for media.

Paul Graham, the Y Combinator. Why to not not start a startup. As a stats of Y Combinator startups, the 4 of 8 succeeded, so the success rate is 50%. Paul expects to have the rate lower to 25%, but still it sounds cool enough. The dramatic failure -- Kiko, the famous calendar which screwed up by the appearance of Google Calendar. However, it was sold through eBay for a quarter of million dollars to angel investors. The anatomy of reluctance:
1. You are too young. Paul says, maybe. However, you can do anything when you are adult. But there is not a specific measure -- to be an adult. It depends on your attitude, your feelings and your understanding of what means being an adult. You can be an adult in 16, but you may not be adult enough in the late 20s - early 30s.
2. Too inexperienced. Start up it anyway and now. Startup company is a great way to gain experience.
3. Not determined enough. It's a problem. The determination is very important for startup.
4. Not smart enough. Very few people underestimate their smartness. Not a big deal if you worry about it. But if you are not smart, go and write enterprise software which leads by sales but not ideas.
5. Don't understand business. Not the hard part and easy to learn if you are willing to.
6. No cofounder. That is a real problem. There is no investor who'd not prefer you having a cofounder. If nobody likes your idea except you, why it should be invested?
7. No idea. It's not a problem. All investors say, it's not an idea, it's a team. And now you can apply to Y Combinator saying I have no idea. But you can easily take a look at your own life, find flaws and problems and solve them.
8. No room for more startups. This is a fallacy. The big companies buy startups because their are not stupid and buy valuable companies.
9. Family to support. A real problem. Paul says, I would not advice you to do a startup, because I don't want to take responsibility.
10. Independently wealthy. If you have enough money you have no need to do it, so it's an excuse.
11. Don't fence me in. Valid excuse.
12. Need for structure. Nice ex-USSR army shot. Don't start a startup.
13. Fear of uncertainty. You don't know what's going to happen. Paul says, I can fix that. You going to fail. Expect for worse, go to the best.
14. Don't realize what you're avoiding. Ask your friends about how work sucks.
15. Parents want you to be a doctor. Treat as a feature request.
16. A job is the default. The default way for a lot of people (except criminals). But you don't want to be a slave of a mass, do you?

Michael Mandel, Chief Economist, Business Week. I missed him a bit, because of huge lines to restrooms and for coffee during the 15 minutes break (which actually was 8 minutes). Anyway, I missed the coffee also, because it was already gone when my line came. Michael speaks about China, technology and business. He says that he doesn't trade budgets or social security and medicare, the thing I am worry the most is the slow in technology development and we need as much innovations as we can. Michael encourages to contact him anyone with any questions by his email michael_mandel@businessweek.com or visit his blog. As for the questions time, the first question was how do choose what you write about? Michael says I write what I'm interested about. The next question was about Bill Gates' willingness to import more "cheap slaves" from other countries by H1B (work) visas. Michael says, you can't fight reality. China is producing from 1 million of college students to 3 millions nowadays. And if I understood his conclusion right, in common he's looking in the pretty similar direction as Bill Gates. Somehow and eventually, the most of the technical jobs which can be taken by outsiders will be taken, and what you can do is to find the better place for yourself, creating your own niche, your own business and your own speciality. There were also a lot of other questions concerning innovations and the US education system. The last question was why Business Week miss a section for startups and innovations. And this is actually wrong, because there is a small portion of Business Week called Small Biz which is actually startup related. In total, Michael looks like a person who really speaks about very serious and global things, and, frankly, he understands what he speaks about.

Max Levchin, the founder of PayPal. Looks really young and seems a bit russian. Feels like this, because I came from Ukraine (this is a part of ex-USSR, for those who don't know) and I know how russians look like. He doesn't start to speak yet, but people who talked to him says that he still got a russian accent. Well, he started to talk now, and I can hardly see any accent. Okay, back to his presentation. He starts from a crash course in Product Management. 85% of startups fail within first year of launch. Why is that? Engineers are not about UI (user interface). The world isn't stick in 1976 and you've got design a UI. Because the most likely the idea is good. But the UI is not. Out of body experience. When you are designing a product, you need to think whom you are designing a product for. if you are leaving a college, take at least one stats class. A lot of people are not statistically oriented. Measure everything about the product. The definition of entrepreneur is the person who don't really care about what to start, but just wants to start anything, just for the process of startup. Most valuable things are pretty hard. Most hard things are pretty worthless. Sometimes very valuable things are very simple add-ons for something really hard. Then the original story of PayPal comes. Really interesting thing, but I can't write it here, so better get a Founders at Work book by Jessica Livingston and you'll find it there, too. Next statement, the web is blue. The successful Web sites are blue. Max also is recruiting for hackers and you can drop him an email to mac@slide.com.

Ali and Hardi Portovi, a lot of things they did, can't list all of them here. The main thing they identify themselves with now is a iLike. Never heard about that before. Looks like they are brothers, aren't they? Jessica just told that they are twins. The presentation called startup stuff. Two points: is my idea a winner and 10 do's and don'ts. So, is my idea a winner? What leads to a winner idea are the following things: can I easily explain the customer need in one or two sentences? Does the business scale? Means, can you double your revenue without doubling your expenses, staff and services. Am I creating added value? Will the users naturally recruit new users? Will the value delivered to customers increase as the number of customers increases? This is the network effect shown by eBay. Am I passionate about it? Success is 1 percent inspiration and 99 percents perspiration. Okay, now top do's: listen to customers, know their top 5 complaints and top 5 favorite features, read discussion boards an email lists, froster communication among your own customers. Stack rank the top problems that are core to your success, and get your top people operationally focused there. Make frugality and profitability part of your culture. Avoid a luxurious environment. Cut spending anywhere you can. These three advices are really about people who about seed funding. It doesn't mean you shouldn't do this if you already made a bank, but it's very important when you've got money and they are critical for your future startup. Move on: move quickly, make decisions fast. Avoid committees. Avoid 12-month development projects. Have a strong CEO. FOCUS. Don't do more things then you should. Hire great people. Put hiring and recruiting at the top of your priority list. And it also could be very expensive. Judging people is one of the most important skills you'd like to learn in business. Okay, some of the don'ts: be distracted by press. PR success is not highly correlated to actual success. Don't make decisions just to get press. Top goals of PR are recruiting and strategic partnerships. Don't take your company culture for granted. Don't be greedy in business negotiations. Heck, let the other company get the bigger piece of the pie, in return for speed. Don't ignore your gut feel about an employee or candidate. It's better to miss a good guy, then hire a bad one. But if you already did a mistake and understood this, don't wait too long to fire. And the most important thins is don't forget to have fun. The startup is not only about running wealthy, but about higher risks as well.

Rahoul Seth, CFO. He's got a pretty impressive resume. Financing: Why Professional Money? To bring business partners, corporate and management advise and governance and recruiting. Few words about financing stages. The seed: customer problem you are solving, strategy planning and founders is the only team you have and need. The first financing: customer express the strong interest, you can release a beta product and got to market plan and them team is getting formed. The second financing: successful client deployments road map to growth and profits and you've got a complete team now. The third stage of financing: the expansion of business, and significant risk taken out of the business. The mezzanine stage: the working capital needed for liquidity event. The last is IPO. Now types of investing. You can take them either from debt (borrow, pay interest, have to repay) or equity (sell a share of your company, investor makes money from liquidity). Equity financing: common stock (founders with stocks and employees with options), preferred stock (investors with stock and warrants, preferences over common at liquidity event, protective provisions divided into participating preferred, avoid in early rounds, cap level 1x or 2x. Also board representation dividends, redemption and anti-dilution). Now few words about equity dilution. The value of $2 millions owned by 100% with seed going to $2.5 millions value, but you get 80% as your $2 millions are. With business growth the value is $10 millions, seed investor has got 20%, you've got 80%. Team expansion leads to employees 30%, seed 14% and owner 56%. The first round is value $15 millions, first gets 33%, owner 38%, seed 9% and employees 20%. Pretty simple math. Equity valuation: founders (can buy stock before everyone, very cheap stock $0.001 per share), investors pay FMV, employees. Equity liquidity events: acquisition (example of Google bought a YouTube) -- mot likely outcome, frequently strategic partnership, the deal structure could be stock for either stock or cash. IPO (example of Google going to NASDAQ) -- another financing round, market conditions, Sarbanes-Oxley impact and senior executives. Stock of stock in acquisition is a tax efficient, because it is tax free event. The legal stuff is corporate, IP, employment and licensing/customer (consider part-time in house counsel). There is number of rent-a-CFO people. Working mostly as advisers.

Mitch Kapor, the president of open source applications foundation and founder of Lotus. Was a certified mediation teacher. An interesting history break which I wouldn't reproduce here, but highly recommended. Disruptive technology. No one was expecting the PC. Transformative innovations like the spreadsheet made the PC ubiquitous. PC's were bad at mainframe tasks. It's easier to tell what is not success, then what is success. I didn't make a good records of Mitch presentation because my laptop battery was completely exhausted and I needed some time for next speakers. Hopefully, somebody else will publish it only, although it was not that long, except the history part.

Greg McAdoo, he's a partner at Sequoia Capital. They are VCs, if somebody doesn't know. The Skinny. Sequoia Capital. The best VC in the Silicon Valley, as Jessica says. About 35 years old, operations in US, China and India. Has about 150 IPOs. IT ecosystem - services: Internet, outsourcing, wireless; software: application, infrastructure, wireless; systems and semiconductors. Owns Starbucks in India. Showed the logos of LinkedIn, Zappos, and many other hi-rise companies as a tomorrow for themselves. Elements of sustainable company: clarity of purpose, spectacular market, alleviate customer pain, team DNA, incredible product focus, real operations margins, frugality and inferno with a single match. 5 major areas of a company: founders, problem, solution, competition and clarity. Clarity: often not respected enough, Startup requires yourself - to believe, management - to focus, employees - to motivate, VCs - to invest, customers - to buy, bankers - to hold money, lessors - to lend. Define the problem and solution. Like YouTube did having difficulties to share video. What are we looking for? Get out early and iterate. Know your competition. Understand the market: ecosystem, trends, dynamics, leverage, speed, distribution, customers. Understand the way which you are riding. Size the market. Three terms: TAM, SAM, SOM. Understand who will be your customer and who will not. Know yourself: functional contributor, interim executive, go the distance. You want to look for a person with hair on fire and sell him a fire horse. If they on fire they will buy. Open up for questions at mcadoo@sequoiacap.com or pg@ycombinator.com. Few shots from questions. Software business which is half a billion dollar market is pretty fine, while hardware business is not. If the direct income ideas doesn't work, and you can come with a reasonable indirect ideas, this may work for a VC. Angels are helpful when VCs are not eager to help. In total, Greg make me feel about him like an extremely IT-understanding guy and who knows how to make business from hi-tech.

Mark Zuckerberg, founder of a Facebook. He came without the laptop and looks very young. I don't really care about does he have a laptop or not, I'm just a visual person and like to see things than just to hear. Just a personal preference. Mark has started to speak about the beginning of Facebook. Releases code nightly. Iteration rocks. Important to do market research. It's important what you focus on. More then 15% uses Facebook every single day. Started from college students, but figured out better performance from people from high-school. Has more then 12 million users. Young people tend to have the similar life. Mark presented their CTO. Not the most impressive person whom I saw ever. Well, I don't want to make it personal, but Facebook in total left an impression of people who came to the right place at the right time and fly high, but it don't feel that strong core bone, which feels in more mature companies and people. Like Max Levchin with his PayPal, Yelp, Slide or wherever he's got else, for example. Maybe he's too young and will get more mature within the next years, as he's got great chances and abilities for that.

Joel Lehrer, he's titled as an associate from Goodwin Procter. The Do's and Don'ts of Patents for Micro-Startups. One more legal issue. The number of patent application grows dramatically. The raise started at 1998 because of a new legal case appearance. In early 2000s the application filled growth slowed down. I am sure everybody do know or can guess why. Next is the 30 years statistics for allowance percentage. The drop-off started around 2002 and keeps falling down. What to show to get a patent: must be something inventive (relatively high bar) and useful (relatively low bar). Must not have publicly disclosed or put on sale for one year (for US patents). You should be the inventor. Will take a long time (like 4 years) and can cost a lot of money (around $15,000 -- but may not cost that much). Does not guarantee that you can actually practice the invention. For software inventions there is a huge backlog making the process slow. Why does anyone care? Wall out competitors. Defense. Potential Income. Value on exit. Credibility to Investors. Articulated Description of Market Differentiation. Joel on Patents: work on your own time and equipment. Understand you current obligations. Document contributions from others. Document code provenance. Get assignments. File something before you launch (provisionals). Do some searching (but not too much). Focus on the product, not patents. Do not worry about the big boys (for patent infringement, that is). Patents on $500 Year: monitor blog and bulletin boards. Monitor newly issued patents and publications. Hire a search firm, like NERAC or INREA -- it will cost you $500 or less. Learn how to write a provisional. Draft and file your own provisional -- this will also cost you $100. The possible changes: accelerated examination. Pear review. Post-grant opposition. Changes to continuation practice. First-to-File.

Finally, the recent founders panel. The latest event for today. We already out of time so it's going to be really short event, but we are going to make as much photos as it is possible. All of the guys from Y Combinator are extremely young and looks like they are having a lot of fun doing all this stuff. The ones which I recognized are Reddit, Wufoo, Justin.tv and Xobni. Some of them I had a chance to speak with yesterday evening during the party in Y Combinator's place in Mountain View, CA.

I've got more photos here. If you want to get anything in a better quality, don't hesitate to contact me and I'll send them your way.

As a conclusion, it was a great even and I am very glad that I had chance to visit it.

I am also finishing the notes on our trip for Startup School and notes on visiting Y Combinator in Mountain View the day before the Startup School in Stanford.

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