Paul Graham of Y Combinator fame has to be one of the sharpest startup minds on this humble planet. His essays on the topics of business, culture and startups are nothing short of genius. I was catchup up on his work recently I found his essay on Frighteningly Ambitious Startup Ideas simply gripping.
If you haven’t happened upon his writings yet, I suggest you log out some time to do it. You’ll be so inspired you might just start to get amped up and take some serious action. They are another reminder of how lucky we are in this day and age to have free and omnipresent access to the worlds greatest thinkers who share their philosophy and ideas for free.
My regular readers will know that 2 weeks ago I released a video of a Lego Space Shuttle that we got into actual space. Quite frankly I was surprised at how much attention it got both on-line and in mainstream media (TV, newspaper, magazine & radio). It has had over 1 million views on Youtube alone. It really got me thinking about what tends to win attention in today’s connected economy, and although I don’t really know the answer, it feels more like simply joys and personal interest work better on line than commercial intentions or hard nosed value equations.
And while I’d much rather one of my businesses get this amount of coverage – it has lead to a lot of interesting business opportunities and offers. The attention generated has become its own asset. It has become a proof point in the people behind it and so it creates intrigue from others who want to simply do cool stuff.
So the question for startup entreprenuers is this:
What cool side projects can we do to generate attention around, so that our bigger ideas can attract the resources they need?
The upcoming Facebook IPO is a very interesting scenario. Not just from a startup / social media or tech point of view but from an economic one. There are a lot of facts and figures being thrown around, but from my point of view I’m interested in just a few of them and what they mean for tech entreprepreneurs:
100 Billion Valuation: If the IPO is successful the expected valuation is 33 times their current revenue. And around 100 times their earnings. For comparison purposes Apple current has a 14 times earnings ratio while Google has 12 times. Both companies which have established and growing revenue streams. I know which companies I’d rather hold stock in.
68 Million in acquisitions: In the past year Facebook invested $68 million in purchasing other companies. They have an appetite for acquisition. And that appetite will only grow when the pressures of being public come to the fore. It means that startups who have invented ways to extract money from the Facebook platform are well placed to be bought by the mothership. If you have an idea on how to do this get moving, because the stock market pressures will ensure that startups with revenue generation via Facebook will be targeted.
The IPO will create 1000+ new millionaires: All of which will feel a sense of ‘owing the tech community’. Many of whom will feel like tech rockstars and want to start their own Angel funds. Which means there will be more startups being funded by the FB IPO gold rush. If there was ever a good time to seek money from the Valley, post FB float will be one of the good ones.
I don’t have a rich Father
I wasn’t left a sum of money from my Grandma
I didn’t go to Harvard
I don’t live in Silicon valley
I’m not technical genius
I can’t code the latest killer app
I guess I’ll just have to build my startup the old fashioned way. Work my ass off, invent my own revenue, build a team and improve what I have to offer as I learn from the mistakes I’m bound to make. If you’re still around in 10 years, look me up.
There is more good than bad in these hilarious Ali G pitches to Venture Capitalists.
What to look for:
- His tone of voice and pausing when speaking.
- His reliance on talking. There is no powerpoint.
- Taking them on a journey. Story telling.
- Simple visuals. Having samples / props.
- Supreme confidence
I’d seriously recommend this video on how to pitch versus most other examples we see on the web so long as we understand the context.
I’m launching a new startup. For those who don’t know about it here are some of the key points:
- The brand extension comes from an already successful enterprise
- The partnership & legal agreements were entered into over a year ago
- The idea is not an original one, rather a new execution of a proven formula
- We didn’t pitch the idea or ask for permission, we just did it
- It’s a brand extension
- It’s a self funded project with no external capital. But we wont have ownership
- We will give away the corporation, once it is cash flow positive
- It’s a very long lead project
- It wont be cash flow positive for more than 20 years
- Estimated cost of the project is around $500K
- We do expect to however, to yield emotional & community benefits very early after launch
- It’s an industry we’ve never worked in before, but have a natural flair for it
- Some of the product development will be outsourced to 3rd parties
- Outsourcing will occur in 3 large segments of up to 6 years each
- The most important product development will be done in house
- There wont be any major advertising, brand awareness will be driven through family & friends
- We already know it’s unique, but wont require any intellectual property protection
- However, major security measures will be taken to protect the asset, especially in the incubation phase
My new startup is my baby due January 25th, and it’s the most exciting one I’ve ever been involved in. We’re involved in more startups than we think…
Startup Blog says: Let’s not define ourselves by what we own, but the cool stuff we do.
A simple way to keep a fair and reasonable percentage in your startup when getting funding is this.
Argue you require a sufficient percentage to keep you motivated.
Tell them you need enough stake to bring out your best performance. That they are investing in your performance and that this is part of the human make up. Then remind them that you are human.
The other day I was involved in pitching my business rentoid.com – I wanted to stay true to my beliefs and present a largely visual presentation to what I expected was an ‘info hungry’ crowd. The type who don’t mind a page full of words and numbers. My rule was no more than 6 words per slide. Some had only 2.
I think the format is pretty useful, so I thought I’d share it. Basically in each chart just change the word ‘rentoid’ and insert ‘your business’ and I think it would be just fine. It was for a pitching competition (I know they seem to be the trend of the day) and we made it to the final after a few stages so I guess it’s a method which has worked. It’s only 5 slides. I think talking to pictures works because it makes people listen, not read, and it shows you know your business.
Here’s some simple advice when seeking investors for your startup.
Never use the words ‘The Next’…
Regardless of the uber successful business which follows these two words it just isn’t going to happen. For two reasons. The first is our probability of being this successful is almost non existent. Secondly if we are this successful, we wont be the next, but something new.
The main point is when people use the words the next, they lose credibility. And when someone says it to me regarding their new business venture, I find it hard to believe anything they say after that.