This post is curated by Keith Teare. It was written by Russell Taylor. The original is [linked here]
Sparked by my frustrations with trying to pay my friends abroad, this is a brief thought piece on the future of international payments —…
there are two dominant startup models in tech today. (1) You can make money selling software. (2) You can lose money selling anything else.
Lots of people wrote back, and one person pointed out that a better metric to look at (than stock price) would be revenue vs. capital raised. He also pointed me to this fantastic TechCrunch article with the data, so here is a closer look at the efficiency of different businesses models, thanks to Boris!
This chart shows that most public SaaS companies need less than $1 of capital to acquire $1 of ARR. For example, Smartsheet (hidden behind PagerDuty) burned $55M of cash prior to IPO and grew to ~$130M of ARR, so it only cost ~$0.40 for Smartsheet to acquire $1 of ARR.
On the chart, companies “below the line” like Domo have had a harder time finding efficient growth, while Zoom (far left, middle of the way up) was actually able to grow to $423M of ARR with negative cash burn (i.e., they had more cash at time of IPO than they raised). Pretty incredible!
So SaaS companies build their businesses quite efficiently… Now here’s what it looks like when you add other recent (non-software) IPOs to the plot (note: instead of ARR, I used last twelve month revenue).
With the exception of WeWork, all of these companies are actually quite close Continue reading “Why VCs Love SaaS Businesses”
In 2020, it’s pretty hard to imagine a world without Uber for a lot of us. Go to any large city, almost anywhere in the world, and the convenience of Uber above taxis and public transport reigns supreme.
However, rewind 12 years and Uber, then “UberCab”, were creating their first ever pitch deck. From it came a $200k total investment, which helped the company to grow into what it is today: A market dominator with an annual turnover of $11.3 billion in 2018 (source).
Knowing that Uber not only secured funding from the pitch deck, which they released to the public for their 9th anniversary, but also that they then used this funding to become such a success story, tells us that businesses have a lot to learn from them!
At Snap Out, we’re grant funding geeks! We help businesses to secure funding, with years of experience under our belt. So, we knew that we had to write this blog post, diving into Uber’s original pitch deck and outlining what it can teach businesses hoping for similar success.
We know, you love your business idea and want to share it with the world. However, don’t be tempted into putting lots of unnecessary detail into your pitch deck and sharing all of the information you have.
When you’re giving a pitch, you need to keep the people you’re selling to as engaged as possible. If they lose interest, you’re Continue reading “What we can learn from Uber’s first pitch deck: 5 tips for startups looking for funding”
Originally published at https://rossysheil.com on February 3, 2020.
‘There’s no talent here, this is hard work. This is an obsession. Talent does not exist’ — Conor McGregor
I recently spent 2 weeks in San Francisco with a group of cross-functional leaders at Stripe from engineering, product, operations and revenue exploring best practices for building top-performing teams and it prompted a reflection on the best teams I’ve led and been a part of during my career. Whilst there are no mechanical set of steps a leader can implement to build a top-performing team there are behaviors and success patterns which an impactful leader encourages and optimizes towards to create the best conditions for a team to do their most valued work. Taking a 30,000 foot view the true function of a leader is to see beyond the individual, the role, the targets and the objectives to row in behind the social and business systems that ensure a team and its constituent relationships are greater than the sum of its parts.
Breaking it down the reality is that building teams and managing humans is equal parts art and science with a shot of unpredictability thrown in for good measure. As a startup founder or leader at early stage you are tasked with building a company and gradually moving from high output individual contributor to manager of people and resources wearing multiple hats projecting yourself through individuals and teams in an effort to deliver on the goals for the business. I’ve been through this journey a few Continue reading “Building high performance startup teams”
Originally published at https://rossysheil.com on February 1, 2020.
Since the ’60s Silicon Valley has acted as the epicentre of innovation for startups across the globe home to the world’s largest technology companies and an established asset class of venture capital which has served as it’s driving force. As an ecosystem, it has had the equivalent of a multi-decade monopoly and head start on other geographies which continues to compound sitting on top of the global startup ranks decades later.
I often think of Y Combinator as a symbol of the success the US has experienced with startups and a yet to be replicated jewel of any other ecosystem taking global talent from across the world and producing 100 companies valued at over 150 million USD and 19 companies valued at over 1 billion USD.
These are the top @ycombinator companies of all time, based on valuation #startups #venturecapital
8. Ginkgo Bioworks
10. Flexport https://t.co/S9yc64ZkQF
– Jose E. Puente (@jepuente_telco) October 3, 2019
If Y Combinator is to Silicon Valley what Silicon Valley is to the rest of the world, nowhere else has this feat been emulated so consistently in a single entity but the tides are changing and this super hub model is evolving to a globally distributed one with different blueprints being adopted around the globe from the government-driven Chinese approach to the corporate-driven one made dominant by the USA.
Naval Ravikant is the founder of AngelList, an angel investor, and a modern-day philosopher.
He is one of my heroes, and here are the ten lessons I’ve learned from him.
In his interview with Shane Parrish, Naval said, “I always spent money on books. I never viewed that as an expense. That’s an investment to me.”
When I went to school, I was taught that books should be read from cover to cover — and that you can’t start a new book until you finish the one you were reading right now.
Thankfully, I am not at school anymore. And thanks to Naval, I don’t finish books anymore. I read whatever I am interested in; I jump around, skip sections, and close the book once it becomes too boring.
I now treat books like blogs, where each chapter is a blog post.
“Everyone I know is stuck on some book. I’m sure you’re stuck on some book right now. It’s page 332, you can’t go on any further but you know you should finish the book, so what do you do? You give up reading books for a while.”
The lesson here is to permit yourself to quit once it becomes boring.
There are too many interesting books in the world (in fact, each day more books are printed out then you would possibly read in your lifetime), so there’s no point in trying to finish a Continue reading “10 Life-Changing Lessons I Learned From Naval Ravikant”
For decades, researchers and business people have tried to identify a single representative personality profile of an entrepreneur. Those efforts have fallen flat. Why?
Well, imagine if there was a personality profile that defined “the entrepreneur.” All the infamous entrepreneurs we know — Bezos, Gates, Jobs, Musk, Zuckerberg — would be alike. And that couldn’t be further from reality.
Well, imagine if there was a personality profile that defined “the entrepreneur.” All the infamous entrepreneurs we know — Bezos, Gates, Jobs, Musk, Zuckerberg — would be alike. And that couldn’t be further from reality.
“[Entrepreneurship] is not a personality trait; in thirty years I have seen people of the most diverse personalities and temperaments perform well in entrepreneurial challenges.” — Peter Drucker
Don’t dismiss personality just yet, though.
Personality is highly related to entrepreneurial success. But startups need people with diverse personalities to be successful because entrepreneurship encompasses a wide range of activities. Here is what we know from over 100 years of scientific study on personality and performance:
The relationship between a person’s personality traits and how they perform is indisputable. By definition, personality traits are deeply ingrained, psychological attributes (cognitive, behavioral, and motivational) that cause behavior. To bring this concept to life, take a moment to think about how you behave day-to-day. You will likely realize that there are clear patterns and tendencies in your actions.
For me, on almost any given day I will think about the future, set goals, panic about Continue reading “The “entrepreneur personality” is a myth”
Businesses should use a 3-step process to define the product scope of every project they work on. It’s one of the best methods to manage resources efficiently and to ensure you’re making critical design and development decisions based on concrete, validated evidence.
Oftentimes, companies fail to create successful products not because their idea is bad but because they don’t invest the necessary time to define their product scope.
They end up building products based on gut feelings instead of data and user research. These products probably boast an overwhelming number of features users don’t need or understand. In short, time and money are wasted.
But it doesn’t have to be this way. Building a product that users care about requires a plan, a methodology, and a process. When you work on a complex, costly project such as the development of an app, establishing a product scope is crucial.
Essentially, product scope is the sum of all the features and characteristics of a product or service. How it will look, how it will work, and what it will offer to users.
Before you start defining the functionalities of your app, you need to gather the information that will lay the foundation for your digital product.
The first big thing you need to do is to identify who your users are and what they need.
A fundamental part of Continue reading “How to Define a Product Scope”
Memory tends to be selective. In our line of business, that’s a blessing. I knew, somehow, that raising money for Done wasn’t going to be easy. But I had forgotten how hard it was. Just a month
This episode of Greymatter is the third in a series of growth discussions featuring Greylock investor Mike Duboe. In this podcast, Lenny Rachitsky, former growth lead at Airbnb, and Dan Hockenmaier, founder of Basis One and former director of growth marketing at Thumbtack, join Mike to share lessons learned when growing marketplaces from startup to scaleup. They discuss how to design a growth org, processes and frameworks around experiments, building growth models, understanding marketplace liquidity, how to think about disintermediation, and parallels between B2C /B2B marketplaces. Below are a few highlights from the discussion.
Prior to joining Greylock, Mike created, scaled, and led cross-functional growth organizations from Series A through IPO across a span of businesses including consumer marketplaces, retail/online commerce platforms, and social payments networks. His most recent stint before Greylock was leading the Stitch Fix growth team through IPO,
Silicon Valley can frequently be too provincial in its views of entrepreneurship, strategy, and markets, and can benefit from learning about a broader view of entrepreneurship where the strategies of Blitzscaling can be applied outside of Silicon Valley and China.
In their first podcast, Reid Hoffman and entrepreneur Wences Casares talked about the ability of entrepreneurs in Argentina to see global markets that Silicon Valley entrepreneurs might miss. And for their second conversation, they turn to the topic of how blitzscaling works when you’re not in Silicon Valley or China.
Among the interesting new techniques that Wences and Xapo are using to build a global business is his approach to creating and growing a completely distributed company (Xapo has 275 employees scattered across 62 different countries). While this poses some coordination challenges, it also allows him to recruit the best talent from anywhere in the world.
On the podcast, Reid and Wences discuss some of the learnings and tools Wences found to help him make remote work at Xapo more effective. You’ll hear why he thinks working in an office is like living with your parents, while working remotely is like living on your own for the first time. Wences aalso explains how he uses always-on Zoom videoconferencing to implement a virtual “open door” policy that generates serendipitous meetings between employees on different continents, and why hiring employees without ever seeing their face or hearing their voice is actually a competitive advantage.
Chile, Entrepreneurs, Endeavor, and Global Lessons with Reid Hoffman and Wences Casares was originally published in Greylock Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.
In this episode of Greymatter, Reid Hoffman, Partner at Greylock and Co-Founder of LinkedIn sits down with Wences Casares, CEO and founder of Xapo, a Greylock portfolio company in Patagonia to discuss a range of topics, including what Silicon Valley can learn from from Argentina.
Silicon Valley has the rare privilege and good fortune to be one of the most amazing entrepreneurial networks in the world. Despite a population of less than 4 million, Silicon Valley has created the majority of the world’s $100 billion companies, including mega-successes like Apple, Alphabet (Google), Facebook, Netflix, and Salesforce.
Silicon Valley benefits immensely from the entrepreneurs, investors, and technologists who come from around the world to make it one of the central nodes in their network. Many of these lessons have been captured in Reid’s book Blitzscaling and podcast Masters of Scale.
But, just as every strength has a weakness, diverse entrepreneurial ecosystems like Argentina can teach Silicon Valley (and others) important lessons about global entrepreneurship. The quintessential teacher here is Wences.
Wences was Patient Zero for Bitcoin in Silicon Valley (you can watch his cameo in the Bitcoin rap battle), and his insight can be attributed to his experiences outside the region. Unlike people whose experience is limited to the bubble of Silicon Valley, he’s seen the challenges presented by unstable governments and currency, such as the difficulties of making cross-border payments. This knowledge made Wences realize much earlier than most the importance of a global, nation-independent, reliable, robust monetary ecosystem.
This is just one of the many insights that Wences and Reid covered during the conversation. They also discuss how Wences’ childhood and family (his mother was an entrepreneur who involved him in her business, and his father built his own computer for the family) helped prepare him for life as a tech entrepreneur. And, you’ll hear the story behind how needing to pay a $200 bus repair bill led to Wences becoming a Bitcoin user and investor.
Argentina Entrepreneurship, Endeavor, and Global Lessons with Wences Casares and Reid Hoffman was originally published in Greylock Perspectives on Medium, where people are continuing the conversation by highlighting and responding to this story.
At Point Nine, we see a lot of startups every year that just closed their first large customers and therefore want to understand in detail how valuable the early traction is, hence if their pilots, prospects or the like are ready to buy.
My colleague Christoph summarized in this post already which criteria we’re looking at when we try to assess the degree of product-market-fit of an (Enterprise) SaaS company. There can be vast differences — pilots that can turn into a company-wide rollout in a few weeks after our investment or endless year-long pilots. If you work in the manufacturing industry, for example, you probably have heard of the pilot purgatory — pilots with large enterprises that don’t seem to move forward and drag along forever (“need more time”).
From my discussions with founders, I realized that it’s often not very easy to communicate the early traction with other stakeholders such as investors if there is not much data yet. In the last couple of months, I worked with a bunch of founders on how we can make it easier to report their early enterprise traction. The result of these discussions is a framework that covers essential questions which you need to have answers to. I think this framework does not only help you in communicating your early enterprise traction but also in reflecting if your first customers are really ready to buy. Let me start with a summary of the areas that I think are most important, and I will dive deeper into each of them afterward. Please note that this summary is far from complete, but I think it covers the most critical aspects. Here is the Google Doc if you want to use it as a template.
If you fill that framework for your first couple of customers once, you can send it to all the investors you’re talking to and thereby save a lot of time in answering the (same) questions they might ask you. Let’s dive deeper into the details.
This part is pretty straightforward and easy. It should include a short description of what the company does, the industry they are in, and some necessary numbers such as revenue and profit. Also, it helps if you add other relevant figures for the product you are selling, e.g. the number of factories, marketing spent, or the number of goods shipped per week.
Great enterprise salespeople have an excellent understanding of the mindset of the customer, and they can read between the lines what is essential for both the company but also the person they are selling to. Having different touchpoints with different people in the organization can give you more insights into the overall customer mindset. Maybe your buyer persona wants to get a promotion, and her goal is to cut costs by 20%, and therefore, your solution could help her a lot in making her a superhero. Or the company is planning to stop production, so your project probably has low chances of success. It’s important that you know about other projects and issues that are going on in the company.
Before you start talking about your solution, you should start with what the problem of your customer exactly is and how your customer is solving it today. Moreover, customers who have tried to solve the problem before can move faster because they have the resources in place, budget, and already problem awareness. Therefore, understanding how much resources your customer put already into solving that specific problem is very interesting — maybe they even worked with one of your competitors before — something you should try to find out.
Especially for broad solutions, it is important to know how your customer is using your product and what the use case exactly is. I have seen cases where customers are using the product differently compared to how the founders would like to have them using it, which is usually not great. Also, covering many different use cases at the beginning is useful to show the potential of your solution, but bear in mind that investors look for early repeatability. Lastly, at an early stage, it’s well possible that the ROI is not proven yet, but it would be good to understand the success criteria and the estimated ROI the customer wants to get from your product.
Let’s go deeper into your sales process at your customer. Besides the acquisition channel and where you stand with your customer — e.g. signed contract or pilot started — you can add the sales cycle, revenue (license vs. service), and what you have validated already. Usage can differ widely, and sometimes it’s even better if the customer does not spend much time with your product because you can automate parts of her job (e.g. RPA). Also, you should add the different stakeholders you are talking to, which is also important to define your ideal customer profile.
Since you are selling to large enterprises, there is usually a lot of potential to roll-out your solution to other departments or subsidiaries. Therefore, it is essential to understand the account potential but even more what additional buy-ins may be required to go from pilot to rollout and how precisely the expand motion works. This means you need to have answers to what you still need to validate and the additional buy-ins that are required to move on.
I know that all of this sounds a lot, but I think it’s very important to understand your early enterprise traction in detail. Maybe the framework can help you in navigating through complex enterprise sales cycles and give you the big picture if your early customers are ready to buy.
This is the first version of the framework, and I would like to adapt it over time, so I appreciate any feedback. If you think you have acquired your first customers and they are ready to buy, please reach out here — I’d love to hear from you.
Ready to buy — do your early customers have what it takes? was originally published in Point Nine Land on Medium, where people are continuing the conversation by highlighting and responding to this story.
I think some venture investors might overstep our bounds when discussing our personal involvement with our firms’ portfolio companies. If so I’m occasionally guilty as well, but I do at least try very hard to be vigilant about avoiding the trap.
I’m specifically referring to venture investors using phrases like “we did a deal with [large company XYZ]” or “when we built [product ABC],” where “we” refers to the investor’s portfolio company. Or — and this grates on my ears like fingernails on a chalkboard — “she’s one of my entrepreneurs,” or “one of my founders did [X].”
Many well-known VCs who I otherwise admire and respect, regularly use this lingo, which I find marginally problematic and personally try to avoid.
Is it accurate or fair for us to take such participatory credit for the company’s activities, or claim “possession” of the company’s founders? For starters, while “we” (venture investors) are technically “part” of the
Welcome London-based Gameplan to the Seedcamp Nation as part of their £500,000 round to develop its Integrated Workforce Management software platform and continuing on in a series of recent investments we’ve made in companies shaping and enhancing what the future of work looks like.
Founded by experienced operators and entrepreneurs Tom Nimmo (formerly of Hassle.com) and Duncan Mitchell (TempTribe) we’re excited to back the team alongside Swiss Founders Fund and leading angel investors including Michael Pennington (Gumtree), Will Neale (Fonix) and Tim Ruffner (Talendo).
The raise follows 18 months of software development and market research with the product already being piloted by selected partners from different industries. Gameplan is building a SaaS solution which aims to help businesses reduce cost and increase revenue by streamlining processes in areas such as assigning work to suppliers, communications, access control, real-time job information, time and Continue reading “Gameplan raises half a million to empower businesses with integrated workforce management system”
Many founders — particularly first-time founders — struggle with the mental chaos of startup leadership. Sometimes it seems like your brain is being pulled in different directions. And that’s exactly the way it should be, at least in the Jungle stage.
One of Jumpspeed’s LPs held a day-long roundtable discussion with his portfolio companies last week and I was privileged to take part. Over the course of the day a number of the founders vented about the daily stress and difficulties they experience in trying to navigate tough decisions based on imperfect or unknown information. Clearly, they felt that this was problematic, a mode of operation they needed to fix or optimize.
I piped up: “Have you ever had a Red Bull and Vodka?” Puzzled looks. I explained: When you drink a Red Bull and Vodka, you feel your brain being pulled in opposing directions, plus a bit of a buzz. To me, that’s
It probably happens to most founders at least once: His or her company needs money quickly and there is an interested investor, but there is not enough time to execute a full-stack seed financing including governance rules, exit provisions, etc. Or even when there is time, the committed investment amount may not yet be sufficient. Or there is confidence that a small bridge funding will be sufficient to raise a proper financing round at a (much) higher valuation shortly thereafter. Or you just want to keep it simple…
In these cases, a convertible loan can help because it’s comparatively easy to agree and does not require to go through the motions of issuing shares. If you’re new to the topic, a convertible is a loan (i.e. debt) by name, but due to the conversion option, it’s actually closer to equity. Put simply, the lender is given the option (sometimes also