Spawning Scalable Startups

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JFDI.asia’s co-founder Meng Wong is a serial entrepreneur and established business angel. He tells the story of how the pre-seed accelerator phenomenon has evolved, what seem to be the vital ingredients and how JFDI.asia fills a gap among complementary early-stage schemes in Asia.

Transcript of Spawning Scalable Startups

  • 1. Joyful Frog Digital Incubator Spawning scalable startups, sustainably echelon2010 June 2 Wong Meng Weng

2. 3. 4. 5. 6. Were going to start a Y-Combinator-like operation soon. Chris Evdemon, Innovation Works, Beijing 7. 8. Seed Accelerator Stats

  • 2005: Y Combinator begins
    • $5,000 per startup + $5,000 per founder
    • 172 startups later, total acquisition value = $84M
    • average value per startup: $488,000
    • funded by founding angels Paul Graham, etc.
    • In Mar 2009 Sequoia invested $2M into YC.
  • 2007: TechStars begins
    • average $15,000 investment per startup
    • 39 startups later, total acquisition value = $17.25M
    • average value per startup: $442,000
    • funded by founding angels David Cohen, Brad Feld
  • Source: Copying Y Combinator, Jed Christiansen

3X in 3Y 9. 10. Paul Graham = awesome

  • Graham ended up investing in Alexis's company through what became the seed funding firm Y Combinator, but the amazing part wasn't the money. It was thatY Combinator helped him move past a bad business ideathat he and his partner spent a year on, and discover a better one, whichbecame Reddit , the social news site that was sold to Conde Nast within 2 years of launching.
  • Then there'sKevin Hale during the interview, despite initial resistance,they were convinced to create a form builder instead . The business became Wufoo, the startup that reached profitability within 9 months.
  • AirBnb : When they joined Y Combinator, they had a site that gave travelers an affordable alternative to hotels by matching them with locals who had space in their homes. They had a national presence, but they were constantly struggling for cash. Y Combinator gave them some funding to keep going, but they told me it wasGraham's suggestion that they focus on just one city till they got their product right, which changed everything.Within a few months, they had a better product and they were finally profitable.

http://mixergy.com/y-combinator-paul-graham/ 11. The Seed Accelerator Model

  • Disrupts the traditional VC model.Series AA funding round is usually in the $20,000 range instead of the $2,000,000 range. Typical startup is valued below $200,000.
  • 3 month development sprint , in a batch of 1020 companies at a time, 2 to 3 founders each.
  • Intensive tutoring by mentorsand alumni helps first-time founders climb the entrepreneurship learning curve fast.
  • 200300 investors convene for a Demo Dayat the end of the batch.

12. Y Combinator and TechStars 13. JFDI.Asia 14. 15. Adapting the Model, Part 1

  • Full-time mentors supervise portfolio startups daily, face-to-face . Our full-time mentors act as co-founders, helping startups focus on launch, early revenue, and marketing.
  • JFDI involves follow-on investors early and throughout the program , not just on Demo Day, thus increasing the likelihood of successful follow-on financing.
  • JFDI covers many startup expenses directly, rather than giving the money to startups.We gain economies of scale by pooling technical and business resources, buying in bulk.

JFDI adapts the TechStars model to Singapore in four key ways:

  • We operate a structured ideation process.Too often we see solutions looking for a problem. Our rigorous process eliminates unmarketable ideas and optimizes for business feasibility.

16. Founder Institute A Real Estate Incubator plus mentoring 17. JFDI startup founder founder You should think of them as a co-founder Chris Evdemon, June 1 18. Positioning 19. Our #1 Value-Add

  • We force founders to
  • talk to their
  • motherf*cking
  • customers

20. 21. Ideation Workshops

  • run by our partner Propellerfish.com

Specialists in New Product Development Market Research and Workshop Facilitation 22. The Process

  • Start with a few themes
  • Do market research ahead of time
  • Gather user requirements and pain points
  • Organize an Ideation Workshop
  • Bring in domain experts
  • Bring in investors
  • Facilitate brainstorming
  • Produce dozens of ideas
  • Evolve and improve.
  • Rank them for feasibility
  • Fit to teams

23. Vision for JFDI Short term value prop: Morepre-qualifieddealflow for seed and Series A investors: solid businesses designed to be investment ready. Long term vision: a self-sustaining startup ecosystem in Singapore that turns founders into funders and inventors into investors. Improve the startup experience for founders and investors. Our motto:spawning scalable startups, sustainably 24.

  • Credibility, Know-how
  • Talent engagement
  • Resource support
  • Customer engagement
  • Investor engagement
  • Core public funding
  • + Smart private money

Strategic Partners 25. Management Team

  • Soon Loo:Board Directors of IPIT, listed business trust with US$500m+ market cap. Adjunct professor, SMU. Former Regional Vice President AXA Group Japan & Asia Pacific. Co-founder and senior VP Nextdoor Networks, a Silicon Valley IT company in Silicon Valley where he helped the company raise USD37.5mil VC capital. Formerly, McKinsey & Company consultant, Harvard MBA.
  • Hugh Mason : Serial investor / mentor / entrepreneur in the IDM sector. Co-founder Pembridge Partners LLP, London-based business accelerator specialising in marketing, media and technology SMEs that has raised/invested directly GBP25mil. Co-founder Narrateo Ltd, international TV production business. Former BBC TV producer. Physics graduate, University of Bath.
  • Meng Wong : Serial entrepreneur and software engineer. Founded pobox.com in 1995. Led SPF/Sender ID antispam standards project to success during 2003 and 2004. Founded Karmasphere in 2005. MBA dropout, National University of Singapore. Founder, hackerspace.sg.

26. Team credentials

  • 33 man-years of frontline entrepreneurship experience
  • 17 man-years of active angel investment experience
  • Over 2,000 SMEs supported
  • Raised ~ $100MM of investment directly and indirectly
  • Networks in US, UK, China, India, and SG + SEA
  • Interdisciplinary, multicultural team technology, education, communication, leadership

27. Operations - bootcamp 28. FAQs

  • Where will the talent come from?
  • Who will fund the startups subsequently?
  • What about exits? Who will acquire the startups?
  • How can I invest?:-D