Download - Puerto Rico Venture Forum 2009 Keynote

Joshua BaerFounder & Managing Director@joshuabaer

MISSION:Austinpreneur

Sunday, December 20, 2009

Today! My entrepreneurial journey

! $500,000 is the new $5,000,000

! Capital Factory

! Startup Lessons! Talk about your idea

! Fail Quickly

! Distribution is harder than development


Austina great city for tech startups

! Youngest city, growing fast

! University of Texas

! Strong economy and job pool

! Low cost of living

! Outdoor lifestyle, creative class


AustinpreneurAustin

! Texas

! Education

! Live Music

! Capitalist Hippies

! Geeks

Entrepreneur

! Creativity

! Control my destiny

! Create jobs

! Create value

! Create wealth


Family

Jack ResnickGrandfather

Retail Store Owner

Sam BaerGrandfather

Retail Store Owner

Al AlterGreat Uncle

Apparel Company

Robert BaerFather

Photographer

Linda BaerMother

Wedding Invitations

Cindy BaerSister

Actress & Movie Producer

Amy MathewsSister

Catering


1,000+ jobs


The Rules Changed! Open Source

! Cloud Computing

! New Distribution Channels

! Facebook

! Twitter

! iTunes App Store


“$500,000 is the new

$5,000,000”Mike Maples, Jr.Maples Investments


The Rules Changed! More is expected of entrepreneurs

! Not just an idea

! Working prototype

! Feedback from real customers

! Get as far as you can without money


Case Study: Tra!c Spike

0

25,000

50,000

75,000

100,000

125,000

Sep 1, 2009 Sep 8, 2009 Sep 15, 2009 Sep 22, 2009 Sep 29, 2009 Oct 6, 2009 Oct 13, 20090

100

200

300

400

Users Servers


Lets do the math! 300 servers x $3,000 each = $900,000

! 300 servers x 2 hours each = 2 months

! Hardware maintenance = at least 1 FTE

! Software?

! What else?


Funding Gap

1980 1990 2000 2010 2020

$$$ Entrepreneurs need$$$ VC’s want to invest

* take this with a grain of salt, it is meant for illustrative purposes only.


Now is the time! It’s always best to start at the bottom

! Turmoil means opportunity

! The fluff gets weeded out

! Average venture lifespan is 7 years

! Lots of capital looking for a home


(3 minute video)


up to $20,000 in cash! Not valuation setting

! You decide how to spend it

! Quit your day job

! Keep it lean

* Exact amount based on # of founders


$20,000 in free stuff(probably closer to $50k, but who’s counting?)


20 mentors! Customers

! Partners

! Investors

! Employees

! “Scar tissue”


10 week program! Weekly group mentoring event

! One-on-one office hours with mentors

! Demo day at the end

! Focus on cash flow

✓ First customers

✓ Angel or VC funding


Who did we pick?! Cubit Planning

! Famigo Games

! Hourville

! PetsMD

! Sparefoot

and why?Sunday, December 20, 2009

Who didn’t we pick?! Not a good fit for the mentors

! Not ready to commit

! Not receptive to feedback

! No technical co-founder

! Great idea, wrong team

! Lots of great ideas, but no focus


2009 Curriculum! Fail Quickly: You are

wrong. Start acting like it.

! Rivers of Revenue: Building a marketing machine.

! Converting Sign-ups to your website

! Raising Money

! Cheerleaders: 1% of your customers could be 90% of your success.

! Business Development for Startups

! Mentor Roundtable: Regrets and Lessons

! Mentor Roundtable: Hiring and Firing


Demo Day! 300 investors and entrepreneurs

! Keynote by Mike Maples, Jr.

! Presentations by 5 companies

! Panel discussion with VC’s

! Standing room only

! Energized Austin entrepreneurship


Startup Lessons


“Fear is the path to the dark side.

– Yoda, Star Wars

Fear leads to anger. Anger leads to hate.

Hate leads to suffering.”

Talk about it


Fail Quickly! Your idea is probably wrong

! The only way to find out how it’s wrong is to get feedback from real customers

! It usually takes many, many iterations

! The faster you iterate, the faster you get to “right”


Distribution! Building it is the EASY part

! Getting anyone to do anything is hard

! Don’t “figure that out later”

! Partnerships can help

! Previous relationships can help


Angel Returns! Angel investors want to find the next

Google, not the next small business

! Think 10x returns, not 30%

! Think big and small

! Paint the vision for how this can get big

! Then focus on how you get the first $$$


Valuations! Valuation doesn’t matter

! Focus on control and board seats

! 51% of the company doesn’t matter

! 2 out of 3 board seats matters


Most advice is BS! In an ideal world...

! But you’re not in that world.

! Most entrepreneurs don’t have options

! A lot of deals are “take it or leave it”

! If you want leverage, you need to have termsheets from more than one VC


Your Mission! Get Puerto Rico excited about entrepreneurship

! Consider entrepreneurship for you

! Talk to others about your ideas

! Talk to me on Twitter @joshuabaer

! Apply for EnterPRize Competition

! Apply for Capital Factory

! Focus on the opportunity, not the idea

! Don’t give up!


My MentorsBrett Hurt@bazaarbrett! Founder & CEO, Bazaarvoice! Founder & former CEO, Coremetrics

Kip McClanahan@kipmcc! Former CEO, Tipping Point! Former President, Motive! Founder & former CEO, BroadJump


More information! http://austinpreneur.com

! http://www.capitalfactory.com

! http://www.youtube.com/capitalfactory

! [email protected]

! @capitalfactory on Twitter
