International Startup Festival Notes – Day 1

Posted on July 15, 2012

I wanted to share my rough notes from the conference for those who weren’t able to attend or for those who attended and want a refresher.  There were two tracks at the event – Inspiration and Execution.  I primarily spent my time in the Inspiration track.

Chris Shipley 

Now is an awesome time to start a business. It is now cool to be an entrepreneur. Her favorite incubator program is Startup Chile to spread startup fever like a flu. Yet Chris is still worried. We might be doing something that is bad for entrepreneurship. It is hard work to build a business. Long hours, little sleep, etc. Even with all of these resources it is still really hard.

“Building an app is not building a business.”

“Winning a business plan competition is not building a business.”

Entrepreneurs create companies built to last. Building the company itself is the area of value. So do something that matters.  Build a business worthy of your time and the sacrifices you are making. Build something of sustaining value

Dave McClure

Shared a pitch practice game called half baked where you sit around in a circle to practice pitching. One person says a word then another person says a second and the third person pitches the blank blank .com business.

Take risk early with your business. Most people are afraid they will fail but you should be more scared of no one ever noticing you.  500 startups has invested in over 300 companies in the past two years and around 9 companies in Canada.

Dave recommends read Geoffrey Miller – the mating mind and spent.  Spent is about applying basic emotions to marketing. Another recommended book was Influence by Cialdini.

You should have a good time trying to fail so do something you care about.  You also have nothing to lose when you first start so take risk early. Playing it safe equals death as you won’t learn much and you won’t get noticed. Hate is a good signal too. If no one cares then you have nothing to iterate around.  So, “stand for something!” and describe in a single word what you stand for.

Tap into humanity. Fear, sex, power, family and anger.  Be a hero, be a villain.  Less is more.  Use one powerful image, 3 powerful words or a few sentences,  30 second meaningful video.  If/when it works then double down.  Be yourself but be your super self. Passion starts from a place you are familiar with. Be authentic and comfortable. Find an emotion you can sustain to carry you through the tough times.

Isaac Saldana – SendGrid

Evolution or revolution- where is the best place to start?

Ask yourself these questions to uncover the answers.

Why do you want a startup? Who am I? What skills do I have? Would I want to run a company like Apple? Facebook? Walmart?

I wanted to share my rough notes from the conference for those who weren’t able to attend or for those who attended and want a refresher.  There were two tracks at the event – Inspiration and Execution.  I primarily spent my time in the Inspiration track.

Bjorne Herrmann – Startup Genome

The majority of companies are failing because of self destruction.  How can we reduce the failure rate of startups in a scalable way? Extreme uncertainty is the biggest challenge.

The problem – premature scaling where startups efficiently execute the unnecessary. To solve it you need to learn faster and perform proper customer discovery. When teams are more focused on product development than customer development this should be a red flag

Stephan Ouaknine

Going after clean tech!

The problem – resources on the planet are going down and the population is rising quickly. Climate change is also playing a role.  3% of energy comes from renewable sources.

Solution – create a clean tech revolution by raising a billion dollar fund to use tech more effectively to bring down costs and create new opportunities. Also working from a market pull perspective. Energy markets are monopolistic and regional. People should be able to buy energy directly.  The idea being they can provide the sales and customers. So far they have been ridiculed.

What are you doing to get ridiculed tomorrow?

Dan Martell – Motivation Trumps Knowledge

Motivation is everything!  When you become responsible for others you won’t feel like you can screw up. Just do it. Don’t worry about not knowing everything when you get started.

Dan told one of the best stories I have ever heard. Story about his brother Pierre Martell and his home building business.

Jon Gosier – changing government through data

“The best minds of my generation are thinking about how to make people click ads” Jeff Hammerbacher

Open data movement is incredibly important. Helps to drive impact and better informed decisions. Another example is crowd sourcing.  Increasingly popular way for governments to work with people. Allow people to vote on items. Citizen reporting is also increasing in popularity.  He cited neighbour land and crime reporting as recent examples.

Predictive technology (for example flow minder) to predict what events might happen in the future. Social media monitoring solutions are being repurposed by large companies like the Red Cross to monitor in a new way of operations center.

Complexity science is a new field being created. Check out the vibrant data project as an example.

Paul Kedrofsky and Howard Lindzon

Howard didn’t make it live (passport expired) so joined by Skype. Do we need more wantrepreneurs?

Howard – We totally need more entrepreneurs. Didn’t want to get off topic defining wantrepreneurs.  Likens entrepreneurs to stock trading in 1999 where everyone wanted to try their hand at it. Not everyone will be good at it. Dig deep – do you really want to do it?

Paul – thinks it is elitist crap and naive of us to think we know who can effectively solve problems. Kauffman data shows that per capita entrepreneur data is decreasing not increasing.  Capitalism operates on waste. Paul wishes more implausible pitches to assure him that too much is a good idea.  Everyone should take a shot at it!

Howard acquiesced at this point based on Paul’s argument.

Paul – If there aren’t too many wantrepreneurs then what are there too many of?  Recommendation is to do away with university based business entrepreneurship programs.   This comment comes from Kauffman research that as entrepreneurship programs are introduced it reduces the number of entrepreneurs. [Further discussion after revealed additional detail from Paul.  Kauffman Foundation research shows that their funding of university business entrepreneurship programs does not produce additional numbers of entrepreneurs.  In fact, funding of technology focused (engineering) programs seems to be where Kauffman is showing the most traction in creating sustainable businesses within university settings.  Paul promised to send a copy of a graph showcasing this effect and I will share it.]

Paul – Andreeson Horowitz has 82 people to create a new model to deal with this mess of only 8 companies per year who matter. Create a studio in house to help them solve these problems. Will it work? Don’t know. But think about the generation of entrepreneurs who are getting the best education in the world. It is more than just getting more people in the funnel but reducing the failure rate for companies when in the funnel

Need to think bigger on how best to build entrepreneurs.  Systems in place to leverage knowledge and expertise. Again comes back to connecting people. Concerns about scalability of the new systems being created like YC and Andreeson.

Way too many accelerators.  Good people gravitate to good people. More competitive people force you to step up your game.

Paul’s suggestion for the biggest policy change to help entrepreneurship is the concept of the Startup visa.  Foreign students who study in the USA would be given a visa to stay in the country for a year or two if they decide to start their own business.  This is also based on Kauffman research.

Randy Smerik – crowd funding

It’s all about the movement of money. Entrepreneurs want to use money but investors want to see it “do something”. What is it they want done with that money?

Making a platform for making it more efficient to obtain money. Based on who you know etc.  Angelist makes it easier to reach these people.  You need to know what people want when they give you money.

Most common reasons are:

1. Be part of something. Fun passion and status.

2. Products and goods (e.g. Kickstarter)

3. Philanthropy – “Give back” (eg. Kiva)

4. Interest (%)

5. Equity

RocketHub and ArtistShare are the oldest forms of crowd sourcing.

For lending sites LendingClub.com and Prosper.com

Two primary camps for equity is either accredited investor or non-accredited investors. Capital marketplaces like Angelist or localstake.

The crowdfunding dream is to provide an equity offering (with real ownership) as a “general solicitation” to make the equity available to a large group of people including non-accredited investors.  This dream has been illegal in the USA since 1933. However, the JOBS act was approved in April but still with the SEC till December. Very revolutionary to relax restrictions in this type of environment.

How?  Beer made this all happen!  What a very cool story. Buyabeercompany.com story.

Two elements of jobs act

IPO on-ramp to make it easier for emerging growth companies (less than 1b  in revenue) you can remove some of the restrictions. Such as a confidential pre-review, relaxing the quiet period, etc. likely to see more public companies now.

Crowd funding

Raise up to 1m in a 12 month period where you use an intermediary platform to help you with the legalities.  If income/net worth less than 100k you can invest 2k or 5%. If over 100k you can invest 10%. If accredited no limits.

The Good News with Equity Crowdfunding

  • Entrepreneurs need access to money and here is another way to get up to $1M
  • Investors gain visibility to lots of opportunities
  • Good for companies not traditionally targeted by VCs
  • Good for folks in geographies without willing investors
  • Could be better capitalization structure than having lots of “custom” friends and family and angel deals
  • Potential “pipeline” for VCs
The (Potential) Bad News with Equity Crowdfunding
  • Disclosure and Communication – imagine having to share plans and status with 1,000 people
  • Anyone can invest – your top competitor can invest $100 and get all of your info
  • Financial and Legal – need audited financials ($$) and a potentially long list of legal docs
  • Can only communicate on the Intermediary – no use of Facebook or Twitter to solicit interest because all communications have to be visible and consistent
  • Scare off VCs – VCs may balk at 1,000 co-investors
  • Exits – need to understand voting and other rights

Potential comes from the fact that the details are not finalized.  However, Randy recommends using Kickstarter for products and goods. Or use capital marketplaces like Angelist to find accredited investors.

Mark Skapinker

Good talk about the beginning of winfax and how they built a strong Canadian tech company.  Some solid lessons learned and his recommendations are consistent with what we are telling teams in our space today.

Craig Walker and Gary Pudles

Spending time talking about selling his companies to Yahoo and Google. Very weird transition when moving from your own company to being part of a larger company. Truly go from turning on a dime to not being able to do that at all.

That is the end of Day 1.  Day 2 notes are available in this post.


1 Reply to "International Startup Festival Notes - Day 1"

  • Alex Kinsella
    August 7, 2012 (1:21 pm)
    Reply

    Did you see any great taco related start-ups?


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