My presentation given to the HNLondon meetup on lessons learned from the failure of the first startup I co-founded, Radik Software.

1. My First Startup Was A Failure
Lessons Learned from Radik
Software
Kirk Wylie
kirk@[opengamma|kirkwylie].com
@kirkwy

2. Who Am I?
Why Are You Listening To Me?
• Started my career in Silicon Valley
• Moved to London 8 years ago
• Worked in pure tech, hedge funds, Ibanks
• Co-Founder and CEO of OpenGamma

3. Shameless Plug Time
• World’s first Open Source platform for
quantitative finance
– Trading, Risk Management
– Data Management, Analytics Computation
– APLv2 Licensed
• Founded in 2009
• $8.25MM investment (so far)
– Accel Partners (London)
– FirstMark Capital (New York)

4. February 2002 – I’m on holiday in Hong Kong
Radik decides to liquidate

5. The Radik Investment Thesis
(Founded Feb 2000)
• Open Source is huge
RHAT, LINX have massive IPOs
• MySQL is getting really popular
It was (is?) a pile of garbage
• Get smartest DB guys in Silicon Valley to
build an Open Source RDBMS
Target more sophisticated users than MySQL could
Feb
2000

6. Founding Team
• Kirk Wylie – CTO
23 year old Berkeley grad DB whiz kid
• Roy Goldman – President
27 year old Stanford DB PhD candidate
• The Other Guy – CEO? CFO?
We thought we needed a “business guy”

7. Mistake #1:
Don’t Be Too Young
We’re not all Zuck, no matter what
Pete Thiel and Paul Graham
would have you believe

8. Mistake #2:
Every co-founder needs to bring
something concrete to the table
Adding a co-founder to your team in
an ill-defined role you don’t know
you need is excess baggage you
don’t want

9. Sweet, Sweet Angel Funding
• Raised a 2x oversubscribed round Feb 2000
Raised $2MM at $10MM pre-money valuation
• Darn impressive angels
Ram Shriram (Google), Rajeev Motwani (Stanford), Greg Gretch
(Sigma), etc.
• Story was Simple: Build v1
$2MM was enough to build a fully functioning prototype ready for
seeding to the market
Feb
2000

10. 1.0 Ready
Radik Conceived

11. Enter: The Pivot
• Situation: 1.0 ready, running low on money
• Problem: Open Source stocks well out of
favor with wall street
• Solution: Let’s become an apps company!
Feb Jan
2000 2001

12. Mistake #3:
When in doubt, ship it!
Real organizations ship code.
Even if it’s not your new focus,
ship the code already!

13. Mistake #4:
Pivot small, not big
Make sure your pivot is within
your investment thesis and core
competencies

14. Mistake #5:
Know what you’re pivoting to
Don’t pivot to an amorphous area:
make sure you know what you’re
going to do before the pivot

15. Mistake #6:
Get whole team buy-in for a pivot
Don’t allow a long-term schism to
develop between founders.
Everybody needs to be convinced!

16. Mistake #7:
Pivot based on evidence
Don’t pivot on a hunch.
Pivot on concrete evidence from
multiple sources.

17. The Big Guns Come To The
Table
• Story: We built what we said we’d build
Money is for commercialization
• Raised $10MM at $18MM Pre
Led by Redpoint Ventures January 2001 – Post Bubble Burst
• Grew the team dramatically in all areas
We still didn’t know what app(s) we were building
Feb Jan
2000 2001

18. Mistake #8:
Staff up when you know what you
need
Don’t add headcount just because
other firms have. Know your
precise needs before increasing
burn.

19. Situation Mid-2001
• We’re half-heartedly working on the DB
• We still don’t know what app to build
• Our burn rate is astronomical
• Developers are inventing problems to stay
busy
Feb Jan Jun
2000 2001 2001

20. Mistake #9:
A new CEO won’t fix a broken
company
Executive team changes can be
helpful but first determine what the
problems are.

21. Mistake #10:
Communicate strategy
consistently to everybody
Investors, employees all need to
be on the same page.
Never give different stories.

22. Mistake #11:
Board governance matters
Have your lawyers involved with
every board meeting and call.

23. The Valley of Darkness
• “What are we building?”
• “Do we have the right people to build/sell it?”
• “Do we have enough money to build it?”
• “Are we building the right precursor
technology for whatever it is?”
Feb Jan Jun
2000 2001 2001

24. The Liquidation
• We had an idea for an application
• It required none of our existing technology or
talent to build
• We didn’t have enough money to get to cash-flow
positive
• Nobody wanted a down round
Feb Jan Jun Feb
2000 2001 2001 2002

25. Mistake #12:
Communicate future inflection
points to executive team
If there are major board decisions
coming up, tell your executives.
Hire adults and treat them as
such.

26. The Aftermath
• We returned 40% of the Series B investment
The single best investment Redpoint made in 2001
• All employees got jobs by the time we shut
Google hired quite a few
Alumni: Google, Facebook, LucidEra, HortonWorks, Duke
University, VMWare, etc.
• Kidar, the database, is in IP Purgatory
No advantage in allowing its release
Portions are now in LucidDB/Eigenbase
Feb Jan Jun Feb Apr
2000 2001 2001 2002 2002

27. 1. Don’t be too young
2. Every co-founder needs to bring something
concrete to the table
3. When in doubt, ship it!
4. Pivot small, not big
5. Know what you’re pivoting to
6. Get whole team buy-in for a pivot
7. Pivot based on evidence
8. Staff up when you know what you need
9. A new CEO won’t fix a broken company
10. Communicate strategy consistently to everybody
11. Board governance matters
12. Communicate future inflection points to executive
team

28. Mistake #13:
Don’t be wrong
It hurts when the company you
were founded to kill gets bought
for $1Bn.
Trust me.