Startup secrets
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There are common pitfalls that startups face at different stages of growth. Team issues are often the biggest determinant of success or failure, with experience and learning agility being important factors. Market validation is also critical, as many startups fail due to producing products that no one wants or having poor unit economics. Financial issues like running out of cash too early or experiencing too much dilution can also cause startups to fail. Growing too quickly or taking on too much scope also contributes to failures during the scaling process. While there are no guarantees, understanding common patterns can help startups navigate the stages towards success.
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Startup secrets
- 1. the traps, pitfalls, mistakes, and best practices on the journey towards the summit Startup Secrets
- 2. blockbusters,successes,and failures There are 3 types of startups #vc4heroes
- 3. NO! But avoidingstupidityis easier than seeking brilliance Is there a formula for success? #vc4heroes
- 4. team issues,market issues,resources issues,and growth issues are determinant But there is a clear pattern #vc4heroes
- 5. Team Issues
- 6. winners are 38 years old at founding (average),and 80% are second-timers withexperience in tech Experience is a key ingredient #vc4heroes
- 7. winners that have mentors,use OKRs, are knowledge seekers raise 7x more capital and have 3.5x better traction Learning agility is a secret weapon #vc4heroes
- 8. winners are typically3-founders with history of working together It is a team game #vc4heroes
- 9. business-heavyare 6.2x better at enterprise software, technical-heavyare 3.3x better at product-centricstartups, and balanced teams are 2.9x better at marketplaces, ecommerces Picking the right battle #vc4heroes
- 10. lack of flexibilityon cap-table and understanding of how to slice the pie But 1 in 4 fails due to founder conflict #vc4heroes
- 11. Market Issues
- 12. ~50% of new product launches fail. Winners spend 41% of their time deciding what goes in products Product no one wants #vc4heroes
- 13. most of the times,first mover is a curse Bad timing #vc4heroes
- 14. 1 in 6 fails for bad CAC, churn, gross margin, working capital Bad unit economics #vc4heroes
- 15. two types: david x goliathor the gorilla fight Competitive fine tuning #vc4heroes
- 16. Money Issues
- 17. 1 in 3 startups fails for lack of cash. It takes 2-3x longer to validate than expected Too much optimism #vc4heroes
- 18. Seeds have 25% chances of raisingSeries A, which have 50% chances of gettingto Series B It is a funnel (multi-turn game) #vc4heroes
- 19. less money reduces in 70% chances of next round, more money reduces in 25% chances of next round Too much or not enough money #vc4heroes
- 20. fat startups ends up with less than 10% of equity, lean startups ends up with more than 40% of equity Dilution kills #vc4heroes
- 21. Growth Issues
- 22. 1 in every 10 startups fails due to premature scaling(traffic no conversion, product, no sales,sales no margin, CAC no LTV, people no sales) False positive (out of synch!) #vc4heroes
- 23. 1 in 5 fails when transformingfrom familyto tribe, to village,to city, to nation Organizational breaking points #vc4heroes
- 24. 1 in 10 fails for carrying too much weight (several personas, products, markets,and channels) Lack of focus #vc4heroes
- 25. Wrong talents reduce 2.6x the speed of startups (cultural fit x technical fit, generalists x specialists,scope x autonomy, do best x do worst) Garbage in, garbage out #vc4heroes
- 26. Summing up
- 27. There are no formulas, but there are patterns Stages can be measured with specific milestones Learning is a fundamental unit of progress for startups Most startup advice is wrong The score takes care of itself (skill & luck) #vc4heroes