8. It does not start from a business idea
Incubation
takes years
2 founder rule
Leader
Skeptic
Multi-skilled
talentsTeam &
Values
It starts from
people
9. Pick your friends wisely
• Your future income will be the average of 5 of
your closest friends
Pick your friends wisely
Your future income = average of your
5 closest friends
13. Three origins of great startups
• Copycats: Copy existing business
model to new markets
• Evolutionary: Seek better solution
to existing problems
• Revolutionary: Seek unknown
solution to unknown problems
The best ideas come on cross-roads
of trends and disciplines
14. • The 30-seconds pitch:
tell your granny
– Who is your customer
– What does your
company do for this
customer
– Why are you better than
competition
• Do you pass the “Google
test”?
The What
15. Why I will never invest in
IT services any more
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8
Sales
Expenses
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8
Sales
Expenses
Company 2:
IT services
Company 1:
Platform business
17. The life of any startup can
be divided into two parts –
before product/market fit
and after product/market fit
Marc Andreessen
18. Why pivot?
Not a single great company follows
its original business idea
Failure is not a problem
Slow failure is a problem
19. The importance of milestones
• MVP (Minimum Viable Product): 48 hrs – 3
months
• Initial customer validation: 1 week – 6 months
• One million something (users, $$$, etc): 1-2
years
• You shall pivot if:
– Your solution seeks a problem, not vice versa
– Nobody wants to use your product – even you
– You have ceased to believe into your company for >1
month
24. The ultimate example of being focused
“I was too busy, I didn’t do
things like that… I just didn’t
go and meet new people
who were involved in
investments.”
Bill Gates on initially refusing to
meet Warren Buffet
Interview with Financial Times, Oct 2010
26. Importance of the right signals
• With whom do we compare ourselves?
• What do our customers, investors, partners
really think?
• Are we insiders or foreign?
• Nothing replaces human interaction even in
internet era
• Silicon Valley is the focal point of information,
emotions and ideas
• It is the mental state
30. 9-18mo
18-24mo
2-3Y
3-7Y
0
+
-
2 10 50 200 500 employees
FFF
$10-500K
A-round
$1-10m
B-round
$5-50m
IPO or
exit
Typical lifecycle of a high-tech company
31. Typical life cycle in figures
Year 1 2 3 4 5 6
Phase Startup Early growth Growth Exit
Revenues ($m) 0 1 4 10 20 30
Growth % 300% 150% 100% 50%
Investment phase Angel A-round B-round
Pre-money / exit valuation ($m) 0,5 3 40 150
Investment ($m) 0,4 2,5 25
Post-money valuation ($m) 0,9 5,5 65 150
Post-money ownership of
founders 56% 30% 19% 19%
Value of founders’ stake ($m) 0,5 1,7 12,1 28,0
IRR to angel investors 124% Money-back, angel 56 times
IRR to A-round investors 102% Money-back, A-round 17 times
IRR to B-round investors 52% Money-back, B-round 2,3 times
32. What shall you know about VCs
• Venture capital (LPs) and venture capitalists
(GPs) are not the same
• VCs are in the business of saying NO and then
making money
• You can divorce your wife but you cannot
divorce a VC
• You shall like, but not love each other
• If in doubt, pick the smartest