Launching the Mexican Internet Boom

Observations from a Silicon Valley NerdDavid Weekly, November 2010, Mexico City

Where are we?

Where am I from?

What does SV have that MX doesn’t?

• Good food?

• Good weather?

• Good programmers?

• Good businessmen?

• $ for ideas?

• Better access to information?

What does SV have that MX doesn’t?

• Good food? GREAT FOOD BOTH PLACES.

• Good weather? GREAT WEATHER HERE.

• Good programmers? SHARP HACKERS HERE.

• Good businessmen? WORLD’S RICHEST BUSINESSMAN IS A MEXICAN.

• $ for ideas? US GOV’T PROVIDES NO FUNDING.

• Better access to information? PACKETS DON’T TAKE YEARS TO CROSS THE BORDER.

I Thought SV Funded Ideas!

• (Kinda true in late 1990’s, but…)

• Terrible idea.Terrible idea.Terrible idea.Terrible idea.– No revenue focus– No validation for team/idea/market– 0% 10-year returns

• Angels Today? Looking for:– VVVValidatedalidatedalidatedalidated idea & team– Fanaticalanaticalanaticalanatical, payingpayingpayingpaying customerscustomerscustomerscustomers.

• Ideas are worthless. The value is in execution.Ideas are worthless. The value is in execution.Ideas are worthless. The value is in execution.Ideas are worthless. The value is in execution.

SV Funding Infrastructure

Landscape is changing rapidlyrapidlyrapidlyrapidly.

• Friends & Family Friends & Family Friends & Family Friends & Family ($1k - $50k)

• AngelsAngelsAngelsAngels ($50k - $1m)

– Often ex-entrepreneurs, investing own money!

– New resources like AngelList

• Angel Groups Angel Groups Angel Groups Angel Groups ($250k - $2m)

• Seed VC / Series A / Series BSeed VC / Series A / Series BSeed VC / Series A / Series BSeed VC / Series A / Series B ($500k - $100m)

Why does Silicon Valley work?

Failure Acceptance

CA Gold Rush, 1849

Hard work earned you a chance at wealth, but no guarantees.

Failure Acceptance

• If you want to succeed more, fail more.

– Edison, Hewlett-Packard, Nintendo, GM!

• Success hides failure pretty well.

– Odio, Wirehog, Google Base

• Could scientists learn anything if every experiment had to succeed?

Pay-it-Forward

Hippie Movement, 1960’s

Life is better together.

Joy > DominionJoy > DominionJoy > DominionJoy > Dominion

Pay-it-Forward

• Entrepreneurship is toughtoughtoughtough.

– You need support, peers, and energy.

– So do they.

• You could, today:

– Help a fellow entrepreneur.

– Share something you know.

– Ask for mentorship / advice.

• #1 = CONVERSATIONS.#1 = CONVERSATIONS.#1 = CONVERSATIONS.#1 = CONVERSATIONS.

• Regular meetups

• Mailing lists

• Conferences

• Places!Places!Places!Places!

• Read, write, discuss, hold each other accountable.

Creating a Support Ecosystem

Don’t Be Afraid to Start Small...

…Things Can Grow Fast!!

SHDH 40SHDH 40SHDH 40SHDH 40500+ hackers!

<18 months old

187187187187 members!8000+ square feet

Sharing? What About Competition?

• If you’re not both growing fast, you both fail.

• Economic growth comes from innovationinnovationinnovationinnovation.

• This is not a zero-sum game. Make more pie.Make more pie.Make more pie.Make more pie.

Scrappiness

Homesteading: 1800’s

The government gives you some empty land. You gotta take it from there.

Autonomy Autonomy Autonomy Autonomy ----> > > > ProsperityProsperityProsperityProsperity

Scrappiness

• Are you a programmer?– Start now. You have no excuses.Start now. You have no excuses.Start now. You have no excuses.Start now. You have no excuses.

• Are you not a programmer?– Befriend a programmer.

– Learn how to program. ☺

Guess how much $ Shawn Fanning had to start Napster?

Coceve PBwiki PBworks

• Started in August 2003 as Coceve.

• Quit my job: no idea what to build.

• $6,000 in savings.

• No office, no grant, no government loans.

• Every day I’d look myself in the mirror:

“If I fail, it won’t be because I didn’t try.”“If I fail, it won’t be because I didn’t try.”“If I fail, it won’t be because I didn’t try.”“If I fail, it won’t be because I didn’t try.”

Coceve PBwiki PBworks

• Sole employee for 2+ years. $0 salary.

• $60,000 raised from friends & family.

• 1.5 years on IM Smarter.

• BotBlock, Coceve, SingleStat.us…

• PBwiki: 1am->8am @ SHDH#1– The power of encouragement!

• 1.5 years later: 1st financing: $350,000.

• 0.5 years later: 2nd financing: $2,100,000.

Coceve PBwiki PBworks

• Ad supported? Low revenues

• Prosumer? Limited market

• Education? Semi-limited market

• Small business? Slow growth

• Creative professionals? Ah-ha! Legal & Agencies

Six years after starting the company, we find a reasonable product-market fit.

Important Lessons

• Nobody cares how fancy the technology is.

• Find people willing to pay to solve a problem.

• Speak to their pain.

Be a solution and not a tool.Be a solution and not a tool.Be a solution and not a tool.Be a solution and not a tool.

“Hustle”

Learn how to make a dollar from day one.

Trust: a capitalist with a clear business model.

What is Success?

• Investment?

• Sale of the company?

• Profitability?

• IPO?

What is Success?

• Investment? NO WAY. (Masters, pressure)NO WAY. (Masters, pressure)NO WAY. (Masters, pressure)NO WAY. (Masters, pressure)

• Sale of the company? DEATH OF YOUR BABY.

• Profitability? GONNA STAY THAT WAY?

• IPO? LIABILITY, FORMS, PRESS, STRESS!!

There is no finish line.There is no finish line.There is no finish line.There is no finish line.

You must be happy with every stage.

Not You:

What is sustainable?

• Making more money than you spend.

• Have the luxury of picking who invests in you, if anyone.

• You pick if or when you want to sell.

Profitability = you in the driver’s seat.

Don’t be a Twitter Birdbrain

• Beware deferred business models.

• HUGE uptick needed…

• …and if anythinganythinganythinganything goes wrong…

You Need To:

• Stop playing Stop playing Stop playing Stop playing at entrepreneurship and start some real companies.

• Stop waiting Stop waiting Stop waiting Stop waiting for government grants.

• Start selling Start selling Start selling Start selling to international market.

• Start shootingStart shootingStart shootingStart shooting for billion peso opportunities.

Mexico Needs…

Successful & visible Successful & visible Successful & visible Successful & visible Internet entrepreneurs.

Role models.Role models.Role models.Role models.

Mexico Needs…

You.You.You.You.

Mexico Needs…

You.You.You.You.

tttto be rich, successful, visible, popular, o be rich, successful, visible, popular, o be rich, successful, visible, popular, o be rich, successful, visible, popular, supportive, and awesome.supportive, and awesome.supportive, and awesome.supportive, and awesome.

So…

Get started!

Thank You.

David E. Weekly

@dweekly

david@weekly.org