1. STARTUP SCIENCE

2. WHAT PREDICTS SUCCESS?The first sale ? ? ? 3. 1 Planning doesnt predict 4. new ventures launched with formal writtenbusiness plans do not outperform oneslaunched without them.Source: Lange, Mollov, Pearlmutter, Singh and Bygrave (2007) 5. Business Plan?21%Source: Bhide (2000)79%Yes!No! 6. No! 7. No! 8. No!No!No! 9. Doh!?! 10. 1 Opportunity Predicts 11. INDUSTRY CHOICE VS. INC 500Source: Shane (2009)Industry Number of Inc 500firmsFirm starts Percent of StartsPulp mills 6 33 18.182Computer and office equipment 99 2359 4.197Guided missiles, space vehicles, parts 2 60 3.333Nonferrous rolling and drawing 14 581 2.410Railroad car rental 3 136 2.206Measuring and controlling devices 49 2482 1.974Paper mills 3 125 2.400Search and navigation devices 6 310 1.935General industrial machinery 26 2173 1.197Photographic equipment and supplies 7 646 1.084Manifold business forms 3 281 1.068Household appliances 4 390 1.026Electrical industrial apparatus 11 1080 1.019Legal services 10 129207 0.008Eating and drinking places 34 494731 0.007Carpentry and floor work contractors 4 66383 0.006Real estate operators 5 90042 0.006Hotels and motels 2 39177 0.005Painting and paper contractors 2 43987 0.005Retail bakeries 1 22165 0.005Grocery stores 5 112473 0.004Used merchandise stores 1 24442 0.004Automotive repair shops 5 124725 0.004Beauty shops 3 79081 0.004Residential care 1 27710 0.004Videotape rental 1 27793 0.004 12. Computer and Office Equipment(1/25)Eating and Drinking Places(1/14,550)Source: Shane (2009) 13. 582 succeedComputer and officeequipment1 succeedsEating anddrinking placesSource: Shane (2009) 14. 0.77Correlation between number ofstartups in an industry and failure rateSource: Shane (2009) 15. 2 Team Predicts 16. 13.1%54.2.%5-YEAR FAILURE RATE?>Source: Bruderl, et al. (1992)+ 17. 90%TEAM SIZE SOUTH AFRICA10%1 founder2 or more foundersSource: FinScope (2010) 18. 3 Advice seeking predicts 19. 45%80%3-YEAR SURVIVAL RATEAdvice fromaccountants 3+/yrNo adviceSource: Watson (2007) 20. SUCCESSIVE ENTREPRENEURSHIP AND NO LEARNINGSource: Pretorius & Le Roux (2011) 21. Source: Pretorius & Le Roux (2011) 22. 4 Industry Experience 23. INC 100 ENTREPRENEURS WITH INDUSTRY EXPERIENCE75%25%Source: Fresser and Willard (1990) 24. No IndustryExperienceIndustry 25.5 %ExperienceSource: Bruderl, et al. (1992)54.5 %5-YEAR SURVIVAL AND INDUSTRY EXPERIENCE 25. Strong Team(1) 3 + members(2) 50% joint experience(3) 3 year industry experience(19%)(73%)Source: Eisenhardt & Schoovenhoven (1990) 26. 5 Traction 27. I'd just go sell it. I don't believe in market research.Somebody once told me the only thing you need is acustomer."Source: Sarasvathy (2007) 28. Source: Reynolds (1987) 29. FOUNDERS INVOLVEMENT IN SELLINGHeavily InvolvedSomewhat Involved 10%Source: Bhide (2000)82%8%Main Salesperson 30. 6 Avoid Pre-mature Scaling 31. AvoidPre-mature Scaling 32. DONT SKIP THE ASSUMPTION TESTINGAMAR BHIDENoFactsIdea Build 33. paulshawsmithscientific business strategy 34. paulshawsmithscientific business strategy 35. of high growth internet start upsfail due to premature scaling.Source: Start Up Genome Report(2011) 36. Startups that scale properlygrow abouttimes faster than startups thatscale prematurelySource: Start Up Genome Report(2011) 37. 8 Community 38. OBSERVATIONAL LEARNING 39. MayansHutuGreeksRomansEgyptiansVikingsKhoisanPersiansTRIBES 40. YPOMBAsGamersSports centersThe SharksKIPPMusic ScoolsRhodes RowingTRIBES 41. THE BREAKTHROUGH COMPANY7000inc 500 companies assessed9best performers chosen for a study4belonged to YPO 42. THE OLD BOYS CLUB 43. While some attribute YC dominate to Paul Grahamsexcellent selection of founders, or his ability tocoach founder to raise every-higher valuations,ort he branding for YC alumni, and theirwillingness to support, mentor and fund eachother to success. In my humble opinion, this iswhat is really valuable about YC, and why itsdifficult for other to copy.- Dave McClure, 500startups founder 44. 9 Values Predict 45. WHAT ARE VALUES? 46. VALUES DEFINITIONHow importance or precioussomething is to a person 47. ELON MUSK VALUESTime:How does a person spend their time?BusinessEnergy:What activities gets the person excited?BusinessMoney:How do they spend their money?Business 48. 8:00: Heads to SpaceXsoffice in his Model S.How does Elon Musk spend his time? 49. HOW DOES ELON MUSK SPEND HIS TIME?8:00: Morning phone calls.Marketing VP, journalists, jobcandidates or conference calls10:45: Week status review onthe Falcon 9 50. HOW DOES ELON MUSK SPEND HIS TIME?12:30: Propulsionschedule meeting12:30: Building operationsmeeting 51. HOW DOES ELON MUSK SPEND HIS TIME?16:30 Visits the rocketfactory 52. HOW DOES ELON MUSK SPEND HIS TIME?19:00 Interviewed by SarahLacy from Pando DailyAttends premier of a film hehas produced 53. HOW DOES ELON MUSK SPEND HIS MONEY? 54. RICHARD BRANSON VALUESTime:How does a person spend their time?BusinessEnergy:What activities gets the person excited?BusinessMoney:How do they spend their money?Business 55. WHAT GIVES RICHARD BRANSON ENERGY?A business has to be involving, it has to be funMy general attitude to life is to enjoy every minute of everyday. I never do anything without a feeling of, Oh God,Ive got to do this today 56. WHAT DOES RICHARD BRANSON SPEND HIS MONEY ON? 57. RICHARD BRANSON VALUESTime:How does a person spend their time?BusinessEnergy:What activities gets the person excited?BusinessMoney:How do they spend their money?Business 58. Values predict yourAMAR BHIDEfuture! 59. AMAR BHIDEBusiness and investingFamily and friendsBaseballBecoming a great investor 60. EatingMovies? PartyingAMAR BHIDEOutcome 1Outcome 2Outcome 3 61. BusinessCareer? InvestingAMAR BHIDEOutcome 1Outcome 2Outcome 3 62. 10 Vision Predicts 63. GROWTH COMMITMENT?Source: Barringer et al. (2005)54%80%FASTGROWTHSLOWGROWTH 64. IF YOU SALES DOUBLED HOW WOULD IT IMPACT ON YOUR: Your workload Extend to which preferred tasks would dominate Your employee well being Ability to control operations Independence from customers, suppliers, etc. Ability to survive a crisis Ability to keep up quality products and services 65. We will create products that becomepervasive around the world We will bethe first Japanese company to go into theUS market and distribute directly.. Fiftyyears from now, our brand will be as wellknow as any in the world. 66. I will build a motor car for the greatmultitude It will be so low in pricethat no man making a good salary willbe unable to own one. The horse willhave disappeared from our highways,the automobile will be taken forgranted. 67. ACTION LIST Validate you have a real opportunity Find co-founders Get an advisory board and listen Dont scale until P/M fit Get traction Join a community Value your business Have a vision 68. SESSION TO DO LIST (09:30 TO 14:00)Goals Run at least 2 experiments (1 to 2 hrs per experiment) At least 10 to 40 customer interactions (At least 5 customers perhour)Prepare to announce Number of experiments run Number of customer interactions* Pick up some lunch while you are interviewing customers