6 startup lessons learned(One more than promised )

Allan MartinsonManaging Partner

MTVP

Background

Baltic

Valley of DeathThe Death Valley?

• 3000 companies and business plans reviewed in 2004-2010• incl 12 companies invested or launched by MTVP

• Out of 3000: • Only 2-3 home-runs (valuations >$1b)• ~15 companies with valuation potential >$100m• Only ~25% of companies show some growth and progress

6 lessons on how to grow your stupid little startup

into SOMETHING

Lesson 1: It’s all about people

It’s all about people

• People, not business plans or technologies• 2 founder rule (Leader & skeptic)• Multi-skilled talents• Values and teamwork are more important

than business plan• Successful companies have bias towards

action

Lesson 2: Incubation takes years

Incubation takes years

• Most successful teams have been together 3-5 years…

• … working on some rubbish• Phoenixes rising from ashes are possible

• Most successful companies are launched by people aged 30+ …

• … but truly disruptive companies need the young

Lesson 3: Why elevator pitch?

The What

• 30 seconds to tell (your mum)– Who is your customer– What does your company do for this customer– Why are you better than competition

• Do the “Google test”• Most great companies:– Copy existing business model to new markets– Seek better solution to existing problems– Seek unknown solution to unknown problems

• Most new ideas come on cross-roads of trends and disciplines

Lesson 4: The art of pivot

The art of pivot

• Not a single great company follows its original business idea

• You shall turn back when:– 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• Don’t be afraid of failure but try to fail fast!• Importance of milestones– One year, one million principle

Lesson 5: Need for speed

Need for speed

• A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty (Eric Ries)

• Startups, by very definition, are probabilistic• Success seems intentional only in retrospective

– impossible to compute• Speed is the best factor to increase success rate• Hunger is the best speed-boost

Lesson 6: Importance of right signals

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• Finnish (or Estonian) references are wrong and negative

information• It is not only place. It is mental state• Go West.

Extra free lesson: pick the right investors

Thank you!

allan.martinson@mtvp.eu