aaron patzer - how to take your start-up to the next level
Post on 18-Oct-2014
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Aaron successfully grew Mint.com from a small bootstrapped team to a large team that was acquired for $170M. In this session Aaron shared how he knew it was time to raise venture capital and grow his team aggressively. He also shared important lessons he's learned which you can directly apply to your business, whether you're raising venture capital or not.TRANSCRIPT
Aaron Patzer, Founder & [email protected] 23, 2010
How to take your startup to the next level
Idea to $170m exit in three years
+
Aaron = Geek … with accounting skills
Duke: EE / Comp. Sci.Princeton: PhD
Dropout
Financial + ManagerialAccounting
3 Phases of Startup Life
1. Garage (<$100k) Validate an idea Create a prototype
2. Seed (<$1m) Launch an alpha product Trial customers
3. Funded (>$1m) Scale system Scale users Scale revenue
Garage: Rapidly Validate an Idea
Original Idea: Goal setting software
Money component resonated...
Talked to 50-80 people(don’t be secretive)
Garage: Goal = Prototype
Prototypedevelopment
IdeaMarket ResearchBusiness Plan
Pre-revenue Valuation:
+$500k / engineer
-$250k / business guy
Result: Mint UI in July 2006
Garage Seed: Raising Funds
1. Solve a real problem2. In a large market3. Real revenue potential4. Sustainable advantage
Seed: Proving revenue…before you have any
2007 2008 2009 2010
$1m
$10m
$50m
Revenue projections will be bullshit (see below)Per transaction / per user rev is more importantAnd a huge market opportunity…
Mint - Money Intelligence
Consumers
Competition:Competition:Quicken & LowerMyBillsQuicken & LowerMyBills
US User Base(millions)
2
20
65
LowerMyBills /Uswitch
Quicken / Money Online Banking
• Difficult to use• Costs money: $30-
70• Does not save or
make user money
4 of 5 quit within one month
Save money, but…
• Manually search for deals
• No insight into your finances
Original Mint late 2006 slide
Lead-Gen & CPA Lead-Gen & CPA Opportunity: Opportunity: $30+/user/yr$30+/user/yr
Category Where on Mint
CPA Revenue
FrequencyOf Action
User Adoption Rate (%)
= Goal Rev User / Year
Credit Score WTS $36 2 yr 20% $3.60 Credit Cards WTS $60 2 yr 10% $3.00 Check/Save WTS $30 2 yr 10% $1.50 IRA Center $100 3.5 yr 5% $1.40 Brokerage Inv/WTS $200 Once 5% $2.00
CDs WTS $30 Once 10% $0.60
Daily Savings Txn $1.50 1 mo 20% $3.60
Insurance WTS $15 2 yr 10% $0.75Comm. Services
WTS $50 2 yr 10% $2.50
Mortgage Refi. WTS $200 Once 5% $2.00Travel Goals $50 2 yr 10% $2.50Home Improve Goals $200 Once 5% $2.00Edu & 529 Goals $200 Once 5% $2.00
= $30
Original Mint 2007 slide
Mint - Money Intelligence
Business Model:Business Model:Referrals & Lead Referrals & Lead GenerationGeneration
• 7% of $16B online ad market
• Fastest growing ad segment Up 160% from 2004 to ’05
(Source: IAB)
• $1.0B in mortgage lead-gen, to triple by 2008(Experian)
20 – 65 M x $30 = $0.6 – 1.8 B
User base Rev/user/yr Mint Opportunity
Lead-Gen
2.1
6.0
2005 2008 est.
Billion
($
US
)
Advertisers
Original Mint late 2006 slide
Seed Result: Mint AlphaSeed Result: UI in April 2007
Funded: Scaling People
Most hire haphazardlyTrain yourself to hireHire better than you…then let them work
Funded: Beta Big Launch
Started blog ecosystemPrivate beta builds demandUse exclusivityUser feedback is key!
Beta Product: Jul – Sep 2007
Funded: The Big Launch!
Venue: TechCrunch 40Aggressive PR – hire an agencyHave a presence
Mint wins!
Mint Today