2011.04.08 startup-sauna-stockholm

C!C

Uppsala, Rice, Berkeley, Technion

CycoreEU-Supply

Ericsson Business InnovationSony Ericsson

Parallel Systems

Co-founder

Founder

Coach

Seed Accelerator19

93

201

1

Startups Academia Industry

KTH-SICS Cloud Innovation Center

Åke Edlund - “multitasker”

Åke Edlund

Startup Life & Seed Accelerators

SEED ACCELERATOR

Part 1/2Startup Life

Something I’d needed when in your ageMy view - minimizing copy-pasteDiscussion – please do interruptAdding realism to your dreams, still keeping them aliveInspiration

Preparing this presentation

Startups, the theory #1

Get an ideaFind a garageCreate a world leading ….Get fundingDo an IPOWorld domination!

Get an ideaWrite a business planGet funding…

Startups, the theory #2

Get/steal an ideaUse open source spare partsAdd your own proprietary partWrite a business planGet funding…

Startups, the theory #3

Get an ideaPatent itWait for someone big to buy you…

Startups, the theory #4

Get an idea that complements some big players portfolioRun your business long enough to attract a good user baseWait some moreSomeone might give you a call…

Startups, the theory #4b

New technologyBuild a long range of products around thisLaunch them one after another…. that’s the official story

Startups, the theory #5

Not muchInspirationalSome “must haves”

What can we learn from success stories?

More to learn here!But who to tell you?

Startups, the non-theory, failures

Great product, won many prizesMany years of hard work in garageBring in fresh VC capitalCEO and mgmt from world class firmDefunct pricing model, non-viralHave to teach the marketHeavy staffing and expansion – burn!Cash flow….

Startup failure #1 – too early

Even greater productStill possible to make betterJumps into an incubatorFix-fix-fix…. (instead of Ship-fix-…)Turns more and more into an R&D projectIncubator hires incompetent CEOs…Times up! Share holders leave.

Startup failure #2 – too slow

Great ideaRunning fast, quick successful rolloutHuge burnrate, but succeeds in getting huge investmentsGreat offering of buyout – but, lost control, can’t get a sellMarket diesStruggle on

Startup failure #3 – lost control

Decide to combine with consultancy

After some years, you realize you’re nothing more (or less) than a consultancy firm

Startup failure #4 – never started

Quite much

But, the risks comes in many flavours

#1: Listen to your intuition

What to learn from these failures?

Why startup?Why me?Why now?

Before we start

“Whatever you are building, it's about passion, and less about the money. Your goals should be about changing the world, or making the world a better place. There are many people who set out to change the world a better place and didn't make a lot of money. But there are even more who set out to make a lot of money, did not make a lot of money and did not change the world.” Guy Kawasaki

Why startup?

Freedom, kind of …CreativityAdVenture, you better like it...

Why startup?

Friends, or not?Getting full commitment – fair shareGet advice, but don’t expect too much

Build your team

Web – blog, mail, twitter…F2F – conferences (outside), …

Build a presence

In parallel with building a businessAs part of product developmentSafer but slowerCash flowReality checkRecruitment

Cost control – consulting

Home sweet home, Cafés, Hotel lobbies, …

Office – do you need one?

Use your networkBuild a presence on the webLot of calls, and meetings

Finding customers

Negotiation – learn how, practiceAsk, and ask againBuild a relationshipLearn to say ‘no’

Meeting customers, closing deals

Cash flow – again!Your time – is limited

Endurance - company

Burn out- not a joke- hard to get back from- signs – that you won’t listen to

Endurance - you

Value your time. Get your sleep. Get time off.

Endurance – work hard, but smart

Do you really need them?For what?How good are they?

Incubators

Did you do your homework?Test it, not only on friendsDo your googeling, but don’t drownDon’t overdo it!

Before buying a .com address

Again: don’t read too muchIt is a highly complex problem, too many unknowns.Get hands-on experience

Before buying a .com address

“You miss 100% of the shots you never take.”

Wayne Gretzky (*)

(*)Thanks John Greathouse - http://infochachkie.com/nps/

Part 2/2Seed Accelerators

Are you a x15 startup?Do you really need them, now?What will it cost you?Are they ‘smart money’ or just money?And are there any? And if not ….. don’t think business angels are that much better.

VCs – old school

Re-think StartupsRe-think IncubatorsRe-think VCs

New School

"Startups can be run so cheaply now (with open-source software, cloud computing, and virtual teams spread across the Web) that many more can achieve profitability without any VC cash.” Paul Graham, Ycombinator

The startup world is changing

"Imagine what it would do to the VC business if the next hot company didn’t take VC at all. The less venture capital there is for new startups, the faster the decoupling will begin.”

Paul Graham, Ycombinator

The startup world is changing

The Innovation Landscape is Changing

Bootstrapping: Cloud Computing, Open Source, Network, Mobility

More to evaluateLess control

Harder to get in earlyMissing more

Lower riskLower investment to more

Faster response

Investor: + -

1. Lower risk2. Quicker to start3. Startup gets further with less

1. More Startups2. More control to Startups

Startup:

BootstrappingMore flexible

Seed Accelerators

Helping many during a short time to get to a good next step. Very early stage. Technical focus. Technical entrepreneurs with Network

Often backed by Venture Capital - that get help with volume and early information and lower risk.

AND

SEED ACCELERATOR

March 2010: "Y Combinator Matures" - 1/4 of Startups Funded Before They Finish the ProgramOctober 2010: 1000 sökandeJan 29, 2011: "Yuri Milner, SV Angel Offer EVERY New Y Combinator Startup $150k"

Seed Accelerator challenges

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4 5

6

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2

3

4

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Applications flow

Filtering

Deal making - start

Deal making - end, Finding investments for next step

Value increase

Match making

7

7 “Good ones” - seldom go through these services

- Creating startups from scratch- Helping existing startups and innovative companies on clouds!

SICS Seed Accelerator

SEED ACCELERATOR

SEED ACCELERATOR

Stockholm, examples of ongoing startups

right now

Wrap upStartup Life and Seed Accelerators

Note: Cloud Computing and Startups slides added for later

We could learn some from the success stories, but more from the failures.

Many like to give advice, but most of the mistakes you have to make yourself.

Summary

Don't count on getting external investments.

Don’t think startup, think microstartup

Summary

Leverage on all technology and networking possibly available.

Cloud computing is a good idea for many microstartups.

Summary

Seed Accelerator is a unique starting point for microstartups close by.

Summary

Make sure to follow your heart, listen to your intuition - it is trying to tell you something important.

Summary – Most important (1/II)

And make sure to have a good life at the same time, it is possible to combine with startups.

Summary – Most important (II/II)

Write this down:

www.sics.se/seedacceleratorwww.fortune1m.comedlund@sics.se

If you have the time – I doubt it…

Steve Jobs

“Stay Hungry, Stay Foolish”

Thanks!

edlund@sics.sewww.sics.se/seedaccelerator

www.fortune1m.com

SEED ACCELERATOR

Extra SlidesMore topics, about me

Part 3/3Cloud Computing and Startups

Where do you have your focus today?

To Create New Business?

Or Manage Server Room(s)?

When to (maybe) use Clouds today?

Time limited tasks

Pilots

Peaks

“We are now working on the new demo ---- but it

will take some time.(Our main computer has

crashed ... )”

2011....

2002. Stockholm. Startup. A typical Saturday evening...

- 3 months of buying- Weeks to get it right- 1 month of POC- Years of ownership

2002. Stockholm. Startup. A typical Saturday evening...

- 3 months of buying- Weeks to get it right- 1 month of POC- Years of ownership

Enter the Startups!

Startups Cloud

"Startups can be run so cheaply now (with open-source software, cloud

computing, and virtual teams spread across the Web) that many more can achieve profitability without any VC

cash.”

Paul Graham, Y Combinator

1.  Rise  of  standards2.  First  major  cloud  compu7ng  provider  outages3.  Microso<  will  be  relevant  in  the  cloud4.  Rapid  consolida7on  of  exis7ng  providers5.  Rapid  rise  of  cloud  compu7ng  startups

“Top  5  predic7ons  on  cloud  compu7ng  2010”

hGp://www.infoworld.com/d/cloud-­‐compu7ng/top-­‐5-­‐cloud-­‐compu7ng-­‐predic7ons-­‐2010-­‐188

Every company in Benchmark’s portfolio uses Amazon’s cloud infrastructure in some way, and about one-third of them

operate entirely on web-based services and infrastructure.

Billing startup Zuora, for example, is doing well despite having “not a single IT guy, not a one,” Fenton said –  and that’s more

meaningful than an analyst’s report.

http://venturebeat.com/2009/06/25/who-uses-cloud-computing-startups-

do-vcs-dont/

We’re already there

More to discuss….

Recruitment – kind of MarketingNovel professional networks – ycombinatorPricing – an art form, don’t overcomplicate itCustomer demand – do they know best?Execute – improve your skillsLeadership – work on it, dailyTime to market – do you want/can you do it?Business angels – or devils?

Nishing – the key to success and partnershipsInvestment cycles, building a step stone to IPOKnow yourselfPitchingMore on VCsBusiness plansVisions – or mantras, what is most useful, why at all?More on Ycombinator – pro and consExits – thinking about it already?Technology vs Sales – Ship vs Fix

!"#$%!&'(')'$%

Åke Edlund

SEED ACCELERATOR

http://kaljundi.com/2010/12/11/startup-bullshit-bingo