the startup ecosystem - maxime pico startup42
TRANSCRIPT
The startup ecosystemMaxime Pico
Startup guide and STARTUP42 Managing [email protected] — @maximepico
startups everywhere
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« Software is eating the world » — Marc Andreessen
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comments- Stating the obvious - A trend that was already indicated by the 2000 bubble
- An incredible pace! From room-sized computers to super computers in our pockets to… ???
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sources- Why Software is Eating the world, Marc Andreessen, WSJ
- Moore’s Law, Wikipedia
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Mind = Blown
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comments- Incredible innovations are to come! If one wants to look into the future, one should dig into: Blockchain, NBIC, Virtual Reality, Augmented Reality…
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sources- NBIC = Nanotechnologies, Biotechnologies,
Information technology and Cognitive Sciences (wiki)
- Blockchain: Forget Bitcoin — What Is the Blockchain and Why Should You Care?, ReCode
- THE RISE AND FALL AND RISE OF VIRTUAL REALITY, The Verge
- How Augmented Reality will change sports … And build empathy, Ted Talk
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The “I’m a startupper” starter pack
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comments- Bootstrapping (starting without significant fundings) a
startup is easier than ever! - Entrepreneurs have access to many services cheaper and
“as a device”: internet as distribution (ex: Amazon), huge communities online = easy marketing, building websites get easier everyday…Even with biotech and hardware company it’s easier thanks to fablabs and biohackerspaces!
- Initial fundings can take new forms with crowdfunding and subsidies
- This goes really far into non-digital worlds with examples like AirBnB selling more nights than any hotel without ever building a single hotel and Uber moving more people than any Taxi company without owning any cab!
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sources- Why It's Easier Than Ever To Be An Entrepreneur, Business Insider
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wait, what is a startup?
« A startup is an organisation formed to search for a repeatable and scalable business model »
— Steve Blank
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comments- We will dig into this definition that is the most accepted in the startup world but another one is commonly accepted: “a startup is a company designed to grow fast, typically 2,5% to 5% WoW” Paul Graham
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sources- Steve Blank, wiki - What’s A Startup? First Principles. steveblank.com
- Paul Graham, wiki - Startup = Growth, paulgraham.com
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wait, what is a startup?
« A startup is an organisation formed to search for a repeatable and scalable business model »
— Steve Blank
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comments- A business model is the strategy of a company to make money flow between different entities a given point in time
- It can be represented in a business model canvas
- It shouldn’t be mistaken with a business plan
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wait, what is a startup?
« A startup is an organisation formed to search for a repeatable and scalable business model »
— Steve Blank
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comments- Repeatable means it’s identified and can be theoretically repeated by a competitor and by yourself over time
- Scalable means margins are getting higher with the number of customers
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Lean Canvas
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comments- Thinking with a Business Model Canvas can be hard in the beginning of a venture, Lean Canvases are easier and more flexible in really early-stage
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CDO
Growth HackerHead of Digital Marketing
Open Innovation Director
Head of Digital
CIO Digital
Startup Ecosystem Manager
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comments- things are moving really fast and a lot of new jobs are created as startups evolve
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however…
STARTUPS ARE HARD
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comments- Always remember this - Not many reach 1b$ valuation or even 100m$ valuation, it happens really rarely! It’s so unlikely that we call them unicorns or centaurs!
- If it’s really rare it’s for a reason: you’ll have to do things no one wants to do = hard things
the ecosystem
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VCsIncubatorsAccelerators
Makerspaces
Co-working
Grants
BAs Contests
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comments- BA = Business Angel - VC = Venture Capitalists - Makerspaces = Fablabs, Hackerspaces and Biohackerspaces
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comments- They all help startups to reach success one way or another
wait, what is success?
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comments- I mean, who defines what is success in the first place??
- It is/should be the founders themselves! (eg. Zuckerberg saying he wants to connect the whole world)
- But common definitions of startup success are:
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success?
Predictable Growth Raising funds at increasing
valuations Being Acquired Going Public
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comments- Notice how most of them are linked to a liquidity event
- Liquidity events are moments when investors (among others) can get their money back
- Why that correlation?
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sources- What is a Liquidity Event?, wise geek
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failure?
no obvious differentiator no IP or barriers
no founder diversity not a sexy market
no ability to go international
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comments- Failure is obviously when the company stops
- But some signs can help predict futur failure
- Of course, no one can predict the futur and successful startups are always anomalies
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want to help?
mindset network money
flexibility
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comments- Bring one of these without slowing down the startup and you’ll already help
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VCs
VC =money + network + mindset
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comments- A VC firm is company collecting funds and investing them on startups hoping for a medium term really high return
- But good VCs bring much more than money! And you should really look for that
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$
timet t+3y t+6y
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comments- VCs expect a startup’s valuation to grow over time, typically
x20 in 5-8 years - Ways to estimate a valuation depend on how mature the startup
is, but just think of it as a multiple of the amount of money that will be generated during the 3 next years
- This is roughly what the air under the curve represents (in blue or grey)
- When the VCs invest at time t, from the past growth of the startup they project the future growth. If this growth is exponential, then the air under the curve should grow exponentially and the valuation with it
- They take the risk to believe in it and support it at time t - When a startup has little to no past growth, the valuation is
more a game of negotiation and standards (x$ for y% in this industry)
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sources- Andreessen Horowitz (a16z) - Accel Partners - Sequoia Capital - Partech Ventures - ISAI - Kima Ventures - Boris Golden’s presentation
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BAs
BA =money + network + mindset
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comments- Business Angels are individuals investing their
own money - They generally invest earlier than VCs - Some typical names are: Paul Graham, Paypal Mafia
(Peter Thiel, Elon Musk, Hoffman Linkedin, Andrew Chen, David Sacks…), Dave Mc Clure, Chris Sacca in the USXavier Niel, Jeremie Berrebi, Marc Simoncini, Jacques-Antoine Granjon, PKM in France
- Sometimes they invest in groups
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sources- Paypal Mafia (Thiel Palantir, Musk, Hoffman
Linkedin, Chen Youtube, Sacks Yammer…), wiki - Dave McClure, wiki - Portrait de Kima Ventures, le business angel
hyperactif (Niel + Berrebi), capital - Marc Simoncini, wiki - Jacques-Antoine Granjon, wiki - Pierre Kosciusko-Morizet, wiki - Paris Business Angels (PBA) - #Startups : Découvrez le classement des 30
Business Angels les plus actifs de France, Maddyness
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incubators
Incubators =network + flexibility
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comments- Incubators can be traced back to 1959 with
the Batavia Industrial Center - Incubators were always built to fight
unemployment/sustain the country’s growth - Startups can stay for 1 to 2 years at
incubators, come when they want and rent a space. Incubators create an ecosystem around them (lawyers, accountants, events…)
- French examples include: Incubateur ville de paris, creative valley, le cargo, agoranov etc.
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sources- Incubators of the world, book on Amazon - Paris&Co - Creative Valley - L'inauguration très politique du nouvel
incubateur parisien Le Cargo - Agoranov
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accelerators
Accelerators =Network + Flexibility +
Money + Mindset
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comments- Y Combinator was the first accelerator in
2005 - Accelerators typically have 3 to 6 months
programs where startups apply and are selected. Accelerators then provide a space, some education, and investment against equity
- Some examples in the US: Y Combinator, Tech Stars, 500 startups, The Alchemist, HAX, IndieBio
- Some examples in France: Startup42, Numa Sprint, 50 Partners, l’accélérateur…
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sources- Y Combinator - Tech Stars - 500 startups - The Alchemist - HAX - IndieBio - Startup42 - Numa Sprint - 50 Partners - l’accélérateur - Accel corporate (Orange Fab, TechStarsMetro…)
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SLP
Melcion Chassagne & CieeFounders
Google Ventures
AngelList
Makesense
The Family Rocket Internet
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comments- Other types of organisations helping or creating startups exist
- They all provide at least one of the four elements of the equation
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sources- The Family - Startup Leadership Program (SLP) - Startup studio = eFounders & Rocket Internet
- MakeSense - Melcion Chassagne & Cie - Google Ventures - Connecting platforms = AngelList, f6s etc.
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in general…
« During the Gold Rush, most would-be miners lost money, but people who sold
them picks, shovels, tents and blue-jeans (Levi Strauss) made a nice profit. »
— Peter Lynch
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comments- Right now is the gold rush as startups are sexy
- History will tell who survives once less startups exist
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contests and venues
Tech Crunch Disrupt Slush
DLD Tel Aviv Pirate Summit
LAUNCHMobile World Congress
etc.
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comments- Big events are nice for education - In my opinion it’s rarely good for startups though…
- Rule of thumb: know exactly how it will help your business when going to an event (visibility among the startup ecosystem is rarely helping the business…)
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sources- Tech Crunch Disrupt - Slush - DLD Tel Aviv - Pirate Summit - LAUNCH - Mobile World Congress - Futur en Seine - Viva tech - Start In Paris - Hackathons, wiki
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makerspaces
Hackerspaces Fablabs
Biohackerspaces
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comments- These place are putting tools and ressources in common so that entrepreneurs can start more easily the prototyping phase
- Hackerspaces are for Software startups
- Fablabs are for hardware startups - Biohackerspaces are for biotech startups
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comments- This map can be found on Makery - There are roughly 40 makerspaces in the Paris region, if you want to explore them MakerBox can be a nice way
- Fablabs are “split” into two “groups” the Mitch Altman school and the Neil Gershenfeld MIT Fab Foundation school
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sources- World map of labs, Makery - Biocurious - Noisebridge - NYC Resistor - TechShop - Mitch Altman, wiki - Fab12 (Shenzen) event - Neil Gershenfeld, wiki - MIT Fab Foundation - /tmp/lab - Le loop - Artlab - Electrolab - UsineIO - fabclub - maker/seine - ICI Montreuil
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subsidies and co
Subventions Avances remboursables
Prix Prêts à taux 0
Bourses etc.
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comments- These are good, but they take A LOT of time! And while you’re doing that you’re not developing your business which is the only reason why you breath
- Paid services can help you to build the applications
- Often founders hide from hard things as long as they have “free money”…
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sources- AIMA - Scientipole - Bourse French Tech - i-lab - PIA - Ensemble des dispositifs BPI
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Y Combinator
3 months 7% 120k$
+107 startups
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comments- Founded in 2005 by Paul Graham - They are the first accelerator, both historically and in terms of success
- 80b$ cumulated valuation over the 800 startups accelerated so far
- AirBnB, Stripe, DropboxDocker, Algolia, Motion Lead, Pulpix, AfroStream were all accelerated by YC
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Y Combinator
Make something people want Do things that don’t scale
10% WoW
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comments- The mindset conveyed by Y Combinator is really key!
- You can look up their blogs, channels and other ressources they share online to understand it
- WoW = week on week
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sources- Paul Graham, blog - Y Combinator, blog - The Macro, blog - How To Start A Startup, Youtube Channel
- Be good, essay by Paul Graham - Do things that don’t scale, essay by Paul Graham
- Startup = Growth, essay by Paul Graham
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Startup42
4 months 0% 0€
7 startups
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comments- We are an early-stage tech startup accelerator - Our program is pro-entrepreneurs and we lower
the entry barriers by taking 0 equity and putting 0 fees
- We are focusing on quality not quantity, creating real bonds between the startups and the network we bring!
- We accelerated 43 startups so far, they raise +6,5M€ in private equity, created +200 jobs, generated 4 exits, and two went to Y Combinator after SU42
ressources
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books
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books
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books
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comments- Books are critical don’t underestimate them!
- I personally think Lean Startup and Lean Analytics are must reads!
- Clicking on the covers send you to Amazon
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blogs
Paul Graham Y Combinator Posthaven
Ash Maurya Andrew Chen Steve Blank Neil Patel
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podcasts
StartUp Podcast a16z
Traction Mixergy
Product Hunt
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videos
How to Start a Startup Google Ventures
Startup Foundation This Week In Startups
Pioneers, Le Web, Slush…
faq
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I’m looking for a CTO, do you know one?
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comments- Learn How to Code. Seriously. - Don’t search for the skills first, search for a passion for the mission and then enrol if they have the skills (eg. your startup is about music, meet people on music forums and maybe you’ll find a dev)
- Be creative, go as far as you can without the CTO!
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I want to raise money, how do I do?
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comments- It’s not so much about wether you want or not but wether it’s the time to raise or not
- The best time is basically when you begin to find a scalable business model, anytime before will be super hard!
- Initiate relationships, with partners way before you want to raise! Ask them tips
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Should there be a CEO?
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comments- Yes. - Read this article I wrote
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Where should I start?
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comments- If you have the opportunity to choose the location where you start your startup, think in terms of markets and partners: where can I make it the most easy to build relationships?
- For instance Silicon Valley might be awesome to start something linked to Social Networks but would suck to start something with music
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How to have a great idea?
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comments- Work in a startup that is scaling (typically just raised a series A -> 1M€ or more). You’ll get the mindset, the knowledge and the cofounders for almost certain. Maybe even a good problem/idea to start with
- Be at the edge of one worlds/technologies. If you are at the edge of two worlds, connect them
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I don’t get any traction, why?
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comments- Talk to your customers. For real. Face to face. Where are they? What do they like? What do they use? Do they have the problem you’re trying to solve?
- You probably don’t know them well enough
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How much should I give to my new cofounder?
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comments- Project yourself in five years in both scenarii: when he is there and when he is not. What is the difference in term of value?
- You have to both agree on the final decision. With all your heart
- Use vesting mechanisms
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BONUS: 95 Advice by Sam Altman Startup42’s manifesto
