Today Y Combinator ambassador to the east Alexis Ohanian came by our office’s.
He spoke about how YC helped him with his startup Reddit and how he is now working on breadpig.com.
There was one thing that Alexis mentioned that really made me think why they are so succesfull at what they do. I think some of the secret sauce that YC has is a weekly dinner. I don’t think it is just the dinner that drives startup product but the demos. Demoing to peers who judge, drive Startups to work a little harder. But it isn’t just that, imagine demoing to the founders of google, or the founder of facebook. Now that is pressure… That drives home a secret message. Get product out fast. Period. You don’t want to look like the startup who didn’t do their homework.
This month Alexis Ohanian, the founder of ReadIt will be talking at a Rose Tech Free Lunch Friday, I am looking forward to it!
They were the first successful company to get an exist out of ycombinator.
NYCSeed‘s managing director Owen Davis came by the Rose Tech Incubator this week to give a talk on what investors look for in startup’s. Some of the key points Owen mentioned that I took away from the talk are below. (NYCSeed only invests in the 5 NY borrows).
To anyone doing a startup, “Time matters”. Owen mentioned that committing large amounts of time to R and D is a bad mistake.
Timing has to be in your favor, things have to be aligned. Your technology and the timing is key. You can build something great but is there a demand for it?
Owen recommends 2 person teams, I hear this magic number a lot, google, yahoo, etc. Startups with 2 founders is the magic number. It shows a demonstrations team work, difference in dynamic. With a team of two you have a sounding board.
Another key thing is to have a prototype complete.
Showing you have tech leads on as founders is the DNA of the company it is important. Moment by moment technology changes.
Angels and VCs like to see a good sized market, show a clear path to revenue.
TYPE OF STARTUP COMPANIES
-Hard to invest in these
–e.g.: Gaming companies
–e.g.: iPhone apps
–e.g.: YouTube lost 40 or 50 million a year
-not real innovation
-look at market
-build an application
e.g.: google’s rank algorithm
e.g.: Advertising space, customer segmentation of ads
Investors believe or don’t believe in the innovation you have.
Some companies have pricing power, if coke raised it’s prices they would be ok.
If a copper wire company raised it’s prices it would take a toll on them
Some examples of companies that have a little higher prices are: zappos.com has customer loyalty.
Amazon charges more then others.
Wholefoods charges much more then others.
Having a good team culture is important.
Be honest and be transparent that is what is important.
WHAT MAKES A COMPANY FUNDABLE
A “good business” is not necessarily fundable.
A lot of great biz that will be successful without funding.
-how do u derive meaning out of data
-New ways to data mine
-Project management tools
-Building a better Craigslist
-Building better Email
Kirill Sheynkman came over to the Rose Tech Incubator and spoke about pitching to VC’s. I took some high notes personal notes from the talk.
Tell them what you are doing.
“We are a _____ for ____ a market worth $$$.”
What is the pain you are addressing.
Who are the people that have the pain.
How many are there?
Let them know your realistic goals.
Think about the next round.
Expect 35%-40% for a series A.
2 1/2 post round B.
How are you going to get to this point?
Think about the next round
Who will sign the check?