IDCEE 2014: Key Takeaways From A Serial Entrepreneur And Investor - Jose Marin (Co-founder & Co-ceo...

Key Takeaways from a Serial Entrepreneur and Investor

José Marín

3 Confiden)al -‐ Kinnevik 2013 THE IDEA

4 Confiden)al -‐ Kinnevik 2013

THE AND VISION ARE IMPORTANT.


PURSUE AN IDEA FOR THE RIGHT REASONS: •  FREEDOM •  GLAMOUR AND FAME •  BE YOUR OWN BOSS •  MONEY


DO IT BECAUSE:

YOU CANNOT NOT DO IT!

“GREAT COMPANIES ARE LED BY MISSIONARIES, NOT MERCENARIES” -John Doerr, KPCB

8 Confiden)al -‐ Kinnevik 2013 THE TEAM

It’s a long journey to the top.

Don’t do it by yourself.

9


Team Diversity Matters

Biggest dilution happens before you even start

Clear terms among founders is key. Vesting

matters a LOT


Bad Developers cost more

Bad Developers

Good Developers

Get Lousy Work Done

Fire Bad Developers

Hire Good Developers

Get Work Done Right

Get Work Done Right

BUILD A HIGH PERFORMANCE TEAM, NOT A FAMILY

LEAD BY EXAMPLE

PEOPLE WORK FOR PEOPLE, NOT FOR COMPANIES

“CULTURE EATS STRATEGY FOR LUNCH” -PETER DRUCKER

16 Confiden)al -‐ Kinnevik 2013 MARKET


Go after a large market and

confront competition


If…

everybody is a potential

customer you are probably

WRONG!

19 Confiden)al -‐ Kinnevik 2013 EXECUTION

Maybe not $100, but Really Cheap

Confiden)al -‐ Kinnevik 2013 20

Domain:

Hosting:

Infrastructure:

E-Commerce Template:

Test Marketing Campaign

$12

$7

$0

$50

$200

$269

Starting a Startup is a LOT Easier

Confiden)al -‐ Kinnevik 2013 21

Website Web Services Outsourcing

ROI Marketing Infrastructure Payments Hosting

Matisse vs

Picasso

USA vs

LATAM

It’s not about Ideas. It’s about making Ideas happen. “1% INSPIRATION 99% PERSPIRATION” - Thomas Edison


Tenacity

& > Passion


•  Don’t Overthink

•  Iterate from Plan A

to Plan that Works

•  Avoid Paralysis of

Analysis



Lean Startup

Product /

Market Fit

& Tested UE

Fat Startup


W O W Yo u r C u s t o m e r s


Don’t launch

until your core

business is

functional

Don’t wait until

you don’t feel

embarrassed of

the product

FUND RAISING

Don’t take money from investors you don’t trust

Investors should be your mentors

Reach out often and for concrete help

Make them happy by making a great business!

Investors play for your team



Spend too much

≠

Raise too little


THE BEST MOMENT FOR

FUNDRAISING IS WHEN

YOU DON’T NEED IT


User Growth is Important

But…Building a Profitable

Company is ImportantER

Set Realistic Expectations

35

0

20

40

60

80

100

120

140

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

> $100 million Exits

Few Exits > $100M

Most Exits < $30M

Most Exits > 5 years

Series A Crunch


Source: PitchBook

As there are increasingly more

companies funding Seed

Rounds, there is a crunch at the

Series A stage that threatens

survival


MANAGING GROWTH

VC-Backed Growth is faster


Source: “Building Sustainable High-‐Growth Startup Companies” – A. Davila, G. Foster, N. Jia

Growth can bring problems


•  Operational complexity •  Dealing with increasing SKUs, new logistics requirements, etc, increase the complexity of

running larger businesses efficiently •  Personnel structure is rarely prepared for rapid growth before growth occurs (timing is key)

•  Overspend •  Capex increases require new funding •  Companies that raise more capital than is required have a tendency to overspend •  Hiring is expensive (make every hire count)

•  Capital needs •  Need to deviate attention away from operations into fundraising •  More complicated rounds that might backfire the entrepreneur

Discipline makes you better prepared


Businesses that adopt

professional management

systems earlier are more able to

raise VC funds and grown into

successful companies

Source: “Building Sustainable High-‐Growth Startup Companies” – A. Davila, G. Foster, N. Jia

The Power of Ecosystems


Top 3% of entrepreneurs have an influence on 80% of the local ecosystem

There are 65 million companies in the World but only 200k create 60% of total Value

Source: Endeavor

The PayPal Mafia


Total Valuations:

Total Money Raised:

Jobs Created:

VC Money Raised:

$67.5 Billion

$813 Million

+10,000

$2.5 Billion

Source: Endeavor, Crunchbase


GENERAL ADVICE


Remember, Relationships

Are Really Important


Success

What people think it looks like

What it really looks like

Success


In the Right Place

At the Right Time

And Get Lucky

47

FOCUS On What Really Matters


When you go All-In

Put your heart in it


JUST DO IT


CEO’s LESSONS


Jon Uriarte Ander Michelena


Leer mails

Key Learning Don’t do everything yourself – Delegate!

Prioritization is very important

Focus on one revenue stream and make it profitable

before considering diversification

Best Practices Act local and adapt to every market

Use local payment methods to have higher

penetration

LATAM is much more than Brazil. Great opportunities

in Mexico, Colombia, Argentina and Chile.

Key Challenges

Different cultures for every market

Things move slowly in certain markets

Red Tape: 6 months to create a company in Brazil

Success Drivers Fast expansion – Actively seize opportunities

Fast execution – Operating in 20 countries in 3

months with limited funds

Right team – Know your limitations and hire talent for

areas you are not an expert


Xenios Thrasyvoulou


Leer mails

Key Learning Hire slow, fire fast – No senior people needed early

Hire hungry young talent at the beginning to reach

product / market fit and then senior talent to scale

Focus and define goals for every employee

Have a long-term vision but don’t plan too far ahead

Best Practices Iterate, iterate, iterate

Talk to your customers often and do it authentically

Set defined goals and attract the best people

Key Challenges Understanding that the original business model might

not be the best one.

It’s hard to get to product / market fit

Success Drivers Picking the right market

Perseverance and resilience. You only fail once you

stop trying

Not being afraid to be wrong


Kevin Ryan


Leer mails

Key Learning Don’t do too many things at the same time! Amazon

only sold books for 4 years before expanding

Focus on things that matter the most. As the CEO you

need to set the example

Best Practices Hire the best team and more importantly, think about

upgrading the team all the time. Just because

business is doing well does not mean every executive

is doing well too.

Key Challenges

Success Drivers Product, product, product. It is really hard to make a

product stand out in the market and that solves the

problem better than the alternatives.

Having the best team.

Building a great product is hard

Keep the dynamism within the team and the

company


Alec Oxenford


Leer mails

Key Learning Overestimated market growth at early stages. As a

consequence over invested in Marketing

Underestimated market growth once the ‘S’ curve

ramped up.

Best Practices Hire the best people. Ideally with a combination of

local knowledge and global mindset.

Build robust technology from day 1, otherwise you

will pay more later.

Common Pitfalls Entrepreneurs think too small and lack global

experience.

Don’t create a ‘hunger culture’ in the company. You

need to transmit your enthusiasm and ambition.

Success Drivers Focus on getting a AAA team on board. All successful

company have amazing teams.

Replicate a proven model to reduce overall risk of the

venture

Get relevant backers, investors and mentors early on.


Kamil Kurmakayev


Leer mails

Key Learning Cash determines survival and scale for ecommerce

If you need cash early on, then fundraise aggressively

Manage cash balance professionally and responsibly

Having more cash in the bank will give you more time

to figure things out.

Best Practices Great people drive great operational success

Make super stars form an ‘all-star’ team. Companies

run on teams and not individualities.

Hire for the next 12 months and not next 5 years

People in Emerging Markets value cash more than

stock options. Keep it simple.

Key Challenges

Success Drivers Bet on the long run and set ambitious objectives.

Transmitted same mindset to key employees who

had the same vision as founders.

Build trust with early investors

Investor relations is a full time job and it is really hard

to manage that and operational duties at the same

time.

Bring together people from different big companies

because the team becomes dysfunctional.


KEY TAKEAWAYS


LESSONS LEARNT

Get Informed Do it with Passion Stay Focused


“Every morning in Africa, a gazelle wakes up. It knows it

must outrun the fastest lion or it will be killed.

Every morning a lion wakes up. It knows it most outrun the

slowest gazelle or it will starve to death.

It doesn’t matter whether you are a lion or a gazelle.

When the sun comes up, you better be running.”

- African Proverb

Thank you!

José Marín [email protected]

IDCEE 2014: Key Takeaways From A Serial Entrepreneur And Investor - Jose Marin (Co-founder & Co-ceo...

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Transcript of IDCEE 2014: Key Takeaways From A Serial Entrepreneur And Investor - Jose Marin (Co-founder & Co-ceo...