Startup Tales - University of Cambridge · •In 2008 company was sold for $4.5m (firesale) 15 ......
Transcript of Startup Tales - University of Cambridge · •In 2008 company was sold for $4.5m (firesale) 15 ......
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Startup Tales
Pilgrim Beart
16 May 2013 CL LT2
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Today
• Intro
• Splashpower - A Cautionary Tale
• Lessons learned
• Q&A
2 Email:[email protected] Twitter:@pilgrimbeart IRL:CL room SN31 on Mondays & Tuesdays
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Intro
• Computer Engineer
• In tech innovation startups since age 17
• Started starting companies myself in 1998
• 4 startups, raised £50m+, various outcomes
• So I’ve played a few rounds of the “game”
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15 years starting companies…
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
spun-out
Splashpower
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A Cautionary Tale
Splashpower Wireless Charging
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2 Cambridge grads with a great idea
6 email:[email protected] twitter:@pilgrimbeart irl:CL room SN31 on Mondays & Tuesdays
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Trends in the mobile market
Unsustainable
Situation
Untapped
Opportunity
More
devices to
charge
More
power
hungry
Chargers a
necessary evil
only
Time for innovation
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SplashModule™ Power Receiver
Versatile thin receiver embedded into devices
Headset
Cellphone
Splashpower
• No plugging in, no connectors
• One pad powers many devices
• Any position on pad surface
• Simultaneous charging of devices with different power requirements
cut loose™
Other Device Data transfer
Power Recharge
A completely wireless solution
®
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2003
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How hard can it be?
• Magnetics
• Power Electronics
• Materials
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How hard can it be? (2)
• Size
• Cost
• Thermal budget
• Safety
…in a consumer device
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Significant interest shown
• Nokia, Motorola, Sony
– “It’s magic”
• New Scientist, Popular Science etc.
• Even the sincerest form of flattery…
– MIT’s “Witricity”
• But we failed to get a license signed
…So we decided we’d launch our own product
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I’m in CUCL room SN31 Mondays & Tuesdays – come & say hi! 14
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Outcome
• Benchmark was our VC
– Totally supportive for the first few years
• We failed to deliver functional product on-time
• So plans cut back still further
– One-device, one-orientation pad
• In 2008 company was sold for $4.5m (firesale)
15 I’m in CUCL room SN31 Mondays & Tuesdays – come & say hi!
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Spawned an industry…
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Qi consortium 130 members
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…but didn’t survive to benefit
• Could Cambridge have had the “ARM” of wireless charging?
• Now all the IP is owned by US company
• No return for founders, investors, employees
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Lessons learned
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• Proximate cause: Credit crunch, SVB
• “Technology took too long”
– We’d thought tech was the challenge
– Multiple devices, different powers, any orientation
– We did achieve all these, eventually
• Failure to sign licensees (“too early”)
• Strategy, timing, execution
– By the time we’d worked-out what to do… it was too late
Causes of failure
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As an innovator, you will be too early So fit your vision back to today’s market
Zone of temptation! Vision
Easy money!
Market
Antenova after 10+ years and 100m’s of antennas
Where Splashpower was focussed
Where Splashpower should have been focussed
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New
Science
New
Technology
New
Product
New
Sector
Profitable Growth
From innovative concept to successful exit (“overnight success" can take 10+ years)
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Crossing the Chasm The Innovator’s Dilemma
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The Hype Cycle
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Crossing the valley
1. VC used to be rocket-booster, turning already-derisked propositions into superstars
2. Now VC invests here. • Fooled by dotcom? • Pushed by PE?
Q: Can you really leap this valley with a rocket-booster?
• Divide-by-zeros disappear • Potholes & Pivots • 10+ year “overnight success”
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Burn rate Success
Burn
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VCs often add to your risk
• Not about Valuation, about Terms – VC’s have absolute power – Unilaterally renegotiate deal on every round
• You inherit your investors’ risks: – Failure (or success) of other portfolio companies
• VC fashion swings – One year Consumer is hot, the next not – One year Cleantech is hot, the next not – One year “software is scalable”, the next “hardware is real”
• VC is a self-fulfilling prophecy, it’s all down to belief • If any investors fail to follow-on they’ll get crushed-down (and so
will you) – Founder+Angels usually unable to follow-on, once reach VC scale
• As a Founder your startup is your life – Do you want someone to own that?
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VC hit rate is 1:100000
• “We see 1 in 100 people who approach us”
• “We invest in 1 in 100 of those.”
• 1 in 10 of those make it to a successful exit
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time
value
Company Outcomes
+VC
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time
value
Founder Outcomes
+VC
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“The average VC fund barely manages to return investor capital after all fees are paid.”
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If I could go back in time…
• Incubate (academia/industry) before spinning-out – Golden Share formula
• Bring experts in early – “Black magic” technology – Licensing
• Pursue an MVP approach from day 1 – Early revenue – accept no substitute! – Find a market niche and get profitable in it – e.g. who needs your USP?
• Military or watersports (waterproof)
– Keep burn low meanwhile
• I like the “own-product plus licensing” approach • Delay VC until profitability (or ideally forever)
31 email:[email protected] twitter:@pilgrimbeart irl:CL room SN31 on Mondays & Tuesdays
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Thanks for listening
32 I’m in CUCL room SN31 Mondays & Tuesdays – come & say hi!
Pilgrim Beart
CL SN31