Most Popular
-
Hi Tony, I'm concerned about missing the current funding boat, and am considering accelerating prototype development by outsourcing. I am technical and business oriented, but I know that with a team I'd build much faster. Am I taking the wrong or right approach? My plan is that once a prototype is created I will bring first customers on board with a private beta, and will raise money. Then I will have the ability to take time iteratively improving the product. Does this sound logical or foolish?
-
i like your approach. i wouldn’t let the funding environment dictate your approach – i know that’s easy to say now but the most important thing is get your product in alignment with the opportunity. nothing else matters in the beginning.
-
-
Hi tony, I got this brilliant startup idea, made Business plan, full mockup , comprehensive market research, I contacted some interested investor who provide seed funding ... what is the fair percent from my startup to give to the investor in exchange for his money ? and how much should i expect to get money as an average for seed funding ? from your point of view as investor & entrepreneur . thanks.
-
in today’s market, $1M for 20% – 25% is a good place to end up.
-
-
Thanks for your time Tony. I'm starting up a new venture and I'm doing all the development myself, hosting on AWS, and I have no co-founders. Should I try hard to get someone on board to succeed and get funded or can I still make it solo at least for the start?
-
i think it’s important to get a few people involved – part of creaitng a meaningful/ successful start-up is the ability to hire exceptional talent – that’s been the key to my success with sphere, about.me, etc
-
-
Did you get to validate your idea before building? Nowadays the lean startup mantra is about assessing the market before doing anything. What are your opinion about that?
-
I THINK FIGURING OUT PRODUCT/ MARKET FIT IS CRITICAL. STEP 1 IS TO SHARE YOUR IDEA WITH LOT’S OF PEOPLE YOU RESPECT WHO CAN GIVE YOU THEIR HONEST ASSESSMENT. ASSUMING THAT GOES WELL, DO A SOFT LAUNCH TO GET MORE FEEDBACK.
-
-
What is the single greatest piece of advice you have personally received?
-
bill draper, rock star investor and one the founding fathers of venture investing, told me it was 100% about the people – i think he’s right.
-
-
How do you evaluate potential investment opportunities?
-
I’m super focused on the founders as we always invest at the earliest stage when a company is just being formed. i’m also concerned with the market and want to understand what unfair advantages a founder(s) have in re-inventing that space.
-
-
It seems like the most popular comment about about.me these days is the fast acquisition. How did you get the interest of AOL early on and demonstrate your value before launching to the public?
-
MY EXPERIENCE HAS BEEN THAT YOU KNOW YOUR BUYERS IN ADVANCE OF THEM BUYING YOUR COMPANY. I’VE TAKEN A VERY PATIENT, LONG TERM APPROACH IN DEVELOPING RELATIONSHIPS. W/ SPHERE, AOL MEDIA WAS ONE OF OUR MAJOR PARTNERS. W/ about.me, AOL VENTURES WAS AN INVESTOR AND I STAYED VERY CLOSE TO TIM [ARMSTRONG], JON [BROD], MIKE [BROWN] AND BRAD [GARLINGHOUSE], KEEPING THEM IN THE LOOP EVEN BEFORE WE HAD LIVE CODE. FROM THERE, THE ACQUISITION DISCUSSION WAS SIMPLE.
-
-
What mistakes do you see founders make when pitching for investment?
-
Often they try to accomplish too much in the first meeting. The format I recommend is to spend the first meeting covering 4 topics (the team; the vision, the strategy, what you’re raising) – 1 slide each. Also, best to make it more conversational vs formal (that will come later).
-
-
Tony, you said: "WE ALSO HAD 26 ADVISORS FOR A 4 PERSON TEAM EARLY ON – THIS CREATED EXCITEMENT/ EXPOSURE FOR OUR PROJECT AT THE VERY BEGINNING." Did you give the advisors equity? If so how much? If not, what was the basis of your pitch to bring them on board?
-
everyone had equity. most importantly, each of these people believed in our mission and many of them are friends so it was a bit easier to get them involved than normal.
-
-
How important was customer feedback to you when you were creating about.me? Did you get early feedback?
-
SUPER IMPORTANT, TONS. WE STARTED BY GETTING TRUSTED/ UNEDITED FEEDBACK FROM OUR ADVISORS (KEVIN ROSE, DICK COSTOLO, VERONICA BELMONT, MATT MULLENWEG, OM MALIK, ETC) TO VALIDATE THE VALUE PROPOSITION. WE THEN DID A PRIVATE BETA WHICH HELPED US IDENTIFY PRODUCT GAPS. THE KEY IS CONSTANTLY SEEK INPUTS AND ITERATE QUICKLY.
-
-
your top 3 tips to someone who will begin his first venture
-
1) get the right people involved 2) don’t over capitalize early on, certainly not before validating product/ market fit 3) constantly solicit input
-
-
How did you created traction for about.me?
-
IT STARTS WITH PRODUCT/ MARKET FIT. I FEEL LIKE OUR PRODUCT IS SUPER THIN BUT I ALSO FEEL LIKE WE NAILED THE FUNDAMENTAL VALUE PROPOSITION FOR THE TWO AUDIENCES WE SERVE. WE ALSO HAD 26 ADVISORS FOR A 4 PERSON TEAM EARLY ON – THIS CREATED EXCITEMENT/ EXPOSURE FOR OUR PROJECT AT THE VERY BEGINNING.
-
-
Should founders ever replace themselves?
-
yes. founders are mission critical to vision, cultural DNA but may not be the best at scaling an opportunity. i do think founders need to always be involved in the business so i’m not an advocate of removing founders.
-
-
We are having trouble getting people to try our app. Any suggestions?
-
Go to a place with lots of people (coffee shops, libraries, etc) and offer to buy them a coffee for 5 minutes of their time.
More advice here: http://www.cindyalvarez.com/ but overall just physically go and find people to try it out
-
-
What smaller-town have you been to with an entrepreneural spirit?
-
portland
-
-
What kind of predictions / math do you want to see from early stage (pre-launch) founders? Seems like everyone just paints a hockey stick. Do you have specific things you look for?
-
Predictions about the businesses microeconomics are more interesting.
What is your average cost of customer acquisition, what channels do you plan on using, what is your average selling price and life time customer value.
That type of thinking shows a deeper understanding of the business and is more valuable as you start to think through how a business can grow.
-
-
Hey Tony! UX designer here. When creating my team of front-end, back-end, pr (marketing), and business - what do you feel are the critical roles? Where are great places to find these kinds of people who are interested in my idea?
-
i think you’re in the most critical role already. my co-founder ryan freitas has a dep ux background which underscores how much i value that skill set. you def need a talented backend and front end dev as well as a designer – those four spots are probably enough to get the product/ market fit piece inplace.
-
-
It seems like everyone is raising money or getting bought by other companys these days. Is it a bubble or do you think its the new norm?
-
there is a lot of activity right now, for sure. the bubble question really depends on stage of market. we’re seeing companies get ahead of themselves (valuation wise, structurally too) in the inception phase (raising too much $ at too high a valuation too early) and in the secondary market as well. interestingly, the in-between phases (series B-D) are not as over heated imo. also, same goes for non consumer oriented start-ups.
-
-
Would you ever invest in somebody who has a failed startup behind them?
-
Absolutely.
The most important thing would be to understand why they failed and what they learned from the process (So they don’t do the same things again.)
-
-
For early employees that have around 1-5% equity, would you and in what cases increase / add bonus equity to them?
-
i highly recommend granting more equity to your highest performers – you want your key stakeholders in alignment with you.
-
-
What are some key things we need to remember when positioning our company for growth to eventually sell?
-
Concentrate on building a great long-term business and acquiers will come.
If you’re focused on selling for Day 1, it’ll be near impossible to hire, raise money, or even be acquired.
Great companies are bought, not sold.
-
-
TONY, WHY ARE YOU YELLING AT US? :P
-
typing so fast i didn’t realize i was on auto cap – apologies :)
-
-
What are the most important questions an entrepreneur should the answers to when seeking funding? (unit economics, team strengths, cash flow needs...)
-
Check out this post for some good background:
http://knowledgeissocial.com/365-days-10-million-3-rounds-2-companies-all-with-5-magic-slides/
But having a deep understanding of your market, customers, and what you want the business to look like is crucial
-
-
Tony you continually refer to an unfair advantage. Please could you give examples where you have seen this in other early stage startups? Thank you
-
for about.me, we had access to several well known tech entrepreneurs who have built a large following on-line. they gave us great insight to the product scope needs and then helped us create broad exposure day one.
-
-
What if you find that you don't have the right mix of people in the beginning. Do you start over, or somehow prune the wrong elements?
-
the single most important thing i’ve learned in my career is that people are the key ingredient – if the mix isn’t right, that should be your primary focus before doing anything else.
-
-
Is there a standard formula for how much equity I have to give up for how much $$?
-
nope. the key for you is to make sure you don’t over price your initial round as it can limit options in the near future – my dad always says “be careful, you might get what you ask for” – sage advice!
-
-
Are you currently investing as an angel, and if so, what markets are you most interested in?
-
i’m investing through true ventures only. i like ideas that are reinventing a space – some good examples: makerbot, typekit, wordpress, stocktwits, 20x200, milk
-
-
I am not raising money for my startup project now but I would kill to have you as an advisor. Do you typically ask for an equity stake to do so?
-
thanks. i’m rare in that i don’t like to take advisor shares as so many people have been helpful to me that i feel like it’s a bit of an honor to give back. having said that, i’ve stopped joining advisor boards because about.me is scaling incredibly fast and i have several investments that are heading in a great trajectory – those two things are my primary focus right now.
-
-
Hi Tony! I have a great idea which I believe will be successful, but I don't have much time to do it because I work in a full-time job. Do u advice me to quit my "good" job or start with less concentration, and when the project successes, I quit my job?
-
tough q – i have followed my passion even when it didn’t make financial/ carrer sense so if you’re excited about the idea and truly believe, go for it – life is short.
-
-
What do you think of all the talk lately around "lean" startups?
-
I LIKE IT – MORE AND MORE ENTREPRENEURS FOCUSED ON PRODUCT/ MARKET FIT EARLY ON VS HYPE.
-
-
For entrepreneurs who are new to venture capital, what resources (print or online) would you recommend for them to read/study so they can better understand how the entire VC process works.
-
MARK SUSTER, BRAD FELD AND FRED WILSON HAVE AWESOME BLOGS ON EARLY STAGE START-UPS, EVERYTHING FROM GENERAL THOUGHTS TO SPECIFIC ADVICE ON HOW TO ENGAGE INVESTORS, ETC
-
-
What's your opinion on the viability of niche social networks, considering the innovation taking place with the "Big 3" (Facebook, Twitter and Google Plus)?
-
I THINK THERE IS A LOT OF GROWTH IN THIS SECTOR: INSTAGRAM IS A GOOD EXAMPLE. STOCKTWITS, GDGT ALSO.
-
-
We have a great team, have potential partners lined up for a pilot and until now have managed on private money. We are now ready for larger investment and trying to decide if it is better to keep raising private or approach a VC firm. Do we need a full business plan to approach VC? I have found that biz plans become dated real quick and instead I use 2-4 week planning sets. Thanks!
-
Check out this post for some tips:
http://knowledgeissocial.com/365-days-10-million-3-rounds-2-companies-all-with-5-magic-slides/
At the early stages, you won’t need a full plan – but you should be able to explain the detail behind where you’re headed.
-
-
What is one mistake you made that young founders should avoid ?
-
A COUPLE OF THINGS: 1) THEY OFTEN TRY TO MAKE EVERYTHING PERFECT BEFORE GETTING USER INPUTS – SUPER IMPORTANT TO GET USER IMPORTANT EARLY. 2) SPEND AS LITTLE AS POSSIBLE, FUNDED COMPANIES OFTEN MISTAKE FUNDING FOR SUCCESS – IT’S NOT. 3) DON’T OVER VALUE YOUR START-UP WHEN RAISING SEED/ SERIES A CAPITAL – IT OFTENS CREATES STRUCTURAL ISSUES.
-
-
What is the best advice you could give a fist-time entrepreneur about marketing and ad spend online..balancing target and platform with $ seems daunting/fleeting
-
Worry about your product first – make your customers happy and they’ll be the best advertising you can’t pay for.
Per marketing spend, wait until you start to understand what the value of each customer you acquire is (that sets the ceiling on your spend per user) – then test out a ton of different channels to find the best ones for your business.
You can find some great advice here via Sean Ellis
-
-
What are the top 3 underlying technology trends that you think are going to shape the consumer internet industry in the years to come?
-
- Growth of mobile smartphone penetration
- Availability of tons of information via API
- Emergence of pay-as-you-go infrastructure services
-
-
Is there a clear cut way to come up with a pre-money valuation for a startup? How do you put a price on an idea?
-
it’s more art than science. the key is to make sure the founders/ employees are left with a meaningful stake without over-pricing the company.
-
-
If someone thinks they have a great idea that people will use (the market) and potentially some one would buy (acquisition or investment), what do you recommend as the starting point for the entrepreneur?
-
GET ACTIVE, BUILD IT.
-
-
We're a team of two trying to do it all. When should we hire a sales person?
-
The Founders should be doing all of the early selling because it forces you to interact with customers and better understand their pain points and their issues with the product you’re trying to sell.
Once you feel that you have a strong understanding of the problems faced by your customer and the number of inbound leads are overwhelming you (meaning you could ramp sales with additional help) – then you should bring on your first sales person (who should more than pay for themselves.)
-
-
Global vs. Local marketing for a Startup, when is good to launch a startup locally instead of globally?
-
Does your startup require a large density of people in a single physical location to be successful?
If yes, launch locally – validate the business – then scale.
If no, may not be global launch – but you’re not locked into focusing on local
-
-
The first time I saw About.me I thought it's just another website. I mean. what's the main factor behind that big success, is it coding, simplicity, idea, attraction or marketing?
-
i think our product is super thin today but i also feel like we nailed the fundamental value prop for the two audiences we serve: profile owners & profile readers. we’ve been disciplined in putting in place a very simple set of tools to curate identity.
-
-
What is the biggest lesson you've learned as an entrepreneur?
-
GET THE RIGHT PEOPLE AROUND THE TABLE IN THE VERY BEGINNING. THIS IS THE MOST IMPORTANT FIRST STEP IN MY OPINION.
-
-
I run a UK software company that has many domain expertise from voice processing, telephony to realtime analytics and a non developer app builder. Over the years we have many products and frameworks. I'm struggling to best market these. Should I go for 1) a single suite approach already integrated for a vertical domain, 2) split into multiple products and target different markets with technical online education how best to leverage a product? 3) Create separate brand entities for each product?
-
First interview customers. Learn what they want, how they buy, etc
Advice here: http://www.cindyalvarez.com/
Then Test. Test. Test. and Validate your thesis from Step 1.
Advice here: http://startup-marketing.com/
-