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Most successful startups are overnight success. That night is usually somewhere between day 1000 and day 3500... ~Startup L Jackson


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5. “Most successful startups are overnight success. That night is usually somewhere between day 1000 and day 3500.”

“You can recognize a company that isn’t executing by the arrows in its back.” 

“If you’re talented, don’t let the tech press do your thinking. You’d be better off relying on Dr. Seuss books.” 

“If you’re competing on price, it better be the case that the incumbent’s cost structure doesn’t allow them to do the same.” 

“BigCo may be late to market, but if there’s not a winner by the time they show up, it’ll probably be them. Go faster.”

As Rich Barton points out: “Ideas are cheap. Execution is dear.” Jeff Bezos is always thinking: “Your margin is my opportunity.”  Relentless perseverance is a requirement for any founder. Reid Hoffman asks: “Where’s the contrarian thinking that, if they turn out to be right, could be really, really big? Consensus indicates it’s probably not a total break-out project. If your thinking isn’t truly contrarian, there’s a dog pile of competitors thinking the same thing, and that will limit your total success.”

Ann Winblad has said (#3): “We invest in markets. If the opportunity is not large, then the business, independent of the people or the technology, will fail. Because of this issue of intense competition and capital efficiency, opportunities always get smaller as soon as you fund the company.”  If you can’t get to $100 million in revenue the math does not work for the venture capitalist since the failure rate is so high, says Bill Gurley. Fred Wilson has also made that point (#1).

3. “The worst possible thing you can do to your business is raise just enough money to throw up mediocre metrics right around the next round, especially with a high valuation you can’t back off of.”

Broken cap tables are a huge problem as Fred Wilson has notedJim Breyer discussed (#6), and Sam Altman states simply: “don’t forget the prime directive of fundraising strategy: set things up so that you never do a down round. The badness of a down round is difficult to overstate; in fact, the threat of that is the best reason not to take a super high price when you’re offered one.  If you raise at such a price, everything has to go perfectly in order for your next round to be an up one.” Metrics referred to by Startup L Jackson above will be discussed more below, including the Five Horsemen (CAC, WACC, ARPU, COGs and churn) and their friend customer lifetime value.

4. “The existential threat to early-stage startups is almost always lack of demand. There’ll be infinite VC to fix tech if you clear that hurdle.”

Ann Winblad agrees with Startup L Jackson when she says: “Warren Buffet’s quote: ‘The market bats last’ means ‘Have you figured out: are there customers out there?’ ‘Do the dogs have their head in the dish? Are the customers buying?'”

Getting to product/market fit and proving that “dogs are actually eating the dog food” is essential. If you want to know even more about how product/market fit fits into building a business Paul Graham lays it out here: “You need three things to create a successful startup: to start with good people, to make something customers actually want, and to spend as little money as possible.” Too many people forget that you need to solve a real customer problem. Without that, the business is toast (not even the artisanal variety). Reid Hoffman describes the other key element here: “If your technology is a little better or you execute a little better, you’re screwed. Marginal improvements are rarely decisive.”

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