Capital Factory’s Demo Day 2011 #DD11
- Energy – keeping healthy: “Don’t buy into the bullsh** that you need to kill yourself. Figure out when you need to get up and go to bed 8 hours before that!”
- Writing: you’re going to need to do a lot of this.
- Speaking: you’re going to need to persuade others to your cause. You need to give a lot of talks to practice and hone your skills.
- Selling: you may hate the idea of selling, but you have to understand it and be good at it for your company to succeed.
- Planning: you need to have a plan. You can’t change your plan or pivot if you didn’t have a plan in the first place.
I was struck by how product-oriented these startups were, and how all of them had paying customers. I also thought these companies didn’t really spend a lot of time on their “big vision” as some Bay Area startups tend to do. Maybe it’s Austin’s general orientation toward the enterprise market, where products talk, and big vision may get you financing but few customers, or perhaps it’s just the way these startups think.The article goes into detail about each startup as well. My personal favorite presentation was HelpJuice’s Emril Hajric – his style was perfect for a technical founder presentation – honest and rough around the edges. But he also had a great value pitch to make for his product, which helps spruce up FAQ’s and customer service. Another startup, SwimTopia, was anchored by the former CTO of Frog Design – Mason Hale. The maturity of the companies presenting was impressive. Even BusinessInsider had modest coverage of the event, but the local journalists did a more thorough job of it. Lori Hawkins of the Statesman also covered the event:
The companies made eight-minute presentations to a crowd of 300 people — mostly entrepreneurs and investors — at the University of Texas AT&T Executive Education and Conference Center. Later in the day, another 15 Austin startups made three-minute pitches to the audience.Brian Sharples, CEO of HomeAway After the pitches, Brian Sharples of HomeAway gave another keynote. He basically explained how HomeAway happened – with some background about his life experiences that allowed him to seize the opportunities as they arose, and to do the risk planning to avoid some previous failures. He had some interesting advice that I jotted down as notes, paraphrasing:
- Look intensely at competition. Be curious. Call anyone you can find to learn about the business you’re entering. Try to figure out who has tried this and failed. And figure out why?
- Business is about game theory. You have to plan for the fact that those other companies will react. it is such a fast follow environment. Groupon was a great example of the fast followers being really crazy right now. Airbnb is another good example. (In my opinion, one of the really smart things HomeAway did was raise a truckload of money, early, which discouraged some of the fast followers when the recession was in full swing).
- Hard to get a big team, so make it a good one. “The team at HomeAway saved the company.”
- Have a profit model. The figure it out later model- “It ain’t reality”. You have to have a business that makes money. HomeAway has been 30% free cash flow since early on (I think I’m quoting that right).
- Really want to pick investors rather than the other way around – and profit or free cash flow is what allows you to do that.
- Do what it takes to get there- to get the funding you need. Don’t hoard equity if it costs you the capital you need to execute your strategy.
- Shhhhhh! Everyone likes press and PR, but keep quiet until you’re ready for competition. If you’re a PR machine but you’re not ready to beat the competition, you’re just inviting competition. (Note: this is not the same as stealth mode).