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Do Things that Don't Scale

Do Things that Don't Scale
July 2013 One of the most common types of advice we give at Y Combinator is to do things that don't scale. A lot of would-be founders believe that startups either take off or don't. Actually startups take off because the founders make them take off. Recruit The most common unscalable thing founders have to do at the start is to recruit users manually. Stripe is one of the most successful startups we've funded, and the problem they solved was an urgent one. Startups building things for other startups have a big pool of potential users in the other companies we've funded, and none took better advantage of it than Stripe. There are two reasons founders resist going out and recruiting users individually. The other reason founders ignore this path is that the absolute numbers seem so small at first. You'll be doing different things when you're acquiring users a thousand at a time, and growth has to slow down eventually. Airbnb is a classic example of this technique. Fragile Delight Experience

How the Productivity Myth is Killing Your Startup — about work You have to admire the insipid, dogged and naive devotion people have to believing they are going to get this huge list of things done. Even when presented with releases that slip by weeks and months, objectives and projects that slip by quarters, commitments that never materialize as brutal sacrifices are made on the altar of underestimation and overconfidence — even then, they will cheerily present their plans and strategies, dripping with ambitious and doomed optimism. Why do we keep believing we’re going to get so much done? Each day is given only 24 hours. Even with the bare minimum of coordination costs, cut down by your tools and your processes and your homegrown blend of agile, whole hours of that day are lost to meetings, status updates, course correction, revision, company chatter, building consensus, setting and measuring, iterating and reporting. Life decimates your team with unerring and unrelenting creativity. The Dire Consequences of the Productivity Myth Out of Delusion

How Funding Works - Splitting The Equity With Investors - Infographic A hypothetical startup will get about $15,000 from family and friends, about $200,000 from an angel investor three months later, and about $2 Million from a VC another six months later. If all goes well. See how funding works in this infographic: First, let’s figure out why we are talking about funding as something you need to do. This is not a given. If you know the basics of how funding works, skim to the end. Every time you get funding, you give up a piece of your company. Splitting the Pie The basic idea behind equity is the splitting of a pie. When Google went public, Larry and Sergey had about 15% of the pie, each. Funding Stages Let’s look at how a hypothetical startup would get funding. Idea stage At first it is just you. Co-Founder Stage As you start to transform your idea into a physical prototype you realize that it is taking you longer (it almost always does.) Soon you realize that the two of you have been eating Ramen noodles three times a day. Registering the Company

27 Zonnige beleggingsfondsen | Morningstar Een handig lijstje met beleggingsfondsen die van de analisten de hoogste waardering krijgen: Gold. Veel populaire vermogenscategoriën zijn vertegenwoordigd zoals Europese, Amerikaanse en Japanse large cap aandelen, fondsen met de focus op Azië, opkomende markten of dividend, obligatiefondsen en mixfondsen. De analisten van Morningstar beoordelen voor hun Analyst Rating beleggingsfondsen aan de hand van 5 aspecten: beheerteam, fondshuis, beleggingsproces, rendement en kosten. Op basis daarvan geven ze het fonds de beoordeling 'Negative', 'Neutral', 'Bronze', 'Silver' of 'Gold'. Krijgt een fonds een 'Gold’ rating', dan is er sprake van een uitstekend beleggingsfonds dat zichzelf op –het merendeel van- de vijf de pijlers onderscheidt en waarvan de Morningstar-analisten in zeer sterke mate overtuigd zijn. WaarschuwingEen waarschuwing is op zijn plaats: een belegger moet niet blindelings in deze fondsen stappen. Bij de fondsen hieronder staan korte samenvattingen uit het analistenrapport.

Jonathan Benassaya :«Aux Etats-Unis, un bon patron est celui qui s’entoure de personnes meilleures que lui. Il est reconnu à la qualité des gens qui travaillent avec lui» Les faits - Jonathan Benassaya, 32 ans (qui signe sur Twitter @john_benassaya), diplômé des Arts et Métiers et de l'Essec, est co-fondateur de la plateforme de musique en ligne Deezer, qu'il a quittée il y a trois ans. Il vit aujourd'hui dans la région de San Francisco, pour son climat mais également pour l'état d'esprit, tourné vers la réussite, qui y règne. Vous êtes installé aux Etats-Unis depuis un an et demi, qu’est-ce qui a motivé ce départ ? L’envie de changer d’air pour commencer. Lorsque vous avez, à 27 ans, créé le site d’écoute de musique en ligne Deezer, vous êtes-vous senti victime de cette méfiance ? Au moment où l’on a voulu faire grandir la société, oui. Qui sont les «on» dont vous parlez ? Le marché. Après quelques difficultés à ses débuts, Deezer a connu le succès, comment gère-t-on une telle réussite entrepreneuriale lorsque l’on vit en France ? On subit plus qu’autre chose le succès qui n'est jamais considéré comme un objectif. En effet. Oui, indéniablement !

Why Companies are Not Startups In the last few years we’ve recognized that a startup is not a smaller version of a large company. We’re now learning that companies are not larger versions of startups. There’s been lots written about how companies need to be more innovative, but very little on what stops them from doing so. Companies looking to be innovative face a conundrum: Every policy and procedure that makes them efficient execution machines stifles innovation. This first post will describe some of the structural problems companies have; follow-on posts will offer some solutions. Facing continuous disruption from globalization, China, the Internet, the diminished power of brands, changing workforce, etc., existing enterprises are establishing corporate innovation groups. But paradoxically, in spite of all their seemingly endless resources, innovation inside of an existing company is much harder than inside a startup. A company is a permanent organization designed to execute a repeatable and scalable business model.

Don't Think of Your Home as an Investment Daniel Marhely Technologie ouverte pour accéder à la musique à partir de n’importe quel appareilDeezer « J’ai toujours rêvé d’avoir facilement accès à ma musique, à toute la musique, même à celle des autres, n’importe où et n’importe quand », se souvient le jeune entrepreneur et développeur Daniel Marhely. En réalité, il avait une idée si précise de son rêve qu’à seulement 19 ans, il parvint à le concrétiser et à le financer à une période où l’industrie du disque paraissait se diriger vers une voie sans issue. Avec la chute des ventes de disques et l’apparition des téléchargements illégaux en peer-to-peer, le premier essai de cet innovateur apparut sur Internet en 2006, sous le nom de Blogmusik. Après avoir reçu plusieurs lettres de sociétés de droits d’auteur qui menaçaient l’existence de son site Web, Marhely opta pour une autre stratégie : « l’offre de musique légale allait devenir mon modèle d’activité », résume le jeune Français. Elena Zafra

Startup = Growth September 2012 A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of "exit." The only essential thing is growth. Everything else we associate with startups follows from growth. If you want to start one it's important to understand that. Redwoods Let's start with a distinction that should be obvious but is often overlooked: not every newly founded company is a startup. When I say startups are designed to grow fast, I mean it in two senses. That difference is why there's a distinct word, "startup," for companies designed to grow fast. To grow rapidly, you need to make something you can sell to a big market. For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people. Writing software is a great way to solve (b), but you can still end up constrained in (a). Ideas Rate Value

Rude VC: The misplaced pride of no marketing I heard it again just the other day during a startup’s pitch. “We’ve done no marketing, and look how much we’ve accomplished,” boasted the founders of the venture for which they were trying to raise money. Imagine what we could do if we spent money on marketing, was the intended implication of what they were saying. Unfortunately, this is not an uncommon refrain in early-stage pitches, and I cringe every time I hear it. There are several reasons this bothers me, but before I describe them, I’ll try to recall the definition of marketing, as explained by my best professor on the subject, Christie Nordhielm at Kellogg: Marketing represents the set of activities and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. So when entrepreneurs brag about their absence of marketing, this makes me wonder… …if they may be working on the wrong problem.

Rate-of-learning: the most valuable startup compensation The frothiness of today’s environment in Silicon Valley makes it easy to get sucked into a warped sense of reality. Valuations are high, capital is cheap, housing prices are skyrocketing, and RSUs are flowing like wine. Talk of another “bubble” is rebuffed, even by those who were scarred by the Dot-com collapse of 2000. Some argue we’ve exited the installation phase of technology—which was still sputtering along at the dawn of the new millennium—and have entered what Carlota Perez calls the ‘deployment phase’ of technology. In this phase, startups move “up the stack”, switching from building core infrastructure (i.e. interstate highways) to applications that go on top of it (i.e. Teslas). Undoubtedly, changes in technology over the last 15 years have been breathtaking. One risk of living in this Gilded Age of Tech is the temptation to view your own career and compensation through a disproportionately financial lens—much as a growing company would. Compounding interest on learning.

Vimeo Founder Says Never Sell Your Company. Really? “An acquisition is the end of a dream.” The quote above is the title of Inc writer Issie Lapowsky’s interview with Jake Lodwick, co-founder of video sharing site Vimeo. To paraphrase Lodwick, he believes selling a business is akin to giving up - failure. Selling gives you the capital to start something even bigger Selling a business does not have to be “the end of a dream.” Ted Turner created his first pool of capital by selling a small group of radio stations. Evan Williams sold Blogger to Google, which gave him the capital to start among other things, Obvious Corp. which gave birth to Twitter. Great companies need different leaders at different stages Back in 1971 Jerry Baldwin, Zev Siegl, and Gordon Bowker started a little company selling coffee beans. Starbucks needed a different kind of leader to fulfill its potential. Building a company is not a life sentence Selling a business frees up your brain to focus on something else. Checking a box is different from ending a dream

Business Basics - Equity: Dividing the Pie Email: mike@risktaker.com I'd rather have a small piece of a big pie than a large piece of nothing! (M. Volker) Why Do You Need a Partner? If you are very bright, very tenacious, and financially well endowed, then you can start a company which you own in its entirety and in which you can hire a bright, capable, highly motivated and well-paid management team. How do you deal in New Partners? Valuation is the issue. Unless you are greatly concerned about control issues, each time you dilute you should be increasing your economic value. If you bring in a new VP of Marketing and give her 5% as a signing bonus, how do you know that her contribution will be worth 5%? There is only one way to bring in new partners: carefully and with deliberation. Who Should Get What? What percentage of the company should each partner in a new venture receive? Suppose Bill Gates said he'd serve on your Board or give you some help. Often, company founders give little thought to this question. 1. 2. 3. Summary

STARTUP BEGINS - On a été pitché par Elaia Partners ! (open office) Ce vendredi 27 juin nous avons réussi l’exploit de passer 5h au sein des bureaux du fond Elaia Partners, de discuter longuement avec 1 analyste, 1 associée et 1 partner…et de présenter ZERO slides de notre projet UBQT ! Nous avons donc participé aux Open Office Elaia Partners ! En toute transparence nous étions partagé sur la pertinence d’y participer. Nous tairons les noms…mais l’un des co-fondateurs de UBQT était enthousiaste mais le second…pas du tout ;) C’est donc avec 50% de dose d’enthousiasme (ce qui heureusement ne dura pas longtemps!) que nous nous sommes rendu rue de de Ponthieu, à l’invitation du fond d’investissement. Néanmoins, comme ce dernier le souligne également, la relation et la collaboration avec un fond d’investissement ne se résume pas aussi simplement. Première remarque en arrivant dans les bureaux : il y avait + de jeans coté « Fond » que coté « Startups » ;) (et avec 2 jeans/baskets coté UBQT nous avons contribué à augmenter la stat des Startups!)

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