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From side project to startup

Natalie Downe
November 07, 2011

From side project to startup

Presentation given at Barcamp London 9

Natalie Downe

November 07, 2011
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  1. making conferences work
    Lanyrd.com

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  2. Lanyrd.com
    accidental
    entrepreneurs
    http://www.flickr.com/photos/chuckp/21394313

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  3. Lanyrd.com
    $US 1.4 million

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  4. Casablanca
    August 2010

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  5. Casablanca
    August 2010

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  6. Lanyrd.com
    People who
    use Twitter
    Professional
    Events
    Something interesting

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  7. Lanyrd.com
    Private Beta

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  8. Bootstrapping on Twitter

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  9. Lanyrd.com
    Tips on beta testing
    Launch in beta first
    ... but not for too long
    Keep the beta testers after launch
    Make sure beta-only features obvious

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  10. Lanyrd.com
    Tom Coates

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  11. Lanyrd.com
    @lanyrd attending #bcl9

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  12. Lanyrd.com
    "We'll scale it live!"
    http://www.flickr.com/photos/chuckp/
    21394313

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  13. Read only mode
    http://www.flickr.com/photos/chuckp/21394313

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  14. Lanyrd.com
    El Jadida
    September 2010

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  15. Lanyrd.com
    Learn from our mistakes
    Don't over-engineer... but...
    Do plan for at least a small spike in traffic
    Don't miss out on users because your site is
    too unstable

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  16. Lanyrd.com
    Launch early
    launch often

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  17. Lanyrd.com
    Community support
    Any contact from a user is a chance to turn
    them into a fan, no matter how grumpy they
    are
    It is not the bug that reflects you, its how you
    deal with it
    140 characters in public is not the best forum
    for discussion
    Let people know about their pet features

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  18. Lanyrd.com
    Community support
    Any contact from a user is a chance to turn
    them into a fan, no matter how grumpy they
    are
    It is not the bug that reflects you, its how you
    deal with it
    140 characters in public is not the best forum
    for discussion
    Let people know about their pet features

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  19. Lanyrd.com
    Watch how people use your site
    Have an activity stream, even if it is just
    admin only
    Data is a symptom of design. Watch for
    duplicates and bad data: these bugs are
    important to fix quickly because they affect
    the quality of your data.

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  20. Lanyrd.com
    Marrakech
    September 2010

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  21. Lanyrd.com
    Marrakech
    September 2010

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  22. Lanyrd.com
    Cairo
    September 2010

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  23. Lanyrd.com
    http://ycombinator.com/atyc.html

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  24. Luxor
    October 2010

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  25. Lanyrd.com
    YC application
    What substitutes do people resort to
    because what you plan to make doesn't
    exist yet?
    What do you understand about your
    business that other companies in it just
    don't get?
    How will you make money?

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  26. Mountain View, USA
    January 2011

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  27. Lanyrd.com
    Y Combinator
    $11,000 (+$3000 per founder) for about 7%
    $150,000 follow-on investment from Start
    Fund
    'Office hours' meetings with YC partners for
    advice
    Weekly off-the-record dinner with invited
    speakers
    'Demo Day' after 3 months

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  28. Mountain View, USA
    March 2011

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  29. Lanyrd.com
    2 minutes, 10 seconds
    You'll be lucky if investors remember
    a single noun from your pitch...
    so make sure it's the right noun!

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  30. Lanyrd.com
    Investment

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  31. Lanyrd.com
    Reasons startups die
    1. Not making
    something people
    want
    2. Fundraising
    http://www.paulgraham.com/fundraising.html

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  32. Lanyrd.com
    "Raise money or Bootstrap?"
    http://www.flickr.com/photos/stawarz/3526784136/

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  33. Lanyrd.com
    "How much should I raise?"
    Raise enough money for 18 months
    You'll have to start fundraising again after
    12
    How much of the company are you willing
    to give away?

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  34. Lanyrd.com
    Valuations
    If you can convince someone to invest
    $1,000,000 for 10% of your company, your
    valuation is $10m
    (Actually it's $11m post-money, and $10m
    post-money)

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  35. Lanyrd.com
    "Equity or convertible notes?"
    http://www.flickr.com/photos/dicknella/2145511833/

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  36. Lanyrd.com
    Convertible Notes
    Also known as "bridge loans"
    Investor can give $100,000 now as an advance on
    your future equity round
    When you raise the full round later, they get
    $100,000 worth of stock at whatever the valuation
    is
    They get perks for investing early (a cap and/or
    discount)
    http://j.mp/convertable-notes

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  37. Lanyrd.com
    "Angel investors or VCs?"
    Angels invest their own money, usually $5k-$50k
    Frequently exited founders themselves
    Not necessarily looking for a massive exit
    VCs invest other people's money
    Looking for the big 10x hits, to make up for
    losses
    You can raise money from both

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  38. Lanyrd.com
    Ask for more than money
    Have a hit-list of skills you wan't to find in
    investors
    Marketing?
    Internationalisation?
    Hiring?
    Growing a company

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  39. Lanyrd.com
    What you'll need
    Executive summary
    Elevator pitch
    Pitch deck
    The phone number of a really good lawyer
    Answers to common questions

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  40. Lanyrd.com
    Common questions
    Where do you see your company in five
    yours time?
    What's your TAM - your Total Addressable
    Market size?
    How are you going to spend the money?

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  41. Lanyrd.com
    Finding (the right) investors
    Introductions are essential
    Ask investors for intros to more investors
    Look at who they have previously invested
    in

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  42. Lanyrd.com
    Investor meetings
    Good investors decide quickly - just one or
    two meetings
    ... but it takes a LOT of meetings to fill up your
    round
    Meet with less exciting investors first, to
    practice
    At the end of the meeting, ask for the money!

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  43. Lanyrd.com
    Closing a round
    A VC will offer you a "term sheet", outlining
    their proposed investment
    Show it to a lawyer!
    If you're lucky, you'll get more than one offer
    from different firms. Then you can negotiate.
    Even when you sign it, you'll still need to
    round up the other investors and negotiate
    on the full legal documents

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  44. Lanyrd.com
    Raising money takes
    longer than you
    expect, even when you
    take that in to account

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  45. Lanyrd.com
    Lawyers are translators
    VCs are professional negotiators - you aren't
    Your lawyers can translate the legalese, and
    tell you what terms are standard and what
    terms aren't
    To negotiate, you need reasons
    Investment is full of strange etiquette - good
    lawyers can guide you through that as well

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  46. Lanyrd.com
    Runway
    http://www.flickr.com/photos/15545136@N06/5891705931/

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  47. Lanyrd.com
    Announcing your round
    It's a free news story, time it well
    Don't share your valuation
    Do say who your investors are, how much
    you raised and what you are going to spend
    the money on
    Give the exclusive to one publication, follow
    up with different angles to subsequent
    publications if you can

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  48. Lanyrd.com
    London
    October 2011
    photo by @bfirsh

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  49. Lanyrd.com
    Have a Vision

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  50. Lanyrd.com
    http://www.flickr.com/photos/21680590@N06/4654423909/
    It may look like a
    glamorous life
    ... but it's not all sunshine and daisies!

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  51. Lanyrd.com
    Lanyrd app for iPhone

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  52. http://www.flickr.com/photos/pattylagera/
    The emotional roller-coaster

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  53. http://www.flickr.com/photos/pattylagera/
    On top of the world!
    Everyone likes us!
    Why would I ever want a
    real job?
    Oh crap!
    The world is ending,
    Servers are down,
    Bad comments on twitter
    Maybe I can still get a real job?

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  54. Lanyrd.com
    It's a tough job!
    You don't get to go home and stop thinking
    about work
    You will have no idea what you are doing -
    but nobody else does either, ask a founder!
    You don't need to be born an entrepreneur
    ... but you do need to find a great co-founder

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  55. Lanyrd.com
    Would we do it again? ... Yes!
    You have something that is yours
    Knowing that you are improving peoples
    lives, even slightly
    You get to build the company you want to
    work for

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  56. Lanyrd.com
    There are many
    ways to do a startup

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  57. Lanyrd.com
    Make something
    people want

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  58. Lanyrd.com
    http://lanyrd.com/sktdf
    Thank you!

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  59. Lanyrd.com
    http://lanyrd.com/sktdf
    Any questions?

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