sdfi 2016 vision davenport
TRANSCRIPT
8/20/2019 SDFI 2016 Vision Davenport
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IDEAS AND
PURPOSEKEN DAVENPORT
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ABOUT MEStarted first company straight out of UCSD in 1991.
Since then, started 4 others in healthcare, software/servicesand social sector.
•
One went belly up (Chapter 11)
• One had a $100+mm exit
•
One is now 7 years in
• One is still early stage
• One is now 4 years in -- no exit possible (501c3)
Raised capital at all stages from all sources.
Mentored dozens of start-ups and founders.
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IT ALL STARTS WITH
A BIG IDEA…
Right?
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YES, BUT…Ideas are great.
The problem is -- everyone has them.
In fact, you should assume that 10 otherpeople somewhere on the planet have your
EXACT same idea and are working on
bringing it to market.
Ideas are necessary. But not sufficient.
Success requires more.
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AHH, IT’S ABOUT
EXECUTION!It’s trendy in the “Valley”to poo-poo the importanceof ideas.
(After all, since everybodyhas them, how good canyours really be?)
So what differentiatessuccessful start-ups fromnon-successful is beingable to execute.
Right?
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YES, BUT…Execution is necessary, but (again) not sufficient.
I believe you also need purpose.
Purpose is personal. It’s yours. It intertwines twokey elements that go to the core of who you are
and what you are trying to create:
• Vision for changing the future in some way.
• Passion for why you want to change it.
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START WITH WHYWhat is driving you?
• The promise of riches? (ha)
•
Freedom from having a boss? (ha, ha)• Because it seems cool? Fun? (for the firstmonth, maybe)
Or do you have a true passion and purposefor what you are doing?
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WHY IS PURPOSE SO
IMPORTANT?Because you are embarking on a difficult and oftensoul-sucking endeavor.
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PURPOSECritical for three reasons:
• It will sustain you when you face adversity
(every day).•
It will enable you to build a team based onshared values – buy-in is more importantthan stock options.
•
It will enable you to effectively sell toinvestors, customers and employees.
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PURPOSE• Early stage
investments aremore about YOUthan the businessmodel.
•
Remember: GoodVC’s and long-terminvestors getmarried to you. It’s
not casual dating,and they will look toyou to staycommitted.
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PURPOSE
How do you know
what you are
passionate about?
Only YOU know.
I had to answer the
same question!
(This book might
help.)
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NOW, BACK TO THE
IDEA Yes, the idea
DOES matter.
Or, rather, theproblem matters.
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WHAT MAKES A GOOD
IDEA?Great business ideas have 4 components thatanswer 4 key questions:
1. A Problem that needs solving.
•
“What’s the pain?”2. Creates value to customers.
•
“Who will benefit and pay to relieve it?”3. An executable model.
•
“Can I reach the customer (affordably)?”4. Good market timing.
• Why now?
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WHERE DO GOOD
IDEAS COME FROM?The best ideas come
from your personal
experience – solving
a problem you know
well because you
deal with it every
day.
But!
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Not all ideas turn into a business.
Key question:
•
Is it a idea for a product? Or can it be thecore of a company?
What’s the difference?
•
Addressable market size, channels,follow-on products, etc.
PRODUCT OR COMPANY?
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Do love your technology.
But don’t let it become the substitute forreal strategy.
BEWARE THE “DOG WAG”
SYNDROME
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THE “LEAN IDEA”
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LEAN IDEA TOOL KIT
Do relentless market research – on yourcompetitors (yes, you have them)
Get relentless market feedback – from yourtarget customers.
•
Craft the idea statement as clearly aspossible. Don’t be afraid to disclose.
•
Focus Groups can be valuable – but bewareof selection bias and confirmation bias.
Present, listen, modify. Present, listen,modify.
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LUCK: THE X FACTOR
Dustin Moscovitz
Eduardo Saverin
Left Facebook 2008
Net worth: $8.8B
Left Facebook 2005Net worth: $2.6B
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CAN YOU MAKE YOUR OWN
LUCK?
Maybe more than you think*
“Chance favors a prepared mind”-- Louis Pasteur
*Marc Andreesen “Luck and the Entrepreneur Part 1”http://pmarchive.com/luck_and_the_entrepreneur.html