Index

A

Account executives (AEs), 64

Acquirer strategic shift, 156–157

Acquisitions, 58–59, 155–159

acquirer strategic shift, 156–157

due-diligence issues, 159

expectation mismatch, 157–158

hiring employees, 158–159

lack of chemistry, 158

lack of competitive bidding situation, 158

lack of relationship, 156

networking, 155–156

selling, 155

Admiral Greer, 142

AdWords, 80

AEs. See Account executives

Airbnb, 96

Amazon, 4, 18, 49, 61, 65, 66, 72, 75

Amazon.com, 78, 102

Android, 9, 23, 82, 128

Angel investment, 104

Angel investors, 103, 104, 107, 108, 116, 122, 136

Anti-spam products, 22

APIs. See Application programming interfaces

Apple, 4, 9, 23–25, 72–74, 125, 126, 130, 135

Apple App Store, 61, 67

Apple Newton, 23, 25

Apple Super Bowl (1984), 78

Application programming interfaces (APIs), 82

Assisted-viral products, 23

Audience, communication with, 146–147

B

Bad communication, 87

Bad contracts, 69

Bad market, 6–7

Bad news, delivery of, 93–94

Bad products, 15–27

building incredible technology, 17–18

failure to focus, 18–20

friction to achieve adoption, 20

magic of product chemistry, 23–24

product blindness, 15–17

product delivery, 24–26

prototype products, 26

simple, universal and viral products, 22–23

users of product, 21–22

Bad sales process, 69–70

Ballmer, Steve, 120

B2B. See Business-to-business company

Benioff, Marc, 30, 31, 166

Bezos, Jeff, 78, 102, 107

BHAG. See Big Hairy Audacious Goal

Bias, fighting, 62

Big Hairy Audacious Goal (BHAG), 78, 89

Big Idea, The, 31

Big-idea company, building, 101–103

Big markets, 4–5

Blank, Steve, 8

Board meetings, managing, 91–93

Bootstrapped entrepreneurs, 116

Box.net, 73

Brand identity, 82–83

Brin, Sergei, 120

Business-to-business (B2B) company, 64, 172

Buzz, 78–79

C

Capital, invested, 162

Capital E, entrepreneur with, 29–30

Capitalization, 11–12

Capital markets, 58

Capital planning model (CPM), 150

Cash management, 115–118

debt, 117–118

product-market fit, cash flows from, 115–118

Cash out date, 122

CEO and acquirers, lack of chemistry, 158

Cialdini, Robert, 76

CityVille, 5

CLV. See Customer lifetime value

Collins, Jim, 78

Communication, 87–98

with audience, 146–147

bad news delivery, 93–94

with customers, 95–96

delivering good news, 94

expectations, 89–90

failure, 97–98

managing board meetings, 91–93

success, 97–98

success story, 96–97

with team, 94–95

vision, 87–88

Company's cost per click (CPC), 57–58

Competitive bidding situation, 158

Consumer company, valuation of, 53

Content-hosting solution, 57

COO, hiring, 120, 121

Cook, Scott, 107

Cook, Tim, 120

Cost per acquisition (CPA), 57–58

CPA. See Cost per acquisition

CPC. See Company's cost per click

CPM. See Capital planning model

CRM. See Customer relationship management

Customer financing, 107–108

Customer lifetime value (CLV), 58–60

Customer relationship management (CRM), 79

Customers, communication with, 95–96

D

D. E. Shaw & Co, 78

Deal failure, 158

Debt, cash management, 117–118

Dell, Michael, 30

Demand generation, 61

Destiny control, 106–108

customer financing, 107–108

investors, 107

nights and weekends plan, 107

rent and ramen plan, 106

Direction, changing, 10

Dropbox, 22, 66, 73, 76

Due diligence, 148, 159

Duffield, Dave, 35

E

EA. See Electronic Arts

Early-adopter program, 17

Early execution vs. executing at scale, 118–119

Earn-outs, 160

eBay, 12, 102, 103

Economies of scale, 4

Electronic Arts (EA), 5

E-mail–based payments, 12

Employees, hiring, 158–159

Entrepreneur(s), 29–41

acting like entrepreneur, 38

with capital E, 29–30

communicating point of view, 97

goal of, 4

hiring for operations, 35–36

hiring great people, 36–37

Marc Benioff, 30–31

personal health, 170–171

product selection, 31–32

quest, 31

repeated failure, 40–41

starting vs. leading, 39–40

success story, 96–97

targetting small markets, 5

teams without clear vision, 32–33

users, importance of, 33–35

weaknesses, improving on, 38–39

Entrepreneurship, motivations, 165–167

Equivalent, in business context, 22

Excite, 125

Executing at scale, 118–119

Execution, 111–131, 174

cash management, 115–118

debt, 117–118

product-market fit, cash flows from, 115–118

early execution vs. executing at scale, 118–119

failure, 111–112

first-mover advantage, myth of, 124–125

fluid organizations, 112–113

goal, 123–124

hiring, 119–122

knowing numbers, 122–123

late entrants, 125–126

market, outruns, 129–131

market leader, 126–129

under-resourced/over-resourced, 113–115

Expectation mismatch, 157–158

F

Facebook, 3–6, 18, 20, 21, 39, 66, 75, 76, 79, 82, 103, 120, 124, 125, 135

Failing fast, great startup, 63

Farming user base, 67

File-sharing market, 72

Financial markets, 103

First-mover advantage, myth of, 124–125

Fluid organizations, startups, 112–113

Founder liquidity, 162

Framing, 143–145

Freemium model, 64–66

Friendster, 26, 125

G

Gates, Bill, 120, 166

Gerstner, Lou, 130

Getting started, 99–110

big-idea company, 101–103

destiny control, 106–108

location, 109–110

making the leap, 99–101

surviving lack of capital, 103–106

team building, 108

users and customers, 108–109

Good news, delivery of, 94

Good to Great, 78

Google, 4, 9, 18, 39, 72, 75, 79, 103, 120, 124–126, 135

Google AdWords, 47, 58, 61, 80

Great design, 24

Great liquidity events, 163

Great marketing, 83

Great operators, 120

Great people, hiring, 36–37

Great product-market fit, 9

Great product(s), 27

bad market, 6–7

building, 173

design, 24

Great wave to ride, 5–6

Groupon, 51

Grove, Andy, 96

H

Healthcare startups, 8

Hiring, from companies, 119

Hunt for Red October, The, 142

I

IBM, 12, 130

Inability to scale, 36

Ineffective sales people, 68

Influence: The Psychology of Persuasion, 76

Infographics, 81

Initial public offerings (IPOs), 163

Insiders, 162

Institutional buyers, 153

Intel, 23

Interim liquidity, 162

Internet, 21

Intuit, 12, 107

Investment(s)

decisions, 149

opportunity and risk, 52–53

process, 138–139

Investor(s), 107

lump failures, 71–73

motivations, 137–138

vision of, 139–141

Invisible startups, 71–83

brand, 82–83

buzz, 78–79

investors lump failures, 71–73

mobile, 81–82

product innovation, 73–75

search, 79–81

social media, 77–78

viral marketing, 75–76

iPhone, 9, 23, 61, 82, 128

IPO. See Initial public offerings

J

Jobs, Steve, 78, 101, 120, 166, 168

K

Keynote Mobile Solutions, 102

Klaff, Oren, 143

L

Leading vs. starting, 39–40

Life-science company, 8

LinkedIn, 23, 66, 75, 76, 136

Liquidity management, 153–163

acquisitions, 155–159

deals, 159–160

events, 153–155

great liquidity events, 163

IPOs, 163

payment, 160–161

secondary markets and interim liquidity, 162

M

Mad Men, 61

Main Street, 53

Market(s)

efficiency, 172

importance of, 52

leadership, 126–129

reaching, 9–10

size, 172

Marketing, spending money on, 47–48

Marquee investors, 136

Mass market, 53

Media sharing, 76

Memorandum of understanding (MOU), 159

Mentors, 175

Microsoft, 5, 12, 72, 74

Mobile, 81–82

Momentum investors, 136

Monetization, 8, 53

Money, raising, 103–106

Money lost on sales, 57–70

acquisition, 58–59

CPA, 57–58

CPC, 57–58

customer lifetime value, 59–60

inherent bias, 61–62

purchase of products, 60–61

sales engine, 68–70

sales leverage, 63–68

sales team turnover, 62–63

Motivations

fueling entrepreneurship, 165–167

investor, 137–138

MOU. See Memorandum of understanding

Murdoch, Rupert, 125

Musk, Elon, 101

MySpace, 68, 125

N

Net adoption curve, 50

Net Promoter Score (NPS), 54–55

Networking, 155–156

News Corp, 125

New York Times, 81

Nights and weekends plan, 107

NPS. See Net Promoter Score

O

oDesk, 81, 82, 106

Omidyar, Pierre, 102, 103

Online advertising, 57

Over-resourced, startups, 113–115

P, Q

Page, Larry, 120

Palm Pilots, 12

Pandora, 22, 82

Partnering, sales leverage, 67

Partner meetings, 150–151

Partnerships, 120, 150

PayPal, 12

PeopleSoft, 35

Personal health, of entrepreneur, 170–171

Pincus, Marc, 5, 102, 103

Pitch Anything, 143

Pitches, 135–151

due diligence, 148

evaluation, 141–142

investor motivations, 137–138

partner meetings, 150–151

perfection, 142

framing, 143–145

presentation failure, 145

audience, connecting with, 146–147

be succinct, 147–148

process matters, 138–139

right investors, 135–136

spell it out, 141

sponsor, supporting, 149

time consuming, 136–137

vision, 139–141

Pivoting, 10–12, 70

Poor product-market fit, 3–13

big markets, 4–5

capitalizing, 11–12

failure, 12–13

finding fit, 8–9

great product, bad market, 6–7

great wave to ride, 5–6

market, reaching, 9–10

market sucess, 12–13

pivoting, 10–11

pivots that worked, 12

product-market fit, 3–4

structural issues, 8

Porras, Jerry, 78

Premature scaling, 123

Pre-money valuation, 139

Presentation failure, 145

audience, connecting with, 146–147

be succinct, 147–148

Pricing, mismatched, 69

Private markets, 104

Product(s)

blindness, 15–17

chemistry, 23–24

delivery, 24–26

innovation, 21, 73–75

purchase of, 60–61

scaling, 26

selection, 31–32

usage, 16

users of, 21–22

vision, 173

visionaries, 120

Product-market fit, 3–4, 173–174

cash flows from, 118

problem, 48–49

Profit-based earn-out goals, 161

Promoters, 55–56

Prototype products, 26

Public markets, 104

Public-market stocks, 162

R

Real cost of spending, 45–47

Rent and ramen plan, 106

Repeatable, profitable acquisition mechanism, 123–124

Right investors, 135–136

Robertson, Niel, 119

Ryan, Jack, 142

S

SaaS. See Software as a Service

Saban, Nick, 18

Sales and marketing, investment in, 45–56

creating value, 51

NPS, 54–55

opportunity and risk involved, 52–53

poor execution, 48–49

promoters, 55–56

real cost of spending, 45–47

spending money on marketing, 47–48

traction curve, 49–51

Sales engine, clogging up, 68–70

bad contracts, 69

bad sales process, 69–70

ineffective sales people, 68

mismatched pricing, 69

Sales engineers (SEs), 64

Sales-execution problem, 61–62

Salesforce, 75

Salesforce.com, 4, 20, 30, 31, 67, 79

Sales Learning Curve (SLC), 49, 50, 52

Sales leverage, 63–68

freemium model, 64–66

monetizing users, 67–68

partnering, 67

software delivery, 64

traditional way, 63–64

word of mouth, 66–67

zero-cost user acquisition, 66

Sales team turnover, 62–63

Sandberg, Sheryl, 120

Schmidt, Eric, 120

Search engine marketing (SEM), 79

Search engine optimization (SEO), 57, 79

Secondary markets and interim liquidity, 162

SecondMarket, 162

Self-motivation, 100, 167–168

Selling, 155

SEM. See Search engine marketing

SEO. See Search engine optimization

SEs. See Sales engineers

Shane, Scott, 169

SharesPost, 162

Siebel, 20

Simple products, 22–23

SLC. See Sales Learning Curve

Small and medium businesses (SMBs), 80

Social gaming, 5

Social media, 77–78

Software as a Service (SaaS), 64

Sony, 5

Sponsor, supporting, 149

Starting vs. leading, 39–40

Startup diet, the, 170

Startup Genome Project, 123

Startup's success, 4, 40

Stepping stones, to startup victory, 165–176

failure, avoiding, 171–175

building great product, 173

craziness, 175

destiny control, 172–173

execution, 174

great mentor, 175

market efficiency, 172

market size, 172

persistence, 174

product-market fit, 173–174

product vision, 173

simplification, 175

stubbornness, 174

target market, 171

willingness to change mind, 174

fast failure, 175–176

friction leading to failure, 168–169

motivations, 165–167

myth of working, 167–168

personal health, 170–171

value chasm, 169–170

Structural issues, product-market fit, 8

Sunk costs, 124

T

Target market, 9, 12, 171

Team building, 108

Team communication, 94–95

Team expectations, 89–90

TechCrunch, 176

Technology, building, 17–18

Timeshare, 6

Time value of money, 170

Town Hall, 5

Traction curve, 49–51

Traditional way, sales leverage, 63–64

Trickle-down effect, 7

TripAdvisor, 61

Trust and Safety Center, 96

Twitter, 22

U

Under-resourced, startups, 113–115

"United Breaks Guitars", 73

Universal products, 22–23

Use case, 16

Users

and customers, 108–109

importance of, 33–35

monetizing, 67–68

V

Value chasm, 169–170

Venture-backed company, challenges in, 18

Venture-backed entrepreneurs, 115

Venture funds, 105

Venture investment, 51, 104

Venture investors, 106, 122, 169

VentureBeat, 176

Viral marketing, 22, 75–76

Viral products, 22–23

Virtual goods, purchase of, 6

Vision

communication, 87–88

of investors, 139–141

vWorker, 82, 106

W, X

Walmart, 4

Warm coffee comfort problem, 146

Welch, Jack, 130

Whittaker, Lou, 171

Wireless carriers, 9

Word of mouth, 66–67

Y

Yahoo, 125

Yelp, 61

YouTube, 75, 77

Z

Zappos, 66, 67, 82

Zero-cost user acquisition, 66

Zuckerberg, Mark, 120, 166

Zynga, 3, 5, 6, 21, 74, 102