This weekend, my friend Cliff Go invited me to speak to a group of MBA students at an INSEAD Entrepreneurship Bootcamp event. I spoke earlier this year at another INSEAD event and also at an SMU event, all here in Singapore, but this one was very different. This time, I spent an hour sharing what I learned in my last startup venture (Welcome Real-time, a provider of credit card loyalty software to banks) and how I am applying that learning to my new venture (Taggo, a tap and go platform for providers of loyalty, prepaid, membership and access card systems and services). Here are the topics I spoke about.
1 - Rolling snowballs
Companies are like snowballs being rolled down a hill: once they’ve been pointed in a direction, it’s really hard to change course. My prior venture was launched in France in 1996 and was acquired in 2007. Where I found it very difficult to change course was … What I want to do better this time is …
2 - So what? Who cares? Why us?
The three toughest questions. Are you doing something important? Who is it important for? Are you selling vitamins, aspirin, or crack? To whom? What if pain is not obvious? Complicated ROI calculations ... Rainmakers and Sales divas ... Why us? Domain knowledge. Experience with similar venture, funding, execution, exit. IP experience and reputation. What are the barriers to entry? Patents, and VAR channel strategies.
3 - What percentage of your company are you willing to give away?
Not the right question - try working backwards: early stage investors want to get 5/7/10x ROI and don't like owning more than 25-30%. What exit valuation needed to achieve that? Credible? “Built to last” versus “Built to flip” … Balance. Who are the target buyers for Taggo? Marketing companies, payment service providers ... Why should companies buy if they can license or partner instead? Who are your target investors? Angels, VCs, strategic investors?
4 - The team
How angels make investment decision: Mgmt team (30% of decision), Size of market (25%), Product/service (10%). Have always managed to attract people passionate about what we were doing because … The type of people that I have had the most trouble finding are … Your larger team … rolling snowballs should be fun.