Been There, Done That
Panel of experienced entrapreneurs
Julie Hanna Farris, Scalix; Richard Mandeberg, Mirra: Michael O’Donnell, BitPass; Steve Poizner, Candidate for CA State Assembly; Peter Thiel, Clarium Capital Management
Q - explain your current opinion of the startup environment
Peter - think about landing your company, not just launching it. During the bubble it was easy to get funding, but there was more competition. Back then you needed money to overcome that competition. Today you can’t get much money, but perhaps you don’t need it.
Steve - In this area geographically there are a few factors that need to be overcome. Some VCs think that California is a hostile business environment, so they send money elsewhere. That needs to be fixed.
Mike - Its difficult to break into the closed environment of VC. You need to find someone to help you make connections (Garage or someone else). VCs have returned to some discipline (metrics didn’t exist during the bubble, they’re back).
Richard - Its all about doing more with less capital. One thing you do get in the Valley is a comunity thats sympathetic to the challenges and brings a pool of experience.
Julie - We might be in a minibubble. There might be lots of people out there irrationally thinking they can pull off another bubble. Asked if its harding to get funding as a woman, says that there is a VC protocol that most women don’t have work experience that has prepared them for. So it could be hard, but not “cause they’re a woman”, its cause they don’t often have the right background.
Q - What is the one major factor for success?
Steve - make sure it works, all the issues all the corner cases.
Mike - Money, “cash is more important than your mother”.
Richard - theres a difference in understanding what the one thing for you is, and then the one thing for the company. For the company, he thinks the company needs to stay focused, and never deviate.
Julie - Knowing what the one thing is that you do better than everyone on the planet, know your domain.
Peter - People are the most important. Although he agrees with the other comments, he thinks there are too many unknowns to try for anything else.
Guy says make your founders vest, so you don’t lose them if the team hits trouble.
Q - What is one of the dumbest thing you’ve done as a CEO?
Mike - overpromising and underdelivering. You work really hard and just miss your goals, you feel like crap, the VCs are pissed off. Try to set reasonable targets. The CEO should not do the forcasting, they need to be too optomistic.
Richard - bringing an investor into a company because he was intrigued with their worldview, someone who wanted to take the company in another direction.
Julie - Learned it always costs more and takes longer, learned because of not tempering optimism. If you don’t hit your milestones you feel bad even if you did great work. Deal with problems early and often. Set your goals some place where you have a high confidence level of being able to hit it (says set the goal at a place where you have 100 confidence).
Mike added forcast at 100 percent and manage your cash to that, but also make an upside prediction taking into account the unknowns.
Peter - don’t hire consultants for core functions.
Steve - Getting the right people at the right time. They engaged in a test of Marines vs Snaptrack in terms of tracking technology, and they ended up with an out of shape engineer vs a young marine, and just looked weird. Says they also didn’t pay enough attention to intellectual property issues.