startup weekend ghent

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Startup Weekend GhentiMinds December 5-7, 2014

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie2

Who is Bruno Lowagie?Original developer of iText®, an open source PDF libraryAuthor of “iText in Action” books published by Manning PublicationsFounder / CEO of the iText Group

iText Group NV (Belgium)iText Software BVBA (Belgium)iText Software Corp (USA)

AwardsBelCham Entrepreneurship Awards 2014: Winner “Most Promising Company of the Year”

Deloitte’s Technology Fast 50 2013: 3rd in Belgium, 10th in Benelux, 53rd in EMEA 2014: Winner (Belgium)

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Part 1

Three Things watching House MD taught me about doing business

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Startup Weekend Ghent: Bruno Lowagie4

Fact #1There are as many diagnoses as there are specialists.

The developers say: “Your product needs more features!”The salespeople say: “Your product needs to be less technical!”The VCs say: “You need more funding to grow faster!”

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Startup Weekend Ghent: Bruno Lowagie5

Conclusion #1

Do not follow any advice, before you know the background and motives of your adviser!

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Startup Weekend Ghent: Bruno Lowagie6

Fact #2

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Startup Weekend Ghent: Bruno Lowagie7

The Four Innovation LiesLie #1: Target customer: “Of course I’ll buy that!”Lie #2: Product developer: “We’ll be ready to ship in six months!”Lie #3: Salesperson: “Of course I can sell that!”Lie #4: Senior executives: “We’re open to anything!”

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Startup Weekend Ghent: Bruno Lowagie8

Conclusion #2

Don’t be angry with people who lie, just make sure you don’t lie to yourself!

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Startup Weekend Ghent: Bruno Lowagie9

Fact #3Tests take time, treatment is quicker.We treat it:

If he gets better, I’m right;if he dies, you’re right!

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Startup Weekend Ghent: Bruno Lowagie10

Conclusion #3

The treatments don’t always work, but symptoms never lie!

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Startup Weekend Ghent: Bruno Lowagie11

Epilogue

You don’t always get what you want,But if you try sometimes

you get what you need…

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Part 2

The Founder’s Dilemmas

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Startup Weekend Ghent: Bruno Lowagie13

Why this book?

IT’S UNFORTUNATE BUT TRUE: IF ENTREPRENEURSHIP IS A BATTLE, most casualties stem from friendly fire or self-inflicted wounds.

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Startup Weekend Ghent: Bruno Lowagie14

Making decisionsCofounders (Chapter 3-7)

Solo vs. TeamRelationshipsRolesRewards

Hires (Chapter 8)RelationshipsRolesRewards

Investors (Chapter 9)Self-fund vs. Outside capitalSources of capitalTermsBoard of Directors

Successors (Chapter 10)Trigger of successionOpenness to successionDesired role after succession

Other factorsPreferred rate of startupCapital intensityCore founder’s capitals

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Startup Weekend Ghent: Bruno Lowagie15

Pick your Quadrant

Complete control

< $$$

Little control

> $$$

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Startup Weekend Ghent: Bruno Lowagie16

Control decisionsCofounders (Chapter 3-7)

Solo (or weak cofounders)Relationships: immediate circleRoles: be the CEORewards: maintain most equity

Hires (Chapter 8)Relationships: close personal networkRoles: keep control of key decisionsRewards: hire less expensive juniors

Investors (Chapter 9)Self-fund: “bootstrap”Friends, fools, familyResist investor-friendly termsAvoid official board

Successors (Chapter 10)Avoid succession until forcedResist giving up CEO positionPrefer to leave

Other factorsGradual to moderate growthLow capital intensityCan build startup without help

Most likely outcome:• Maintain control• Build less value

“KING”

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Startup Weekend Ghent: Bruno Lowagie17

The “King” Quadrant

Complete control

< $$$

Little control

> $$$

KING

© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Startup Weekend Ghent: Bruno Lowagie18

Control decisionsCofounders (Chapter 3-7)

Build teamRelationships: find the best foundersRoles: delegate decision-makingRewards: share equity

Hires (Chapter 8)Relationships: hire experienced staffRoles: delegate decision-makingRewards: incent with cash or equity

Investors (Chapter 9)Take outside capitalTarget angels or VCsBe open to termsBe open to losing control

Successors (Chapter 10)Initiate succession “in time”Be open to giving up CEO positionRemain executive (expertise)

Other factorsFast to explosive growthHigh capital intensityFill gaps by involving others

Most likely outcome:• Imperil control• Build financial value

“RICH”

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Startup Weekend Ghent: Bruno Lowagie19

The “Rich” Quadrant

Complete control

< $$$

Little control

> $$$

KING

RICH

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Startup Weekend Ghent: Bruno Lowagie20

Chances at successIf you go for being King

Maintain control: 80% x 80% x 80% = 51% probabilityBuild fullest value: 20% x 20% x 20% = 1% probability

If you go for being RichMaintain control: 20% x 20% x 20% = 1% probabilityBuild fullest value: 80% x 80% x 80% = 51% probability

If you go for something in-betweenMaintain control: 80% x 80% x 20% = 13% probabilityBuild fullest value: 20% x 20% x 80% = 3% probability

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Startup Weekend Ghent: Bruno Lowagie21

The “Exception” Quadrant

Complete control

< $$$

Little control

> $$$

KING

RICH

EXCEPTION

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22

The “Failure” Quadrant

Startup Weekend Ghent: Bruno Lowagie

Complete control

< $$$

Little control

> $$$

KING

RICH

EXCEPTION

FAILURE

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Startup Weekend Ghent: Bruno Lowagie23

Try for yourself!

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Part 3

One more thing

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Startup Weekend Ghent: Bruno Lowagie25

The pie seen from your side

$1,000,000,000

YOU INVESTORS

$1,000,000

YOUINVESTORS

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Startup Weekend Ghent: Bruno Lowagie26

The pie seen from a VCs side$1,000,000,000

YOU INVESTORS

$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS

$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS$10,000,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

$1,000

YOU INVESTORS

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Startup Weekend Ghent: Bruno Lowagie27

Think before you decideDo you really need a VC?

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Startup Weekend Ghent: Bruno Lowagie28

Closing thought

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Questions?