Download - Startup Weekend Ghent
© 2014, iText Group NV, iText Software Corp., iText Software BVBA© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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!”
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
Startup Weekend Ghent: Bruno Lowagie8
Conclusion #2
Don’t be angry with people who lie, just make sure you don’t lie to yourself!
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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!
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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.
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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
< $$$
Little control
> $$$
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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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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
© 2014, iText Group NV, iText Software Corp., iText Software BVBA
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?