On April 19th, Carl gave us a talk about starting out our own adventure, how to avoid the common pitfalls and survive in the wild market. The story starts out with a lego hero who is venturing into starting his own business (Carl, an amazing photographer that he already is, had taken tons of lego photos and used them in his slides which felt like a perfect story telling process. No wonder he ventured into the right business.)

This is the fact that Carl establishes early on in his talk: Believing in your vision (Big Hairy Audacious Goal, as he calls it) and having the right spirit and passion about what you want to do, as this is very important when you start something new. It’s definitely like starting to date someone. You need to have the same enthusiasm throughout; otherwise it’s sure to fall apart later. He quoted several examples of companies that survived by having a clear and better vision and also gave examples of companies that failed to do so.

He also told us to gather as many skills as we can (even a skill such as Excel will come in handy). People skills, business skills, accounting skills, managing talent are the most common skills that one might need. Quoting examples from his own experience, he further talked about setting up the actual business and maintaining it in the chronological order. Different kinds of programs like TechStars (http://www.techstars.org/) – Boulder and Boston, Y Combinator (http://ycombinator.com/) – Silicon Valley, Launchpad LA (http://www.launchpad.la) – Los Angeles, help start ups by mentoring and helping them to find the right kind of investors and giving them a ramp to get things rolling. Taking calculated risks and assessing the situation to make the right decisions at the right time is important. For this purpose, hiring a lawyer and making sure that you know it’s the lawyer who works for you, so you get to decide how to balance your risk becomes important in many instances.

After the business and the vision are set, you can then start to expand and market your company to get more funding. Carl gave us many tips for finding the right kind of investors and how to manage the options and the company at the same time. At this point, you have the company in the hands of the employees. By the end of the day, it’s the employees who work to make a successful product and it becomes obvious that you need to hire the right kind of people and respect them for the kind of work they do. Small things like talking to them while passing by help to remove the hierarchical barrier and create a healthy work environment. This reduces the pressure and increases productivity.

The last thing Carl told us was to always remember the BHAG – Big Hairy Audacious Goal that you start with when you started the company. After reaching the goal, you need to know what’s next. Planning ahead of time and being the foreseer of the company is what you need to be. It was precious 2 hours that I spent that day. Thanks Carl for giving us a great talk! You indeed inspired us all.

The Art of the Deal

Jason Mendelson

On April 8th, 2010, Jason Mendelson, Managing Director of the Foundry Group, came to visit the ETC SV campus and brought us an exciting talk. Jason’s job is to find new companies to invest in and help those companies succeed. Jason is also one of Carl’s past business partners.

At the beginning of the talk, Jason talked about his experiences working as a technology venture capitalist. We learned that his group invested in Zynga and Sifteo, which are companies we visited this semester. And they really enjoy investing in interesting technologies.

He also talked about how they filter the pitches since there are tons of requests each year. The first thing he would consider is the creativity of the technology. He had an interesting thought that making conversation with the pitch team is like dating a girl. He said if the second time you lose interest or the pitch is not as attractive as the first time, you should give it up. He also enjoys a quick pitch, which is something we ETCers do a lot in ETC. He also believes the management team is very important for a successful product.

We then talked about how to make sure an investment is correct and can return a profit for the investors. He suggested most of his ideas about this comes from his experiences of failure. “Because when you succeeded, you didn’t really know the reason, but when you failed, you got serious about what you did wrong,” said Jason.

Finally, in the Q&A session, we asked all kinds of questions about venture capital. One of them was how can we approach a VC for funding? Some important points are: A. be introduced to the VC by some friends; B. be good at your elevator pitch; and C. have realistic plans. These suggestions are really useful if we are planning on our own company.

In all, it was a great talk. Thanks Jason for giving us a valuable and significant insight in to the VC business.