Naval Ravikant's talk at the 7th Founder Showcase. More at http://angel.co and http://venturehacks.com.

1. Anatomy of
a fundable startup
Naval Ravikant
Venture Hacks / AngelList
✌
angel.co

2. Anatomy of
an unfundable startup
Naval Ravikant
Venture Hacks / AngelList
✌
angel.co

6. Exceptional Fundings

7. Exceptional Outcomes
LinkedIn
Pandora
Facebook
You are here

8. The Age of Free Leverage

9. The Age of Free Leverage
• Capital, Labor, Machines

10. The Age of Free Leverage
• Capital, Labor, Machines
• Intellectual “Property” - Code, Books,
Movies, Music

11. The Age of Free Leverage
• Capital, Labor, Machines
• Intellectual “Property” - Code, Books,
Movies, Music
• IP Platforms (iOS, S3, LAMP, FB Connect)

12. The Age of Free Leverage
• Capital, Labor, Machines
• Intellectual “Property” - Code, Books,
Movies, Music
• IP Platforms (iOS, S3, LAMP, FB Connect)
• Labor Platforms - Mech Turk, Communities
(YouTube, Quora, Wikipedia)

13. The Age of Free Leverage
• Capital, Labor, Machines
• Intellectual “Property” - Code, Books,
Movies, Music
• IP Platforms (iOS, S3, LAMP, FB Connect)
• Labor Platforms - Mech Turk, Communities
(YouTube, Quora, Wikipedia)
• Capital Platforms (AngelList, KickStarter,
SecondMarket,YC, TechStars)

15. Traction

16. Traction
You

17. Traction
You
Product

18. Traction
You
Product
Social Proof

19. Traction
You
Product
Social Proof
Market

20. Traction
You
Product
Social Proof
Market
High Concept Pitch

21. Traction
You
Product
Social Proof
Market
High Concept Pitch
Elevator Pitch

22. Traction
You
Product
Social Proof
Market
High Concept Pitch
Elevator Pitch
Presentation

23. A Note on Location

24. A Note on Location
• Silicon Valley, New York

25. A Note on Location
• Silicon Valley, New York
• Seattle, Austin, LA, Boston, Chicago, London

26. A Note on Location
• Silicon Valley, New York
• Seattle, Austin, LA, Boston, Chicago, London
• Estonia, Chile, India, Croatia, Poland

27. A Note on Location
• Silicon Valley, New York
• Seattle, Austin, LA, Boston, Chicago, London
• Estonia, Chile, India, Croatia, Poland
• Capital is mobile, but capitalists are lazy

28. A Note on Location
• Silicon Valley, New York
• Seattle, Austin, LA, Boston, Chicago, London
• Estonia, Chile, India, Croatia, Poland
• Capital is mobile, but capitalists are lazy
• Funding markets develop backwards

29. Markets and
Approaches

30. Markets and
Approaches
• Services, multiple products

31. Markets and
Approaches
• Services, multiple products
• Small Markets (obviously)

32. Markets and
Approaches
• Services, multiple products
• Small Markets (obviously)
• Desktop software / Dead Platforms

33. Markets and
Approaches
• Services, multiple products
• Small Markets (obviously)
• Desktop software / Dead Platforms
• Conquered Markets with Network Effects

34. Markets and
Approaches
• Services, multiple products
• Small Markets (obviously)
• Desktop software / Dead Platforms
• Conquered Markets with Network Effects
• High atom content

35. Markets and
Approaches
• Services, multiple products
• Small Markets (obviously)
• Desktop software / Dead Platforms
• Conquered Markets with Network Effects
• High atom content
• Not too large, not too small

36. Team?

37. Team?
• “Functional visionary and project manager”

38. Team?
• “Functional visionary and project manager”
• “I have no ego. Currently my role is visionary / strategist”

39. Team?
• “Functional visionary and project manager”
• “I have no ego. Currently my role is visionary / strategist”
• Outsourced development, business-heavy

40. Team?
• “Functional visionary and project manager”
• “I have no ego. Currently my role is visionary / strategist”
• Outsourced development, business-heavy
• Sole founder

41. Team?
• “Functional visionary and project manager”
• “I have no ego. Currently my role is visionary / strategist”
• Outsourced development, business-heavy
• Sole founder
• Part-timers

42. Team?
• “Functional visionary and project manager”
• “I have no ego. Currently my role is visionary / strategist”
• Outsourced development, business-heavy
• Sole founder
• Part-timers
• “High Tech Sales Exec who loves his family and loves to run”

43. Team?
• “Functional visionary and project manager”
• “I have no ego. Currently my role is visionary / strategist”
• Outsourced development, business-heavy
• Sole founder
• Part-timers
• “High Tech Sales Exec who loves his family and loves to run”
• 12 years experience in...

44. Exceptional Team

45. Exceptional Team

46. Exceptional Team

47. Exceptional Team

48. Team Guidelines

49. Team Guidelines
• No adjectives / opinions of yourself

50. Team Guidelines
• No adjectives / opinions of yourself
• Show, not tell

51. Team Guidelines
• No adjectives / opinions of yourself
• Show, not tell
• Quantitative and precise, not qualitative and
vague

52. Team Guidelines
• No adjectives / opinions of yourself
• Show, not tell
• Quantitative and precise, not qualitative and
vague
• Branded or measurable output

53. Team Guidelines
• No adjectives / opinions of yourself
• Show, not tell
• Quantitative and precise, not qualitative and
vague
• Branded or measurable output
• Recruit only the best. And if you can’t,
you’re not ready

54. Product?

55. Product?
• “We will disclose more under NDA”

56. Product?
• “We will disclose more under NDA”
• “I am raising money to build the product”

57. Product?
• “We will disclose more under NDA”
• “I am raising money to build the product”
• “Launching next month”

58. Product?
• “We will disclose more under NDA”
• “I am raising money to build the product”
• “Launching next month”
• “Sign up for the beta here...”

59. Product?
• “We will disclose more under NDA”
• “I am raising money to build the product”
• “Launching next month”
• “Sign up for the beta here...”
• “Building second version now”

60. Exceptional Product

61. Exceptional Product

62. Product Guidelines

63. Product Guidelines
• No promises / vision

64. Product Guidelines
• No promises / vision
• Show, not tell

65. Product Guidelines
• No promises / vision
• Show, not tell
• Quantitative and precise, not qualitative and
vague

66. Product Guidelines
• No promises / vision
• Show, not tell
• Quantitative and precise, not qualitative and
vague
• Something hard with specific knowledge

67. Product Guidelines
• No promises / vision
• Show, not tell
• Quantitative and precise, not qualitative and
vague
• Something hard with specific knowledge
• Expect competition

68. Product Guidelines
• No promises / vision
• Show, not tell
• Quantitative and precise, not qualitative and
vague
• Something hard with specific knowledge
• Expect competition
• Build only the best. And if you can’t, you’re
not ready

69. Traction

70. Traction
• Markets are efficient - individuals cannot
predict traction

71. Traction
• Markets are efficient - individuals cannot
predict traction
• Amount varies by product

72. Traction
• Markets are efficient - individuals cannot
predict traction
• Amount varies by product
• Incremental not cumulative

73. Traction
• Markets are efficient - individuals cannot
predict traction
• Amount varies by product
• Incremental not cumulative
• Know your microeconomics

74. Traction
• Markets are efficient - individuals cannot
predict traction
• Amount varies by product
• Incremental not cumulative
• Know your microeconomics
• If you can’t generate traction, do you really
want to raise money?

75. Traction
• Markets are efficient - individuals cannot
predict traction
• Amount varies by product
• Incremental not cumulative
• Know your microeconomics
• If you can’t generate traction, do you really
want to raise money?
• How much is enough? 10% per month?
20%?

76. Social Proof

77. Social Proof
• “Get referred to us by someone we know”

78. Social Proof
• “Get referred to us by someone we know”
• Entrepreneurs and committed investors
best

79. Social Proof
• “Get referred to us by someone we know”
• Entrepreneurs and committed investors
best
• Herd mentality is rational

80. Social Proof
• “Get referred to us by someone we know”
• Entrepreneurs and committed investors
best
• Herd mentality is rational
• Why? What did they like that you can’t
show in the other metrics?

81. Real Hacks

82. Real Hacks
• Advisory Round (Notable Founder,
Operator)

83. Real Hacks
• Advisory Round (Notable Founder,
Operator)
• Cast a Broad Net, move simultaneously

84. Real Hacks
• Advisory Round (Notable Founder,
Operator)
• Cast a Broad Net, move simultaneously
• Easier to pitch a new investor than to
convert one

85. Real Hacks
• Advisory Round (Notable Founder,
Operator)
• Cast a Broad Net, move simultaneously
• Easier to pitch a new investor than to
convert one
• Equity, not notes

86. Real Hacks
• Advisory Round (Notable Founder,
Operator)
• Cast a Broad Net, move simultaneously
• Easier to pitch a new investor than to
convert one
• Equity, not notes
• Sell an option

87. Real Hacks
• Advisory Round (Notable Founder,
Operator)
• Cast a Broad Net, move simultaneously
• Easier to pitch a new investor than to
convert one
• Equity, not notes
• Sell an option
• But if you’re having a hard time, re-start,
not push

88. In Summary

89. In Summary
• Get to a funding hub

90. In Summary
• Get to a funding hub
• Recruit an exceptional team.

91. In Summary
• Get to a funding hub
• Recruit an exceptional team.
• Build something that you are passionate
and knowledgeable about

92. In Summary
• Get to a funding hub
• Recruit an exceptional team.
• Build something that you are passionate
and knowledgeable about
• Test it against customers

93. In Summary
• Get to a funding hub
• Recruit an exceptional team.
• Build something that you are passionate
and knowledgeable about
• Test it against customers
• Get social and customer validation

94. In Summary
• Get to a funding hub
• Recruit an exceptional team.
• Build something that you are passionate
and knowledgeable about
• Test it against customers
• Get social and customer validation
• Raise on at least one exceptional
characteristic

95. In Summary
• Get to a funding hub
• Recruit an exceptional team.
• Build something that you are passionate
and knowledgeable about
• Test it against customers
• Get social and customer validation
• Raise on at least one exceptional
characteristic
• PS - Assume fierce competition