Strategies for Startup Success

Strategies for Startup SuccessSim Simeonov

Polaris Venture Partners

[email protected]://simeons.wordpress.com

The wiser speakers refused to talk on this subject

The same strategies that have the highest probability of

extreme success also have the highest probability of extreme

failure--Guy Kawasaki

http://simeons.wordpress.com/2007/02/21/guy-kawasaki-why-good-strategies-fail/

How much risk did PayPal take on?

Livingston, Jessica. Founders At Work. p6 (interview with Max Levchin)

Poor analysis of the wrong data in a mythological context

• Limited or inaccurate data• Correlation vs. causation• Omitted variable bias• Sensationalism

Most of the industry’s effort is spent analyzing successes

Revisionist history due to egocentric ex post facto

analysis

Why Did YouTube Succeed?

http://www.youtube.com/watch?v=nssfmTo7SZg (talk by YouTube co-founder Jawed Karim)

Success is often the result ofavoiding failure by will or luck

Why Do Startups Succeed and Fail?

Sim SimeonovPolaris Venture Partners

[email protected]://simeons.wordpress.com

The more thoughtful speakers refused to talk on this subject

What do “success” and “failure” mean?

Company “A” raises $100+M of institutional capital and goes

public at $2.4B valuation

Company “F” raises $2M and sells for $20M

Company “M” raises 500K and shuts down six months later

• Innovation?• Market share?• Revenues?• Impact?

• Employees?• Execs?• Founders?• Angel investors?• Institutional investors?

Efficient experimentation is critical to any evolutionary

system

Success and failure are notuseful analysis targets

The Startup Environment

Sim SimeonovPolaris Venture Partners

[email protected]://simeons.wordpress.com

Emily is a helluva persuader

• Experienced investors• National focus• $3B under management• Diversified across stage & sectors• Active partner with entrepreneurs• Great track record

The technology industry has changed substantially in the

past few years

Technology

$1,000M $1,000M

$100M$100M

$10M$40M

The leaderThe #3 player

Winners used to be selected by the market. Now they are

anointed through M&A

How successful would Flickr have been without Yahoo?

Sustainable differentiation and solid execution

• Superior execution• Cut the right deal(s)• Network effects

Protectable technology enables a defensible business model

It is the best of times, it is the worst of times

Sim SimeonovPolaris Venture Partners

[email protected]://simeons.wordpress.com