Category Archives: Entrepreneurship

What I learned from NYU Stern EEX Annual Entrepreneurs’ Summit 2012

You know you’ve been to a good conference when you leave with a giant headache, because too many neurons have been firing off in your brain. Listed below is the speakers and I’m going to write down some thoughts I learned from each speaker or panel. Before I start, I want to talk about what I absolutely HATE: <rant> people who say “Thanks for coming and speaking to us….” – Speakers are partially doing it out of the kindness of their own hearts but more likely they are doing it for media coverage, exposure, and what successful person doesn’t like talking about their own success? If 10 people spent 3-5 seconds with some lame introduction like that, that takes away 30-50 seconds for someone else who actually has a good question instead. </rant>

  • Opening Keynote by Dan Porter (OMGPOP) and Erick Schonfeld (formerly of TechCrunch)
  • Panel – Startup from your MBA Dorm Room; featuring David Teten (ff Venture, HBS Angels), Neil Blumenthal (Warby Parker), Alexa von Tobel (LearnVest), Kevin Nazemi (Done)
  • Panel – Accelerate Your Startup; featuring David Tisch (TechStars) and Jason Baptiste (OnSwipe) and Laurie Segall (CNNMoney)
  • Closing Keynote Speech by John Maloney (Tumblr)
Dan Porter (OMGPOP): 
Dan’s talk was interesting because the online gaming industry has a lot of similarities with other tech startups:
  • Having the resilience to endure multiple failures: I liked Dan because he acknowledges the tremendous power of luck. His company has been creating games for a long time and the gaming industry is much like the music industry, sometimes you have to just wait for a hit to come. Draw Something was actually a side project that made it big. He had 4 people working on it, including himself. He joked about a time when an investor asked what Dan’s “success plan” was when a game really makes it big and Dan had no answer. When Draw Something became huge, he started asking the same question to his team. Sometimes investors know what they are talking about. When OMGPOP wasn’t successful, it was still a fun place to work at.
  • Having the ability to scale when a product/service becomes popular: Apparently, one of the most significant metrics that got investors horny over Draw Something was when they noticed the metric that people played that game when they woke up in the morning. Kind of like how I check my gmail/linkedin/twitter when I first wake up. We have become attached to our smart phones.
  • Having the ability to create a broad appeal due to the low margins per customer: Dan talked about the broad appeal of Angry Birds, the birds aren’t cute enough to make it exclusively for children and the birds aren’t angry enough to make it exclusively for adults. It was also totally different than anything else out there. He spoke about Draw Something appealing to a segment of the population that doesn’t even play games. I never thought of it that way, usually you want to target a very specific market, but in the low-margin game, if you can convince people who normally wouldn’t even try the product/service you offer, then you’ve got gold.

On the Zynga acquisition:

  • In January, the financials weren’t looking to good for OMGPOP, Draw Something launched in February, OMGPOP acquired by Zynga in March.
  • The only person who had any mergers and acquisition experience on his team was someone in their early 20′s who worked for IBM. (Is this a hopeful sign for non-technical MBA grads?)
  • Mark Pincus was very aggressive in this acquisition, aggressive people don’t ask you for statistics, they already have it – they are ready to make the deal while the competition is still trying to acquire and analyze the data. Also take a look at who is showing up at the meetings, Zynga sent its top people and that definitely reflected their level of interest and seriousness. Speaking of Mark Pincus, I met him during Northwest Entrepreneur Network (NWEN)’s Entrepreneur University in 2008. It’s funny how small the entrepreneurship community is and how the same people keep showing up.
  • The CEO’s job is to harness the media frenzy and fury, the irrational and the rational, when your company does have a product/service that blows up.
  • Zynga was also buying OMGPOP’s ability to scale up, not just Draw Something.

Other interesting thoughts:

  • Each app is like a bookmark.
  • Mobile is where the growth is (This was general consensus amongst all speakers).
  • For games specifically (could apply to other businesses), build something on established behaviors. For example, Draw Something is like Pictionary, but it isn’t. However, people intuitively know how to play it.
  • For non-technical founders, the right approach isn’t to have “some guy” build an app or website for you. They need to be part of the team and part of the business. This provides an interesting parallel to the military. When I was in the Army, I noticed that the best units had the whole staff working as one: S1, S2, S3, S4, S6, Battalion XO, everybody. The Army is also great in rotating people from staff to command positions, which really fosters the camaraderie between line and staff officers. Apparently, this wasn’t always the case in the U.S. military, as I’m reading the second book in Edmund Morris’s trilogy about Theodore Roosevelt (a follow-on post on the good Colonel later).
  • Over-communicate with investors.
Startup from your MBA Dorm Room; featuring David Teten (ff Venture, HBS Angels), Neil Blumenthal (Warby Parker), Alexa von Tobel (LearnVest), Kevin Nazemi (Done):
Having David there was a blessing as he balanced out the overly-optimistic energy that was pervasive throughout the whole summit. I’m leading off with this point because I was just thinking about my upcoming CFA exam and one of the topics is about hedge funds survivorship bias. The hedge funds that report returns are the ones that are successful and still alive. Same thing with entrepreneurs, all the people you hear speaking at conferences are the winners, the people who have succeeded. You don’t get to hear about people who haven’t made it. Take Dan Porter for instance, he was rejected from a speaking engagement at the Game Developer’s Conference – before Draw Something made it big. If Draw Something never made it big, we would have never heard of Dan Porter. If Mayor Bloomberg never started Bloomberg, he would just be another finance guy with a couple of million bucks.
Hedging your bets:
  • This was a huge topic as the audience was full of MBA students. The basic concept was that entrepreneurship is rife with failure, so you better have some backup plans, i.e. still get the summer internship and full time offer. All of the founders on the panel had a backup plan. In fact, one got so lucky as to receive $250,000 in funding when he called to turn down his full time offer and pay back his sign-on bonus.
  • Going all in may seem glamorous and brave, but be aware that the top jobs that you could get immediately after an MBA might not be available to you afterwards, i.e. banking and consulting. Each failure decreases the other options available to you.
  • Most people fail. It’s easy to think that YOU won’t fail, but that is probably a systemic misconception that most Americans have. Another parallel to the military, I always thought that I wouldn’t die. I had no good basis for that thought, I just felt that I’ve always been lucky in my life so I should just stay optimistic. I just read a great quote by Sebastian Junger about death: “…try to really understand that you’re not risking your life, you’re risking the sorrow, and even the sanity of everyone you love. Because when you get killed, you’re the only person that won’t have a problem. Everyone else will suffer just extraordinarily. It’s easy to be cavalier about one’s own life, but it’s a little harder to be cavalier about the well-being of everyone you care about. And that is really what you’re playing poker with, and it’s hard to know that.”

How to use business school:

  • Be a maker, not a taker (quote courtesy of David). There are already a lot of things programmed into an MBA, but all MBA students should truly leverage their school’s brand and their time at business school to test something or do something new and unique. Don’t be an attendee, organize something.
  • Business school isn’t a product to consume, it is a platform for you to consume other things.
  • Think beyond just current students and alumni, non-alumni will probably know your school too, professors, etc.

Vetting your idea:

  • Have every smart person you know destroy your idea. If you still come out of it thinking that your idea has a good chance of success, then it probably actually does or you are really delusional.
  • Have a solid business plan and strategy up front because cash runs out fast, and you can’t afford it to ponder new scenarios on the fly.
  • The bar to getting funding has raised (for tech startups) because everyone is expected to have at least a splash site and in some cases a paying customer already. It costs almost nothing to start a company.
  • If fundraising is hard, it might be you.
  • Investors are more objective about your baby than you. Random thought – my daughter is awesome
  • Find something that you really hate, and then fix it
Other thoughts:

 

Accelerate Your Startup; featuring David Tisch (TechStars) and Jason Baptiste (OnSwipe) and Laurie Segall (CNNMoney):

  • You need the right founder, the right team, the right market, and the right idea
  • Outsourcing tech doesn’t really work because it only means that anybody with the same idea as you but with a local team can just devastate you with faster changes
  • Mentioned the Mark Susterblog post, “Invest in Lines, not Dots”: In a nutshell, don’t ask strangers (VC/angel investors) out to dinner when you don’t even know them. Read their blog, post a few comments, follow them on twitter, and slowly develop a relationship first.
  • Techstars application is a dialogue, a process. A number of current Techstars companies are re-applicants.
  • Desirable CEO traits: capacity to build a team, capacity to sell (a product, a service, or a vision)
  • Broadly networking doesn’t really help, it is better to have a targeted approach and to, for the lack of a better word, stalk people online (their blogs, twitter, etc) – figure out how they think, connect and build rapport with thought leaders.
  • Great entrepreneurs flip the investor – entrepreneur relationship. Make investors call you, make investors request a meeting with you. That only happens when you’ve built a really great product
  • Don’t focus on features, don’t do a feature walkthrough

John Maloney (Tumblr):
By the time it came to John’s talk, most of the wisdom and knowledge has been repeated more than a few times already.  John’s story is similar to everyone else’s that I’ve heard so far – serial entrepreneur who had to work years to finally “make it big.” In many ways, the tech startup community resembles the entertainment industry. People slowly work their way up and when they make it, their peers generally seem supportive of them.