Bill Tai, Charles River Ventures
Twitter investment: keep going as Yuri wants to fund you =) reason:
- increasing connectedness - increases value of the product
- its winner-takes-it-all business )
- as you grow you get to the point when customer acquisition cost = ZERO
Consumer Internet is UI business
- basically - this is a web-interface, representing data in the cloud
- also - this is very similar to songs. Consumer internet is very similar to media business =)
- what makes song a hit ? ;)
- winners are not the best products - but the most engaging products!
- money will not buy a customer base for you if you don't have an engaging product!
Investments & Philosophy
- 50 investments as Charles River
- 15 investments individually
- 75% deals - loosing $$
- consumer internet: 300.000 new products launched every year. Not that many will find their consumer audiences
Tango case study:
- CTO - Bill met at kite =) CTO knew space pretty well
- cool technology as an enabler
- pre-money: $4-5Mio
- invested $300-500k individually, as the guy didn't know why he needs a million bucks ;)
- after releasing a product - 5.000 users registered. Projection: 5.000 more within next week. Reality: 2.500.000 within one month
TwitDeck investment:
- liked the song, played with UI
- called Twitter founders - guys were very skeptical
- thought about the idea of TwitDeck being like Outlook & SMTP -> made investment
Valuation for consumer internet - completely subjective thing:
- driven by supply & demand
- seed stage - standard terms from YC sort of an industry standard: $300k, $3Mio pre-money
- supply and demand - one company valuation increased $300k at $3Mio pre-money -> $800k at $8Mio pre-money in 4 days
The most important thing for consumer products: clarity of usecase!
- Product can have incredible functionality - but how do i use it?
- Very simple first -> can be more complex as the time goes on ;)
Betty Kayton - DropBox CFO
- CFO for small companies
- goal: build a company and (btw) - make money
- react-watch-measure
- fail quickly
- entrepreneurship: be flexible and focused! The journey is more important than the destination
startup finance - driven by KPI
- funnel & revenue KPI examples: visits (earnings per visit); active users (arpu);
- cost of goods sold (cost of user support, cost of running datacenters) - average cost per user; average support cost per paying user; etc
- cost of running your customer acquisition and conversion funnel: cost per visit, customer acquisition cost, etc
- cost of building the product - your R&D expenses
- cost of running business - legal, taxes, office and stuff
The presentation is here: http://www.tecglobal.org/blog/20101203_betty_kayton