Deep Dive Day 4

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:

Corporate Members



What They Say About Us

"The wonderful thing about entrepreneurs is that their passion for starting new companies transcends languages and geographic boundaries."

Ron Conway, Founder and Managing Partner of the Angel Investors LP funds, early stage investor in Google and PayPal

"Networking is very important for start-ups. The challenge for them is often not money: it is mentoring and finding people who can give good advice from experience."

Esther Dyson, Founder, EDventure Holdings

"This conference is clearly a labor of love for a group of dedicated professionals who care deeply about the Eastern European entrepreneurs. From the value-packed educational panels, to the star-studded key note speakers' line up, to an amazing quantity of venture capitalists – this is a not to be missed event for any high tech entrepreneur,"

Richard Guha, President of the Marketing Executives Network and Managing Partner at MaxBrandEquity

"As Stanford MBA students, we were exposed to a lot of VC firms both from the Valley and abroad. It is at Stanford that we met Anna Dvornikova, an absolutely amazing business leader and (by our big luck) our friend, who was the center of the Russian Silicon Valley professional community, and was doing a huge work to connect Russia and the Valley. Anna helped us a lot with kick-starting Wikimart, put us to our first-ever conference, introduced us to most of Russian VCs. And all that happened in a very short time span! It was the beginning of a six-month journey that despite the particularly tough times resulted in an extraordinarily group of investors backing our start-up."

Maxim Faldin and Kamil Kurmakayev,
co-CEOs, Wikimart