Entrepreneurship
- Distribution is key.
- The marginal cost for software is approaching zero. You need to find a moat that can be protected
in the age of AI.
- With the cost of software approaching zero, speed and execution is what matter most, along with
distribution and the business model.
- Speed is what really matters in greenfield projects to get the first mover advantage.
- Create FOMO
- Every investor interaction should be forward moving: “hey, I’m sharing this update, how’s the process on your side”, “we reached this great milestone, ready for a follow-up?”, “we faced this issue, want to brainstorm a fix?”.
- Never cold email investors, it doesn’t work. Try to get warm intros from more than one person. This maximises the probability of getting a meeting.
- If an investor haven’t said yes, they are a no! Keep bugging them until the actually reject you.
- Investors have an incentive to wait as much as possible to minimise their uncertainty and see what others will do. You need to create urgency on them.
- Investors are as afraid of investing in a losing horse, as of missing on a great opportunity. Frame yourself as the great opportunity.
- Understand the investment process for funds: there is an intro call, potential follow-up calls with other partners, investment committees, and due diligence. Be aware of the process and the overall timelines for that fund.
- Look at investors actions and not what they say. They will try to maximise their optionality by never rejecting you and keeping you on the wire as much as possible. That is why you need to fight for that clear no.
- Avoid investors who don’t lead. Once you close a lead, filing up the round is way easier.
- The key KPI/metric to consider on a B2B business and to understand its moat and performance is the rate
Deal Size / Deal Close Time. The bigger the deals and the less time it requires to close them, the better business it is. This metric is also useful to compare different businesses in the same industry.
- Use the smile curve to identify a market opportunity. The bulk of value extraction in the market is in the edges: either that who owns the infrastructure (Nvidia), or the one that owns the users (ChatGPT). The low part of the smiley curve is where the brutal competition happens and where the opportunities for value accrual is lower.
Interesting articles
Fundraising