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Entries Tagged 'Startup Lessons' ↓

Should entrepreneurs raise a seed round?

A lot has been written about seed funding. How much should you raise, from what type of investors, under what terms and conditions?

I believe the first question an entrepreneur should ask himself or herself is whether they should raise a seed round at all.

Unless you’re building semiconductors or hardcore hardware, it is no secret that the cost of starting a company and achieving market validation, the ultimate value creation milestone for startups, is trending to zero for engineer founders that can moonlight or survive three to six months with no or limited income. Dave McClure’s “Moneyball for Startups does a great job explaining this. An incorporation and simple shareholder’s agreement will cost a couple hundred bucks if you do it online and use some of he free templates. The open source software stack and its numerous development frameworks like ruby on rails are free and have sped up development cycles to the point where a common mortal can build a brand new application and release it into the wild in months. In fact, a team of two should be able to build the first version of its product or service between one to three months, depending on the complexity. Accelerators like Y Combinator, Techstars, Seedcamp and Launchbox Digital have proven this assumption over the past few years. On the hardware side, cloud services like Amazon Web Services allow startups to scale their computing, bandwidth and storage costs as their business grows, limiting the initial costs to less than $100 per month. With a first product in hand and a scale-as-you-go infrastructure, a team can then deploy and test customer fit and market adoption assumptions for free (except for a few hundred $$ Adwords) on multiple platforms and channels including Social (Facebook, Twitter, Youtube, Gmail), Search (Google, Bing), Mobile (iPhone, iPod, Andoid, Blackberry, etc.), each with audiences of hundreds of millions or more and the emerging Business Marketplaces such as Google Apps and Salesforce’s AppExchange, to name a few. Continue reading →

Startup Lessons: The bike accident

The Accident

On Friday, September 10, 2010, I biked to work, like I try to do 1-3 times per week. It was a beautiful sunny day with barometer over 20 degrees Celsius. I got on my bike at around 5PM to head to Suite 701 Lounge, the trendy bar and restaurant of Hotel Places d’Armes, one of Montreal’s finest boutique Hotel located in Old Montreal, to attend my good friend and partner Mark MacLeod’s 40th birthday party. It was rush hour and the city was buzzing with activity: people on the streets getting out of work and ready to start the weekend, traffic, bixis, the works. I work downtown which is directly at the base of the Mount Royal and at a higher elevation to Old Montreal. As I was coming down Beaver Hall, a small street that feeds into Square Victoria where The Montreal Stock Exchange, the Hotel W, and the CDP headquarters are located, I started to pick up speed to reach about 35KM/h. About half way through the hill I hit the breaks to prepare to stop at the red light about 50 meters below. To my surprise, although I stopped picking up speed, I wasn’t slowing down. I was on the right side of the street, headed for trouble. My first reaction was to look back to see whether I could cross the street in an attempt to slow down. No car, so I made a tight left turn but still no breaks. I was now less than 25 meters from the red light, on the left side of the street with a car parked right in front of me about 10 meters away. I had two choices: go through the red light and hope for the best or jump off the bike and get hurt. Continue reading →