At the recent Startup Grind Global Conference hosted in Silicon Valley, over 3,000 founders and investors came to learn about entrepreneurship and general shifts in the space of startups and technology. From securing astronomical valuations, to self-service healthcare, and avoiding common blunders, the conference provided a mix of advice, commentary and unique, valuable insights.
Below were my top three highlights from the event.
Valuations are Bullshit
When Basecamp CEO Jason Fried had his talk about turning down multiple offers from investors, he discussed how the venture capital industry is one of the worst industries to be in or tied to, as most investments ultimately fail. Fried said that when it comes to choosing a partner for your business, it doesn’t make sense to take funds from people who have bad track records.
The CEO also referred to startup valuations as ‘bullshit,’ citing the $100 billion valuation Basecamp had a few years ago – the astronomical figure came from selling 0.000000001% of the company for $1.
The End of the Annual Physical?
In her talk titled Fueling a Healthcare Revolution Through Customer Empowerment, 23andMe CEO Anne Wojcicki spoke about empowering patients by providing them with access to their own detailed medical information, all the way down to genetic makeup. Although it’s already important for medical equipment design, the information also helps patients better understand the medical treatments they require.
Wojcicki pointed out that no one person knows everything about the human body, and that patients can’t rely on a single opinion regarding critical medical issues. Ultimately 23andMe is trying to strengthen the landscape for online, real-time and consumer-empowered healthcare. When a customer knows about their genetics, through their own discovery, they are able to avoid unnecessary visits, as well as particularly risky habits that land you in the doctor’s office in the first place.
Stop Trying to Blow Smoke, Build a Great Product
In his Startup Grind talk on entrepreneurship, Guy Kawasaki, former Chief Evangelist of Apple, discussed the top ten mistakes made by startup founders. The two most important lessons from the talk were, “There never has been a startup which has died because it couldn’t scale fast enough,” and that you shouldn’t assume an opportunity for wild success and significant attention by taking a measly 1% of a multi-billion-dollar market.
The first lesson comes from the fact that if you’re lucky enough to even gain traction, you should push to fund the growth required to handle that traction with the money and equipment you have on hand. While there are times where investment is justified, that only comes after the company pushes existing scalability to its limits with existing resources – both technical and operational.
When it comes to projections, many entrepreneurs are prone to concocting lofty figures. Aside from the fact that getting 1% of any large market is difficult, just saying that you’re going to get a sliver of sales doesn’t sound particularly exciting to shrewd investors. When it comes to building your business, you’re better off being a big fish in a small pond rather than a small fish in a big pond.
Charles Costa is a marketing specialist helping technology companies grow, one word at a time. You can learn more at CharlesCosta.net
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Sometimes we use automobiles or go on foot.
That was always one thing about Shark Tank that surprised me. Using these valuation numbers and then the Sharks basing their decision on them. They must know the numbers are pure garbage and they still put their money in?
I always thought valuation was supposed to be more than just a math problem. I never understood how someone could stand in front of me and tell me a simple startup was worth millions.