Startup Weekend Ghent

Startup Weekend Ghent
iMinds December 5-7, 2014
© 2014, iText Group NV, iText Software Corp., iText Software BVBA

Who is Bruno Lowagie?
Original developer of iText®, an open source PDF library
Author of “iText in Action” books published by Manning Publications
Founder / CEO of the iText Group
iText Group NV (Belgium)
iText Software BVBA (Belgium)
iText Software Corp (USA)
Awards
BelCham Entrepreneurship Awards
 2014: Winner “Most Promising Company of the Year”
Deloitte’s Technology Fast 50
 2013: 3rd in Belgium, 10th in Benelux, 53rd in EMEA
 2014: Winner (Belgium)
Startup 2 Weekend Ghent: Bruno Lowagie

Part 1
Three Things watching House MD taught me about doing business

Fact #1
There are as many diagnoses
as there are specialists.
The developers say:
“Your product needs more features!”
The salespeople say:
“Your product needs to be less technical!”
The VCs say:
“You need more funding to grow faster!”

Conclusion #1
Do not follow any advice, before
you know the background and
motives of your adviser!

Fact #2

The Four Innovation Lies
Lie #1: Target customer: “Of course I’ll buy that!”
Lie #2: Product developer: “We’ll be ready to ship in six months!”
Lie #3: Salesperson: “Of course I can sell that!”
Lie #4: Senior executives: “We’re open to anything!”

Conclusion #2
Don’t be angry with people who
lie, just make sure you don’t lie
to yourself!

Fact #3
Tests take time, treatment is quicker.
We treat it:
If he gets better, I’m right;
if he dies, you’re right!

Conclusion #3
The treatments don’t always
work, but symptoms never lie!

Epilogue
You don’t always get what you want,
But if you try sometimes
you get what you need…

Part 2
The Founder’s Dilemmas

Why this book?
IT’S UNFORTUNATE BUT TRUE:
IF ENTREPRENEURSHIP IS A
BATTLE, most casualties
stem from friendly fire or
self-inflicted wounds.

Making decisions
Cofounders (Chapter 3-7)
Solo vs. Team
Relationships
Roles
Rewards
Hires (Chapter 8)
Relationships
Roles
Rewards
Investors (Chapter 9)
Self-fund vs. Outside capital
Sources of capital
Terms
Board of Directors
Successors (Chapter 10)
Trigger of succession
Openness to succession
Desired role after succession
Other factors
Preferred rate of startup
Capital intensity
Core founder’s capitals

Pick your Quadrant
Complete control
< $$$
Little control
> $$$

Control decisions
Solo (or weak cofounders)
Relationships: immediate circle
Roles: be the CEO
Rewards: maintain most equity
Hires (Chapter 8)
Relationships: close personal network
Roles: keep control of key decisions
Rewards: hire less expensive juniors
Self-fund: “bootstrap”
Friends, fools, family
Resist investor-friendly terms
Avoid official board
Avoid succession until forced
Resist giving up CEO position
Prefer to leave
Other factors
Gradual to moderate growth
Low capital intensity
Can build startup without help
Most likely outcome:
• Maintain control
• Build less value
“KING”

The “King” Quadrant
Complete control
< $$$
Little control
> $$$
KING

Control decisions
Build team
Relationships: find the best founders
Roles: delegate decision-making
Rewards: share equity
Hires (Chapter 8)
Relationships: hire experienced staff
Roles: delegate decision-making
Rewards: incent with cash or equity
Take outside capital
Target angels or VCs
Be open to terms
Be open to losing control
Initiate succession “in time”
Be open to giving up CEO position
Remain executive (expertise)
Other factors
Fast to explosive growth
High capital intensity
Fill gaps by involving others
Most likely outcome:
• Imperil control
• Build financial value
“RICH”

The “Rich” Quadrant
Complete control
< $$$
Little control
> $$$
KING
RICH

Chances at success
If you go for being King
Maintain control: 80% x 80% x 80% = 51% probability
Build fullest value: 20% x 20% x 20% = 1% probability
If you go for being Rich
If you go for something in-between

The “Exception” Quadrant
Complete control
EXCEPTION
< $$$
Little control
> $$$
KING
RICH

The “Failure” Quadrant
Complete control
EXCEPTION
< $$$
Little control
> $$$
KING
RICH
FAILURE

Try for yourself!

Part 3
One more thing

The pie seen from your side
$1,000,000,000
YOU INVESTORS
$1,000,000
YOU INVESTORS

The pie seen from a VCs side
$1,000,000,000
YOU INVESTORS
$10,000,000
YOU INVESTORS
$10,000,000
YOU INVESTORS
$10,000,000
YOU INVESTORS
$10,000,000
YOU INVESTORS
$10,000,000
YOU INVESTORS
$10,000,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS
$1,000
YOU INVESTORS

Think before you decide
Do you really need a VC?

Closing thought

Questions?

Startup Weekend Ghent

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