IDCEE 2014: Key Takeaways From A Serial Entrepreneur And Investor - Jose Marin (Co-founder & Co-ceo @ IG Expansion)
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http://idcee.org/p/jose-marin-ig-expansion/ Jose started his professional career as a consultant at The Boston Consulting Group. In 1999 he co-founded DeRemate.com (eBay model for Latin America). The company raised 75 M USD, did a partial cash-out sale to Terra and later merged with Mercado Libre that went Public in Nasdaq . Currently Jose is co-Founder and co-CEO of IG Expansion. IG takes successful internet business models into emerging markets (main focus Brazil). IG builds one project per year and will not build more than 6 (investing the first 3 to 5 M USD per project). 5 of the 6 are already operating being Viajanet (Expedia for Latam) its biggest success. Jose is also starting to look into project building in disruptive spaces in the US. Jose is also founder of Serendipity Investments, company that has invested in >100 start-ups globally. Before this, Jose invested in projects such as Bazee (auctions sold to eBay in 2005) and eDreams (European Travel site sold to TA Associates in 2006) obtaining top tier returns. Jose is a Mechanical and Electrical Engineer and holds an MBA and an MA in International development Economics from Stanford. Additionally, Jose is a marathon runner, and he is keen on extreme sports such as flying, skiing and skydiving. He also plays the piano since the age of 5. Pic's are here: http://www.flickr.com/photos/idcee/sets/ More @ http://idcee.org Follow us on: YouTube: http://www.youtube.com/user/OfficialIDCEEChannel Facebook: https://www.facebook.com/IDCEE Linkedin: http://www.linkedin.com/groups/IDCEE-3940138 Twitter: https://twitter.com/idcee_eu Google+: http://gplus.to/idcee Flickr: http://www.flickr.com/photos/idcee/collections/
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IDCEE 2014: Key Takeaways From A Serial Entrepreneur And Investor - Jose Marin (Co-founder & Co-ceo @ IG Expansion)
- 1. Key Takeaways from a Serial Entrepreneur and Investor José Marín
- 3. THE IDEA Confiden)al -‐ Kinnevik 2013 3
- 4. THE AND VISION ARE IMPORTANT. Confiden)al -‐ Kinnevik 2013 4
- 5. PURSUE AN IDEA FOR THE RIGHT REASONS: • FREEDOM • GLAMOUR AND FAME • BE YOUR OWN BOSS • MONEY Confiden)al -‐ Kinnevik 2013 5
- 6. DO IT BECAUSE: YOU CANNOT NOT DO IT! Confiden)al -‐ Kinnevik 2013 6
- 7. “GREAT COMPANIES ARE LED BY MISSIONARIES, NOT MERCENARIES” -John Doerr, KPCB
- 8. THE TEAM Confiden)al -‐ Kinnevik 2013 8
- 9. It’s a long journey to the top. Don’t do it by yourself. 9
- 10. Team Diversity Matters Confiden)al -‐ Kinnevik 2013 10
- 11. Biggest dilution happens before you even start Clear terms among founders is key. Vesting matters a LOT
- 12. Bad Developers cost more Confiden)al -‐ Kinnevik 2013 12 Bad Developers Good Developers Get Lousy Work Done Fire Bad Developers Hire Good Developers Get Work Done Right Get Work Done Right
- 13. BUILD A HIGH PERFORMANCE TEAM, NOT A FAMILY
- 14. LEAD BY EXAMPLE PEOPLE WORK FOR PEOPLE, NOT FOR COMPANIES
- 15. “CULTURE EATS STRATEGY FOR LUNCH” -PETER DRUCKER
- 16. MARKET Confiden)al -‐ Kinnevik 2013 16
- 17. Go after a large market and confront competition Confiden)al -‐ Kinnevik 2013 17
- 18. If… everybody is a potential customer you are probably WRONG! Confiden)al -‐ Kinnevik 2013 18
- 19. EXECUTION Confiden)al -‐ Kinnevik 2013 19
- 20. Maybe not $100, but Really Cheap Domain: Hosting: Infrastructure: E-Commerce Template: Test Marketing Campaign $12 $7 $0 $50 $200 $269 Confiden)al -‐ Kinnevik 2013 20
- 21. Starting a Startup is a LOT Easier Website Web Services Outsourcing ROI Marketing Infrastructure Payments Hosting Confiden)al -‐ Kinnevik 2013 21
- 23. USA vs LATAM
- 24. It’s not about Ideas. It’s about making Ideas happen. “1% INSPIRATION 99% PERSPIRATION” - Thomas Edison
- 25. Tenacity & > Confiden)al -‐ Kinnevik 2013 25 Passion
- 26. • Don’t Overthink • Iterate from Plan A to Plan that Works • Avoid Paralysis of Analysis Confiden)al -‐ Kinnevik 2013 26 Confiden)al -‐ Kinnevik 2013 26
- 27. Confiden)al -‐ Kinnevik 2013 27 Lean Startup Product / Market Fit & Tested UE Fat Startup
- 28. W O W Yo u r Cu s t ome r s Confiden)al -‐ Kinnevik 2013 28
- 29. Confiden)al -‐ Kinnevik 2013 29 Don’t launch until your core business is functional Don’t wait until you don’t feel embarrassed of the product
- 30. FUND RAISING
- 31. Investors play for your team Don’t take money from investors you don’t trust Investors should be your mentors Reach out often and for concrete help Make them happy by making a great business! Confiden)al -‐ Kinnevik 2013 31
- 32. Spend too much ≠ Raise too little Confiden)al -‐ Kinnevik 2013 32
- 33. THE BEST MOMENT FOR FUNDRAISING IS WHEN YOU DON’T NEED IT Confiden)al -‐ Kinnevik 2013 33
- 34. User Growth is Important But…Building a Profitable Company is ImportantER Confiden)al -‐ Kinnevik 2013 34
- 35. Set Realistic Expectations 35 140 120 100 80 60 40 20 0 > $100 million Exits 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Few Exits > $100M Most Exits < $30M Most Exits > 5 years
- 36. Series A Crunch Confiden)al -‐ Kinnevik 2013 36 Source: PitchBook As there are increasingly more companies funding Seed Rounds, there is a crunch at the Series A stage that threatens survival
- 37. MANAGING GROWTH Confiden)al -‐ Kinnevik 2013 37
- 38. VC-Backed Growth is faster Source: “Building Sustainable High-‐Growth Startup Companies” – A. Davila, G. Foster, N. Jia Confiden)al -‐ Kinnevik 2013 38
- 39. Growth can bring problems Confiden)al -‐ Kinnevik 2013 39 • Operational complexity • Dealing with increasing SKUs, new logistics requirements, etc, increase the complexity of running larger businesses efficiently • Personnel structure is rarely prepared for rapid growth before growth occurs (timing is key) • Overspend • Capex increases require new funding • Companies that raise more capital than is required have a tendency to overspend • Hiring is expensive (make every hire count) • Capital needs • Need to deviate attention away from operations into fundraising • More complicated rounds that might backfire the entrepreneur
- 40. Discipline makes you better prepared Businesses that adopt professional management systems earlier are more able to raise VC funds and grown into successful companies Source: “Building Sustainable High-‐Growth Startup Companies” – A. Davila, G. Foster, N. Jia Confiden)al -‐ Kinnevik 2013 40
- 41. The Power of Ecosystems Confiden)al -‐ Kinnevik 2013 41 There are 65 million companies in the World but only 200k create 60% of total Value Top 3% of entrepreneurs have an influence on 80% of the local ecosystem Source: Endeavor
- 42. The PayPal Mafia Confiden)al -‐ Kinnevik 2013 42 Total Valuations: Total Money Raised: Jobs Created: VC Money Raised: $67.5 Billion $813 Million +10,000 $2.5 Billion Source: Endeavor, Crunchbase
- 43. GENERAL ADVICE Confiden)al -‐ Kinnevik 2013 43
- 44. Remember, Relationships Are Really Important Confiden)al -‐ Kinnevik 2013 44
- 45. Success Confiden)al -‐ Kinnevik 2013 45 Success What people think it looks like What it really looks like
- 46. In the Right Place At the Right Time And Get Lucky Confiden)al -‐ Kinnevik 2013 46
- 47. FOCUS On What Really Matters 47
- 48. When you go All-In Put your heart in it Confiden)al -‐ Kinnevik 2013 48
- 49. JUST DO IT Confiden)al -‐ Kinnevik 2013 49
- 50. CEO’s LESSONS Confiden)al -‐ Kinnevik 2013 50
- 51. Jon Uriarte Ander Michelena Confiden)al -‐ Kinnevik 2013 51
- 52. Don’t do everything yourself – Delegate! Prioritization is very important Focus on one revenue stream and make it profitable before considering diversification Confiden)al -‐ Kinnevik 2013 52 Key Learning Leer mails Best Practices Act local and adapt to every market Use local payment methods to have higher penetration LATAM is much more than Brazil. Great opportunities in Mexico, Colombia, Argentina and Chile. Key Challenges Different cultures for every market Things move slowly in certain markets Red Tape: 6 months to create a company in Brazil Success Drivers Fast expansion – Actively seize opportunities Fast execution – Operating in 20 countries in 3 months with limited funds Right team – Know your limitations and hire talent for areas you are not an expert
- 53. Xenios Thrasyvoulou Confiden)al -‐ Kinnevik 2013 53
- 54. Hire slow, fire fast – No senior people needed early Hire hungry young talent at the beginning to reach product / market fit and then senior talent to scale Focus and define goals for every employee Have a long-term vision but don’t plan too far ahead Confiden)al -‐ Kinnevik 2013 54 Key Learning Leer mails Best Practices Iterate, iterate, iterate Talk to your customers often and do it authentically Set defined goals and attract the best people Key Challenges Understanding that the original business model might not be the best one. It’s hard to get to product / market fit Success Drivers Picking the right market Perseverance and resilience. You only fail once you stop trying Not being afraid to be wrong
- 55. Kevin Ryan Confiden)al -‐ Kinnevik 2013 55
- 56. Don’t do too many things at the same time! Amazon only sold books for 4 years before expanding Focus on things that matter the most. As the CEO you need to set the example Confiden)al -‐ Kinnevik 2013 56 Key Learning Leer mails Best Practices Hire the best team and more importantly, think about upgrading the team all the time. Just because business is doing well does not mean every executive is doing well too. Key Challenges Success Drivers Product, product, product. It is really hard to make a product stand out in the market and that solves the problem better than the alternatives. Having the best team. Building a great product is hard Keep the dynamism within the team and the company
- 57. Alec Oxenford Confiden)al -‐ Kinnevik 2013 57
- 58. Overestimated market growth at early stages. As a consequence over invested in Marketing Underestimated market growth once the ‘S’ curve ramped up. Confiden)al -‐ Kinnevik 2013 58 Key Learning Leer mails Best Practices Hire the best people. Ideally with a combination of local knowledge and global mindset. Build robust technology from day 1, otherwise you will pay more later. Common Pitfalls Entrepreneurs think too small and lack global experience. Don’t create a ‘hunger culture’ in the company. You need to transmit your enthusiasm and ambition. Success Drivers Focus on getting a AAA team on board. All successful company have amazing teams. Replicate a proven model to reduce overall risk of the venture Get relevant backers, investors and mentors early on.
- 59. Kamil Kurmakayev Confiden)al -‐ Kinnevik 2013 59
- 60. Cash determines survival and scale for ecommerce If you need cash early on, then fundraise aggressively Manage cash balance professionally and responsibly Having more cash in the bank will give you more time to figure things out. Confiden)al -‐ Kinnevik 2013 60 Key Learning Leer mails Best Practices Great people drive great operational success Make super stars form an ‘all-star’ team. Companies run on teams and not individualities. Hire for the next 12 months and not next 5 years People in Emerging Markets value cash more than stock options. Keep it simple. Key Challenges Success Drivers Bet on the long run and set ambitious objectives. Transmitted same mindset to key employees who had the same vision as founders. Build trust with early investors Investor relations is a full time job and it is really hard to manage that and operational duties at the same time. Bring together people from different big companies because the team becomes dysfunctional.
- 61. KEY TAKEAWAYS Confiden)al -‐ Kinnevik 2013 61
- 62. LESSONS LEARNT Get Informed Do it with Passion Stay Focused Confiden)al -‐ Kinnevik 2013 62
- 63. “Every morning in Africa, a gazelle wakes up. It knows it must outrun the fastest lion or it will be killed. Every morning a lion wakes up. It knows it most outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle. When the sun comes up, you better be running.” - African Proverb Confiden)al -‐ Kinnevik 2013 63
- 64. Thank you! José Marín jmarin@fjlabs.com