Tech venture insight

Choice takeaways from VC Fred Wilson on tech and Internet ventures when he spoke at HBS from Seeing Both Sides.

• “Early on in a start-up, entrepreneurs should be hunch-driven more than data-driven.  If you are only data-driven, the risk is that you will move too slowly.  It’s more important to have a hypothesis about what might work and what might not work and then see what happens in the marketplace to prove or disprove that hypothesis.
• Lean start-up as a methodology or approach is very useful, but isn’t a guarantee for success by any stretch.  Think of the methodology as a machine.  If you have garbage inputs, you will still have garbage outputs.  There’s no substitute for good strategy, great entrepreneurs and a very large market opportunity.
• When considering when to monetize your new product/service, think carefully about whether the monetization strategy actually improves the service or is a distraction.  Banner ads on Facebook are a distraction (as Zuckerburg supposedly said in the movie Social Network, “No ads. Ads aren’t cool.”)  But, for example, on Etsy if someone pays for a product, it inspires producers to create more products.  Thus, the monetization is harmonious with building the service.
• If you are going to fail, and certainly with more start-ups being created and seeded we will see more failure, be sure to fail gracefully.  How you handle yourself as you unwind / seek a soft landing will reflect heavily on you and will cement your reputation.
• Don’t worry about whether you are building a feature, a product or a company.  Build something great, have huge passion for it, engender affection with a large customer base, and let the rest follow.
• If you get traction, transform your company into a platform.  The most valuable companies are those where third parties help you grow by plugging into your services like a utility.
• VCs don’t make companies successful.  They can believe in and support a company, but ultimately the entrepreneurs make or break the company’s success and don’t let anyone (particularly an egotistical VC!) imply otherwise.”

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