How To Evaluate A Startup?

Why?

It’s mostly depend on the angle you are coming to this good question. If you are the founder, valuation matters because it determines the share of the company you are going to give away (to investors) in exchange for money. If you are the investor, you want to make sure it’s the right deal in terms of risk/reward or give/get.

When you listen to experts in this domain, in most cases, the answer is something like: “It is a form of art rather than science”. But this is not very helpful, is it?

How?

Let’s break the puzzle into few pieces and see how can we think on each one of them. Here are few questions to help us identify what we are doing in each piece. We start with ‘What we  are going to solve’ (=problem) and with ‘How we are going to solve it’ (=solution). Later, we should see what is the potential (=market) and what are the risks (= direct/indirect competitors). We also need to show the team and why it’s capable to deliver.

Recommended Books

A mid year reflection on the books I’ve been lucky to read in the past 6-7 months. I usually try to blend one ‘learning’ book and one ‘story’ book. However, in most cases, it’s not an easy definition and these types are blending.

Smarter Faster Better – It’s a book that I took with me on a long flight (TLV-LAX) and it was good learning experience. At the core of this book there are eight key productivity concepts: from motivation and goal setting to focus and decision making. It try to explain why some people and companies get so much done. Drawing on the latest findings in neuroscience, psychology, and behavioral economics—as well as the experiences of CEOs, educational reformers, four-star generals, FBI agents, airplane pilots, and Broadway songwriters.

The Snowball: Warren Buffett and the Business of Life – This is one of the best books I’ve read in the past years. The snowball makes immensely clear why Buffett is so respectable. I liked the fact that Alice Schroeder (a great writer btw) paint a picture of a human, that like most lives, has been a mix of strengths and frailties. Yet notable though his wealth, Buffett’s legacy will not be his ranking on the scorecard of wealth; it will be his principles and ideas that have enriched people’s lives. There are many lessons in this book and I plan to go over it again. It’s a long one but full of great mini stories in it.

Year Of YES – This is a wonderful, funny and easy book by Shonda Rhimes. After reading it, I wasn’t surprised to learn that she is the extremely talented creator of Grey’s Anatomy and Scandal and of How to Get Away With Murder. It is a great story that show to power of positive attitude and how to be (even) more productive. I specially liked that description that she gave to her roll: “Laying the tracks to the railroad”. In her cases, it’s a lot of long-long rails.

 

The rest of the list is below. Have fun.

Happy reading.

Startups And Running

Last week, I had an interesting talk with a friend about the common set of skills you need in order to create a successful (big) project. In most cases, the planing phase is important but not the most challenging one. The execution is the real deal.

It’s the ability to push on when things are falling a part. As someone said: “Everybody has a plan until they get punched”. This is why grit is a critical aspect.

We later talked about another passion we shared: long distance running. It wasn’t too hard to see the similarity in characteristics of great entrepreneurs and runners.

From my experience, in both cases, it’s about the people that you meet in this clan and the willingness to help and support each other. In most cases, it’s not a direct competition, but rather a huge challenge to make it to the end. Where each individual define the ‘end’ differently.

Sure enough, someone already did a ted talk on this topic.

The Next Billions Users

This is a short one that is mainly compose from 3 images that tell the story of “The next billions users” and what we should focus on.

From which countries new users will come online?

If you wish to see more about this data. Check this Source.

What to focus on?

When you develop your fast and resilient web app, you should focus on 4 aspects:

How?

The client must be able to render the application regardless of their connectivity. If the user can’t load the app, nothing else is important. Offline is a normal mode of operation for resilient applications. You can do it today with the Service Worker API. It’s not only the offline feature, but the ability to control your users’ experience and improve it (e.g. push notifications).

More in Ilya’s #IO16 Talk and right here.