The visit to StartupHouse
Met with Elias Bizannes the founder of Startup Bus and StartupHouse.
He is originally from Australia but he was so fascinated by the market size of the U.S. compared to Australia that he moved to Silicon Valley.
Elias’ key advice for startups:
1. In a big corporate environment you are used to the world of perfection, the finished product needs to be perfect. And you learn analytical skills which are important but they are not useful in startups. Complementary thinking as opposed to analytical skills is what makes you successful in a startup. It’s building up on ideas until you come up with the idea that works.
2. In a Startup you are basically just searching for a business model.
3. You have to rephrase failure, I call it experimentation. You’re always failing but the art is to experiment and see the result of that. Ultimately what makes failure in startups is running out of money due to bad execution.
4. Saying most people fail in startups, is like saying life will end in death.
5. Being an entrepreneur means being able to acquire and manage money. Managing your working capital is very important. People get caught up in raising money but what is even more important is managing your capital.
6. In a Startup you have to do a lot so being able to prioritise is very important.
7. What are the traits in co-founders that make it work:
-When you are staring a business you need two people, someone that can build it and someone that can sell it.
– the chemistry. Test it with being able to go through intense stress.
– Have really good agreements in place. Common is 1 year cliff and 4 year vesting. Slicing pie is also really good, because it is dynamic.
8. The probability of success of a startup is much higher if you are in Silicon Valley. Because of the ecosystem. Within a mile of here there are 5000 startups. We have such a high concentration of startups that the rate of learning, failing, and learning again is so much higher. But you could also do a business from anywhere, and also from Australia. If you are in Australia have a presence here.
However, the people of San Fran are not loyal. They move around as soon as someone else raises more money. So they may be the best in the world but they are also a pain.
9. Never do a business plan for a startup. Silicon Valley hates business plans. What actually matters is building a product that is great, and then showing traction. The best kind of traction is engagement. Acquiring users is easy, showing return of users is important. That type of traction is money, and is a business plan.
10. Australians are a very bootstrap nation, which is very different to the way of thinking here in the U.S. But if you can afford it bootstrapping is the best thing you can do. But at the end of the day it’s all about managing your working capital!