April 21st, 2013
Stanford GSB Sloan Study Notes, Week 3 (33), Spring quarter
Head down in two inches of readings for this week and a fresh flow of first written project deadlines, like a two-degrees-deep analysis of your friends and advisors social graph or a set of regressions to be run on profitability data of a bank who has no clue if there is any connection between the demographics and profitability of their customers.
For a little different entertainment in the Sales Orgs class we are running a simulation game where you need to manage yourself through the pipeline as a sales rep of a medical devices company. Four virtual “years” in four weeks. After a miserable first year (I hit merely about a quarter of my quota – should have read the manual before I tried to just figure the game mechanics out for 2 “quarters”) I look forward to the Tuesday class from a much more comfortable position after “year” 2. I guess the hours spent as a teen with Civilization and the likes can sometimes pay off?
GSB hosted a fun networking event this week called “Fewer than 300″ – bringing people in from over 30 companies who are about to grow out of their startup phase (but are yet to break 300 employees), but have raised money and shown traction and still are just burning of enthusiasm about what they are doing. Think of the likes of Uber or Nest or Visual.ly. Good people and good conversations.
Covered in this issue:
- Analysing network centrality measures and deriving composite relationships from simple a matrix
- Using Bass diffusion models for new product adoption predictions
- Handling variability in processes (from job shops to continuous flow)
- Economics of selling SaaS subscriptions and merging sales teams after M&A
- More team-first entrepreneurial models
- History of Sloan Program at Stanford
- Data Science learnings from LinkedIn and other Greylock companies
- Guests: Vinod Khosla, Mark Leslie & part of Veritas exec team, Corey Leibow, Eric Botto, George Parker, DJ Patil
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March 8th, 2013
With the end-of-quarter groupwork frenzy I am behind on posting the academic lecture notes – hope to get to that this weekend. But meanwhile, as the flow of new thoughts from extracurricular guest visitors in just last seven days has been mind-blowing I’ll post them for your enjoyment.
See further for tips, startup plugs, book recommendations and videos from:
- Jonathan Abrams (founder of Friendster, Socializr, Nuzzel, Founders Den)
- Peter Halacsy, Peter Arvai (co-founders of Prezi, Hungary)
- Peter Vesterbacka (Mighty Eagle, Rovio)
- Andy Dunn (CEO and co-founder, Bonobos)
- Tim O’Reilly (O’Reilly Media, O’Reilly Alphatech Ventures)
- John Doerr (Kleiner Perkins Caufield & Buyers)
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February 17th, 2013
Stanford GSB Sloan Study Notes, Week 6 (26), Winter quarter
The picture reflects the exact view I have from where I’m sitting posting this. When you live in Northern Europe, “good snowy ski weather” usually means you have to give in on other things (such as clear skies and light). Not in Tahoe – and that’s why a mission of Sloans have landed here again for a long Presidents’ Day weekend.
But no play without hard work, right. There were quite a bit of extra-curricular activities on campus (I made it to several BBLs even!), some long-planned and inspiring 1:1 coffees with MBA colleagues, a few guests I would bucket in “personal heroes” category. And a fun roleplay of 8am termsheet negotiations, with lawyers at each table and all.
Covered in this issue:
- Differences in financing with debt vs equity – and some irrationalities caused by taxation
- Seed financing – how to survive until Series A
- Intricacies of convertible note structuring
- European startups: plasma drilling in Slovakia and why you should move to Berlin
- When and why founder CEOs get fired
- Introduction to Private Equity
- BBLs on Crowdfunding and Big Data
- More guests from: Geothermal Anywhere, Soundcloud, Intellicap, Twitter, Benchmark Capital, Hellman & Friedman, PubVest, LinkedIn
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February 2nd, 2013
Stanford GSB Sloan Study Notes, Week 4 (24), Winter quarter
The relative (& temporary, I’m sure) breather on reading volume this week left some much awaited time to deal with things out of the classroom: we’ve gotten over the home stretch in our core marketing course with some brand audits and presentations, on Tesla Model S. And it was even more fun to work with my MBA-mixed study groups for venture financing and business planning.
My highlight of the week was doubling the Estonian population on campus when Steve came to join our Sloan class for an evening lecture and smaller breakfast to discuss the most inspiring trends he sees as an investor (no separate notes – but see notes from the Science panel at the Intersection Event for a hint on his direction).
And I even got out of campus for a bit: to a fun chat between Eric Ries and Marc Andreessen at A16Z office on the Lean Startup movement and diversity issues in the valley. Highland Capital Partners threw a GSB mixer at the legendary Old Pro. I was also lucky to have two different insightful conversations with a physicist (one turned VC, the other a space entrepreneur, as it is customary here) in one week, on maximising impact. I am grateful for weeks like this.
Covered in this issue:
- State of Space Tourism in 2013
- Risk & Return – was it sensible for Airbus to build the A380?
- Structuring financing deals and more terms sheets
- Building an eCommerce firm in Russia
- Writing a business plan and pitching to VC partner meeting
- Advanced body language tips to presenters
- More guests & speakers from Virgin Galactic, XCOR Aerospace, Mohr Davidov Ventures, Wikimart, DeRemate, Wealthfront, Exploramed, Bare Escentuals…
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January 20th, 2013
Spent an inspiring day at The Intersection Event at Googleplex. Full agenda is here and my notes from the sessions below.
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January 19th, 2013
Stanford GSB Sloan Study Notes, Week 2 (22), Winter quarter
I think we’re getting back in the rhythm here. Continuous flow of external guest speakers and occasional valuation models to be built are bringing more variety to just swallowing hundreds of pages of cases. I did drop my across-the-street strategy class to get back to 19 units and thanks to that even made it to a few BBLs and a GSB High Tech Club company visit to Box. There is a long weekend coming up. Life is good.
Covered in this issue:
- Finance: NPV and IRR, including pitfalls
- Entrepreneurial finance: unit economics in business models and real options
- Angel & VC finance (and a E-Club BBL): life of an angel investor
- Negotiating Term Sheets, especially on valuation
- Marketing and Mastery of Communications: more stories, including analysing viral videos & TED talks
- Guests: Sand Hill Angels, Tory Burch, Pattie Sellers, James Buckhouse, Gil Penchina, Jeff Erickson
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January 12th, 2013
Stanford GSB Sloan Study Notes, Week 1 (21), Winter quarter
The pace of the new year has been just mindblowing, and not just compared to the Christmas break down time but to almost any of the school weeks from previous quarters. I guess this is what happens when you can almost fully customize your class schedule. And you want to get out of GSB to “across the street” schools for a bit. And you get accepted to this year’s LOWKeynotes speaker series, with dozens of hours scheduled for prep-work and coaching before the big stage. And…
I’m saying “almost in control,” because I have had close to no time to spend with family, sleep over 6 hours or socialize these last five days. And I do intend to do those things this quarter too. Exhausted, happy, but realizing this kickoff pace will not be quite sustainable as is. Let’s see what next week brings with its reading volume and booting up several project groups.
Covered in this issue:
- Finance basics: free cash flow, annuities, perpetuities & NPV calculations
- Business planning: financial business modelling, life time value of customers, Dropbox freemium example
- Venture Capital: industry history and sizing, how VCs think, how they move money and get paid
- Marketing: stories, stories, stories – creating and delivering them (videos)
- Strategy: Grabber-Holder model explaining disruptive tech innovation via ultimate nothingness from Taosim and Yin-Yang cycle
- Space entrepreneurship: an inspiring event on synthetic life with the Student Space Flight club
- Guest speakers throughout the week: Vinod Khosla, Nancy Duarte, Craig Hanson and John Cumbers
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January 8th, 2013
Several entrepreneurship-related classes at Stanford refer to a simple conceptual framework developed by Professor William A. Sahlman of Harvard for planning and evaluating new ventures. In short he proposed looking at People, Opportunity, Context and Deal of a venture and analysing how they Fit with each other in this particular combination at hand. You can read all about the model from his article, Thoughts on Business Plans (on Google Books) which in turn comes from an essay collection Sahlman edited in the 90s.
What inspired me in this material was a systematic use of simple, but carefully targeted questions. I decided to extract a condensed reference of them below – still mostly Sahlman with minor revisions, but I’ve added a few more, and would be happy to keep the list living if anyone proposes more useful questions from their arsenal in comments.
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January 5th, 2013
As the Sloan year has passed the equator, I’ve signed up for the following classes kicking off next week. It is going to be quite intense, 22 units in total and Mondays going from 8am to 9pm…
Core classes:
Yes, just two this time, leaving more precious time for electives.
Electives:
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December 31st, 2012
I picked up The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup by Noam Wasserman after he spoke about it in the ETL speaker series at Stanford back in November (see my study notes of that week here). With all the regular school reading in parallel it took me 2 months and 2 vacation trips to dig through the material, but coming out on the other side it is a highly recommended read for anyone in the tech startup scene. Doesn’t matter if you’re just contemplating bootstrapping your first company or want to take a step-back look at the impact your term sheet demands as an investor can have on entrepreneurs on the receiving end.
Basically, what Noam has done is to take a whole sequence of inevitable dilemmas every founder has no way of escaping while building their startup, gone back to about 3k companies and 10k people and surveyed the hell out of them to quantify both the triggers as well as the indirect results down the road after they have made their choices on these issues so often just considered a “gut feeling thing”. Should I found a company now? Should I do it alone, with friends or strangers? What happens to my likely CEO tenure time if I take external money? What kind of side effects can different outcomes of horse trading over boards seats practically have? What are the hidden costs (and benefits) of hiring youth over experience, and vice versa?
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