Guy Kawasaki presents 'The Art of the Start' for Informatics Ventures

this production is brought to you by the University of Edinburgh we've got to school for startups one in Aberdeen on the 1st of June and and so that's the six rules of startup and one in Edinburgh on the 3rd of June and that's zero cost marketing for startups so M go to school for start-up still code at UK and just a quick reminder that we are being streamed live on the on the web and this is being captured for the universities their iTunes U site and so just just to warn you that you're being you're being recorded and okay so I'm not gonna do much of an introduction for a guy because you've read his blog you've read his tweets you've you've seen his website you you're you're here to see him and so I'm just gonna hand over to guy [Music] [Applause] that is a rather presumptuous introduction let me here let me explain Who I am in case you know you might not know who the hell I am my name is Guy Kawasaki I'm from Silicon Valley California and I'll tell a little bit about my background I work for Apple from 1983 to 1987 I was Apple software evangelist there any of you use Macs in this room yeah oh the usual five percent and the rest of you are oppressed right because nobody uses a Windows machine voluntarily I I work for Apple from 83 to 87 I was a software evangelist this is in the Mac division so I work for Steve Jobs that was a very interesting experience the Macintosh division was arguably the greatest collection of egomaniacs in the history of California and that's saying a lot goes a lot of ego maniacs in California although I think that record was subsequently broken recently by Google so Google now holds that record but until Google we held the record the Macintosh division was the hand-selected children of Steve Jobs basically because we work for Steve we had very special rules unlike any other part of Apple unlimited supplies of fresh orange juice at $2 the bottle we had a rule that any flight over two hours we could fly first-class my interpretation of the rule is that the two hours begins at the moment you leave your apartment so I flew first-class everywhere it was as I said a group of very arrogant people we're trying to change the world and I'll give you some of the negatives of this we back then Apple Computer was divided into product divisions there was the Apple 2 division which was making all the money and there was the Macintosh division which was spending all the money and so if you looked at the Apple P&L back then the P would be Apple 2 and the L would be Macintosh but the Macintosh division would not let Apple 2 division people into our building so if you can imagine working for a company or one part of the company was not allowed into another part of the company and to compound that problem you think about it the Apple to division was paying for the building that the Macintosh division built would not let them into so the Matt the app the Apple to division came up with a very good joke about the Macintosh division which is how many Macintosh division employees does it take to screw in a light bulb the answer is one the Macintosh division employee holds up the light bulb and expects the universe to revolve around him for those of you who are Windows users the Windows version of this joke is how many Microsoft employees is to take the screw in a light bulb and the answer to that is none because Bill Gates has declared darkness the new standard early in my career I watched many high tech CEO speak and I'll tell you I learned two things about them as speakers first of all they pretty much all suck and the second thing is they go long so that is a there's a very powerful ironic and unfortunate combination right so if you're good and you go long it's okay and if you suck and you go short it's okay but if you suck and you go long that's the worst possible combination that's like being stupid and arrogant at the same time and so I have adopted a top ten format for my speeches so that if you think I suck at least you can track progress through my speech so when I'm on number five you know I'm halfway done sucking I hope you don't think I suck but in case you do that's how you can track my progress I am going to talk to you today about the art of the start after Apple I started several software companies today I'm a venture capitalist and as well as an entrepreneur and so this speech reflects my previous book the art of the start as well as my current book reality check and I'll try to give you as much I have an hour I have an hour to 11 I'll give you as much as I can about starting up a tech company in one hour and I'll try to rip through it so that we can have Q&A right we try to do that so we'll have some Q&A and now admittedly I come from Silicon Valley this is the Silicon Valley perspective and that's not to say that that's the right one or the only one but this this is a perspective from Silicon Valley although I would make the case that if you can survive and build a company in Silicon Valley you can do it anywhere because arguably we have the most competitive market for capital and for attention and for employees than anywhere in the world so this will play anywhere so let's start so the first thing that I learned and I want to really hammer in the point to you is that great tech companies in my experience they start with the motivation of making meaning that is to change the world and if you look at the great tech companies they did much more than make money Apple Computer changed the world Google changed the world Cisco changed the world Yahoo changed the world all these companies change the world because I think their co-founders started off with the goal of making meaning of making the world a better place making people more creative or more productive which is very different now as a venture capitalist I'll tell you I meet with lots of entrepreneurs who say they want to make money and do we have any MBA students in this audience that's good okay so now the reason why the reason why you want to make meaning and you want other people who want to make meaning is that if you start your company to make money you will attract the wrong kind of employees you will attract MBAs and MBAs are the worst kind of employees for a tech startup and I have an MBA so I'm telling you this from firsthand experience so what you want to do is find people and be one of these people who want to change the world making people more creative more productive peace of mind those kinds of things that's the start of great innovation and great entrepreneurship I'm gonna read to you this is an ad and this is an ad for Nike women's aerobics shoes a woman is often measured by the thing she cannot control she is measured by the way her body curves or doesn't curve by where she is flat or straight around she was measured by 36-24-36 and inches and ages and numbers by all the outside things that they'll never add up to who she is on the inside and so for woman let her be measured by the thing she can control by who she is and who she is trying to become because as every woman knows measurements are only statistics and statistics lie so let's pretend that I'm the vice president of marketing for Nike and just okay you can be my prospective customer and I say to you you know do you have a hundred euros or a hundred pounds or a hundred dollars say yes for student so I tell you what so you have a hundred pounds euros dollars and I tell you what if you give me those hundred pounds euros or dollars I will give you two pieces of cotton leather and rubber manufactured under somewhat suspect conditions in the Far East yeah it's not quite the pitch that Nike uses right so my point here is that Nike has turned to pieces of cotton leather and rubber into something that stands for efficacy and power and liberation they are making meaning with two pieces of cotton leather and rubber you truly want to change the world you can make meaning and Nike can do it with cotton leather and rubber imagine what you should be able to do with the brain power that's in this room make meaning now I tell you it's been my observation that not only are the companies that make meaning and make the world a better place successful the method that they use the perspective is one of jumping curves not just duking it out or fighting it out on the same curve so there's a very good example from the 1800s ice 1.0 you want to make meaning you jump curves ice 1.0 in the 1900s early 1900 there was an ice harvesting industry in the United States in the year 1900 10 million pounds of harvested ice was shipped these people would go to frozen lakes and ponds obviously it has to be the winner obviously it has to be cold cut blocks of ice and sell them that was ice 1.0 ice 2.0 was the ice factory now it did not have to be winter and it could be any city you could freeze water in a fact and then the Iceman would drop off ice at your house big breakthrough no longer winter no longer cold ice 3.0 was the refrigerator curve now the Iceman didn't drop off ice at your house you had your own personal ice factory the first pcs if you all personal chillers the interesting historical fact is that none of the ice harvesters became ice factories and none of the ice factories became refrigerator companies because most people do not jump curves they stay on the curve they're wrong they define their business based on what they do not what they provide if I am an ice Harvester I define my business as during the winter going to a frozen lake in a pond with a horse and a saw cutting blocks of ice if I'm an ice factory I freeze water in a factory and then I have the Iceman deliver ice to people's homes if I'm a refrigerator company I build these little boxes that freeze water in people's homes most companies define their business by what they do not what they provide and that's why it's so difficult to jump curves and make meaning if you truly want to make meaning one very good test is are you jumping curves if you were a daisy wheel printer company is your idea of innovation more typefaces or is your idea of innovation let's get off the Daisy wheel curve and let's get to the laser printer curve jumping curves the second thing I'd like to suggest that you do as you start your companies and create your companies and products is that you make a mantra to describe why your product your company or your service should exist I don't know what the practice here in Scotland is but in America most companies create mission statements how many of you have a mission statement or is it because most of you haven't cut your students right so you don't have Mischa stairs all right so when you go to work for bozos which is you know a possibility you will see most companies have mission statements and most mission statements are way too long I'll tell you how we make mission statements in America it is a two-day off-site you take all the top 50 people in your company and you go to a hotel with a golf course it's a very high correlation between golf course and mission statement and it's two days you hire an outside meeting facilitator the reason why you hire an outside meeting facilitator an executive coach is that nobody on your team can communicate or lead because if you had someone on your team could communicator lead you wouldn't need this off-site to create the mission statement so the first day first day of this thing I hope you never have to go through this by the way the first day of this thing you have these team-building exercises you climb ropes together you hold each other's arms you fall into each others arms so that you can build trust and communication with the people you can't stand the second day you're in a room like this and the meeting facilitator helps you build your mission statement and if there's 50 of you there each of you figures that you have the the responsibility and the right to have one word each in the mission statement okay so if you're in California the mission statement has to be good for the employees the shareholders the customers the whales and the Dolphins and you come up with something like this the mission of Wendy's is to deliver superior quality products and services for our customers and communities through leadership innovation and partnerships okay so do you have Wendy's here you're lucky actually actually Wendy's is you know like a McDonald's or something like that and fast food and I tell you I do like Wendy's I have four children and when the children outnumber the adults in the family to use basketball terminology when you've gone from man-to-man to zone you have a whole new appreciation for fast food so I'll tell you french fries is one of our favorite vegetables in our house so in all the times that I have driven through Wendy's or stood at the window at Wendy's ordering french fries and a hamburger I must admit it has never occurred to me that you know what I'm participating in is leadership innovation and partnerships it's just never occurred to me well I don't think any Wendy's employee could repeat this mission statement verbatim not even the founder of Wendy's can repeat this mission statement of bader I happen to know that's true because he's dead but the point here is that these mission statements are too long and they're not memorable all right so what you want to do instead is create a mantra a mantra is two or three words long Wendy's mantra should be healthy fast food in three words Wendy's can define why it exists healthy fast food somewhat oxymoronic but healthy fast food FedEx FedEx is airplanes trucks vans an incredible IT infrastructure FedEx can tell you that your package is on the left hand side of a van going south on highway 101 in Silicon Valley at the Sunnyvale exit in the second lane from the light left at 26 miles an hour it could tell you all that because it stands for peace of mind when you absolutely positively want something someplace you use FedEx and Nike has a great slogan just do it but the company stands for authentic athletic performance so these are our three examples using three words each I think you should create a mantra for your organization for your product for your service three or so words that explain why it should exist if I have not dissuaded you from creating a mission statement at least let me show you a very easy way to do it there is a Dilbert mission statement generator website we exist to professionally build long-term high-impact sources so that we may endeavor to synergistically leverage existing effective deliverables to stay competitive in tomorrow's world no off-site no aggravation or hiring an executive coach just go to the website click on a few mission statements adopt one save yourself two days and maybe $25,000 right this is the way to get a mission statement so step two is after you've decided to make meaning creating a mantra to the you're meaning two or three words step three is to get going this is an ironical thing you know everybody has this impression about entrepreneurs that they're these really risk loving action-oriented people who are just jumping into it and going for it and it's been my observation that that is not true many times we encounter entrepreneurs who if they're engineers they're looking for this perfect world where you know that's the software is completely bug free it has every feature ever conceived of and it's this perfect thing and it's just wrong it's just wrong you need to get going so let me give you three key steps first is think differently jump curves don't just be the the up teeth ice harvester or the up teenth ice factory or the up teenth refrigerator company think about what's on the next curve not what's on this curve right you need to think differently step one step two don't be afraid of polarizing people that is think about this product or your serve or service that you're creating and accept the fact that some people will love it and some people will hate it the worst case is nobody cares if you asked most venture capitalists what they're looking for in a company they will tell you a proven team with the proven technology in a proven business model okay and I'll tell you that's all because if you apply that test to investments you would have never invested in Google Apple Cisco Yahoo or YouTube or eBay all the big winners would not have passed that test they did not have proven teams they were not improving markets and they did not have proven technology Zippo zero none of them what you need to do is have the courage to create the product or service that you yourself would want to use and it will polarize people some people will hate it some people will love it I'm not telling you to intentionally piss people off okay don't get me wrong but I am telling you if you try to create something that makes everybody happy you will create something mediocre and you might as well just give up right now or create something great third step is you need to find soulmates there is a stereotype perpetuated mate perhaps by Americans that the entrepreneur is out there doing it all by himself or herself and it is not true Steve Jobs had Steve Wozniak and Bill Gates had Steve Ballmer and if you look at all these cases you know there's Larry and Sergey from Google there's David and Jerry from Yahoo if you look at all these cases there are at least two people and typically they come from different backgrounds you know you don't want to engineers because then you'll never ship anything you don't want to sales people because you'll never create anything you want people who are soul mates you need to balance each other off I think the ideal number people's three basically you need someone to make it you need someone to sell it and then you need an adult to collect the money those are the three key roles right so think different think different don't just try to build the 10th same kind of search engine the 10th the same kind of enterprise software the 10th spam killer think different create this product that some people love and some people hate and find the soulmate because it's gonna be a long difficult journey those are the three key steps to getting started the fourth thing is to define a business model three key points about a business model first point is your business model needs to be very specific we meet with many entrepreneurs who come in and say well we're selling to fortune 500 companies and that's arguably an improvement it used to be that we don't know who we're selling to we're just going to collect a lot of eyeballs trust us someday we'll monetize it that will not is that your is that your plan yeah oops when did you raise money oh good for you I would suggest you get more specific now and so there's one level of specificity that says fortune 500 right that's enterprise software I don't think even that's specific enough I think it should be so specific as to say fortune 500 company aeronautics company this department within the Aeronautics company and in fact this is the buyer for that department of the specific Aeronautics company the metaphor I'd like you to use is think of your customer and think of this particular person and she has your money in her wallet temporarily and your goal is to get your money out of her wallet that's the test can you get that specific second thing is many entrepreneurs come to us and they say we have a patent-pending curve jumping paradigm shifting new business model and you know what you may think that's a cool idea but most people don't particularly investors really we don't want you to change the world in terms of business models we would like you to just make something for 50 Cent's and sell it for five dollars you know and and there's you can sell direct you can sell indirect you can do site licenses you can you know monetize the eyeballs but we don't really particularly want to hear about clever business models that no one has figured out before we'd just like you to make something sell it and collect the money so keep your business model simple and the third and most important and I hope it translates here to another culture you should ask women what they think of your business model not men and I'll tell you why not men I believe that men deep in their DNA absolutely in their roms they have a predisposition to want to kill things so men want to kill people they want to kill animals they want to kill plants they want to kill things the manifestation of the modern civilization is that to some degree unless you're a Republican you know you have to sort of control your emotions about wanting to kill things so you you cannot kill people indiscriminately anymore you can't kill the environment and plants and trees and fish and fauna anymore so you're running out of things that men can kill one thing the society still blesses is killing the competition right so you want to create a company to kill Microsoft or kill Oracle kill Google and so because then have this predisposition to want to kill things if you ask them what do you think about creating this product to kill Microsoft or kill Oracle or kill Apple almost all the time a man will say yeah it's a great idea because men are predisposed to wanting to kill things all right women do not have that fundamental genetic flaw so when you have an idea about a company in a business model you should ask women what they think of the idea not men because a man will always say it's a good idea you need to ask women so I hope you asked her what she yeah okay so be specific keep it simple and ask women what they think of the idea the three key steps of defining a business model the next step is to weave a mat mat stands for milestones assumptions and tasks I happen to love to play ice hockey and ice hockey one of the pleasures of ice hockey is to be one of the first people on the ice right after the Zamboni has cleaned off the ice because the ice is just pure and there's no scrapings anywhere and it's no cuts and it's just a beautiful sheet of ice it's just like being the first person down a mountain in the morning ski ok when you start a new company it's like being the first person on the ice or the first person on the slopes it's a beautiful thing because there's no crappy product that people are complaining about the bugs there's no stupid employees that you've ever never hired there's no crappy furniture there's no lousy office there's no lousy everything everything is beautiful right it's very exciting are you in this stage still there's no pain-in-the-ass venture capitalist all right all right so life is beautiful everything is upside it's this pure wonderful virgin sheet of ice and when you're faced with that situation often you don't know what to do first because it appears that finding an office is really important designing a logo is really important coming up with stationery is really important buying furniture is really important so this is a matter of the priorities of starting a company the first priority is you establish your milestones and milestones are things like you finish the design god help you you ship the product god help you you collect the money milestones are things that you would brag about to your spouse to your boyfriend or your girlfriend you would not call up your spouse boyfriend or girlfriend and say honey today we designed our logo you would say honey today we shipped that's a milestone and you need about four of these milestones not 40 because they're not if you have 40 none of them are important not one because if you only have one probably your focus too much on one single thing in your mouth three or four okay so you need milestones second thing is then you need to write down your assumptions how many sales calls can one of our salespeople make per day when you do an eyeball play many people go through something like well there are six billion people on the internet how hard could it be to just get 1% of that six billion to use our product how hard could that is just 1% and that kind of assumption is very very misleading it's the top-down assumption it's like saying well according to this consulting firm a hundred billion dollars is spent on security software per year right and so how hard would it be to get 1% of a hundred billion dollars well it's pretty hard actually a much better way is to start from the bottom up you know how many sales reps can we hire how many reps how many sales calls can they make per day of those sales calls how many will actually get through to a decision maker of those decision makers how many will actually say yes of the ones that say yes how many can actually get the purchase order approved and so if you do a bottom up research you have a much much smaller number but you need to test these assumptions and then the final thing you do is then you do tasks but the purpose of doing tasks are to either test an assumption or complete a milestones so the pecking order is milestones and assumptions then the tasks to do those assumptions and milestones the sixth thing is all the marketing you need to know is the tech startup a very simple graph the vertical axis measures your ability to provide a unique product or service the horizontal axis is the value of that product or service to the customer if you understand this graph you'll never have to take any marketing you never have to do any outside consultants with marketing this is the graph okay there are four corners to this graph let me take the suspense away you want to be in the upper right corner because everybody in the 2 by 2 matrix wants to be in the upper right corner did you do a 2x2 matrix when you pitched in December no I'm so disappointed okay I'll show you how to make one now okay so let's go through the four corners the first corner is where you create something of value to the customer but there are other competitors who do the same thing in that corner you always have to compete on price right if you're making a Windows clone you have the same operating system with the same hardware or guess what you're gonna have to compete on price you're not unique it could be something valuable Dell made a lot of money in this corner but you have to compete on price the next corner is a corner where you have Trulli cornered the market only you do something the problem is what you do is of no value to anyone in that corner you're just plain stupid you own a market that doesn't exist the next corner is arguably even worse in the next corner you create something that is no value to the customer and there are many competitors funded by stupid VCS like me who do the same thing that's the dot-com corner this is the worst corner you know this is dog food there used to be a dog food business online in the United States now let me explain what happened the dog food business is really simple at some basic level you have a cow and you have a dog and it's a supply chain management issue you need to kill the cow put it in a can get the can to the dog that's all the dog food business is and so pets calm looked at this situation say well why is there pet food store in the middle of this supply chain issue why is this pet food store grabbing 25% margin we can eliminate the pet food store and ship the rack patent-pending curve jumping paradigm shifting new way to change the supply change match supply chain management issue of going from cow in kam to dog there's only one problem with this theory dead Kyle's and cans weigh a lot there's lots of shipping and handling and if you ordered a dead cow in a can you have to be at home when the UPS person drops off a dead cow in the can so it was just as expensive and no more convenient to buy dog food online hence pets.com really didn't give that much value to the customer and then people like me we funded pets calm ifs calm last-minute pest calm discount Fez calm ie pets I pets every kind of pets calm there are sixteen ways to spend more for dog food online than at the dog food store that's the dot-com corner so the corner you want to be in is the other quarter here this is the upper right hand corner in this corner you are unique and you are valuable in America where I live there is a movie ticket buying service so if you want to buy a ticket at home and print it at home and not go to the movie theater and find it sold out and not have to stand in line where I live the only way you can do it is Fandango sick oops this is the smart car this car just came to America this year you guys had it for a while right but you know in America there are thousands of models of cars that can park parallel to the curb as far as I know there's only one that can park perpendicular to the curb smart car you're really tight for parking boy that's about the only car you can get this is a Breitling emergency if you unscrew that knob there and pull it out it puts out an antenna that puts out a bird emergency broadcast signal that emergency broadcast sick no it's caught by other airplanes and they will tell the post guard or the you know whoever emergency service to come looking for you so this is not something that you take and do and use when you took the wrong exit off the freeway okay this is a way and you're about to die you do this this is a unique watch you're not many watches that have this service if you are a surfer camper firefighter skier snowboarder this watch could save your life this is a trek line this bike made in America has an automatic electronic transmission it's just about the only bike that shifts gears for you it's a trek line I think I have one more oh no I know so the key point is in this this 2x2 matrix is if you are engineering and most of you are you need to create a product that is truly unique and truly valuable if you're marketing you have to figure out how to convince the world that it's unique and valuable where you are unique and valuable that's where meaning is made that's where margin is made that's where money is made that's where history is made how are you hi and to the right what is unique about your product and what is valuable about it if you're in any other corner it's much harder to be successful the seventh thing is to follow what I call the 10-20-30 rule of pitching I have something called Meniere's disease Meniere's disease has three symptoms ten which is a ringing in this ear hearing loss in this year and also the third symptom of manures is sometimes you get attacks of vertigo now there are many theories about what causes Minh ears excessive salt excessive alcohol excessive caffeine excessive stress so far I've just described my life so what you try to do is you reduce all those factors as you try to control these things now I will tell you that I've tried to do that and I have another theory about what causes many years my theory is that I'm a venture capitalist and as a venture capitalist I listen to pitches from entrepreneurs day in and day out all year long every one of you comes into our offices for a one-hour meeting with 60 slides because you are so freaking eloquent you can rip through one slide per minute every one of them says we have a patent-pending curve jumping paradigm shifting new way to use Google Adsense with Linux and MySQL using PHP and rails and Drupal to tackle the just mind-boggling potential of selling dog food online we have a proven management team we've been working at Petsmart over the summer you know we have proven technology we're experts in visual basic and all we need is there's 300 million Americans one in four on the dog that's seventy five million dogs each dog eats two cans of dog food per day that's 150 million cans whoo two cans of dog food per day how hard could it be to get one percent of one and a 150 million cans of dog food per day conservatively speaking that's 1.5 million cans of dog food per day our margin is $2 per can a 3 million dollars per day conservatively speaking in the first year we should do 500 million dollars you know is that what your pitch was like and so and I'll tell you some real-life doozies about being a venture capitalist one company came in and said they wanted to raise money to buy Israel they want to they wanted to fight wholesale they wanted to buy the country in order to make it into an amusement park another company came in and they wanted to build a geodesic dome over Los Angeles to control air pollution I don't know if it was to keep air pollution in or keep it out but but the I'll say a third example which is arguably the most interesting this guy from Hawaii comes up to us and says I have a patent pending curve curve jumping paradigm-shifting way to tap the growing drowning industry okay you're looking at me like I'm not so I'm not making this up and he says all right you know so we're gonna tap this growing drowning business I said well why is the drowning business growing and this is five or six years ago he says well it's because there's so much more disposable income that dumber and dumber people are buying boats so according to Forrester and Jupiter and IBG the drowning business should be twenty billion dollars by the Year 2015 okay I'm a venture capitalist I'm tracking so far and I said well what part of the drowning industry are you going to tap is it the disposal of bodies I mean where where is the pain point in the drowning business he says no the pain point in the drowning business is when you're in the coastguard helicopter and it's night and the waves are 30 feet tall it's spotting Bubba or junior drowning in the water where do you drop the basket with the Coast Guard diver to rescue drowning Bubba or drowning junior I said okay I understand that so show me the chip cuz I'm thinking oh so now you buy a boat you get a chip implanted in your neck if you start drowning you press your neck the chip talks to the satellite the satellite talks to a heads-up display in the helicopter it's making sense to me says no you know that's not it at all we don't use a chip I say well show me this pair and I'm shifting patent pending new way to tap the drowning business and he shows me I'm not making this up a roll of red tape and in astonishment I say to him well you know it's not a chip it's this roll of red tape how does this work he says well if you're drowning or your airplane crashes as you're in the water you unwrap the tape you wrap it around your wrist and you throw the roll of red tape out so that when the coastguard helicopter comes they look down I say there's the trail of red tape there's Bubba or jr. that's where you drop the basket and at this point I'm having an out-of-body experience right and I'm saying you cannot you're kidding me you're trying to raise millions of dollars to create rolls of red tape that as you drown you wrap around your wrist so that the Coast Guard can see where you are and he says yes and so I dismissed the idea now fast forward a few years and I'll tell you what this guy has been successful and he has sold hundreds of thousands of these things and he's made a version that when a pilot hits the water itself deploys because apparently when you eject from a fighter jet and you hit the water you pretty much knocked unconscious so you're not sitting there thinking oh man I gotta roll the red tape and he's made a version that absorbs energy during the day so that it can blink all night this guy's done it so hundreds of thousands of these so I tell you all these stories because I believe that the reason why I have dizzy spells and I have a ringing in my head and I'm going deaf is because of the crappy pitches I listen to it's not because of the salt or the stress or the alcohol or the caffeine it's because I'm a venture capitalist it's an occupational hazard so to prevent a epidemic of manures I came up with the 10-20-30 rule of pitching may you observe these first is the optimal number of slides in a PowerPoint presentation for a company is 10 10 10 that's all the human mind can handle in particular that's all a venture capitalist can handle because most venture capitalist even the best ones have ADHD okay 10 these are the ten now many people believe with PowerPoint more is more exactly not true less is more if you can can't cover these ten points you'll be doing better than 95% of the people who meet with a venture capitalists the point of a PowerPoint presentation meeting with a venture capitalist is not to use shock and awe to get the venture capitalists to be so impressed that they want wiring instructions at the end of the meeting okay that just never happens the point of using PowerPoint with a venture capitalist is to not get eliminated it's not this sign a deal it's to not get eliminated you just want to go to the next step which is due diligence not writing a check that's all you have to cover those ten you should be able to give those ten slides in 20 minutes you may have one hour but 95% of you are going to need 40 minutes to make your Windows laptop work with the projector okay the other 5% using Macintosh is you truly will have 40 extra minutes in those 40 extra minutes have some discourse have some conversations so 10 slides that you can give in 20 minutes and then the optimal size font in PowerPoint is 30 points a good rule of thumb is this is too dogmatic for you figure out who the oldest person is in the audience divide his or her age by two most of the time you'll be pitching to 55 60 year-old people 65 by two is 30 god bless you venture cameras are getting younger and younger someday you may present to a 16 year old venture capitalists use the 8 point font at that point well until then 10 slides 20 points 30 10 slides 20 minutes 30 point font the a thing is to hire infected people I think many people will tell you in your in recommending how you hire people that you find people with the perfect work experience with the perfect academic background ideally you would like a pH student PhD student in electrical engineering computer science material science bio engineering something like that some great engineering background and who went on to start Cisco or Yahoo or Apple or Genentech or something like that you know this perfect team someone who worked at Google for the last five years as a vice president someone who worked at Microsoft or Oracle or Apple and I'll tell you that I understand that theory but I think that theory is wrong because for one thing correlation does not equal causation right and so there are thousands of Google employees who now believe that they caused Google's success in reality they are just correlated with Google's success because if you get on a good enough horse any idiot can win the race the question is that you cause the horse to win the race so my recommendation is not only do you consider people's background work and education but also are they infected with a love of your product I think that's as important a variable so to do that you have to ignore what's irrelevant there are two kinds of irrelevant sees the first irrelevant see is the lack of the perfect background these are two rings these two rings depict my background when I was hired by Apple I came from the jewelry business most of my career prior to Apple I literally counted and schlepped diamonds around the world I was in the jewelry business I have absolutely nothing in my background to indicate that I should go to work as a software evangelist for Apple Computer so one kind of ignorance is you need to ignore people's lack of the perfect background the other kind of ignorance is that you need to ignore people who have the perfect background but don't get it someone who work for this really well-known tech company who has this perfect background but just doesn't see how we're changing the world you need to not hire that person just as you need to hire the person who doesn't have the perfect background but does get it and does love what you do second thing is you need to always hire better than yourself everybody says this very few people do it it takes someone with great personal self-esteem to do this right so if you're the engineering guy this is particularly true of engineers and engineers has really hard time doing this because engineers believe that the hard thing in a company is engineering and everything else is easy sales is easy ops are easy accounting is easy finance is easy marketing is easy everything is easy only engineering is hard all right I know I know you believe that in this building all right I guarantee you believe that right so you're all engineering back or anything engineering is hard sales is easy right so you hire somebody and you say well I'm gonna hire this guy but I know I could be a better salesperson than this guys just I'm engineered that's the harder thing that's what I need to do what you need to do is you need to hire people who are better than yourself the hardest case for you will be to hire an engineer who's better than yourself there's something about this people have a very hard time hiring people better than themselves ideally the ideal CEO whether you come from an engineering background or not would say I want to hire a sales person who's better selling than I am an ops person who's better at organizing things than I am a marketing person who's better at marketing than I am not people who are less good so that you can feel superior you to hire people who are better than yourselves and the last thing is you apply what I call the shopping center cyst the shopping center test works like this if you are at a shopping center and you see someone that you're talking to to hire and the distance is for me to the back of the room if you see that person but that person is not yet seeing you you can have one of several reactions one reaction is it's not that big a shopping center if I actually get face to face with the person I will actually say hello that's one reaction another reaction is oh my god I'm gonna go to another shopping center third reaction is drop everything go over there and talk to the person if you have any reaction other than wanting to just make a beeline straight over there and saying hello to him or her you should think twice about hiring the person because a start-up is like a family it's a dysfunctional family but it's a family and so the initial reaction to any prospective hire is Wow I really like that person I should go over there and say hello that's the shopping center test the ninth thing is to lower the barriers to adoption this is what we call in America a dull ism as in done of course you want to lower their barriers to adoption as opposed to what raised the barriers to adoption but I'll tell you many companies have barriers to adoption starts with this learning curve is too steep the model here should be take it home plug it in and it works most companies have a model that is taking home plugs it in go online look for the manual I don't even know you know anybody has a VCR anymore but there used to be this thing called VCRs and I swear you had to be akio morita of Sony to set the time nobody could set the time on a VCR flatten the learning curve take it in take it home plug it in it works go to the home page look at it use it it works no one have to read a manual second point is you should never ask people to do something that you yourself would not do this is a very good test for any new product or service are you asking people to do something that you yourself would not do let's say that you have the greatest website for content this content is so great that there is no way that people will mind filling out 50 fields of personal information to get the free password you know what you wouldn't do it don't ask anybody else to do it this is a washing machine it's a positive example because at the Kauai Hyatt Regency Kauai is kind of like Edinboro except it's sunny I was told that there's two sunny days a year it's a true is that an exaggerated it's less maybe you tell that to America so we don't come here good marketing I have to tell you I have to tell you the most impressive thing I've seen in Scotland you know we have to being here one day is and I hope you don't tell me it's not true but this theory that people you you know you blow off that cannon every day I wanna clock I love that idea and and not the fact that everybody sets their clock you know to 1 o'clock at that but just the cleverness of thinking well I can either do it at 12:00 I'd have to shoot it 12 times or shoot it at 1 and she didn't want that is very clear that is really good thinking I really so that was a high point yesterday I had a very interesting day yesterday so thanks to my hostess here we start off with this really really high-end breakfast cuisine at a place called snacks all right which I had breakfast with six drunks at 7 a.m. that was an interesting experience and then we had lunch with a prime not a prime minister with a minister from the Labour Party and he curves so you know went from snacks to the Parliament to have dinner at the dining room then we went to the castle and oh but between that there was a hypo tomorrow my day was we went to Crombie's and we met mr. Krum Crombie's all right we met mr. Crombie's because in America there's this TV channel called Discovery Channel and there's this show called Bizarre Foods and this guy Andrew Previn he goes all over the world and he eats Bizarre Foods so he did a thing about Scotland and the UK and he went to Crombie's and he showed how they made hog haggis Auguste haggis I guess and so we went there and mr. Crowley walked in and we got a picture with him so that was my high point of the day but really don't tell Andy Kerr that well where was I here you know the mark of a good keynote speakers you never get off-track but the mark of a great one is you can get off-track and come back so I'll show you that and the third point about lowering the barriers is to embrace your evangelists I was an evangelist for Apple my job was to convince people that Macintosh would make the world a better place by making people more creative and more productive I was an internal evangelist I was on the pay world an external evangelist is someone who's from your customer base who sees what you do and wants to help you spread the word tivo the PVR has evangelist Nike has evangelist Harley Davis and his vengeance Apple certainly has evangelist Google had evangelists in the early days you know there was a time where people just loved Google and just spread the word for Google and not Google employees most companies are afraid of evangelists they're freaked out like why are these people wanting to help us we're not paying them they're not our employee you need to embrace those people give them information give them the ability to help you welcome them into the fold three ways to break down the barriers the tenth thing is about sales no-one will probably tell you this but I will tell you this write this down sales fixes everything you can blow all the smoke you want about strategic partnerships and you have this growing number of eyeballs and all this kind of it all comes down to sales if you are generating sales life is good if you are generating sales your investors are not gonna bug you because I guarantee you your investors or you know on five or ten boards of the five or ten boards nine are not meeting their budget if you're the one that meets your budget and sales are working guess what they don't have time for you they don't want to bother you they don't want to jinx you they will stay away from you sales fixes everything I cannot give you a more important point say fixes everything if you want to be left alone by painting a species have say it's very simple so this is how you have sales how you make it rain first you let one hundred flowers blossom this is stolen from Chairman Mao although I fail to see how he ever implemented this letting one hundred flowers blossom means that when you come out with your product you may think you know exactly who should use it and what they should do with it get over that attitude because when you come out with your product or service you may find people who you never anticipated are using your product or service and you may freak out my god the wrong people are buying our products in large quantities what's going wrong we need an off-site if that ever happens to you step one take the money sales fixes everything take the money step two find out who these people are that are adopting you and find out why give them more reasons which is very different than finding out the people who are rejecting you and trying to fix it for them I have found that that never works if someone doesn't get it doesn't understand what you do in the first ten minutes they never will cut your losses right let 100 flowers blossom McIntosh was created to do spreadsheet database and word processing where 0 for 3 that's all 0 for 3 by the way who won Barcelona vs led-100 flowers blossom spreadsheet database word processor 0 for 3 one flower that came for Apple was all this page maker all this page maker created a field the file was called desktop publishing and desktop publishing saved Apple if it was not for all this page maker and desktop publishing there would be no Apple today all of you would be listening to Sony cassette walkman tapes today not iPods right letting a hundred flowers blossom all this page maker was a gift from God to save Apple computer I truly do believe that fact I believe in God and it's not exactly CS level Lewis CS Lewis level reasoning but I believe in God and one of the main reasons I believe in God is there is no other explanation for Apple's continued survival than the existence of a benevolent God let a hundred flowers blossom step two is enable people to test your of your product or service to take it home to download it to use it basically you're saying to people I think you're smart and because I think you're smart try my software try my site I am NOT going to bludgeon you into becoming a customer try my stuff and then you decide find the key influencers many young entrepreneurs they make this mistake they say I want to find CEO CIO CTO CMO CX o level people I want to talk to CX o level people because they're the people with the highest title therefore they're the smartest and most powerful they can make a purchasing decision I will tell you that generally speaking in American companies maybe not in Scottish companies but in American companies the higher you go in most companies the thinner the air and the thinner the air the more difficult it is to support intelligent life so the higher you go in most Comerica companies the stupider the people get and so what you truly want to do is find the influencers these influencers are tech support their customer service their secretaries administrative aides summer hires interns they're the people who do the real work and understand what they really need those are the people that the CIO CEO CTO CMO CFO ask what should we do find the key influencers it's not necessarily the CX o level person this is how you make it rain and this is my last recommendation don't let the bozos grind you down the bozos are gonna try to grind you down they're gonna tell you can't be done shouldn't be done isn't necessary there's two kinds of bozos in the world one bosal slobbing me disgusting body odor drives a rusty old car you know dandruff pocket protectors you just name it a loser you look at that bozo you say wow you're a loser if I listen to you what does that make me a loser because only a loser would listen to a loser right that's not the dangerous bosal the dangerous bozo is rich successful German car Swiss watch you know uses a Macintosh dresses in all black buy stuff that ends in AI Armani Lamborghini Ferrari you know Maserati beware of people who buy a lot of stuff and in I okay and so you look at this person he say ah rich and famous parses too smart 50% of the time that's wrong Richard famous parses too lucky not smart lucky and so you know we're in the midst of a flu crisis here and and as soon as you get the vaccination for swine flu but generally speaking the way you fight flu is well besides washing your hands is you get inoculated you get a little bit of flu so your body has built up resistance to big flu right same thing is true with Bo's ASSA T so I'm going to expose you to some velocity so that when you encounter major Bowes ASSA T your body has already built up resistance I think there is a world market for maybe five computers Thomas Watson chairman of IBM said this in 1943 he predicted a world market of five computers I have five Macs in my house I have all the computers he anticipated in the world in my house this telephone has too many shortcomings to be seriously considered as a means of communication the device is inherently of no value to us Western Union internal memo in 1876 Western Union is not PayPal today duh guess why they roll off telephony hard to go from Telegraph the internet if you write off telephony in the middle to pick a chasm to cross not to be fair to Western Union in 1876 if you had the first telephone who would you call maybe their strategic direction in 1877 was why don't we teach Americans the Morse code how hard could it be we'll teach every American the Morse code that we could put a telegraph in every house there's no reason why anyone would want a computer in their home kennels and founder of Dex at this in 1977 he was a great entrepreneur great innovator but he was so successful on the mini computer curve he could not embrace the personal computer curve this is dangerous philosophy and one last example it's too far to drive and I don't see how it can be a business I uttered this pose a city 15 years ago six weeks seven days five hours and 43 minutes ago when I was asked by Michael Moritz of Sequoia Capital would you like to interview for the CEO position of a company that I just funded and I said Mike I live in San Francisco my wife and I have a son she's in beta with our second son I don't want to drive an hour each way and I looked at the company's homepage and I don't see how it can be a business because all it is is a collection of two people's favorite websites what are they going to do sell ads to ARPANET scientists what's the business model so I passed on the opportunity to interview for the CEO position of Yahoo now let's say I took the interview I would have gotten the job so I'd have been CEO I would have been CEO of Yahoo would have gotten 10% of Yahoo because I was the first adult there right they did ten percent of Yahoo it would vest over four years but let's be conservative let's say after two years of the four year vesting I Peter Principle out I reached the height of mine competence so there's this big board meeting and they say you know guy we need someone who can take Yahoo to the next level someone who can stand toe to toe with Steve Jobs Steve Ballmer Bill Gates Steve Case Rupert Murdoch Michael Ovitz we need someone who can stand toe-to-toe with all these media moguls you're not the person we can't believe that you could take Yahoo to the next level so we're terminating you today as the CEO of Yahoo now I don't know how it works here but in America guess what as a Japanese American I'm an oppressed minority in America you cannot fire oppress minorities you know it's called wrongful termination so I would have told them very calmly you don't understand something is Japanese American I'm gonna press minority we're still pissed off about World War two you know because in World War two you didn't intern hardly any Italians you didn't intern hardly any Germans you only intern to Japanese Americans why was that we're still pissed off about that then you know this big peaceful nation of America drop a freaking bomb on my country twice as a matter of fact we still pissed off about that you think you're gonna fire me I don't think so there will be a lawsuit there'll be a lawsuit tomorrow on your desk called wrongful termination and then and then turn your TV to CNN or sky because you'll see 60 little Japanese ladies protesting in front of Yahoo's headquarters and he would have said you know guy what would it take remain calm what would it take for you to go away quietly and I would have said just fully vest me give me all four years even though I've been here only two years and he would have said okay so by my calculation this response cost me two billion dollars you know I have to tell you two billion here two billion there adds up to real money pretty quick I would not be in Scotland today if I had not made this decision so question is why and it was because I was a bozo because I was on the personal computer curve and successful there I could not embrace the internet curve I thought that the personal computer curve had a new extension called the Internet the internet was nothing more than what was coming through the modem cable right I was so wrong also I looked at Yahoo and it was what collection of Jerry and David's favorite web sites where's the proven management team yeah they worked at the Stanford bookstore one summer where is the proven business model selling ads to whoo ARPANET scientists where's the proven technology it's not technology they're they just use HTML to create this little database of their favorite websites there's nothing defensible there's no perfect Eno perfect product no perfect patent-pending curve jeongmi paradigm shifting new technology there's no great business model that's unique nothing zero Zippo right so I passed on Yahoo this is bozo city this is velocity you need to keep these stories in mind because I tell you what as you pitch your companies you're gonna pitch to people like me and you know customers and all that and you're gonna hear no can't be done shouldn't be done isn't necessary you need to resist there bodacity now I wish I could tell you that every time somebody tells you no it means you're going to succeed it's not that easy right most of the time they'll be right but if you listen to people who tell you no and don't try you will never know and then true truly you will never know and you will have lost don't let the bozos grind you down and this is my last slide three pieces of information first if you want to copy this presentation just drop an email to Gina at garage comm second I have this website called all top where we aggregate news one topic is startups so all the news about startups is that startups that all top we do venture capital not all top and we also have one for your country Scotland that all top so this is news aggregation by topic and the third thing is I used a lot of stock photography in this presentation and I get these photos from my stock photo and I love this company's company it's now part of giddy but it's out of Calgary Alberta Canada and so for 3 bucks let's say you wanted to illustrate the concept of stupid people you could ask your friends or classmates or relatives to pose but why do that you just go to iStockphoto pay 3 bucks you get hundreds of pictures of stupid people high res royalty free life is good I stock photos so those are my last three pieces of information and it's been exactly an hour do I have time for questions or no yeah ok so any questions for me yes microphone hello yes what would you say is the one most important characteristic of a successful businessperson the one most important kind of tastic characteristic so the question is what's the most important characteristic of a successful startup and I'll tell you something quite honestly luck really I truly do believe that because I look at some of these companies and I tell you at the time they were starting and raising money I don't think I would have invested I don't think I would have invested I don't think any of you confronted with some of these ideas would have squeezed the trigger and joined or done it because I mean let me describe some companies in terms you've never have probably heard them described so I need infinite bandwidth an infinite server space because I'm going to allow people to take illegally obtain copyright video and upload them and the tipping point for my company will be when people drop Mentos into diet cokes what do you think you want to fund YouTube I'm going to enable people to buy and sell used printers online forget the fact that if you're buying the printer you really don't know if it works forget the fact if you're selling the printer you don't know if you'll get paid besides that why not fund eBay right we have the 16th search engine ignore the fact that there's Alta Vista and Inc to me and Yahoo just fund us because we have a new algorithm for search engines we're going to count inbound links the world needs another search engine Wow that's Google and so if you go down the list time and time again you just have to say wow would you have funded that and an honest VC will tell you no and I I just can't see you know yes I believe successful companies have people who work hard I believe that but a lot of unsuccessful companies have people who work hard successful companies have smart people but so do unsuccessful companies and so you know every VC will tell you I if if I had funded Google Yahoo Cisco or Apple I would tell you right now it's down here right now I'll tell you I knew that Google was going to be a success because I met Larry and Sergey they were bright people and I knew that counting inbound links was a better algorithm and I understood that there would be a democratization of advertising so that people eventually would want to buy the word real estate plus Santa Cruz because I knew that in Santa Cruz real estate brokers want to come up at the high end of that search when people type in Santa Cruz real estate so I knew that so I had this vision for how search could be better by counting inbound links I'll looked at the team I knew they were going to be good people and I knew there was a good business model because all these real estate brokers all these people selling you know football equipment would want to buy the word football Scotland you know and football Barcelona so I had this vision for our search could be better that's why I funded Google and the way it works in the venture capitalist business is you do this you make about 20 bits 19 are failures the odds are 95% did you know your failure what can I tell you but let's say you are the next Google or the next Yahoo or Cisco or Apple the way this works is you make 20 bits 19 are failures one is a success and then you declare victory you say I knew that this guy was the next Larry Sergey David Philo Jerry Yang Steve Jobs Wozniak I knew this guy was the next guy and so if confronted and someone asks you well can I just point out to you you made 20 bets 19 were wrong one was right if you're so smart how come you were wrong 19 out of 20 times and you say no I knew he was going to be successful my partners did the other 19 that's the way the venture capitalist business works so now you know I guess that's not too actionable so if somebody says well what's the most important factor and I say well you know be lucky I guess you could write that down but you know tomorrow what do you say oh guy said be lucky now what do I do and the truth is that it's a crapshoot and the only way you're gonna find out is to create a prototype and get out there there is I don't there is no there's no other way you just have to take the shot and just understand that you're in a game that 19 out of 20 times you'll fail well that's that's a little harsh because there's you know there's the Google which is this homerun success but then three or four or five out of that that twenty might have five or ten times exits money you know and that's great so there's BAE ball analogy every Google was you know the end of the World Series last game grand slam home run with two outs right that's Google cannot get better than Google but there are a lot of triples and doubles and even singles that are very successful but man it's I think luck is a very big factor what else yes so you said something in your presentation about asking women did your wife say about ol top what am I why never asked her you know the thing for me with all top is it's very gratifying work because the people the bloggers who are in all top appreciate the traffic and the people who need the information are very appreciative that we have found a better way to display information than arguably a search engine so you know the difference between Google and all top besides in a hundred billion dollars in valuation is that Google is very good for answering the question like how many people live in Scotland ok if you typed in how many people population of Scotland you would point you to probably Wikipedia right and you get the answer we answer a different question our question is what's happening in Scotland so if you went to Scotland not all top where we have all the news feeds from the Scottish newspapers and the Scottish bloggers and all that you would see kind of what's happening in Scotland at this moment and that's very different than saying how many people live in Scotland the the last the last two topics that we created last night we created one called sky dot all top for the sky network the news network because I was having dinner with people from Sky so we decided to do that and previous to that a few hours before we created swine flu dot on top so it's swine you can can you go to swine flu oh it's it's swine flu not flu you can just click on the s here click on the s in alphabetical this will show you all the topics we begin with s and there will be one called where is it swine flu there so these are all the news feeds about swine flu so if you really care about swine flu if you really want to know you know these are the feeds from the Center for Disease Control and the World Health Organization and Google's doing that search and New York Times and LA Times you know arguably this is a great aggregation of swine food news and so can you go to venture capital dot Alltop and that's all the Scottish news so this is all the blogs and news about venture capital right now and if you mouse over would you just put the mouse over one of these yeah so we show you the first paragraph of each story so you can determine whether you want to click through the business model by the way is we sell those two ads we sell a leaderboard and we sell a 300 by 250 so that's you know we are an eye ball player to our our intellectual argument right or wrong is that we truly offer a segmented audience because if you're at Scotland at all top guess what you're interested in Scotland and if your twine flew that all top yours to say the swine-flu contrast that by perhaps the random Google Adsense where let's say you're a scottish blogger and you wrote that i went to hear Guy Kawasaki speak today but I know he just came from Mexico I sure hope he doesn't have swine flu so Google picks up the word slime flu and you know uses that Adsense algorithm and it gives you an ad for I don't know a surgical mask okay but really you're fundamentally what you wrote about is not the swine flu you're you're a blogger about Linux or you're a blogger about open source you're a blogger about Scotland and so the fact that the string swine flu was in there were just sort of happenstance accident that is very different than swine flu doll top if you're at swine food that all top you're interested in swine flu and if you're at ADHD all top you're interested in because you're a parent of attention-deficit kids so it very much segments the audience and that's the theory of all top my wife is particularly interested in human rights so we created slavery not all top all the news about slavery and human trafficking is in one side so that's the goal so I must admit I did not ask her so much maybe means I'll fail but yeah how about one last question yes how many of you on Twitter right now are two on Twitter in general I was just wondering where you thought the next big opportunity slide where yeah you know the truth is I have no idea I don't think the role of venture capitalists are to be visionaries because venture capitals are not visionaries the the role of a venture capitalist is to find visionaries and then sink our teeth into them and so I'm here to sink my teeth in you I'm not here to tell you what the future is by definition of venture capitalist is over the hill because if we could do it we would do it we cannot do it we need you to do it it's a whole different world so it's much more likely that the future is going to be invented by the audience than by the speaker it's just and even if I knew I wouldn't tell you but I don't know guy mike colter digital agency calm guy just ask you a quick question based on one point nine about sales fixes everything and I'd like to bring into it Twitter in terms of no one seems to know what Twitter's monetization model is or what the future is to Twitter whether Google will buy them or not be really interested in what you see six months time for Twitter and where it yeah I love Twitter truly I love Twitter I think Twitter is the best thing for advertising and marketing that's been invented since television and arguably it's better than television because television now you need to kind of spend three million bucks for a Superbowl commercial right so so I I don't know how Twitter intends to monetize but you know when they get 25 million or 50 million users there will be a way if I were them I would use some kind of model inspired by text messaging where in the United States anyway you know you get a certain level of text messages for free and then there's another level where you pay 10 bucks a month and then there's another level where you get unlimited for you know 20 bucks a month that's what I would do with Twitter I would say you can tweet 250 times for free 250 to a thousand times it's 5 bucks and 5,000 over unlimited is that I'll pick a number 20 bucks and you know many people believe that if Twitter started charging like that most people would stop using Twitter I think that's not true I think that Twitter is so ingrained in many of us now that like I could not leave Twitter somebody said Twitter was 50 bucks a month I would pay I would pay without question because 50 bucks a month is roughly you know one cup of coffee every two days all right I spend 50 bucks a month at Starbucks so why wouldn't I spend 50 bucks a month for for Twitter which is arguably making all top successful so maybe I should ask you of you Twitter users if you had to suddenly start paying five bucks a month for Twitter would you pay and I think I'm sorry if so let's say there is a free version you can have up to 250 tweets I'm picking a number out of the air yeah maybe 250 is too many because that's 8 a day it's a lot well that's not so much so yeah up to 250 it's free after 250 you pay 5 bucks a month how many would you pay to be on Twitter see that's the argument right so we go from 50 people to 5 people but so let's say we go from 50 to 5 so only 1 out of 10 people will pay 5 bucks a month but one out of 10 people of 50 million is 5 million 5 million times 5 bucks is 25 million 25 million a month times 12 months hey it's getting interesting you know I'm saying so you know I love Twitter if you felt it was appropriate that Twitter maybe has an AdWords model based on what people are tweeting yeah so the question is you know what happens if if Twitter had an AdWords model Allah I said that right yeah I like Google and well so yeah another parameter could be free with advertising or five bucks without advertising right personally I think most people would say yeah I can ignore the advertising no problem I so that would be like the Gmail model right where you send a Gmail and you say I'm going to Scotland I'm thinking of getting you know haggis and oh there's a text ad in my gmail that says go to Crombie's right gmail has never I don't think I could my my perception of Gmail is that's not that successful I don't know I like the SMS model that you know it's very direct it's like you get 250 free you want more than 250 hey we're your drug dealer five bucks I like that model you know I mean going back to my presentation where I said keep the business model simple I think that's a simple business model 253 five bucks over you know it's very easy to understand I really I think you could do something like you know with with Twitter you could say all right so for one year unlimited use is 50 bucks one-time or you can pay five bucks a month so it's 60 you know five times 12 is 60 or 50 now I would do that too I think people will pay for Twitter at this point okay so just to wrap up you know for me the key to entrepreneurship is that you decide you want to make meaning not money meaning if you make meaning if you change the world you'll probably also make money don't worry about it you'll make money so make meaning get a mantra two or three words that describe what you do all right jump curves don't just stay on the same curve do something 10 times better not ten percent better go from ice harvester to ice factory to refrigerator curve don't worry be crappy you know you don't have to have this perfect first version just get it out there find these co-founders good get get to sales I mean sales fixes everything don't let the bozos grad you down and that's the key to entrepreneurship thank you very much [Applause] this production is copyright the University of Edinburgh

Channel: The University of Edinburgh

Views: 122,656

Rating: 4.8808703 out of 5

Keywords: Guy, Kawasaki, lecture, informatics, ventures, forum, start-up, advice, art_of_the_start, business, management

Id: Y8X57eucxnI

Length: 82min 3sec (4923 seconds)

Published: Mon Jul 20 2009