• Product solves a problem for a specific target customer
• Capital-efficient business – operational @ < $1M funding
• Primarily internet-based distribution – search, social, mobile, location
• Simple revenue models – transactions, subscriptions or affiliate
• Functional prototype before investment (or previous success)
• Small but measurable usage – some customers, early revenue
• Small but cross-functional team – engineering, design/UX, marketing

Donald Valentine, who founded Sequoia in 1972, shares with students from the Stanford Graduate School of Business the investment strategy at Sequoia. Through this talk Donald Valentine asks and provides answers to this simple question : why is Sequoia successful?

Key learning

• “We don’t choose people, we choose markets” [tweet]
• “We rarely ever invest in a market where there is only one product” [tweet]
• “Making everything in house might have worked for Sloan and the Ford family but certainly not recently” [tweet]
• “You only have to do a couple of things well in your company” [tweet]
• “We’re never interested in creating markets – it’s too expensive. We’re interested in exploiting markets early.” [tweet]
• “If you have a question figure out how to express it in less than 20 words” [tweet]
• “The art of storytelling is incredibly important” [tweet]
• “Learning to tell a story is critically important because that’s how the money works. The money flows as a function of the story” [tweet]
• “We don’t do function in house that we can outsource” [tweet]
• “The last person we hire in a new management team is the financial officer. Why do we need him? We don’t have any money” [tweet]
• “There is only one metric that matters in finance in our world. It’s cash flow” [tweet]

Key Learnings

•  “Talking with your customers doesn’t mean doing what your customers ask” [tweet]
• “Your job in customer development is to figure out if people have the problem your are trying to solve and if they do how deep do they feel about it.” [tweet]
• “Market segments are people who share the same problem, the same language” [tweet]
• “If you have to market to 2 individuals differently they are in 2 different segments” [tweet]
• “You don’t do MVP in order to be a lean startup, you do MVP to learn what the value is for a specific customer” [tweet]
• “Believe in yourself but be skeptical about your idea” [tweet]
• “Figure out what’s the most risky part of your Business Model, be willing to be wrong and go test it” [tweet]
• “Everytime you use the word I know, PAUSE!” [tweet]

About Brant Cooper

Brant Cooper is the author of “The Entrepreneur’s Guide to Customer Development.” Brant is is passionate about startups and about growing the San Diego Tech community. You can follow Brant on his blog Market By Numbers and tweets @brantcooper.

Some key learnings

• “act as a team is the single most important predictor of success…There’s nothing more important than how you collaborate and make decisions.”[tweet]
• “the most important thing is to get your product into the hands of your customers and see what they think about it and then learn from that and go from there.”[tweet]
• “why” is the most important word in a customer development research interview.”[tweet]
• “customer development interview is very different from a usability test…when you’re doing that kind of research, the most important thing is that you encourage the other person to tell their story. What you want is to let them talk 90% of the time.”
• “taking features out of your growing product is probably one of the most important skills that a team can develop and it takes a lot of discipline to decide to remove a feature.”[tweet]
• ”code is not an asset. Good, agile people will tell you that code is a liability.”[tweet]
• ”what I would like entrepreneurs to do is actually validate that their thinking is accurate because probably it’s not.”
• ”one of the things that we have to get really comfortable with is that we’re going to make a whole bunch of mistakes before we get this right and, as disappointing as that is, and as humbling as that is, it’s the path to success.”

About Janice Fraser

Janice Fraser (@clevergirl) is the co-founder and CEO of LUXr. Janice Fraser has about 15 years of experience in the UX field and had previously co-founded Adaptive Path and served as it’s first CEO. She is a guest speaker at Haas, Kellogg, Stanford, CCA and the Presido Graduate School of Management.

LUXr is a lean UX company working for early-stage companies who want to build products that customers want, need and love to buy. LUXr was started a year and a half ago specifically to help entrepreneurs develop their products and with better user experiences.

From: Business MBA

Nice interactive infographic from MBA@UNC: Online MBA showing the US startup ecosystem on boath coasts of the country over the last 5 years.

Aaron Patzer, Mint CEO, talks about the history of his startup Mint.