Tech Talk Unplugged from Event in Kelowna

Hey good looking,

Just got back from tech talk unplugged — a good little start-up primer and kickoff for the 2010 event in Kelowna, B.C. There were about 70 folks in attendance for the presentations that were given in the student theatre of the beautiful UBC-Okanagan campus.

Tim Bajarin, president of Silicon Valley-based Creative Strategies and a regular columnist, and Ethan Anderson, a former Google’r and co-founder of TechCrunch winner, were the featured speakers.

Tim kicked things off with a presentation that touched on the importance of start-ups (especially those seeking investment) addressing the question of Why? in their business plan, using the example of Apple (it seems Uncle Jobs and The Woz started Apple because they couldn’t afford to buy any other personal computer or kit of the time). Bajarin characterized this Why? as a statement of Apple’s mission to “deomocratize” the personal computer market.

Tim also made some interesting points around the future of cloud-computing technology as the centre of the connected universe that will service all the screens in our life, which made me feel pretty good about that skin I have in MoboVivo, and brought home the future business opportunity for cloud-based solutions.

Some notable predictions from Tim’s presentation:

  • It took us 25 years to get one billion people on PCs; the next billion will get online in less than 5 years (as a result, Tim boldly predicts that Silicon Valley is unlikely to go out of business, anytime soon 🙂
  • Tim figures that 3 Mobile OS’s can survive in the global marketplace. His Top-5 bets are: Apple, Android, RIM, Windows Mobile and the newly HP-acquired Palm OS

Next up, Ethan Anderson walked the crowd through his Google-tested, VC-approved method for launching a start-up.

It starts, says Ethan, with crystal clear product definition (he’s a disciple of the Minimum Viable Product approach currently en vogue with Silicon Valley types). The idea is to figure out the bare minumum your product requires to find success with your target customer and market.

In Ethan’s world, if you haven’t gotten to that clarity fo product defintiion there’s no movement beyond this point in your start-up — the telling quote:

“A lot of old-school business professors will tell you that you need a complete business plan with a minimum of five years of financials before you even get started — ignore them.”

Ethan then ran through the variety of options that entrepreneurs have at their fingertips when selecting an online business model: freemiums, subscriptions, ad-supported, admissions, commissions etc.

Other important question that you want to ask about your business model, include:

  • Do I monetize my customer once, a couple times a year or more? (goes to true cost of acquisition etc.)
  • What is my operating break even as compared to my cumulative cash flow break even? (the difference between spending and making 100k a month by month 12 vs. taking a 3m debt investment at start-up that may not pay off until month 18). Ultimately, a good VC will want to know what your cumualtive cash flow B/E is.

Ethan stressed the importance of early-day user adoption and the greater value of sometimes eating a little profit in order to build up critical volume and demonstrate scalability to investors. He also paid homage to Dave McClure in referencing RedBeacon’s use of Startup Metrics for Pirates.

I wasn’t crazy about Ethan’s characterization of employees as a semi-fixed expense – “You can always lay them off” – but I suppose anyone joining RedBeacon in the Valley will be smart enough to negotiate options.

That’s it for now. Heading back out to hit-up the booze, schmooze and cruise portion of the metabridge event, over at Quails Gate Winery, where 30 or so local tech start-ups will be clamouring for attention from the Silicon players.

Peace, love and profit from the Silicon Vineyard