some viewers of the Stanford Entrepreneurial Thought Leaders pitch, featured here http://stanford.io/1M3zhZ9 have asked Floodgate to post a link to the presentation deck.

1. Mike Maples, Jr
(@m2jr)
Entrepreneurial Thought Leaders
January 27, 2016

2. Thunder Lizards

9. What can we learn from the
people who have built
ThunderLizards?

10. Key Thought #1:
3 Exponential Laws of
Entrepreneurship

11. Moore’s Law

12. Moore’s Law
Performance of computing doubles
every 18 months at a given price.

13. Metcalfe’s Law

14. Metcalfe’s Law
The value of a network is a function of
the square of its number of nodes.

15. The Power Law
97% of all exit profits
come from <10
>10,000 startups a year

16. The Power Law
97% of all exit profits
come from <10
>10,000 startups a year
The Value of the best outcome exceeds all other
outcomes combined; the second best outcome exceeds
the value of subsequent outcomes and so-on.

17. The Goal of Tech Entrepeneurship
Leverage the power of
Moore’s Law and/or
Metcalfe’s Law…
To create…
An extraordinary
outcome

18. But How?

19. Key Thought #2:
The Value Stack

20. The Value Stack
Value creation
Proprietary Power
Product Power
Company Power
Category Power
…avoids the need to
compete
…achieves product-
market fit
…prepares for rapid
scaling
…captures the value
from changing spend

21. Proprietary
Power
Avoiding the need to
compete
Proprietary Power
Product Power
Company Power
Category Power

22. Common View of Capitalism
Capitalism is a system of
perfect competition.

23. The Broader View of Capitalism
“True” capitalism and
competition are opposites

24. Fundamental Advantages are
Fundamental
• Perfect competition is not perfect
• Mindless competition is pervasive in Silicon Valley
• Can it be a monopoly if it works?
• Is there a structural competitive advantage, not just a
first-mover advantage?

25. Sources of Proprietary
Power

26. Technology Advantage
(usually harnessing Moore’s Law)

27. Network Effects
(usually harnessing Metcalfe’s Law)

28. Suggested Reading

29. Product Power
Achieving Product-
Market Fit
Proprietary Power
Product Power
Company Power
Category Power

30. Common View of Products
Company Market
Product
• Startup has product idea and builds it
• Startup launches product
• Then gets customers and iterates

31. Problems with this view
“In a great market – a market with lots of real potential customers –
the market pulls product out of the startup.”
Conversely, in a terrible market, you can have the best product in the
world and an absolutely killer team and it doesn’t matter – you’re
going to fail.”
“The #1 company-killer is lack of market.”
Marc Andreessen

32. Product/Market Fit
Product Market

33. Product/Market Fit
Product Market
Identify the market
• Large
• Strong customer desire
• Right timing

34. Product/Market Fit
Product Market
Identify the market
• Large
• Strong customer desire
• Right timing
“Pulls” the product

35. Product/Market Fit
Product Market
Identify the market
• Large
• Strong customer desire
• Right timing
Pull the product
Delights the customer

36. Delighting the customer requires a
“WTF” Experience
Lyft and Uber Tesla Autopilot

37. Suggested Reading

38. Company Power
Preparing for rapid
scaling
Proprietary Power
Product Power
Company Power
Category Power

39. Sources of Company Power
• Scalable Business Model
– Converts innovation to value
• Scalable Management Systems
– Avoids technical and management debt

40. Scalable Business Model
• Always possible when Proprietary Power and
Product Power are present
• Increasing margins and pricing power are
“proof” that the first two layers are strong

41. Suggested Reading
Business Model Canvas
By Alexander Osterwalder

42. Scalable Management Systems
• Culture: Define it or let it happen?
• Basic Management Systems:
– 1:1s, Board Meetings, Team Meetings, Forecasting
Frameworks
• Compensation Strategy
– Particularly important for recruiting and retention
• Hot Teams

43. Suggested Reading

44. Category Power
Capturing the value
from changing spend
Proprietary Power
Product Power
Company Power
Category Power

45. Category Kings…
• Category Kings don’t just make something to sell to
people
• Category Kings introduce the world to a new category
of product or service.
• Category Kings replace our current point of view with a
new point of view.
• And ultimately, they change how people and
businesses decide to spend their money.

46. Examples

47. Category Kings usually capture
70-80% of the profit pool.

48. Suggested Reading
www.playbigger.com

49. Funding your value stack

50. The Goal of Seed Rounds
Value creation
Proprietary Power
Product Power
Company Power
Category Power
…marry the first two
layers
…lay early groundwork

51. The Goal of “Execution” Rounds
Value creation
Proprietary Power
Product Power
Company Power
Category Power
…create the flywheel
for blitz-scaling
...category design
…invest to tighten
fundamental
advantages

52. The Goal of “Late Stage” Rounds
Value creation
Proprietary Power
Product Power
Company Power
Category Power
…relentless refinement
...capture the profit pool
from emerging category

53. Final Thought

54. Never let go of being
exceptional

55. THANKS!