Insight
Apache-licensed open-source cores are hard to defend against AWS exploitation
“I mentioned before there's some exploitive behavior from the cloud service providers, in particular AWS, and so you have to be very careful about your license if you're doing open source. I would not just have a very powerful core that, for example, is with th…”
Insight
Pursuing open source and cloud SaaS simultaneously creates two distinct companies
“But the really worst thing about trying to do open source and also, of course, trying to build a cloud service, which you fundamentally need to do, we're at the SAS conference here in 2023, is that you're actually going to build two different companies, much l…”
Insight
Startups should avoid open-source unless target customers reject managed cloud services
“So I'd say that if you're starting from scratch in 2023, you should only ever consider doing both of these things at the same time. If your ICP that you just believe is really the sort of narrow set of potential customers out there that really need and want yo…”
Insight
Founders should optimize for reaching product-market fit rather than minimizing dilution
“Which I don't think that it makes a lot of sense to optimize for dilution early on.
Instead, what I think people should be looking at is just how much money do you really need in order to get to that stage where you get product market fit.”
Disclosure
Cockroach Labs allocated 10% equity across its first 20 startup employees
“What we are trying to do, this is sort of empirically determined, is say that the first 20 employees of the company would have 10% of the equity. And the next 20 employees would have an additional five percent of the equity. And then the next 40 employees woul…”
Insight
Early-stage startups should hire a hands-on Head of Sales, not a VP
“You should probably call this a head of sales. Don't hire a VP of sales. You want to find somebody that actually has done something quite a bit like this stage recently and was successful. This is exploratory motion, and you want someone that's going to roll u…”
Insight
VCs lack operational experience, making independent startup board directors absolutely essential
“So they also typically don't have operational experience, or they don't have much of it, or it's been a long time. So as your board meetings happen quarter in, quarter out, you need to think about when the right time is to add an independent that's gonna start…”
Insight
Early hands-on go-to-market leaders typically only scale with startups for one year
“So that early go-to-market leader that rolls up their sleeves, they probably won't scale very far with you. Maybe a year, and that's actually pretty good.”
Insight
Promoting top-performing account executives into sales management is a common startup mistake
“And it's actually a really common mistake to believe that a really successful account executive is gonna make a good VP of sales, ah, or a sales manager. Ah, these are two extremely different things. Ah, one is coaching, and one is, ah, being an independent co…”
Insight
Major software product failures can be leveraged to build stronger customer trust
“And even when you have egregious product failures, and believe me, when you're building a relational operational database, they can be pretty egregious. Every one of those has the seed of a stronger, more trusting relationship with that customer.”
Insight
Spencer Kimball: Startup ideas are naturally conceived by multiple people simultaneously
“No matter how good your idea is, or how novel it seems, the best ideas arrive by multiple people at the same time.”
Insight
Asking venture capitalists to sign NDAs looks naive and unserious
“That actually makes you look very naive and somewhat unserious to a venture capital you know, venture capitalist when you ask for an NDA.”
Opinion
Generative AI startups are currently pushed into Series A rounds too quickly
“These days, I think if you're doing something in generative AI, you're probably gonna get shuttled into doing a series A, and that might not always be appropriate.”
Assertion Supported
VCs typically expect over 20% equity in both Seed and Series A
“Because of the high degree of risk at that early stage, venture capitalists are often expecting more than 20%.
And you're going to have to eventually do a series A, and that's going to be another something like 20%, because the risk is still perceived to be qu…”
Insight
Blind startup execution reaches a local maximum without strong visionary conviction
“And the execution, if it's sort of blind, you're going to end up with a sort of local maximum, if even that. Instead, what you need to do is you need to inform all of that effort with a visionary belief in what you're doing. And that's what you bring as a foun…”
Insight
Startups beat incumbents by being ten times better in a defined niche
“To beat all of the incumbents that are there, you have to be 10 times better. It's almost impossible to be 10 times better at everything that an involved product category has. But you can be 10 times better if you define a niche in that product category that y…”
Insight
At 10 to 20 reps, revenue operations becomes the most critical function
“When you get to about 10 to 20, Sellers. Then it starts to change into more of a revenue function, and there's a lot of components to a good revenue function, but the single most important one is a healthy and sort of advanced, sophisticated operations functio…”
Insight
A startup CEO has only three core jobs across all funding stages
“There's three jobs for the CEO, and this is true when you're Series A and it's true when you're Series F. You gotta keep money in the bank, you have to sell the vision internally and externally, and you have to fire yourself by hiring people to do jobs better …”
Disclosure
Cockroach Labs' founders wrote a culture manifesto before incorporating the company
“And so when we decided that we were going to even consider doing another startup, which was Cockroach, we actually sat down, we wrote a manifesto on culture, before we even incorporated the company.”
Assertion Not checkable as stated
Cockroach Labs spent three years building its database before having any customers
“We were building a product before we had customers for about three years, and I was programming.”
Disclosure
Spencer Kimball has angel-invested in over 80 startups
“On the way I've done a lot of angel investing, so I've invested in more than 80 different startups.”
Spencer Kimball