Review of the DC Startup Week 2019

Last week, I had the opportunity to attend the Washington DC Startup
Week 2019 which was from September 9th to the 13th. During this week, the DMV (DC, Maryland, and Virginia) startup community came together to learn and grow from each other and from experts around the world. Following are some of the things I learned as I attended the various talks, pitches, and workshops:

Financial Projections for SaaS Companies from GSP

  • Most SaaS companies charge the client(s) everything upfront for the services
  • Freemium model should be used only to figure out what the actual pricing might be
  • Customer services should be a cost so gross profits look good
  • 15% of base salary is a good measure to determine employee benefits
  • When you add customers then you need to add employee (Sales and Marketing) too
  • Sales and Marketing projections should not be constant over the years
  • To get Venture Capitalist (VC) funding:
    • Keep financial projections until year 3
    • Determine if money will last for what you want to build
  • Know your industry’s Customer Aquisition Costs (CAC)
  • My Thoughts:
    • Determine the likely cost (money, reputation) of a data breach
    • Create a checklist of what to do and not to do when making projections

Accounting Procedures for Startups

  • Investors look at accrual accounting
  • Investors will compare your gross profits to your industry
  • Projects should be positive and show a real picture
  • My Thoughts:
    • Except googling there seems to be no place to look at various industry gross profits for various industries at one centralized location

Fundraising

  • There are three major main sources of funding:
    • Government Grants
    • Angel Investors
    • Venture Capitalists
  • Keep in mind what you are building towards and the specific milestones
  • Provide monthly (or sooner when needed) updates to investors:
    • Summary of what happened
    • Challenges
    • List of Ask(s)
  • Ask investors what is their investing process
  • Pay yourself minimum (initially) to enough (when a company becomes self-sustaining)
  • Avoid these common mistakes:
    • Asking for more money isn’t always better
    • Don’t be afraid to negotiate
    • Focus on product/service and customer service
    • Show the landscape of the market, trends and where you fit in

Best Practices for Corporate and Startup Partnerships

  • Startups bring freshness to the organization
  • 3 things corporations care about when looking at startups:
    • A problem needs to solve
    • See something incidental
    • If this scales up, we will have problems
  • Nurture partnerships overtime
  • Transparency and timing is important
  • Always do due diligence before taking on a partner
  • Help people think outside the box
  • Corporations need mechanisms to speed things up
  • Figure out corporations pain points
  • Have a champion internally in the corporation that can pitch for your product or service
  • Corporations look at their internal capabilities vs. external capabilities of startups
  • 75% of USD $100B Venture Capitalist money goes to California, New York, and Massachusetts

Using Design Thinking for Products and Services

  • Design for simplicity
  • Design to make things easier

Finding Product/Market Fit

  • Have a focus on who your client is going to be
  • Sometimes your products/services might be ahead of its time
  • Don’t lie
  • Don’t assume success in one market will translate into another
  • It is best when the majority of the sales are inbound
  • Show/have evidence of traction
  • The lifecycle of a Startup Funds:
    • Ideation – friends and family, crowdfunding, bootstrapping
    • Seed Stage – minimum viable product (MVP)
    • Series A – real revenue
    • Liquidity – exit
  • To iterate on your MVP go to different groups to see what works and why it works
  • Be self-aware
  • Show repeatable product/service and then figure out how to get customers
  • Customer Aquisition Costs (CAC) strategy is very important
  • Think about your exit strategy and who would buy your company
  • Validate the market
  • Have a conversation with your competitors
  • Develop relationships with potential acquirers
  • Always have a domain experience
  • Watch a customer go through the product
  • To get a product/service market fit:
    • Who are you trying to help
    • Make it your priority to know pain points
    • Listen to negative reviews
  • As investors, they care more about the numbers (money) than the story
  • Figure out your why
  • Focus on the revenue model
  • Give real-world examples of pain points

Startup Pitches

1. Guardian Savings – a digital savings bank for children

2. JSkills – providing career transition skills training for journalists

3. Forget me not AI – personalized automated customer interaction

4. Akku – portable battery pack pickup and drop-off

5. Tabitha – Restaurant payment processing app for customers

6. Mully Lingua – Language and culture immersion app

7. Co-Tripper – Single mom group travel

8. Koin Street – A place to manage digital assets

9. Please Assist Me – Chores completion services when you are out of the house