1/30: There’s a supply/demand imbalance in the startup world (too much capital/not enough great companies). This means it’s a great time to be a Founder if you have an epic idea, but how do you know if your idea is any good? I asked some amazing VCs and here’s their advice:
2/30: Put a prototype in users' hands. When you try to take it away from them, do they kick and scream and tell you to get lost? If so, you've got a good idea. If not, keep iterating. (@Mark_Goldberg)
3/30: Can you can describe it in 30 seconds or less to a tech-illiterate relative at Thanksgiving? Great ideas are simple, but non-obvious. (@Mark_Goldberg)
4/30: Silver bullet > Lead bullets. The value of a single, focused 10x improvement for customers far exceeds the value of a basket of small improvements that might in aggregate be a 10x improvement. And it's far easier to explain (market) to a potential customer! (@illscience)
5/30: Don't worry about market size. TAM is often impossible to predict since many products are focused on potential markets vs existing markets. Focus on insanely over-delivering for a single cust/use case. If you succeed the market will often unfold around you. (@illscience)
6/30: Distribution > Product. Acquisition insights matter as much as product insights given the anti-gravity of paid acquisition (CAC only goes ). The former is usually a much bigger struggle than the latter. (@illscience)
7/30: The best defense is doing something your competitors are economically dis-incentivized to copy! I.e. zero dollar trading (Robinhood), overdraft protection (Dave.com), or human in the loop onboarding (Superhuman). (@illscience)
8/30: A quirk of startups is any time you have a cool idea, there are 5 other companies doing the same thing that you haven't heard of, but VCs may have. Founders should know their competition better than we do and have insights into what will define success. (@iamjakestream)
9/30: “Happens over time”. The same ideas recur over and over. It's impressive when founders know the history of the market and have unique perspectives on what caused companies to fail in the past and what has changed to aid their success. (@iamjakestream)
10/30: There are lots of ways to be an entrepreneur without starting a VC backed start-up. For example, I come from a family of small business owners. Make sure you know what you want. Starting from a place of self-awareness is the best way to begin any journey. (@dkimerling)
11/30: Most start-ups fail. Be so passionate about a problem that you can work on it for a decade without financial gain or regret. I've been working on bank APIs since 2012 and still am obsessed. If you’re that compelled, you're headed in the right direction. (@dkimerling)
12/30: The iron law of start-ups: Build something people want. If people want it, are using it and paying you for it, then keep going. VCs make a lot of type-1 and type-2 errors so follow your customers’ hearts and wallets. That is the ultimate validation. (@dkimerling)
13/30: Whatever you are going to build needs to create absolute value for customers as well as more relative value than any other option in the market. (@wquist)
14/30: Figure out how much was spent last year solving the problem you are solving. Figure out if you need to create a market or if one exists. (@wquist)
15/30: Think through the barrier to competition you are creating or will benefit from. There are only a few proven moats out there. (@wquist)
16/30: Play out the quality of your business. What do you think you can charge your customers? How much cash flow can you generate after accounting for the cost to build it and the cost to sell it? How much cash will you have to invest to get there? (@wquist)
17/30: Summary: If you think you can build something of value for a large market, with a moat, and you can generate a lot more cash than the equity it costs to get there, you probably have something great (@wquist)
18/30: There are two key questions a Founder should be able to answer about the merits and executability of their idea: (1) Why are you the best person to work on this idea? and (2) Why is now the right time for this idea? (@mbatny)
19/30: If you can honestly look yourself in the mirror and believe you have strong answers to those two questions, then your idea may have real merit. (@mbatny)
20/30: Almost every opportunity is still available in Fintech. Look for areas where the incumbents can’t do something (Square w/mobile payments) or won’t (Dave w/overdraft protection). (@ryan_falvey)
21/30: Make sure your vision and initial product are well articulated. Clear concise language > clever marketing. Also, unless you have actual revenues and actual growth, don’t bother with financials. They’re going to be wrong. (@ryan_falvey)
22/30: The single biggest differentiator at the seed stage is speed of execution. Build, learn and test fast. But don’t break any laws - financial regulators have a lot more teeth than taxi regulators ;) (@ryan_falvey)
23/30: What’s the true test to know if you’re startup is a great idea? If customers give you their credit card then you know you are creating value. (@mjmreport)
24/30: Raise prices and if your customers keep coming back then you know you are creating value. Continue this cycle until you see diminishing returns. (@mjmreport)
25/30: I meet a lot of talented founders who are incredibly passionate about their startups, but the ones that truly standout are those who have gone through hardships to get their startup off the ground. This shows me true conviction. (@mjmreport)
26/30: Adding on a few of my own thoughts:
27/30: Be honest about whether you’re trying to solve a real problem or a manufactured problem. The easiest way to build a durable and large business is to create a solution that dulls or eliminates your target customer’s pain. (@fintechjunkie)
28/30: Play out the future like it’s a chess game. Businesses are built in stages so internalize what has to go right over multiple stages to build a sizeable company. If you can’t create a narrative that describes a great business you don’t have an epic idea. (@fintechjunkie)
29/30: Be able to convince yourself and potential investors why incumbents have and will continue to allow the problem you’re tackling to persist. Don’t approach this question with arrogance. Approach it with respect. (@fintechjunkie)
30/30: Leaving you with this thought:

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More from @fintechjunkie

19 Nov
1/30: Many #Startup CEOs struggle to redefine their own role as their company scales. I’ve been asked by startup CEOs many times: “What should my job be?” What follows is a framework I’ve used to guide various CEOs through the evolution from a “Small Team CEO” to a “Proper CEO”:
2/30: But, before I share the framework I almost universally have to re-set their expectations because most first time CEOs think that their primary function is to “make all critical decisions”. Breaking them out of a “control everything” mentality is uncomfortable but essential.
3/30: What’s disappointing is that many CEOs can’t wrap their heads around the thought that they won’t be directly involved in everything happening at their company and in the middle of all critical decisions. Only when they’re ready to deal with this they can evolve.
Read 30 tweets
10 Nov
1/32: Building a #StartUp business has similarities to a spacecraft crashing down on an unknown planet. I talk to Founders about this all the time. Unpacked:
2/32: We’ve all seen blockbuster “how the heck are we going to survive” SciFi movies. The one commonality is that there’s an obvious prioritization of what has to be solved and in what order.
3/32: This is because all human beings need 3 things to survive: Oxygen, Water and Food. Without any of them we can’t survive. But, bad things start to happen if we don’t have oxygen for 3 minutes, water for 3 days or food for 3 weeks.
Read 32 tweets
3 Nov
1/29: Have you ever had a concept explained to you that helps frame complex issues you’ve been wrestling with and opens your eyes to new possibilities? A concept that I share that seems to resonate well with Entrepreneurs and Investors is what I call “Truth Files”. Unpacked:
2/29: So what is a “Truth File?” Simple definition: “A truth file contains data that without need of additional confirmation can be considered factual.” Not all truth files are 100% accurate and not all are valuable, but the best ones can be transformational.
3/29: The operative question that defines how valuable a truth file is: “What does the truth file reveal that can be used as a substitute for investigative work or help make more accurate decisions?” The first reduces friction and the second improves outcomes.
Read 29 tweets
26 Oct
1/15: Of all the questions I’m being asked on recent diligence calls about our companies, the most common is “What are the skills/gaps of the Founder(s)?” Given COVID, this has become an important topic so I thought it would be worth sharing how I think about the issue. Unpacked:
2/15: In every conversation I try to level-set the outsider and speak in “truisms” before diving into specifics. The first truism is that the skill set needed to run a high growth, disruptive start-up is multi-dimensional and that it’s about tradeoffs vs. insisting on completism.
3/15: We’d love if our Founders were world class on dimensions that include: Action orientation, ability to make decisions with limited/changing data, magnet for talent, ability to frame a business vision, and fundraising skills. These are just a few of the many important skills.
Read 15 tweets
16 Oct
1/42: What the heck is going on with the #fintech ecosystem’s obsession with Neo-Banks? Do they actually make sense in the US? Traditional Bankers say “absolutely not”. I say “they can”. Unpacked:
2/42: Because there’s so much confusion about the topic, it’s worth starting with a definitional statement about what a Neo-Bank is. One definition: A Neo-Bank is a COMPANY that offers a LIMITED SUITE OF BANKING PRODUCTS with NO OWNERSHIP OF BRANCH LOCATIONS.
3/42: COMPANY does not mean Bank. There are many forms and fashions of Neo-Banks but not many of them are actually Banks. It’s possible with today’s technological solutions for a non-Bank to offer Banking products.
Read 42 tweets
11 Oct
1/28: The most commonly debated and IMHO the least grounded topic in early stage VC is “how do you determine what a company is worth?” Recent early stage #fintech and #venturecapital valuations seem to defy gravity but are they justified?
2/28: Answering this question requires breaking down the problem into a framework that’s easier to analyze. One framework: A business is “worth” a combination of the intrinsic value of what it can produce and the option value of what it might be able to produce in the future.
3/28: When a company has cracked the code on turning a dollar of investment into a multiple of the dollar in the future it can be categorized as a money making machine.
Read 28 tweets

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