고군분투 미국에서 벤처 창업

At Greylock, my partners and I are driven by one guiding mission: always help entrepreneurs. It doesn’t matter whether an entrepreneur is in our portfolio, whether we’re considering an investment, or whether we’re casually meeting for the first time.

Entrepreneurs often ask me for help with their pitch decks. Because we value integrity and confidentiality at Greylock, we never share an entrepreneur’s pitch deck with others. What I’ve honorably been able to do, however, is share the deck I used to pitch LinkedIn to Greylock for a Series B investment back in 2004.

This past May was the 10th anniversary of LinkedIn, and while reflecting on my entrepreneurial journey, I realized that no one gets to see the presentation decks for successful companies. This gave me an idea: I could help many more entrepreneurs by making the deck available not just to the Greylock network of entrepreneurs, but to everyone.

Today, I share the Series B deck with you, too. It has many stylistic errors — and a few substantive ones, too — that I would now change having learned more, but I realized that it still provides useful insights for entrepreneurs and startup participants outside of the Greylock network, particularly across three areas of interest:

• how entrepreneurs should approach the pitch process
• the evolution of LinkedIn as a company
• the consumer internet landscape in 2004 vs. today

—Reid Hoffman

---------------------------------

context

In 2004, the consumer internet was just beginning to rebound. Friendster was at its height, strongly battling MySpace after raising its premium round from Benchmark and Kleiner in the fall of 2003. Facebook, by the way, was not yet on most people’s radars in the summer of 2004.

Friendster’s valuation set the tone for the entire social networking space. Friendster and MySpace had millions of users, a ton of engagement, and all the press attention they wanted. Press and analysts characterized LinkedIn in one of two ways: “LinkedIn is an interesting niche that might be worth paying attention to” or “LinkedIn is the Friendster for business”. Neither is a particularly good backdrop for trying to raise capital, because

1. we weren’t the natural leader of a market or technology trend that everyone was paying attention to,
2. we didn’t have substantial organic growth, and
3. we had no revenue.

Advice

Investors see a lot of pitches. In a single year, the classic general partner in a venture firm is exposed to around 5,000 pitches; decides to look more closely at 600 to 800 of them; and ends up doing between 0 and 2 deals. The goal of an entrepreneur is to be one of those deals.

First, understand your audience. Research prospective investors thoroughly. What kinds of businesses are they looking at? What model/criteria/triggers do they use to judge whether a project will be successful or not? If you don’t have some sense of their points of view, your likelihood of making the pitch go well is more random. You may happen to emphasize the right points that pique an investor’s interest, but you shouldn’t leave your financing up to chance.

Second, understand the broader financing climate. In 2004, investors regained interest in the consumer internet again. Friendster raised a big round in 2003; MySpace started gaining traction. But with so many investors still licking their wounds from the dot-com bust, many focused on proven business models, such as advertising or e-commerce. As a result, we knew that our pitch would need to steer into investors’ biggest concern: the lack of revenue.

Context

In our first slide, we answer three questions:

• What is LinkedIn? The graphic we chose emphasizes that it is a network of people.
• Why is it valuable? Because you can find and contact people you need.
• How is this different? Because unlike Google search or other means, it involves people you already trust.

Although we knew that the recruiting space would be our initial business opportunity, we believed then — and know now — that LinkedIn is more than just a recruiting business. Thus, our pitch framed LinkedIn as a platform for finding the people you need, which we called “professional people search 2.0″, making the parallel to Google because investors understood that Google was valuable. (On slide 5, I begin explaining the importance of pitching by analogy.)

If we framed LinkedIn as only a “jobs/classifieds” website, most smart venture capitalists would not have invested because that seemed to lack the potential to be a broad platform that could sustain a large business. Ultimately, Greylock’s investment thesis was that LinkedIn would be a great recruiting business with an option for more.

Advice

Open with your investment thesis, what prospective investors must believe in order to want to be shareholders of your company. Your first slide should articulate the investment thesis in generally 3 to 8 bullet points. Then, spend the rest of the pitch backing up those claims and increasing investors’ confidence in your investment thesis.

For example, if I were pitching LinkedIn’s Series B today with what I now know about successful pitches, the investment thesis would be:

1. Massively valuable properties will be built off networks.
2. There will be different networks for different domains.
3. The professional domain will be one massively valuable network.
4. We are the leader in the professional domain with viral growth.
5. Great businesses can be built off this network, starting with matching talent and opportunity.
6. It’s a network effects business, which means it has inherent defensibility with a network.

Clearly articulate your investment thesis so investors can offer feedback that helps you refine it, eventually getting to a place where you both agree on it. Any disagreement will likely cause serious problems down the road.

링크--------

The knock on Facebook is often that it doesn’t have its ad strategy figured out. That might be, but the company courted advertisers pretty much from the get-go.

As captured in “The Social Network,” Facebook’s then-CFO Eduardo Saverin was in New York City right after the launch of TheFacebook, as it was then called, to sell ads. One of those who met with Saverin in April 2004 saved Facebook’s first media kit, which was provided to Digiday.

TheFacebook was a far cry from the global behemoth it is today. Just a bit over two months old, the media kit details its 70,000 users at 20 major colleges. But Facebook’s grand plans are evident in its projections, which include launching in 200 colleges in six months.

Facebook’s original pitch was a bit different than the message it bring to marketers today. For one, Facebook wasn’t urging them to use social ads but instead offered to run IAB standard ad units. Yet Saverin was already emphasizing Facebook’s unique (and personal) data, explaining that marketer’s could target by sexual orientation or even by dorm.

Below is the media kit Saverin was using to pitch potential advertisers that spring, obtained from a New York-based marketer he met with personally. Saverin was asking for ad commitments of around $80,000 for targeted display ad placements that would reach “thousands” of users.

Y Combinator Funding Application
Summer 2007
Application deadline: 12 midnight (PST) April 2, 2007.

Please try to answer each question in less than 120 words.

We look at online demos only for the most promising applications, so don't skimp on the application because you're relying on a good demo.

We don't make any formal promise about secrecy, but we don't plan to let anyone outside Y Combinator see these applications, including other startups we fund.

We recommend you save regularly by clicking on the update button at the bottom of this page. Otherwise you may lose work if we restart the server. 

# Username:  
dhouston

# Company name:  
Dropbox

# Company url, if any:  
http://www.getdropbox.com/
 
# Phone number (preferably cell):  
(redacted)
 
# Usernames of all founders, separated by spaces. (Please have all founders create YC accounts, or create accounts for them.)  
dhouston
 
# Usernames of all founders who will move to (or already live in) Boston for the summer if we fund you.  
dhouston
 
# What is your company going to make?  
Dropbox synchronizes files across your/your team's computers. It's much better than uploading or email, because it's automatic, integrated into Windows, and fits into the way you already work. There's also a web interface, and the files are securely backed up to Amazon S3. Dropbox is kind of like taking the best elements of subversion, trac and rsync and making them "just work" for the average individual or team. Hackers have access to these tools, but normal people don't.

There are lots of interesting possible features. One is syncing Google Docs/Spreadsheets (or other office web apps) to local .doc and .xls files for offline access, which would be strategically important as few web apps deal with the offline problem.

# For each founder, please list: YC username; name; age; year, school, degree, and subject for each degree; email address; personal url (if any); and present employer and title (if any). Put unfinished degrees in parens. List the main contact first. Separate founders with blank lines. Put an asterisk before the name of anyone not able to move to Boston for the summer.  
dhouston; Drew Houston; 24; 2006, MIT, SB computer science; houston AT alum DOT (school i went to) DOT edu; --; Bit9, Inc (went full time to part time 1/07) - project lead/software engineer

Although I'm working with other people on Dropbox, strictly speaking I'm the only founder right now. My friend (redacted), a great hacker, Stanford grad and creator of (redacted) is putting together a Mac port, but can't join as a founder right now as a former cofounder of his started an extremely similar company. My friend and roommate (redacted) from MIT is helping out too, but he works with me at Bit9, and a non-solicit clause in my employment contract prevents me from recruiting him (and the VP Eng explicitly told me not to recruit him.)

In any case, I have several leads, have been networking aggressively, and fully intend to get someone else on board -- either another good hacker or a more sales-oriented guy (e.g. the role Matt fills at Xobni). I'm aware that the odds aren't good for single founders, and would rather work with other people anyway.

# Please tell us in one or two sentences something about each founder that shows a high level of ability.  
Drew - Programming since age 5; startups since age 14; 1600 on SAT; started profitable online SAT prep company in college (accoladeprep.com). For fun last summer reverse engineered the software on a number of poker sites and wrote a real-money playing poker bot (it was about break-even; see screenshot url later in the app.)

# What's new about what you're doing?  
Most small teams have a few basic needs: (1) team members need their important stuff in front of them wherever they are, (2) everyone needs to be working on the latest version of a given document (and ideally can track what's changed), (3) and team data needs to be protected from disaster. There are sync tools (e.g. beinsync, Foldershare), there are backup tools (Carbonite, Mozy), and there are web uploading/publishing tools (box.net, etc.), but there's no good integrated solution.

Dropbox solves all these needs, and doesn't need configuration or babysitting. Put another way, it takes concepts that are proven winners from the dev community (version control, changelogs/trac, rsync, etc.) and puts them in a package that my little sister can figure out (she uses Dropbox to keep track of her high school term papers, and doesn't need to burn CDs or carry USB sticks anymore.)

At a higher level, online storage and local disks are big and cheap. But the internet links in between have been and will continue to be slow in comparison. In "the future", you won't have to move your data around manually. The concept that I'm most excited about is that the core technology in Dropbox -- continuous efficient sync with compression and binary diffs -- is what will get us there.

# What do you understand about your business that other companies in it just don't get?  
Competing products work at the wrong layer of abstraction and/or force the user to constantly think and do things. The "online disk drive" abstraction sucks, because you can't work offline and the OS support is extremely brittle. Anything that depends on manual emailing/uploading (i.e. anything web-based) is a non-starter, because it's basically doing version control in your head. But virtually all competing services involve one or the other.

With Dropbox, you hit "Save", as you normally would, and everything just works, even with large files (thanks to binary diffs).

# What are people forced to do now because what you plan to make doesn't exist yet?  
Email themselves attachments. Upload stuff to online storage sites or use online drives like Xdrive, which don't work on planes. Carry around USB drives, which can be lost, stolen, or break/get bad sectors. Waste time revising the wrong versions of given documents, resulting in Frankendocuments that contain some changes but lose others. My friend Reuben is switching his financial consulting company from a PHP-based CMS to a beta of Dropbox because all they used it for was file sharing. Techies often hack together brittle solutions involving web hosting, rsync, and cron jobs, or entertaining abominations such as those listed in this slashdot article ("Small Office Windows Backup Software" - http://ask.slashdot.org/article.pl?sid=07/01/04/0336246).

# How will you make money?  
The current plan is a freemium approach, where we give away free 1GB accounts and charge for additional storage (maybe ~$5/mo or less for 10GB for individuals and team plans that start at maybe $20/mo.). It's hard to get consumers to pay for things, but fortunately small/medium businesses already pay for solutions that are subsets of what Dropbox does and are harder to use. There will be tiered pricing for business accounts (upper tiers will retain more older versions of documents, have branded extranets for secure file sharing with clients/partners, etc., and an 'enterprise' plan that features, well, a really high price.)

I've already been approached by potential partners/customers asking for an API to programmatically create Dropboxes (e.g. to handle file sharing for Assembla.com, a web site for managing global dev teams). There's a natural synergy between Basecamp-like project mgmt/groupware web apps (for the to-do lists, calendaring, etc.) and Dropbox for file sharing. I've also had requests for an enterprise version that would sit on a company's network (as opposed to my S3 store) for which I could probably charge a lot.

# Who are your competitors, and who might become competitors? Who do you fear most?  
Carbonite and Mozy do a good job with hassle-free backup, and a move into sync would make sense. Sharpcast (venture funded) announced a similar app called Hummingbird, but according to (redacted) they're taking an extraordinarily difficult approach involving NT kernel drivers. Google's coming out with GDrive at some point. Microsoft's Groove does sync and is part of Office 2007, but is very heavyweight and doesn't include any of the web stuff or backup. There are apps like Omnidrive and Titanize but the implementations are buggy or have bad UIs.
 
# For founders who are hackers: what cool things have you built? (Include urls if possible.)  
Accolade Online SAT prep (launched in 2004) (http://www.accoladeprep.com/); a poker bot (here's an old screenshot: https://www.accoladeprep.com/sshot2.gif; it's using play money there but worked with real money too.)

# How long have the founders known one another and how did you meet?  
There's a joke in here somewhere.

# What tools will you use to build your product?  
Python (top to bottom.) sqlite (client), mysql (server). Turbogears (at least until it won't scale.) Amazon EC2 and S3 for serving file data.

# If you've already started working on it, how long have you been working and how many lines of code (if applicable) have you written?  
3 months part time. About ~5KLOC client and ~2KLOC server of python, C++, Cheetah templates, installer scripts, etc.

# If you have an online demo, what's the url?
Here's a screencast that I'll also put up on news.yc:

http://www.getdropbox.com/u/2/screencast%20-%20Copy.html

If you do have a Windows box or two, here's the latest build:

http://www.getdropbox.com/u/2/DropboxInstaller.exe
 
# How long will it take before you have a prototype? A beta? A version you can charge for?  
Prototype - done in Feb. Version I can charge for: 8 weeks maybe? (ed: hahaha)
 
# Which companies would be most likely to buy you?  
Google/MS/Yahoo are all acutely interested in this general space. Google announced GDrive/"Platypus" a long time ago but the release date is uncertain (a friend at Google says the first implementation was this ghetto VBScript/Java thing for internal use only). MS announced Live Drive and bought Foldershare in '05 which does a subset of what Dropbox does. Iron Mountain, Carbonite or Mozy or anyone else dealing with backup for SMBs could also be interested, as none of them have touched the sync problem to date.

In some ways, Dropbox is for arbitrary files what Basecamp is for lightweight project management, and the two would plug together really well (although 37signals doesn't seem like the buying-companies type).

At the end of the day, though, it's an extremely capital-efficient business. We know people are willing to pay for this and just want to put together something that rocks and get it in front of as many people as possible. 

# If one wanted to buy you three months in (August 2007), what's the lowest offer you'd take?  
I'd rather see the idea through, but I'd probably have a hard time turning down $1m after taxes for 6 months of work.

# Why would your project be hard for someone else to duplicate?  
This idea requires executing well in several somewhat orthogonal directions, and missteps in any torpedo the entire product.

For example, there's an academic/theoretical component: designing the protocol and app to behave consistently/recoverably when any power or ethernet cord in the chain could pop out at any time. There's a gross Win32 integration piece (ditto for a Mac port). There's a mostly Linux/Unix-oriented operations/sysadmin and scalability piece. Then there's the web design and UX piece to make things simple and sexy. Most of these hats are pretty different, and if executing in all these directions was easy, a good product/service would already exist.

# Do you have any ideas you consider patentable?  
(redacted)

# What might go wrong? (This is a test of imagination, not confidence.)  
Google might finally unleash GDrive and steal a lot of Dropbox's thunder (especially if this takes place before launch.) In general, the online storage space is extremely noisy, so being marginally better isn't good enough; there has to be a leap in value worthy of writing/blogging/telling friends about. I'll need to bring on cofounder(s) and build a team, which takes time. Other competitors are much better funded; we might need to raise working capital to accelerate growth. There will be the usual growing pains scaling and finding bottlenecks (although I've provisioned load balanced, high availability web apps before.) Acquiring small business customers might be more expensive/take longer than hoped. Prioritizing features and choosing the right market segments to tackle will be hard. Getting love from early adopters will be important, but getting distracted by/releasing late due to frivolous feature requests could be fatal.

# If you're already incorporated, when were you? Who are the shareholders and what percent does each own? If you've had funding, how much, at what valuation(s)?  
Not incorporated

# If you're not incorporated yet, please list the percent of the company you plan to give each founder, and anyone else you plan to give stock to. (This question is as much for you as us.)  
Drew

# If you'll have any major expenses beyond the living costs of your founders, bandwidth, and servers, what will they be?  
None; maybe AdWords.
 
# If by August your startup seems to have a significant (say 20%) chance of making you rich, which of the founders would commit to working on it full-time for the next several years?  
Drew

# Do any founders have other commitments between June and August 2007 inclusive?  
No; I've given notice at Bit9 to work on this full time regardless of YC funding.

# Do any founders have commitments in the future (e.g. have been accepted to grad school), and if so what?  
No. Probably moving to SF in September
 
# Are any of the founders covered by noncompetes or intellectual property agreements that overlap with your project? Will any be working as employees or consultants for anyone else?  
Drew: Some work was done at the Bit9 office; I consulted an attorney and have a signed letter indicating Bit9 has no stake/ownership of any kind in Dropbox

# Was any of your code written by someone who is not one of your founders? If so, how can you safely use it? (Open source is ok of course.)  
No

# If you had any other ideas you considered applying with, feel free to list them. One may be something we've been waiting for.  
One click screen sharing (already done pretty well by Glance); a wiki with version-controlled drawing canvases that let you draw diagrams or mock up UIs (Thinkature is kind of related, but this is more text with canvases interspersed than a shared whiteboard) to help teams get on the same page and spec things out better (we use Visio and Powerpoint at Bit9, which sucks)
 
# Please tell us something surprising or amusing that one of you has discovered. (The answer need not be related to your project.)  
The ridiculous things people name their documents to do versioning, like "proposal v2 good revised NEW 11-15-06.doc", continue to crack me up.

다음은 조성문씨 사이트에서 퍼온 겁니다.

며칠 전 아래와 같은 트윗을 했었다. 15번의 리트윗에 비해 Favorite 등록이 100건인 것을 보니 많은 분들이 나중에 보려고 저장해둔 것 같다. 사실 41페이지나 되는 빡빡한 문서라 일일이 보려면 시간이 많이 걸린다.

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그래서 블로그 독자들을 위해 재미있게 본 부분만 몇 개 발췌해서 옮겨볼까 한다. 시콰이어 캐피털이 보관하고 있던 이 문서가 세상에 알려지게 된 이유는 소송 때문이다. 2007년에 미디어 자이언트인 Viacom이 자신의 컨텐트가 유투브를 통해 유통된 것을 유투브에서 막기는 커녕 오히려 도왔다며 구글-유투브를 상대로 $1B (약 1조원)의 저작권 침해 소송을 걸었고, 이 소송은 재심, 항고 등을 거치며 2013년까지 끌다가 둘이 합이하면서 끝이 났다. 어쨌든, 그 덕에 이런 재미난 사실이 알려졌으니 나로서는 고마운 일이다.

Roelef Botha

이 글을 쓴 사람은 Roelef Botha로, 벤처 업계에서 매우 유명한 사람인데, 현재는 시콰이어 캐피털의 벤처 캐피털리스트이다. 남아프리카공화국에서 태어나 매킨지 요하네스버그 사무실을 거쳐 스탠포드 MBA를 졸업한 후, 2001년에 페이팔에 조인했고, 곧 CFO가 되었는데 이든 해에 회사가 상장했다. 그 때 그의 나이가 28세였다고 하니 무지하게 운이 좋다(물론 뛰어난 인재여서 잡은 기회이지만). 2003년에 페이팔이 이베이에 $1.5B 에 매각된 후 그는 회사를 떠나 시콰이어 캐피털에 합류했으며 그 이후 좋은 회사들에 많이 투자했다. 유투브는 그가 2007년에 발굴한 대박 회사이며, 그 후 에버노트, 인스타그램, 몽고DB, 스퀘어 등에도 투자했다. 그가 지금까지 투자한 포트폴리오 회사들의 총 가치가 $12B (약 12조원)나 된다고 한다. 이 문서를 보면, 그가 당시에 시장을 어떻게 봤는지, 회사에 투자할 당시에 무슨 생각을 했는지 등을 엿볼 수 있다. 아래 요약. 2~8페이지는 2005년에 유투브를 처음 알게 되어 세 명의 창업자들을 만나고 투자를 결심하기로 된 과정을 설명한다. 그리고 유투브 창업자들이 그들의 비전을 뭐라고 설명했는지도. “사람들이 직접 만든 비디오를 인터넷에서 공유하는 가장 주된 장소가 되고 싶다는 것”. 그리고 “비디오를 찍는 기기들의 값이 싸지면서 사람들이 비디오를 더 많이 만들게 될 것이라는 것”

시콰이어 캐피털의 Roelef가 쓴 문서. 유투브 창업자들을 처음 만났을 때 들은 이야기를 설명하고 있다.

그 다음에는, 유투브가 저작권이 있는 컨텐트가 퍼지는 것을 막기 위해 어떤 의식적 노력을 기울였는지를 설명한다. 즉, 비아콤이 주장하는대로 유투브가 그런 활동을 도왔다는 증거는 없다는 점과, 유투브가 그런 컨텐트로부터 돈을 벌 의도도 없었다는 점을 주장한다. 다음엔, 유투브 창업자들의 처음 보여줬던 문서의 일부.

유투브를 만들 당시 관찰했던 비디오 공유의 문제점들: 1. 비디오 파일의 크기가 너무 크고, 2. 비디오 파일 형식도 다 다르고, 3. 연관된 비디오들을 연결해주는 서비스가 없다는 것.

당시의 경쟁자들은 구글 비디오와 24 hour laundry, 그리고 DailyMotion과 Vimeo. 난 Vimeo가 유투브를 보고 따라 만든 건줄 알았는데 유투브보다 먼저 만들어진 사이트라는 점에 놀랐다. 당시에는 기술이 별로 안좋았다고 설명. 그리고 Google Video는 개인 비디오가 아닌 할리우드 비디오를 신경쓰고 있었다고.

당시 경쟁자들. 물론 구글 비디오도 그 중 하나였다.

그리고 사업을 설명한다.

여기 설명된 네 가지 모두 훗날 유투브의 가장 주된 수익원이 되었다는 점이 놀랍다. 1. 플레이되고 있는 비디오와 연관성 있는 광고 비디오를 옆에 보여줌. 2. 비디오 상영중에 광고를 오버레이로 보여줌. 3. 비디오 시작전에 짧은 비디오를 보여줌.

그리고 유투브 초기 성장 곡선이 나오는데, 투자자라면 군침을 흘릴 법한 그래프다.

유투브 초기 성장 곡선

그 아래에는 Botha가 직접 작성한 문서가 나온다. 투자를 결정하기 전에, 시콰이어 캐피털 내부의 다른 파트너들, 그리고 외부 투자자들을 설득하기 위해 쓴 것 같다. 시콰이어가 투자하고 싶었던 액수는 $1M + $4M. 그래서 회사의 30%를 소유. 만약 이대로 계약했다고 하면, $5M 투자해서 1년만에 495M를 벌었으니 연 10,000% 수익률인 셈이다. 초대박.

그럼에도 불구하고, 투자 당시에는 엑싯 가능성이나 액수에 대해 그렇게 크게 보지 않고 있었던 듯. 유투브와 비슷한 회사들이 별로 크지 않은 금액에 매각되었다고 설명함. 예로 든 회사들은 $70M, $50M 정도에 매각. 트립어드바이저는 같은 부류는 아닌데 $100M에 엑싯했다고 설명 (사실 당시엔 이것도 상당히 큰 엑싯으로 생각했을듯). 그 다음엔 비용 추정.

유투브 운영 비용 추정. 비디오 한 개의 평균 크기를 7MB 로 낮게 잡았다. 컴퓨터 한 대당 하드디스크 크기는 320기가로 가정.

마지막엔 유투브 창업자들이 발표에 사용했던 것으로 보이는 슬라이드 중 하나. 1년 후 1조 7천억에 팔리게 될 회사의 발표 자료 치고는 참 소박하다는 생각. :)

유투브가 시콰이어 캐피털의 투자를 받기 위해 발표할 때 사용했던 슬라이드

여기까지다. 전문을 보고 싶다면 여기를 클릭하면 된다. 드롭박스가 Y컴비네이터에 처음 도전할 때 질문에 답변했던 내용도 참 흥미로웠는데, 이 문서를 보니 유투브 초기 시절의 모습이 떠올라 재미있어서 공유해본다.

Foursquare is one of the biggest, buzziest startups in New York.

Scratch that -- anywhere.

The local check-in startup raised $50 million this past summer from Andreessen Horowitz and Spark Capital. It recently reached 15 million downloads and it has been rolling out tons of new features including Lists and Radar.

Foursquare has come a long way in two years. What started as a self-proclaimed "part friend-finder, part social city-guide, part social-game" has become a $600 million company.

We asked cofounder Dennis Crowley for a copy of his original pitch deck so other entrepreneurs could see what Foursquare looked like in its early days. Crowley obliged and sent us a deck from July 6, 2009 -- three months after Foursquare's debut at SXSW and two months before funding talks "really kicked up."

"Decks don't have to be super formal," says Crowley. "It's okay to stray from the 'business school 10-slide pitch deck template."