TechFire conducted one of its “fireside chats” the April 19 at the Google facility in Venice.
The subject was “The Road to Series A: From Ideation to Product/Market Fit.”
For those of you who don’t know what “Series A” means, Series A is a term used to describe early-stage financing for a start-up company.
The company might be up and running and maybe has already achieved what is called Seed Round or Friends and Family financing; Series A is when things become more serious and the dollar amounts go way up. Additional financings can be called Series B, Series C, etc.
It was a very interactive session, with several questions coming from the audience – followed by lots of practical advice.
Erik Rannala of MuckerLab said that many of the best ideas are identified as a result of a personal need. That is, an individual finds a problem that he or she is faced with and then decides to go on and find a solution to the problem.
Josh Yguado of Jam City said some entrepreneurs are tinkerers who like to build products; others are business people who are mostly interested in the opportunity for financial gain.
Rannala said it’s a long and difficult road for entrepreneurs and that successful companies need a mix of both tinkerers and business people in order to succeed.
You can’t do everything yourself, added Yguado, who said it’s important to build a team with members who have complementary skills.
If others are willing to jump in and help without pay, said Rannala, that is often a good sign that the idea might have merit. Otherwise, he continued, why would others waste their time?
But nothing beats traction, both speakers agreed; having a live product that real people actually like is the kind of “proof of concept” investors are looking for, according to Rannala and Yguado.
Yguado said retention was an important metric to monitor. That is, do people keep coming back for more? But even this isn’t enough if a company is going to scale (grow). You have to market yourself, added Yguado.
According to Yguado, telling a great story to explain why the new product is needed is an important skill entrepreneurs need to develop.
It was was mostly a digital crowd at Google that evening. One member of the audience asked if it’s better to start with a mobile app or a website.
Rannala said it depends on the product, and there is no one standard answer. Some products present better as a mobile app, some on desktop or laptop, he said.
Patrick Anding of Wilson Sonsini Goodrich & Rosati was moderator of the session. WSGR is a big supporter of the local tech scene and sponsors the TechFire presentations, organized by David Murphy.
Murphy put in a plug for WSGR and said it’s important to get all your legal documents done properly, otherwise entrepreneurs could find themselves in trouble if things ever went sour between founding team members.
This generated murmurs of agreement from several in the room. Rannala said a break-up among founders often leads to “tanking the company.”
Wilson Sonsini helped many of today’s tech giants get started, including Google, Twitter, Amazon, LinkedIn and Netflix.
MuckerLab (and Mucker Capital) specialize in early stage startups. See: MuckerCapital.com. Erik Rannala and his co-founder, William Hsu, have several startups under their belts. Before Mucker, Rannala was with Harrison Metal Capital, TripAdvisor and eBay.
“Mucker” is a term originally coined by Thomas Edison, who called members of his R&D team “muckers.”
Jam City is mostly in the entertainment and online gaming spaces. Several of the founding executives come from the world of entertainment. Josh Yguado was an executive with Fox Entertainment before starting Jam City (see: JamCity.com).
To learn more about Wilson, Sonsini, Goodrich & Rosati, go to wsgr.com.
For more information about TechFire and upcoming TechFire events, go to TechFire.co.
David Murphy has been promoting the idea of “Silicon Beach” long before the term came into vogue.
