“I believe that, like, Gilt has turned me into an even better multi-tasker than I was before!” – thrilled Gilt customer
Gilt has 4M members. Holy moly.
“Michael Bryzek, our CTO and co-founder, was in the warehouse packing boxes for the first few months.” – Alexis Maybank
This is a really complex business model.
“I build two things: I build a product and I build a company-as-a-product.” – John Osher
On the opportunity:
Everyone needs toothbrushes, and big players (P&G, Braun) have been unable to build brand loyalty. Loyalty in toothpaste, loyalty in razors, no loyalty in toothbrushes.
John Osher had Chinese factories making 200M [...]
What’s wrong with healthcare?
Herzlinger: Consumers don’t have information or incentives to make sensible choices.
Porter: Ineffective competition in healthcare does not produce greater consumer surplus.
Christensen: Muted incentives and artificial barriers to entry prevent disruptive entrants.
Accretive => “plump” startup >> Initially, small team of senior execs. Sell Clearview on taking [...]
Fascinating case, not sure about take-aways…
Sal Khan cited authenticity as the “core” of Khan Academy’s success. Other factors: bite-sized content (10-15 minute segments), totally brilliant and interesting presenter (Sal), tutoring vs. teaching model.
I’m worried about their transition to the big time. It seems as if Khan will have serious crossing-the-chasm problems that [...]
Benefits of an IPO:
– Access to equity capital
– Liquidity for (1) founders/employees and (2) investors
– “Currency” for (1) acquisitions and (2) attracting talented employees
IPO market is in decline in last 15 years; small IPO market has basically evaporated. Most transactions used to be 3 months). Caused by decimalization, [...]
Useful criteria for tech-push “experiments” (from WiTricity case):
– High willingness to pay
– High tolerance for Version 1.0
– Quick, discriminating feedback
– Low/no strings attached
“The only weapon you have as an entrepreneur [trying to raise funding] is scarcity.” – Bill Doyle
Big Pharma is basically the only set [...]
Business model decision: IP Licensing vs. OEM => “right” answer is probably a mix
IP Licensing: Less capital intensive/higher margin but more exposed to copying by competitors with deep pockets to fight legal battles. AND the cost of litigation rises with success; truly high-potential innovations inspire more knock-offs.
OEM: Worse margins, more protection [...]
How do you actually define “high impact entrepreneurship?” After listening to the founder, I’m still not sure…
Selecting Endeavor Entrepreneurs = balance between potential to blow up, economic progress, and social progress
Endeavor has basically targeted returns (potential to blow up).
Sort of like a VC firm, except they appear to make much [...]
American search fund: a Mini-LBO. Returns from leverage in acquisition and operational improvements (margin expansion). Growth industry increases likelihood of good exit.
Mexican search fund: a Mini-VC fund. Not much leverage; too risky to buy bad business and try a turnaround; primarily banking on either top-line growth or operational improvement/multiple expansion.
Challenges with non-American [...]
Entrepreneurship in Germany (or, why Facebook didn’t start in Munich):
– Stigma about failure in business (deters smart people from attempting high-risk ventures)
– No iconic role-models (Who is the German Steve Jobs?)
– Conservative mindset
– Bankruptcy laws that favor creditors (Can’t just leave the [...]
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