Hello ,
“Can you get to profitability on your last round? Have you even considered such as a reality?” – Bill Gurley, Tweetstorm, 20 August 2015
Long after it is clear that water is scarce, people continue to make small changes that have little impact on their water usage. So it is with many startups – founders realize too late that they need to take drastic action to conserve cash. Their companies fail.
Fortunately, Sequoia Capital has worked through multiple economic cycles. After the 2008 crisis, they created our favorite VC decks of all time to explain what to do when it’s time to switch from growth to profitability. We anticipate a new version, but expect many of the recommendations to remain unchanged.
As Bill Gurley points out, right now it is essential to consider the “no funding” scenario. But Sequoia goes further to emphasize the importance of changing focus from getting new customers, to preserving cash. Even if many firms understand the change, they don’t act fast enough.
More in RIP Good Times (slides 46–56).
[Startup Candidate] Fortified Bike – We’ve followed their efforts to help bikes to survive in the concrete jungle. Now they’re applying what they’ve learned to provide a more convenient ownership model for commuters. It’s not bike share. It’s bike-as-a-service.
[Insights] Know your startup metrics – As investors look beyond growth, these metrics are critical to understanding current and potential profitability. More from a16z.
[Insights] Only 3% of government procurement spend goes to startups? – NESTA analysis looks at government procurement data in the U.K. and finds startups getting a tiny slice of the pie. Why? More from NESTA. (HT Sascha Haselmayer)
[Opportunity] Code for America Summit has been kind enough to offer 50% off for early stage startups to join the civictech fair (the package is valued at $2,500). It’s a fantastic opportunity to meet local government and civic-tech leaders. Details are here.
[Opportunity] NYCEDC Bigapps has a lot going on this week a civic engagement panel and hackathon, a roundtable related to affordable housing and a tour and discussion related to zero waste. The Bigapps team will also help you boost visibility of your project!
[News] Google’s new org structure makes their interest in cities much clearer. There are the core Google business, Google X, Google Capital and Google Ventures. Three of the five new named operating businesses are focused on making cities better (Nest, Fiber and Sidewalk Labs). The Economist has a great take on the evolution from search to tech conglomerate.
[New investment] Mark43 – We’re excited to announce our investment in Mark43. The team has been working diligently to build better tools for law enforcement providing new insights and dramatically improving efficiency. (Thanks to Jon Smidt for introducing us.)
[New Investment] Logcheck – We’re happy to announce our investment in Logcheck, too. They’re transforming routine maintenance in buildings and impacting everything from energy efficiency to safety. (Thanks to Bill Field and Jeff Perlman for introducing us.)
[Startup News] Skycatch $22m series B – Congrats to Christian and the Skycatch team. They’ve brought together a great group of investors for their series B. No doubt, this will help them to expand their team and continue to lead the commercial drone market in areas from construction to energy. More from the Skycatch blog.
[Startup News] Radiator Labs Team + Funding – we’re excited that Dave Yeskel will join them as COO, bringing deep management and domain expertise. Radiator Labs also added a few new strategic investors over the summer as they prepare to ramp up deployments in the fall.
Shaun, Stonly and Anthony
P.S. We really are urging our founders to understand RIP Good Times. It's not clear how quickly and how far sentiment is shifting, but we think it is more important thank it has been in some time to understand cash preservation options.
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