slides from my talk on Incremental Innovation @ IVS Spring 2013 (Sapporo, Japan)

1. Incremental Innovation.
“Make Stuff Suck Less.”
Dave McClure
500 Startups
slideshare.net/dmc500hats

2. #TONYSTARK
#DOESNTSUCK
http://marvel.com/ironman3

3. Most Things Suck.
• But, It’s Easy 2 Make Them Better.
– Especially Because of Technology.
– And Because of Tony Stark.
– They Make it Easy To Copy & Improve their Innovations
• TIP: DO NOT TRY TO BE TONY STARK.
• JUST COPY / USE THEIR STUFF. (and Make It Slightly Better)
• 99% of the time -- Copy/Use Other People’s Amazing Stuff.
• 1% of the time -- Come Up With Your Own Innovative Stuff.
• Improve the Innovation by 1% Every Month.

4. Over Time, Things Sucks Less.
• Fire
• The Wheel
• Farming
• Pigs, Cows, Chickens
• Iron, Steel
• Ships
• Printing Press
• Textiles
• Steam Engine
• Electricity
• Cars, Airplanes
• Telephone
• Radio, TV
• Cable
• The Internet
• Social Networks
• FB, Twitter, YouTube
• Mobile Phones

5. Why No Flying Cars Yet?
(Teleportation? Sexy Robots?)
• Because That Stuff is Really Hard.
• Not So Many Tony Starks / Elon Musks Around.
• You Ain’t All That Smart.
• Or That Rich.
• But, You Might Get To Use Their Stuff.

6. We Are Mental Midgets
Who Stand on Shoulders of Giant Geeks
• Da Vinci
• Sir Isaac Newton
• James Watt
• Nicola Tesla
• Marie Curie
• Gates
• Jobs
• Bezos
• Larry & Sergei
• Zuck

7. #INCREMENTALINNOVATION
#ITERATIONFTW
How 2 Boil a Frog

8. You Don’t Have to be Tony Stark
• Just Copy/Use the Stuff that Tony Stark Makes.
– Tip: Since Most People Suck, They Won’t Notice U Aren’t Tony Stark.
• Copy/Use 99% All The Amazing Stuff Out There.
• Innovate on the other 1%.
• Innovate 1% More Every Month.
• Then Kick Back and Have a Beer.

9. Most Businesses Suck @ Innovation.
• They Don’t Know Technology.
• They Don’t Know How to Code.
• They Don’t Know SEO or SEM.
• They Don’t Know Email Marketing.
• They Don’t Know Social, Video, Local, Mobile.
• They Don’t Know Good Design or UX.
• They Don’t Know How to Cut & Paste.
• They Don’t Know How to Use PayPal.

10. Most Things Are Not Amazing.
• But, We Can Easily Make Most Things Better.
• Tech + Web = Reduced Overhead Costs.
• Search + Social Platforms = Better Marketing.
• Copy Existing Business Model = Reduced Risk.
• FOCUS = Make ONEthing / SOMEthing Better.

11. #EVILPLAN
#MWAHAHA
Everyone Needs An Evil Plan (Hugh MacLeod)

12. Formula 4 Awesome:
Notice Things That Suck. Make Them Suck Less.
• Most Brick & Mortar Businesses Are Inefficient.
• Lots of Overhead, Shitty UX, Crappy Marketing.
• Copy Their Business Model (It Already Works).
• Reduce Overhead Cost (Go Online).
• Increase Marketing Efficiency (Go Online).
• Copy/Integrate 99% Awesome Stuff (aka Tech)
• Innovate on the Remaining 1%.
• Keep Innovating 1%. Every Month.
• Beat Them Like a Drum, Every Day & 2x on Sunday.

13. Ok, Let’s Try It.
• Find an existing, physical-world big dumb business
that makes money, but kinda sucks.
• Verify they have high overhead costs, inefficient
[offline] marketing, crappy service.
• Copy the business model, reduce overhead costs,
improve marketing.
• Add some awesome technology, and then innovate
on ONE important thing.

14. Problem: Ordering Food Sucks.
(see blog post “Why Menus Suck”)
• Issues:
– Waiters
– Menus
– Pictures
– Sharing
– Discounts
– Customer Lists
– Food Quality
– Food Service
– Reviews
– Delivery Time
– Payment
• Solutions:
– ElaCarte
– KitchIt
– FoodA
– Chewse
– CraftCoffee
– LoveWithFood
– GoldBely
– TeaLet
– Ordr.in
– MileHighOrganics
– WholeShare

15. #BRANDING101
#THINKDIFFERENT
Here’s To The Crazy Ones. (Jobs)

16. 3 Basic Types of Brands:
Virgin, Southwest, [Niche]
• Virgin = “Mass Luxury” (+ sexy)
– High-End Look & Feel, priced just barely within reach of most
middle-class customers, who love the “red-carpet” treatment 
• Southwest = “Convenience & Value” (+ funny)
– Shit that just works, not very expensive, great value for
everybody. (Who doesn’t like Southwest?)
• [Niche] = “Just for You & Me”
– Designed for well-defined customer segments / attributes.
– Less competition, higher margins, better retention
– Ex: Gay, Old, Black, Short, Female, Moms, Left-Handed, Etc

17. Thanks.
http://500.co

18. Dave McClure
Founding Partner & Chief Troublemaker, 500 Startups
00’s & 10’s:
• VC: Founders Fund, Facebook fbFund, 500 Startups
• Angel: Mashery, Mint.com, SlideShare, Twilio, WildFire, SendGrid
• Marketing: PayPal, Simply Hired, Mint.com, oDesk, O’Reilly
80’s & 90’s:
• Entrepreneur: Aslan Computing (acq’d by Servinet/Panurgy)
• Developer: Windows / SQL DB consultant (Intel, MSFT)
• Engineer: Johns Hopkins‘88, BS Eng / Applied Math

19. 500 Startups
Global Seed Fund & Startup Accelerator
• What is 500?
– $65M+ under management
– 25 people / 12 investing partners
– Locations: SV, NYC, MEX, BRZ, IND, CHN, SEasia
– 1000+ Founders / 200+ Mentors
– Insanity 24x7x365
• 500+ Portfolio Co’s / 30+ Countries
– Wildfire (acq GOOG, $350M)
– Twilio
– SendGrid
– TaskRabbit
– MakerBot
– 9GAG
– Viki
– Gengo
– AppStack
– VivaReal
– MindSnacks
– Visual.ly

20. 500 Startups: Global Seed Fund
Over 100+ startups outside US, in 35+ countries
• Q4/12 added: Germany, Korea, Peru; + Russia, Israel, Turkey in Q1/13
• Priorities in 2012: Brazil, Mexico, India
• Priorities In 2013: China, SE Asia, MENA, Eastern Europe