The New New Startup Economics, my talk at 10x10 Shanghai 2012 on how the economic model of startups, and investing, has changed.

1. The New New Startup
Economics
Stephen Forte
Weibo: SteveForte
Twitter: @worksonmypc

2. My Experiences at Startups
• Early 1990s
– $20m to get from idea to paying customer
• That number dropped in my startups:
– 1999: $10m
– 2002: $350k
– 2007: $100k
– 2011: $25k

3. Why?
• 1999: 4GL languages, cheaper hardware
• 2002: Internet, Outsourcing, recession
• 2007: Virtualization, Skype
• 2011: Cloud, recession

4. Pay as you go..
• The elasticity of the cloud means that you
only pay for the bandwidth/CPU that you
need
• In 2000, I had to spend $1m on a “server
farm”
– Today that would be free to start and would pay
$100 a month after 6 months or so
– You will *still* spend that $1m, but not up front!

5. What does this mean?
• Raise less money!
• Delay your raise, don’t waste time looking
for $$, instead:
– “Get the hell out of the building” (free!)
– Build the prototype with sweat equity
– Get to beta launch with sweat equity if possible
• When you do raise money, spend it
differently

6. 问题 ?