#KillerSaaSPitch in 10 Words (Part 2)

Mastering your pitch to a VC, prospective customers, new hires or partners is part art and part science. As a VC, I hear dozens of these every week, and what I’ve learned is that a masterful and successful pitch for a SaaS company involves 10 key items.

The best entrepreneurs are often those who can articulate their vision and roadmap in a simple, elegant and purposeful manner. I have tried to analyze the elements which get me excited about a company – drawing from what I observed from CEOS of start-ups I have backed, like Nicolas Dessaigne (Algolia), Frederic Mazzella (BlaBlaCar), Stan Niox-Chateau (Doctolib), Graham Cooke (Qubit) or Jonathan Benhamou (PeopleDoc). This post is a summary of my findings, with a lens focused on SaaS businesses.

I highlighted five pieces of advice in part-one of this two-part post as illustrated in five words: Alignment, Preparation, Advice, Backdoor and ‘Wow’. Here are the final five pieces of advice. Hopefully this will help you pitch your SaaS company with greater impact.

#6 Passion

While everyone wants to make money, good VCs look for more in an entrepreneur than the desire to cash out. They invest in entrepreneurs who want to change the world. When Elon Musk received $200 million from the proceeds of the PayPal acquisition in 2002, he re-invested everything to build the next big thing: $100 million in SpaceX and  $100 million in Tesla. Talk about passion and commitment!

Don’t hold back your passion and your vision – give examples of crazy flights and nights in the office to meet a launch date, or epic stories with your first customers. Illustrate how you have pushed the limits of what’s possible.

#7 Story

Smart VCs fund entrepreneurs if they believe in their story. When you prepare slides, think about the narrative – it should be told as a personal story. A touch of humor also helps. Illustrating your points with personal stories help people relate and remember your message. For example, I have always remembered how Frederic came up with the idea of BlaBlacar:

“It all started one Christmas, when Frédéric wanted to get home to his family in the French countryside. He had no car. The trains were full. The roads, too, were full of people driving home, alone in their car. It occurred to him that he should try and find one of the drivers going his way and offer to share petrol costs in exchange for use of an empty seat. He thought he could do it online, but no such site existed.” (You can read the full story here)

#8 Engine

Developing a scalable sales and marketing engine is a key element of success for SaaS companies. It’s very important to explain in detail how this engine is designed and how you can scale while maintaining quality and productivity. Here are a few typical models and some of the points I would find interesting to highlight:

• Enterprise sales (e.g., Docusign, Peopledoc): typical outbound sales model targeting mid market+ companies and relying on being able to hire consistently sales people making their quota. I like to understand for these models how many sales people are quota carrying, what is the distribution of quota attainment, and what is the profile of an ideal sales person 
• Inbound model (e.g., Algolia, Twilio, Sendgrid): for companies targeting developers for example, the outbound model is harder to develop as developers rarely answer sales call. This model relies on grass root marketing of the targeted community, combined with smart online tactics (e.g., content development) to generate inbound interest. For this type of model, I would like to understand how the number of inbounds is scaling with the activities and how much virality there is in the model as the word spreads out in the community
• SMB door to door sales (e.g., Doctolib, OpenTable): this model is the little parent of the enterprise sales model but for SMBs. Typically, it is a combination of an inside sales engine generating leads and booking appointments for an outbound door to door sales team. These teams are typically run on monthly quotas. For this model, I like to understand how scalable the lead gen model is (e.g., how many searches are available on Adwords) and what is the quota attainment and churn rate of the sales people as well as their profile
• SMB online sales (e.g., Wix): for SMB product sold mostly online, the key for me is to understand the scalability on Adwords as well as the channel strategy

Entrepreneurs must concisely explain their own model and describe how the engine will churn out powerful results month-after-month and year-after-year. You might not add all of this in the slides, but be prepared to explain how your engine will scale, where your teams be located and how they will be structured for growth.

#9 Numbers

There’s a saying that “numbers raise dollars.” In other words, there are universal metrics that smart investors require to make investing decisions. I outlined five of these financial KPIs for SaaS, which I called the 5 C’s of SaaS Finance: Customer Monthly Recurring Revenue (CMRR); Customer Acquisition Cost (CAC); Churn; Customer Lifetime Value (CLTV); and Cash.

However, with the evolution of new SaaS models, I added three more that will likely pertain to your sales engine:

• Cohorts: when most SaaS models were targeting mid-market or enterprise customers, there was not a lot of volatility in the churn and upsells, so looking at the average was meaningful enough. Today, we are seeing more an mode model where the churn can be high but the upsells are also very high and looking at cohorts help see how they net out over time
• Concentration: I see more and more companies being built on the back of one or a few very large contract. Understanding the breakdown of the revenues by customer is something I like to see upfront in the discussion
• Country breakdown: with the development of the SaaS ecosystem, it is now more common, in particular for services targeting SMBs to see early stage SaaS companies with customers on all continents and it says a lot about the scalability of the model. For more traditional enterprise SaaS companies starting in Europe, showing traction in the US and outside of their home country is also very important.

#10 Listen  

A pitch is also an opportunity to get to know the VC, so prepare questions and take this opportunity to assess what kind of value the investor will provide. This is essential in determining whether or not you would like to work with him/her for the next five-seven years. When I ask entrepreneurs if they want an overview of Accel, I often get the answer “we know, we looked at the website.”

How would you feel if a VC were to tell you: “I know all about your start-up because I looked t your website!” You get the idea.

Bonus: European founders should spend a week in San Francisco. Why? Because telling European VCs that you are going to the US will add a bit of competitive dynamics to your fundraising process. They will assume you’ll meet Silicon Valley-based VCs (even if it is not the case!), which will likely help advance and deepen your conversations locally.

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Allow your passion to be at the foundation of your approach – from there, create a masterful pitch and build a trusted relationship with investors. Remember, it’s not always about immediate results, but rather about your vision, ambition and a deep knowledge of the industry you hope to disrupt. Adapt and make it personal – show us something we’ve never seen before!

When And How To Pick Your Next Launch Country

(This post was originally published on TechCrunch and has been enriched with a few quotes from the Blablacar founders)

International expansion is a challenge any globally ambitious company will face — some sooner than others.

As a long-time investor in both the U.S. and Europe, I often get asked by the venture community about the difference between the two. In my opinion, one of the key elements is the market fragmentation, which is something that European companies tend to come up against sooner than their U.S. counterparts. I like the way Frederic Mazzella, the founder and CEO of Blablacar, describes it: “When I'm asked if it's easier to launch a business in the EU or in the US, I say that it's like comparing a 110 meters hurdle to a 100 meter run... In the EU we have to adapt to 28 different countries, regulations, cultures and markets, which slows down the growth”.

While both the U.S. and Europe are consumer markets of more than 300 million people, grasping this potential in Europe is more challenging — and few companies have managed to do it successfully, given the region’s many diverse, distinct markets. As a result, I’m going to talk about international expansion using European examples and context for this piece — hopefully with takeaways that are universally relevant.

Can you go big without going home? Sure you can — if you give enough thought to the dynamics of expansion, starting with when and where to go next.

Is There Such A Thing As The “Right Time” To Launch In A New Country?

The first question the founding team of a consumer service needs to address concerns the timing of the launch in a new country. At McKinsey, and in most books on strategy, you will read that you can only replicate something successful, so you need to wait until your home country is cranking before starting abroad.

This is sound judgment. Unfortunately, it does not play out very well in the startup world. Why? Because by the time you have proven your model is a success in your home country, you already have other startups doing the same model in other key European markets, and competition gets fierce. As Nicolas Brusson, the co-founder of Blablacar puts it: “By the time most European companies go international it is too late…We decided to go early into different European countries — adding a local team each time — before proving the business model, something very few players do.”

On the other hand, if you do a full roll-out with something that is not working or tuned enough, you will waste a lot of resources, which can sink the company.

So when is the right time? Every company will have a different answer. In my view, given the current competitive environment, the sooner the better. However, it is critical to do it gradually and in a controlled manner.

Here’s how I advise startups to approach expansion:

Nail your MVP (Minimum Viable Product) first. You need to have a service with a clear value proposition that works in different markets. You don’t need bells and whistles, just something simple but effective.

Field test your product with a meaningful amount of customers — typically a few thousands or tens of thousands. This should give you a good idea of what to expect.

Complete your initial marketing playbook. You need to have identified acquisition channels (SEM, Facebook, offline…) at a reasonable cost with payback typically in less than nine months. Make sure your approach is scalable.

Taking a thoughtful and considered approach to scaling internationally is key.

How To Pick Your Next Country?

Once you’re clear on the ideal time to launch in your next country, the question becomes “where to go next?”

While every business and situation are different, the following three elements should always be considered when choosing your next market:

Market Potential: The “market potential” is a mix of different elements that must be weighted specifically for each business. It includes the market size, of course, but also the competitive dynamics, your network in the country (or your investor network) and the similarity with your home country. For example, in my experience, what works in France tends to also work well in Italy and Spain, but the U.K. can be an outlier.

Cash Requirements: Be clever with your resources. It is very important to assess your cost of capital and how much burn you can afford. If you raised €20 million in your Series A, you can take more risks and launch abroad sooner than if you raised €3-4 million. Picking a large market is attractive, but if it requires a level of investment that would reduce your runway considerably, you may be better off picking a smaller market. I have seen too many companies go big, burn big and then have to retrench, which is not a good position to be in.

Human Capital: Money is not everything; it is reasonably easy to get. The real challenge of international expansion lies in finding the right team, both at HQ to support the local launch and locally to scale the activity.

I typically encourage companies to start their expansion with one country and digest it to the point where it is scaling before launching a new one. It does not mean you need to wait a couple of years — a few months may be enough.

Most technology markets are winner-takes-all.

You can then accelerate the number of launches over time if you are successful. It’s key to remember that most technology markets are winner-takes-all — or at least takes most. It is, therefore, much better to be the leader in three countries than No. 5 in 10 countries.

Also, the more countries you support, the higher your cash burn and the fewer resources you can allocate to win in a given market — this is something that needs constant evaluation.

In summary, taking a thoughtful and considered approach to scaling internationally is key — and the sooner the better. First-mover advantage can offer a decisive advantage over competitors — and accelerate a company’s ability to become the global category leader early on.

While there may not necessarily be a perfect time for launching in a new market, preparing your business for expansion early on will support your continued success in a world where scaling internationally fast has become a requirement for any founder with global ambition.

Has Europe Earned its Place as a Global Tech Leader?

Short interview on the European tech ecosystem and recent exits at the Dublin Web Summit with Caroline Hyde from Bloomberg:

#KillerSaaSPitch in 10 Words (Part 1)

Last month, I attended the SaaS Founder Meetup organized by Point Nine Capital in Berlin. In its fourth year, the event is a great opportunity for SaaS ‘aficionados’ to compare notes, share war stories and learn from each other. For those in SaaS, this event is a must attend in Europe, and as Algolia’s founder Nicolas told me during our board meeting the week before, I better “get my game up because the level of the presentations at the Meetup is high, and I’d better be well prepared!”.

Advice in tow, I focused my keynote on “How to Best Pitch a SaaS Company.” While much has been said ‘how to pitch a VC’ ($1B+ market, competition, differentiation…), I brought a new approach and focus on elements which are outside of the traditional Powerpoint slides.

Here, I recap the first five pieces of advice as illustrated in five words – I will follow-up with another post, including the latter five pieces of advice, in the next couple of weeks:

#1 Alignment: It’s crucial that entrepreneurs find an investor whose interest aligns with yours, and supports you in your approach. The reality is that entrepreneurs can be blinded by a pre-conceived notion that a certain investor is right, before having ever talked with anyone from the firm.

One of the element to consider is the size of the fund. When you look at the two pie charts on the right - which white share of the pie is the biggest?

Actually, both are the same size (if my math is correct!). As a founder, there’s no difference in having a small share of big exit or large share of small exit. When narrowing your list of potential investors, consider the size of the firm’s fund. A venture investor typically owns 20% of a company (an amount that will ideally yield a meaningful return for the fund). A $50-100 million exit will return $10-20 million, which is meaningful for a $50 million fund. You’ll need an exit of $500 million-$1 billion to have the same proportional return for a roughly $500 million fund (like Accel in Europe). 

Another very important consideration is the geographic footprint of the fund. For most B2B SaaS companies, category leadership often means US leadership. Winning companies find a way to expand to the US as soon as possible, so choose a firm with a global network to support your ambitions to cross the ocean.

#2 Be prepared: When I received my engineering degree, I decided to start in management consulting and began preparing for my interviews. I interviewed with a dozen of firms keeping my three favorites for the end. When I got to interview with these three firms, I had completed more than 35 interviews. This training allowed me to practice and refine my presentation style. It paid off, as I ended up working for McKinsey in Paris and Palo Alto.

Entrepreneurs should apply a similar approach when pitching VCs. You need to understand the questions and refine your slides to run a more impactful meeting. Start with dry runs in front of entrepreneurial friends, peers or people familiar with the industry and get honest feedback.

From there, it’s crucial to understand who you are meeting – not only the fund, but also the investor profile, his/her past investments, hobbies and common connections (people, cities, companies, etc.). We apply the same approach at Accel and work hard to develop a deep expertise in the areas we focus on: one of our moto is “Chance favors the prepared mind.”

#3 Ask for Advice (not money). If you ask a VC for money, you will get a yes or no answer. However, if you ask for a meeting to get some advice on your business, the pressure of a yes or no answer is off the table and you’ll likely get a lot more from the meeting. This also will increase the chances that you get a follow-up meeting three-to-six months down the road or a preemptive offer if this is an immediate fit.

Build a relationship with the investor: get to know him/her and assess if you’d want them on your board. Similarly, they will gain confidence in you throughout the process. Most of my investments have come 12-24 months after the first meeting with the entrepreneur.

When I first met PeopleDoc CEO Jonathan Benhamou in November 2012, they had just one product, relevant in France. Jon did not ask for money, just for advice, but we began to collaborate and I suggested him to broaden his solution. Less than a year later, he had launched a new and powerful product – I advised that he expand to the US, which he did. In April 2014, we closed an $18 million round of funding which was followed by a $28 million round last month.

#4 Backdoor: In the surfing world, there’s a famous wave called “Pipeline” in Oahu. For 14 years following the first time anyone surfed the wave, riders always went on its left side (the right side was considered too dangerous). In 1975, Shaun Thomson won the famous contest held at the break by doing the unthinkable: surfing the wave on the other side and renaming the wave “Backdoor.”

Shaun Thomson surfing Backdoor

To win, you need to do things most entrepreneurs don’t do. VCs like to find hidden gems, so find an unconventional way in. Ask an entrepreneur from the VC portfolio to introduce you or find an industry expert connected to the VC to refer you. Or do something original – a 3D printing company once offered to print an iPhone case with the Accel logo on it. Not a game changer, but it caught my attention.

#5 WoW:  VCs see hundreds if not thousands of pitches every year. In order to be remembered, you need to start with a ‘wow’ moment. This video from Bill Gates at TED Talk is a great example:

The talk focused on curing malaria, and to start the talk, he releases mosquitos into the audience. Gates made his talk unforgettable and it went viral.

What is unique about your company, and how can you show it as such? Is it a product demo, a number/performance, a big technical problem you have cracked? Illustrate with a video or picture to make it snappy and unforgettable. When I first met Algolia, the pitch was simple: “we are Google instant search for any website, with 260B API calls”. That got my attention.

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In short, approach your pitch as a way to establish a trusted relationship with the VC. If all goes well, this trust will grow and crystallize into an investment. But, trust (as seen in the equation below) takes time, so nurture it.

This post illustrates some of these points. More to come in Part 2!

• Credibility: has to do with the words we speak.  Think "#Wow/Backdoor/Alignment " 

• Reliability: has to do with actions, be responsively engaged before and after the meeting and deliver what you said you will deliver when you meet again. Think "#Be prepared"
• Intimacy: relates to how much does the VC knows you after the meeting. Think “#Advice”

Round size vs. ambition: Tips from France Digitale Day 2015

I had the chance to be invited to speak at the France Digital Day 2015 with Toby Coppel from Mosaic and Delphine Villuendas, GC at Partech. We discuss start-up ambition vs. round size as well fund raising tactics. Here is the video:

    

Ecole42: meet the dev school without teacher or classroom

I had the chance to visit Ecole42 during my last trip to Paris and I must say that I have been very impressed by the originality of the concept and the ambition of the project. Ecole42 was founded by Florian Bucher, Xavier Niel, Nicolas Sadirac and Kwame Yamgnane as a new type of information-technology school. 

The school has a unique approach and accessibility to all, completely free of charge. There is no teacher or classroom - just computers. Students are developing their skills by completing projects online. Each project, when completed, enables the student to reach the next level and graduation is reached at level 21. Very unique system. To favor teamwork, all projects must be completed in teams. Each project is rated by several peer students as there are no teachers. There is no specific timing to complete the program: students can leave the school for a period of time to replenish their savings and come back when they want. 

The school works closely with HEC and each year, they mix business students with Ecole42 developers to work on start-up projects. The first batch of start-ups has already raised more than EUR 3m. A good start!

The school takes 1,000 students per year - enough to have a big impact on the tech ecosystem. It started 3 years ago and so far only one student has graduated reaching level 21 but this is just the beginning. 

Looking forward to see the first promotion joining our start-ups!

Boosting the French Tech Ecosystem

The French ecosystem has been booming for the past five years has proven its ability to generate Unicorns like Criteo, Showroomprive or Blablacar and the next wave is coming with a strong number of fast growing and disruptive start-ups including Peopledoc, Withings, Algolia, Doctolib, Food Assembly or Sigfox.

Accel has been at the forefront of this new wave and we have been actively investing in France. In the past few years, we have deployed more than $130m in companies including Showroomprive, Blablacar, Peopledoc and Algolia and we don't intend to slow down.

The current administration - and in particular the ministers Axelle Lemaire and Emmanuel Macron  - have been working hard to help the development of the ecosystem and seek feedback from venture investors.

Emmanuel Macron during the workshop in Versailles

In this context I was invited, together with a large dozen of foreign investors, to participate in a workshop to discuss what France could to do to attract more venture capital from global firms. The workshop was held in the palace of Versailles followed by a dinner at the Elysees to share the salient points of our discussion with Francois Hollande.  

To prepare the discussion, I worked with my colleague Pia d'Iribarne on a short memo summarizing a few elements that could be addresses in the labor law to reduce complexity and increase the agility of start-ups. These suggestions are coming for a large part from the founders and CEOs of several French start-ups we have reached out to and are articulated around four themes:

1. Limiting the burden of social charges
2. Enabling start-ups to attract foreign talents
3. Reducing the burden of regulatory compliance
4. Send a strong PR message to the Tech and investor community

The core idea would be to create a simple framework for start-ups - defined as companies of less than 10 years old and or loss making - for which different rules would apply. The feedback was well received, so I hope that some of these ideas will make their way in the new laws around labor.

1. Limit the burden of social charges for start-ups

Start-up founders have the option to select any country to start their new company and today, the burden of social charges does not make France standout in a positive light in the global tech ecosystem. Making changes in this area would be a key element in making France more competitive and attractive for foreign investors and founders. We understand that the new law will address all companies and not only start-ups, and have tried to make suggestions more broadly applicable but with a strong impact on start-ups. The CIR and JEI are going into this direction but the following suggestions would help further:

a. Implement a gradual scale for social charges applicable to new companies, which would catch up with the current level after a period of 7 to 10 years. This would help companies get off the ground and create jobs faster while catching-up with the current regulation after a few years
b. Cap social charges for loss making companies in their first 10 years: in a period of stress, companies would be better off keeping more of their workforce but paying less charges than having to layoff massively. Many start-ups are going through ups and downs and this change would both incentivize them to hire more when things are going well and lay off less people in the downturns

Examples from other countries:

• Russia reduced IT companies’ social contributions from 30% to 14% until the end of year 2017

2. Enable start-ups to attract foreign talent
Access to talent is key to improve the success of tech start-ups. While France is very strong on the engineering side, attracting foreign sales, marketing and product talents is often necessary. A few measures that could help:

Unique perspective on the Galerie des Glaces
without any tourist around!

a. Cap the income tax at 25% for foreigners during their first few years in France (5-6 years – typical duration of a position in a start-up). This measure could be limited to company less than 10 year old and could also be extended to French people who have not worked/resided in France for the past 5 years and want to come back (link to the initiative “Reviens Leon”)

Examples from other countries:

• Spain’s “Beckham Law”: under the terms of Royal Decree 687/2005, (10th June), enacted to amend the Income Tax Regulations under Royal Decree 1775/2004, (30th July) which govern the special fiscal regime applicable to Non-Resident Income Tax, any foreign nationals coming to work in Spain may apply to be taxed as non-residents. At the time of enactment, the tax rate was set at around 24%, instead of the average income tax rate which was around 43%.
• The Netherlands has a special tax regime for expatriates - known as the 30% regulation – which entitles them to a tax-free cost reimbursement of 30% of the salary (with some technical adjustments). The employee is then, in essence, no longer entitled to separate general tax free reimbursement of expenses, in relation to the assignment to the Netherlands.

b. Lower social charges for foreigners joining a company less than 10 years old. Given the differences in salaries between France and the US or the UK in particular, having lower social charges would help fill the salary gap as well. This measure could also be extended to French nationals who are coming back after 5 years to France and could be limited in time (5-6 years)

c. Create a visa with express application for foreigners working for companies less than 10 years old. Time is critical for start-ups and having express visa would reduce the hiring friction

Examples from other countries:

• In the Netherlands, immigration law changed on 1 January 2015, offering a new visa for start-up founders from non-EU countries. The scheme’s associated residence permit entitles the applicant to be a resident of the Netherlands for one year. A prerequisite, however, is that the start-up must be guided by an experienced mentor who is based in the Netherlands. This means that within that year, the start-up entrepreneur can develop a sustainable a business based on an innovative product or service under the guidance of the experienced mentor.

3. Reduce burden of regulatory compliance for young companies under 10 years old

Applying the same regulation to fast moving start-ups as to other companies increases the complexity of running the business, and the cost of compliance in time and legal fees is high. Here are a few suggestions that would help reduce this burden:

a) Comite d’Entreprise and Employee representations: while these representations are very important for larger companies, they are not designed for start-ups and are a real burden for founders. Adapting the law to introduce a notion of company age could be a way to limit the impact on start-ups. For example, the law could specify that companies require a CE only after 5 years post incorporation (in addition to the compliance period, this would be 7-8 years before it is put in place).

b) Standard lay-off package: laying-off people in France is something that any entrepreneur or foreign investor fear because the process is lengthy, complex with an uncertain outcome. For start-ups, this complexity may make the difference between life and death as a few months of cash runway means everything. Giving start-ups the ability to lay-off people with a standard package of 3 months salary without further negotiation would make things easier (this is the way it works in the UK or the US). This measure could be limited to companies less than 10 year old and loss making to limit the scope but make it very relevant for start-ups.

Frederic Mazzella addressing Francois Hollande
and John Chambers at the Elysee dinner

4. Change France’s image with a strong PR message about a new law favoring start-ups
France is mostly known abroad for the 35-hour week, and the 75% tax rate it tried to introduce (and was fortunately considered unconstitutional). However, these measures are always announced first and then mitigated by a lot of exceptions in the law. These exceptions are usually not communicated or understood abroad – they are often too complex and not newsworthy. It is time for France to announce something going the other way, something that would change our image. Some of the ideas above, if well communicated, could help improve the image of France in the eyes of foreign investors.

It was really refreshing to see the openness of the government around these ideas and I look forward to continuing to work on these initiatives to improve the competitiveness of the French ecosystem and enable startups to reach escape velocity much faster!

PS: many thanks to Pia who joined us recently for her contribution to this post

Accel APX conference: short take aways

A NEW GENERATION OF APPS AND THE APIs THAT POWER THEM

I was lucky to be able to attend our Accel APX conference in San Francisco last week. In an environment becoming increasingly more competitive, it is becoming critical for companies to leverage external platforms & APIs to build a product fast and concentrate their resources on their core products. The objective of the conference was to understand how APIs will power the next great web and mobile companies and share some best practises in understanding when to use APIs or not and how can API company best market to developers. We were fortunate to host  very talented speakers from our portfolio (Ilya Sukhar from FB/Parse, Steve Marx from Dropbox, Bill Ready from Braintree, Ali Rayl from Slack, Eric Wittman from Atlassian, Sam Mac Donnell from HotelTonight...) and from leading companies (Jeff Seibert from Twitter, Mina Radhakrishnan from Uber, Adam Fitzgerald from AWS among others). We had around 300 attendees and our room at the Terra Gallery was packed. I loved it

The major themes of the discussions were around

• What to build on APIs vs develop internally
• Developer evangelism and fostering a community
• How to launch a successful API, documentation best practices
• Customer service and sales for dev-focused companies
• Developing an API vs a platform

Here are a quick set of notes that our team (thank you Andrei!) gathered at the event. It is not very polished but was designed for a fast read. I hope you will find this helpful

PANEL: We're built on APIs
Andy Fang, CTO Doordash
Sam MacDonnell, CTO HotelTonight
Mina Radhakrishnan, Head of Product Uber

- what to build in house vs. use from outside: think of what's core to the transaction, use 3rd party as much as you can
- DoorDash "delightful delivering": refuse to outsource customer support; but open to outsource payments, fraud etc.
- HT: don't outsource communication b/c part of core UX even though APIs available
- healthy dev environment around APIs, very important to get confidence you can build your platformon on top of them
- APIs give you freedom, don't have to invest both people and tech in maintain internal platforms
- HT had to totally revamp their infra, to manage 10x supply, allow advance bookings etc., so needed to ingest a lot more data (and already had performance); they totally ripped out their inventory system and moved everything to Elasticsearch, removed their Rails endpoint; got this going in 2 months, would not have been possible 10 years ago
- very challenging to build a solid external API, on the roadmap of HT but need to allocate lots of time and resources for it
- need to be clear about brand guidelines for how 3rd parties use your APIs; T&S are very important for Uber

FIRESIDE CHAT: Launching a platform and driving community
Adam Fitzgerald, Global Head of Developer Marketing at AWS

- founder of Springsource, then at VMWare and Pivotal
- APIs are important for building a community of developers
- need to understand who your developers are
- devs are hard to market to
- devs are the connoisseurs of tech, they've been sold so many techs that never panned out, that they're very discerning about the techs they use
- they're protective about the intellectual capital needed to get familiar with a new tech
- metric is "if I spend X hours learning this, will I save XXX hours later to not do this type of work again?"
- devs very interested in productivity and simplifying their lives, not in chasing new techs
- Rules:
1) Do documentation right: keyword rich, want engineers to write it; e.g. GitHub is using GitHub to write GitHub docs, engineers more willing to do it, and then can easily launch it as part of project, devs can fork it
2) Remove barriers to get started: use free tiers, reg-free accounts, allow people to experiment easily, give starter kits; e.g. Twilio does a phenomenal job; also look how devs are using your services
3) Be responsive
4) Find a community hero
5) Be a cheerleader
6) Listen actively: the opposite of marketing or broadcasting

PANEL: New vertical APIs
Adam Ludwin, CEO, Chain
Daniel Yanisse, Founder & CEO, Checkr
Andrei Pop, Founder & CEO, HumanAPI
 
- rise of vertical APIs in new categories
- Checkr for background checks (Accel portfolio)
- Chain is a blockchain API: indexing the large volume of data and providing fast access, managing private keys
- Human API: health data API, solves data liquidity and data mobility in healthcare
- need to abstract complexity from end user
- first set of customers: go for bleeding edge or big reference incumbents: once you prove product market fit with a couple of customers it's easier to get additional ones
- Checkr: 200 customers after 1 year live, now they're the 4 or 5th background check company in the US
- Chain: large market share in a small but fast growing market of bitcoin devs. To get started: you can "do things that don't scale": first sales were with customized prototypes
- first hires: need excellent engineers early; where you need domain knowledge is in product and once you start enterprise sales
- when you're building an original product, your team will become that source of domain knowledge in a matter of months
- Human API: no healthcare expertise in house; don't want to hire people with too much baggage (this can't be done), this can slow down company a lot
- for new thinking on old problems, you can't bring old thinkers
- need strong generalists and have to love the mission
!!! ninja hiring tactic: check Twitter lists of engineers, curated, then send them to mechanical turk, and filter them by focus, works well for specific areas like bitcoin
- useful API monitoring tools: Runscope
- tools like intercom are good, but still generalist-targeted
- most big companies end up writing API documentation in house, needs to be alive -- there should be a good tool for that

PANEL: Building a business model around developers

Bill Ready, CEO, Braintree
Calvin French-Owen, CTO, Segment
Eric Wittman, GM & Head of Dev Tools, Atlassian

- Braintree: payments are a big part of margins (can be 3% of the 10% take)
- need to remove barrier to entry
- key to propose a very simple pricing, so developers can make the buying decision,  not the CFO
- at scale, can't avoid talking to CFO
- need to build things that allow pricing development over time
- at Braintree they try to be proactive on pricing: when volume increase by 10x they reach out before to decrease pricing before the customer ask
- at Atlassian, they eventually land in front of CFO b/c of virality inside a company
- no one has left Segment b/c of pricing; it helps that they give easy access to customers' own data; if switching is easy, people stay
- Segment: stay away from custom agreements and consulting work; only add feature if they help the whole customer base; do one thing and do it well; don't do consulting work
- most of sales for Segment are inbound, no sales reps involved
- Braintree: don't want sales people who just want to shove product down people's throats; want to make sure sales people try to help customers, understand if product is a fit or not
- don't want to aggressively hit quotas, sell to customers who will churn in a year
- breaking discipline to not do custom work for customers can have huge repercussions down the road: you won't be able to serve customers well because of not maintaining the different tech stacks etc.

 
PANEL: Best practices for developers evangelism and support
John Milinovivh, Founder & CEO, URX
John Sheehan, Founder & CEO, Runscope
Ali Rayl, Head of Developer Support, Slack

- everyone needs to see all support communication, helps build trust and deliver a consistent message
- need clear SLAs across all channels
- need tiering of support, but no need to artificially slow down support for small customers
- support team needs to be well versed in any language
- support is the one opportunity to delight customers
- Slack: API should not be versionalized, backwards compatibility is part of the customer proposition
- API relationship is a long-term business relationship; e.g. some customers use multiple API keys to override limits, once they scale, do you want to keep them this way? Successful on your platform but not sticking to guidelines, can also affect the rest of your customers
- you need to help developers become more successful
- can you outsource support in an authentic way? No!
- metrics of success: time to first contact, time to resolution, customer satisfaction score
- if you see some feature that's grossly underutilized, it's probably very hard to use
- customer support at Slack: triage channels, basically one each support channel there's a dev that can answer; also all past discussions are searchable

PANEL: Facebook, Twitter and Dropbox - Building platforms at scale
Ilya Sukhar, Founder & CEO Parse/Facebook
Jeff Seibert, Director of Platform, Twitter
Steve Marx, Head of Platform, Dropbox 

- Crashlytics sees about 5B crashes a month
- roughly 3B active users around the world - experience shaped by roughly 3M developers
- customer support: need to respond to everyone fast, but also appropriate levels of depth depending on customer relationship
- Dropbox: app approval process if you want to go beyond 100 users
- people doing automated creation of apps: cat & mouse game, need to use captchas, look at metrics
- Facebook will charge if you get scale, weeds out a lot of folks
- Twitter: make their Fabric API very restrictive, let product guide use cases; by contrast, the broad Twitter Rest API is very broad
- Meerkat: comes down to intent; unhealthy if goal is to build identical graph
- Dropbox: need to be very intentional with why you're building on the platform
- the more data you have on how devs use your platform the better you can scale it. Need to run native code, just relying on API calls not enough

Live from MWC in Barcelona: are we in a tech bubble?

I was interviewed by Seema Mody at the Mobile World Congress in Barcelona. As the Nasdaq reached 5,000 pts that day, the focus of the discussion was not on mobile trends but on valuation and whether or not we are in a bubble. In a nutshell, my argument was that on the public side, the valuation of high growth tech companies do not seem very inflated at this point. For example, if you look at SaaS comps, the average FWD revenue multiple is around 5.4x for a growth rate of 25%. This is very similar of where these comps were in 2006 when I started in venture. On the private side though, things are different and I am seeing a large increase in both the round size and valuation. So is it a bubble? I would say that the private market environment is definitely very inflated. However, in my view, the qualities of the companies and the globalization of the market makes the situation different from 2000.