I attended the Techcrunch Talk hosted by Mike Butcher in London yesterday (December 16th). It was a fantastic event with a host of excellent contributors including Barry Vitou (Winston and Strawn), Sean Seton Rogers of Balderton, Andrew Scott of Rummble, Greg Marsh of Index Ventures and Colette Ballou of Ballou PR.
Here are some of the key lessons from the event:
1. Need to monetise early
The days of entrepreneurs being able to spend two years on a concept before it brings in revenue appear to be well gone. The revenue model also needs to be built in up front rather than tacked on afterward.
2. The more revenue streams the better
If possible, seek to supplement income for your new idea while it is in development, e.g., can you undertake some consultancy? Better still, can you find someone who will help pay for a prototype?
3. Manage cash flow
Ensure your business plan includes a realistic cash flow forecast, break-even points and milestones. Click here for more information on cash flow management.
4. Next year is the year of bootstrapping
As funding dries up, cash burn rates need to be managed very carefully. Bootstrapping is likely to become increasingly important for entrepreneurs.
5. Need to reduce cash burn with new solutions
Entrepreneurs need to closely analyze where they are spending to assess whether there are significant cost savings to be made from switching to newer more competitive solutions, e.g., outsourcing hosting to Amazon hosting.
6. Need for better business plans
One thing evident from the pitches, was the need for better business plans given the more competitive market for funding. Many high net worth investors have suffered in the past year (across a range of asset classes), reducing the number of angels currently looking to invest.
For more information on the Techcrunch event click here.
Palo Alto Software Ltd – UK