MARTIN OMANDER: Hi.
Welcome to Root Access, the show on Google Developers
Live about startups.
My name is Martin Omander, and I'm joined here today
by Don Dodge, longtime investor and startup advocate.
Welcome, Don.
DON DODGE: Thank you.
Great to be here.
MARTIN OMANDER: Great.
So you've invested in many companies.
And we keep hearing, or at least I keep hearing,
that investors look at the team a lot.
Not just the idea, but at the team in a startup before they
invest.
What specifically are they looking for?
DON DODGE: They look for a couple of things in a team.
One is balance.
So a technical co-founder, a business co-founder, maybe
a design co-founder that's really strong in design.
Or maybe someone who's strong in marketing and social media
and that kind of thing.
You need all of those things, and it's rare
that one person possesses all of those qualities.
So the first thing they're looking for
is a balance of co-founders and capabilities.
Second thing they look for is experience.
So do you have experience in building scalable systems?
Or do you have experience in launching products
across multiple market segments?
Or do you have domain experience in this market, so you
understand what the problems are and that kind of thing?
So it's those types of things you look for in founders.
And then the most important thing is passion.
Do you have passion for this idea?
Is it something that you have experience in?
So a lot of times I hear investors say,
why did you start this company?
What is the idea?
The reason they ask that question
is to probe a little bit on where your passion is.
Is this a problem that you've experienced
and that you have passion about?
If you do then your odds of success are slightly better.
MARTIN OMANDER: Right.
So what if you have everything lined up?
You have a team that is a good balance of business
and technology, good domain experience.
And what if you have somebody on the team who
has done startups and been successful before?
Does that mean you're going to succeed?
DON DODGE: Good question.
So the question about, are serial entrepreneurs more
successful than first time entrepreneurs?
Generally, yes.
If you've had an experience once or twice before,
your chances of success are slightly higher.
Even if those prior experiences were failures.
The reason is because--
MARTIN OMANDER: Oh, even if they were failures.
DON DODGE: Yes, yes.
Now, if you've had multiple startups before,
and they were successful, your odds of success
go up a little higher.
But even if you've had multiple experiences,
and one or two of them were failures,
you still have a slightly better chance
of success than a first time entrepreneur.
Because you've seen some of those problems
that come up in every startup.
So every startup is going to face
some of these problems that happen.
And if you've been through them before,
at least you know what to look for.
And you see the red flags earlier and say, oh, OK,
I have seen that problem before.
I didn't do it right last time.
So I know not to do that.
I'm going to try something different.
So all of those things together give you
a slightly better chance of success.
MARTIN OMANDER: A slightly better chance.
So not a much better chance then.
DON DODGE: No.
MARTIN OMANDER: No?
DON DODGE: No.
Most startups fail.
50% of them fail completely.
So what you're trying to do, as an entrepreneur
and as an investor, is increase your chances
of success 5% or 10%.
If you can do that, if you can be successful
55% of the time, 60% of the time as an investor,
you're doing great.
As an entrepreneur, if you can just
increase your odds of success.
Because there are no guarantees in this business.
But if you can increase your odds of success a little bit,
that's good.
MARTIN OMANDER: Right.
Even a little bit counts.
DON DODGE: Yes.
MARTIN OMANDER: So I've seen many startup teams, founders,
they have this great idea.
They think they're alone with it.
They are very excited about it.
And then they hear that another company's doing it, maybe
another startup that is better funded.
Or they might hear that somebody tried a similar idea
in the past and failed.
And they are disheartened.
Should they be?
DON DODGE: No, they shouldn't be disheartened.
They should learn from that.
So as an entrepreneur you want to look
at the competitive landscape and see,
is there anyone else trying to do what I'm doing now?
Generally there is.
So understand--
MARTIN OMANDER: Oh, so you're seldom alone with your idea?
DON DODGE: Almost rarely.
If you're alone, I would be even more skeptical.
Because if no one else is doing this,
then maybe this isn't a market.
So typically there is competition, either currently
or someone has tried this in the past and failed.
So what you want to do is learn from that and say,
all right, here are the approaches that they took.
Here are the strategies that they had.
Here the feature sets that they focused on.
Why did those fail?
Or why did they succeed?
You need to do the homework to understand
why the competition failed and how
you're going to avoid that failure.
Or how you're going to do something better,
maybe the same approach but you have
new wrinkles and new approaches to make it work.
So if you haven't done the homework to sort that out
and to understand what the competition is,
why they succeeded in some cases and why they failed,
then your chances of success go down.
So make sure you do your homework
and understand why something failed.
MARTIN OMANDER: Understand what failed.
OK, great.
Thank you very much, Don.
Thanks for sharing your experience with us.
DON DODGE: Thanks.
Good to be here.
MARTIN OMANDER: And when I'm not sitting here
I'm a developer here at Google, writing
internal tools for my team.
And I always use the Google Cloud Platform.
Because that allows me to actually write
code and be productive, and not deal
with system administration.
And we now have an offer where you viewers can
get started on the Google Cloud platform
and get a $2,000 credit.
So you can really try it out, see how it works for you.
The details are onscreen.
That's it for today.
Please keep those comments on YouTube coming.
And we will address and answer them in future episodes.
Thanks, bye.