Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 7)

Sramana Mitra: I just have one last set of questions before we retire. You are one of the few entrepreneurs I have interviewed who has roots in Latin America. We see entrepreneurial activity in the technology industry from Indian and Chinese entrepreneurs. Why has Latin America been slow on developing in the technology industry?

>>>

Funding Rejection Statistics Of Key Players

You’ve often heard me say that over 99% of the entrepreneurs who seek financing are rejected. This post offers a set of rejection statistics culled from credible sources on some of the key players:

YCombinator: 97.15%

YCombinator started as a summer programme and the roots still show, with courses running for three months, about the length of an academic summer break. Teams all join at the same time, in batches. Applicants are rigorously screened and the best invited for interview. For the latest batch 74 (including six not-for-profits) were selected from a field of more than 2,600. Those lucky few get paid between $14,000 and $20,000 to attend. In return they have to hand over about 7% of their firm’s equity. [Source: The Economist]

>>>

Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 6)

Andres Rodriguez: I’ll tell you the short answer. For young entrepreneurs today, they can do it but they have to have technical people in the team that have lots of equity in the company. The one thing that an investor wants to see is the proof point that you have a concept. This is for the kind of company that you were just telling me about where what you’re trying to prove is a concept. It’s really about getting traction or users. I don’t think it has changed as long as you can get a technical team that can work. A group of two or three engineers can build a lot of value to prove a concept in six months. An investor will fund that. That is the way to do it with no track record.

Sramana Mitra: You’re right. That’s a very interesting observation. You can build if it’s a group of highly-skilled engineers who are willing to work for equity and do not cost a lot of cash. You can get to a certain level of validation working with customers and build technology. That is a scenario that can be funded. What I’m saying is, that’s not a concept financing, that is a business financing.

>>>

Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 5)

Sramana Mitra: In modernizing the enterprise storage using cloud principles, was there any other competitor or were you the first to come into that space?

Andres Rodriguez: When we came out, we thought we were the first but there are always competitors in the space. We have competitors today.

Sramana Mitra: Big opportunities tend to have competitors and that’s not a bad thing.

Andres Rodriguez: Absolutely. If you’re not chasing an idea that another company is chasing, you should be worried.

>>>

Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 4)

Sramana Mitra: What happened next in your history?

Andres Rodriguez: After we sold Archivas, we had all the top venture capitalist wanting to fund the next project.

Sramana Mitra: I’m sure. What’s good with being an entrepreneur is, capital follows you.

Andres Rodriguez: Success breeds capital.

Sramana Mitra: However, let’s talk about the investment pieces that you explained to the investors? What year was this when you started on Nasuni?

>>>

Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 3)

Sramana Mitra: What year did you start Archivas?

Andres Rodriguez: Towards the end of 2001 and the beginning of 2002.

Sramana Mitra: Was it the same team that you had in Abuzz?

Andres Rodriguez: Some of the engineering team was the same, but a key ingredient was missing. This is happens often when you shift industries. With Archivas, I was moving from application layer of the stack down to the infrastructure layer of the stack. My team was exceptionally good at doing rapid amplification of distributed system layer. Now, we were going down to the storage layer, which requires a great deal of attention to quality and quality assurance.

>>>

Building Fat Startups: Nasuni CEO Andres Rodriguez (Part 2)

Sramana Mitra: What were the mechanics of Abuzz? Was it a venture-funded company?

Andres Rodriguez: Yes, it was a classic Series A venture funded company. It was funded by SoftBank, Brad Feld, Solstice Capital, and Flatiron Ventures, which is no longer around. I was very lucky to have good guys. They were especially good with young entrepreneurs. They knew how to work with teams that did not have a lot of experience. They coached young entrepreneurs through the process of building companies very early on.

It was also a great time to build a company. I think we are in a very similar time today where young people’s ideas can get a lot of support and a lot of money behind them to make those ideas happen.

>>>

Who Are The Top VCs in Silicon Valley Today?

I have been having this discussion with a few people whose analysis of the venture capital industry I respect. The exercise is not just to assess who are the top investors, but more, to assess where the industry is going, and where the next generation of venture scale companies are going to come from. In this post, I will provide a framework for the discussion. Please weigh in with your thoughts.

>>>