From Opportunity to Execution: Berkeley Blockchain Xcelerator Notes #2
Updated: Mar 11, 2020
Disclaimer: This article contains copyrighted materials by UC Berkeley and AnChain.ai. Please refer to the original when sharing. This article is my personal notes unless specified and maybe inaccurate.
AnChain.ai is honored to be selected to the Berkeley Blockchain Xcelerator2019 batch. In this intense 12 week journey, ten selected startups will attend UC Berkeley in these 3 tracks:
Entrepreneurship & Business
Many are curious about what I learn at this top notch Blockchain Xcelerator program. Hence, with the kind approval of UC Berkeley program committee, esp. Kartik Mehrotra , Jocelyn Weber and Keith McAleer (Editor), I am happy to share my notes on this exciting accelerator journey. Blockchain is decentralizing our world, and we believe knowledge should be openly shared.
In today’s blog, I will share my notes on the lecture “FROM OPPORTUNITY TO EXECUTION” on Entrepreneurship & Business track, by renowned Prof. IKHLAQ SIDHU, Chief Scientist & Founding Director, IEOR Emerging Area Professor, Department of Industrial Engineering & Operations Research at UC Berkeley.
1. The startup’s innovation journey
The critical moment for most startup innovation journeys is when there is a “working business model.”
Before this, the company is in experimenting mode, searching for the right business model.
After, the company aims to scale the business by executing the playbook.
Prof. Sidhu shared an interesting story on that gentleman in the slide: William Durant, the founder of General Motors. He’s an innovator who envisioned automobiles will disrupt the entire American industry back in 1900’s. But he moved on to other ventures once the company passed the “working business model” critical moment.
2. “The best people in each phase of innovation are different”
Since I founded AnChain.ai in the summer of 2018, I’ve had various friends ask for advice: “Should I start my company?”
Most of these friends have a wonderful high paying job at top companies. My advice to them varies by case, but this lecture actually provides the guideline of which talents both big companies and startups are looking for.
In the matrix, the Skills, Motivations, and Characteristics requirements are quite different, for Searching and Scaling phases.
This resonates well with my advice to my wannabe-startup friends: “Should you work at a big company, or startup?“
Everyone is different. The questions you need to ask yourself before founding or joining a startup:
Do you enjoy solving unknown problems by experimenting with something new and are you willing to pull many all-nighters? Or you are good at executing the defined route?
Do you prefer to follow the rules in your career (or school)? Or do you always challenge the status quo?
Silicon Valley is the hub of technology innovation. Your understanding of startups might be biased. You may be more successful in a large corporation than in a startup.
Recently this April, the “Developers’ Lives Matter” or “996” campaign outbreak has made many headlines, especially the Chinese high tech companies. The github has received 30,000 stars, making https://www.linkedin.com/redir/general-malware-page?url=996%2eICUbecoming a popular website.
996, or “9am to 9pm, 6 days a week” is not a sustainable way of running any business, and it has a negative impact on the health that may put you in the ICU.
The key question is whether you really enjoy it.
I remember I stayed up nights digging in blockchain transaction data, tuning machine learning models, that led to the successful detection Blockchain APT hacker in 2018 summer. In startup life, you wear multiple hats (I’m CEO + Data Scientist + Data Engineer + UI designer + Blog writer + Sales + many others). Just as a warning, you might need to occasionally 996 in early stage startup. That’s how Apple, Microsoft, Facebook were founded.
3. Startup is all about Execution in reality
In MBA education or textbook, the four parts to any new venture we are taught:
Story → Team → Validation → Execution
But in reality, it’s almost the opposite. Execution is the key. Whether a startup can succeed or not, is eventually about execution.
That reminds us of the ICO mania in 2017–2018. A whitepaper with a shiny team (even part time hobbyists) can raise $10 million funding. Most of these projects are now gone. They cannot pass the test of execution. This slide is a wake-up call.
4. Sell First, Build Later
Probably the most shocking slide to me.
Most computer science background founders usually do the opposite “Build First/ Sell Later”.
Here a different methodology was taught to the Xcelerator startups.
“Sell First / Build Later” is great because:
Low risk. It’s a market validation with almost zero overhead. What if you spent a few months building a product that no one even wanna buy? This happens more frequently than you expect.
Force you to find customers first. Customer acquisition is often a long process. It took AirBnB many months to rent out the first room. Why not start acquiring customers first?
An interesting real story was shared: in the 90’s there was a software startup founder posted an advertisement of the “yet to be built” product with a price tag. This was before the kickstarter website. Surprisingly he received $100K of payment!
This basically validated the pain point enough that customers willing to pay up front!
He ended up sending the money back, with a nice letter saying “Thanks, but we are out of inventory.” Yes he can argue that he is not lying because there is really nothing in the “inventory.” 🙂
With that, he “Sells first”, and quickly he raised funding, and assembled a team of engineers to “build later”. This company became a successful software company and had an exit after a few years.
5. You need a team of talents to execute.
To avoid killing yourself with 996 as the founder, you better have a founding team of talents. These are the minimal elements:
Company story / Product (CEO)
PR / Brand Awareness (Marketing)
Engineering (CEO / CTO)
6. The art of asking for funding.
It is an art to ask for funding. Best way is to learn from the best artist: Marc Andressen’s email as a great example of funding request to VC.
The key elements of a successful “cold call” email for funding:
What is it and for whom?
We are credible
A reasonable request
Hopefully, you will be as lucky as Mark Andressen that landed on great VC investments, and Ning had a successful exit.
7. Demystify New Venture Journey
Text book sketches out the linear route to the startup journey. While in reality it’s most likely nonlinear like this.
The startup route: MVP → Sell First → Market Traction → Funding → Scale
Key Question: “How will you handle the changes that you don’t know about yet?”
Depends on: “Technical and people skills.”
This lecture may not necessarily answer all startup founders’ questions, but most importantly, it provided us with guidelines from opportunity to execution.
AnChain.ai is a Silicon Valley based AI power blockchain security company, invested by top VC’s from both Silicon Valley and Wall Street: Amino Capital, Susquehanna International Group (SIG), CRCM, etc. The founding team has extensive experiences in cyber security, artificial intelligence, cloud, big data, previously worked at FireEye, Mandiant, EMC/RSA, Yahoo, Google, Amazon, Pivotal, etc. AnChain.ai is continuously securing top-tier crypto exchanges and DApps world wide by providing actionable value with its two products: Situational Awareness Platform (SAP) and Smart Contract Auditing Sandbox (CAS):
The Situational Awareness Platform (SAP) proactively protects crypto assets by providing proprietary artificial intelligence, knowledge graph and threat intel on blockchain transactions. The SAP is able to detect and even predict vulnerabilities and threats before and after they occur. AnChain.ai detected the first Blockchain APT (BAPT) hack in for the 1st time in history: BAPT-FOMO3D that have stolen $4 millions worth of ETH. SAP has been protecting world’s top DApp’s $8m weekly transactions.
The Smart Contract Auditing Sandbox (CAS) is a cloud based smart contract auditing sandbox that automatically scans most known vulnerabilities such as re-entrancy, overflow, etc. The CAS is fully automated, fast scanning, accessible in the cloud, and connects to professional auditing experts. CAS is trusted by the world’s leading crypto exchanges, and DApp developers.