[00:00.000 --> 00:11.080]  Hi, everyone. My name is Tom, and today I'll be talking to you about starting an open-source
[00:11.080 --> 00:17.800]  startup. So about this talk, it's directed at early-stage startups or people thinking
[00:17.800 --> 00:22.360]  about starting one with an open-source product or people thinking about open-sourcing the
[00:22.360 --> 00:26.600]  existing product. If you were here for the previous talk, it was more about the step
[00:26.600 --> 00:29.720]  one to step two. Here I'm going to talk about the zero to one. You don't have a product
[00:29.720 --> 00:35.640]  yet, you're just starting out. And so what is an early-stage startup? For the purpose
[00:35.640 --> 00:41.280]  of this talk, it's an early-stage company that's designed to grow fast, often backed
[00:41.280 --> 00:48.640]  by venture capitalists, so investors, and aiming for very high revenue. You have to remember,
[00:48.640 --> 00:52.560]  and maybe it's important to frame the rest of the talk around this, is that this is a
[00:52.560 --> 00:56.680]  capitalistic endeavor. You're taking money from people, and you're promising them to
[00:56.680 --> 01:01.240]  return them more money after a certain amount of time. And you have to remember that all
[01:01.240 --> 01:05.120]  for our thing. It's something that's so easy to forget, but that's the basis for everything
[01:05.120 --> 01:10.060]  else. And it's especially easy for us to forget, because we're so used to giving so much free
[01:10.060 --> 01:14.720]  value to the world with our open-source contribution, and also taking a lot of free value back by
[01:14.720 --> 01:19.320]  using Linux, by using KDE, by using all of these tools. But if you're out there building
[01:19.320 --> 01:24.320]  a business, taking money from investors, that's something that is important to remember.
[01:24.320 --> 01:29.560]  So who am I? I'm the founder and CEO of Sviks. It's a company. We started as a business,
[01:29.560 --> 01:33.520]  and then open-source the product, although that was the intention from the beginning,
[01:33.520 --> 01:37.960]  and also created EtiSync that started as an open-source project, and then turned into a
[01:37.960 --> 01:43.320]  business. I'm obsessed with API, developer tools, been around for a while, worked on
[01:43.320 --> 01:50.160]  Elightment, OpenMoco, and a few other projects as well. So what is Sviks? We do webhook sending
[01:50.160 --> 01:55.400]  as a service. It's an API-first developer tool. We help companies send webhooks, essentially.
[01:55.400 --> 02:00.440]  It's both open-core, hand-on-oaster product, as we do both. We raise over $10 million from
[02:00.440 --> 02:05.440]  top investors, including Y Combinator, and Treason Horowitz, RF, and founders and CTOs
[02:05.440 --> 02:12.040]  of companies such as GitHub, PagetGT, Segment, Lookout, and Fly.io. So why am I even giving
[02:12.040 --> 02:16.320]  this talk? So there are a lot of resources for how to start a startup online. A lot of
[02:16.320 --> 02:20.760]  great resources. But there aren't a lot of resources for open-source startups, especially
[02:20.760 --> 02:25.200]  not ones that come from the community, from people that actually understand open-source.
[02:25.200 --> 02:29.720]  It's more like an opportunistic approach that a lot of people take. And also, a lot of people
[02:29.720 --> 02:35.320]  have been asking me for advice over the years, even this weekend. I figured, why not? Let's
[02:35.320 --> 02:38.640]  make a deck out of it.
[02:38.640 --> 02:43.720]  So before we begin, why even start a startup? I saw a talk by one of the co-founders of
[02:43.720 --> 02:47.600]  Facebook many years ago, and it really resonated with me, especially now that I've seen other
[02:47.600 --> 02:52.640]  people start companies, I've started companies myself. And a lot of people think it's cool.
[02:52.640 --> 02:55.760]  Your vision is that you're going to hit launch, you just finish building a product, you get
[02:55.760 --> 03:00.560]  press attention, go wakeboarding with Obama, or I don't know what you want to do, Rockstar.
[03:00.560 --> 03:04.320]  But the reality is that no one is actually going to care at all. You're going to beg them
[03:04.320 --> 03:08.880]  for press attention, you're going to beg customers to use your shitty product, and really, honestly,
[03:08.880 --> 03:13.320]  you don't have time for press and all of the Rockstar stuff anyway, you're building a business.
[03:13.320 --> 03:16.800]  And also, a lot of people think that they want to be the boss, you know, big office,
[03:16.800 --> 03:20.840]  private steam room, make a billion dollar deals, private jets, all of that stuff. In
[03:20.840 --> 03:25.520]  reality, it's a noisy co-working space, if you're lucky, most likely a kitchen counter,
[03:25.520 --> 03:28.960]  and begging people to try a product again and fighting for survival. So it's really
[03:28.960 --> 03:34.480]  not that, it's not like what you think. Another thing people think, well, I'm my own boss,
[03:34.480 --> 03:40.040]  I'm going to have flexibility. I love this quote, as an entrepreneur, you get some flexibility,
[03:40.040 --> 03:44.600]  you get to choose which 24 hours of the day you work on. It's so true, and for a variety
[03:44.600 --> 03:47.680]  of reasons, first of all, your customers are demanding, and you want to make sure that
[03:47.680 --> 03:51.360]  they're served right, you don't want to lose that deal just because you're unavailable,
[03:51.360 --> 03:56.200]  even though it's your wife's birthday or some other occasion. And the other reason is, you're
[03:56.200 --> 03:59.080]  really obsessed with what you're building, so you're actually thinking about it all the
[03:59.080 --> 04:02.240]  time anyway, and you have ideas in the shower, and you have ideas during dinner, and you're
[04:02.240 --> 04:07.640]  just dying to go back and kind of like put that into reality.
[04:07.640 --> 04:11.520]  Another bad reason is that you want to have more impact. Honestly, just join an early
[04:11.520 --> 04:14.920]  stage startup, you're going to be working on a product that's already well funded, doing
[04:14.920 --> 04:19.440]  well, and you're going to grow with the team, become the CTO maybe, it's like, you know,
[04:19.440 --> 04:25.080]  it's a great path, or a late stage company. You know, I worked at Samsung, my code was,
[04:25.080 --> 04:28.920]  you know, it's been used by millions and millions of people, or at least devices. That's much
[04:28.920 --> 04:33.320]  more impact than any of my companies have reached, you know, so far. So that's just
[04:33.320 --> 04:39.000]  something to keep in mind. Another thing, you want to get rich. That's not a good reason,
[04:39.000 --> 04:43.240]  because the likelihood of success is very low. You're most likely going to have like a really
[04:43.240 --> 04:48.160]  low salary for many years, and then you're going to go bust. Not a good strategy if you
[04:48.160 --> 04:53.480]  want to make money. Again, join an early stage startup, a premium 50 at Facebook, for example,
[04:53.480 --> 04:58.760]  is a multi-multi-multi-millionaire, or just work at Facebook, Google, all of those companies.
[04:58.760 --> 05:02.000]  Again, I don't recommend, but if this is what you want, then you're just chasing money,
[05:02.000 --> 05:06.600]  you can do that. And you have to remember, it's going to be absolutely brutal. So things
[05:06.600 --> 05:10.720]  are going to go wrong, deals are going to go full through, you're going to get a lot
[05:10.720 --> 05:14.320]  of nose from candidates, from investors, from literally everyone, all the time. You're going
[05:14.320 --> 05:18.160]  to want to quit, but because you're the founder, that means that if you quit, the company is
[05:18.160 --> 05:21.600]  going to close, and that means your employees are going to lose their job, and your investors
[05:21.600 --> 05:25.600]  are going to lose the money invested. So you're really like, it's really hard to quit as a
[05:25.600 --> 05:31.760]  founder. Okay, so we covered all the budget stuff. So why actually start a startup? And
[05:31.760 --> 05:35.920]  there are a few good reasons. One, you really care about the problem. You want to cure cancer.
[05:35.920 --> 05:40.440]  No one else is like, cracked it yet. You think you have a shot? Go for it. You're really
[05:40.440 --> 05:44.560]  passionate about your idea. You have, I don't know, Uber for cats, terrible idea, but like,
[05:44.560 --> 05:48.880]  this is something that you really care about, and you want to get, because everyone thinks
[05:48.880 --> 05:52.320]  it's terrible, I guess, for the laughs. Like, no one else is going to build it. You decide
[05:52.320 --> 05:57.040]  to build it yourself. And you just want to start, maybe, your own company. You just,
[05:57.040 --> 06:00.600]  I don't know, whatever reason, this is what you want to do. And just make sure that your
[06:00.600 --> 06:06.320]  motivation is long lasting, because you're going to need it for the next 10 years. Another
[06:06.320 --> 06:11.400]  good reason, a bit more altruistic, is that open source startups are good for the community.
[06:11.400 --> 06:15.800]  Much more money and talent into open source, great open source products. You know, we're
[06:15.800 --> 06:20.560]  all going to use them every day. And also, open source startups tend to support the rest
[06:20.560 --> 06:24.760]  of the community. We support other projects, both financially and by upstreaming patches.
[06:24.760 --> 06:30.920]  We also employ the maintainer of, like, Redis Rust. And so, again, great for the ecosystem.
[06:30.920 --> 06:34.520]  But you have to remember, there are other alternatives. You can join a promising startup. You can
[06:34.520 --> 06:39.840]  start a non-VC backed startup, much less of the stress that I mentioned. You can start
[06:39.840 --> 06:43.960]  a side business. I've done that. It's great, much less stressful, still stressful, but
[06:43.960 --> 06:48.560]  much less. Or you can just start an open source project. Again, I've done that. Many people
[06:48.560 --> 06:51.760]  in this room, I'm sure, have done it as well. It's a great way to just, you know, put something
[06:51.760 --> 06:56.680]  out there without the pressure of actually having returns. And so, really, just, like,
[06:56.680 --> 07:00.400]  be true to yourself and what you want, because, you know, you need to know what you're signing
[07:00.400 --> 07:07.000]  up for. So, let's talk about getting started. The first step in the journey is validating
[07:07.000 --> 07:11.000]  your idea. So, is this a problem that people even care about? Are you the right team to
[07:11.000 --> 07:14.960]  build it? How will you make money? How will you get customers? How big is the opportunity?
[07:14.960 --> 07:18.600]  You need to constantly validate your riskiest assumptions in order to not go, you know,
[07:18.600 --> 07:23.160]  like head on the wrong direction. I highly recommend filling in the white combinator application.
[07:23.160 --> 07:27.560]  Like, white combinator is like an accelerator. Even if you don't submit it, it just forces
[07:27.560 --> 07:32.760]  you to think very thoroughly about the business from the eyes of investors and from a business
[07:32.760 --> 07:38.280]  perspective. And it's been, like, very helpful for me. And you know how people say there
[07:38.280 --> 07:45.600]  are no bad ideas? There are definitely bad ideas. Some threads of common bad ideas are
[07:45.600 --> 07:53.320]  the ones that are very obvious. So, for example, oh, I'm going to start a startup for teleportation.
[07:53.320 --> 07:56.200]  Great idea. I'm sure all of you guys are going to, like, pay instead of, like, taking the
[07:56.200 --> 08:01.200]  flight back home. But the problem is it's actually technically difficult or impossible.
[08:01.200 --> 08:07.120]  That's why no one has started it. So, you know, it's the first step of validation. The other
[08:07.120 --> 08:10.680]  type of bad ideas is when you have a solution, you build a project, you're really excited
[08:10.680 --> 08:14.600]  by it. That's what you want to work on. The problem is it's not applicable to everything.
[08:14.600 --> 08:18.400]  I don't have a good example from the top of my head, but there are many of them. And I'm
[08:18.400 --> 08:23.720]  sure, you know, like, the more crypto, you know, crypto, God, haters will use the crypto
[08:23.720 --> 08:31.400]  as an example for that. Also, another one, I get pitched a lot of ideas about, you know,
[08:31.400 --> 08:36.520]  spaces that the two B founders know nothing about. You know, I know nothing about cancer
[08:36.520 --> 08:40.640]  research. I'm not going to start a cancer research company. And one last thing, which
[08:40.640 --> 08:44.920]  is actually not a bad signal, people telling you that it's bad. And that's, you know, going
[08:44.920 --> 08:48.360]  back to, like, why doesn't exist? Because everyone thinks it's bad. And that's where
[08:48.360 --> 08:55.800]  your opportunity lies. So, just ignore the naysayers. I asked Paul, like, the co-founder
[08:55.800 --> 09:00.880]  and CEO of Superbase, what's his best advice? And he said, everything should be open source,
[09:00.880 --> 09:05.320]  but not every open source should be a business. And that's so true. Again, validate, verify
[09:05.320 --> 09:12.640]  that what you're building is actually a good business. In the now immortal words of Y Combinator,
[09:12.640 --> 09:17.240]  you need to make something that people want. That's it. So, when you start, all you need
[09:17.240 --> 09:22.280]  to be focusing on is writing code, showing it to customers, getting feedback, talking
[09:22.280 --> 09:25.680]  to them, all of that. You know, in the open source world, we now release early, release
[09:25.680 --> 09:32.320]  often. That's how you get things to the back hands of customers or users and you get feedback.
[09:32.320 --> 09:36.480]  It's much better to find a few that really love what you're doing than many people that
[09:36.480 --> 09:40.520]  are, eh, because the few that love, really love it, are going to tell their friends about
[09:40.520 --> 09:44.080]  it. And the few that are okay about it are going to stop using it after a certain period
[09:44.080 --> 09:50.280]  of time. Also, 90-10 solution. So, find how you make the most impact with the less amount
[09:50.280 --> 09:55.520]  of time. Like, perfection is really the enemy of good here. And the last thing, you want
[09:55.520 --> 09:59.880]  to do things that don't scale. So, what do I mean by that? There are, like, certain activities
[09:59.880 --> 10:03.280]  that you can do at this stage of the company that are definitely not going to work once
[10:03.280 --> 10:08.160]  you have a billion users. But for now, you can do them. So, one example from our, from
[10:08.160 --> 10:14.120]  the beginning of Svix is that I used to send the API keys encrypted to our customers. We
[10:14.120 --> 10:18.200]  didn't have a sign-up flow. There was no need, right? I don't know if anyone wants the company
[10:18.200 --> 10:22.440]  or wants the product. So, like, why build a sign-up pro? Why build a landing page? None
[10:22.440 --> 10:26.880]  of these things matter in the beginning. So, just focus on the product.
[10:26.880 --> 10:31.480]  Another great quote that I love is from Steve Jobs. So, everything around you that you call
[10:31.480 --> 10:36.240]  life was made by people that were no smarter than you are. And you can change it, you can
[10:36.240 --> 10:40.840]  influence it, and you can build your own things that other people can use. So, it's really,
[10:40.840 --> 10:45.480]  don't be scared because it looks, you know, it seems difficult. Just, like, go for it.
[10:45.480 --> 10:52.560]  Really just go for it. So, before you start, ignore the naysayers, but be honest with yourself.
[10:52.560 --> 10:55.400]  You know, a lot of people are going to tell you what you're doing is stupid, silly, bad
[10:55.400 --> 11:00.640]  thing. Maybe they're right. You have to make that call. And effort counts for nothing.
[11:00.640 --> 11:04.600]  This is not school. If you don't get results, it doesn't matter how hard you work. It doesn't
[11:04.600 --> 11:08.320]  matter, like, how much you tried. It doesn't matter how cool your code is. It just doesn't
[11:08.320 --> 11:13.920]  matter. Again, do you risk the business? You have to listen to advice, but decide for yourself.
[11:13.920 --> 11:16.400]  First of all, it's because it's practice for later stages. You're the only one running
[11:16.400 --> 11:20.720]  this company. But also, you're the only one with a lot of context about what your customers
[11:20.720 --> 11:23.520]  want because you've been talking to them all the time. And, like, what doesn't work because
[11:23.520 --> 11:27.520]  you've been writing the code. So, really, just decide for yourself. And remember that
[11:27.520 --> 11:32.320]  most startups fail, like the vast majority. So, if you're doing average input, you're
[11:32.320 --> 11:36.760]  going to get average output, and that means deaf for startup. So, definitely watch out
[11:36.760 --> 11:40.760]  for that. Okay. I think that was, like, the beginning.
[11:40.760 --> 11:45.080]  Now we can talk a bit about the product. So, the first and most important thing is understanding
[11:45.080 --> 11:50.240]  the problem. And you need to know your customers, what they want, what they care about, what
[11:50.240 --> 11:54.600]  they hate. Really have the curiosity of a child and really get to have, like, as most
[11:54.600 --> 11:59.760]  empathy as you can. A good hack in the beginning is being your own customer. That really works.
[11:59.760 --> 12:03.080]  But you also have to make sure that there's a path to other customers that are different
[12:03.080 --> 12:06.280]  than you are. Because if you're just building, you know, like, I don't know, like, a name
[12:06.280 --> 12:09.560]  tags that just say the name Tom on them. That's great. But there are just so many Tom's in
[12:09.560 --> 12:13.720]  the world. I don't think it's, like, a good business.
[12:13.720 --> 12:17.800]  Another quote, I love quotes, is from Henry Ford. It's asked people what I wanted. They
[12:17.800 --> 12:24.120]  would have asked for a faster horse. And that means don't, you know, listen to your customers,
[12:24.120 --> 12:28.200]  learn about their needs and wants. But don't follow blindly. Say no. It's absolutely fine
[12:28.200 --> 12:33.880]  to say no. You also have to remember it's about what you do. It's not about what you
[12:33.880 --> 12:37.840]  do. Sorry. It's about what you enable. And so people don't actually care about drills.
[12:37.840 --> 12:41.760]  I mean, drills are fun. Don't get me wrong. But what they want is holes. And you have
[12:41.760 --> 12:45.360]  to figure out how you give them a hole. And again, don't, you know, don't obsess on the
[12:45.360 --> 12:51.720]  fact that you already have a drill. And another part about this is, you know, we talked about
[12:51.720 --> 12:57.080]  product, and that kind of implies, you know, what people actually use. But really, when
[12:57.080 --> 13:00.600]  I asked James about his experience, he said something that really resonated, which is
[13:00.600 --> 13:06.880]  your old company is the product. And actually, Zeno also concurred. And from my own experience,
[13:06.880 --> 13:11.000]  like, it's, I've lost counts, the amount of products that I really wanted to try. And
[13:11.000 --> 13:14.080]  I went to their website, and I couldn't understand really what they're doing, but I thought maybe
[13:14.080 --> 13:17.400]  it's relevant. And I went to their docs, couldn't understand how to get it started, and just
[13:17.400 --> 13:21.120]  dropped off, even though I'm sure it's actually the perfect product for me. And it's the same
[13:21.120 --> 13:26.280]  with every other aspect. So, you know, like marketing, customer success, all of those
[13:26.280 --> 13:32.080]  kind of things. You have to obsess with a customer experience. So obviously, I have great customer
[13:32.080 --> 13:36.200]  service, as I mentioned, you know, your wife's birthday, but the customer is calling. You
[13:36.200 --> 13:40.400]  may need to, like, drop for a few minutes. And but much better than having a great customer
[13:40.400 --> 13:44.800]  service is actually fixing the docs. Like, why should they even have a problem in the
[13:44.800 --> 13:48.800]  first place? But even better than fixing the docs is just making the product easy to use.
[13:48.800 --> 13:54.160]  So, you know, same defaults, great onboarding in the product itself. And all of those things
[13:54.160 --> 13:59.600]  make for a much better experience. Now, I know this doesn't need repeating at FOSDOM,
[13:59.600 --> 14:02.440]  you know, just like looking in this room or looking even outside with all the stands
[14:02.440 --> 14:06.600]  of the amazing communities that are powering, you know, this whole event, but maintaining
[14:06.600 --> 14:09.480]  a healthy community really matters for an open source project, because that's how you
[14:09.480 --> 14:13.760]  get contributors. That's how you get evangelism. That's how you get all of those things that
[14:13.760 --> 14:19.760]  later on turn into business goals. As I said, capitalistic talk. I'm not as cynical in real
[14:19.760 --> 14:24.680]  life, but I'm just like trying, just showing you the connections to business value. And
[14:24.680 --> 14:29.960]  so be quick to respond to PRs. The most annoying thing, I opened a PR like two years ago. Got
[14:29.960 --> 14:34.400]  feedback a few months ago. Obviously, never fixed the feedback. I mean, that's ridiculous.
[14:34.400 --> 14:38.480]  There are tools to help to make sure that you maintain a good community, like Orbit
[14:38.480 --> 14:44.480]  Love and also the community dev room here at FOSDOM. Okay, so we talked about a product
[14:44.480 --> 14:47.680]  which maybe some of you know, maybe some of you already built a successful open source
[14:47.680 --> 14:53.800]  project, but now what we need to remember is that we're actually building a business.
[14:53.800 --> 14:58.320]  We're no longer just engineers, and we should focus our time on non-engineering tasks, which
[14:58.320 --> 15:03.640]  is so hard, and I'm going to talk about that in a bit. But the first step is understanding
[15:03.640 --> 15:07.640]  your business model. And what is a business model? It's just a fancy way of saying how
[15:07.640 --> 15:11.640]  are you actually going to make money? There are many different models for open source
[15:11.640 --> 15:17.240]  and many different models for non-open source. Red Hat and Canonical, they're a great example
[15:17.240 --> 15:22.640]  of selling additional services, so training, support, consulting, packaging, so like packages
[15:22.640 --> 15:28.840]  literally. Another example is OpenCore. So you release some of the source code as open
[15:28.840 --> 15:34.240]  source and then proprietary stuff on top. GitLab and RedDisk both do it. Again, very
[15:34.240 --> 15:39.160]  common. Do a licensing, so cute and free buy they do it. So you have licensed your code
[15:39.160 --> 15:43.600]  as copy left or something that is not compatible with some companies, and then they pay you
[15:43.600 --> 15:49.120]  an extra fee to kind of like unlock it and get an enterprise contract. And then you have
[15:49.120 --> 15:54.560]  managed cloud, SaaS. Oftentimes goes hand in hand with OpenCore when you have your features
[15:54.560 --> 16:01.440]  only in the SaaS product and again for the enterprise. GitLab and MongoDB both do it.
[16:01.440 --> 16:07.800]  You can either run a multi-tenant SaaS or you can just run the product for them. And
[16:07.800 --> 16:11.600]  there was a time that OpenCore was the way to go and then SaaS became the way to go
[16:11.600 --> 16:16.480]  because the advent of the cloud. And actually OpenCore is getting some traction again because
[16:16.480 --> 16:21.880]  a lot of people want to sell first with GDPR, all of those kind of things. People are looking
[16:21.880 --> 16:29.000]  to sell first again. And then another one that's not often talked about is supporting
[16:29.000 --> 16:32.840]  products and services. So that's kind of like similar to OpenCore, but you're not actually
[16:32.840 --> 16:37.000]  extending the product, but you're providing services on top of it. So good examples are
[16:37.000 --> 16:43.200]  GitHub. GitHub has nothing to do with open source, but they're riding on the Git success.
[16:43.200 --> 16:48.440]  And Android, Google is selling services over an operating system that was open and can
[16:48.440 --> 16:55.400]  be customizable by many of the, you know, by all the other form manufacturers. You can
[16:55.400 --> 16:59.600]  also combine multiple models, but you should know what your main driver is. You're an early
[16:59.600 --> 17:04.400]  stage startup. You probably have like one person or more likely 0.1 person like working
[17:04.400 --> 17:10.080]  on this stuff. So you really need to focus and see like what's the main driver for you.
[17:10.080 --> 17:14.840]  And now, because you're building a billion-dollar business, you're going to have a lot of competition.
[17:14.840 --> 17:18.320]  Other people are going to see your success. They're going to see your opportunity. We have
[17:18.320 --> 17:23.800]  numerous copycats that have launched since we started. And you have to figure out like
[17:23.800 --> 17:29.000]  how do you protect yourself? So there are a few common ways for open source projects.
[17:29.000 --> 17:34.320]  One way is the license. Obviously, I'm sure those need no introduction here. Copy lefts
[17:34.320 --> 17:41.280]  or GPL. The problem with those is that oftentimes they're not liked by enterprise lawyers.
[17:41.280 --> 17:46.600]  So it's really hard to sell to an enterprise if GPL is just banned from that enterprise.
[17:46.600 --> 17:50.280]  So that's something to watch out for. Then you have the permissive ones, which is what
[17:50.280 --> 17:55.960]  we chose, but they don't provide any protection. And then you have the non-free or FOPEN, obviously
[17:55.960 --> 18:00.920]  not open source. I understand where they're coming from. Like seeing AWS just take your
[18:00.920 --> 18:06.440]  business, host it, and then take all of your revenue stream probably is not fun. I don't
[18:06.440 --> 18:10.040]  know what I would have done in that situation, but it's definitely, I can see how there's
[18:10.040 --> 18:16.240]  going to be like more innovation in the licensing space just following the mega-cloud companies.
[18:16.240 --> 18:22.040]  And the last one is usually, it's like CLAs, usually tied with copyright assignment. And
[18:22.040 --> 18:26.160]  then when you do do a licensing, you need to actually own the copyright. So contributors
[18:26.160 --> 18:31.480]  assign the copyright to you, and then you can re-license.
[18:31.480 --> 18:37.360]  If I asked multiple lawyers and founders, and almost all of them said, own the trademark,
[18:37.360 --> 18:42.120]  your license is probably too liberal to protect you. And the trademark is the reason why Mozilla
[18:42.120 --> 18:47.360]  can say, well, you know, like can prevent a competitor from starting Firefox plus plus
[18:47.360 --> 18:51.640]  or Firefox remix, all of those kind of things, because that is actually confusing to customers.
[18:51.640 --> 18:56.000]  And that's a good line of defense. And I think like a few years ago, the founder of
[18:56.000 --> 19:00.800]  own cloud actually gave a talk here at Forstem, and he mentioned that they never had the trademark
[19:00.800 --> 19:05.800]  for own cloud, and that prevented them from actually, you know, offering a good hosted
[19:05.800 --> 19:09.960]  service, because there were so many clones, and there were so many people that, you know,
[19:09.960 --> 19:14.000]  that claimed to be the official one, and it was like really hard for them to actually
[19:14.000 --> 19:16.640]  maintain control.
[19:16.640 --> 19:22.160]  Another one is network effects and ecosystem. So if you look at GitHub, or even GitHub,
[19:22.160 --> 19:25.480]  even though it's not open source, it's just because everyone is there, that means the
[19:25.480 --> 19:31.000]  new projects are going to be hosted there as well. That's it. It's really tough to break.
[19:31.000 --> 19:35.760]  But even without, you know, a SaaS component, just think about Postgres. There's so many
[19:35.760 --> 19:40.160]  libraries for Postgres, and so many utilities for Postgres across many languages, and across
[19:40.160 --> 19:45.360]  many, like, they're just, the ecosystem is vast, so it's really hard to append Postgres
[19:45.360 --> 19:52.480]  from where they are. So that's like, again, another good line of defense.
[19:52.480 --> 19:56.240]  Also remember, you know, plans are worthless. Everything is going to change. You're going
[19:56.240 --> 19:59.880]  to change your assumption. Everything, it's really in flux. Like, it's hard to understand
[19:59.880 --> 20:06.520]  how much things, sorry, how to explain how many things change on a single day. But actually,
[20:06.520 --> 20:11.040]  the process of planning is extremely valuable. You know, I'm going to say a word that probably
[20:11.040 --> 20:15.600]  sounds scary, which is like financial modeling, but it's really, you just go and download
[20:15.600 --> 20:21.000]  a spreadsheet, fill a few values, change it to whatever you need, and that will provide
[20:21.000 --> 20:25.640]  you a lot of insight into the levers that actually move your business. So if, for example,
[20:25.640 --> 20:31.040]  you want to charge people $5 and you think you're going to be able to reach 2,000 customers,
[20:31.040 --> 20:35.920]  that means that you're going to make $10,000 a month. Maybe enough for you, maybe not enough
[20:35.920 --> 20:39.440]  to sustain a business, but now you know, maybe you need to increase the price, or maybe you
[20:39.440 --> 20:43.840]  need to have a different business model. So really, just the process of planning is extremely
[20:43.840 --> 20:47.080]  valuable. Now that you know the plan, you kind of know
[20:47.080 --> 20:52.240]  how you're going to make money, it's very important to assess the business opportunity.
[20:52.240 --> 20:57.000]  One common wrong way to do it is to say, well, you know, the software industry is vast. It's
[20:57.000 --> 21:01.440]  $1 trillion. If we do really well, Microsoft has 5% of it. If we do really well, we can
[21:01.440 --> 21:06.880]  go to 1%, and that's a lot of money. Realistically, that just doesn't make sense, and there's like
[21:06.880 --> 21:12.200]  so many variables that are hidden here that, you know, it just doesn't add any insights.
[21:12.200 --> 21:17.240]  Like the much better way to do it is bottoms up analysis. So it's essentially you saying,
[21:17.240 --> 21:21.040]  well, you know, we make $5 out of each customer. I think we can get to a million customers
[21:21.040 --> 21:26.240]  next year, and then 5 million 5 years after, and then 100 million 10 years after. And you
[21:26.240 --> 21:28.520]  probably not going to hit 100 million, or probably you're going to change some stuff
[21:28.520 --> 21:33.720]  in the business, that's fine. But just understanding that where you're heading is a $500 million
[21:33.720 --> 21:37.560]  a year business, that already gives you enough of context, and like gives you investors enough
[21:37.560 --> 21:42.000]  context to know what it is, you know, what kind of business you have.
[21:42.000 --> 21:47.360]  It's also important to ask, are you really selling $2 for $1? Like is your business model
[21:47.360 --> 21:51.760]  is like a losing model? So those are a bit more advanced questions. It's better to just
[21:51.760 --> 21:56.200]  do the market sizing in the beginning, but that's just something to keep in mind. And
[21:56.200 --> 22:00.200]  when asked here from Cal.com, like it's the open source calendar, I don't know if you
[22:00.200 --> 22:05.200]  know this one, and his top advice, he said that as an open source startup, you actually
[22:05.200 --> 22:10.680]  need a 10x time. Time is total addressable market. So like the, what I said in 10 years,
[22:10.680 --> 22:15.760]  100 million. And what he was saying by that is, you know, you're cannibalizing your own
[22:15.760 --> 22:19.880]  business. If you have a successful open source project, people are going to self-host it.
[22:19.880 --> 22:24.760]  At least I hope. And that means that you're competing with, you know, the most formidable
[22:24.760 --> 22:29.040]  competitor. They're always going to be at least as good as you are. And you're going
[22:29.040 --> 22:32.320]  to lose, right? So you have to understand that some people are not going to buy the,
[22:32.320 --> 22:36.520]  you know, the extra paid product. And that's important to keep in mind.
[22:36.520 --> 22:42.560]  I asked Nick from QuestDB, like his perspective, and for them, their delay in monetization,
[22:42.560 --> 22:45.760]  actually not charging money. And that I know, like the reason why I wanted to highlight
[22:45.760 --> 22:49.760]  this one, is that that's often a point of really cool about startups, like, oh, you
[22:49.760 --> 22:53.440]  know, this startup is losing like $10 million a year. But what you have to understand is
[22:53.440 --> 22:56.360]  that there are two kinds of losses. There are the losses that don't make sense, and you're
[22:56.360 --> 23:00.960]  just burning money for no good reason. And then the losses that are part of a strategy,
[23:00.960 --> 23:05.320]  like Nick's, which is saying, you know, we're only valuable if we actually have an ecosystem
[23:05.320 --> 23:09.960]  around us. We're only valuable if people actually use the product. And after that, we can figure
[23:09.960 --> 23:13.600]  out ways to make money. Or we already know how we're going to make money, but we can
[23:13.600 --> 23:19.480]  defer that. Okay. Now we can talk about go-to-market.
[23:19.480 --> 23:23.360]  Again, fancy way of saying getting customers. You know, you have to remember that at the
[23:23.360 --> 23:26.880]  end of the day, you're a business, and you need to make money. And paying customers are
[23:26.880 --> 23:32.800]  your business. Again, you can start by non-paying in the beginning, but you need customers.
[23:32.800 --> 23:37.680]  One common way of thinking about it is if you build it, they will come. It worked in
[23:37.680 --> 23:41.640]  the past, but it probably not going to work for you. You know, it worked for Linux, because
[23:41.640 --> 23:46.880]  that was the first open-source operating system. It worked for KDE. It worked for a lot of
[23:46.880 --> 23:51.400]  Linux distributions. But realistically for you, you're going to have a lot of competition,
[23:51.400 --> 23:55.680]  and people are most likely, like the market is most likely very saturated. So people are
[23:55.680 --> 24:02.080]  not just going to show up. So what you can do, though, is do things that
[24:02.080 --> 24:08.120]  don't scale. Again, as we said earlier, what does that mean? You know people. Ask, you
[24:08.120 --> 24:15.040]  know, email 200 people from your contact list to try your product. Or you're here at FOSDM.
[24:15.040 --> 24:18.960]  Just go to a relevant area or relevant dev room and just chat to people and just ask
[24:18.960 --> 24:22.320]  them to try your product. There are a lot of easy ways that are definitely not going
[24:22.320 --> 24:25.960]  to work. That's not how you're going to get to 100 million customers, but that's how you're
[24:25.960 --> 24:29.840]  going to get to your first stand. And you want to focus on the easy ones, like trying
[24:29.840 --> 24:32.960]  to sell to Amazon sounds like a very, you know, like, oh my god, they're going to pay
[24:32.960 --> 24:37.560]  me $10 million a year. That's amazing. But realistically, it's going to take six months
[24:37.560 --> 24:42.000]  until you get anywhere, and then it's going to fail. But even if it doesn't fail, then
[24:42.000 --> 24:44.800]  you succeed. It took you a year, and you're probably out of business by the time you even
[24:44.800 --> 24:50.040]  like managed to scratch the surface on that deal. And again, few that love you are much
[24:50.040 --> 24:58.480]  better than many who like. Go-to-market is a very common topic with both technical and
[24:58.480 --> 25:03.520]  open-source developers. The reason why is because we're technical. We don't think about marketing.
[25:03.520 --> 25:07.360]  We don't think about sales. We don't think about those things. And so a lot of people
[25:07.360 --> 25:13.120]  had a lot of feedback about that. One, ship as early as possible. Another one, learn marketing.
[25:13.120 --> 25:17.560]  Another one, you know, if you're trying to sell to companies, maybe start by getting
[25:17.560 --> 25:21.040]  the individuals at home first, because that's much easier than getting the approval and
[25:21.040 --> 25:26.560]  the contract and all of that going on. Now that you're kind of like, you're starting
[25:26.560 --> 25:31.720]  to get customers, you know, there's some traction, you actually have to, you know, have some
[25:31.720 --> 25:36.160]  metrics. And by metrics, I don't mean Google Analytics and like tracking your customers.
[25:36.160 --> 25:42.760]  I really just mean like knowing our things are even going the right way. And so, and
[25:42.760 --> 25:45.720]  also actually like if you know, if you're tracking the important things, you can also
[25:45.720 --> 25:49.440]  affect them. You can like, oh, revenue is not growing as much as we wanted. I guess we
[25:49.440 --> 25:54.320]  can, you know, do something about it. And so you really want to track the most important
[25:54.320 --> 25:59.840]  parts of the business. Often revenue, but you know, some precursor to revenue can be,
[25:59.840 --> 26:04.640]  you know, can be a good one as well. And it's really easy to go for vanity metrics. Like
[26:04.640 --> 26:08.000]  one of the founders, I'm not going to put, I didn't put a quote from him, but he said
[26:08.000 --> 26:12.880]  that they were tracking PyPy downloads. So like the Python package manager. That sounds
[26:12.880 --> 26:16.960]  great. The problem is, again, like CI, all of those kind of bots, all of those things
[26:16.960 --> 26:20.040]  actually download packages from there as well. And they thought they had a lot of traction
[26:20.040 --> 26:25.280]  but actually had nothing. So that's something to keep in mind. So there's some good metrics
[26:25.280 --> 26:30.640]  that you can use. You know, revenue is always king. If you're making money, great. But also
[26:30.640 --> 26:35.080]  a number of customers using you in production. So a few big companies that everyone knows
[26:35.080 --> 26:39.960]  are already using you to, you know, to serve millions of customers. That's something. Even
[26:39.960 --> 26:44.800]  if you're not making money now, you can probably make money later. Some insufficient ones are
[26:44.800 --> 26:49.240]  GitHub stars, signups, downloads, Twitter followers. You know, a GitHub star is really
[26:49.240 --> 26:56.360]  just someone clicked a button. Maybe that someone is a target customer, maybe not. Signups,
[26:56.360 --> 26:58.920]  maybe they signed up and then they dropped because they realized it's not even the product
[26:58.920 --> 27:03.640]  that they want. They're like a lot of really false signals here. And also, GitHub stars
[27:03.640 --> 27:08.080]  don't mean that you have a great business. So this one has like 240,000 stars, like one
[27:08.080 --> 27:12.560]  of the top star repos. But it's a set of tutorials. And maybe it's a great business. I don't know.
[27:12.560 --> 27:20.240]  They can spin it into something. But it's definitely not a business on its face value.
[27:20.240 --> 27:23.680]  But a lot of stars can definitely indicate that you're onto something. Again, this is
[27:23.680 --> 27:29.040]  from Superbase. They're at 40,000 stars and they're just growing like crazy every year
[27:29.040 --> 27:36.240]  consistently for two years, I guess. That's something. And that's just like an indication
[27:36.240 --> 27:41.880]  of the market share that they're gaining with the developers. So I guess the main question
[27:41.880 --> 27:45.440]  that we need to ask is whether we should even open source. I talked about all of that. And
[27:45.440 --> 27:49.360]  before you boom me off stage, I know this is not the right place to ask this question.
[27:49.360 --> 27:53.280]  But you have to understand it's actually a business decision. At the end of the day,
[27:53.280 --> 27:58.000]  you took money from investors. You promised them to return them more money. You got people
[27:58.000 --> 28:00.840]  on board, offered them a job and told them that you're going to be around for five years.
[28:00.840 --> 28:06.640]  So you have to make the best decision for your business. And there are reasons for both
[28:06.640 --> 28:12.560]  doing it and not doing it. And so one thing is your customers even care. Maybe they don't
[28:12.560 --> 28:17.280]  even know what open source is. I don't even know. I don't want to go with some cliche,
[28:17.280 --> 28:21.520]  but they just have no idea what open source is and they couldn't care less. Is there a
[28:21.520 --> 28:25.840]  business advantage to be in open source? So for example, when you're a developer tool,
[28:25.840 --> 28:32.040]  that means that people can try your product more easily. That's great. Maybe go open source.
[28:32.040 --> 28:36.880]  And does it even make businesses? You're just going to cut yourself. You're going to just
[28:36.880 --> 28:42.600]  kill your own business. So ideology is fine. I've done it for ideology as well with Etisink.
[28:42.600 --> 28:45.760]  It started as an open source project. But you just have to remember that at the end of
[28:45.760 --> 28:52.320]  the day, you're building a business. So they're definitely upsides. Engaged community really
[28:52.320 --> 28:57.000]  helps. Again, so many volunteers outside handing out flyers about projects, really promoting
[28:57.000 --> 29:01.680]  them. And you can also hire from the community. No need to find great developers if you already
[29:01.680 --> 29:06.360]  have developers that know your code base and been contributing code. Increase trust. Healthy
[29:06.360 --> 29:11.840]  communication that comes with open source. Easier adoption, as I said, with DevTools.
[29:11.840 --> 29:16.440]  And also the product is just more flexible. People can just fork it and adjust it to whatever
[29:16.440 --> 29:22.680]  they need. They're also downsides though. Balance the community and business needs.
[29:22.680 --> 29:29.440]  Does this one go to the open source product or does this stay as a priority extension?
[29:29.440 --> 29:32.960]  Getting a burnout is a good topic. It's a very front of mind topic for a lot of people
[29:32.960 --> 29:37.120]  nowadays and it's absolutely true. And the same with support, right? I mean, people asking
[29:37.120 --> 29:41.080]  questions about your product on GitHub, you want to make sure you're going to give them
[29:41.080 --> 29:43.920]  the best support possible. But they're not paying you in the end. So you're doing a lot
[29:43.920 --> 29:48.440]  of free support, which is fine. It's part of being a project, but also it can be overwhelming
[29:48.440 --> 29:53.720]  at times. It's really harder to say no to things because everything is in the open.
[29:53.720 --> 29:58.960]  And also startups win on speed. You really have to compete and move fast. And enabling
[29:58.960 --> 30:02.320]  self-hosting and doing database migration, seamless migration, all of those kind of things
[30:02.320 --> 30:06.520]  just makes things so much harder. And maintaining two core bases, which you have to do because
[30:06.520 --> 30:11.040]  you're going to have customizations for specific customers or you're going to have hacks for
[30:11.040 --> 30:14.360]  specific customers. You're going to have a ticketing system where you're going to say,
[30:14.360 --> 30:18.680]  well, you know, customer X asks for this. We have to finish it now. You're not going
[30:18.680 --> 30:23.200]  to be able to do that in the open just because your customers wouldn't want that. And also
[30:23.200 --> 30:27.840]  your secret sauce may be public. And you're really just undercutting yourself on price.
[30:27.840 --> 30:34.560]  You're looking to self-host. So there are downsides. Another quote that I like is by
[30:34.560 --> 30:40.360]  Joseph Jax. He said don't open source something you don't want to commoditize because you're
[30:40.360 --> 30:44.080]  open sourcing your secret sauce. You're open sourcing all of the internal structure. It's
[30:44.080 --> 30:49.000]  actually really easy to mimic or even fork, but definitely to mimic what you're building.
[30:49.000 --> 30:51.920]  So just assume it's a commodity the moment you release it and make sure that the stuff
[30:51.920 --> 30:58.040]  that you don't want to be a commodity, they stay proprietary. Okay. So now we can talk
[30:58.040 --> 31:02.880]  about fundraising. I know this is something that people are often mystified by even just
[31:02.880 --> 31:07.440]  by the amount of people that asked me about it in the last 48 hours alone. So happy to
[31:07.440 --> 31:14.480]  cover a bit of it. So the first thing is that you're dealing with investors. And when you're
[31:14.480 --> 31:17.560]  dealing with people, you have to understand what do they actually care about and understand
[31:17.560 --> 31:23.680]  how they think. So the first thing to understand is the power law venture capital investments.
[31:23.680 --> 31:31.080]  What does that mean? Let's assume for simplicity that a fund invests in 100 companies. Most
[31:31.080 --> 31:35.320]  startups fail. So that means 90 are going to fail. And they invest a million in each.
[31:35.320 --> 31:39.600]  So 90 are going to fail. Okay. They already lost $90 million. And now they have 10 live
[31:39.600 --> 31:45.360]  companies. Let's say five of them are going to return, sorry, eight of them are going
[31:45.360 --> 31:50.040]  to return 5X. Okay. That's a good outcome. They invested for a certain amount of money.
[31:50.040 --> 31:55.120]  It's now worth 5X that amount. Great return. So that's $40 million that they made. And
[31:55.120 --> 32:01.640]  then the last two, so they lost 90. They just made 40. So they're down 50. So the last two,
[32:01.640 --> 32:05.440]  the last two companies really need to carry the whole weight of the whole investment fund
[32:05.440 --> 32:10.440]  to actually make a return. So that means the last two probably need to return 100X each.
[32:10.440 --> 32:14.520]  So if they invested a value of 10 million, it needs to be worth a billion now. And it's
[32:14.520 --> 32:18.960]  really the old venture model is based on the fact they're trying to find these one or two
[32:18.960 --> 32:24.360]  companies in their whole fund that is going to be 100X. Facebook was a 2000X or something
[32:24.360 --> 32:29.440]  like that. Uber as well. They're companies that are definitely outliers. Apple as well
[32:29.440 --> 32:36.520]  if you look at the whole 30 years at a time. So the moment to understand that they don't
[32:36.520 --> 32:43.280]  care about your 5X, because that 5X was $40 million out of the 240 that they made, you
[32:43.280 --> 32:49.880]  really have to position yourself as that 100X. And you also have to understand that they
[32:49.880 --> 32:54.240]  have investors. So even though you're talking to that person and they love what you're doing
[32:54.240 --> 32:59.080]  and they're open source developers themselves, they really want the product, whatever, they
[32:59.080 --> 33:02.320]  have investors to answer for. They told them, hey, I'm going to invest your money and I'm
[33:02.320 --> 33:07.880]  going to give you that amount of return. So really, you have to make sure to understand
[33:07.880 --> 33:13.680]  that dynamic. It's also, it's their job. I mean, here I wrote, you know, stay in touch,
[33:13.680 --> 33:17.400]  but really it's their job to waste your time. And they want to like meet you. They want
[33:17.400 --> 33:20.360]  to like know more about the space because they're going to invest in a competitor and
[33:20.360 --> 33:23.800]  they really want to understand the space better. They want to know about all the cool companies
[33:23.800 --> 33:27.120]  so they can tell their friends at the country club that, I mean, that was maybe a bit of
[33:27.120 --> 33:30.880]  an extreme joke, but they want to tell their friends that they've talked to all of these
[33:30.880 --> 33:34.920]  cool companies that are just doing very well now. This is not your job. Your job is to
[33:34.920 --> 33:40.200]  build a company, not to waste your time talking to investors. And another thing to remember
[33:40.200 --> 33:47.160]  is that not a yes is a no. So investors want to invest in the really good companies. As
[33:47.160 --> 33:51.440]  I said, they want to invest in the hundred extra. It's really hard to know if this company
[33:51.440 --> 33:54.760]  is that. So what they're going to say, they're not going to say, well, no, this is stupid.
[33:54.760 --> 33:57.240]  I'm not going to invest in you. What they're going to say is like, oh my God, this sounds
[33:57.240 --> 34:01.020]  amazing. I need to build my conviction for a few weeks and I'm going to like do some
[34:01.020 --> 34:04.200]  research and I'm going to like talk to you then and then they disappear. But if they
[34:04.200 --> 34:08.320]  see that some big name investor is talking to you or there's some traction there, then
[34:08.320 --> 34:12.880]  they're going to come back and complain to you and say, well, I told you I was interested.
[34:12.880 --> 34:15.360]  But really what they said in the beginning was no and you're never going to hear back
[34:15.360 --> 34:18.440]  from them again. So it's really important to count that as a no and not to count that
[34:18.440 --> 34:25.440]  as a yes. And another thing is that you want to believe the no, but not the why. So again,
[34:25.440 --> 34:29.320]  they want to invest in you, maybe not even in this company, but maybe in your next company,
[34:29.320 --> 34:36.800]  but they want to invest in the best companies. And if they're going to tell you, you suck,
[34:36.800 --> 34:41.280]  you're not going to talk to them the next time. So they're really going to say something
[34:41.280 --> 34:44.960]  nice like, oh, you know, this is, you know, our fund is like slowing down its investment
[34:44.960 --> 34:48.560]  so that really this is not the right time for us. But like, let's chat again in a couple
[34:48.560 --> 34:52.480]  of months. Really what they mean by that is leave me alone. I don't want to invest.
[34:52.480 --> 34:56.680]  And so like don't like, don't count it as a yes in a couple of months. Just count it
[34:56.680 --> 35:02.440]  as a no, essentially. Also like everything, it's a business. You want to have a plan.
[35:02.440 --> 35:05.880]  How much are you going to raise? What are you going to actually do with the money? Like,
[35:05.880 --> 35:09.680]  you know, it sounds good. I'm going to raise $2 million, but are you going to hire people?
[35:09.680 --> 35:13.200]  What are those people going to achieve? You know, figure those things out. How much of
[35:13.200 --> 35:17.200]  the money are you willing to sell? Are you willing to sell 90% of the company for $1
[35:17.200 --> 35:20.940]  million? Are you willing to send 10? Those are all questions that you have to come in
[35:20.940 --> 35:24.720]  prepared for because you're dealing with professional negotiators that are going to rip you to
[35:24.720 --> 35:29.720]  shreds if you don't have like a strong stance on any of those. Another thing is to speak
[35:29.720 --> 35:36.880]  to investors all at once. So investors talk, as I mentioned, and they will talk about the
[35:36.880 --> 35:41.400]  cool companies that are chatting with. And if they're going to see that you've been talking
[35:41.400 --> 35:45.800]  to investors for the last year and you haven't raised around yet, that probably means you're
[35:45.800 --> 35:51.080]  tainted goods and they're not going to want to invest in you as well. So the right thing
[35:51.080 --> 35:54.800]  to do is probably try to invest money, like raise capital for like two, three months,
[35:54.800 --> 35:58.880]  and after that, if that doesn't work out, just stop, go back to building your business.
[35:58.880 --> 36:01.360]  If you're a developer, you probably don't need that money anyway. You can just continue
[36:01.360 --> 36:08.920]  building the product and then come back stronger in a few months. I'm going to rush this one
[36:08.920 --> 36:13.600]  a bit, but if you want to find investors, start with angels. Don't chase Sequoia. They're
[36:13.600 --> 36:18.400]  not going to invest in a small company, or they very rarely do. Don't waste your time.
[36:18.400 --> 36:24.320]  Build traction with angels, like small checks, and find people that are excited by the space,
[36:24.320 --> 36:29.120]  invested in similar companies, ask your friends. But really, the most important thing is don't
[36:29.120 --> 36:33.760]  take intros from investors who haven't invested. Investors want to look good, and again, they
[36:33.760 --> 36:36.640]  want to look like they know all the companies. So they're going to tell you, hey, I'm going
[36:36.640 --> 36:40.840]  to introduce you. I know a guy, Sequoia. I'm going to introduce you to him. I know a girl.
[36:40.840 --> 36:46.000]  They're that fun. But really what happens is that if they haven't invested in you themselves,
[36:46.000 --> 36:49.000]  they're just signals to Sequoia that you're tainted goods, because they don't want to
[36:49.000 --> 36:53.600]  invest in you, so why should they? So that's a really bad strategy to accept those intros.
[36:53.600 --> 37:01.640]  Just say that you already have enough traction and interest. But once they invest, by all
[37:01.640 --> 37:06.000]  means, that's the strongest signal. Someone put their money on you, have them introduce,
[37:06.000 --> 37:09.400]  have them go on a building and shout to the world that they've invested, and get introductions
[37:09.400 --> 37:17.800]  from them. This is actually where I see founders error the most, not because maybe that's the
[37:17.800 --> 37:22.880]  most common place for mistakes. It's just a place that I'm exposed to the most, is their
[37:22.880 --> 37:27.680]  decks and their pitch. You want to really keep it short. You want them asking for more,
[37:27.680 --> 37:33.080]  not going through 80 pages of boring stuff about whatever. You want to keep it short,
[37:33.080 --> 37:38.720]  short, 10, maybe 15 slides, really on point. You want to highlight what's most impressive,
[37:38.720 --> 37:44.640]  and in your case, it's probably team, maybe idea. Maybe if you have a really impressive
[37:44.640 --> 37:48.320]  set of customers, that's great. Highlight that. But most likely, you don't need to analyze
[37:48.320 --> 37:52.840]  your $2,000 a month revenue, because again, they don't care about that. It's not something
[37:52.840 --> 37:58.000]  that they see impressive. So focus on the stuff that are impressive.
[37:58.000 --> 38:01.960]  Another thing that people often get wrong is they confuse their customers with investors.
[38:01.960 --> 38:06.040]  So they go to the investor and assume the investor has the problem. The investor actually
[38:06.040 --> 38:10.280]  really cares about, I don't even know, I don't have an example at the top of my head, but
[38:10.280 --> 38:14.480]  they really care about this topic, and they understand the problem, and they face it themselves,
[38:14.480 --> 38:19.960]  and they really feel it. And if you told them about all the research that you've done, about
[38:19.960 --> 38:24.120]  this product, and how you solve it, they're going to really be interested about that.
[38:24.120 --> 38:26.880]  The most likely scenario is that they don't even know what you're talking about. It's
[38:26.880 --> 38:31.200]  not their job to be subject matter experts in whatever it is esoteric thing that you're
[38:31.200 --> 38:35.600]  building. They just need you to demonstrate that there is a problem. People really care
[38:35.600 --> 38:39.160]  about that. People are going to pay you money. This is how much money you're going to make.
[38:39.160 --> 38:42.320]  This is how you're solving it, not necessarily in this order. This is who you are and why
[38:42.320 --> 38:47.960]  you're the best person or best team to solve it.
[38:47.960 --> 38:52.640]  And obviously, you want to know your business inside out. You want to be concise, so let
[38:52.640 --> 38:56.800]  them ask questions, always iterate. Every after every call, I would go back and make
[38:56.800 --> 39:04.840]  sure that I get better after every call. On the call, be calm, relax, don't look desperate.
[39:04.840 --> 39:08.920]  You can sense desperation a mile away. When we were fundraising, I knew the worst case,
[39:08.920 --> 39:12.400]  I'm a developer, I can build a product myself. I don't need their money. I would love to
[39:12.400 --> 39:18.120]  have it, but I don't need it. That made it possible for me to relax and show that confidence
[39:18.120 --> 39:23.040]  that they're looking for. You're also assessing them. Ask questions, figure out if you want
[39:23.040 --> 39:28.080]  to take their money, because you're going to be with them for the long run if they're
[39:28.080 --> 39:33.040]  going to invest, so that's important. Also, only the CEO should go on calls. Don't
[39:33.040 --> 39:37.840]  do party conversations. First of all, just distraction, but also, you're going to get
[39:37.840 --> 39:44.320]  so many noses, and it's much better that less people get pounded with all of these noses,
[39:44.320 --> 39:49.840]  and the other people can actually focus on the business and continue.
[39:49.840 --> 39:54.320]  So the deal, this is mostly a side for you to read afterwards, but there are a lot of
[39:54.320 --> 39:58.000]  topics like, is it simple, is it fast, or are we going to spend 200,000 on lawyers in
[39:58.000 --> 40:02.360]  this deal? What are the terms for Rata, liquidation preference? All of those kind of things, you
[40:02.360 --> 40:08.920]  need to understand before you jump on that call, and make sure that what they're offering
[40:08.920 --> 40:14.120]  is what you're willing to accept. One thing that really grinds my gears, by the way, is
[40:14.120 --> 40:20.120]  investors that tell you, we invest 500,000. 50% of that is in money, and 50% of that is
[40:20.120 --> 40:25.120]  in services. So we're going to let you use our office and use our designers. I don't
[40:25.120 --> 40:29.840]  want your services. I'm going to hire my own designers, and that is such a rip-off if you
[40:29.840 --> 40:36.520]  ask me, and avoid those if you can. So final notes about fundraising. You only need one
[40:36.520 --> 40:41.960]  yes. When preparing this talk, I was thinking in my head, how many noses did I get when
[40:41.960 --> 40:45.440]  fundraising? I thought probably one, two. Then I looked at my notes, it was probably close
[40:45.440 --> 40:50.480]  to 50, but I really couldn't care less, because that doesn't matter. I only need one yes.
[40:50.480 --> 40:53.120]  You probably need more than one yes, you're probably going to get a few investors, but
[40:53.120 --> 40:57.680]  once you get a yes, the flywheel is rolling. Ignore the naysayers, ignore the assholes,
[40:57.680 --> 41:01.640]  you're going to meet some really shitty people along the way. They're humans as well, so
[41:01.640 --> 41:06.680]  just ignore those. Fundraising is definitely not success. Fundraising is definitely not
[41:06.680 --> 41:10.680]  company building. You need to actually build your company. This is not the end, this is
[41:10.680 --> 41:16.480]  just the beginning. You may not be able to raise some expectations, be ready for that,
[41:16.480 --> 41:21.280]  have a plan B, that's absolutely fine as well. As I said, very hard to fire investors, so
[41:21.280 --> 41:26.480]  watch out who you put in your cap table and who you marry. Another small point is that
[41:26.480 --> 41:32.880]  many investors only invest in certain locales, so a lot of investors only invest in the US.
[41:32.880 --> 41:39.080]  That's something to keep in mind. Why a big fan? They find a lot of open-source startups.
[41:39.080 --> 41:42.440]  They've been transformational for us. I would really consider applying. We got rejected
[41:42.440 --> 41:47.600]  many times. Don't let it hold you back. There are a lot of great open-source startups, GitLab,
[41:47.600 --> 41:53.240]  Docker, Superbase, HopeHosog, really the list just goes on and on. You're going to be in
[41:53.240 --> 41:59.640]  good company. One thing is that you need to be aware of the siren song. The tempting places
[41:59.640 --> 42:04.600]  where things usually go wrong for people. One place, as I said, fundraising or valuation
[42:04.600 --> 42:08.960]  or money raise or thinking that talking to an investor is actually success. But again,
[42:08.960 --> 42:13.520]  no, you need to build your company. Another area that people go wrong is that thinking
[42:13.520 --> 42:17.840]  that hiring more people is actually success. Managing 20 people. How big is your team?
[42:17.840 --> 42:22.400]  People ask me that all the time. We're small. The reason why we're small is because that's
[42:22.400 --> 42:25.480]  what we need to build a kick-ass product. This is something that you need to keep in
[42:25.480 --> 42:31.120]  mind. Burning money does not equate success. Plain startup does not build a company. Going
[42:31.120 --> 42:35.560]  to pitch competition, startup conferences, startup meetups, investor chats, all of those
[42:35.560 --> 42:42.160]  kind of things. Fun. Chasing press as well. Maybe fun. Honestly, probably fun. But it
[42:42.160 --> 42:46.720]  really just don't mean anything for the bottom line of your business. Just don't do it. Also
[42:46.720 --> 42:50.840]  remember, you really have not made it. Really don't look focused. The only thing that matters
[42:50.840 --> 42:56.360]  are customers, product, team and metrics. That's it. Everything else is just noise or
[42:56.360 --> 43:03.160]  maybe an enabler to get to everything else. So some lessons I personally learned the hard
[43:03.160 --> 43:09.080]  way is that you're no longer an engineer. I really like coding. That's it. I wake up,
[43:09.080 --> 43:14.080]  I love coding. And it's really hard to remember that this is not why you raise capital. Like
[43:14.080 --> 43:19.160]  this is not what my job is at the business anymore. I'm the CEO. I need to do just business
[43:19.160 --> 43:24.760]  stuff. I can help with the code. I can help with the architecture. But my main time should
[43:24.760 --> 43:30.320]  be spent on go-to-market. Opportunities are not going to last forever. Just grab them
[43:30.320 --> 43:33.880]  when you see them. It's very easy to say, I'm just going to perfect this landing page
[43:33.880 --> 43:37.760]  for a couple more weeks and then I'm going to take this opportunity. But then the opportunity
[43:37.760 --> 43:43.000]  is going to be gone. We missed a few in the beginning. People are going to be trying to
[43:43.000 --> 43:49.360]  take advantage of you. So just watch out. You're running a large budget. So just watch
[43:49.360 --> 43:55.840]  out for those people. Be mindful and protective of your time. So a lot of people are going
[43:55.840 --> 43:59.840]  to want to chat, catch up, whatever. Great. But as I said, you're going to be working
[43:59.840 --> 44:07.240]  24 hours. So maybe spare the 25th hour for some fun stuff or maybe more work. And the
[44:07.240 --> 44:11.240]  last thing is that you really want to surround yourself with optimists. The truth is that
[44:11.240 --> 44:15.120]  your startup sucks. And it's going to suck for the longest time. So the last thing you
[44:15.120 --> 44:21.720]  want is people that are negative around you. A few more things. Team, super important.
[44:21.720 --> 44:25.920]  Early team sets the tone. Bad hires can really derail the company. Great co-founders can
[44:25.920 --> 44:29.640]  make the difference. I've seen it multiple times. But actually better to start on your
[44:29.640 --> 44:35.360]  own than having a terrible co-founder, which I've also had. You're really in control of
[44:35.360 --> 44:39.440]  your destiny. If something isn't working, you can change it. The only thing you cannot
[44:39.440 --> 44:43.560]  change is the market. But really just iterate, iterate, iterate. You can get lucky. We got
[44:43.560 --> 44:47.760]  lucky many times. Just put yourself out there. Talk to customers and you're going to notice
[44:47.760 --> 44:51.080]  something that no one else has and you're going to get lucky. And it's really a game
[44:51.080 --> 44:54.600]  of persistence. You can't lose unless you stop. Obviously I'm not saying go and bang
[44:54.600 --> 45:00.040]  your hand against the wall. You have to have some, you know, some acumen there. But as
[45:00.040 --> 45:05.400]  long as you don't give up, you're going to win. So just a few closing advice. It's very
[45:05.400 --> 45:10.760]  easy to think that hiring X will fix everything. Or customer X, once we get them, that's it.
[45:10.760 --> 45:14.760]  The business is going to go crazy. Or maybe this investor is going to change the destiny
[45:14.760 --> 45:19.200]  of the company. And maybe. Maybe some of them will. But it's really just on to you to actually
[45:19.200 --> 45:23.760]  fix the company and make it work. And you have to remember everything is sales. So you
[45:23.760 --> 45:26.680]  have to really get good at it. You want to get customers. You're going to get candidates.
[45:26.680 --> 45:29.280]  You're going to get investors. You have to sell them on the vision of the company and
[45:29.280 --> 45:36.040]  the company itself. Some more sources of great advice. YC YouTube channel, library. I mean,
[45:36.040 --> 45:40.920]  check it out afterwards in the slides. And yeah. And that's it. I just want to give you
[45:40.920 --> 45:46.800]  like a few closing words before I open the floor for questions. So make sure that it's
[45:46.800 --> 45:51.360]  really what you want. I mean, I kind of like try to dissuade you a bit in the beginning
[45:51.360 --> 45:55.440]  because really you need to be, you need to want to start this company even with my dissuasion
[45:55.440 --> 46:00.440]  there. And the only important things are to talk to your customers and build a product.
[46:00.440 --> 46:03.920]  Nothing else matters at this stage. You want to build something that people love. You have
[46:03.920 --> 46:08.920]  to remember it's a business. It's not, you know, not an open source project. It's something
[46:08.920 --> 46:13.800]  that you have to actually make money. And this is the primer, but there's so much more
[46:13.800 --> 46:17.560]  to it. And this is just to get you from zero to one. Every stage of the company is different
[46:17.560 --> 46:21.400]  and there's so much more and like, and maybe conflicting advice once you get to the one
[46:21.400 --> 46:27.440]  and once you get to the two. And one more thing. It's your job to be the number one
[46:27.440 --> 46:33.200]  evangelist of the company. And so always be selling. And in that spirit, if you need webhooks
[46:33.200 --> 46:39.120]  or you want to work at a fast growing startup, yeah, come talk to me about Sviks. And that's
[46:39.120 --> 46:40.120]  it. Any questions?
[46:40.120 --> 46:47.120]  Yeah. Sorry, a bit over.
[46:47.120 --> 46:54.120]  Amazing talk. Thanks a lot.