So what’s his advice for aspiring entrepreneurs? Well, let’s see what he has to say:
Q. After raising almost $100 million, are there any lessons for entrepreneurs that stand out?
A. Yes, I do have three key lessons I can share:
1. A startup is not the same thing as a small company. It's an entirely different organization, with its own dynamics, rules and functions. Everyone is making things up as they go along, often with no set procedures to fall back on. Taking the initiative — both as an individual and within the team concept — is critical to transform a problem into a solution. After all, in a startup you're dealing with an unknown product, unknown market, and an unknown customer.
2. A startup is one giant mood swing. There are no emotional buffers in a startup, which means that you and everyone around you constantly has to react to good news and bad news. Everything gets amplified. The result: A negative email can send you into a quick tailspin, while a secured deal can put you on top of the world a second later. You have to have the confidence in the big picture or risk losing talent. And in a startup, losing an employee could be a matter of survival.
3. This might sound like a cliché, but cash is more than king. Cash is blood. Every single dollar matters — so spend your money wisely.
Q. What was the biggest challenge to raising capital? Any surprises?
A. After going through this process three times, I can say there are always surprises when you are attempting to raise money because every venture effort is unique, with changing economies, markets and other factors that influence VC behavior. That said, for the entrepreneur it all comes down to confidence: Rock solid confidence in your vision to the point of underestimating the risks that are involved in starting a company from scratch. It’s the confidence to get everyone around you to believe in your vision and follow where you lead. And it’s the confidence to sell your future to your investors and your customers.
Q. What are your views on the venture funding environment for 'Big Data' next year and beyond?
A. For the most part, venture capital has focused on funding core infrastructure — essentially the plumbing that enables customers to collect, collate and store massive amounts of data. I believe that next year and beyond investors will turn their attention to data and app platforms, which will finally convert all that data into something useful that can be analyzed, understood and acted on.
Tom Taulli is the author of How to Create the Next Facebook: Seeing Your Startup Through, from Idea to IPO and High-Profit IPO Strategies. Follow him on Twitter at @ttaulli.
