slides from my talk at #StartupIstanbul

1. 1 0 C H A L L E N G E S F O R
E M E R G I N G M A R K E T
S TA RT U P E C O S Y S T E M S
@ D A V E M C C L U R E @ 5 0 0 S TA R T U P S 5 0 0 . C O

2. 1 ) T H E R E A R E N ’ T M A N Y I N V E S T O R S .
M O S T O F T H E M A R E E V I L O R S T U P I D .
• low valuations and crappy terms: “51% for
$100K”
• supply vs. demand problem; fewer investors
than startups, lack of competition = no
urgency,
• say NO to business plans / revenue projections
• say YES to marketing plans, expense
projections
• wins & exits => FOMO, competition increases

3. 2 ) T H E R E A R E N ’ T M A N Y E N T R E P R E N E U R S .
M O S T O F T H E M A R E C L U E L E S S .
• need more
mentorship, more
founder experience
• product management,
design & UX, growth
hacking & marketing
• changing quickly as 1st
gen founders exit ->
2nd gen startups

4. 3 ) T H E R E A R E N ’ T M A N Y C U S T O M E R S .
M O S T O F T H E M D O N ’ T PAY.
• Not true anymore; 3B+ smart
phones
• increasing internet penetration +
consumer GDP
• improving payment & logistics
• local/regional markets getting BIG
• access to global markets easier

5. 4 ) S TA RT U P S D O N ’ T H AV E T R A C T I O N ,
A N D N O I D E A H O W T O G E T I T.
• Growth Hacker movement
• STOP building product features; START
growing customers (via online platforms)
• unit economics: CAC vs. CLV, timing of
revenue & expense, conversion metrics
• find profitable, high-volume customer
acquisition channels that convert to
KPIs, learn how to grow them
• WMD.co (weapons of mass distribution)

6. 5 ) T H E R E A R E N ’ T M A N Y E X I T S .
M O S T O F T H E M A R E S M A L L .
• where are the unicorns?
• acquirers crossing borders to find
talent (US, EU, China, Japan, Korea,
etc)
• non-tech companies acquiring
startups for innovation
• global companies looking for
emerging market footprint
• local -> regional -> global growth

7. 6 ) I N V E S T I N G I N R E A L E S TAT E I S B E T T E R
B E T T H A N I N V E S T I N G I N S TA RT U P S
• startups aren’t real estate!
• real estate doesn’t go up
forever
• most startups fail completely
• but a few startups grow up to
be unicorns
• use real estate to lower risk,
drive liquidity

8. 7 ) M O S T A C C E L E R AT O R S S U C K .
A N D T H E Y ’ R E G O I N G T O D I E . S O O N .
• Accelerator economics are tough.
• Most startups fail. Most wins are small.
Big wins take time (5-7 years).
• Most accelerators are under-staffed,
under-capitalized, short time horizons.
• Accelerators should verticalize, focus on
industry-specific expertise, get
corporate / academic / govt sponsors
• Create operational capital via investment;
use real estate to hedge risk, be creative

9. 8 ) E M P L O Y E E S D O N ’ T U N D E R S TA N D E Q U I T Y.
F O U N D E R S D O N ’ T G I V E I T T O T H E M .
• equity should be distributed
widely among team (not just
founders and management)
• when exits happen, a thousand
angels are born
• PayPal Mafia, Google, Facebook
• Yemekspeti example
• create equity culture, angel
investor culture

10. 9 ) M O S T S TA RT U P S N E V E R G O G L O B A L .
M O S T T H AT T RY W I L L FA I L .
• startups have to start SOMEwhere
• some local & regional markets are BIG
— Turkey, MENA, Brazil, Indonesia
• 50-100M customers is a good place to
start
• hard to jump to global markets without
local market MVP, product/market fit
• you don’t need to go to Silicon Valley,
but you need to get Silicon Valley to
come to YOU.

11. 1 0 ) M O S T F O U N D E R S & I N V E S T O R S D O N ’ T
T H I N K T H E Y ’ R E A S G O O D A S S I L I C O N VA L L E Y.
• Silicon Valley isn’t a place, it’s a
State of Mind.
• Most startups in Silicon Valley
came from somewhere else
(PayPal, WhatsApp, Udemy)
• The biggest problem isn’t lack of
experience, it’s lack of confidence
(for both investors & founders)
• You’re Good enough. You’re
Smart enough. Get Going!