Adventures with Start-ups: Successes and Failures in Wonderland

1. Adventures in Wonderland
Successes and Failures with Startups
Philip Ammerman
University of Cyprus C4E
28 March 2018
1

2. Living in Wonderland
2
“But I don’t want to go among mad people,"
Alice remarked.
"Oh, you can’t help that," said the Cat: "we’re all
mad here. I’m mad. You’re mad."
"How do you know I’m mad?" said Alice.
"You must be," said the Cat, "or you wouldn’t
have come here.”
Lewis Carroll, Alice in Wonderland

3. Navigator Entrepreneurship Charter
To launch one start-up
per year between 2010
and 2020
To support social entrepreneurship or solo entrepreneurs working in
worthy fields.
3

4. Backstory
4
Founded Navigator Consulting in Athens
Began tech advisory (travel, banking)
Web 1.0 boom
Google founded
Synchronised currency, debt, tech & equity crash
Facebook founded, Web 2.0 boom
Cyprus joins EU
Bear Stearns fails
Lehman fails, synchronised property, govnt, equity crash
Work on first Navigator start-up
Navigator hits € 5 billion in advisory projects; launches EC
1995
1996
1996-1999
1998
1997 – 2000
2004
2007
2008
2009
2010

5. Business Failure Rates
5
https://www.bls.gov/bdm/entrepreneurship/entrepreneurship.htm

6. Start-up J-Curve
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http://startupsac.com/the-startup-j-curve/
Based on Howard Love: The J Curve

7. J-Curve & Startup Financing Cycle
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https://en.wikipedia.org/wiki/File:Startup_financing_cycle.JPG

8. Multiple Perspectives
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As a Consultant
advising start-ups
As a Founder
managing start-ups
As an Investor
financing start-ups
As someone who has advised
Smart Money
and Stupid Money
As someone who has
Made Money
and Lost Money

9. 9
Founder Lesson #1
What’s the most
valuable thing in
business?
Money can’t buy you love. But money can buy you focus.

10. 10
Founder Lesson #2
If you don’t hurry, you
won’t succeed.
Somewhere in the world, 62 other founders are working on
exactly the same thing you are. And they are all smarter, better-
looking and better-funded than you are.

11. 11
Founder Lesson #3
There is smart
money, and there is
stupid money.
EU money = stupid money. Another crash approaches.

12. 12
Founder Lesson #4
Despite all efforts to
the contrary, stupid
money is rising.
There is now too much money chasing too few real assets.
The main exit strategy for most VCs has become flipping.

13. 13
Founder Lesson #5
You can buy market
share. What next?
Spending equity capital on Facebook advertising only works if
you can raise your revenue to above your break-even rate within
a specific time frame. If not, you’ve made Zuckerberg richer and
your investors poorer.

14. 14
Founder Lesson #6
If it’s not working, pivot.
If it’s still not working,
shut it down fast.
Shutting down can mean an exit via onward sale or liquidation. Just
do it fast and take care of your stakeholders.

15. 15
Founder Lesson #7
There is no shame in
failure. There is only
shame in dishonesty.

16. Investor Lesson #1
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Are you in the
right country?

17. Investor Lesson #2
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Who’s on your team?
Who has equity?
Who is replacable?
Probably the main reason start-ups fail is because the team
doesn’t work properly over time. Either they don’t maintain
focus, or there are personality conflicts. Particularly once the
first success is reached.

18. Investor Lesson #3
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Why are you 10x
better than your
competitors?
Ask Peter Thiel

19. Investor Lesson #4
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How far away are you
from generating
revenue?
Money talks. Bullshit walks.

20. Investor Lesson #5
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Are you charging
enough so that you
can afford to sell?
Is customer lifetime revenue per customer higher than cost
of customer acquisition? How fast does it break even?

21. Investor Lesson #6
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Why invest?
Why not just sell?
What is your minimum viable product?

22. Investor Lesson #7
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What’s the money
for?
Detail your real funding needs, and how the funds will be
used. DETAIL. Lack of detail = lack of preparation = high
chance of failure. Don’t “leave this for Series B”.

23. Investor Lesson #8
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What’s our
equity share?
If you aren’t ready to value your company and answer
this question correctly, don’t ask for money. It’s
disrespectful and a waste of time.

24. Investor Lesson #9
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How likely is it we
will get anything
back?
If the start-up fails, how will liquidation work, and who
has priority on regaining capital? This is a critical term
sheet question.

25. Personal Outcomes
25
Founding
Startups
has made me a better
Manager
Becoming a better
Manager
has made me a better
Consultant
Becoming a better
Consultant
has given me more ideas for
Startups
Higher self-confidence | Great CV | Real industry outlook | More assignments

26. Operational Outcomes 1
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Transformation from a
consultancy
to a
professional services
group
Higher valuation | new opportunities | risk diversification

27. Operational Outcomes 2
27
Growth challenges are now down to
talent
and
cash flow
Clear growth opportunities in multiple directions | Excellent traction

28. Financial Outcomes
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I still can’t afford a Ferrari L

29. Financial Outcomes 2
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But I no longer want one J
These nine years have taught me to
appreciate frugality, and that the greatest
value in life is time well-spent with the people
you love.

30. What’s Next?
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Two fintech start-ups:
2018: Financial services (B2B/B2C)
2019: Peer-to-peer lending (B2B)
One environmental:
2020: Carbon remediation
Actively looking at tourism and/or equipment

31. Some Great Resources
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32. 32
Focus

33. Thank you!
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Philip Ammerman
www.navigator-consulting.com
www.numenorcapital.com
https://www.linkedin.com/in/philipammerman/