Dave McClure

Blackbird Ventures – Dealflow observations in the 8 months since launch – Rick Baker @blackbirdvc

Rick Baker is the Managing Director of Blackbird Ventures, a Sydney based Venture Capital fund raised early this year by Rick Baker, Niki Scevak, and VC Veterans Bill Bartee and John Scull and backed by numerous names in the Australian and US tech scene including Mike Cannon-Brooks from Atlassian, Dave McClure from 500 Startups, Bill Tai the Kite Surfing VC and Southern Cross Ventures. 

Rick-Baker-Blackbird-VC

Rick Baker Blackbird Ventures

 

 

I wrote this piece as a newsletter to our investors a few weeks ago.  We thought we’d share it to give you some more insights on what’s out there and what we’re looking for.

After 8 months since the fund opened, we’ve logged 226 companies in our database and seen another 100 or so that weren’t worth logging. Add to this 260 Startmate applications, and we’ve seen a lot of business ideas.

From this deal flow we’ve made 9 investments and have one more in progress.  So we’re getting good at saying no!  Nevertheless we’re very happy with the deal flow coming out of the Aussie tech ecosystem at the moment.

Blackbird-VC-Logo

Here are some observations from the deal flow so far, our filters and what we’re looking for:

Blackbird Investment Map - Credit Blackbird.vc

Blackbird Investment Map – Credit Blackbird.vc

1. Sources:

As would be expected, by far the majority of deal flow by quantity comes from our contact@blackbird.vc email address. This is despite us and our website imploring founders to find a warm introduction to us through their networks.

By far the majority of quality deal flow comes from the Blackbird community of investors, founders and Startmate. We’ve been very pleased with the way this is developing and all of our investments to date have originated from these sources. It’s given us a number of opportunities that are outside the general flow of usual sources: accelerators, incubators, angel groups and well-known founders in capital cities.

There is a third category, which is investment advisors – i.e. people who promise to raise money for young companies for a cut of the raising or equity. While there are some good advisors with interesting companies, we’re a little cynical of deal flow that comes from this source as it tends to indicate a founder who is not able to get to us directly, or does not know or care about fund raising.  Fund raising is such an important part of the early years of many tech startups, that this is a factor we have to take into account. They also tend to come with 60 page business plans and detailed forecast spreadsheets to justify high valuations!  We haven’t yet found a company introduced by an advisor that we’ve really fallen in love with, but this may change of course. [By the way, this is not a dig at the advisor community and we we certainly take all companies introduced to us seriously.  I’ll try to write some more detail on this soon, but please do feel free to comment below if you think differently.]

2. Stage:

As you know we have a strong focus on companies that have a product in the hands of a “core group of happy customers”. While revenues are not essential, it’s often the best measure of this.  So we’ve quickly filtered out a lot of pre-product, pre-revenue businesses, pointing these founders to the angel communities.  We have only made one exception to this rule: Canva, where the founders had built a previous business in a similar area and I (Rick) had been mentoring the founders for some time.

It’s encouraging that we’re seeing more and more series A stage companies, where the business is around 2 years old and starting to generate decent and growing revenues. We love companies with $30-100k in monthly recurring revenue and seem to be finding a steady stream of these! We still see very little Australian capital targeting this space. Our key collaborator is Square Peg Ventures, and we hope to continue investing alongside them.

3. Global vs local:

The second quick filter is businesses that do not meet our passion for global markets. The majority of Australian deal flow is either Aussie focussed, or Aussie first. We are constantly challenging founders to think bigger and smash local boundaries from day one. Each of the businesses we have backed so far is truly global, with founders who have a real passion to be the best in the world, rather than the best in Australia.

4. Scalable business models:

One of the key attributes we’ve become more and more focussed on is finding scalable marketing and sales models. This usually comes in the form of digital and content marketing, with only light touch human sales efforts. We are particularly avoiding business models which require scaling up sales teams in Australia and around the world. We think this is a difficult model to execute from Australia.

5. Founders with an authentic connection to the problem they’re solving:

Finally and most importantly, we’re looking for founders who we think have a real passion and expertise in the area they are tackling. We have to believe that this person has a better chance than 99.999999% of the global population of being able to have insights to crack apart a market. We’re not interested in people who want to be entrepreneurs for it’s own sake, or have chosen random problems while gazing at their navel. We want founders who have become immersed in their niche and have a driving passion to make it better. They are rare, but we love it when we find these founders, and have found them in all the companies we’ve backed so far.

That’s all for this month. Please do keep your antennae tuned to find great businesses to send us!

Blackbird.vc or fill out the form to contact via staging.startup88.flywheelsites.com

 

 

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Lean Startup Tools and Processes Im using

Eric Ries - The Lean Startup, London Edition

Eric Ries – The Lean Startup, London Edition (Photo credit: betsyweber)

Lean Startup Book Cover - Credit - Eric Ries

Lean Startup Book Cover – Credit – Eric Ries

Over the last few weeks I have launched a prototyping project, its high profile, technically difficult, experimental and needs to be done quickly.

Normally in a big corporate you would spend a year on this, an academic might study it for 2-3 years, I hope to condense it to a few months and produce a working prototype.

I have listened to Lean Startup a few times now over the last year (well most of it) and started looking for tools to facilitate building a lean startup (within a multinational split over 4-5 timezones).

Funnily enough when I launched my first business nearly 14 years ago I didn’t spend much time planning, I just made a best guestimate of what we should do, the 3-5 big goals that would change my world, listed the tasks needed to achieve each goal and executed hard, measured the results and adjusted as I went, I would review the priorities every day and set new weekly goals based on a quarterly plan (but no more than that).

Everything was an experiment unless proven otherwise (I got this experimental approach from Seth Godin’s book “Survival is not enough” long before Lean Startup was a movement) and I ran lots of experiments, more than 25 different ways to get the message out (and more than 150,000 mail drops to Sydney Businesses with about 20 messaging variations)

Here is the list of tools that I have come across and tried/used so far in my process.

Please add any you think we should have to the comments and I will put them into the list.

http://leanstack.com/ has a multiuser Lean Canvas – Works well when you are working with an international team, simple but easy way to get the critical data to make a product and a decision down on one page.

Leanstack.com Canvas App

Leanstack.com Canvas App

http://leanstartupmachine.com/validationboard/  A Google Docs Validation Board template

Similar but more manual and works on Google Docs

123D Design – Free 3D drawing software, there is a desktop version (which crashed a lot for me) and a web version (which is not as capable as the desktop version). Despite these problems I still recommend it as it is very capable software and amazing given its free.

123D Design

123D Design

Tinkercad.com  Very good if you are aiming to build models for 3D printing but I found it lacking for more complex object contruction (or it could be my lack of skill) Also free

Tinkercad - Credit Tinkercad.com

Tinkercad – Credit Tinkercad.com

Autodesk Inventor – This is what you will probably use if you need more than 123D. Easy enough to use, but you really need 8Gb ram and Win 64, it too will crash on 4gb. Extremely capable. Not free but a demo is available.

Autodesk-Inventor - Credit Autodesk & www.synergissoftware.com

Autodesk-Inventor – Credit Autodesk & www.synergissoftware.com

Google Docs – Because enterprise collaboration tools will arrive in your company 2 years after you need them.

 

 

LeanProduction.com  Excellent explanation of the 25 lean tools for manufacturing

Strikingly.com for building a great landing page, ever wondered who builds those beautiful one page sites that explain everything you need to know about a product or service and nothing else? Strikingly.com does.

http://pollenizer.com/tools Check out Phil and Micks collection of tools, these guys are experts in the space.

https://trello.com to create a shared workboard so that you can collaborate rather than email everything – Freemium

http://www.targetprocess.com Agile Project Management Software – Freemium

https://www.circuitlab.com/ This is a great App for desiging circuit schematics and then running them in a simulator – Freemium

CircuitLab.com

CircuitLab.com

https://www.fluidui.com/editor/live/ Available in your Chrome Browser for designing App mockups – Freemium

Fluid - Chrome Based Mockup App

Fluid – Chrome Based Mockup App

What did we miss? Add your preferred Lean Tool in the Comments.

 

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