A few months ago we had the privilege to meet John Gage from Kleiner Perkins Caufield & Byers(KPCB) who was down in Malaysia. KPCB is one of the top investment firms in Silicon Valley and also the world.
Who is John Doerr you may ask? John Doerr is a partner at Kleiner Perkins Caufield & Byers(KPCB). Along with KPCB’s partners, John has invested and sits on the board of directors of many of America’s leading entrepreneurs including:
Larry Page, Sergey Brin: Google
Jeff Bezos: Amazon
Andy Bechtolsheim, Scott McNealy, Bill Joy, Vinod Khosla: Sun
And the founders of Compaq, Zynga, VeriSign, Macromedia, Palm and Symantec.
Just to name a few.
Courtesy of VentureBeat.com who had a round table with KPCB, John Doerr had a list of sound advice for start-ups to follow by.
At VentureBeat’s Downturn Roundtable event this morning, Kleiner Perkins’ John Doerr came prepared with a list of the top things that start-up CEOs should do. He surveyed 18 of Kleiner’s companies, and here’s what they suggest [update: Doerr has since added an eleventh point]:
1. Act now. Act with speed. Raise money. Get a loan, secure financing. Focus, cut or sell.
2. Protect the vital core of the business. But use a scalpel not an ax. Be surgical. Protect the vital core of the company. Cut once, deeper than you think.
3. Make sure you have at least 18 months of cash. Or more — on a conservative revenue forecast.
4. Defer facility expansions. Don’t spend money on tech infrastructure, such as new software or computers. Doerr noted that Andy Bechtolsheim’s new startup, Arista uses Google Docs (free web office software).
5. Reevaluate your R&D priorities.
5. Renegotiate any contracts that you can. Everything is negotiable.
6. Remember, everyone in the organization should be selling, from the receptionist to the engineers.
7. Offer people equity instead of cash e.g. in place of bonuses. (You can do this with outside vendors as well).
8. Secure your cash. Treasuries, or treasury backed securities, are more secure than money market funds.
9. For your revenue plan, develop and obsess on leading indicators — e.g. bookings, unique visitors, conversions.
10. Over-communicate with everyone – employees, investors, partners and particularly customers. Don’t sugar coat things, communicate your resolve.
Angel investor Ron Conway added a key twelfth point: Be open-minded to mergers and acquisitions. Always a good tip.
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