“Chad’s Maxims for Startups”

A little off-topic for my blog, but I’ve been thinking about this for the last 6 months (first public mention was here), and thought to myself “these maxims are actually true in my experience, it’s worth writing them down”.

Startup land is fascinating – and I have incredible respect for the creativity and innovation they bring into the marketplace.  Having come to EMC (a large incumbent) through the acquisition of a tiny startup, and having done several startups myself I look back on the startup period with realistic (not rosy tint), and fond memories.  I love it here at EMC, and am surprised, learn and expand every day.

So, without further ado, here are “Chad’s Startup Maxims”:

It’s interesting to watch this space, as we’re in a fresh wave of storage startups.  

If you’re a founder, then #2 isn’t that important (startups without large revenue streams can have OK outcomes for founders at smaller valuations, but the only way an individual makes out is if the valuation is driven by a material revenue stream – which means large numbers of customers).

Personally, I’m amazed constantly on the inside how much EMC is all over #3 and #4.  We’re not perfect (not by a long shot!), but that awareness means that while we do lose sometimes to the new folks – after a relatively short period of time, we learn and adapt, and that usually means the number of customers is relatively small, and the period of #3 is very short.

It’s very hard (but not impossible) for a startup to navigate “Chad’s Maxims” – and you can point to several cases in point where they did – but my view is that it’s relatively rare.   I wonder if any VCs have looked at this analytically – as it seems to me that Rule #4 is particularly tough in storage space, which makes investment models a little unique.

Comments

[Duncan]

Valid points Chad!

Don't know if you noticed it, but it seems to be the same VC funding many of the storage startups today.
Lightspeed Venture --> Tintri, Nimble, Fusion-IO, Nutanix, Pivot, IO Turbine.

[Robert Pell]

Not a surprise that alot of the VCs are the same. If I'm a rich guy, what are my options for investing? Real estate? Stock market? Treasuries? No, the best odds and payouts are in storage startups. There are more startups in SV now than there ever were in early 2000's.