Advice for hard-tech and biotech founders
Presentation, Transcript and Webinar, Jared Friedman, YC Partner
Advice for hard-tech and biotech founders YC Startup School 2019
Outline • What is a hard-tech company? • Why should you start a hard-tech company? • The 2 most common problems for hard-tech cos • Fundraising for hard tech co's
What is a hard-tech company? 1. It will take a lot of time and money to build the first product 2. It may or may not be possible to build it
Market Risk: Do people want it? • •Technical Risk: Can we make it?
Why start a hard-tech company?
"In many ways, it's easier to start a hard company than an easy company" - Sam Altman
There's never been a better time to start a "hard" company
Hard-tech, Biotech and YC • Funded over 250 bio companies • YC is the largest bio seed investor in the world • YC is the largest hard-tech seed investor in the world • Biotech and hard-tech applications have 10X higher acceptance rate
How much of YC's advice applies to hard-tech founders? Most of it.
How much of YC's advice applies to hard-tech founders? WEEK 1 WEEK 6 Startup School 2019 Orientation Building Culture How to Talk to Users All About Pivoting How to Evaluate Startup Ideas Pt. 1 WEEK 7 WEEK 2 How to Improve Conversion Rates How to Plan an MVP Startup Pricing 101 How to Set KPIs and Goals WEEK 8 Analytics for Startups How to Prioritize Your Time WEEK 3 How to Evaluate Startup Ideas Pt. 2 Nine Business Models & Metrics Investors Want WEEK 9 How Investors Measure Startups Q&A Advice for Hardtech and Biotech Startups WEEK 4 Intro to Modern Startup Investments How to Launch (Again and Again) WEEK 10 Growth for Startups How to Talk to Investors About Your Startup WEEK 5 How to Become a $100B Company Startup Finance Pitfalls & How to Avoid Them How to Work Together
How do you make progress when you have a "heavy MVP"?
Boom Do things that don't cost money • Assemble a team of top advisors • Build computer simulations • Build a plastic model • Show customer demand
Solugen Start small 2019: huge chemical plant
Solugen Start small 2019: huge chemical plant 2016: a beaker
AirX Launch a simplified version Original plan: Medical Device 3 years to get FDA approval New plan: Use existing medical device Write software Zero FDA approval
Notable Labs Bootstrap with a service Long-term vision: develop new drugs for cancer Hack to get started: provide tumor screening services
Astranis Start with a proof of concept
Ginkgo Bioworks Sell it before you make it
How do you prove people will want your product, if you haven't built it yet?
Pre-sales Ideally, you sell your product before you build it
LOI: Letter of Intent "Non-binding contract to buy your product when it's ready"
Good LOI's Include: •How many units they will buy •The price they will pay •When they will buy •What specs your product needs to achieve
Fundraising for Hard-Tech and Biotech companies $ 50M Series A Time
A better fundraising plan Series B: $30M $ Series A: $15M Seed 2: $4M Seed 1: $1M YC: $150K Time
Final Thought The way to accomplish incredibly ambitious things is to break them into very small steps