Startup Nightmares

One of my guilty pleasures is watching Kitchen Nightmares (I prefer the BBC to the Fox version). For those of you who haven’t seen the show it follows Gordon Ramsey as he helps turnaround struggling restaurants with a lot of tough love.

I thought it would be fun to have a startup version aptly called Startup Nightmares. The concept would be similar to Kitchen Nightmares, but the show would follow a successful serial entrepreneur as he helped turnaround struggling startups. The serial entrepreneur would have one week to set the startup on the right path.

The question is, who should be the Gordon equivalent? I nominate the following: Jason Calacanis, Mark Suster, Dave McClure, Brad Feld. Who would you nominate?

Better Chance of Getting Funded in NYC or SF?

Matt Mireles, co-founder and ceo of SpeakerText, chronicles his frustation raising money and finding talent in NYC. From his perspective, he’s done everything right, ie bootstrapped the company and built a killer prototype, so why is he not getting funded? Matt’s uses a structural functionalism argument, namely NYC just doesn’t have the infrastructure or the sheer number (and the right kind) of Angels/Seed VCs that SF has in place. Therefore, he concludes that if he goes to SF, then the chances of getting funded will be higher than NYC. He’s testing his theory by going to SF and making the rounds. Matt is an incredibly driven entrepreneur with a great product so I hope he gets funded.

However, let’s play social scientist, and ask, “Is Matt’s conclusion correct?” There are two possible outcomes when Matt goes to SF:

1. He arrives, meets Angels/Seed VCs, and gets funded.
2. He arrives, meets Angels/Seed VCs, and does not get funded.

Under Scenario 1 (S1), he concludes that he was right. Under Scenario 2 (S2), he concludes he was wrong. But are these the right conclusions? Let’s go through these conclusions more carefully.

It is easy under S1 to assume that Matt is correct about the difference between NYC and SF. However, there is one path that we didn’t get to see. Matt stays in NYC for a few more weeks, meets a few more Angels/Seed VCs and gets funded. The question is how many Angels did he meet in NYC, and was it an exhaustive list? If not, then we should question Matt’s conclusion even though he gets funded in SF.

Under S2, I would agree that Matt was was incorrect about NYC and that both NYC and SF Angels/Seed VCs want to minimize their risks (esp with first time entrepreneurs) and fund companies with traction. For B2C it maybe 30% user growth month over month with a 1% conversion to paying customers and for B2B it may be a $100K signed deal.

I’m hoping Matt gets funded in SF but I also want to leave open the possibility that NYC is still a great place to build a startup.