Mr. Dave McClure | Founder of 500startups
From the foundation in 2010, he has made 150 investments over two years as a founder of 500 startups. He manages small amount investments and accelerator programs for early stage companies.
If your house is on fire and you need to get out of the house, would you take a time to put on your jacket and tie? Then you might die. The demographic ratio is getting worse, and Japan has huge amount of national debt. Now Japan is on fire. Do you see that? I don’t think so. That’s why I’m wearing on T-shirt. And another reason is that my company is still one of the startups. It is very important to have such ideas.
Stave Jobs, everybody agrees now, is a wonderful amazing successful person. However, he was fired from his own company for 10 years or more. He was not considered as success; Bill Gates was considered as success. Failure is necessary. It’s a process, not a problem. Continued iteration of failure in public is how you get a success.
10 years ago, building startups was expensive because you have to buy servers, software, and bandwidth pipes. They cost millions of dollars. However, most of those costs have gone away because of a whole layer of infrastructure from companies like Amazon, Paypal, and so on. At the same time the cost structure is going down, access to customer is going up because of Facebook, Twitter, Google, Apple, and YouTube. These created access to hundreds of millions of customers in some cases. If you want to think of yourself as a neighbor of innovation and entrepreneurship, you need to think about how you provide access to these three things, features, users, and money, to anyone you want who wants to come to your ecosystem.
Compared to a traditional venture capital firm that might only make 30 investments over four years, 500 startups make 250 investments which are very small bets, $50 thousand to $100 thousand in two years. 60 to 80 percent of them might be failure, but we can get profit in long term by increasing bets to the other 5 to 10 percent. From this iteration, we can learn how we fail and solve problem. Now, I use the term “fast, cheap, fail.” It is really important to make product which is not perfect but works enough. Again, you will be a failure in most cases. Thus, the high density of problem solving is the key to the success. For a local innovation success of Osaka, you need to concentrate your efforts in a large sample size and a small amount of dollars, and start to attract interest. You do need some capital and willingness to change quickly. Lastly, let’s talk about government and legal innovation. Opening up immigration can be a solution. Next, the structures of personal bankruptcy and guarantors when failure occurs might be changed. The penalty is incredible. Finally, I guarantee you, if your house is burning, you need to get out of the house before you put on your jacket and tie.