Some 11 companies founded and 125 funded, Paul Ahlstrom has earned his tag of "serial entrepreneur." As Founding Partner of Alta Ventures, Paul has built a bridge between North and South America - a bridge of over $1B in capital accrued and invested over 9 funds, and one of the largest in South America.
It's fitting, then, that Paul taught a packed room of entrepreneurs at Startup Grind about "creating a company that is going to be worth investing in." How? According to Paul, “it all starts with a BIG idea”.
To celebrate the occasion, Paul officially launched the Big Idea Challenge for 2016 inviting founders to submit their ideas, be evaluated by a panel of experienced founders and investors, and - if chosen - receive $2,500 and a suite of supporting services from Big Idea.
From Ditches and Rockets
Big ideas weren't always Paul's domain. Before becoming an entrepreneur, it was working at restaurant that he called "the hardest thing I have ever done" - until the CEO of Pure Water asked him an important question that became a revelation:
“Do you want to spend 24 hours a day digging ditches or building a rocket ship?”
"In other words, you need to think BIG," Paul said, adding “it is actually easier to attract capital and talent with big ideas." Paul has created the Big Idea Canvas just for this purpose, helping aspiring exponential founders test underlying hypothesis and "avoiding spending time on small ideas."
The founder and investor believes startup entrepreneurs should be critical of their ideas, urging we "do not to fall in love with your idea, but fall in love with the problem you are trying to solve."
Testing Your Idea Against the Problem
Our first question: Who's your customer, and what's their pain?
Too often do founders misunderstand or totally imagine the customer, especially in corporate environments, says Paul. Consider not just the person, but their pain, and remember that “the frequency of that pain is just as important as the level of pain." More than that, Paul's canvas helps design the business from idea to desired exit outcome, and even the competition, with nuance: “many people and many things are competing for your potential customers’ attention," says Paul.
Our next question: What's the potential of the market, and what kind of differentiated product can you serve it with?
And just as importantly, “do you have the core competencies to build this product?" The idea must be supported inside the company by the skills and knowledge to build a viable product.
Now Let's Get to Work
Paul concluded his presentation by presenting three companies he has invested in who, in his sense, had big ideas:
VidAngel, to personalize your online movie viewing experience.
Jott, a mesh network for teens.
Converus, a lie-detection company working on pupil dilation, already being used by the Mexican police.
As Paul says, you can start with a small idea, build a perfectly fine company but “you will not reach the stars." However, once you have a great idea with big potential “do not fall in love with it, fall in love with the problem you are trying to solve”.