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SXSW, Lessons from Mark Cuban, Treasury Management
Looking for lessons on startup best practice from the best global entrepreneurs.
SXSW Takeaways: Five Lessons in Entrepreneurship from Hamdi Ulukaya and Mark Cuban
Entrepreneurship is a challenging journey that requires persistence, hard work, and a willingness to take risks. At this year's SXSW festival, two of the most successful entrepreneurs in the world, Hamdi Ulukaya, the founder and CEO of Chobani, and Mark Cuban, entrepreneur, investor, and owner of the Dallas Mavericks, shared their insights on entrepreneurship across two different sessions.
Coming out of the conference (and the fog of the banking crisis), I’ve taken the opportunity to share five key lessons from their talks and how they can help aspiring fintech entrepreneurs build better businesses.
Embrace Serendipity
Hamdi Ulukaya's journey to success began with a piece of junk mail. He stumbled upon the yogurt industry by chance after receiving a brochure for a fully equipped yogurt plant. This encounter led him to start his yogurt business, which has now grown to a billion-dollar company.
According to Ulukaya, "Serendipity plays a significant role in entrepreneurship." Being open to different possibilities and being able to see opportunities even in unexpected places can lead to great success.
As an entrepreneur, it is essential to keep an open mind and be receptive to unexpected opportunities. This can be at the moment of original inspiration, but also along the way.
Retain Control and Ownership
Mark Cuban emphasized the value of retaining control and ownership of your business. When starting a business, many entrepreneurs are tempted to give up equity in their company in exchange for funding. However, Cuban advises entrepreneurs to retain as much ownership as possible to maintain control over their vision – particularly early in the journey as the product is being crystalized.
Read the rest of it HERE.
SVB ←→ Camels
Great piece reflecting on SVB’s failure. No it doesn’t talk about interest rates. Neither does it talk about remote work or diversity. It dives into culture.
Not even the bank’s culture, but rather Silicon Valley’s as a whole.
“Silicon Valley Bank imploded in part because it was a repository for the riskiest behaviors of the industry it serviced. Its growth was supercharged by tech's clubby, insular nature, and its operation depended on a rising tide that was always sure to go out. A financial institution should be aware of economic cycles — but SVB's management, like so many in the Valley before it, blew off the realities of the market until it was too late. SVB helped fuel the tech bubble, and the tech bubble helped fuel SVB — but now that's all blown up.”
Now might be the time for self reflection. “Without some serious accounting about Silicon Valley's culture and the tech industry's role in SVB's collapse, then something ugly like this is going to happen again.”
Treasury Best Practices
Last week I shared five predictions about what SVB’s failure would mean to startup treasury management best practice.
Who was most affected by the bank failure? “Don’t believe the pundits who conflate middle-class entrepreneurs and Big Tech. Startups are today’s mom-and-pop businesses.”
I’m also taking the opportunity to share a good resource on treasury management best practices. It covers Treasury management, risk management, debt lines, bank and relationships among other topics.
Finally, why are there so many banks in the US? Great thread below. “The design of the US Banking system stems from fears that a centralized system would cater to the needs of the influential, not the needs of the populace. The North was industrialized while the South focused on agriculture. Decentralization of Banking was the solution.”
In the US, there are roughly 4,000 banks and 5,000 credit unions to serve ~300m customers. Canada, where I’m from, has 80 for 35m people. This is by and large a regulatory choice. One that Canada has taken the opposite view of.
Couple additional reads
Entrepreneurship is on the rise. And not just in a global way, but also a generational one. Great piece that highlights the surge of student interest in entrepreneurship on college campuses. This is something I’ve seen first hand in the past teaching at the Middlebury Institute for International Studies. Gen Z is an entrepreneurial generation, with 62% of respondents in a WP Engine study saying they plan to start their own business in the future. This trend will have far-reaching impact, since Gen Z is set to make up one-third of the workforce by 2030.
A recurring narrative has been that emerging markets are never going to emerge. Yet, recent Morgan Stanley research points to the opposite. Future emerging market outperformance is projected for a number of reasons including growth differentials, healthier sovereigns and corporates, improved external balances, and crisis-level valuations of currencies and equities. Nine of the ten top-performing markets this year are emerging countries. The piece argues that the headwinds of the past are becoming tailwinds in several markets.
This month has highlighted fraud in fintech. The first was the Hindenburg research report on Square’s cash-app. The second relates to an emerging market story at Union54 in Africa. This is likely going to be a much more widely discussed topic.
Fintech has solved both mass market issues (e.g. neobanks, BNPL, etc) and some more specific ones. Great piece that reminds us of some of the specific issues that are still unsolved. Many adult children end up caring for their parents late in life. But when the role reversal happens in their 20s and 30s, the burden can feel too much to bear. This moving article tells a personal story of handling a father’s finances starting at 25. We will see more fintech for the elderly emerge.
Who wins the fintech game: platforms, incumbents, or startups? Another installment to this fight: Apple launched a buy-now-pay-later product via its Wallet.
The TED After Hours podcast talks about the future of venture capital and philanthropy in the wake of SVB and the current down market. Fascinating discussion and fun deep dive into the camel model (minute 36).
Future book of the month on startup strategy
In Out-Innovate I wrote about how the best global entrepreneurs often build the horizontal stack - filling many gaps to solve a broader market problem.
Fascinating long-read about ByteDance, the company behind the popular short-video app TikTok, which has become the world's most valuable (and contentious) startup in just 10 years.
How did they manage to achieve such phenomenal growth? Their approach: a shared-service platform (SSP). Via the SSP, they centralize common business technology and operating functions to then rapidly expand and launch new products.
This has yielded a wide ecosystem of products.
In a future edition, I will review The Attention Factory but in the meantime, sharing this excellent summary on which the graphic above is based.