Photo: Flickr / leweb3
More than four years ago, 500 Startups partner Dave McClure invested about $50,000 in a newborn company called Wildfire Interactive.Eventually, Wildfire would build a business around helping other businesses market themselves on Facebook and Twitter.
Then, last summer, Google bought Wildfire for ~$250 million. McClure and 500 Startups profited nicely.
How’d he do it? What was his process?
McClure explains in a new presentation he’s put together called “Silicon Valley 2.0: Lots Of Little Bets + Moneyball For Startups.”
Here are some broad points from this deck:
- McClure invests 30% of his capital in making lots of little bets. He invests the other 70% doubling down on startups with traction after six months.
- He bets on “singles” not “home runs” – targeting companies that solve a problem, have a market, and already have a functional prototype.
- He pushes startups in his portfolio to fail as fast as possible (if they are going to fail)