1. We're starting a startup — that starts up other startups — and we bring them EXITS. We are venture builders. Just us three — for now.
2. This is me — and my backseat drivers — doing a test drive at Sonoma Raceway for the 2017 Prius Challenge, the ultimate MPG contest.
3. We work together — as a team — to win an impossible race against 19 other teams — while driving a Prius — our race car — for the first time.
4. But that won't be our last. Come to think of it — we have never really stopped trying to figure out new things to try. This is our first high-power rocket launch in the Mojave Desert. It carries a CanSat payload — works on the first try — and our lucky boy got a prize.
5. Startups are inherently risky. Just like everything else we've tried — we think there is a winning formula waiting to be discovered — one that would dramatically improve the odds.
6. We want to figure out ways to reduce startup risks — and beat the odds. So we start by first counting the ways we can do this right. Then make it better. Better yet — we know how to do this methodically using a good-to-great "flywheel".
7. We choose to only build "two-bit ventures" — aka "zebras". Just 20 of them to make a portfolio. Corporate development folks love us because we think about their companies from Day One. Nobody else does that — not even the i-bankers that sell them companies.
8. We solve for liquidity risk. Investors love us because each startup journey is only two years. But old-school angels love us the most!
9. We use a repeatable model that creates startup exits — via spin-ins. Employees love us because we make them richer doing what they are really good at — what they have been doing all along. Plus they get to keep their day job, too!
10. New venture creation takes many forms — garage startups happen to be one that people are already familiar. Others include "digital ventures" — created by venture studios at "Big 3" consulting firms. Cash cows are great — but we like zebras more.
11. Zebras are capital efficient and quicker to exit. Each zebra takes no more than four million dollars to build — be ready in less than two years. We plan to raise a dazzle of zebras for the corporate "spin-in" segment and become a new player in the startup M&A market. A portfolio of zebras occupy a "four-by-two" design space somewhere in the lower left quadrant.
12. A Two Bit wedge into the "pre-seed" stage — that's the starting point for where we ply our trade. We build "safe passage" for new ventures — to improve survival odds — all the way to exit. But we don't take ponies — only zebras.
13. We go the extra mile to take care of M&A — via "spin-in" — on that critical but under-served final segment of the startup journey — the home stretch. So money flows back to investors — the capital flow loop is now complete — they can replenish their funds and make new investments.
14. We are evolving a playbook for how to make deals that people want. M&A is a "matching market" — where prices don't do all the work. So we take special care to ensure compatibility between new ventures and their potential acquirers — from Day One.
15. We make semi-rival goods for sale. Two-bit ventures share half their components — so each venture can be priced at less than the sum of its parts — if need be — and still leave room for profit. A semi-rival school of 132 penny fish only costs us 66 cents to make — but we can sell them for 99 cents.
16. We are on the lookout for surprises — things that confound models, or things that don’t fit templates. That’s what drives our unit economics — something worth building. We'll do 20 deals over the next 5 years — that's 5 annual seasons of 4 ventures each.
17. We set our design goal at "20/20" — that means 20 exits from 20 ventures — starting from year 2020. For continuous learning we use a flywheel — the "Kaizen wheel" — to encode our venture building process so we can iterate and improve our craft while we are at it.
18. We're assembling an initial cast to kick-start a pilot season of venture building — as a Bain & Company affiliate — in partnership with Y Combinator. The best there is in Silicon Valley — for raising zebras with Two Bit Ventures.
19. Our 20 deals over 5 years are organized into 5 annual seasons of 4 ventures each. This is a simple two-bit scheme to count bits and share gains.
20. See how the picture changes — with the simple addition of a two-bit venture studio — co-resident at Bain.
21. The timing feels right — hence our proposal for setting up Two Bit × Bain. Let’s explore further?
22. We work together as one team. So let's design this thing right — from the start — so it's fun for everyone.
23. Let's win this one. We know we can.
24. Any questions?