Yearly Archives: 2010

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2011 Personal and Business Goals

2011 GoalsI’ve never been very big in New Year’s resolutions. I haven’t understood why we need a new year to set goals or want to change things in our lives, but I suppose a full year does provide a good timeframe and tracking mechanism.
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No Perfect Solution To Bootstrapping vs. Investment

Should you take a bag of money for your business?

From dennis on Flickr

A recent blog post at 37Signals Signal vs. Noise blog takes the business media to task for writing sensational stories about companies raising investment money.

In this case the media in question was the New York Times and the article was about the Pulse iPad application raising $800k in venture capital money.

While the focus of the blog post is mostly on the media, it follows a trend of 37Signals on their blog and in their successful books to speak negatively about companies raising outside investment opposed to bootstrapping a business and surviving and growing off your own revenue. I think their theme is not actually wrong, it’s just unfair because it lumps “web businesses” together too broadly.

It’s a good thing overall that 37Signals is balancing out the stronger coverage of the tech media with coverage of bootstrapped companies on their blog and letting entrepreneurs know that you don’t have to raise VC money to build a successful business.

The downside of this is that at times unnecessary negativity seems to come out in a broader brush against companies that raise investment money as if bootstrapping is the “better” alternative.

The reality is that bootstrapping can often be a better alternative but for many businesses it’s a much worse alternative. It all depends on what the business is trying to accomplish.

Google could have never become Google if it bootstrapped. Same with Facebook. They would have been forced to focus on ways to make money much sooner and they wouldn’t have been able to roll out new datacenters and infrastructure based on how much money they were bringing in.

Opponents of raising VC money also point out all the failures that have occurred from VC funding and how the press doesn’t cover it enough. Well, I don’t see the press covering all of the bootstrapped companies out there failing every day. In fact, we never see that.

While I don’t have any data to back this up, I’d suspect there may be a higher success rate for companies that received professional angel or VC investment vs. bootstrapped companies.

Why you ask? Receiving investment provides some level of external validation of the business idea, the team involved, and the opportunity. Investors can also add value through their experience and connections.

Investment can cause problems by letting companies make bad decisions with the money, causing companies to grow to try and grow too fast, or not getting to profitability in time.

The right thing for an entrepreneur to do is to not think about which path to take. That path should be determined by what they are trying to accomplish with their business and the roadmap that’s needed to get there.

If you can start earning revenue from day one and don’t need to hire a team and pay for lots of things, then by all means bootstrap! If you are going after a big market opportunity where speed is of the essence, you need to hire a team, or build out your infrastructure and organization quickly, then you’ll need outside money.

Will Facebook’s Climb Up The Display Advertising Charts Last?

Facebook Rockerts up the Display Charts

From Silicon Alley Insider Chart of the Day

As seen in the image, Facebook is growing like mad in the display advertising space with a trajectory that is vastly different than any of the other major players in the space. That growth is borderline shocking, but shouldn’t be that surprising for anyone who’s been following their user growth as well.
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How Starting a Company Is Like Coaching College Football

Chip Kelly Oregon Ducks Football CoachThere are two huge things going on in my life right now besides the usual exciting things my wife and kids are up to all the time.
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Google’s Computerized Car Debate

By some futurist predictions from the past, we’d all be flying around in our cars by 2010. While that’s obviously not the case, Google announced this week that they have developed computerized cars that have logged over 140,000 miles on public roads. While this by itself is pretty cool and amazing, it sparked a bit of debate among tech blogs about how and if Google should be spending time on projects that seem far away from their core mission.
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Congratulations to AppNexus

AppNexusReal-time Ad Platform AppNexus announced a large $50M Series C investment today to fuel more growth and taking their business global.
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New I Love My Ducks (Return of the Quack)

Following up to last year’s hit breakout I Love My Ducks, Supwichugirl brings back Ducks love with 2010′s “I Love My Ducks (Return of the Quack)”.

[youtube]http://www.youtube.com/watch?v=f_P1PPy7FTo[/youtube]
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Thoughts on Techcrunch Disrupt: Day 1

Mike Arrington at Techcrunch DisruptThe first day of the Techcrunch Disrupt conference definitely had its share of “disruption”, but I don’t think any of it was the type of innovative product and company disruption people were expecting.

I won’t cover the whole event since you can see the whole day webcast here as well as read about each session’s summary individually on Techcrunch.

Super Angels vs. VCs
The disruptive fireworks started early with the Super Angels vs. VCs panel that was very anticipated for anyone who had been following the AngelGate controversy that Arrington started with a blog post earlier in the week on Techcrunch that alleged there was a conspiracy of Silicon Valley angel investors who were looking to collude and do various nefarious things. This led to a public denial from Dave McClure who was on the panel, along with “private” emails from Ron Conway and Chris Sacca getting leaked on Techcrunch as well.

Arrington prefaced the whole Techcrunch event with a blog post that discussed how this specific panel and the whole event would not be about AngelGate, but then proceeded to ask his first question about it and made a few jokes that actually started the whole panel off on a somewhat hostile and uncomfortable foot.

The panel didn’t get much smoother from there due to there being too many panelists (7) and various panelists cutting each other off. Arrington also was fairly aggressive in changing topics, cutting people off, and jumping around. It was entertaining, but I’m not sure anyone learned anything from the panel except that there are still some hostilities to be worked out among those involved.

Peter Thiel
One enjoyable session to me was Clarium Capital and early Facebook investor Peter Thiel’s fireside chat. Thiel is a known contrarian, which made for an interesting discussion to see how he’s currently seeing things differently from the rest of the silicon valley.

His most notable comment of the day was that he thinks Facebook is relatively undervalued at $30B (see my recent post about Facebook’s valuation), and that he would be long Facebook over Google if given the choice. As an investor he benefits greatly if this occurs so he’s obviously biased, but it’s interesting for him to say it so publicly.

Another comment that stuck with me was Thiel talking about how many companies in Silicon Valley are just building iterative products that really only serve the early adopters living in Silicon Valley. We have a recession/depression occurring throughout the country and people are building products in a bubble for the technology elite. He said if you drive 30 miles out of Silicon Valley people don’t care about most of the products people are building. As someone who lives outside of Silicon Valley, I can relate to that. There’s not too many people in Eugene, OR using a lot of the newer iPhone applications for example. Thiel was really trying to remind all the entrepreneurs in the audience to try and change the world with their companies instead of just building a “me too” product.

Startup Battlefield
The next set of disruptions came in the Startup Battlefield which was three sessions filled with companies demoing for 15 minutes to the audience and a rotating panel of judges that mostly consisted of well-known investors. The disruptions were not so much from these companies though, but the fact that almost every demo had awkward pauses as there were almost always troubles switching between screens for the video portions of presentations. It really killed the flow of many of the presentations. If someone wants to build a truly disruptive technology, design conference presentation equipment that works.

The general feeling I got from all the presentations is that there is a whole batch of new companies that are focusing on check-ins to different things, gamification, and rewards. Most of the startups were heavily focused on these, and it became to get repetitive to the audiences and the judges.

I have to give the companies credit though, it’s not easy to stand in front of a smart panel of judges and a very smart audience and do a presentation of your new product and then get questioned and criticized by the judges and the press in attendance.

I won’t go through every company, but here’s some quick thoughts on a few of them:

  • Qwiki – This company led off the first session and a had a very impressive presentation. It was polished, had humor, and showed off their product well. It basically builds an interesting visual presentation that mixes pictures, videos, data graphs, and audio on any subject. One judge called it “search with a voice” which they took offense to, but it was definitely very cool. Gina Biachini did ask what the use case for this was, and I find myself also wondering if this cool product ever will get used by a large amount of users, but one of the best demos and it was cool technology.
  • Storify – An interesting product that lets you quickly add tweets, youtube videos, flickr pictures, and other pieces of social media together to create a “story”. They presented this a bit as a journalist tool, but I think that was the wrong approach. It seems more to be something useful for WordPress bloggers and social media junkies.
  • Gifi – There seemed to be some positive buzz out there on Gifi, which was a product built internally at payments company Venmo as an example of their API. Taken in that context, it’s a very nice use of their API. The concept of leaving money for your friends in different spots they can check in is very cool in theory. However, I don’t see this getting that much traction. When you realize that the number of people out there actively checking-in to places is still quite small (although growing), and then you see how many of them actually want to leave money for friends and will remember to do so, I think that number is pretty low.
  • Badgeville – A startup positioned to take advantage of the growing game dynamics on the web, Badgeville is a service that publishers pay for to add what’s essentially somewhat custom game dynamics to their site. Users get points, badges, and rewards for doing things like reading a story, tweeting a story, etc. It was nice that the publisher had a lot of control over what their game is like. I agreed with Joe Kraus when he was judging this though that it feels like this space may get overcrowded and people may get tired of game dynamics. Or, we’ll see a couple of clear winners that come out of this space but that it’s hard to tell who that might be. They also are already generating healthy revenue from selling this service to publishers. Always nice to have good revenue in a very young startup.
  • OneTrueFan – Built by members of the MyBlogLog team, OneTrueFan takes some of those features and also combines it with game dynamics to have a competition among website visitors to become the “one true fan” of a website. The idea is similar to being the mayor of a place in Foursqure, except there are more things that help make you a one true fan such as reading an article, sharing an article, commenting on an article, and more.
  • CloudFlare – Usually when I see the word “Cloud” in a company’s description my eyes glaze over and I wander off. However, CloudFlare’s founder was very energetic in a controlled way and did a really nice job showing the value propositions of the service. It provides a lot of the benefit of having your site hosted on a cloud as far as speed and reliability combined with added security and analytics. There’s a good free option as well as paid options for more advanced features. I set this blog up on it in under 5 minutes and was really impressed with the signup process and the obvious usefulness. This may was my top startup of the group.

Techcrunch Being Sold to AOL?
The last disruption of the day was the story Om Malik published that sources were saying AOL is on the verge of buying Techcrunch. Obviously this was a tad distracting, as Mike Arrington was absent from his own conference for the 2nd half of the day.

We’ll see what happens on Day 2, could be big news?

When Play Valuations Become Real or What is Facebook Really Worth?

Mark Zuckerberg and Facebook valuationIn what is a very generous gift, Facebook founder Mark Zuckerberg is giving a “$100 Million” donation to the Newark School system to help improve it. However, I put that “$100 Million” in quotes because the donation is in stock so that number is based on Facebook’s current valuation.
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Startup Failures Make For Great Lessons

Startup Failure People say you often learn more from failure than you do from success, but nobody wants to intentionally fail just in order to learn more. Luckily, the increased transparency of sharing on the web has led to various startup founders who are willing to talk about failures out in the open for the benefit of others.
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