July 2010
1 post
For every foursquare there are a dozen wesabes.
June 2010
1 post
Do you have a net worth of $1 million?
Some of you probably do and some of you probably don’t, but I bet that most if not all of you think you are sophisticated enough to invest in startups. Unfortunately for those of you who don’t meet that standard or any of the other accredited investor exemptions promulgated by the Securities Act, most startups won’t take your money. This post is not about whether startups should...
May 2010
1 post
M&A Transaction of the Week →
I recently closed an M&A transaction for some close Kinkaid friends: Mark Schmulen and David Lyman. Nirav Batavia was also on the team. It was rewarding in a lot of ways, as it was great working with friends and helping them achieve a significant milestone in their careers. Financial terms were not disclosed but it was a big win for everyone, which always makes it more enjoyable. A few lessons...
April 2010
2 posts
What's a 'fan' really worth?
A social branding firm in Atlanta says $3.60 based on the following formula:
1M impressions x 2 posts x 30 days = 60M impressions
60M impressions / 1000 x $5 CPM = $300,000
Of course this will be debated ad nauseum in comments to blogs, including this one. In today’s marketing metrics driven environment it is important to determine the value of your social media efforts. That being...
March 2010
4 posts
I couldn't have said it better myself... →
The GP of Andreessen Horowitz simplifies startup success:
Find the product that 1,000 enterprise or 50 million consumers want to buy and grab those customers before your competitors do.
Raise enough cash and spend it intelligently so that you don’t go broke along the way.
His thesis is that the goal isn’t to be ramen profitable and it doesn’t matter if you blow your VC cash...
How Will We Read?
According to Homer, first you get the sugar then you get the power. He may be right, but as we also learned from PSAs during Reading Rainbow commercials - knowledge is power.
I still get the print edition of the WSJ which is like a morning stroll through the news. The editors hold your hand and guide you. I like that and it’s well worth the hard earned dollars I spend on it. That being...
February 2010
2 posts
November 2009
1 post
“If you are not embarrassed by the first version of your product, you’ve launched...”
– This quote by Reid Hoffman, founder of Linkedin, has an equal number of supporters as it does dissidents. There are many examples of startups who took this advice only to be ushered more quickly to the deadpool. To me, this is OK. I am a believer in Mike Maples Jr.’s philosophy to fail fast...
October 2009
2 posts
“You don’t have to read a book to have an opinion.”
– Tom Townsend from the 80’s teen angst film set in Manhattan’s UES (an especially interesting film when juxtaposed against John Hughes’ typical setting in suburban Chicago), Metropolitan, prefers good literary criticism because you get both the novelists’ ideas as well as the...
September 2009
4 posts
Be thoughtful about your pricing strategy.
I remember a year or so ago asking a founder of an Austin startup what he was going to charge for his SaaS product (which is launching at DEMO) and he said $X.00/month. When I asked him how he came to that number, he replied “that’s what we think the market will pay”. A couple thoughts: (1) don’t “think”…survey, (2) don’t leave money on the table unless you are competing on price, and (3) if you...
Keep it simple stupid. →
Readers of this blog know I preach simplicity. Some of the great companies I work with (popscreen, infochimps, prefinery and nutshellmail to name a few) have developed sophisticated solutions with intuitive and attractive UIs. Their special sauce is not necessarily the underlying technology (though some have filed provisionals and/or patent applications) but rather their “human”...
August 2009
6 posts
TheFunded "Standard" Term Sheet
There has been a lot of blog chatter about TheFunded’s form term sheet, including here, here and here. The sentiment from VCs has been generally positive with some saying that a return to balance for founders has been a long time coming. The WSJ queried whether VCs would put their money where their mouths are. I would be interested in your opinion. I think the term sheet makes too many...
Facebook/friendfeed Thoughts
I haven’t been able to get my hands on the purchase agreement but the WSJ reported the $50m purchase price was $15m in cash and the rest in equity installments that vest over time. This is a similar mix to what was offered to Twitter earlier this year. Twitter rejected Facebook’s advances because they didnt want a bunch of illiquid securities they would have to pay taxes on.
If the...
Teens Don't Tweet
The *groundbreaking* report released by Morgan Stanley this week highlighting teenagers’ use of technology was actually pretty predictable. Teens don’t tweet or read the newspaper. Yawn. I am often told by my colleagues that I’m the only person they know who still gets a paper (the WSJ), so its not surprising that younger generations get their news online (if they even read it at...
Sunday Thoughts
Social media startups are REITS: A REIT is a company dedicated to owning, and in most cases, operating income-producing real estate. Back in the early days of social sites, the only real estate being used to generate revenue was side bars and banner ads. In the ‘now’ economy it is important to think of your site like a mall operator. What spaces and subdomains might be available to...
July 2009
6 posts
Are we living in a "FREE" economy?
I downloaded Chris Anderson’s “Free” (for free) but haven’t yet turned the first digital page. I look forward to reading Anderson’s thoughts on the future where prices are driven to zero as productivity increases and input prices decrease at an exponential rate. Anderson is testing his hypothesis by providing his new book, the hardback version of which will fetch...
“News is what somebody somewhere wants to suppress; all the rest is advertising.”
– Great quote from an unlikely source: Michael Arrington paraphrasing news baron Alfred Harmsworth. What is cleverly being referred to as “Twittergate” has been the subject of much blog chatter. After the most embarrassing of security breaches (Twitter’s password was...
“We will have more Internet, larger numbers of users, more mobile access, more...”
– Vinton Cerf knows a thing or two about the internet. He did invent it after all (*disputed by Al Gore). Mr. Cerf works for a company conglomerate called Google as its Chief Internet Evangelist. He says the Internet is just a baby, and he’s right. For all the cackling about VC being dead, there...
Law of Unintended Consequences
A few states this week found themselves in precarious public relations positions as their legislatures tried to pass laws which would require internet retailers to collect sales tax in states where they do not have a physical presence. Amazon, Overstock and other big box internet retailers severed relations with advertising affiliates in those states to make the states’ arguments even more...
June 2009
8 posts
what you are doing is not unique (and your idea is...
Awful idea = -1
Weak idea = 1
So-so idea = 5
Good idea = 10
Great idea = 15
Brilliant idea = 20
No execution = $1
Weak execution = $1000
So-so execution = $10,000
Good execution = $100,000
Great execution = $1,000,000
Brilliant execution = $10,000,000
Since I don’t know how to import a spreadsheet in tumblr, I have copied the above variables which can be multiplied to determine...
“If staring at lakes and [water] skiing after work are important to you, don’t...”
– Ouch, tough love from Michael Arrington. We’ve talked about the silicon valley/everywhere else dichotomy on this blog before, but this hardly scientific data doesn’t support Michael’s theory that startups can only thrive in CA. I can name dozens of amazing startups in Austin and...
A Self Fulfilling Prophecy
With venture capital returns dismal over the last year and some calling the model broken, there has been a lot of debate as to how to return to normalcy. There has been some innovation to help with short term liquidity issues but the big question is how to make venture capital an attractive asset class again. For one, LPs want smaller funds. Fred Wilson has talked about the oversupply of venture...
Occam's Razor →
William of Ockham is attributed with saying that entities should not be multiplied unnecessarily. East coast early stage VC Ed Sim applied Ockham’s theory to startups by advising founders to focus on the big picture and that less is more. I have been beating this drum for a long time, but to a slightly different tune. The concept of Occam’s Razor, to shave off any complexities, is...
May 2009
8 posts
Sunday Stories Behind the Stories
SolarWinds and OpenTable IPOs Post Solid First Week Gains
SolarWinds and OpenTable sold relatively small blocks of shares and as such have a small public float and high volatility. Furthermore, due to the lack of tech IPOs over the last year or so, there was a lot of pent-up demand. That coupled with the fact that a number of potential sellers are locked up for 180 days suggest we might not be...
“Our first year, we were learning to crawl, figuring out how it all worked, and...”
– This quote adapted from a speech by Paula Berg, Manager of Emerging Media for Southwest Airlines, shows that some companies get it, although its clear that some don’t. I recently drafted an E-Alert to clients highlighting the importance of protecting their trademarks online, especially on...
The New (New) Paradigm
It is no secret that it costs a lot less to start a web-based business or develop an iphone, fb or other “light” app these days. This is great for entrepreneurs that have access to the reduced capital requirements and not so great for some early stage venture investors who are finding themselves with less buyer power. Some early stage VCs and incubators, however, are finding ways...
Public Service Announcement →
A new startup called Tweexchange has made it easier to buy and sell twitter handles. This will likely encourage cybersquatting similar to what is commonplace with domain names. That being said, if you haven’t done so already, I recommend that you sign up for a twitter account with the name of your business entity (and any d/b/a) to prevent others from beating you to the punch.
April 2009
5 posts
A New Way to Exit? →
Traditionally VCs and angel investors have made their over-sized returns in one of two of exits: IPO or acquisition (which includes mergers, asset sales, and the like). With the IPO market in what seems like eternal hibernation, acquisition has recently been the only likely exit strategy for private companies. Meet secondmarket.com, the angel investor’s new best friend. The site aims to...
“Skeptics may ask why anyone would pay for something that was elsewhere available...”
– My good friend @adamholz and I had a spirited discussion in DC this past weekend about the future of print media and specifically how it can and will be monetized. While we agreed that “online presence” in itself is insufficient, we had different views as to how to get people to pay for...
Immersive Real-time Experiences Across Multiple...
I don’t tout myself as a futurist, but I do have an inkling as to what it needs to look like with respect to sharing real-time experiences with others across multiple mediums. This year there have already been some high profile facebook-connected events, such as: the inauguration, the Oscars and SXSW (see prior posts on pepsico zetigeist). Today I want to bring to light one that is a bit...
Corporate lattice as a structure to let stars...
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