The Secret History of Silicon Valley

Filed under: entrepreneurship, technology, silicon valley, steve blank

Delivering Happiness – by Tony Hsieh

Filed under: entrepreneurship, leadership, startup, customer service, happiness, zappos

Where am I going wrong?

Someone just called me and asked, “Do you know how much VCs have invested in Digg?” I said, “Probably a few million”. “Few million? Look it up”. I said, “How much?”. “$40MM!!” “Holy moly…”

Is it based on revenues? Future revenues? Capital requirement? What?
I think I am pretty bad at Math. I look at the VC investments in web 2.0 startups and try to do the math. Something just doesn’t add up:

Digg – $40M
Yelp – $56M
Slide – $78M
LinkedIn – $103M
Ning – $119M
Twitter – $160M
Zynga – $219M
Facebook – $716M (Big Daddy of all start-ups)

What could justify a $40M investment in Digg (with hardly any revenue stream) versus a $56M investment in Yelp (with good revenue streams)? Are the VCs so desperate to keep the companies alive that they are unwilling to forego sunk costs? Are they funding losses and lengthening the lives of these companies which would have died long before.

Let’s compare these investments to the funds raised by star tech companies in the 1990s (before they went IPO):

Yahoo – $3M
Excite – $3.25M
Ebay – $5M
Google – $25.1M
Juniper – $60.2M (Hardware company and requires capital investment)

Where am I going wrong? Even inflation cannot account for such a disparity. OR is it just the damn recession that has lengthened the IPO cycle?

Food for thought?

Filed under: entrepreneurship, startup, web 2.0, facebook, twitter, valuation, venture capital, web 2.0

Social Media – Choice and Competition?

One of my friends on facebook posted this in May: “Just look at the possible “sharing” options for a new article!”

Now look at the same option in October:

Wow!! This is a real social media explosion in 6 months. The paradox of choice? Why would you need 50 sharing platforms? Is this adding clutter or removing clutter?

There is clutter from a choice perspective. But choice is good. “Choice and Competition” – the famous phrase from the healthcare debate. Choice is always good for the consumer but bad news for VCs and entrepreneurs. This space is really getting crowded – too many players, too less innovation.

It is time to think about a new business opportunity? The long tail – Well! I will keep harping on it till I see entrepreneurs try to create businesses for businesses. Consumers won’t pay; businesses will.

Long Live the Fortune 5 million!!

Filed under: entrepreneurship, startup, technology, web 2.0, sharing, social media, web 2.0

Define your own “Success” – Must See

Filed under: entrepreneurship, Personal, startup, success, TED

TechCrunch50 – A summary #tc50

While I was watching the demos at TechCrunch50, these questions kept popping:

Where is the business model? What is the pressing need? What’s the purpose – are you raising money? Looking for customers? Advisors?

Maybe I am not an expert or maybe I am old school. I still fail to understand how all these companies will make money. I don’t think I should make a blanket statement but honestly it applies to most of the companies on stage.

And then I see a twitter valuation of a $1B – no, you are not dreaming. You heard it right. A billion dollars valuation before you are cash flow positive or make a single dime.

Seriously? I am just curious what VCs look for, before they invest. How can you do a positive valuation for companies without a business model? Is this similar to the bubble of the dot-com eras? OR am I hallucinating?

Don’t get me wrong. Some of the companies had some real cool products. There were some, which I think would really go far like RedBeacon, DataXu, AnyClip, CitySourced or Udorse. But none created the excitement, which I expected to get at least once. Like the Aha moment when I first used Hulu or Youtube or Yahoo.

I am sure the company is out there – I am wondering which one?

Filed under: entrepreneurship, startup, technology, web 2.0, valuation

TechCrunch50 Day01 #tc50

Are you watching TechCrunch50? There is a live stream on their homepage at http://www.techcrunch50.com.If you are not, then you are really missing out on the future of web. Google launched Fast Flip and Bing launched visual search all on the same day.

There are also some interesting start-ups launching their products on stage. I was pretty stoked to see the IIT KGP self proclaimed geek giving a demo of the imo controller – one of the most gutsiest presentations I have ever seen. Very excited by the fact that real innovation is happening in India and especially, talented engineers starting companies of their own at such an early age.

There were some other companies that need mention. I really liked udorse and healthygame. Both companies are founded on great ideas and are doing something really different. Udorse being backed by Peter Theil and Founders Fund have already scored some points with the critics.

Though I was initially confused with Rackup; I was impressed by their business model which provides a win-win for consumers. DataXu had some very interesting “rocket science” technology that can be of very high value to enterprise CEOs.

I am really looking forward to Day 02.

Here is the entire list of companies:

Penn & Teller Story Something Clasemovil ToonsTunes.com Sealtale iTwin iMo FluidHTML Toybots Woozees Spawn Labs Clicker 5to1.com DataXu SeatGeek HealthyWage RackUp Udorse Redbeacon Yext localbacon RefMob TheSwop.com MOTA Motors DemoPit of the Day: ODesk DemoPit of the Day: Yourversion

Filed under: entrepreneurship, startup, technology, techcrunch50, web

Raising Capital: Closing the Deal

This is a great Joe Beninato Presentation from fbFund REV Start-ups on how to raise money from angels and VCs:

Filed under: entrepreneurship, startup, angels, funding, vc