Good morning, All,
Last week we attended the preview of the next class of ER Accelerator startups – and were quite impressed at the caliber of the companies chosen (ER Accelerator Announces Class of Winter 2012: http://tnw.co/ycfo6i). We are admittedly a mentor in the program; it’s early days, and of course, time will tell. One thing did strike us: that these companies do have paths to revenue. Then again, this is New York, and in New York, we do mean business. We look forward to seeing what they build and it being a new year, being there gave us pause to look back as well. At the formerly much-touted Groupon, whose stock has fallen below its IPO price, as well as Zynga, whose stock price is going down, down, down – so far – and is nearly already 20% lower than its IPO price.
There hasn’t been much mention of the ‘b’ word yet this year (yes, bubble): the year is still young. We’re not big on predictions, but there are a few rules you might want to keep in mind as you forge bravely forward into this clean slate:
1. Don’t make a resolution – make a plan. And if you come upon a fork in the road, well, in the words of Yogi Berra, take it. At least consider it. It may be there for a reason.
2. Build a real business – something that’s needed and sustainable; that has a large market and actually fills a market need. Do you have a company, or a feature? Always a good question to keep in mind. VCs do. And you don’t always want to depend on the vaguaries of investors. They can be a fickle lot.
3. Bootstrapping may be the key to survival, but not to growth. Prove your model. Then take the investment. You’ll no doubt get a better valuation and above all, keep it real: THE BILLION-DOLLAR CLUB: 12 Startups With Skyrocketing Valuations. Do they deserve it? Some do, no doubt and again, time will tell: http://read.bi/pJomCl
4. The barriers to entry for doing a startup are down. Lean startup, faster/first to market, fine, use whatever buzzwords you’d like, but remember: the rules of economics are still immutable – and far from virtual. If you’re living on – and depending on – borrowed money, unless you’re one of those rarities that comes along that is too big to fail, thank you, twitter, but the twitters of the world are the exception than the rule, so don’t bank on it – literally, or besides living on borrowed money, you may be living on borrowed time. Well, your startup, anyway
5. If at first you don’t succeed – you might be talking to the wrong people. Expand your circle of acquaintances and business contacts. Here’s that word again: NETWORK!
6. If it ain’t fixed, don’t break it. Meaning, again, build a real business, not something based on what we personally like to call grouponomics, which is the concept that the SEC will avert its eyes, the investors will help you to cash out and to hell with the rest. Don’t leave the gate with something half-baked. It detracts from us all and leads to a buh-buh-buh – don’t make me say it. Yes, we are aware that we currently have a bad example at the top of the food chain. Don’t think Congress: think Progress. Read More...