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Month: August 2012

8/28/12

8/28/12

Good morning, All,

We’ve always wondered what the tipping point is, when a startup goes from ‘startup’ to ‘company.’ We often wonder the same thing about Founder/CEO. Corporate paperwork aside, does founding a company make one a CEO? Having a great idea is one thing; knowing how to implement is quite another matter. Early stage companies may not have the juice or means to bring on a CEO who is a subject matter expert/can appeal to investors, so the founders often fill the role. Does that mean that the founder should keep the job, once the company is ready to moved to the next level? Not necessarily. A founder is a person who will sacrifice everything to build something out of nothing. A CEO is someone who takes care of the business end of the business and not uncommonly, someone the investors may bring in at some point to help take it to the next level. Not all founders like the idea of giving up the reigns – it’s their baby. Newsflash: always a good idea to play to your strengths – and to be aware of your shortcomings. Founder and CEO - not everyone is good at both, especially in an industry rife with youth, and with youth comes inexperience in business. Don’t be upset if/when it’s time for you to step aside, at least for the time being. Remember: a then young Larry Page and Sergei Brin gave up the reigns to Eric Schmidt, and Steve Jobs was much better suited to be Apple’s CEO the second time around. Mark Zuckerberg has long been the online media’s apotheosis of the startup CEO: young, brash – and he built a company with one of the largest populations on the planet. And like most countries right now, well, the economy isn’t doing very well. FB is working on a business model (Facebook’s New Retargeted Ads Performing “Very Well”, Adds Partners To Run Them: http://tcrn.ch/Og00p0) But targeting users – and having them actually click - are two different things, and do you go to FB to do your shopping? Know your audience – and decide whether or not you’re really up to the job of CEO. Having the passion doesn’t mean you have the skills to run a company. That’s what distinguishes a true leader: you know when to get out of your own way. Facebook has it’s place in the world – for now – until something else comes along, and maybe that’s why something else almost always comes along in the world of technology. Is it really the short attention span of users, or the person at the top's failure to innovate? Consider Amazon and Apple - companies that create new models and markets. Amazon started as a bookseller, grew to become an online shopping center - then changed the game with the Kindle. Apple, which nearly disappeared at one point, is now one of the most successful companies in the world. And there’s the lesson for you: know your users/customers/members and give them something they don’t even know that they need – yet. The true winners are the market-makers. They’re industry leaders that inspire Macolytes rather than follow the old models and devolve into just another company seemingly destined to dot come and go. Onward and forward.

Deadlines: Read More...

8/20/12

8/20/12

Good morning, All,

Our next SOS gathering is tonight, August 20th, so don't forget to register and looking forward to seeing you there. To RSVP: http://sosaugust2012-zvents.eventbrite.com/ discount code: sos. It was another bad week for three Web 2.0 darlings: Facebook is at ½ its IPO value; Zynga is down 69% and Groupon is off by 82%. We're not saying it's a bubble: it was more a wakeup call. And it seems to have roused the sleeping giants, so in case you missed it: A massive partnership was just announced between some of the largest retailers and merchants in the US, including 7-Eleven, Best Buy, Sears, Walmart and Target, to name a few. The plan: to create a mobile wallet that would be honored at its members' retail locations (Tired of Being Cut Out of Mobile Payments, Major Retailers Strike Back: http://rww.to/SEg5oq). This comes on the heels of the NY Times' announcement that it is unloading about.com, which it bought from Primedia (who paid over $600 million for it) for $410 million in 2005, to answers.com, for $270 million (The New York Times Is About to Say Goodbye to About.com: http://dthin.gs/RAxCSy). So don't bank on starting a company called YouNeedToBuyUsBeforeGOOGDoes.com: You prove your worth, or you're off the island. We see this as a harbinger and our takeaway: we’re on the eve of Web 3.0 and it won’t be about the Rise of Mobile (which is part of it) or the Demise of Social (which needs to come to the realization that there’s no free lunch: eventually the waiter does comes around with the check). Amazon never concerned itself with its stock price: the online retailer was busy building a business, and customer service was always front and center: after all, it was the customers who were paying the bills. Does Walmart care how many likes they get on FB? Haven’t seen them post too many – or any – Groupon offers, either, for that matter. You might be a media darling for 5 hot minutes, but careful: the adults are now stepping into the room. It seems they weren’t asleep after all: they’ve quietly been watching from the sidelines and they’re getting ready to stake their own claims in our brave new world. That’s Web 3.0, in our humble opinion and you’d be better be prepared to play in the big leagues now, and maybe even do business with the big guys. They mean business – and always have. If you don’t realize that playtime’s over and that the game is changing, you may well find yourself in way over your hoodie. Onward and forward.

Deadlines: Read More...

8/14/12

8/14/12

Good morning, All,

Don't forget that our next SOS gathering is Monday, August 20th and just under a week away, so don't forget to register and looking forward to seeing you there. To RSVP: http://sosaugust2012-zvents.eventbrite.com/ It’s August. Big vacation month – especially for investors. Since rust - and an entrepreneur - never sleeps, good time to work on your game face – and your pitch. Let’s face it: there’s nothing new under the sun. Facebook? Back in the day, there was sixdegrees.com. Amazon is an online store, albeit a successful one and expanding globally. We go to pitch events all the time. Nine times out of ten, we’ve heard it before. So, how do you get an investor’s attention? Here are some basic helpful hints/rules of thumb:

1. If you want investors’ attention, have a story that gets their attention. 2. If you plan on disrupting an industry, you’d damned well better have a pitch that wakes up the room. 3. Something compelled you to start this company. Share. Don’t keep it a secret. It may just be that pain point with which your potential investor can identify. 4. Speak from the heart. Keep it real. 5. Don’t be yet another concept on steroids. Heard it before – ad nauseam – and besides, steroids should only be administered under a doctor’s care and are illegal, if you happen to be participating in competitive sports. 6. Keep your message simple. And memorable. That way, it’s more likely to be remembered and hopefully, so will you. 7. An investor deck is also a business plan. Just remember that you’re building a business and make sure you have a pathway to profitability. 8. If you’re depending on an ad revenue model, ask yourself: when was the last time I clicked on an ad or a banner*? 9. *The SOS Donate button at the top of this page should be a notable exception, and do feel free to click. 10. Be able to describe your business in one sentence – sometimes, that’s all the time you have. Talking fast doesn’t count. 11. If you have a stellar background – or have unique personal experience having to do with your startup - spell it out. Front and center. It may be the thing that makes you uniquely qualified to do what you’re doing, and potential investors need to know that. 12. Don’t end your deck or presentation with contact information. It needs to be in there, but this is an advertisement for you and your company: leave them with a sound bite that they’ll remember. Read More...

8/7/12

8/7/12

Good morning, All,

The next SOS gathering is coming up on August 20th and if your're in town, we'd love to see you. Details and RSVP are here: http://sosaugust2012-zvents.eventbrite.com/ and you know, you don't have to register at the last minute. How well we know you all!

It wasn’t a good week for FB, but then, the company hasn’t had a good week since it went public. Turns out the 6th largest country in the world, by population, admitted that millions of accounts are fake (http://bit.ly/N1xqsQ); the company lost more than three-quarters of a billion dollars of market cap EACH DAY since it went public (Who To Blame For Failed IPOs: http://tcrn.ch/QC4SJQ); Randy Zuckerberg went to work for Google; and her brother is no longer a Top 10 Tech Billionaire (http://on.mash.to/NeAwGz). He’s fine, but with the stock plummeting, he is at risk of losing valuable employees (Facebook loses 2 more executives, after stock price hits low: http://bit.ly/Mecr6G). Zuckerberg never wanted FB to go public – ever – and with the company under constant scrutiny for some privacy issue or another (Facebook’s facial recognition gets probe from Norwegian officials: http://bit.ly/MecBuI), it’s no wonder. One of the valuable lessons we can learn from FB, from way the company/investors handled the IPO to its policies, to its seemingly ever changing look, is that actions have consequences, even when the service is free. Yes, new users subscribe daily, but FB is not monetizing the base in any meaningful way. We personally think twice when the ‘I’ll allow it’ button pops up and given the choice between FB and allowing it through another service, we opt for the alternative: after all, Zuckerberg and ethics are rarely ever used in the same sentence – in a good way. The trust is long gone. He was always a press darling and still gets a great deal of ink – again, these days, not in a good way. We menton this because it’s August, and investors have mostly checked out for the time being. A good time to work on your business and, if necessary, to retool your business plan, and to think long and hard about what you’re creating, how you’re monetizing and if you’re not, what or whom you’re selling. We work in technology and we’ve all come to learn that there’s no such thing as the free internet: someone always pays. Let’s take some responsibility for what we’re doing because what we’re building is the future – and we all have to live there. Onward and forward. Deadlines: Read More...

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