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Month: May 2013

5/28/13

5/28/13

Good morning, All,

Yahoo’s back and Marissa Mayer seems for all intents and purposes to be on a buying spree. Last week it was Tumblr and now they’ve thrown their hat in the ring to acquire Hulu. They supposedly bought Tumblr to attract a younger audience, and it is highly unlikely that they took the time to view this infographic before they dropped $1.1 billion to close the deal. Yeah, right. At last week’s CM Summit, Yahoo CMO Kathy Savitt reminded us of something that we had forgotten: that it was Yahoo that first made the web a daily habit. All of those websites out there and there was no way to find them, unless you knew the URL. Yahoo was a game changer. When they went public, they went on a buying spree and tried to be all things to all people: broadcast.com, geocities, to name two. They missed out on eBay and tried to build their own. Remember Yahoo auctions? Didn’t think so. They cast too wide a net too early on and it was unmanageable. The field was wide open and enter Google (which Yahoo passed on, just for the record). As for Yahoo’s acquisitions, closed and pending, let’s not forget that besides search, Yahoo is and always was a content company. Content and search were always Yahoo’s core competencies, and they seem to be returning to those roots that first made them successful. This time, with an eye to the future: native advertising (Ok, we know that contextual advertising has been around for a while and that only the name has been changed to deceive the clueless, much as the cloud is networked computing by any other name: gotta love the marketing department, and see what a little strategic marketing can do? A ‘new’ category is born.’ Take heed). But Mayer needs to give Tumblr time to continue to build their audience, and focus on long-term goals rather than short-term mandates.

Google started on a different path: Remember ‘Don’t Be Evil?’ (Google's Broken Promise: The End of "Don't Be Evil") That went down the same rabbit hole as did their privacy policy, monitoring your every keystroke while you’re on any and every google product, all in the name of giving you a better online experience, and never mind that they’re facing yet another anti-trust probe over their display ads. Speaking of the old days, head’s up, Google: push technologies didn’t work. Read More...

5/21/13

5/21/13

Good morning, All,

When you’re starting a company, everyone tells you what to do – put together a deck, talk to customers, talk to investors. We’ve seen the lists ad nauseam, but what about a list of what not to do?

1. Produce a product or technology that no one wants. It’s called ‘buy-in’ because the idea is to get people to buy. 2. Not have a revenue model from Day One. You might not implement it immediate – but it better be there. 3. Spend all of your time fundraising and not enough time on developing your product 4. Build a pitch instead of a business 5. Listen to investors, chapter and verse. We all go to pitch panels and get investor feedback. Question: how many times have you attended one such event, heard an investor sing the praises of the company - and witness him/her write a check, or heard that they wrote a check not long afterwards? Thought so. 6. Not listen to investors. Some do know what they’re talking about. We know both of them. 7. Think that sales and marketing are not as important as product development. Every chair needs at least three legs to support it. 8. Lack the determination and resolve to realize your dreams. 9. Start a company for the wrong reasons – your product is cool, but is it compelling? And are you the one to do it? Know your strengths and limitations. 10. Give up too easily: of course it’s hard to do – if it were easy, everyone would do it 11. Not have a clear message or product. We go to a lot of pitching events. Half the time, we’re not sure what the company is about – and neither are the investors. Do one thing and do it well. And be able to describe it. 12. Have a grabber. Example: BMW – the Ultimate Driving Machine. FedEx: When it absolutely, positively has to be there overnight. Clear. Simple. Effective. Multibillion dollar company – and they got there almost overnight. Be memorable. Read More...

5/14/13

5/14/13

Good morning, All,

We’ve heard it ad nauseam: the VC model is broken. There is certainly no shortage of posts on the subject. At TechCrunch Disrupt, Fred Wilson called the VCs sheep, saying they all wait, then jump into a deal together, usually when it’s too late. Most VCs, said Fred, are not forward looking. Question: do they really know the industry?

Investors are usually: 1. Entrepreneurs who made good 2. Entrepreneurs who got lucky (right company at the right time – early hires as opposed to key players: we know a junior project manager who went to a startup. It was her second job out of school; eighteen months later, the company was acquired and she was a multimillionaire before her 25th birthday) 3. Investors who invested well or again, were in the right place at the right time. 4. Those born with lucky sperm; no experience required. Read More...

5/7/13

5/7/13

Good morning, All,

Is it OK for multimillionaires like Zach Braff to panhandle for money on Kickstarter? “Crowdfunding has helped countless creative projects get off the ground, but if we continue to allow it to be hijacked by the rich and famous there will be no chance left for the little guy,” the piece begins. Remember: donors get nothing; if the film is successful, the producers get yet another opportunity to show up at a restaurant and take that table that you’d been waiting an hour for. Braff already had a financing deal in place. But he felt it was more important to take the $25 from that kid in Brooklyn. He’s disrupting the Hollywood system. We understand that. He’s also disrupting a system that might otherwise produce the next Stanley Kubrick – someone whose vision is so far afield, it’s way beyond the scope of the traditional Hollywood financing clique. How long will it take before a Shawn Fanning or an Evan Williams decide to launch their next startup through kickstarter? Would that not diminish the chances of an unknown with a possible groundbreaking technology?

Speaking of disrupting systems, we attended TechCrunch Disrupt this past week, and saw a number of companies exhibiting who had gotten their start through kickstarter programs. Meanwhile, investors on the panels seven floors north of them were complaining that there were no more big ideas. We did note that, after the investors finished their panels, they disappeared. We didn’t see them mingling among the startups. Hard to notice something that starts as a speck on the landscape, from an ivory tower. They’re looking for the next Jack Dorsey or Evan Williams, meaning, they’re waiting to see what Jack Dorsey or Evan Williams come up with next and honestly, how many groundbreaking ideas can one person or two people come up with, after all? Cuil and Color had A teams. Yet Cuil lost millions – not Cuil, and Color disappeared before ever really launching, leaving many an investor (they raised $41m) in the red on that deal. Which, in all fairness, is a Color, too. Read More...

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