This begins with a tale of one of our readers who had customer support problems with three different platforms:
A payments platform – wrong bank account#, contact email, plus phone# attached to a different account.
A hosting service – the reader had a new phone and was setting up the email account.
We recall back in the day when Facebook hit the zeitgeist in a huge way, it was suggested that the company charge a nominal fee for the service, and we believe it was a dollar a month. Easily affordable in most countries, and why not to bring family and friends closer. Of course, there are countries where a dollar a month is quite steep, and the company opted for eyeballs uber payment and they’d make their money via tracking you and offering up adverts.
As a note to self and a cautionary tale to founders: best to bake in the revenue model/premium services early in the game, as did, say, LinkedIn, who, when they hit a tipping point long ago – a year or two after funding – the company did maintain a free version, but also introduced a premium model and people were willing to ante up. It seems to have worked. We do believe that the company is still around. And with multiple revenue spokes. Also a good idea.
Re Facebook. Well, times change, as has Apple’s advertising policies: the company’s anti-tracking protections cost Facebook, now Meta, some $10B in ad revenue last year.
Every two weeks, we host an online breakfast with a single investor, and a small, self-selecting group of entrepreneurs. Other investors – angels and VCs – sometimes attend as well. We keep them small to make sure everyone has a chance to participate, ask questions, and learn. You’d be amazed at how many founders have found investment – just by showing up and participating.
And hearing first-hand, precisely what investors are looking for – and we don’t simply mean the verticals in which they invest – but what they look for in a pitch deck, and how they read it.
We know you’ve heard it all before. As we’ve said over and over, in our opinion, the #1 reason why startups fail is that founders don’t listen.
Those of us who work in technology – which is most of us here – can’t help but glom onto or at least test the shiny new thing that comes along. It’s in our DNA. The problem is that tech tends to jump in feet first without realizing the possible consequences, dystopian side, or even fully examining the product.
Apologies if we sound a bit repetitive here, but read on. We do have a point to make, that no one else seems to be considering.
BuzzFeed To Use ChatGPT’s AI For Content Creation, Stock Up 200%+ (forbes.com). Okay, it’s ‘BuzzFeed’ which is ‘clickbait’ by any other name. As Forbes further reported, “Investigative reports on The Byte shared that media website CNET was using AI technology, under articles penned by the anonymous “CNET Money Staff”. The AI was created by CNET resources, and only used for a very small number of posts before human oversight detected significant misstatements of facts, errors and plagiarized content, according to multiple news sources.” The result: CNET pauses publishing AI-written stories after disclosure controversy.
We’re not a big fan of best of/worst of lists. Nor are we big on New Year’s resolutions, but not always easy to buck every trend that comes down the pike, so without further ado, nine resolutions founders might want to consider. We didn’t go for 10 as we do understand that even nine is pushing it…
And a very happy and productive 2023 to one and all, as we go onward and forward.
Thanksgiving kicks off the holiday season and while tech never rests, those people on the money side of the table, be they potential investors, partners, or clients, do tend to slow down/take longer to make a decision or even take meetings.
As we well know, there’s little rest for the startup side of the equation, but here’s some not-necessarily-light holiday reading, the list courtesy of CBInsights, who asks, “What separates success from failure? These 11 laws contain some of the most influential ideas that the biggest tech companies use to run their operations, design business models, and build products.
Some, like Moore’s Law, have been extremely prescient. Others, like Conway’s Law, provide counterintuitive insights — such as why Microsoft sells Xbox consoles at a loss, or how Facebook became one of the most valuable companies in the world by offering a free service.”
Anyone working on a startup – or an investor deck – knows that one of most important criteria to investors (besides what your company will do to ensure that they’ll see an exit at some point in their lifetime, or at all) is product-market fit, which is especially important at this juncture, given the downturn in the market. Although we will remind you once again that some of the biggest companies emerged during the worst of times.
That said, Big Tech is no more immune to the vagaries of the market and the importance of product-market fit than is anyone else, but one thing that they do have- so far – is deep pockets.
Does that really help? At Alphabet, “Revenue growth slowed to 6% from 41% a year earlier as the company contends with a continued downdraft in online ad spending,” said CNBC. It had missed analysts’ expectations. “CEO Sundar Pichai said in the statement that the company is “sharpening our focus on a clear set of product and business priorities,” while Ruth Porat, the finance chief, said “we’re working to realign resources to fuel our highest growth priorities.” So, does that mean so much for moonshots et al and, instead, sharpening the focus on what people do want, rather than what the company feels that they might or should want?
Tech is and has been referred to as the wild, wild west since the early days of Web 1. Like those pioneers who ventures out into terra incognita when the west was being settled, those web pioneers didn’t know what they’d find, and even in their travels, they were making it up as they went along.
Head’s up: the same goes for investors. There’s no startup handbook, although there are books that bear that title. There’s no investor handbook, either. Which is why founders may hear one thing from one investor, get totally different feedback/advice from another. And yet different feedback/advice from a third, and so it may go, all the way down the line.
With the downturn in the unicorn market, founders have lost much of their power with investors. “New unicorns are plummeting. Here’s how volatile markets and shrinking valuations are shifting power from founders to investors, CB Insights reported, and venture funding to startups is ebbing.
Even those certain funds and investors who had ridden to rock star status in the last decade plus with those outsized returns are being scrutinized more closely, especially by the tech press. While new funds are still being raised, existing funds raising follow on funds and investors are still writing checks – albeit more cautiously these days, Adam Newmann and A16z’s investment into Flow aside – if it’s not full-on investor winter in many quarters, we’re certainly getting close.
Mark Zuckerberg/Facebook (now Meta) has always been something of a bellwether for the Web 2.0 Age of Surveillance nee Age of Social and high time to just call it as it is.
Since Zuckerberg did help to define the last iteration, it stands to reason that he would lead us once more into the fray as we barrel towards Web 3, no?
He thinks so. He may not be building his own metaverse as originally planned, but nor is he sitting idly by. Au contraire. Instead, as Futurism noted, “the company wants to get in on the ground floor and determine its rules.”