December 2007 Archives
Michael Arrington reports that the Founders Fund has closed its second fund. FF is an interesting creature - a fund created by successful entrepreneurs (mostly from PayPal). Their structure and their terms and conditions are different from traditional VCs, more relaxed and more fair towards the founders who are getting the money. The second round is not money from entrepreneurs though - external investors are involved. So it'll be interesting if that influences the way FF will deal with their upcoming fundings...
Over the past five years a number of companies tried to pull off the concept of making voice a web service. None of them quite succeeded, for various reasons. Now with Web 2.0 being all over the place Ribbit seems to be the new kid in the block trying to do the same albeit with more 2.0ish buzz words. Apparently they have done well in getting VC funding - but then all others like Sylantro were well funded.
It'll be interesting to see if this one too bites the dust at some point, or we will finally have a voice 2.0 platform...
It'll be interesting to see if this one too bites the dust at some point, or we will finally have a voice 2.0 platform...
I liked it when I heard it - it makes sense coming from Google. Marissa Mayer, whose talks I have always enjoyed in conferences, tells us that GOOG-411 is not about profitability but about getting more samples to improve ASR for voice search.
Jaxtr has had an amazing growth: 5M new users in less than 5 months. I happen to know one of the co-founders, Phillip Mobin, and I think I'll see him the day after tomorrow. I will ask him how they did this. Amazing, and congratulations!
Since home theater has always been a topic of interest to me, and yes I am one of those people who paid like $600 to get a progressive scan DVD player when it came out - something you can get for $30 these days - I had to post these two links here. Understanding and comparing different types of displays (LCD, plasma, etc) and the whole resolution war (720p, 1080p, 1080i) can be pretty confusing for some people - too many choices. So these might help:
On different type of displays: http://www.cnet.com/4520-7874_1-5108443-1.html
On resolution and scanning: http://reviews.cnet.com/4520-6449_7-6810011-1.html
On different type of displays: http://www.cnet.com/4520-7874_1-5108443-1.html
On resolution and scanning: http://reviews.cnet.com/4520-6449_7-6810011-1.html
LinkedIn released its API, See coverage on TechCrunch.
Also, Imeem is doing a fantastic job of landing deals with the big names of the music industry - getting close to serving about 5,000,000 songs for free (ad supported). Latest deal is with Universal Music.
Last but not least, TechCrunch has published an interesting chart of the traffic trends of some major media sites, in which NY Times seems to be the winner. Personally I was not expecting such level of increase in their web site...
Also, Imeem is doing a fantastic job of landing deals with the big names of the music industry - getting close to serving about 5,000,000 songs for free (ad supported). Latest deal is with Universal Music.
Last but not least, TechCrunch has published an interesting chart of the traffic trends of some major media sites, in which NY Times seems to be the winner. Personally I was not expecting such level of increase in their web site...
The (pleasant) shock of Verizon deciding to open up is still here...
Enjoy:
http://www.businessweek.com/technology/content/dec2007/tc2007123_429930.htm
Enjoy:
http://www.businessweek.com/technology/content/dec2007/tc2007123_429930.htm
I have to give it to them: Divorce 360 is a brilliant idea. Maybe you and I do not like the concept of divorce, but it's out there and it happens to people. Personally I do not have any moral issues with helping people through the process and make some money along the way. Whether they execute well and become successful or not is to be seen, but as far as finding an unserved market niche is concerned, they have hit the nail on its head. To see why it makes sense in terms of dollars and cents, see the TechCrunch coverage of Divorce 360.
We have all heard about why VCs look for 10x return and how most of their investments fail or underperform (hence the need for the 10x home runs). Fred Wilson of Union Square Ventures has published two blog posts which contains an analysis of the startups he has invested in as a partner - 32 investments over 17 years.
First of all notice that it's not 320, it's 32. So we're talking 2 new investments a year. This is in line with most of other VCs I have heard from (about 2 deals per year per partner). They receive a lot of business plans but select only a few. Usually the partner involved takes a seat in the board of directors of the company, and these accumulate over the years - if the average life time of a company through exit is four years, the partner ends up on some eight boards.
In failure rates in early stage deals, he shares some numbers in terms of what he thinks (and promises to VC investors) in terms of success/failure rates, and what his performance shows (he has done great, by the way). He counts on 5x-10x in 1/3 of the companies he invests in, complete loss on another 1/3, and another 1/3 in between (doing ok, but no considerable ROI).
Personally I find the second post, why early stage investments fail, even more interesting. Notice that this is not "why early stage startups fail". In fact of the two reasons he gives, the second mostly applies to companies beyond their early stage.
He talks about two main reasons: 1) VC realizes it's not a good idea and kills the investment. 2) Idea is good but grows too soon, i.e., it gets overfunded and burn rate goes high before they realize how to scale the business.
He then goes into more details on the second reason, which is what I really liked about the post. I have seen this first hand. He sys most of the time the business plan is flawed in the beginning, and the companies have to transform themselves as they are executing to make sure they finally find the right business plan. In his words: "Most venture backed investments fail because the venture capital is used to scale the business before the correct business plan is discovered. That scale/burn rate becomes the cancer that kills the business."
Again he shares some data - of his investments, within the ones that did 5x or more, 7 transformed, 4 did not. Of the failed ones, 1 transformed, 4 did not. Interesting, eh?
First of all notice that it's not 320, it's 32. So we're talking 2 new investments a year. This is in line with most of other VCs I have heard from (about 2 deals per year per partner). They receive a lot of business plans but select only a few. Usually the partner involved takes a seat in the board of directors of the company, and these accumulate over the years - if the average life time of a company through exit is four years, the partner ends up on some eight boards.
In failure rates in early stage deals, he shares some numbers in terms of what he thinks (and promises to VC investors) in terms of success/failure rates, and what his performance shows (he has done great, by the way). He counts on 5x-10x in 1/3 of the companies he invests in, complete loss on another 1/3, and another 1/3 in between (doing ok, but no considerable ROI).
Personally I find the second post, why early stage investments fail, even more interesting. Notice that this is not "why early stage startups fail". In fact of the two reasons he gives, the second mostly applies to companies beyond their early stage.
He talks about two main reasons: 1) VC realizes it's not a good idea and kills the investment. 2) Idea is good but grows too soon, i.e., it gets overfunded and burn rate goes high before they realize how to scale the business.
He then goes into more details on the second reason, which is what I really liked about the post. I have seen this first hand. He sys most of the time the business plan is flawed in the beginning, and the companies have to transform themselves as they are executing to make sure they finally find the right business plan. In his words: "Most venture backed investments fail because the venture capital is used to scale the business before the correct business plan is discovered. That scale/burn rate becomes the cancer that kills the business."
Again he shares some data - of his investments, within the ones that did 5x or more, 7 transformed, 4 did not. Of the failed ones, 1 transformed, 4 did not. Interesting, eh?
