Who controls a startup? January 30, 2007Posted by jeremyliew in startups, Venture Capital.
In a nutshell, he says that “control” is a bit of an illusionary concept, and that in reality having everyone aligned around a startup’s strategy is far more important than either company management or investors being able to “force” their point of view on the other side. We completely agree.
Pitching a VC: Focus on these FOUR things January 25, 2007Posted by John Vrionis in Consumer internet, Digital Media, Ecommerce, Infrastructure, Security, startups, Uncategorized, Venture Capital, web 2.0, WiMax.
The best part of being a ‘VC’ is meeting passionate entrepreneurs and listening to pitches about how their idea is going to change the world. Since I joined Lightspeed, I’ve found myself meeting amazing people and debating revolutionary ideas on a daily basis.
I’ve had the opportunity to listen to hundreds of pitches and as a former entrepreneur I did my share of pitching. I firmly believe that all great plans highlight the four key areas that are at the heart of every good VCs decision process.
1. Demonstrate you are addressing a Billion dollar plus market. This is the most important thing. If you can’t convince the VC you’re solving a problem in a huge market, you’re dead in the water. Big markets make big companies. Big markets can also hide mistakes. Do the bottoms up analysis. Talk to your assumptions.
2. What is your unfair advantage? Describe this in 30 words or less. Repeat it as many times as you can in the presentation.
3. Does the team have a visionary? VC’s are NOT visionaries. The team has to have someone on it that sees where the opportunity is going to be and can pick the right products to take advantage of that market.
4. What are the capital requirements for the major milestones? VCs want to back capital efficient businesses. They want to understand what the major risks are in the busines, when they can be mitigated and how much money it takes to do it. A simple timeline with milestones compared to cash needs is one of the best slides an entrepreneur can provide.
My final comment. Have fun. Remember — your job is to inspire and compel!
As always, all comments are welcome. Or send email direct to firstname.lastname@example.org
Failure IS an option January 24, 2007Posted by jeremyliew in browsers, Consumer internet, Digital Media, Search, startups, Venture Capital, video, web 2.0, widgets.
There have been a lot of posts on startups laying people off, losing founders or closing down in the last couple of months, part of the natural cycle in the valley. But what has disturbed me has been some of the mean spirited things that have been left in the comments to some of those postings. Often anonymously. It really bothers me. People can (and do!) reasonably disagree about a company’s business plan and prospects, but some of this stuff is just over the top.
The great thing about Silicon Valley has been the entrepreneurial culture, and the acceptance that working for a failed startup is not necessarily a judgement on your character or your ability. But recently there seems to have been a change in attitudes at least amongst some people (trolls?) who are taking joy in the misfortune of others. When a startup closes down, founder’s dreams die. Employees find themselves looking for work, and at least for a period, worrying about paying their bills and supporting their families. This should never be a cause for celebration.
I don’t personally know the teams at Backfence or Peerflix or FilmLoop, or Bitpass, or Findory, or Browster or many of the other companies that have recently entered Techcrunch’s deadpool recently, but I think that they are to be applauded for their willingness to take a chance on starting a company, not condemned because that particular company wasn’t successful.
Companies die, founders and employees learn from the experience and move on, and hopefully start more companies. I for one would love to see the second acts from the teams that are newly freed up.
The 53,651 strike back January 19, 2007Posted by jeremyliew in Consumer internet, startups, widgets.
Josh made the point that too many companies are targeting an audience of 53,651 (Techcrunch‘s audience at the time) rather than the “real world”. Before joining Lightspeed last year, I’d spent the last 10 years working for large internet companies whose audiences mirror the internet user at large (CitySearch, IAC, AOL and the “old” Netscape). I wholeheartedly agree with Josh’s thoughts that the Valley can be an echochamber where opinions can radically differ from those of the general public.
The NY Times’ piece focused on widgets as “digital bling” and gives equal weight to several different types of widgets; (i) self expression widgets, (ii) widgets offering some utility to blog readers, (iii) revenue generating widgets and (iv) widets offering some utility to blog publishers. It mentions MySpace in passing, but is very focused on widgets in blogs.
Wow. What a disconnect from the reality of how widgets are actually used. If you did a straight up count of all widgets embedded everywhere on the web, I suspect that you’d find that the VAST majority of widgets are on social network profile pages, not on blogs. And they are ALL about self expression. My SWAG is that classes (ii)-(iv) would probably represent less than 10% of all embedded widgets.
Quite frankly, I think that all of the pub that widgets have gotten and continue to get (2007 the year of the widget? Playa, please!) distract from bloggers creating great blog content in the first place. The emphasis on bling detracts from bloggers focusing on what matters most: creating fresh, interesting, passionate content which is the REAL reason why people come to read any blog.
A violation of blog principles. Google’s focus on the search box was a refreshing antidote to confusing portal pages such as Yahoo’s. Similarly, the blog represented a pared-down way of reading news: the most recent item at the top; scan down the page; stop when an old headline appears. Widget clutter is not simply distracting to readers; it compromises the original appeal of the blog format.
[I cringe as I write this, awaiting the inevitable snarky response]
seem a little blogger centric. But that is the nature of the 53,651. Slamming widgets because they distract from the content when put in blogs is like slamming TVs because they distract from driving when put in cars. But TVs belong in the home. And widgets belong in social networks.
At least Om gets that:
The real excitement of widgets in on personalized pages, mobiles and the desktops.
Now there have been legitimate questions raised about the busines model for widgets which I’ve addressed in a previous post.
But writing off the whole category as hype because glitter text or picture slideshows detract from your deeply meaningful blog posting seems a bit of an overreaction. At least judging from an average Bebo users page or an average Myspace users page the general public quite likes to express itself through these widgets. Looks like we, the 53,651, are in the minority on this one.
Why VCs don’t sign NDAs January 17, 2007Posted by jeremyliew in startups, Venture Capital.
When I was VP of Strategic Planning at IAC and SVP of Corporate Development at AOL we didn’t like signing NDAs, but we did it reasonably frequently. In those cases though, we were looking at buying companies and we were getting pretty deep into the financial and operational details of a company very quickly.
Now that I’m on the Venture side, we hardly ever sign an NDA. As both Brad and Rick point out, there shouldn’t be a need to disclose confidential information at a first meeting to determine whether or not there is interest in moving forward.
Interesting insights from SVP of Corporate Development at Yahoo January 15, 2007Posted by jeremyliew in Consumer internet, Digital Media, Ecommerce, startups.
1 comment so far
Toby Coppel recently posted on the Y! corporate blog with his thoughts on interesting startups. He calls out some companies he finds interesting (one of which Y! has since acquired!), talks about how this wave of startups is different from the late 90s, and talks about how many of Y!’s acquisitions were about attracting visionary talent. It’s well worth reading
The Venice Project – both easier and harder than people think January 14, 2007Posted by jeremyliew in Consumer internet, Digital Media, startups, video, web 2.0.
1 comment so far
Patrick wrote a post on “The New Must See TV” on Friday and I know that he wanted to include some information on The Venice Project but was unable to say much because of the NDA that we signed. However, it looks like Om was not under the same constraints as his excellent and informative NewTeeVee post goes into a lot of detail about the company. Both Om and Mike Arrington at Techcrunch comment that they see two key hurdles for TVP which I think are surmountable, but I believe that a third hurdle exists that will limit TVP’s eventual scale.
1. TVP lacks compelling content
I haven’t seen the NDA material so my thoughts here may be way off base, but I don’t think that a lack of compelling content today is likely to be a long term hurdle.
Much has been written about the long tail of video content, all of which is legitimate. However, its no accident that Youtube is now pursuing licensing agreements from the major TV networks, music labels and movie studios. Long tail notwithstanding, as even Chris Anderson says, “Hits aren’t dead”.
Furthermore, the major studios and networks seem to have turned a corner on their willingness to license their content. When startups like Guba, Wurld Media and Bit Torrent can get licensing deals done with major studios, its pretty clear that the policy rubicon has been crossed, and now the only haggling to be done is on price. As soon as TVP is willing to pay the prices asked, it can get content.
2. TVP requires a download
Requiring a download is certainly a hurdle, but not an insurmountable one, as the founders of TVP have demonstrated twice before, with both Skype and Kazaa. However, both Skype and Kazaa are clients that benefit from obvious network effects, as do many other successful consumer clients such as AIM, ICQ, Y! Messenger, Bittorrent, Limewire, Morpheus etc. Other successful downloads that do not benefit from the network effect have mostly been focused on security concerns, including the Firefox browser and the many anti Adware/Spyware products. One of TVP’s challenges will be how to balance making its network effects obvious with the likely desire of content owners to keep some level of control over their content. The social aspects that they’ve built into the product are certainly a good start. I haven’t peered behind the NDA curtain on this issue so don’t have any further PoV on the matter.
3. High quality video is too bandwidth intensive
The issue that I think may be underestimated is that of bandwidth. Om alludes to this issue in his post and seems to give the benefit of the doubt to TVP, although he points out that TVP would require 250MB/hour which is enough to violate many ISP’s terms of service. Video is an incredibly bandwidth intensive application, especially at higher quality levels. At high levels of penetration, even p2p solutions are not sufficient to support high quliaty video streaming because of asymmetries in the upload/download bandwidth for most consumer’s broadband connections. If TVP is successful to Skype like levels, then there simply isn’t enough upstream bandwidth from peers to fulfil the downstream bandwidth demand from users who are trying to watch high quality video. Most upstream bandwidth pipes are only 1/5 to 1/10 the size of downstream bandwith.
Now this only becomes a problem at real scale, but it may put a cap on how big TVP can become before video quality becomes degraded or expensive server farms need to go into place to supplement peer delivery. Jeremy Riemer makes a similar point at ArsTechnica.
None the less, althought there is likely no VC investment opportunity here, this will be an interesting company to watch!