Billion-Dollar Start-Ups Face Problems With Valuation and Acquisitions. Zef Nikolla/FacebookFor start-up companies, going public isn’t very appealing considering what happened with Facebook’s lackluster initial public offering. Congratulations! Your start-up is now valued at over $1 billion! This might seem exciting, as though you’ve won a lottery. But in reality, when you recheck your lottery ticket, you might find you were off by a single number. You see, being in the Billion-Dollar Start-Up Club limits how, and if, a company can get out of the Billion-Dollar Start-Up Club — at least safely.
The Club is growing quickly. Dozens more companies are within arms’ reach, including Foursquare, WordPress, GitHub, Quora and Fab. They have a lot to worry about. Given that Apple rarely makes acquisitions, that leaves Google, Microsoft and possibly Facebook. And speaking of Facebook: after its lackluster initial public offering, when its stock dropped by half, going public isn’t very appealing. Some of these companies’ valuations might be justified by revenue and growth. Rethinking Mobile First. I wrote the Mobile First Web Second blog post a few years ago. In that post, I talked about apps that were designed to be used on mobile primarily with the web as a companion.
There have been a number of startups that have taken that approach and done well with it. Most notably Instagram, and also our portfolio company Foursquare. It has become a bit of a orthodoxy among the consumer social startup crowd to do mobile first and web second. But is it the right thing to do? Vibhu Norby, co-founder of Everyme and Origami, wrote one of the most thought provoking posts of the past month arguing that mobile first is a recipe for failure for most, if not all, startups. Vibhu makes some excellent points: All in all, mobile service apps turn out to be a horrible place to close viral loops and win at the retention game.
And You have an entirely different onboarding story on the web. I use my phone more than anything else. But I don't want to focus on business model in this post. Dear awesome startups, don’t join an accelerator, unless… I've noticed a common refrain with investors at accelerator demo days. "What did you think of the companies? " I ask. "Eh," they say with a shrug. Over the last month I've asked around 15 of them the same question, it became difficult to find a VC who'd argue, in general, IN favor of the industry. For VC's, these programs act as a filtering or vetting system for early stage companies. The problem is that now there are just too many programs to get excited about. Some investors take the argument a step further, saying the jury is out on the whole premise: VCs that say the elite Y Combinator is the only program that matters, but in the next breath complain that it is an "over-fished pond," with too much investor interest driving up valuations.
That said, it would be lazy to issue a sweeping dismissal of accelerators. A familiar chorus was that accelerators don't help most companies. The worst accelerators do guarantee success. So don't join an accelerator unless you can win it. Instagram's Mike Krieger Shares How To Do Better Product Design. App and mobile design has come a long way in the past few years, with many popular services shifting their focus more towards to improving the way their apps look.
At 500 Startups’ Warm Gun conference, an event focused on design problems in the tech industry, the theme that design and user experience are being treated as “second class citizens” in the community — if you’re not focusing on usability and response time, then “you suck”. “Do it for the puppies” Those words came from 500 Startups co-founder Dave McClure. In his opening remarks, he stated that most app designs suck — take a look at the most popular ones out there, like Twitter and Facebook: their mobile experience “sucks” and McClure questioned why that is.
Josh Brewer, Principal Designer at Twitter, agreed on the spot and said that Twitter was “working on it”. Refreshing the design process It appears that the design process isn’t something that has been fully realized by most organizations, according to Krieger. Why First Round Capital funded a lawsuit. Managing Startups: Best Posts of 2011. Marc Andreessen in conversation with Eric Ries - Lean Startup Conference 2012 HD. Startup technology demystified. By Danny Boice On December 18, 2012 When it comes to technology, it can be confusing out there for the business-minded (read: non-technical) co-founder. Do those snowboard-loving, flip-flop wearing, EDM-listening, tattoo-having jackanapes-for-developers ridicule you with their fancy words and assault you with offensive acronyms? Do you think that JSON was that guy with the hockey mask and chainsaw in “Friday the 13th”?
Thought Ruby was a reference to Grandma’s dear friend at the nursing home? Take heart, my friend, there is still hope. 1. What is it? Node.js is a platform built on Chrome’s JavaScript runtime designed to easily build fast, scalable network applications. Translation: Node.js makes it much easier, faster and efficient for your development team to do cool shit in your app in real-time that will melt your users’ faces. Why should you care? Node.js allows developers to do things in real-time more easily, in way that scales pretty damn well. What’s it good for? Who’s using it? 2. 3. Startup Attention and PR 101 by Ben Parr. Are You An Alcoholic Yet? Or, The Great Startup Rollercoaster. This post has appeared as a guest blog on FounderDating, which brings together entrepreneurs with different skill sets to start innovative new companies.
Startups are by their nature extremely stressful. At a large company, the company itself has momentum. With a few exceptions, if one person (or team of people) were to suddenly disappear, the company will continue to coast for (potentially) multiple years before the effects may become evident Thought experiment - imagine if the (multi hundred person (?)) Microsoft Office product and engineering team suddenly disappeared (kidnapped by aliens?). In contrast, at a startup as the entrepreneur if you stop pushing, everything immediately comes to a halt.
There are times when you need to push much harder then others to get over a hump that reminds me of activation energy from chemistry. As a friend of mine put it, if a year into your startup you are not an alcoholic, you must be doing something wrong. So how to deal with all the stress? Why Startup Founders are Always Unhappy — jessblog. Startups are incredibly stressful. I know many founders whose companies are doing great, but they are still stressed and unhappy. Polyvore is doing great (growing fast and cash-flow positive!) , but I still have my moments of extreme unhappiness. Here’s my theory on why this happens. The trajectory of a successful startup looks something like this, up and to the right: It’s not a smooth, straight ride though. If you’re lucky enough to have gotten from point A to point B on this graph, you should be happy, right? Unfortunately, humans are terrible at understanding absolute values. My theory is that a founder’s happiness is tied to the rate of change of their startup’s success.
Even though point B is 2x better than point A in terms of success, it is a deceleration from the moment before. Some tips to keep from drowning when your happiness is below the line — 1) Remember where you came from. 2) Great culture and great people are your glue. Strangely, this comforts me :-) Frighteningly Ambitious Startup Ideas. March 2012 One of the more surprising things I've noticed while working on Y Combinator is how frightening the most ambitious startup ideas are. In this essay I'm going to demonstrate this phenomenon by describing some.
Any one of them could make you a billionaire. That might sound like an attractive prospect, and yet when I describe these ideas you may notice you find yourself shrinking away from them. Don't worry, it's not a sign of weakness. There's a scene in Being John Malkovich where the nerdy hero encounters a very attractive, sophisticated woman.
Here's the thing: If you ever got me, you wouldn't have a clue what to do with me. That's what these ideas say to us. This phenomenon is one of the most important things you can understand about startups. [1] You'd expect big startup ideas to be attractive, but actually they tend to repel you. 1. The best ideas are just on the right side of impossible. Microsoft : Google :: Google : Facebook. 2. Whatever you build, make it fast. 3. 4. 5. Four African Girls Created Urine-Powered Generator. 7 November '12, 04:58pm Follow What have you built lately? 14-year-olds Duro-Aina Adebola, Akindele Abiola, Faleke Oluwatoyin, and 15-year-old Bello Eniola have created a urine powered generator. All over Africa, young men and women have missioned across the country and arrived in Lagos, Nigeria.
All they want to do is show off what they have made. Maker Faire Africa is more than your typical startup event: it actually shows off innovations, inventions, and initiatives that solve immediate challenges and problems, and then works to support and propagate them. Put another way, this isn’t just a bunch of rich people talking about how their apps are going to change the world. These four girls may not end up doing that either, but their efforts definitely stand more of a chance than yet another hyper local social cloud app. Here’s how it works: If this doesn’t motivate you to go out and start thinking about how you can really make an impact, then I don’t know what will. Image credit: David Lat. For A Stranger In Silicon Valley, Success Isn’t Only About Who You Know. Editor’s note: Cherian Thomas is founder and CEO of Cucumbertown, a recipe-publishing platform. Follow him on his blog and Twitter. For entrepreneurs, it is now both easier and harder to raise capital: easier because of powerful platforms like AngelList; harder if you’re not part of an accelerator or don’t have a strong network.
Silicon Valley has more startups than ever before. My startup, Cucumbertown, raised its first round a month ago, and during the course of this journey, I realized that, as a first-time entrepreneur without any solid Valley footing, my run toward raising funds as a non-American co-founder was somewhat unique. Valley funding used to be an impenetrable fortress that opened up only by way of introductions. Your success in raising capital decreased to insignificant levels otherwise.
So here’s how my month of experience as a non-accelerator, non-American fundraiser translates into advice. Make Friends Fast Meet With Companies Who Have Raised Get On AngelList Learn To Say No. Instagram Co-Founder Mike Krieger’s 8 Principles For Building Products People Want. Mike Krieger, Instagram’s founder, thinks you can build apps that fit in the real world by watching what people want, not guessing.
He presented his eight core product design insights today at 500 Startups’ Warm Gun conference. Here’s the cheat sheet to his talk. “Just because you’ve Googled something doesn’t mean you’ve learned,” Krieger explained in the intro to his design talk. To build something that solves a problem, “You want to know people better than they know themselves.” You should come away with serious insights, not just random facts. And now, Mike Krieger’s Eight Principles Of Product Design: Draw On Previous Experience and Understanding – The biggest problem is startups in search of a problem.
7 tactics lean startups need to build great products. If you’re running a lean startup, “launch and learn” is undoubtedly a familiar mantra. But launching a new feature can take weeks or even months, and for a scrappy startup that’s a potentially make-or-break issue. Our design studio works with dozens of startups each year to help teams define their products and features. Through the process of doing this over and over again, we’ve collected a time-tested toolkit of methods for learning that are cheap, fast, and perfect for startups to find those crucial mistakes earlier and then adapt their plans more nimbly.
The result is almost always that they ship better products and do so even faster. Clickable mockups Most teams think they need to build an interface that functions and looks real before showing it to customers to get feedback. At first I thought these prototypes would be too rough to be useful. Customer interviews Instead of working in a vacuum, gather data to use as fuel for designing your product. Fake doors Recon Micro-surveys. Warby Parker: We are a lifestyle brand. Killing Your Startup on a Thursday Night. Editor’s Note: Lucas Rayala was the cofounder of Altsie. This is what you do when you close down your startup: you call Rackspace and cancel the Windows SQL server plan.
You email SendGrid and give them notice on your Silver SMTP Service Package. You close down your Wells Fargo Business Checking account and your Paypal Merchant account. Glamorous stuff. This is what I told them: “I’m folding up Altsie. I put three years of my life into building and running Altsie, a bootstrapped startup funded out of my back pocket. As we approached launch last May, I started to understand what buzz was. That’s the nice side of the story. Elon Musk said that running a startup was like eating glass and staring into the abyss. I was confronted with my own limitations and began to see myself in the harshest, most honest light ever directed on me.
Two years building and eight months running Altsie took its toll. Then everything I actually wanted to say suddenly boiled up, and I started to talk — really talk.
Ready-to-quit.png (300×575) Black Swan Farming. September 2012 I've done several types of work over the years but I don't know another as counterintuitive as startup investing. The two most important things to understand about startup investing, as a business, are (1) that effectively all the returns are concentrated in a few big winners, and (2) that the best ideas look initially like bad ideas. The first rule I knew intellectually, but didn't really grasp till it happened to us.
The total value of the companies we've funded is around 10 billion, give or take a few. But just two companies, Dropbox and Airbnb, account for about three quarters of it. In startups, the big winners are big to a degree that violates our expectations about variation. I don't know whether these expectations are innate or learned, but whatever the cause, we are just not prepared for the 1000x variation in outcomes that one finds in startup investing. That yields all sorts of strange consequences. It's a constant battle for us.
Harder Harder Still Notes. Screw the Black Swans: Ichiro is our role model, not Barry Bonds. | Dave McClure. There are probably better things for me to do today, however i feel compelled to respond to the Black Swan Farming post by Paul Graham, founding partner of Y Combinator. Maybe you can call this post “Grooming for Ugly Ducklings”. While i respect YC & PG immensely – note that 500 Startups has invested in over 40+ YC startups, and we have generously borrowed (COUGH) many excellent & original ideas that YC developed – at the same time, it’s useful to grok the similarities vs. differences between 500 & YC. Put bluntly: we are both ambitious and we both play baseball, but YC is quite clearly the Yankees, while 500 is more like the Oakland A’s. Though i don’t profess to be Billy Beane (or Jerry Maguire), 500 is ideologically more focused on being an organization that teaches great hitting & fielding, rather than one that aims to find the best hitters & help them negotiate the best contracts.
But before we describe our differences, let’s first review the similarities. But 500 Got Next. Kudos. How Airbnb Evolved To Focus On Social Rather Than Searches. Disruptions: Let Silicon Valley Eat ... Ramen Noodles? Why I Never Started My Own Company. - Startups - Chris Sacca of Lowercase Capital - TWiST #291. Simon Cowell and Will.i.am join forces to find new Bill Gates | The Sun |Showbiz|TV|X Factor. Leanstartup: #leanstartup requires opinions...
Startup is the New Hipster. Sacca: Don't think about how to explain... All Revenue is Not Created Equal: The Keys to the 10X Revenue Club. Sites Like Groupon and Facebook Disappoint Investors. The 7 Habits of Highly Effective Mediocre Entrepreneurs. How To Thrive In The Free-Product Economy. North of Where We Are Today: Live Nation Labs in San Francisco - Live Nation Labs. The Two Types of Companies in Silicon Valley. Ideas are just a multiplier of execution. Blake MastersSearch results for: cs183. Nurturing a Baby and a Start-Up Business. The 7 deadly sins of software development. 9 Deadliest Start-up Sins. 'The Golden Age of Silicon Valley Is Over, and We're Dancing on its Grave' - Derek Thompson - Business. The Cliff. Steve Blank on small startups, big execution, and Steve Jobs. Was Zynga’s Deal To Buy OMGPOP That Disastrous? Here’s Some Perspective. A new field guide for entrepreneurs of all stripes.
Google and Facebook Grow Comfortable and Complacent. Behind the Scenes at 9 Hot Tech Startups [PICS] MEGA Startup Weekend 2012 Highlights – Day 1. How I Got Ripped At 500 Startups. Why I think ad's are no one-for-all revenue solution. MassChallenge Wants to Ignite a Startup Renaissance. Class 2 Notes Essay. How to Make It as a First-Time Entrepreneur. Stanford 2012 Lean LaunchPad Presentations – part 2 of 2. The myth of the overnight success. Crowdfunding Law Will Turn the Start-Up World Upside Down - Tim Rowe - Voices.
Small Demons Deck. DressRush Pitch Deck. Frighteningly Ambitious Startup Ideas. How To Increase Your Productivity 500% Altucher Confidential. Why Some Startups Succeed And Others Fail: 10 Fascinating Harvard Findings. 20 best startups of 2011. Minneapolis a tech center? Start-ups say yes. Submit a Story | Startup News for Entrepreneurs. After Four Years as ReadWriteWeb’s Lead Writer, Here’s My Next Adventure.
Reid Hoffman of LinkedIn Has Become the Go-To Guy of Tech. Inventions. 500 Startups Peels Back The Curtain On Its Third And Largest Batch Yet. Brave New Thermostat: How the iPod’s Creator Is Making Home Heating Sexy | Gadget Lab. The legal checklist every startup should reference. The legal checklist every startup should reference. Andy Brett | Do Not, Under Any Circumstances, Start A Startup: Or, What I Learned At Startup School 2011.
Grow Detroit | Grown in the D. The ultimate startup lesson: knowing what matters — Cleantech News and Analysis.
Interview #1: Hiten Shah, co-founder of CrazyEgg and KISSmetrics | Startup Guide for Non-Coders. (Founder Stories) Eric Ries: How Lean Was The Google+ Launch? YC. 10 Essential PR Tips for Startups.