Archive for January, 2008

Why A Real Market Of A Few Is Better Than A Mythical Market of Millions

Posted in buzzpal philosophy, other people's blogs, startups on January 30, 2008 by chrisco

Another article from OnStartups.com.

Key Takeaways:

  • Identify and serve individual customers as early in the process as possible.
  • Focus on the user and the user experience, not the market size.

He makes some other points, one being: Don’t focus on too narrow of a vertical (niche). I have seen a lot of startups making that mistake, mostly driven by investors who didn’t know that you could go too narrow. Turns out you can. Now they know.

Sep 24, 2007
Why A Real Market Of A Few Is Better Than A Mythical Market of Millions
By Dharmesh Shah

I talk to entrepreneurs all the time that are very excited about their idea because “…the market opportunity consists of millions of potential customers!” This line of thinking then eventually leads to reasoning that goes something like this:

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Startup Marketing: Big Bang vs. Darwinian Evolution

Posted in buzzpal philosophy, other people's blogs, startups, venture capital on January 29, 2008 by chrisco

A good article from OnStartups.com.

As a bootstrapping and agile startup, BuzzPal believes the evolutionary approach beats the big bang theory, even if it were possible for us.

Jul 16, 2007
Startup Marketing: Big Bang vs. Darwinian Evolution
By Dharmesh Shah

Broadly speaking, I think there are two types of marketing approaches.

The first is what I’ll call “Big Bang”. This was very popular in the 1990s, particularly for venture-funded startups. In this approach, the sequence of events goes something like this:

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The Penny Gap

Posted in other people's blogs, startups, venture capital on January 27, 2008 by chrisco

Keep this in mind when figuring out your business model.

March 10, 2007
The Penny Gap

By Jkopelman
(original blog and comments: First Round Capital)

Here at First Round Capital, we see a lot of business plans for consumer-facing internet services. Most assume a significant portion of their revenue comes through advertising — but almost all of them have a “premium/subscription” option. Typically that subscription revenue accounts for 20-40% of total revenue, and is based on a very low ($1-5/month) subscription fee. When asked to support these subscription revenues, entrepreneurs [VCs] almost always say “well, it’s very cheap ($2 a month) and we’re only assuming 5% of our users take advantage of it).” On the surface, a reasonable position.

However, that is rarely how things play out. Most entrepreneurs [VCs] fall into the trap of assuming that there is a consistent elasticity in price – that is, the lower the price of what you’re selling, the higher the demand will be. So you end up with hockey stick looking revenue charts that go up and to the right, all supported by an “it only costs $2 month” business plan.

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Why Early Stage Venture Investments Fail

Posted in other people's blogs, startups, venture capital on January 24, 2008 by chrisco

A good article for startup founders, managers and investors.

From East Coast VC Firm, Union Square Ventures. I bolded some of the key points for all you skim readers out there.

November 29, 2007
Why Early Stage Venture Investments Fail

[S]o why do venture investments fail? Well if I look at the ones I’ve been involved in there are two primary reasons:

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Another Garage Startup in the News

Posted in articles, recruiting, startups, venture capital on January 21, 2008 by chrisco

Triggit.com (staff pictured above).

Why did we post this article? To make the point that you don’t need a big team or a perfectly mapped out plan to do a startup. You need a small group of smart, creative and driven people, who admit mistakes quickly, wear many hats and do whatever it takes. You could list lots of other individual and team characteristics, but you get the point. Small and agile is best for this kind of thing. It works for special ops, it works for startups. Now on to the article!

From Wired.com 2008-1-17:

Web publishing tool Triggit launches Thursday, and its staff is smiling.

Zach Coelius came to San Francisco at age 25, as a Minnesota native and Silicon Valley outsider. Within a month he crashed the high-profile Demo conference and charmed his way into a top-secret poker game among venture capitalists, where he won a thousand dollars in seed funding for a then-nonexistent company.

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The Startup Developer Superstar Detection Quiz

Posted in other people's blogs, recruiting, startups on January 18, 2008 by chrisco

From onstartups.com, a 5-minutes quiz: 😉

The Startup Developer Superstar Detection Quiz

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Article: From 10 Hours/Week, $10 Million/Year

Posted in articles, startups on January 13, 2008 by chrisco

A lot has been written about Plenty of Fish and its founder, Markus Frind (great job on the PR, Markus), but we thought this article covered some new ground, which is why we republished it here. Enjoy.

Before we get to the article, let me address one thing:

Some of you may be wondering why we republish articles and blogs here. The reason is that we want to share some of the things that we — an early stage bootstrap startup — find interesting and useful.

Maybe you’re a trendsetter or blogger, maybe an entrepreneur or investor, or maybe you’re just killing time. Either way, we think you’ll find something you like.

Oh yeah, you can also use our blog to follow BuzzPal’s developing story. Just signup for the RSS feed or email subscription.

Now on to the New York Times article:

January 13, 2008
From 10 Hours a Week, $10 Million a Year
By RANDALL STROSS

MARKUS FRIND, a 29-year-old Web entrepreneur, has not read the best seller “The 4-Hour Workweek” — in fact, he had not heard of it when asked last week — but his face could go on the book’s cover. He developed software for his online dating site, Plenty of Fish, that operates almost completely on autopilot, leaving Mr. Frind plenty of free time. On average, he puts in about a 10-hour workweek.

For anyone inclined to daydream about a Web business that would all but run itself, two other details may be of interest: Mr. Frind operates the business out of his apartment in Vancouver, British Columbia, and he says he has net profits of about $10 million a year. Given his site’s profitable advertising mix and independently verified traffic volume, the figure sounds about right.

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