Image via Wikipedia

TechCrunch Turns Into F**kedCompany 2.0 – says Dare Obasanjo.

Really? Tell me something I don’t already know.   Have we all forgotten that TechCrunch acquired FuckedCompany.com over a year ago?   OK, that was just an April Fool’ s Joke , but you can really say TC is unprepared for a downturn – after all, they own FuckedCrunch.

OK, on a more serious note: I also said, way back in January 2007 that TechCrunch Did Not Build it; It Can’t Knock it Down Either:

TechCrunch did not build this boom. Yes, a well-timed review helps a startup gain initial traction, but Mike does not make those companies successful: whether they make it or not, they do so on their own. And when they fail, they fail own their own merits, too.  Failures are part of business reality, and reporting on them only makes TechCrunch balanced. Without it Mike would be just a biased cheerleader (something he was accused of in the past).

I still mean what I said there, except that in the downturn there will clearly be more failures, and it won’t always be on a startup’s “own merits”.  Reporting on them is part of reality.

But what I really hope for is that TechCrunch and other influential blogs that are a strong part of the startup ecosystem will take a constructive approach, and instead of becoming doom-reporters they start discussing ways of survival – i.e. how to tweak one’s business model to establish a healthy revenue stream.

I’ll have more on this soon.

Update: I’m often amazed at the image selection Zemanta proposes. The word “train” does not once occur in my post, yet it recommended this image of a train-wreck.

Tags: Blogging, business model, fuckedcompany, recession, revenue, Startups, techcrunch

Lot’s of noise today, RIP Good Times,  IT’S OVER! POP GOES THE BUBBLE, Sorry, Startups: Party’s Over etc.   I think the panic is overdone.

Sure, a lot of startups will fall – and some of them would have done so without a recession anyway. Times are officially tough, but the truly strong businesses will survive, and some of the Web 2.0 whiz-kid baby-CEOs  will come out of this as battle-hardened Entrepreneurs.

Talk about Executives… some can wreck the business on their own, they don’t need a crisis: see Entellium wrecked by fraud.

Finally some startups think they can keep on re-architecting forever – see NetBooks, ViewPath (the latter just came out with a new product though.)  Good luck to them… wonder if their market runs away…

These are some of the thoughts I’m discussing on CloudAve today – read more here.  Even better, grab the feed here.

Update:  Want to get off the “Sky is falling” treadmill? Need inspiration?  Find it here.

Even better, get really inspired at Defrag.  Use discount code zoli1 to get $300 off.

.

Tags: business model, defrag, entellium, entrepreneurship, management, netbooks, recession, SaaS, Startups, vc Funding, venture Capital, viewpath

Fincancial crisis or not, VC investments did not entirely disappear, it’s just getting increasingly difficult to get funded.  But VCs are still on the lookout, and as proof I’ll be moderating another SVASE VC Breakfast Club meeting this Thursday, October 2nd in San Francisco.

As usual, it’s an informal round-table where up to 10 entrepreneurs get to deliver a pitch, then answer questions and get critiqued by a VC Partner. We’ve had VC’s from Draper Fisher,  Kleiner Perkins, Mayfield, Mohr Davidow, Emergence Capital …etc.  This time we’ll welcome Peter Morrissey, Managing Director, Hambrecht Geneva Ventures.

These breakfast meetings are a valuable opportunity for Entrepreneurs, most of whom would probably have a hard time getting through the door to VC Partners. Since I’ve been through quite a few of these sessions, both as Entrepreneur and Moderator, let me share a few thoughts:

• It’s a pressure-free environment, with no PowerPoint presentations, live demos, Business Plans…etc, just casual conversation; but it does not mean you should come unprepared!
• Follow a structure, don’t just roam about what you would like to do, or even worse, spend all your time describing the problem, without addressing what your solution is.
• Don’t forget “small things” like the Team, Product, Market..etc.
• It would not hurt to mention how much you are looking for, and how you would use the funds…
• Write down and practice your pitch, and prepare to deliver a compelling story in 2-3 minutes. You will have about 8-10 minutes, the first half of which is your pitch,  but believe me, whatever your practice time was, when you are on the spot, you will likely take twice as long to deliver your story. The second half of your time-slot is Q&A with the VC.
• Bring an Executive Summary; some VC’s like it, others don’t.
• Last, but not least, please be on time! I am not kidding… some of you know why I even have to bring this up. Arriving an hour late to a one-and-a-half-hour meeting is NOT acceptable, but we’ve had too many such incidents, so here’s a new rule:  if you’re late by more than 20 minutes, you will not be allowed to join the session.

Here’s the event info page, and please remember to register the next three Entrepreneurs get in free, contact me here.

See you in San Francisco!

Tags: entrepreneurship, startup pitch, Startups, SVASE, vc Funding, venture Capital

Reading that TechCrunch calls  Yotify  “Google Alerts on Steroids” I had great expectations… that did not last long. For now, it’s a no-go… read my quick review on CloudAve.

Related articles by Zemanta

• Yotify Launches Its "Google Alerts On Steroids"
• Concierge-Style Search Service Yotify Launches
• Stop Searching The Web - Let Yotify Do It For You
• Yotify Can’t Really Notify - Yet

Tags: concierge, google alerts, personal search, productivity, search, Startups, yotify

Are we heading into Recession?  The “Big R” talk of early this year quickly subsided, economic growth returned, the markets appeared to vindicate the optimists.  US Presidential Candidate John McCain repeatedly said the economy was fundamentally strong… until just days ago, when he quickly switched to declaring a crisis.  The Wall Street Journal says we’re in the Worst Crisis Since ’30s, With No End Yet in Sight.

I don’t claim to be an expert economist, so whether the Big R is looming is not my call – but if you believe we’re in a strong economy, I have a bridge to sell you.  Let’s just focus this discussion on how Software businesses can survive in a financial crisis, which is undeniably here.

Not all will survive, and it’s probably healthy they won’t.  Tim O’Reilly, Father-of-all-things-Web-2.0, asked the question at the Web 2.0 Expo last week:

Global warming. The U.S. losing its edge in science and technology. A growing income gap. “And what are the best and the brightest working on?” O’Reilly asked, displaying a slide of the popular Facebook application SuperPoke, which invites you to, among other things, “throw sheep” at your friends.

“Do you see a problem here?” he posed, showing another slide of the popular iPhone app “iBeer,” which simulates chugging a pint. “You have to ask yourself, are we working on the right things?”

The poster-child of the Web 2.0 boom may very well become the symbol of what went wrong:

• useless
• consumer-only
• ad-driven

Actually, the problem is not what they do, but how seriously they were taken.  Will Price, a very smart VC said long ago:

It may well be that Slide raising $55m from mutual fund companies at $500m+ pre-money will be the “what were we thinking” moment of the current cycle.

I’m glad they did not go public, at least not a lot of people will get hurt holding the bag.   But enough of what’s wrong, here’s what works:

• go where the money is, and that’s businesses (“Enterprise” vs. consumer, even if it means small business)
• deliver value – useful functionality that improves business
• charge for it – companies actually prefer to pay for reliable, good service.

The last point brings up the price issue.  Credit will dry up. Whether we’ll officially declare Recession or not, the fear of the Big R is enough for corporate budget cuts, the disappearance of any CAPEX spending. Even worse, an entire sector almost disappeared as IT buyers.  Did you know that Lehman Brothers spent over $300M on IT in just the last quarter, right before declaring bankruptcy?   How do you sell in this environment?

The after-bubble nuclear period of “no IT spending at all” found me at a startup in 2001-2003. We did not exactly hit it big, but did not go under, either, and that’s because our model allowed us to get in the door way below the threshold that would have required higher authorization. Not classic SaaS, rather SES (Software Enabled Service), we were essentially data providers and often got into an “enterprise” account at $3k for the first month … eventually ramping up to annual $60-$100K.   Anyone familiar with Enterprise Sales knows the term Economic Buyer:  typically getting involved later at the sales cycle, approving or nuking the deal.  Well, we saw no Economic Buyer: being under the threshold, we sold to the User directly.

Of course my little business is not the only proof: Salesforce.com & WebEx thrived during the last recession. The secret is the business model: pay-as-you-go.  SaaS offers lower risk to enter, no initial cash layout, the subscription fees come out of OPEX vs. CAPEX, and is often approved by the User, not the mysterious Economic Buyer.  The barrier of entry is much lower: once you’re in, it’s up to you to grow.

In fact I suspect the looming downturn will accelerate the structural changes in the software industry: SaaS players will thrive,  traditional on-premise vendors will shrink, many will disappear.

That leaves a final point to discuss: financial solvency.  For startups, it will be increasingly hard to find investors.  For larger businesses the lack of late-stage investment, the credit crunch may be a serious impediment to expansion.   Discover the beauty of bootstrapping – you actually get to do what you believe is right for your business, not what your Board tells you.  Do less, take small steps.  Frugality is key to survival.  Small is beautiful will get a new meaning.

In summary, Software businesses that combine good old business sense: frugality, spending wisely, delivering value to businesses and getting paid for it, with a new business model, SaaS are likely winners in the downturn.  The rest are playing musical chairs. (Oh, and the bridge is still available)

(This post originally appeared on CloudAve.  Keep informed by grabbing our feed here.)

Related articles by Zemanta

• Goldman, Morgan Stanley Become Bank Holding Companies as Government Tries to Pass Bailout
• Wakie Wakie Web 2.0, Daddy Says It’s Time To Earn A Living
• O’Reilly: Stop throwing sheep, do something worthy
• O’Reilly signals Free Web 2.0 party is over?
• Why it will be very different this time
• Surviving the Financial Crisis
• The Financial Crisis: A Survival Guide for Startups
• Recession Proof Software? Try SaaS, Managed Services and Open Source
• Software for the “Recession Diet”

Tags: bubble, business model, cloud computing, enterprise sales, Enterprise Software, entrepreneurship, On-Demand, recession, SaaS, salesforce.com, Software, Startups, webex

We can argue all we want about  the benefits of SaaS, discuss hypothetical use cases at length, but the best showcases are served up by real life, often unexpectedly.

A startup CEO friend asked me to take a look at his PowerPoint deck before he would send it to a VC.  (Incidentally, I don’t believe presentations should be sent in advance of a meeting:  if your deck has enough content to convey the message standalone, than it’s not a  presentation… but let’s put that aside for now.)   I agreed to help, and he fired off an email with the PPT attachment.

Too bad I could not open it.  I have MS Office 2003 on my Windows computer - that’s the last version I purchased, since moving to the Cloud, and I won’t buy an Office package ever again - and he has Office 2008 on his shiny Macbook Air.  (Standard issue for hot startup CEO’s in San Francisco?). Yes, I know there’s a converter thingie I can download from MS, but apparently I haven’t done it on this particular computer, so my friend quickly saved it for me in the older format.

I reviewed and commented on it, and as an aside noted that the fonts and the text alignment were way off on a page.  He did not see the text problem on the version I sent back.  Then came a second round of conversions and emails.  It became apparent that no matter what we do we always end up seeing different layouts - so much for the MS to MS conversion - so we just focused on content, and I sent back the revised version.  It took a while… hm, no wonder, the PPT deck that started it’s life as a 2MB file first became 5, then 7, finally 9 Megabytes.  Wow!

What an inefficient process!  Emailing multiple bloated copies of the same file, never seeing the identical version, leaving quite some footprint behind, when we could have started with an online presentation, collaboratively work on the one and only copy online, see the same and not clutter several computers with the garbage files.

I will come back to this in a minute, but here’s another benefit my CEO friend missed out on: providing the latest and greatest information.  The VC Partner he was talking to was about to to go on vacation, and she was planning to review the presentation in the next 2 weeks - who knows when.  This startup was at the time in advanced discussion with major prospects, and signing any of those deals would materially change the presentation.  Had my friend sent just a URL to the online presentation, he could have safely update it any time, and be assured that whenever the VC reviews it, she will always have the latest and greatest information.  Does this scenario ( sans the VC) sound familiar?  How many times have you hit “send” only to wish you could retract the email and replace the attachment with the correct version?  

Back to the storage footprint issue. On my count, just between my friend and myself, we generated and stored nine copies of this presentation, the last one being 9MB, up from 2.  It’s probably fair to assume a similar rate of multiplication in the process the original deck was created, between the CEO and his team.  Next he sends it to the VC, who will likely share it with several Associates in the firm, and in case there’s more interest, with other partners.  Of course my friend will send the same presentation to a few other VC firms as well, so it’s not beyond reasonable to think that there are at least a hundred copies floating around, occupying a Gigabyte of storage or more.  Oh, and I did not even consider the footprint of this presentation at ISP’s and all hops it goes through.  Not that I ever bought into IDC’s Storage Paradox, but this is clearly a very wasteful process.

All of that could be replaced with one central copy on the Web, represented by a URL. 

Oh, and the irony of all this: my friend is CEO of a GreenTech startup.

(Cross-posted from CloudAve.  Follow our CloudAve Feed for more)

Tags: bloatware, Collaboration, idc, microsoft, powerpoint, ppt, presentation, SaaS, Startups, storage

If Robert Scoble thinks he found examples of poor startup marketing (Startups: your web site sucks) he ain’t seen nothing.  How about picking a name that almost actively drives visitors away?

A few months ago Ben Kepes drew my attention to Viisibility, and I promptly called out their really poor naming:  how can they call their supply chain company Viisibility when there is already an ERP business named Visibility?

Now a friend who’s watching TechCrunch50 on site tells me he likes FairSoftware.  OK, let’s check them out… what is so innovative about Fair / Trade Show management software, and it does not even appear to be a  startup!

Hm… but Crunchbase says:

FairSoftware is the place to start and grow a virtual online business. It only takes a few clicks for software developers and website publishers to incorporate, hire and share revenue with other project members.

…

Bloggers, designers and developers can use FairSoftware to grow their business by working together online, without having to deal with the complexity and limitations of traditional corporations.

What’s wrong here?  They picked a name with only the .net domain available: fairsoftware.net .  Not too good… but perhaps not the end of the world - unless the .com version belongs to another software company.  Now it’s a disastrous choice.  Unless, of course if they already have a deal to acquire that domain.

Update: iCharts is another one with the .net domain only, but it’s by far not as bad as FairSoftware.  icharts.com does not appear to be a real business, just a parked domain whose owner is probably holding out for a high price.  Hm… will they buy it?

Related articles by Zemanta

• Robert Scoble vs Startups at Demo’08
• Robert tonight you lost that shine
• Companies: has TechCrunch 50 or Demo spurned you?
• It’s Easy to Say Startups Suck When You Have Never Started One
• Scoble Sucks
• FairSoftware virtualizes startups
• Startups pitch new tools for business
• FairSoftware virtualizes startups

Tags: branding, brands, company name, Demo, demofall, domain, icharts, marketing, naming, pr, Startups, techcrunch50

After all, those greedy Partners who stole this deal from their Limited Partners made a coupla millions each.

What do you mean they didn’t steal it?  Oh, their firm, Insight Venture Partners only does late-stage deals and Photobucket did not qualify?  Hm.. small detail, who cares?  It’s still guaranteed profit, I want in on such deals.

What?  Not guaranteed?  Are you crazy?  Oh, you mean this is what Venture Capital is all about.. you take a risk and invest in a company that could actually be a dud?  Oh, boy, now where do I make my safe millions?

And what’s all this fuss about?

Wall Street Journal, CNET News.com, Silicon Alley Insider, A VC, Valleywag, PE Hub Blog, Technology Live , Startup Chatter, paidcontent.org.

test

Tags: Humor, photobucket, Startups, vc Funding, venture Capital

Yes, I like LinkedIN, and am one of the very early users, from the early days before social networks become trendy. Simply because, unlike some of the more fashionable networks, I actually found it useful for business.

But is it worth One Billion Dollars?  Apparently it is - if you ask Bain Capital Ventures, Sequoia Capital, Greylock Partners, and Bessemer Ventures, who just invested a whopping $53M  with the even more whopping $1B valuation.  $53 million is a decent exit for some startups - but LinkedIN has about $100M in annual revenues.  Still, I really wonder what kind of stratospheric exit (IPO) valuation the current investors expect.

Or perhaps Kara Swisher is right:

Why go public when you can just pretend?

Exactly.

Update (6/18):  In celebration of entering the Billion-Dollar Club, LinkedIn is down.

Tags: ipo, LinkedIn, Social Networking, Social Networks, Startups, valuation, vc investment, venture Capital

Venture capitalists have been pouring money into “clean technology” companies - $2.2 billion in 2007, an increase of 46% over 2006. Why are VCs making so many long-term, capital-intensive bets? Which technologies will be world-changing, and which will be duds?

In living proof that there is life outside the Palo Alto / Menlo Park proximity, SVASE will host a VC Panel on investing in Green Tech tomorrow at the Crow Canyon Country Club, in Danville, CA.  (A very green venue for a Green Event).

The panelists are:

• Marianne Wu, Partner, Mohr Davidow Ventures
• J. Christopher Moran, Vice President, General Manager, Applied Ventures
• Paul Chau, Partner, WI Harper
• Peter Henig, Managing Partner, Greenhouse Capital Partners
• Mark Harris, Relationship Manager, Silicon Valley Bank

Agenda:
6-6:30 pm: Networking and Hors D’oeuvres
6:30-8 pm: Panel discussion and Q/A

For details see the SVASE site, or head straight to registration.

See you there!

Tags: entrepreneurship, Startups, SVASE, vc investment, venture Capital