Friday, March 30, 2007

Start-Ups to Watch

This weeks edition of Business-today listed start-ups to watch .In this article they listed following then companies.


24X7 LEARNING SOLUTIONSVirtual University
NAME OF COMPANY: 24x7 Learning Solutions
YEAR OF FOUNDING: 2001
FOUNDERS: Karthik K.S. & Anil Chikkara
AREA OF OPERATION: E-learning
FUNDING: KITVEN and Anil Garg; to raise $10 million over two years
REVENUE: $3 million
SIZE OF TARGET MARKET: Globally $28 billion; In India, Rs 350 crore
KEY COMPETITORS: IBM, Sum Total, Gurukul Online, NIIT, Aptech and Blue Apple


NAME OF COMPANY: Adventity
YEAR OF FOUNDING: July 2003; Commenced operations in January 2004
FOUNDERS: Kumar Subramanian, Ulhas Deshpande, Niket Patankar, Jagdish Iyer and Vivek Arora
AREA OF OPERATION: BPO/ KPO
FUNDING: Undisclosed 'steel and plastics' group in India ($10.5 million), Norwest Venture Partners ($20 million)REVENUE: Roughly $25 million
SIZE OF TARGET MARKET: $17 billion (just the KPO bit)
KEY COMPETITORS: Amba Research and B2K Corporation


NAME OF COMPANY: Drishtee Development & Communication Limited
YEAR OF FOUNDING: 2000
FOUNDERS: Satyan Mishra, Nitin Gachhayat and Shailesh Thakur
AREA OF OPERATION: Provides ICT (information, communication & technology) services to rural India
FUNDING: Acumen holds a 25 per cent stake for which they paid $1 millionREVENUE: Rs 3.87 crore for 2005-06
SIZE OF TARGET MARKET: Currently caters to 300,000 customers. Target market is whole of rural India, which is 650 million people
KEY COMPETITORS: ITC's e-choupal

NAME OF COMPANY: Guruji.com
YEAR OF FOUNDING: 2006
FOUNDERS: Anurag Dod and Gaurav Mishra
AREA OF OPERATION: SearchFUNDING: $7 million, Sequoia
REVENUE: N.A.
SIZE OF TARGET MARKET: $20 million*
KEY COMPETITORS: 123India.com, Justdial.com, Khoj.com*Current search market for search queries originating from India

NAME OF COMPANY: JiGrahak
YEAR OF FOUNDING: 2003
FOUNDER: Sourabh Jain
AREA OF OPERATION: M-commerce
FUNDING: $ 2.2 million, Hellion Ventures
REVENUE: N.A.
SIZE OF TARGET MARKET: N.A.
KEY COMPETITORS: Paymate, mChek

NAME OF COMPANY: Asia Cryo-Cell
YEAR OF FOUNDING: June 2004
FOUNDER: S. Abhaya Kumar
AREA OF OPERATION: Private Banking of cord blood; research and therapy applications using cord blood
FUNDING: Rs 20 crore, largely by Abhaya Kumar; remainder from investors like P.S. Pai and other individuals
REVENUE: Rs 15 crore
SIZE OF TARGET MARKET: N.A.
KEY COMPETITORS: Reliance Life Sciences; Karnataka Cryogenic; Cord Life

NAME OF COMPANY: Nautanki.TV
YEAR OF FOUNDING: November 2006
FOUNDERS: Sunil Nair, Vikram Prabhu and Herumb Khot
AREA OF OPERATION: Online TV channel
FUNDING: Rs 1.5 crore from founders and two investment bankers in their personal capacity
REVENUE: Advertising revenue approximately Rs 12 crore by March 2008 ( first full-year operation)
SIZE OF TARGET MARKET: Internet advertising market in India to be Rs 750 crore by 2009-10 (source: PwC)
KEY COMPETITORS: None yet

NAME OF COMPANY: Onyomo
YEAR OF FOUNDING: January 2006
FOUNDER: Shailesh Mehta
AREA OF OPERATION: Person to Application (P2A) segment of mobile value-added services, including SMS sent by end users for contests and for seeking other information
FUNDING: Shailesh Mehta and IIT Delhi (in talks with VC and PE investors for large funding) REVENUE: Won't reveal before the commercial launch
SIZE OF TARGET MARKET: Rs 428 crore for 2006 (source: IAMAI)
KEY COMPETITORS: Ziva Software, Bangalore

NAME OF COMPANY: Seventymm
YEAR OF FOUNDING: 2005-commercial operations started in March 2006
FOUNDER: Raghav Kher
AREA OF OPERATION: Organised movie rental-part of the home video segment
FUNDING: Initial funding from Draper Fisher Jurvetson ($2 million) and second round led by Matrix Partners India ($7 million)
REVENUE: N.A.
SIZE OF TARGET MARKET: Home video market Rs 2,100 crore by 2009-10 (Ficci-PwC 2006 report)
KEY COMPETITORS: Mad House and Clickflix

NAME OF COMPANY: UFO MoviezY
EAR OF FOUNDING: 2005
FOUNDERS: Raaja Kanwar and Sanjay Gaikwad
AREA OF OPERATION: Digital cinema
FUNDING: Initial funding of Rs 100 crore from Apollo Group and second round of Rs 100 crore from private equity firm 3i
REVENUE: First full-year operations 2007-08-Rs 100 crore
SIZE OF TARGET MARKET: Rs 10,000 crore by 2009-10
KEY COMPETITORS: Only player in the market


There are some surprises. There are some unknown or lesser known names while some better known start-up like Makemytrip, TravelGuru,Zoho etc are missing.

I

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Thursday, March 29, 2007

Entrepreneurial Proverbs

Internet is such a wonderful thing!!!!!!!!!!!!!!! Every day you find some "food for thought", something that stimulate our mind .Today I got these pears of wisdom by Marc Hedlund.

I am going to take printout of it and paste it on my walls.

Starting

It's good to be king -- being an entrepreneur is the best job I've had. Every day your job is new and different; you constantly have to push yourself in new directions. You no longer have to say, "Well, I'm just an engineer, but..." -- you have a great excuse to take an interest in everything. Working in an environment you shaped to your own beliefs about how a company should be run is incredible (and humbling!). And of course there are sometimes financial rewards, although it's still a great job regardless.

Losing sucks -- shutting down a company is unbelievably difficult. It affects your home life, your health, your job prospects, your financial stability. Professional investors are grown-ups, but it's still extremely disheartening to lose the money people invested based on belief in you. If your backers include friends or family, it's extremely difficult to have to tell them the company is closing and their money is gone. Most entrepreneurs fail several times before succeeding, too, so losing is both terrible and nearly inevitable. Fight as hard as you can against it.

Building to flip is building to flop -- this is taken from Jason Fried, and he's right. People who start out with only one goal, to sell to a big portal, will find their options are too limited. Plan as many paths to success as possible for your company, and always have a Plan B when acquisition (or whatever path you choose first) doesn't work.

Prudence becomes procrastination -- it's great to research your market and talk to potential buyers about your ideas. It's terrible to let an excess of this become a impediment to getting started. Too much prudence edges away from research and into procrastination.

Momentum builds on itself -- just start. Do whatever you can. Draw a user interface. Write a spec. Make something, anything, that people can see and touch and try. A prototype is worth ten thousand words. Once you start moving, you will find that people start to carry you along.

Jump when you are more excited than afraid -- lack of fear is irrational, and too much fear is debilitating. Make the jump into your business when you have considered the fear, and come out more excited than afraid.

The Idea

Pay attention to the idea that won't leave you alone -- this is taken from Paul Hawken's Growing a Business. Sometimes an idea catches hold of you and you find you can't put it down. Pay attention to that! Just start working on it. Can't get yourself to do anything on it? Move on. Find yourself waking up out of bed to write down new ideas about it? That's a good one to choose.

If you keep your secrets from the market, the market will keep its secrets from you -- entrepreneurs too often worry about keeping their brilliant secrets locked away; we should all worry much more about springing a surprise on a disinterested market (anyone remember the Segway?). To quote Howard Aiken: "Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats."

Immediate yes is immediate no -- does everyone immediately tell you your idea is great? Run away from it. If the idea is that obvious, the market will be filled with competitors, and you'll find yourself scrambling. One good test: when the New York Times Magazine puts out its annual "Year in Ideas" issue, is your idea in it? Then don't do it. You're already too late.

Build what you know -- this is the most basic advice of idea generation: scratch an itch you have yourself. To make a great company, stop and ensure that your need is broadly felt, and that your solution is broadly applicable -- not everyone spends their life in front of a computer, remember.

Give people what they need, not what they say they need -- interviews are tricky. People will swear up and down that they would buy a product you describe if only it were available, and then fail to do so as soon as it is. Likewise, in conversation an idea can sound terrible, but in actualization the idea can become a compelling product. You have to sherlock out the truth of the interest people express, and "yes/no" questions are usually less useful than "how much" or "how bad" questions.

Your ideas will get better the more you know about business -- engineers hate to hear this, but you can generalize up quite far from here: the more you know about everything, the better all of your ideas will get! If you want to start a business and your strength is in development, learning about pricing, sales, marketing, finance, and yes, even HR, all of it will make your product ideas stronger and better.

People

Three is fine; two, divine -- having too many co-founders makes decisions hard to reach; if you're on your own, you have to bear all of the stress and worry about the success of the company. In my judgment, three people can do well together, but having two founders is best.

Work only with people you like and believe in -- I once heard Eric Schmidt say something along the lines of, "The older I get, the more I think all that matters is working with people you like." If you're smart and talented, you're probably going to like a lot of smart and talented people. Working with people you like is so much more fun, and often more productive, than fighting against someone who may be smart and talented but just isn't a great fit for you.

Work with people who like and believe in you, just naturally -- maybe you are very persuasive, and can talk people into working with you against their better instincts. Especially for co-founders and early employees, don't try that hard. Find the people that naturally want to work with you, and nudge them into the roles where you need them. You'll have more fun and get more done.

Great things are made by people who share a passion, not by those who have been talked into one -- a corollary of the last; you can spark a passion in someone, but you can't do it without some fuel to catch. Better to wait, and find the person who is already inclined to believe in your cause. You may talk someone into co-founding a company with you, but will they stick with it through ups and downs if they had to be persuaded that hard?

Product

Cool ideas are useless without great needs -- this is the classic engineers' entrepreneurial mistake (or at least I'd like to think so, since I've made it). Techies love tech, and a new technology can produce a lot of companies that don't really meet a need. Better to start with the need, and then see how what you know can produce a better answer to that need. (Marketers tend to have the opposite problem: real, pressing needs with completely unworkable solutions.)

Build the simplest thing possible -- engineers have the hardest time with this, with not overdesigning for the need they're addressing. Make the simplest possible product that makes a significant dent in that need, and you'll do far better than you would addressing two or three needs at once. Simplicity leads to clarity in everything you do.

Solve problems, not potential problems -- you can waste a lot of money implementing solutions for problems you don't have yet, and may never have. Work on the biggest, most pressing problems today, and put aside everything else.

Test everything with real people -- it's unbelievable how helpful this is. Go find civilians, real people who use computers because they have to and not because they love to. Find them in Starbucks, or at the library, or in a college computer lab. Give them $20 for 20 minutes, and you'll be paid back a hundred times over.

Money

Start with nothing, and have nothing for as long as possible -- small budgets give big focus (probably another line I'm stealing from Jason Fried: it sounds like something he'd say...) Don't go out and raise a ton of money right away. Instead, give yourself just enough to get going, and use the limits that imposes to motivate yourself.

The best investor pitches are plainspoken and entertaining (not in that order) -- think about what this implies. A plainspoken pitch is the surface of a very solid business. If you have to fudge and lie to get investors interested, why is that? If you're running a great business, it is not hard at all to lure investors into it; the worse your business, the bigger (and more odious) your fundraising task is. Entertaining implies a fun person to work with, and VCs like working with people they like as much as the rest of us do. If you don't bring the funny, bring the person who brings the funny.

Never let on that you're keeping a secret -- telling an investor "I don't want to talk about that" is terrible. It's the natural converse of being plainspoken. It's good to be aware, though, that some potential investors will listen to you and then share your information with your direct comptitors, and not always because they're invested in those comptetitors. Knowing that, you have to keep some secrets -- but be as diplomatic about that as possible. Respond to the idea behind the question, without giving away more than you feel comfortable discussing. Learn to steer the conversation in the way you want it to go. And then give up more information as you become more comfortable with the potential investor.

No means maybe and yes means maybe -- you should never take a "no" from someone you want to work with. Accept the no, ask for feedback, and then just keep sending them updates on how much butt you're kicking in the market. During one company, three of the five term sheets I collected came from VC firms that told me "no" originally. Conversely, though, the only money in the bank is actual money actually in the bank. Everything else is just a possibility, and you have to treat it as such. Don't stop fundraising until you have a firm commitment for the funding you need, and don't accept halfway promises like, "We'll fund you if another firm comes in." Keep on driving until the wire transfer is complete.

For investors, the product is nothing -- the classic engineer's VC pitch has ten slides about the product and two about the academic achievements of the founders. That's a terrible pitch. One slide should be about the product, while the rest cover the market, competitors, financials, funding history, and the relevant experience of the team. The product matters far less to most investors than the reactions of customers, the properties of the market, and the credibility of the team. Obsess about the product on your own time; present your business in all of its parts.

The best way to get investment is not to need it* -- if you have a running business with real customers and you're paying all your bills, you are much more likely to get a funding round than if you need the round in order to survive or succeed. The pitch that goes, "We could accelerate our growth with more money" is much more compelling than, "I need your money or our doors will close."

I'm sure other people have their own rules of thumb; what are yours?

Wednesday, March 28, 2007

Entrepreneurial Thoughts

Here are some of entrepreneurial thoughts by Joe Ollivier, First Capital Development.


It has to be a business that gives you an emotional high.

Avoid any business that is labor or inventory intensive.

Have independent market research done on the feasibility of your idea, then do test markets.

Don't think someone is waiting to steal your idea, it's paranoia.

Don't get started on a real business until you have someone (wife, husband, family member) who will listen to your dreams, sympathize with your failures and applaud your successes.

Never involve yourself in any service or product that requires a consumer attitude change.

Don't invest on home run schemes - invest in what you like and know.

Find a lifelong mentor as soon as possible. Have him continually play devil's advocate.

Have an exit point or harvest plan to cash out of each business you start.

Do a self awareness training. You are not your business, your background or your personal financial statement.

Pick a charity (other than a religious one) or a charitable activity where you have nothing to gain, and work at it every year.

Do some charitable acts each year in secret.

Keep a notepad next to your bed at night - some of your best thoughts will come during the night.

Get a week-at-a-glance planner. Each weekend make our a 3x5 notecard of activities you want to accomplish.

You don't need to keep 51% to control your company.

Find an aggressive banker and CPA, send them referrals and Christmas presents.

Be willing to take major risks, but be aware of risk versus reward. Don't ever even think about taking out Bankruptcy.

Have someone else do all your serious negotiating for you.

Have the attitude that everything that happens to you in your life is your own personal responsibility; you are never a victim.

Remember that you will learn much more from your mistakes and failures than your successes.

Trust everyone, but be aware that most people shade the facts and lie part of the time.

Live in the nicest, most expensive house you can. It will alter your view of yourself and the way others view you.

Remember that with each successful venture there was a time when the entrepreneur wished he was not involved.

Expect to be sued - it's normal - have the attitude that it's the person who's suing that has the problem.

Never sue unless there is real estate that can be attached.

Expect to become wealthy - do a financial statement on yourself each quarter.

Realize that money is power and can be used for great good.

Being an Entrepreneur means more than buying yourself a job. You need a salary to live, a return on your investment and a monetary reward for your risk.

In every entrepreneurial activity you enter make sure it's: 1. Fun and Interesting, 2. You are going to learn something, and 3. You add value.

Realize that business is really just a monetary game, and the things that mean the most -your character, your family, your own values, and your beliefs- are unaffected regardless of the outcome.

Tuesday, March 27, 2007

Red Herring 100 Asia

To celebrate the most innovative technology companies in the Asia Pacific region at Red Herring conducting Red Herring 100 Asia, August 29-31 in Hong Kong, China. Now in its third successful year, this high-profile event honors 100 cutting edge private technology companies from China, India, Japan, Singapore, Korea, Australia and Vietnam. Red Herring 100 Asia brings together an elite roster of entrepreneurial and global venture investment firms to showcase excellence in innovation.Asia’s top 100 startups from 2007 will be spotlighted, and many of their CEOs will share winning strategies in special keynote presentations. This event is a premier opportunity to exchange information and ideas, delve deeper into key topics, and network with peers and viable business partners

So if you think your compnay is working on some cutting edge technology and you want to talk about your technology and compnay I guess its a great plateform.

Apply here:http://www.herringevents.com/asia07/index.html

All the best!!!!!!!!!!!!!!!!!!

Friday, March 23, 2007

Web 2.0 Business Models

This is a comment from Michael Eisenberg blog sixkidsandafulltimejob.blogspot.com. I am very much impressed with the bravity of the comment. he is spot on.

"I am just back from a "cool web 2.0" IDB event (see http://www.ibdnetwork.com/index.php?option=content&task=view&id=156) Many companies presented, and the most common question from the panelists was "what is your business model". The ubiquitous response was "premium services and advertising" (PS&A). The audience did not buy this - at some point, when yet another cool web 2.0 entrepreneur responded PS&A, many in the audience actually laughed out. Smart crowd, I guess. You need substantial volume on your site in order to derive significant revenue from advertising. Most of these web 2.0 are one feature built around cool technologies – hard to believe they will drive enough traffic to support a substantial business. Premium services are even trickier – you must find an add-on service which is at least as useful as your basic free service. Plaxo, LinkedIn and the like did not figure that one out for years – and may never figure this out."


And for this comment i find another interesting comment there:
Right now, the internet market is a mess - full of customers who have no money and companies that do little but swallow the industry status quo (make everything free); hook, line and sinker. That said, the picture is more complicated and it may be the nature of the internet market it self that stops people building proper (as in, old fashioned) businesses.

Really, what we've just gotta see a proper fragmentation in the supply side of the market. We've gotta see companies sell premium quality services at premium prices - rather than having a homogeneous market of suppliers who commoditize each other.

A proper market has to be layered, as delimited by pricing different strategies between discount, at market and premium suppliers.

Of course, it wouldn't hurt if the majority of consumer internet weren't pennyless college kids (not that there is anything with that).

Now, on the contrary, trying to move away from marketing free software may be more of a problem that first seems. Basically, why on Earth should I try to build a real business (i.e. sell something) if in 12 months, what ever I am selling is gonna be technologically obsolete....



I think who ever imagines that any internet startup existing today will survive for even the next 5 years must be kidding them selves. After all, this is the software business and innovation around here happens a lot faster than I can restructure my product line.So what do I do if I just don't have the time to grow organically, charge through the roof and build sales teams etc....?Well...that's what happens, I take the next best option, do a bit of gambling and spell it out and clear that my business model is rolling dice in the hope of capital gains.

I know, sounds crazy....but is it really?

Thursday, March 22, 2007

How to Build a Web 2.0 Technology Startup

I find this pithy artical on net. Its quite relevent and to the point.


The recent wave of Web 2.0 technology products is an indicator of today’s entrepreneurial vitality. Log onto Techcrunch, and you’ll likely see new several startups forming every day. Yet, there’s one continual theme you notice in every Web 2.0 startup: most technology startups haven’t opened their doors for the public.

Worse, grand opening announcements won’t come until several months later–if even that.
The problem with starting late? It delays those Web 2.0 startup companies from laying firm foundations for their companies. No, not their products, but the intangibles: professional connections, public inquiries, media relations, and whatnot. Most importantly, it stalls cultivating relationships with initial customers.

What should you do if you’re starting a Web 2.0 technology startup? If you’re planning on building an actual business, and not just selling out a product, here’s what we recommend:

Seek passion first. Profits, second.

Stop what you’re doing (or what you plan to do). Are you passionate about it? Do you live and breathe the idea, as if you were born to do it? It’s not just an opportunity, is it? The biggest crime we see entrepreneurs make involves jumping from opportunity to opportunity, thinking the next great idea exists in a specific industry. Then they fall prey to what we see as the entrepreneurial trap: they jump shark to the next “great” opportunity. Who can blame them? Sophomoric business books flaunt market opportunity.

Here’s two reasons why that’s total BS: First, what if a “greater” opportunity comes up afterward? You know it’ll happen. Will you jump shark? Probably.

Second: jumping from the next “great opportunity” will never augment your strengths. You’ll continually go to and fro, never finding a clear sense of direction, never building on top of the foundation you’ve pieced together. Instead, you’ll be like a bungling contractor — having good skills in various areas, but never seeking greatness.

Greatness lies not in finding and profiting from a great opportunity. Greatness lies in continually, repeatedly, and consistently enhancing your strenghts.

Michael Jordan wouldn’t be the most envious athlete if he had jumped over to Boxing in the 70s, Roller Derby in the 80s, Indy Racing in the 90s, and Poker in the 2000s. You shouldn’t jump at the next great opportunity as well.

Instead do this: Where does your passion lie? After living a good number of decades on this planet, a passion of some sort is already ingrained in you. Cultivate it.
Once you seek your passion, you’ll find new and greater opportunities popping up. Paradox indeed. Harvard’s Amar Bhide contends about successful startups: “once they are in the flow of business, opportunities often turn up that they would not have seen had they waited for the big idea.”

If you’re not passionate about what you do, you’re in the wrong line of business.
First, find your passion. Then, start building.


Start early. Get something out.

Once you find your passion, do something that relates to it that can give you good and steady cash flow.
Forget business plans. Forget finding the “perfect” idea. Instead, see cashflow as the king of your new Web 2.0 company. It’s your startup’s blood, and only source for survival. Most startups forget this. They believe they’ll wait until their final product comes to fruition, and then reap rewards.

The brutal facts? It’s far less than 5% likely that the product will achieve what the founder envisioned. Most startup businesses that succeeded, as a Harvard study indicates, didn’t leave all their eggs in one basket. Instead, they experimented with smaller projects. Once those succeeded, they exploited the momentum by building higher-cost products. The important cashflow, of course, kept them afloat.

Harvard’s Amar Bhide: “Get operational quickly. Bootstrappers don’t mind starting with a copycat idea targeted to a small market. Often that approach works well. Imitation saves the costs of market research, and the start-up entering a small market is unlikely to face competition from large, established companies.”


Forget being perfect.

You will fail. That’s okay. As you’re starting your Web 2.0 Startup, know this: Perfection kills progression. Failures fuel creativity; that is, of course, you don’t give up. Learn to fail. Failing is good. It drives you to understand where possibilities and opportunities exist.
For every major success you see, the media forgot to report the one thousand failures from the same person. While other Web 2.0 entrepreneurs are fearing failures and quitting because of it, you’re not. You see failures as a natural part of building a startup. You see failures as something others don’t: a driver to that next successful product.

Experiment!

If you forget perfection, you’ll open your doors to experimentation — the secret sauce for the most innovative companies. In the business world, you’ll learn that you can’t plan for anything. A million-dollar idea (in your mind, anyway) could very well bomb.

Media reports hailed the Segway as the next great thing. It was supposed to transform roads. It didn’t. It sucked, and venture capitalists no doubt regret their blunders. On the flipside, an invention appearing out of the blue might — just — net you a million dollars. Think eBay, Yahoo, Google, etc. etc.. The point? Ideas aren’t formed from thoughtful analysis. It’s formed from experimenting, and trying different things.

Learn to use the law of probability to help you.
Say one product has a 10% success rate. Then, getting one success out of two experimental products is 32% (i.e. 10% * 10%). Five experiments? 63%. The more you experiment, the greater your chance for success.

Forget product features. Seek purposeful innovation.

Having fun experimenting with all the new Web 2.0 features? Stop! Forget tagging, curvy corners, AJAX and all the other BS just for the sake having them. Just because others are doing it. Just because they say it’s essential for Web 2.0. Just because.
Technology products are built for humans. If you want to build the next great Web 2.0 product, ignore what people are doing on TechCrunch. Instead, spend your time understanding the human brain. Know people’s motivations. Understand their desires.
Abraham Maslow. That’s a start.Once you understand humans, you’ll understand precisely what Web 2.0 features you’ll need for your intended product.You will not see the next great technology company as the most innovative user of Ruby on Rails. Instead, the next great Web 2.0 Technology Startup will understand and cultivate human desires.

Cultivate early customers.

A Web 2.0 Technology Startup without a blog is a startup without a compass. Like Magellan, you’ll need a direction to steer your company. A blog helps you cultivate your first customer relationships, gives you important feedback on product wants/not-wants, and quickens the product development process.
Sure, you can get by without a blog. But, understand that every company needs its early adopters. We’ve found blogs to be the best way of doing that.

Have fun.

Yeah, all too-good-to-be-true success stories tell you to have fun. And, we’re not arguing with that sentiment. We feel entrepreneurs have the most exciting and adventurous career paths. It should also be the most enjoyable.

Please, have fun!

One final thought: In one hundred years, you won’t take your Web 2.0 startup money with you. Start leaving an imprint, a legacy that continually affects and consistently improves the lives of your surrounding communities.
And, world.
Word to your mother.

What to look for in an Internet investment

Nisan Gabbay of startup-reviews listed leading indicators for potential success in consumer internet start-up . Its gives us a very fresh and convincing prespective.

Product that fits the needs of an underserved niche

Conceptually this is pretty easy to understand, so I’m probably not providing an earth-shaking insight here. However, a company that has truly unearthed a market need that isn’t being met by other services and delivers upon that need with the right feature set and value proposition represents the best opportunity for an Internet start-up today. I think that the venture community tends to underestimate the potential of niches to transform themselves into the mainstream plays, which explains why companies like eHarmony, Newegg, Zappos, and Betfair were not backed by top tier VC firms until after they had proven their success.

Strong ability to leverage natural search as the primary means of user acquisition

I think this is probably the most under recognized opportunity area for Internet entrepreneurs and investors today. It is no secret that search engines, and Google in particular, have become the gateway to the Internet. Search query volumes continue to grow at a fantastic clip, and as such offer one of the best ways to acquire users at no cost. It is particularly appealing to start-ups, because search neutralizes the need for brand recognition.


Any company that can demonstrate an ability to achieve high natural search rankings for a high volume of search terms stands a good chance to become a success on some level. Recent examples here include Yelp and Digg, both of whom owe a great part of their success to natural search. In the case of Digg it was inbound linking from tech bloggers and for Yelp the production of a massive amount of searchable, local user-generated content that did not exist before.

Service that empowers people to make a living

Every Internet service needs power users, and I would argue that the best type of power users are those that have a vested personal financial interest in the success of that Internet service. There is probably no better example of this than eBay and the legion of people who earn either a full or partial salary from their eBay activities. iStockphoto is another good example, enabling semi-professional photographers access to the stock photography market, and some supplemental income for themselves. An emerging example is uShip, a company that is transforming the freight services market by leveling the playing field for sole proprietors.

Free (or near free) alternative for a previously high cost service

Again, not an amazing insight, but one that has been time tested on the Internet and hence I feel is worth re-iterating. Really this is just another way of framing the value proposition. Some good examples of this include Greenfield Online, the pioneer in online market research, Craigslist as a free alternative to classifieds, and iStockphoto for near-free expensive stock photography.

True viral distribution potential

A viral Internet service is one where each new user must involve friends to derive personal value from the service. This is best exhibited by communication and hyper-social services. Telling a friend is not an option; it is a necessity in order for the user to derive value from the service. Although it is easy to incorporate viral feature sets into any Internet service, actually getting users to utilize these features is quite hard unless they recognize the value they personally and immediately will receive by involving friends. Thus, while many Internet start-ups will claim to rely on viral marketing, only a select few will actually qualify as truly viral services.

Ability to jumpstart user acquisition through distribution partnerships

Having a distribution channel to jumpstart user acquisition isn’t a requirement, but it does increase the likelihood of success. Skype was able to acquire its first 500,000 users by being bundled with Kazaa. MySpace migrated users over from a dating service (CupidJunction) and made heavy use of database marketing. Bebo marketed to the install base of its established, sister property BirthdayAlarm.com. Even Digg launched via a TV show that reached 100,000+ of its target users (tech enthusiasts). As a counterpoint, successful services like Flickr, Craigslist, Piczo, RockYou, Xfire, and countless others did not benefit from proprietary distribution.

Story that lends itself to mainstream PR

Although many will claim the death of mainstream PR in Web 2.0, I would claim that it is still a key ingredient to achieving scale and mainstream adoption. Thus, companies that have the potential to be good PR stories after achieving some initial success, have a much greater likelihood of being break-away successes. The truth is, some services are sexy and make for good stories, whereas others do not. Companies like Hotornot and Craigslist made for great stories, and thus received massive amounts of press attention. More recent examples include MySpace, YouTube, and Zillow. Mainstream PR cannot provide the spark, but it can fuel the fire in a big way

Capital requirements of web2.0 start-ups

Here is VC's prespective on web2 start-up cost.

http://avc.blogs.com/a_vc/2006/12/web_20_is_a_gif.html

A Brief History of Hard Work, Adjusted for Risk

Seth Gobin wrote this intersting article on "hardwork" and its meaning in new economy.I find it quite amusing find it a good read.


Your great-grandfather knew what it meant to work hard. He hauled hay all day long, making sure that the cows got fed. In Fast Food Nation (Houghton Mifflin, 2001), Eric Schlosser writes about a worker who ruptured his vertebrae, wrecked his hands, burned his lungs, and was eventually hit by a train as part of his 15-year career at a slaughterhouse. Now that's hard work.

The meaning of hard work in a manual economy is clear. Without the leverage of machines and organizations, working hard meant producing more. Producing more, of course, was the best way to feed your family.

Those days are long gone. Most of us don't use our bodies as a replacement for a machine -- unless we're paying for the privilege and getting a workout at the gym. These days, 35% of the American workforce sits at a desk. Yes, we sit there a lot of hours, but the only heavy lifting that we're likely to do is restricted to putting a new water bottle on the cooler. So do you still think that you work hard?

You could argue, "Hey, I work weekends and pull all-nighters. I start early and stay late. I'm always on, always connected with a BlackBerry. The FedEx guy knows which hotel to visit when I'm on vacation." Sorry. Even if you're a workaholic, you're not working very hard at all.
Sure, you're working long, but "long" and "hard" are now two different things. In the old days, we could measure how much grain someone harvested or how many pieces of steel he made. Hard work meant more work. But the past doesn't lead to the future. The future is not about time at all. The future is about work that's really and truly hard, not time-consuming. It's about the kind of work that requires us to push ourselves, not just punch the clock. Hard work is where our job security, our financial profit, and our future joy lie.

It's hard work to make difficult emotional decisions, such as quitting a job and setting out on your own. It's hard work to invent a new system, service, or process that's remarkable. It's hard work to tell your boss that he's being intellectually and emotionally lazy. It's easier to stand by and watch the company fade into oblivion. It's hard work to tell senior management to abandon something that it has been doing for a long time in favor of a new and apparently risky alternative. It's hard work to make good decisions with less than all of the data.

Today, working hard is about taking apparent risk. Not a crazy risk like betting the entire company on an untested product. No, an apparent risk: something that the competition (and your coworkers) believe is unsafe but that you realize is far more conservative than sticking with the status quo.

Richard Branson doesn't work more hours than you do. Neither does Steve Ballmer or Carly Fiorina. Robyn Waters, the woman who revolutionized what Target sells -- and helped the company trounce Kmart -- probably worked fewer hours than you do in an average week.
None of the people who are racking up amazing success stories and creating cool stuff are doing it just by working more hours than you are. And I hate to say it, but they're not smarter than you either. They're succeeding by doing hard work.

As the economy plods along, many of us are choosing to take the easy way out. We're going to work for the Man, letting him do the hard work while we work the long hours. We're going back to the future, to a definition of work that embraces the grindstone.

Some people (a precious few, so far) are realizing that this temporary recession is the best opportunity that they've ever had. They're working harder than ever -- mentally -- and taking all sorts of emotional and personal risks that are bound to pay off.

Hard work is about risk. It begins when you deal with the things that you'd rather not deal with: fear of failure, fear of standing out, fear of rejection. Hard work is about training yourself to leap over this barrier, tunnel under that barrier, drive through the other barrier. And, after you've done that, to do it again the next day.

The big insight: The riskier your (smart) coworker's hard work appears to be, the safer it really is. It's the people having difficult conversations, inventing remarkable products, and pushing the envelope (and, perhaps, still going home at 5 PM) who are building a recession-proof future for themselves.
So tomorrow, when you go to work, really sweat. Your time is worth the effort.

Wednesday, March 21, 2007

Seths godin's The realistic entrepreneur's guide to venture capital

Optimism is a key to success, but it doesn't necessarily work so well when it comes to VC. Because this is a cottage industry with thousands of players, all with different objectives, it's very easy to keep knocking on doors, just waiting to find the right match. It's also easy to spend a year or more adjusting your business to what each VC asks for ("bring me the broomstick of the wicked witch!" while you could have been out there building a real organization.)
Here are a bunch of conditions that you ought to take seriously before you invest the time and the energy to track down outside money for your great idea:


1. Investors like to invest in categories they've already invested in. If your business is so new that it's never been tested before, or is in a category VCs hate, think twice.

2. Investors want you to sell out. As soon as possible. For as much as possible. They have no desire to own part of your company forever.

3. Investors want to invest in a project that's tested. If you can't make it work in the 'small', why do you think it'll work when it's big?

4.Being a little better than the market leader is worthless.

5.Investors don't want you to use their money to cover your losses. They want you to build an asset (a patent, an audience, channel relationships) that's actually worth something.

6.Investors want someone to run your company who has successfully run a company before.

7.Investors want to be able to come to one of your board meetings and still make it home in time for dinner.

8.VCs like curves more than they like cliffs.

9.There are actually very very few business problems that can be solved with money.

10.You will probably have to replace many of your employees if you raise money from someone.
11.VCs understand that being the best in the world (#1) is the place with the biggest rewards, so it's unlikely they will settle for any performance (even a profitable one) that puts you in second or third place.

12.VCs are very smart and very connected, but they're smart enough to know that their connections and their insights can't fix a broken business.

13.Investors are very focused on the company, not you. They're not interested in having you take out your original investment or paying you a large salary as profits go up.

14.Business plans are bogus. The act of writing one is critical, but no one is going to read more than three pages of what you write before they make a decision.

15.The companies that VCs most want to invest in are the companies that don't need their investment to survive.

Ten Rules for Web Startups

A few friends and colleagues have linked to Evan William's Ten Rules for Web Startups.Its a good read

#1: Be Narrow

Focus on the smallest possible problem you could solve that would potentially be useful. Most companies start out trying to do too many things, which makes life difficult and turns you into a me-too. Focusing on a small niche has so many advantages: With much less work, you can be the best at what you do. Small things, like a microscopic world, almost always turn out to be bigger than you think when you zoom in. You can much more easily position and market yourself when more focused. And when it comes to partnering, or being acquired, there's less chance for conflict. This is all so logical and, yet, there's a resistance to focusing. I think it comes from a fear of being trivial. Just remember: If you get to be #1 in your category, but your category is too small, then you can broaden your scope—and you can do so with leverage.

#2: Be Different

Ideas are in the air. There are lots of people thinking about—and probably working on—the same thing you are. And one of them is Google. Deal with it. How? First of all, realize that no sufficiently interesting space will be limited to one player. In a sense, competition actually is good—especially to legitimize new markets. Second, see #1—the specialist will almost always kick the generalist's ass. Third, consider doing something that's not so cutting edge. Many highly successful companies—the aforementioned big G being one—have thrived by taking on areas that everyone thought were done and redoing them right. Also? Get a good, non-generic name. Easier said than done, granted. But the most common mistake in naming is trying to be too descriptive, which leads to lots of hard-to-distinguish names. How many blogging companies have "blog" in their name, RSS companies "feed," or podcasting companies "pod" or "cast"? Rarely are they the ones that stand out.

#3: Be Casual

We're moving into what I call the era of the "Casual Web" (and casual content creation). This is much bigger than the hobbyist web or the professional web. Why? Because people have lives. And now, people with lives also have broadband. If you want to hit the really big home runs, create services that fit in with—and, indeed, help—people's everyday lives without requiring lots of commitment or identity change. Flickr enables personal publishing among millions of folks who would never consider themselves personal publishers—they're just sharing pictures with friends and family, a casual activity. Casual games are huge. Skype enables casual conversations.

#4: Be Picky

Another perennial business rule, and it applies to everything you do: features, employees, investors, partners, press opportunities. Startups are often too eager to accept people or ideas into their world. You can almost always afford to wait if something doesn't feel just right, and false negatives are usually better than false positives. One of Google's biggest strengths—and sources of frustration for outsiders—was their willingness to say no to opportunities, easy money, potential employees, and deals.

#5: Be User-Centric

User experience is everything. It always has been, but it's still undervalued and under-invested in. If you don't know user-centered design, study it. Hire people who know it. Obsess over it. Live and breathe it. Get your whole company on board. Better to iterate a hundred times to get the right feature right than to add a hundred more. The point of Ajax is that it can make a site more responsive, not that it's sexy. Tags can make things easier to find and classify, but maybe not in your application. The point of an API is so developers can add value for users, not to impress the geeks. Don't get sidetracked by technologies or the blog-worthiness of your next feature. Always focus on the user and all will be well.

#6: Be Self-Centered

Great products almost always come from someone scratching their own itch. Create something you want to exist in the world. Be a user of your own product. Hire people who are users of your product. Make it better based on your own desires. (But don't trick yourself into thinking you are your user, when it comes to usability.) Another aspect of this is to not get seduced into doing deals with big companies at the expense or your users or at the expense of making your product better. When you're small and they're big, it's hard to say no, but see #4

7: Be Greedy

It's always good to have options. One of the best ways to do that is to have income. While it's true that traffic is now again actually worth something, the give-everything-away-and-make-it-up-on-volume strategy stamps an expiration date on your company's ass. In other words, design something to charge for into your product and start taking money within 6 months (and do it with PayPal). Done right, charging money can actually accelerate growth, not impede it, because then you have something to fuel marketing costs with. More importantly, having money coming in the door puts you in a much more powerful position when it comes to your next round of funding or acquisition talks. In fact, consider whether you need to have a free version at all. The TypePad approach—taking the high-end position in the market—makes for a great business model in the right market. Less support. Less scalability concerns. Less abuse. And much higher margins.

#8: Be Tiny

It's standard web startup wisdom by now that with the substantially lower costs to starting something on the web, the difficulty of IPOs, and the willingness of the big guys to shell out for small teams doing innovative stuff, the most likely end game if you're successful is acquisition. Acquisitions are much easier if they're small. And small acquisitions are possible if valuations are kept low from the get go. And keeping valuations low is possible because it doesn't cost much to start something anymore (especially if you keep the scope narrow). Besides the obvious techniques, one way to do this is to use turnkey services to lower your overhead—Administaff, ServerBeach, web apps, maybe even Elance.

#9: Be Agile

You know that old saw about a plane flying from California to Hawaii being off course 99% of the time—but constantly correcting? The same is true of successful startups—except they may start out heading toward Alaska. Many dot-com bubble companies that died could have eventually been successful had they been able to adjust and change their plans instead of running as fast as they could until they burned out, based on their initial assumptions. Pyra was started to build a project-management app, not Blogger. Flickr's company was building a game. Ebay was going to sell auction software. Initial assumptions are almost always wrong. That's why the waterfall approach to building software is obsolete in favor agile techniques. The same philosophy should be applied to building a company.


#10: Be Balanced

What is a startup without bleary-eyed, junk-food-fueled, balls-to-the-wall days and sleepless, caffeine-fueled, relationship-stressing nights? Answer?: A lot more enjoyable place to work. Yes, high levels of commitment are crucial. And yes, crunch times come and sometimes require an inordinate, painful, apologies-to-the-SO amount of work. But it can't be all the time. Nature requires balance for health—as do the bodies and minds who work for you and, without which, your company will be worthless. There is no better way to maintain balance and lower your stress that I've found than David Allen's GTD process. Learn it. Live it. Make it a part of your company, and you'll have a secret weapon.

#11 (bonus!): Be WaryOvergeneralized lists of business "rules" are not to be taken too literally. There are exceptions to everything.

Wednesday, March 14, 2007

The World's Top Web Markets

Comscore has a new ranking of countries by Internet usage. If I were the CEO of a Web company planning to expand worldwide, I'd hit these countries in this order:

Top Countries by Internet Penetration (Unique Visitors)

Jan-07 Percentage (000) Change
Worldwide 746,934 10%
United States 153,447 2%
China 86,757 20%
Japan 53,670 4%
Germany 32,192 3%
UK 30,072 1%
South Korea 26,350 8%
France 24,560 4%
India 21,107 33%
Canada 20,392 11%
Italy 18,106 13%


Figures for India looks quite interesting and encouraging for any aspiring internet entreprenuer. With present PC penetration and usage pattern these figure will improveamny a times as cost of PC has come to a all time low of 10k. With all indian telecome operator promising for a better broadband future we will witness a revolution in India cyberspace.






* Excludes traffic from public computers such as Internet cafes and access from mobile phones or PDAs
The next five countries catching up fast are, in order, Brazil, Spain, Russia, the Netherlands and Mexico, with the non-European countries growing the fastest.