Mahalo: Will Calacanis Win the Billion Dollar Startup Lottery in 2008?
News Years Resolution? Grow your startup into a billion dollar business, NO business model required! NO problem, in Jason Calacanis’ entrepreneurial rule book, as long as you are as capital connected as him!
Calacanis has a $20 million capital kitty in the VC bank for his latest venture, Mahalo, undoubetdly much more than Twitter is working with from Union Square Ventures. So, when will Calacanis see his first Mahalo billion? After all, Calacanis guarantees billions for Twitter within 12-24 months.
At Mahalo, though, Calacanis is counting on his VC money to give him a five year ride, and he is getting his money’s worth: Claim to the title of “the world’s first human-powered search engine” costs a pretty penny. The expense side of the startup equation is ignored, however, in Calacanis’ feel-good, throw out your business model on the way to the startup lottery window world.
Mahalo nevertheless pays dearly in human capital costs costs for its no-algorithms-here branding. Twitter’s free-to-Twitterers largesse is also costing its investors dearly, as Twitter has acknowledged:
We’ve negotiated for good bulk rates but we still pay for this SMS traffic just like we pay for storage, hosting..
Twitter appears nevertheless to be firmly in accord with Calacanis’ exhortation to “get to tens of millions of users and forget about money”:
The idea has been floated that Twitter somehow earns money from your texting while in fact the opposite is true.
WHEW! What a relief? If Calacanis’ wild and crazy musings about Twitter’s growth trajectory were actually to come to pass, what an expensive Tweet Twitter and company would be in!
Calacanis’s throwing startup caution to the wind advice is eerily similar to Web 1.0 style eyeball snatching, VC busting, grow traffic, not profitable sales, “business models.”
Startups beware: Calcanis’ billions can be had for the “critical mass” taking entrepreneurial “strategy” is the venture equivalent of playing the lottery. As millions know, though, there is NO “smart” lottery money.
MORE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss and Web 2.0 Startups: Will Geek Chumby ‘Fade Away’ in 2008? and Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model
PLUS: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and Want Sequoia Funding? Submit a Business Plan: Here’s How AND Kleiner Perkins Venture Capital: Business Plans Please
WANT TO SUBMIT YOUR BUSINESS PLAN?: Draper Fisher Jurvetson ~ Mayfield Fund ~ Sequoia Capital ~ Kleiner Perkins Caufield & Byers
NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN