Like.com to Entrepreneurs: It’s the Revenues, Stupid!
Michael Arrington is outraged over what he (now) characterizes as a “hypocritical, wrong and conflicted” Union Square Venture’s celebrity blogging VC: Fred Wilson.
ODD? After all, I subjected an extremely flawed Fred Wilson post last week to a similar style of analytical analysis as Arrington does today (without indulging in similar style emotional, personal vindictives as Arrington does though), citing Jason Calacanis on Wilson’s propensity to over “share” publicly, at his blog: SEE: Why Silicon Alley VCs Should Do Blogging Due Diligence, Too
Arrington wasn’t outraged then, however. In fact, Arrington threw his personal support to blogger Wilson in the comments:
Arrington to Wilson, one week ago: “Fred, Great post. You are such a good blogger, especially for someone outside of Silicon Valley.”
What a difference a week makes? Not really, what a difference a Wilson crtiique of TechCrunch’s co-editor makes! BUT, Arrington’s condoning of Wilson’s “hypocricy 101″ style last week helped fuel the blogging VCs ongoing propensity for doublespeak, a typical Wiilson approach that Arrington notes, NOW:
Also, in a comment to his original post, he says “Erick didn’t get it wrong…but i think he missed the opportunity to get it right.”
How can you be both wrong and right at the same time?
GOOD QUESTION, and “how can” a VC recommend that his portfolio companies sell out to the likes of Yahoo, AOL, Google, while at the same time decrying that such profitable Union Square Ventures business decisions are “not good” for the Internet, as I analyze and critique in Is Union Square Ventures Changing Exit Strategies?
“Web services don’t get better under the ownership of big companies. They get worse,” the Union Square Ventures’ managing partner declared.
REALLY? Poor Union Square Ventures portfolio companies Twitter, Wesabe, Zynga….then? After all, how can Wilson advise “exits” to “big companies” Google, Yahoo!, Microsoft… if such “big” sell outs will stifle Web innovation, according to Wilson.
“We don’t need or want consolidation of services on the Internet,” Wilson warned.
There is no apparent change in Wilson’s VC modus operandi which spurs such “consolidation,” however, if it is to the financial advantage of his Union Square Ventures’ financial returns.
While Arrington defends his writer and Wilson defends his portfolio company, however, there is one entrepreneur’s story that is not being heard: The plea of Munjal Shah, CEO of Riya (developer of the Like.com Visual shopping service), to focus on startups’ revenues:
I would ask every reporter to get a new metric for evaluating how startups are doing. Why can’t Michael, Matt, Om, and others start asking for this info before writting positive pieces about companies.
EXCELLENT SUBJECT MATTER, and one that I continuously report on and analyze here at Insider Chatter. In fact, I headlined yesterday–Business Plans & Revenue Models: TWO Startup Must Haves–a critique of ex-Googler Paul Buchheit’s advice to startups that was devoid of a financial performance metrics discussion.
Michael, Matt, Om, and others may continue to perpetuate the myth that a startup’s traffic is the best indicator of success, but I steadfastly spur entrepreneurs to focus on the bottom line and welcome every opportunity to speak with founders and CEOs about their sales and profitability milestones, and happily share their inspirational accomplishments here at Insider Chatter.
Insider Chatter also respects timed company embargoes, another “glitch” in Venture Beat’s report on Like.com that was lamented by Like.com’s Shah. I have similarily experienced Venture Beat’s “misunderstanding” of clearly stated timing restricitions on news releases. Venture Beat’s self-serving propensity to “hit publish” before mutually agreed upon times risks hurting not only Venture Beat’s Web publishing competitors but the very startups being covered, Shah’s Like.com big case in point.
Remember, though, “It’s the revenues, stupid!” Entrepreneurs ought to heed Shah’s real-world call to financial arms:
As a 2nd time entrepreneurs, we at Like.com had decided to not focus on eyeballs or users, but rather revenue and eventually profits. If you remember we first took this approach back in May of 2006 after we launched Riya (and while we had usage) and didn’t know how we were going to make money. We retooled and launched Like.com, which we knew would make money.
Like.com likes revenues!
MORE: Silicon Alley Web 2.0 Startups: Bootstrap For Success and Silicon Alley: Crouching Tiger, Hidden Entrepreneurs and How Web 2.0 Meetups Displaced the New York Software Industry and Business Plans Help the Web 2.0 Kool-Aid Go Down
PLUS: Facebook Meltdown: Is Twitter Next? and FriendFeed: Got Google Millions? Who Needs Revenues!