DONNA BOGATIN ANNOUNCES STARTUPALPHA.COM TO FOSTER THE TECHNOLOGY STARTUP CULTURE IN SILICON ALLEY AND BEYOND.
READ ALL ABOUT THE NEW, ONLINE-OFFLINE VENTURE PITCH COMMUNITY AT STARTUP CHATTER, DONNA BOGATIN’S NEW COLLABORATIVE TECHNOLOGY MAGAZINE.
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Within weeks of beginning my technology blogging career in the Spring of 2006, I had the pleasure of interviewing Dan’l Lewin, Microsoft Corporate Vice President of Strategic and Emerging Business Development, to get a first hand look at how he leverages a worldwide VC network for surfacing and nurturing emerging venture capital backed technology start-ups with the potential for being the “next big things” AND for extending the Microsoft platform, a multi-billion dollar business, and growing.
I spoke with Lewin to discuss how he helps grow the Microsoft platforms business by enabling innovation and accelerating the software ecosystem. As a leader in the DPE, Microsoft’s Developer and Platform Evangelism, it is Lewin’s mission to find “incredible companies” and help them do “incredible things,” with a helping hand from Microsoft.
Don Dodge is part of Lewin’s team and works to discover those incredible companies. Today, Dodge shares how one of the Web 2.0 entrepreneurial ventures he works with as part of Microsoft’s Startup Accelerator program has achieved accelerated development, Me.dium, “a web browser plug-in that turns web browsing into a social experience.”
How does Microsoft identify start-ups that will foster productive use of the Microsoft platform? What does Microsoft do to promote platform growth via new technologies?
Lewin told me he works closely with the VC community as a collaborative filter; Because VCs seek extraordinary returns, they only invest in companies judged to have a high probability of achieving inordinate market success. By aligning with VC backed technology start-ups, therefore, Microsoft can dedicate resources to software companies with the best chance of achieving market leadership. Market leading companies with software solutions that significantly extend the Microsoft platform represent the targeted end-game for Lewin, and his team.
To successfully achieve the end-game sooner, rather than later, Microsoft Developer and Platform Evangelism provides software developers with “the best tools, programs, services and content offerings to create the next generation of world-class software.” Lewin spoke to me of a “virtuous cycle”: For every $1 generated in Microsoft revenues, $6 - $11 is generated throughout the larger Microsoft ecosystem. Lewin aims to ensure that the Microsoft ecosystem “share of market” grows faster than the whole market.
David Mandell, VP at Me.dium, evangelizes Microsoft evangelism, Dodge reports at his blog:
Getting direct connections to developers within Microsoft speeded our own internal development time significantly, I would estimate about a 50% velocity increase…
The Emerging Business Team and The Microsoft Startup Accelerator Program have truly turned into an invaluable resource for Me.dium. We would never have imagined that a company as large as Microsoft would have the desire to focus on a small startup such as Me.dium, but we were completely blown away by the attention and access to people that we were given and owe much or our current success to that relationship.
I also know first hand about the Microsoft Emerging Business Team’s passion for helping startups such as Me.dium realize their visions sooner rather than later. I had the pleasure of sharing the stage with Don Dodge as a fellow speaker (along with Eric Auchard, Reuters) on the closing media panel of the Council For Entrepreneurial Development’s annual Tech Conference in the North Carolina Research Triangle last October and appreciated the lessons from the field he shared with the enthusiastic South East entrepreneurs.
MORE: CED Tech 2007: 30 Cool Startups, But NO Facebook Apps and DayJet CEO: Business Models Drive Disruption, NOT Technology and The Future of Technology VC is Now in Research Triangle
ALSO: 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
What are the startup lessons to be learned from failed Edgeio, the $5 million VC backed classifieds play that Michael TechCrunch Arrington co-founded? DON’T look to Arrington’s TechCrunch to find out!
First off, Arrington was disingenuous on “reporting” to his readers two months ago about the purported “doing well” status of Edgeio in his last public post abut the startup he represented as a member of the Board of Directors, as I recount in Edgeio $5 million Failure: The Myth of Disposable Startups.
Now, in publicly refelecting on the Edgeio meltdown, he says differently:
It seemed like every board meeting I was saying the same thing - stop spending money, stop hiring, stop. I was out voted, and the company followed its own path.
In responding to Arrington’s announcement earlier this week of his Edgeio Web 2.0 startup bomb, I noted: Is Michael TechCrunch Arrington’s disarming writing style one of the keys to his success? After all, it is not an easy feat for a Web 2.0 startup blog phenomenon to spin his own personal $5 million Web 2.0 startup failure into an easy come, easy go tale!
The Arrington failed startup spin continues, big time:
The fact that Edgeio ultimately failed, though, doesn’t mean I was right. The investors felt that the time to spend and try to grow was now. It doesn’t matter that Edgeio failed, what matters is that it is the right approach if you are trying to make something big. If you want to be conservative, don’t be a silicon valley entrepreneur.
Michael TechCrunch Arrington may be “obsessively profiling” Web 2.0 startups, but he is NOT obsessing over helping the “cool apps” he showcases thrive beyond the (double edged-sword) TechCrunch effect he powerfully engenders.
For the past 18 months, I have been counterpointing Arrington’s cavalier who needs revenues Web 2.0 startup parade of demo summaries at TechCrunch.
While Arrington cheerleads daily on behalf of twenty something software developers rapidly prototyping the hottest, latest Web 2.0 apps, he does NOT rally for commercial viability or long-term sustainability of the new Internet products and companies he champions, even those he invests in himself!
Arrington famously warns about what he perceives as the dangers of “over business planning,” as he did at the “The Future of Web Apps Summit,” September 2006. The Arrington checklist for Web 2.0 startup “winners”:
Passion for what they are doing
Do something extraordinary
Remove serious friction
Great founder dynamics
Never raise big money or raise it after you have won
Perfect revenue model is not required
Launched with post on TechCrunch
Arrington’s qualification of a Web 2.0 startup winner: SELLOUT (quick)!
Writely: Google acquisition
Del.icio.us: Yahoo acquisition
Userplane: AOL acquisition
Flickr: Yahoo acquisition
MySpace: News Corp. acquisisiton
Bloglines: IAC/InterActiveCorp
Truveo: AOL acquisition
Grouper: Sony acquisition
Newroo: News Corp. acqusition
Moral of the TechCrunch story to twenty something amateur entrepreneurs? In the words of YCombinator’s Paul Grahm, don’t “sweat the business model” BECAUSE multi-billion dollar corporations are sure to be on the look out for your cool app!
YEAH, RIGHT! (SEE Y Combinator to Hackers: Dream SMALL and Code for Google on the Cheap)
Michael Arrington and Grahm’s YCombinator would undoubtedly be greater champions of Web 2.0 start-ups if they championed realistic, attainable Web 2.0 start-up goals. The dream of an acquisition by Google, Yahoo, News Corp…is a foolhardy replacement for a viable business plan, as Arrington’s own failed Edgeio should attest to.
BUT, no;Slow, steady and SMART wins the Web 2.0 startup race does not make for Techmeme worthy TechCrunch headlines!
Who sees startup planning differently? Draper Fisher Jurvetson, Mayfield Fund, Sequoia Capital…
SEE: 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
ALSO: Business Plans Help the Web 2.0 Kool-Aid Go Down and Hey Paul and Fred: Hackers, NOT Startups, Are the Commodity and Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model
PLUS: Henry Blodget Slams eBay’s Whitman: Yahoo’s Yang Next? and Reid Hoffman: LinkedIn About Face (book) and Google Zeitgeist: $200 University Payola AdWords Scam
Is Michael TechCrunch Arrington’s disarming writing style one of the keys to his success? After all, it is not an easy feat for a Web 2.0 startup blog phenomenon to spin his own personal $5 million Web 2.0 startup failure into an easy come, easy go tale!
Arrington has not disclosed how much of the $5 Edgeio financing he actually contributed. Nevertheless, in placing the Web 2.0 startup that he co-founded into his own TechCrunch deadpool, Arrington fesses up to his personal loss: “I’m obviously sad about this since I was one of the founders.”
Edgeio’s $5 million failure within a short two year period, however, is also a professional loss for Arrington. The TechCrunch Web 2.0 startup blog was launched by Arrington shortly after he co-founded the Edgeio Web 2.0 startup. The TechCrunch credo is “to obsessively profile and review new Internet products and companies.”
In his last TechCrunch Edgeio post, a mere two months ago, Arrington hailed ”Part of my promise to readers is to call things like I see them.” REALLY? In the very same post, Arrington asserted of his own Edgeio, the “classified listing platform has been doing well. We use it for our CrunchBoard job board, and many other blogs and websites have begun to use it, too.”
Arrington confidently reported to his readers on September 30, 2007, that Edgeio “has been doing well.” How is it then that, a mere 60 days later, Arrington reports to his readers his “sadness” in placing the same Edgeio in his TechCrunch deadpool?
Perhaps Arrington did NOT call Edgeio things like he saw them, two months ago. Arrington reveals now:
For the last few months CEO Keith Teare has been working on a number of plans to keep the company going, but none of them panned out.
Even if Arrington’s Edgeio “involvement for the last two years has been as a board member only,” such a role entails knowing that “ For the last few months CEO Keith Teare has been working on a number of plans to keep the company going, but none of them panned out.”
Arrington is shrewdly vague in attempting to explain away the Edgeio shut down:
The company burned through that money according to plan, meaning they ran out this month. The product roadmap was fulfilled, meaning development lags didn’t hurt the company. But the revenues didn’t come in and user/partner milestones weren’t met. And that meant no one else was going to put more money into the company.
Did Edgeio have a business plan, or didn’t it? Did Edgeio have a revenue model, or didn’t it? Arrington’s TechCrunch is famously oblivious to such solid startup fundamentals while it “obsessively profiles” Web 2.0 startups.
Just yesterday, Arrington hailed the no-business-planning-needed philosophy of the founder of another Web 2.0 startup he has invested in, Seesmic.
In Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model I rebutt Le Meur’s cavalier entrepreneurial “advice,” warning it is more harmful, then helpful. Arrington’s Edgeio musings also ought to be taken with a grain of salt:
This is the way the startup world works. You win some, but you lose most. Edgeio wasn’t meant to be a success. And now Keith and the rest of the team can start the fight over again, and hopefully next time they’ll come out winners.
NO, Michael, startups are not disposable. Moreover, without proper business planning in future endeavors, the no-win Edgeio scenario is destined to be replicated.
Hope is not what Michael TechCrunch Arrington ought to be prescribing to startups, even if his own personal startup philsophy is based upon such entrepreneurial nonsense.
Who sees startup planning differently? Draper Fisher Jurvetson, Mayfield Fund, Sequoia Capital…
SEE: 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
UPDATE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss
ALSO: Business Plans Help the Web 2.0 Kool-Aid Go Down and Hey Paul and Fred: Hackers, NOT Startups, Are the Commodity
PLUS: Henry Blodget Slams eBay’s Whitman: Yahoo’s Yang Next? and YAY? Weblo Cheapens Facebook ‘Friendship,’ Whales Rejoice!
Voulez gagner dans le monde entrepreneurial? N’ecoutez pas Monsieur Loic Le Meur, n’importe qu’il parle en Anglais, ou en Francais!
Loic Le Meur is an alum of France’s take on Harvard Business School, and so am I: Hautes Etudes Commerciales, HEC. Nevertheless, Le Meur giddily, and Web 2.0 fashionably, disses all notions of solid business theory.
I do not, though. In the world of startup advice, my money is on a different French-born entrepreneur that ventured to the United States long before Le Meur was on the French-American scene: Georges Doriot, Harvard Business School Professor and considered the creator of the modern practice of venture capitalism:
France’s General Georges Doriot taught at the Harvard Business School between 1928 and 1966. He founded America’s first venture capital company–American Research & Development–and was the lead investor in Digital Equipment Corporation. Doriot was the first to articulate a philosophy of venture capitalism and entrepreneurship, he wrapped everything into “manufacturing” and set a standard for VC. (Georges Doriot on Leadership, Capital and Business Organization, Gondolier Press)
Known as the “first venture capitalist,” Doriot’s VC “philosophy” is studied and emulated to this day. In “Fundamentals of Venture Capital,” VC attorney Joseph Bartlett presents Doriot’s “rules of investing”:
a new technology, new marketing concepts, and new product application possibilities,
a significant, although not necessarily controlling, participation by the investors in the company’s management,
investment in ventures staffed by people of outstanding competence and integrity (herein the rule often referred to in venture capital as “bet the jockey, not the horse”),
products or processes which have passed through at least the early prototype stage and are adequately protected by patents, copyrights, or trade-secret agreements (the latter rule is often referred to as investing in situations where the information is “proprietary” (proprietary information)),
situations which show promise to mature within a few years to the point of an initial public offering or a sale of the entire company (commonly referred to as the “exit strategy”),
opportunities in which the venture capitalist can make a contribution beyond the capital dollars invested (often referred to as the “value-added strategy”).
Bartlett says of Doriot:
General Doriot’s boundary conditions are to be treated with great deference because it is commonly agreed that Doriot is the single most significant figure in postwar traditional venture capital.
Web 2.0 , 3.0…startup “experts” find Doriot’s business rigour laughable, however. Cavalier entrepreneurial “advice,” though, such as Le Meur’s, is more harmful, then helpful:
Don’t wait for a revolutionary idea. It will never happen. Just focus on a simple, exciting, empty space and execute as fast as possible
Don’t spend time on market research. Launch test versions as early as possible. Keep improving the product in the open.
Don’t obsess over spreadsheet business plans. They are not going to turn out as you predict, in any case.
Don’t plan a big marketing effort. It’s much more important and powerful that your community loves the product.
Don’t focus on getting rich. Focus on your users. Money is a consequence of success, not a goal.
What IS the recommended Le Meur path to entrepreurial success? Start a blog and make YouTube videos, just like Loic is doing for his latest startup, Seesmic, “the dashboard for your videos.”
Who sees startup planning differently? Draper Fisher Jurvetson, Mayfield Fund, Sequoia Capital…
SEE: 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
ALSO: Business Plans Help the Web 2.0 Kool-Aid Go Down and Hey Paul and Fred: Hackers, NOT Startups, Are the Commodity and Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss
Money does (help) make the world go ’round, even for Wikipedia, the “free encyclopedia.”
In a bid to ensure quality illustrations will grace its online pages and thereby bolster Wikipedia in its Encylcopedia Britannica smackdown, the online encyclopedia that “anyone can edit” aims to pay qualified illustrators for their work.
Wikipedia’s Brianna Laugher, says the plan is to create a list of articles that need illustrations and then solicit the work, according to the New York Times: “The first list is expected to have 50 illustrations and be completed this month. Contributors will be able to sign up for an illustration and have two weeks to submit it; if it is accepted, the illustrator will be paid $40.”
Will Wikipeia’s move spur a move away from the content must be handed over for free Web mentality wreaking havoc on livelihoods and business models?
In my role as closing panelist at the Kelsey Interactive Local Media Conference last week in Los Angeles, I was asked for my predictions about possible future innovations that might impact the local content opportunity online. Micro-payment systems may spur more high quality citizen journalist contributions, I suggested.
Mike Orren, President, Pegasus News, proudly shared at the conference that his site’s content aggregation and redistribution deals are almost all structured without revenue sharing.
I underscored in my closing remarks, however, the importance of the “old school” notion of paying for content production and use to ensure quality and fairness.
Independent video producers are seeking remuneration for their contributions online, and graphic artists are now being courted on the Web.
Hopefully, cash will continue to be king, online as well as off!
MORE FROM KELSEY CONFERENCE: Local Advertising Online: SMEs Hold the Billion Dollar Keys, ILM ANALYSIS
Google Apps & Maps: Enterprise and Local Business STILL Missing and
Google Beware: Facebook Takes Local Advertising Gloves Off, ILM REPORT and
Jason Calacanis: ‘Wrong About Local Too,” ILM REPORT
The Future of Local IS (Google) Search: ILM REPORT and
Citysearch’s Herratti on Social Media and Merchant Reputation: ILM INTERVIEW and
Local is Global: $134 billion in Yellow Pages, Classifieds and Internet Advertising, ILM REPORT
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