Great article about fake friendly services:
http://sivers.org/sms
Archive for category Business
17 times revenue multiples…
Sep 16
I was reading this article on Sylicon Alley Insider and I was surprised by the title “Mint Acquisition Brings Internet M&A Multiples Back To Lofty Levels“. Reading, I found this words:
Intuit is buying personal-finance site Mint.com for $170 million. This represents a fairly rich acquisition price relative to current financial performance:
If our projections of about $10 million in revenue this year are accurate, that would be a 17-times multiple of revenue.
Is it 17 times multiple so high for a startup that probably is closing this year with revenues, that is not burning cash, that work in a evergreen market (banking and finance) with a free product? I don’t believe so.
È veramente crisi?
Mar 20
Camminando per Roma…
10 best Business for 2009
Mar 12
In their list of top 10 business opportunities in a down economy, John Assaraf and Murray Smith, founders of OneCoach, a provider of small-business coaching services, recommend the following:
- Business coaching: As employees get downsized, upsized or just plain sick of their jobs, more of them are starting their own businesses. You can be there to provide the coaching and mentorship they need to succeed.
- Social networking for business: Take advantage of the interactivity of social networking to connect with prospects and help other businesses do the same.
- Alternative fuels: Help consumers cut their energy costs with alternative fuels and products that boost fuel efficiency.
- Environmental services: It’s the greening of America, and it’s only just begun.
- Health care: People are living longer and need health-care products and services to help them maintain a good quality of life.
- Nail salons/beauty products: Think fewer facelifts and more facials. People will always tend to their appearance, even in a down economy.
- Discount retailers: Give people what they want at deep discounts, just as Wal-Mart and 99 Cents Only Stores do.
- Luxury products: Interestingly, yacht sales are up, as are sales of Prada skirts. There are still consumers with money who are willing to spend it.
- IT and technology services: Help business travelers cut the cost of flying with virtual meetings.
- Credit and debt management: Show consumers how to tighten their purse strings even further.
Raising money, VC or Angels?
Jan 26
Everybody know that if you wat to raise money for a startup you should ask them to Ventur Captalist Fund or to Angels. But what’s the real difference? When to aks to the first ones, and when to second ones? This article form entrepreneur.com should help you. The article has been written by Bred Feld an early stage investor.
As a venture capitalist, I get approached several times a day by entrepreneurs looking to raise money. One of my typical responses is, “You shouldn’t be talking to me; you should be targeting angel investors.”
The source of this confusion varies: Sometimes it’s a misunderstanding of the different roles and expectations of a venture capitalist vs. an angel investor. Other times it’s a lack of clarity on the part of the entrepreneur regarding what he or she wants to accomplish with both the business and the financing. Regardless of the source of the confusion, here are a few guidelines for determining whether you should be approaching venture capitalists or angels for your financing.
- The amount of money you’re raising in this round: If you’re raising less than $1 million, you’re likely wasting your time targeting venture capitalists, with two exceptions: 1) you specifically target funds that do seed rounds, or 2) you have a preexisting relationship with a VC firm and want to put together a seed round to get going quickly.
- The total amount of money you’re looking to raise over the life of your company: If you think you can get your company to a point where it’s cash-flow positive on less than $3 million, stick with angels.
- The type of company you’re building: Venture capitalists love to fund businesses with the potential to be enormous. Angels love this, too, but they’re much more willing to fund smaller companies that will presumably require less capital. In addition, most venture capitalists want to fund businesses that have clearly defined economies of scale (such as software companies) vs. ones that scale linearly with some factor (such as service companies).
- Your experience: Successful serial entrepreneurs always find it easier to raise money from venture capitalists. If you’re a first-time entrepreneur, that doesn’t mean you can’t raise VC money, but you’re going to find it more difficult than an experienced entrepreneur will.
- Your network: If you’ve never met a venture capitalist before and none of your colleagues have built companies with VC funds, you’re at a disadvantage by having to start from scratch. In contrast, if your best friend’s father is the CEO of a Fortune 1000 company, you have a good shot at quickly getting plugged into a powerful set of angels.
As with all guidelines, there are plenty of exceptions. One seems to hold in most angel financings: the rule of thirds. A third of your financing will come from one investor, the second third will come from a set of people following that investor and the last third will be random. So make sure you go hunting for your lead investor.
10 ways to get rich
Nov 28
With an estimated fortune of $62 billion, Warren Buffett is the richest man in the entire world. In 1962, when he began buying stock in Berkshire Hathaway, a share cost $7.50. Today, Buffett, 78, is Berkshire’s chairman and CEO, and one share of the company’s class A stock worth close to $119,000. He credits his astonishing success to several key strategies, which he has shared with writer Alice Schroeder. She spend hundreds of hours interviewing the Sage of Omaha for the new authorized biography The Snowball. Here are some of Buffett’s money-making secrets — and how they could work for you.1. Reinvest Your Profits: When you first make money, you may be tempted to spend it. Don’t. Instead, reinvest the profits. Buffett learned this early on. In high school, he and a pal bought a pinball machine to pun in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Buffett used the proceeds to buy stocks and to start another small business. By age 26, he’d amassed $174,000 — or $1.4 million in today’s money. Even a small sum can turn into great wealth.
2. Be Willing To Be Different: Don’t base your decisions upon what everyone is saying or doing. When Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not Wall Street, and he refused to tell his parents where he was putting their money. People predicted that he’d fail, but when he closed his partnership 14 years later, it was worth more than $100 million. Instead of following the crowd, he looked for undervalued investments and ended up vastly beating the market average every single year. To Buffett, the average is just that — what everybody else is doing. to be above average, you need to measure yourself by what he calls the Inner Scorecard, judging yourself by your own standards and not the world’s.
3. Never Suck Your Thumb: Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking “thumb sucking.” When people offer him a business or an investment, he says, “I won’t talk unless they bring me a price.” He gives them an answer on the spot.
4. Spell Out The Deal Before You Start: Your bargaining leverage is always greatest before you begin a job — that’s when you have something to offer that the other party wants. Buffett learned this lesson the hard way as a kid, when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shoveling until they could barely straighten their frozen hands. Afterward, his grandfather gave the pair less than 90 cents to split. Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advance — even with your friends and relatives.
5. Watch Small Expenses: Buffett invests in businesses run by managers who obsess over the tiniest costs. He one acquired a company whose owner counted the sheets in rolls of 500-sheet toilet paper to see if he was being cheated (he was). He also admired a friend who painted only on the side of his office building that faced the road. Exercising vigilance over every expense can make your profits — and your paycheck — go much further.
6. Limit What You Borrow: Living on credit cards and loans won’t make you rich. Buffett has never borrowed a significant amount — not to invest, not for a mortgage. He has gotten many heart-rendering letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you’re debt-free, work on saving some money that you can use to invest.
7. Be Persistent: With tenacity and ingenuity, you can win against a more established competitor. Buffett acquired the Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the mart from a pawnshop into the largest furniture store in North America. Her strategy was to undersell the big shots, and she was a merciless negotiator. To Buffett, Rose embodied the unwavering courage that makes a winner out of an underdog.
8. Know When To Quit: Once, when Buffett was a teen, he went to the racetrack. He bet on a race and lost. To recoup his funds, he bet on another race. He lost again, leaving him with close to nothing. He felt sick — he had squandered nearly a week’s earnings. Buffett never repeated that mistake. Know when to walk away from a loss, and don’t let anxiety fool you into trying again.
9. Assess The Risk: In 1995, the employer of Buffett’s son, Howie, was accused by the FBI of price-fixing. Buffett advised Howie to imagine the worst-and-bast-case scenarios if he stayed with the company. His son quickly realized that the risks of staying far outweighed any potential gains, and he quit the next day. Asking yourself “and then what?” can help you see all of the possible consequences when you’re struggling to make a decision — and can guide you to the smartest choice.
10. Know What Success Really Means: Despite his wealth, Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He’s adamant about not funding monuments to himself — no Warren Buffett buildings or halls. “I know people who have a lot of money,” he says, “and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you. That’s the ultimate test of how you’ve lived your life.”
That’s not what you’d expect. I would have guessed difficulty in raising funds would be linear, but it isn’t.
The primary reason is that there are two typical investors: angels and VCs. Angels are just wealthy people who typically sums of between $10 and $100k, with $50k probably being a good average.
VCs are institutional investors who raise funds often totaling in the hundreds of millions, and are paid in such a way that they are incentivized to deploy the entire amount into investments. So, VCs like to make bigger investments because then they can make fewer. That means less due diligence, fewer board meetings, etc.
Not many VCs make it their business to invest amounts of money that small. It happens, but it’s often just something they do to lock up right of first refusal on future rounds. A lot of companies would much rather raise $500k than $5m, so they’ll do it if they like you enough, but it’s relatively uncommon.
Raising $500k from angels means convincing somewhere between 5 and 20 different people, all with their own habits and goals, to invest in you at the same valuation and terms. That happens too actually, even outside of the few syndicates that exist, but again, it’s hard to pull off.
This is a Paul graham Article:
The economic situation is apparently so grim that some experts fear we may be in for a stretch as bad as the mid seventies.
When Microsoft and Apple were founded.
As those examples suggest, a recession may not be such a bad time to start a startup. I’m not claiming it’s a particularly good time either. The truth is more boring: the state of the economy doesn’t matter much either way.
If we’ve learned one thing from funding so many startups, it’s that they succeed or fail based on the qualities of the founders. The economy has some effect, certainly, but as a predictor of success it’s rounding error compared to the founders.
Which means that what matters is who you are, not when you do it. If you’re the right sort of person, you’ll win even in a bad economy. And if you’re not, a good economy won’t save you. Someone who thinks “I better not start a startup now, because the economy is so bad” is making the same mistake as the people who thought during the Bubble “all I have to do is start a startup, and I’ll be rich.”
So if you want to improve your chances, you should think far more about who you can recruit as a cofounder than the state of the economy. And if you’re worried about threats to the survival of your company, don’t look for them in the news. Look in the mirror.
But for any given team of founders, would it not pay to wait till the economy is better before taking the leap? If you’re starting a restaurant, maybe, but not if you’re working on technology. Technology progresses more or less independently of the stock market. So for any given idea, the payoff for acting fast in a bad economy will be higher than for waiting. Microsoft’s first product was a Basic interpreter for the Altair. That was exactly what the world needed in 1975, but if Gates and Allen had decided to wait a few years, it would have been too late.
Of course, the idea you have now won’t be the last you have. There are always new ideas. But if you have a specific idea you want to act on, act now.
That doesn’t mean you can ignore the economy. Both customers and investors will be feeling pinched. It’s not necessarily a problem if customers feel pinched: you may even be able to benefit from it, by making things that
save money. Startups often make things cheaper, so in that respect they’re better positioned to prosper in a recession than big companies.Investors are more of a problem. Startups generally need to raise some amount of external funding, and investors tend to be less willing to invest in bad times. They shouldn’t be. Everyone knows you’re supposed to buy when times are bad and sell when times are good. But of course what makes investing so counterintuitive is that in equity markets, good times are defined as everyone thinking it’s time to buy. You have to be a contrarian to be correct, and by definition only a minority of investors can be.
So just as investors in 1999 were tripping over one another trying to buy into lousy startups, investors in 2009 will presumably be reluctant to invest even in good ones.
You’ll have to adapt to this. But that’s nothing new: startups always have to adapt to the whims of investors. Ask any founder in any economy if they’d describe investors as fickle, and watch the face they make. Last year you had to be prepared to explain how your startup was viral. Next year you’ll have to explain how it’s recession-proof.
(Those are both good things to be. The mistake investors make is not the criteria they use but that they always tend to focus on one to the exclusion of the rest.)
Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I’ve been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. The cheaper your company is to operate, the harder it is to kill. Fortunately it has gotten very cheap to run a startup, and a recession will if anything make it cheaper still.
If nuclear winter really is here, it may be safer to be a cockroach even than to keep your job. Customers may drop off individually if they can no longer afford you, but you’re not going to lose them all at once; markets don’t “reduce headcount.”
What if you quit your job to start a startup that fails, and you can’t find another? That could be a problem if you work in sales or marketing. In those fields it can take months to find a new job in a bad economy. But hackers seem to be more liquid. Good hackers can always get some kind of job. It might not be your dream job, but you’re not going to starve.
Another advantage of bad times is that there’s less competition. Technology trains leave the station at regular intervals. If everyone else is cowering in a corner, you may have a whole car to yourself.
You’re an investor too. As a founder, you’re buying stock with work: the reason Larry and Sergey are so rich is not so much that they’ve done work worth tens of billions of dollars, but that they were the first investors in Google. And like any investor you should buy when times are bad.
Were you nodding in agreement, thinking “stupid investors” a few paragraphs ago when I was talking about how investors are reluctant to put money into startups in bad markets, even though that’s the time they should rationally be most willing to buy? Well, founders aren’t much better. When times get bad, hackers go to grad school. And no doubt that will happen this time too. In fact, what makes the preceding paragraph true is that most readers won’t believe it—at least to the extent of acting on it.
So maybe a recession is a good time to start a startup. It’s hard to say whether advantages like lack of competition outweigh disadvantages like reluctant investors. But it doesn’t matter much either way. It’s the people that matter. And for a given set of people working on a given technology, the time to act is always now.
Google Inc. is working on plans to start a venture-capital arm, according to some rumors.
The group will be lead by David Drummond, Google’s senior vice president of corporate development and chief legal officer, according to two of these people.
What’s sure is that Google has hired William Maris, a 33-year entrepreneur who has worked as an investor, to help set up the venture
Google is able to attract attention every time it moves itself.
Y Combinator says to us what are the main interesting idea fields to invest for them. Here’s the link.
I found very interisting:
- Simplified Browsing
- Enterprise software 2.0
- Online Learning
- Finance software for individuals and small businesses
- Tools for measurement
- Web Office apps
but overall the “bestselling”:
Something your company needs that doesn’t exist