PhotoBucket still rocking
June 27, 2006
Colorado’s Photobucket (which I profiled earlier) is still rocking along and accounting for 2% of all US internet traffic. As of today, Alexa has it ranked #75 among all web sites visited.
I thought they might see a hit from CNET’s similar new product AllYouCanUpload.com. If you take a close look at the reach graph on Alexa, you can see that right when AllYouCanUpload was announced and quickly circled the blogosphere, there was a brief but noticeable drop in PhotoBucket traffic. The good news is that it picked right back up. Perhaps some people tried AllYouCanUpload that week, and came right back to PhotoBucket. That’s pretty encouraging if so.
PhotoBucket is enjoying a dominant 44% market share among online photo hosting services, with most of the hits originating at MySpace. As Om Malik points out, the product works because it’s simple, solves a problem, and does what users want - this has nothing to do with Ajax, Web 2.0, or fancy web sites.
And, and, and…. they make money. Almost forgot that one. ;-)
When to start a startup
June 27, 2006
The best time to start a startup is right after college, or between undergraduate and graduate degrees.
Lately, I’ve run into a few bright people who think they need to get a job right away and build a bit of a resume up before starting a company. They feel that they’ll get some real world experience and have something strong on their resume in case they fail.
I’m not sure I agree with that philosophy. Often, I’d much rather hire somebody who took a chance out of school and showed some passion and the guts to go it on their own, assuming the idea was reasonable. What a great way to learn. It’s at this point in your life (early in your career) that you can afford the risks associated with a startup. You probably don’t yet have a family, mortgage, or other commitments that eat away at your time or your bank account. You have plenty of time to earn money later on in your career, especially if you’re confident in your abilities.
Of course, that doesn’t mean you can’t be successful starting a company later in life - of course you can. But if you ask me there is no time like the present for new graduates.
Where are all the closet entrepreneurs?
June 21, 2006
I’m advising about 8 startups right now that are pre-funding. Most of them need to fill one key role to get to the next level. Some of them need a great developer to capture one key account. Others need a CEO to create a strategy or make investors feel secure. Some need a CTO to lead execution, or a BizDev person to build a channel.
They need to find “been there, done that” people, but they simply can’t pay the $100-300k+ salaries that many of these people require. There are many companies on the verge of something viable and potentially great. It’s kind of frustrating to watch. I honestly believe that there are people who are qualified to fill these roles and are sitting unfulfilled in a cube somewhere. It’s nobody you or I know well, because if we did know them, we’d be recruiting them for somebody.
I’m not talking about a virtual CXO. I’m talking about someone who can really get his hands dirty and will be committed for the long haul. I’m talking about the closet entrepreneur.
The closet entrepreneur is someone who could live off of a low salary for 6 months or so, and believes in her own ability to go and get a new job if she has to. That person could easily find a startup that needs her talent and take a chance on them for a piece of equity. In 6 months, they’d know if it was going to work or not, if they’re really good at what they do. And the upside is very real.
It would be nice if there was an exchange for this new market of closet entrepreneurs. People who’ve always wanted to do something entrepreneurial (but are not entrepreneurs) and would consider working for a combination of salary and equity would register themselves. Entrepreneurs would use the exchange to register their needs and what they could offer in terms of compensation.
I’m sure Monster will jump right on it.
Your next worthless startup idea
June 19, 2006
Tonight I was walking home along Pearl Street with my friend Rajiv who was visiting from Vancouver. In these 5 blocks, Rajiv spit out about 5 ideas for startups. Rajiv will admit to you that he’s the programmer (and a very good one), not the business guy. So he won’t be upset when I tell you that most of his ideas were pretty damn cool things that nobody would ever pay for.
My friends often remark that it seems as if I have at least one startup idea per day. Startup ideas are not hard to come by. I have lots of good ones, and I give them away all the time. Once in a (great) while I hear a great startup idea. I think lots of people forget that this gets you about .001% of the way to building a successful company. Certainly it helps to have a great idea. But I’ve seen a hell of alot of great people take good ideas for startups and turn them into millions. It’s not just the idea: it’s the passion, the vision, the people involved, and the execution.
I recently read an interesting post in the OnStartups blog called “Startup ideas: Are bad ones better than good ones?” The author’s theory is that you want to have lots of bad ideas that you can easily reject rather than those pesky “good” ideas that you should reject but don’t in fear that they might just be great ideas after all. Good ideas are harder to distinguish from great ideas and are therefore dangerous. After all, you might spend 5 years working on one of them before coming up with the conclusion that it was not such a great idea after all.
So the obvious question is “How can I tell my good ideas from my great ideas?” Well, great ideas tend to have certain attributes. They tend to solve real problems that people already know they have. Often, they take something that you can already do and make it much cheaper, more reliable, or easier to use. Give your good and possibly great startup ideas these simple litmus tests. Of course, beware of false negatives - in some rare cases the very best ideas defy this logic.
So tell us all, what are your good startup ideas? Give them away. I know you won’t share your great ones.
Tucows acquires Boulder’s NetIdentity today
June 19, 2006
Tucows finalized the acquisition of Boulder based NetIdentity today in a deal worth about $18M. NetIdentity owns the rights to a large collection of domain names for surnames and provides personalized email, blogging and web hosting services for these names. Think Joe@Smith.com (purposely not linked to save this poor bastard the deluge). Tucows has developed a channel that reaches more than 50 million end users worldwide, and they must believe they can sell these services to those users. NetIdentity has been doing so profitably lately, so it’s not a bad assumption.
As Brad feld points out, this is the fifth Boulder company to be acquired in just the last few months. Two of them (NetIdentity, Sketchup) were based smack in the middle of Pearl Street. Hopefully this will further fuel the idea of startup central.
Tucows has published a nice explanation of the deal here. There’s also a (tedious) podcast explaining the deal.
(via Feld.com/blog)
Hypersites - a new way to build a serious web site
June 17, 2006
Let’s say you want a fully functional dynamic data-driven web site, and you want it quickly. Your choices used to be:
- Build it yourself (if your geek quotient is sufficient) in Rails, Java, PHP, .NET or similar.
- Select a content management system (CMS) such as Mambo, WebGUI, Joomla, etc.
- Contract with a development shop to get it done (expensive!)
Enter soon-to-launch Hypersites - a fully hosted solution for building a dynamic web site. It includes wysiwyg editing and layout tools, sets of prepackaged functionality, a content management system, support of multiple security levels, and (soon) a set of pre-built “starting points” to get you going.
I’ve spent some time with founder Michael Sitarzewski (his personal site and blog is a hypersite of course) over the last two months and have gotten a couple of projects going where I was able to use Hypersites. I’m no great web developer but I was able to get going and build something functional pretty quickly. I included a blog, photo album, and one data driven form as well as a few other pages in my test site in about 10 minutes using just my web browser. I also didn’t look at any documentation since that’s how real users behave. I have to say the experience and technology behind Hypersites is pretty damn cool. The flexibility that I found when using the tools defeated much of my skepticism. It feels to me like you can develop a sophisticated web site in at least half the time with at least half the cost using this tool.
The downside that someone may see in this sort of solution is that once developed, the site must continually be hosted by Hypersites and is not portable to other hosts. However, I think for many companies the benefits and flexibility provided will far outweigh this concern.
Hypersites is in revenue and has some solid customer validation. It just hasn’t been launched with a mass market campaign and pricing strategy yet. One of the issues I’ve been talking to Michael about recently is the go to market strategy. This is all still coming together but it appears as if users will be able to use the tool to get a basic site up and running for free while the traffic is low. As traffic rises, the monthly fee will rise with it. Personally I think this combined with the pending release of starting points is a winning model and I would expect to see some adoption and buzz around this product if it’s executed properly. What a great tool for any startup to use to put up a decent web site at little to no real cost!
Hypersites has recently relocated to the Denver/Boulder area from Dallas and is currently seeking affordable (a-hem) office space in Boulder. They’re also interested in finding advisors with experience marketing software as a service.
By the way, this is my first post using Qumana, which allows me to write blog posts offline and sync them up when I get a connection. That’s very useful when you’re on a plane for hours, for example. So far, so good.
UPDATE: Oops, I originally said Austin, but the Hypersites gang is originally from Dallas.
Ahhh, back in Boulder…
June 15, 2006
I woke up this morning in Austria, flew all day, and made it back to Boulder just in time to watch the sunset as I came over the hill. Man, you never really get used to that amazing view, do you?
A reasonable question at this point is what does my trip to Europe have to do with Colorado startups? Well, not much, except… Otologics (of Boulder) was launching their new Sonata fully implantable hearing aid at a conference in Vienna.
My girlfriend works for Otologics and had to attend, so we decided to make a long weekend out
of it before she had to start working on Wednesday. We went to Amsterdam for a few days first (don’t ask) and then we spent half of Wednesday stuffing marketing packets in a five person assembly line (I wanted to help get her out of there as soon as possible so we could go see some sights).
Sorry Thomas, but I’m not sure that The World is Flat after all. I was staying near St. Stephens square in the middle of Vienna, and there was no wireless internet to be had. My hotel had a PC that was locked down to only certain sites and was riddled with spyware. I had to walk about 20 blocks to find a T-mobile hotspot inside a Starbucks. Then I had to drink some mineral water - not an Izze in sight. I was really missing home.
It may be 9:30 here, but it’s now 5:30am now where I started my day. Nite nite.
RVC Colorado Capital Conference Recap
June 10, 2006
I was asked to sit on the panel for a couple of sessions at the Colorado Capital Conference this past Thursday. Our task was to review six companies that we knew nothing about based on their 10 minute investor pitches. One was PositiveWare which I have discussed before. I found a couple of the other companies to be somewhat interesting and I hope to blog about them soon as well. Most of the pitches were well rehearsed but of course some exhibited the common mistakes I’ve now seen too many times such as:
- Not telling the investor what’s in it for them (ROI, time frame, comps, etc).
- Jumping into the solution before describing the problem.
- Not sizing the market or the opportunity presented.
- Focusing too much on the product specifics and not enough on the deal.
Of course the goal of these things is simply to excite the potential investor enough to get a chance to say more. I have frequently been asked about the perfect pitch (in fact, right after the second session I was asked that by an attendee – great question!). I usually describe a 9 slide pitch when asked that question, but since reading Guy Kawasaki’s 10/20/30 approach to a perfect pitch I have now added a tenth slide which is to ask for an investment. It might surprise you to know that many entrepreneurs never ask for the investment. I figure that if you can’t do that, you don’t understand how to sell yourself, your product, or your company.
The highlight of the conference for me was listening to the lunch keynote by Reid Hoffman (CEO of LinkedIn). Reid prefaced his whole speech by stating that he comes out of the consumer internet space and so this is his real expertise. I love learning about that space so I was more excited than the VC (who shall remain nameless) sitting next to me who fell asleep in his chair during the speech.
I thought Reid was uber-cool, but then again I’m a geek too. LinkedIn is by no means a first act – Reid has been involved with some pretty successful companies such as Paypal, Friendster and Flickr. He didn’t use any slides and honestly it didn’t feel like he had prepared for more than 10 minutes. Reid talked about what he viewed as the 5 deadly sins of startups and the 5 principals of successful startups. One thing I really liked was his inclusion of “luck” as one of the factors contributing to his past success. You always know you’re talking to an experienced entrepreneur when you hear them talk about how they were helped out by luck time and again. This is because good entrepreneurs are often humble, credit everyone around them but themselves, and aren’t driven by the need to take personal credit for how smart they are all the time.
I wasn’t able to stay for the afternoon sessions as I was leaving for Amsterdam the next morning*. If you attended, leave a comment about the afternoon if you found any of the sessions particularly worthwhile.
* By the way, if anybody can recommend a good offline blogging tool please shout. I’m writing this on the plane in Word, and there has to be a better way.
MIT Enterprise Forum recap
June 10, 2006
The MIT Enterprise Forum session on Wednesday night was fun. There were about 45 people who attended, so the small media room at DU was fairly packed. This was the first time I had been to one of these, so I was surprised to see the makeup of the crowd.
For some reason I was expecting a crowd full of MIT grads and stuffy CXO types. I couldn’t have been more wrong. There were lots of young entrepreneurs like Danny Newman, Jason Eckenroth, Chris Stock, Michael Sitarzewski and Kevin Cawley in attendance. There also seemed to be a good number of founders from small service oriented companies present.
After about an hour of watching the broadcast on angel investing from Boston, the attention turned to a small local panel made up of private investors, entrepreneurs, and venture capitalists. I had been invited to sit on this panel, and wasn’t quite sure what to expect.
The crowd really got into it, and what followed were lots of great questions. I wanted to repeat the gist of a few of the better questions.
One person said that they were trying to raise $1M for his company. Correctly noting that he did not live in Silicon Valley, he remarked that this amount seemed to be in the “no mans land” between angel investment and venture funding. We effectively answered this question by saying “you’re probably right.” Not phased by the panels obviously high tolerance for ambiguity the young man pressed on by asking “ so what do I do then?”. The advise was to go and do something with less money. Many young entrepreneurs don’t understand that good angel investors will be prepared to double down once or twice if things are going well. It’s a great lesson: If you need a million – ask for $250k, say what you’re going to do with it, and then do it. If things are going well, raising a second round will be possible.
Another person said that they were confused by some angel investors ambiguity towards the annual rate of return that they were seeking. The panel discussed the fact that angels often state fuzzy goals like “a 10x return on investment”. So she pressed the panel with a barrage of completely reasonable questions intended to nail this down such as “Over what period of time? Annually? Across their whole portfolio?” I think this gets to the heart of one of the fascinating subjects discussed in “Angel Investing: An Insiders View” which is that there are many motivations for angel investing. Certainly, angels aren’t looking for 10-20% annualized returns. Angels are looking for a rocket ship. The honest answer is “We want a 10,000 percent return on investment in 3 years”. Angels just don’t say this because they don’t want to sound stupid. They realize that in many ways their portfolio companies are lottery tickets. It’s just that the game is a heck of a lot more fun than watching ping pong balls line up. If you ask me, most angel investors don’t want to lose their money, and they want a chance to hit one or two out of the park while getting the mental exercise and reward of helping to build interesting companies.
Finally, there was a lively discussion about whether or not a pre-revenue startup should bring in a seasoned executive with a $130k per year salary. Coincidentally, I had just advised a startup a few days ago to steer very clear of such a person. Even if you’re just a bunch of product guys, and even if you know you have a gap to fill at CEO or need a VP of BizDev so badly it hurts, don’t pay this kind of money for it. The person you are talking to is not an entrepreneur if they are demanding this sort of salary while you take none and eat Ramen noodles. If this person were confident in you, your company, and their own abilities then they would be asking for equity instead of salary. Entrepreneurial people take small risks and work for a startup, but entrepreneurs take real risks and work on a startup.
If you get the chance, come and check out the next MIT Enterprise Forum session (not yet announced). I have to say that Jim Pollock does a great job organizing it and ensuring a lively discussion on the topic at hand. Thanks Jim!
eNeighbors - localizing community one neighborhood at a time
June 7, 2006
Thanks to Colorado’s own eNeighbors, Nottingham Forest South residents can read all about the latest progressive dinner happening in their neighborhood.
I met with founder Chris Stock this morning and he explained to me that his product fills a need for homeowners associations, defined neighborhoods and apartment complexes. It gives them a presence on the internet and a place to allow residents to network. eNeighbors provides the community with a web presence while creating a channel for localized advertisement (the local bank will buy you lunch!). It also enables other revenue generating possibilities such as payment processing (think rent payments, school dues, soccer team fees, HOA fees, etc).
eNeighbors has signed up several customers and is in the process of designing and building it’s “2.0″ version in support of a national launch. This update will allow for additional scalability and a single point of entry under the eNeighbors domain. The company will soon be seeking angel investment and is currently searching for a hands-on entrepreneurial CTO to lead future product development.
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