Startup Diaries

Posts Tagged ‘startups’

The Amazing Opportunity Of The Open Graph

November 22nd, 2011

One of the most exciting opportunities for startups in recent months is the new Facebook Open Graph. The life blood of every startup is the ability to reach new users. The old “viral black magic”. Facebook and Twitter were always some of the best tools. Startups who managed to get their users to share more content on these networks, received in return a stream of new users to their services. But the new Open Graph capabilities takes this to a all new level.

First and most important is the fact that users don’t need to do any action to share something. It is all done automatically in the background. You listen to a song – it goes to your timeline. You watch a video – it goes to your timeline. I’ll be the first one to admit that at first, as a user, this option is a bit scary. I wouldn’t want to use this option with every service. But Facebook thought also about that and are giving you, as a user, some nice benefits to enable this functionality. If you use it with a music service like Spotify for example, it allows you to easily see all the music you listened to. Forgot what was this cool song you discovered last week? No worries. With one click you can find it. It’s also quite cool to see how your music taste change over time.

But for developers this functionality is pure gold. It means that users will constantly keep pushing your content in front of their friends. The specific app aggregation view is also great. It allows other people to easily discover vat amount of content through their friends’ profile pages. Just check the how my Stagedom timeline looks like. With one glimpse you can see exactly what music I listen to, which new artists I discover and find new music videos from the web.
And the best thing: The integration with the Open Graph API is very simple. It took me just a few hours to configure everything. There is simply no excuse to not integrate with it right away.

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Posted in Facebook, Stagedom, Start ups

Tags: Facebook Open Graph Stagedom startups

The Startup Scene: SF vs NYC revisited

October 20th, 2011

As many of you knows, after a few years in San Francisco I’m now spending most of my time in New York. I made the move mostly for personal reasons as well because my new startup is very entertainment focused and I wanted to get to know the NYC scene.

But the last few months here gave me some perspective on the long debate whether you should build your startup in NYC or the bay area. I wanted to share some of my thoughts here with you:
I’ll start by saying that there is no doubt that the NYC startup scene is getting bigger and better in rapid pace. It’s nothing compared to where it was just two or three years ago. You can find many weekly meetups and events, there are many new co-working spaces like General Assembly and WeWork Labs and it seems that every day there are many new entrepreneurs around.
When you live here you can not miss the buzz around. NYC feels like the center of the world. It feels like it is the next big thing that going to pass the bay area without looking back. But as much as I love this buzz and rush, whenever I go back to visit SF it takes me just a couple of days to put things in proportion.

NYC is getting better. It even might be the second best place to build your startup in. But it is still a far second. The amount of investors, money, developers, experience entrepreneurs and potential partners in the bay area is still a few times more. If you want to build a super ninja technology team, it will still be much easier to do that in the bay area. If you want early stage investments and access to capital, you will still have many more people to meet with in the bay area. NYC is getting better, but it’s still not there.
You can easily see that in the numbers provided by the Huffington Post. SF share of all VC deals for 2011 is four times bigger than New York. If you look at the amount of money committed this number grows to five times more.

But before all my New Yorker friends are after me let me add that I think that NYC has some advantages over the bay area:
First and foremost it’s the access to industries and businesses that simply don’t thrive in the bay area. If your potential customers are in the music, fashion, entertainment or finance industries this is definitely the place for you. But it’s even more than that, while in the bay area when going to networking event you mostly meet techies and entrepreneurs, here I find myself meet actors, musician, non profits, scientists and many others. The variety of people around the city is something that is hard to find anywhere else in the world. This also affect the kind of early crowed you can reach. They are not going to be just the early tech adopters. They can be the trend setters and “cool kids” that we at the bay area sometimes love to push away.

So bottom line, what is my recommendation: I think that if you are still building your team and initial product you will probably do better on the west coast. But when you want to go out, test your product and push it to the market you will probably want to start spend more of your time in the big apple.

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Posted in Start ups

Tags: bay area investments new york nyc san francisco startups

The Art Of Pitching

September 16th, 2011

It’s been a few years since I had to pitch a new company and I almost forgot one of the most important lessons for entrepreneurs: Pitch early and pitch as much as you can.

There are tons of post that details why you should not adopt a stealth mode and the importance of getting early feedback. But there is one additional very big benefit for pitching early: How it affect you. It’s amazing to realize how your pitch changes from one to the next. It’s not just that you slowly perfecting your pitch. Many times it actually change how you think on your business model, future obstacles and features you need to implement in your product.

The moment you try to explain your business to someone else something changes. Suddenly it’s not just about your feelings and instincts. Suddenly you need to face some hard truths that you didn’t want to admit. There is also some very strange but powerful psychological effect when we say something out loud instead of just thinking it.

So my advice to all of you entrepreneurs is very simple: Pitch early and pitch as many times as you can.

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Posted in Start ups

Tags: entreprenurs pitch pitching startups

Championship Lessons – What The Mavericks Heat Series Can Teach Us About Business

June 13th, 2011

I’m a huge sports fan. One of these crazy people who follow their team around the world, paint his face before a game and cry when they lose.
I have also been playing basketball all my life. Many times I mentioned that I think that a lot of the way I deal with business came from the days I spent on the court.
Watching the series between the Dallas Mavericks and the Miami Heat, brought me back there. There is so many things we as startup founders can learn and take from the sports world. Let’s see some of the lessons we can take from this amazing Dallas’ Championship:

The Perfect Team
Dallas and Miami couldn’t have been more different teams representing different mentalities. Dallas was built around one super star player, Dirk Nowitzki, and many talented and hard-working players. They strike a balance between young, almost unknown players and older experienced ones.
Miami on the other hand is all about the superstars. It’s a team that was built around three super star players who a bit like mercenaries were hired together to bring a ring. During the series it was obvious which approach is better. And like in Sports also in startups, when building a team what you want is not a team of superstars. You want a balanced team. You need a few superstars that will lead but you also got to have the hard-core developers who are willing to put the hours and write the “dirty” boring code.
You need a team that will have a good chemistry and together will be much better than all the individuals alone.

It’s a long process to success
In sports as in business there are no shortcuts. Through the years there were many examples of sport teams who tried to skip some levels, building an all star team in one summer. From Real Madrid to Chelsea and now the Heat. It almost never works. The teams who win the championship are always the ones who have been together for a few years.
Same thing for startups. Most startups will need to work for years before they will exit. During these years the people will get to know each other better. Understand the better and worse sides of everyone. A startup is a marathon, It’s the founders job to observe this process and tweak it along the way. Bring or let go people making the team just a little better each time.
Same thing for your product. Facebook, Google, Windows or any other platform out there was never perfect from day one. It never meant to be. When you launch a product it should be good enough not perfect. With time, you need to look at how your users using it, tweak it again and again in thousands of little iterations until you get it to be just perfect.

Believe in yourself and be consistent
Along the way there will be many people out there who will tell you what you should do. How you need to change your product or your business. When I raised money for my last company, every VC we met with had something different to say. Wanted us to push to a different direction. One of our big mistakes was that we actually listened to everyone. Now don’t get me wrong. There are a lot of smart people around you and you should be smart enough to know to listen. But in the end, you should also understand that this is your company and your direction. You should take under consideration everyone advice but than listen to your heart and follow your own path.
This is exactly what Marc Cuban done with the Mavericks. For years everyone around told him to sell Nowitzki, to change the team, rebuild it, etc. But he believed in his way. Knew which team he want to build and just kept working on it. And today it finally paid off.

To wrap this post up, I just wanted to link to Marc Cuban (Dallas Mavericks owner) post game interview. Replace the word “championship” with “exit” and this interview will sound like a startup pitch instead of one of a sport team, with great lessons to all of us:

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Posted in Sports, Start ups

Tags: Championship Dalls Mavericks Internet Miami Heat NBA Sport startups

The Big Music Business Opportunity

April 28th, 2011

As many of you already know, I’m working now on my next venture. And as some of you know, this one is going to take a deep dive into the music industry.
What? Music? Am I serious?
Yes. Like you, I also read the hundreds of blog post and articles that details why trying to do anything with this industry is a suicide. I also saw the presentation of Dalton Caldwell (Imeem founder) warning everyone to stay away from music like from fire.
So why do I decided to do just the opposite? Put aside the fact that music is simply one of my biggest passions, I also believe that these exact difficulties that everyone are talking about are also the core of a huge opportunity. Let me try to explain:

First, let’s start with the obvious. The Music industry is a multi billion dollars industry that is shrinking every year. But what’s important to note is that it is shrinking not because the product (the music) is less loved, but because the business around it is rapidly changing. This in itself is a sign of a great opportunity. Any changing industry is an industry ripe for innovation. People are passionate about music now more than ever. People are actually extremely passionate about music. And anything that people are passionate about is something that they are willing to pay for. You just need to find the right way to let them do so.
Just look at how Netflix changed the movie streaming industry. For years everyone talked about the end of the film industry as everyone are just pirating movies and suddenly the all picture looks different. Netflix managed to build a product that is simply good enough to convince everyone to pay for it. Their growth was so big that now everyone from Amazon to Google is going after them, trying to replicate their model.

The second reason I think there is a huge opportunity in music is the industry structure itself. Like many other industries, much of the way the music business is handled is still rooted in the way business was done years ago. I just finished reading Donald Passman book “All You Need To Know About The Music Business”. In it, Donald breaks down a guide for the new artists on how the business works and how an artist should build his contracts, career, etc. A couple of things really amazed me:
- How complex the all thing is. You need to be a MBA graduate to understand how much money you need to get paid. I really have no idea how a young artist suppose to control his career and destiny.
- How little does the artists actually getting paid. If you are not a real star you are not going to see any money and most likely you will actually lose some.

As an entrepreneur coming from the outside all of this is actually exciting. Old complex industry that still stuck in the dark ages with much bureaucracy and many players between the consumer and the product. And all of that around a multi billion, international market? Are you kidding me? It’s the dream for every tech entrepreneur.

Now don’t get me wrong. I’m not naive. Every major disruption for such a big industry is going to get tons of push back. It’s not just that people don’t like change. With such a big change, there will be many people who might lose their jobs or need to fight for their place in the new world. Trying to shift an all industry can probably be painful like a root canal. It’s also not a quick and easy exit. It’s a process. A long one. But in its end lies a really big opportunity and a chance to really change the world.

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Posted in Music, Start ups, Uncategorized

Tags: Amazon disruption Google innocation Music NetFlix startups

Conclusions From The SXSW Experiment

March 20th, 2011

After 9 days, tens concerts, more parties, a few panels, not enough hours of sleep and way to much to count glasses of vodka, I’m finally out of the SXSW madness. It took me about two days to recover and it is now time to try to summarize some of the experience and conclusions.

The Experience – Should I go or Should I not
Let’s start from the end. Yes. You should definitely go next year.
I know it’s very popular to bash on SXSW right now. I can understand why people who have ben going there for many years feel like someone stole their favorite toy. SXSW got big. Many will say to big. It’s not your insiders only conference anymore. But that doesn’t mean that it is not good or useful. It’s just different. If you do it right, it is still one of the best networking events out there. It is still a great place to get a glimpse of some of the applications which will become mainstream in upcoming years. It is still a great place to test your product with thousands of hungry geeks. And most of all – It’s simply one hell of a party that you just don’t want to miss.

East VS West
It was fascinating to see the differences between the NYC and Bay Area based startups. This year it was all about NYC. These guys (and girls) ruled the place. Wherever I turned I kept meeting more and more entrepreneurs coming from there. But the big difference was in their energy levels. NYC entrepreneurs feel that they are the next big thing. The spotlight is leaving the bay area and coming to the big city. For them, all these networking, money and fame is fresh and new and they take advantage of every minute of that.
While a lot of my bay area friends preferred to spend the nights in small groups in various restaurants, the new yorkers were hopping from party to party, drinking and networking like crazy.
It was also interesting to see the difference in usage of some tools. For example: For most new yorkers Hashable was the first choice of how to exchange business cards while most bay area people didn’t even sign to the app yet. At the same time, all of SF people were constantly on plancast, but many of the east coasters still haven’t heard about this cool startup.

The Winners
It’s true that SXSW is its own micro system and not everything that works there will go mainstream. Still, I like to look at it as an experiment zone on hyper drive. A quick glimpse of what might happen in the future when everyone will be mobile and socially connected all the time.
My definite winners are:

Plancast – This was the best way to navigate the hundreds of daily parties and events all around.
Hashable – This was the first year ever that you started (finally) to see the end of the business card. Hashable was a big part of that.
QR Codes – They were everywhere. About 30% of the cards and ads I got used them. All the booths used them. QR codes are finally becoming integral part of our lives.
Group Messaging – I don’t know which one of the many companies out there won this race, but it was finally obvious why so much money is going there. While sometimes we were all in text overload, it quickly became obvious how addictive the experience of texting with a group might be.
Foursquare – At least with the people I hanged out with it seemed obvious that Foursquare were ruling SXSW second year in a row.
The iPad – It was everywhere. The new and the old one. My favorite moment was when Jewel went on stage with an iPad and used it to remember the words of some of her upcoming songs
Mobile – It was amazing to look at the long lines for some of the concerts. Not in the interactive part but in the music part. The one where the “normal” people are going to. About 90% of the people were holding some sort of smart phone, facbooking or texting with their friends. Mobile is the new platform and if you are not on it you have no place in the future world.

Best Parties
There were so many parties that it is hard to remember all, but a few of them seemed to raise above all. Here are my favorites (and thanks for the companies that organized them):
The Nikon/Vemeo party, The Klout day party, 500 startups party, Conduit rooftop party and the SVB party.

To Bubble Or Not To Bubble
This subject probably deserve a post of its own, but in short it was obvious that there is a lot of money in tech right now. The exhibit hall looked a bit like a circus, everywhere you looked there was free food and alcohol, Audi ere giving cars as prizes in parties. In short – it was a madhouse. I do think there is too much money going to startups right now. I do think that something is going to have to change soon. But I don’t think we are in a bubble. I’ll write more on that soon, but in the mean time I’ll be happy to hear what you guys think.

Missing
It wasn’t hard to miss the fact that there were no exciting new services launching in SXSW this year. It was more just more of the same. More sharing, more connectivity, more everything. Just not new. I haven’t seen any new exciting technologies or ideas that are really different. I guess this is one of the symptoms of the shift from technology to media in recent years.

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Posted in Start ups

Tags: conduit hashable Internet klout Mobile parties plancast sms startups sxsw technology

On Social Life And Startups

January 10th, 2011

In his book (which I highly recommend for any entrepreneur) “Delivering Happiness”, Tony Hsieh writes about the move of Zappos to Las Vegas:

“Although it seems obvious in retrospect, probably the biggest benefit of moving to Vegas was the nobody had any friends outside of Zappos, se we were all sort of forced to hang out with each other outside the office. It was an exciting time”

Reading these lines again, I couldn’t think about my situation today. A few weeks ago I moved to Santiago Chile as part of the Startup Chile program. With me, there are about 20 other startups teams who came from all around the world.
Among ourselves we sometimes joke that coming here was like going back to college life. We all came from different places, we didn’t know anyone around and we are in a very different place (even speaking a different language) than what we used to.
So naturally we all hang out together, go to dinners, drink (and drink some more together and basically have an almost dorm like lifestyle. For us Santiago is our own Vegas.

I totally agree with Tony. Building this kind of social life among a startup employees (and the community around it) is highly important. Like in team sports, a startup is a battle. A team battle. Having a culture of helping each other, of friendships or even almost brotherhood can really help a startup go through some of the rough days that will surely come.

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Posted in Start ups

Tags: culture delivering happiness startups

Lessons From The Trenches: Lesson 1 – Why Should You Start a Startup?

November 27th, 2010

I founded NuConomy with a friend of mine in mid 2006. For four years we ran it and although we managed to sell it we never considered it as a success. In many point along the way we had a huge potential to become a truly big company. But this was our first startup and we managed to do almost every single mistake possible. This series of blog posts will try to detail these mistakes and the lessons we learned from them. Hopefully it will help other first time entrepreneurs avoid at least some of them.

Lesson 1 – Why Should You Start a Startup

I’m sure you heard one of these sentences a million times: “A startup is a marathon” or “there is no such thing as an overnight success”. We all heard this again and again, but still for most of us the word startup still brings out the dream of a quick exit and the fats road to fame and success.

We all have this romantic look on a bunch of young people working hard at the garage. No money, long nights of coding with red bulls, and than suddenly millions of dollars come out of the blue and make them famous. We all watched to many Hollywood movies. In reality, although sometimes fun, there is nothing romantic about working in the garage. Instead, prepare yourself for really log nights, tons of stress, almost impossible personal life and an unclear future.

Because in reality a startup is a marathon. Its the hardest marathon you will ever take. The average life span of a startup is at least four years. Most of the successful startups worked for at least a year or two before just getting to be known. And of course most startups don’t even get to this stage.

Moat startups don’t get to raise money outside of friends and family. Almost all of those which did raise money won’t make an exit. Out of the ones who will exit, just a small percentage will make really big money for their founders. If it’s money you are after, your best chances are to stick to your job, get to become a senior VP and take a million or two back home.

So if it’s not for money, maybe you should start a startup in order to be your own boss and have more freedom?
True, You will be your own boss, but it wont bring you more freedom. You will actually find yourself working harder than ever and much more tied up to work than ever before.

So why should you start a startup?

I was asked many times why I preferred to start my own startup instead of working for one of the big players like Google and Microsoft. My answer was that it’s because there is something wrong in my brain. There is no real logical way for this decision. A startup is really like a virus. Something alien that takes control of your body.

The reason for starting a startup should come from your stomach and not from your head. It should be a need, something you feel, not something you think about. You should really want to change things. Build something big. You should see yourself doing it every night in your dreams and when you wake up.

If this is the situation for you, so yes, You should definitely go for it. Otherwise, stick with your day job.

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Posted in Start ups

Tags: lessons startups

It's Not About Seed Money – It's About Smart Seed Money

July 14th, 2010

The last few weeks saw a surge in posts about the phenomena of seed funds. I especially liked Fred Wilson post on the topic. In it Fred is talking about the fact that although startups today need less capital to start and get traction, they still need bigger amount of money in order to grow into profitable and large businesses.

I totally agree with this notion. In the last month or so since I left Live Person (the company that acquired my startup) I experimented in rapid development, curios to see what I can come up with. The results were amazing. It’s simply stunning to see what can be done in less than 24 hours.
I truly believe that a group of two or three developers plus a great graphic designer can build amazing products in less than a week. Will these products be the most stable and scalable products ever created? Of course not. But that’s not what’s important at this stage. What’s important is to have something out there that you can start and get feedback upon and actually see if you are up to something big.

So if this is the new reality why anyone ever need traditional VCs? Why do you ever need to raise more than a couple of hundred thousands? Why can’t everyone become the new angel/seed investors?

The answer is simple: It’s all about time and experience.

Building a prototype of your idea is cheap and fast. But getting enough traction in order to now raise your next round (in a higher valuation) takes time. For most startups it will take at least a year if not more. It means that you need to know how to grow your business, get real traction, build a brand and do it all in a very lean way. This is art. This require a lot of experience. Thinking back on myself when we just started NuConomy, there is no way I would have known how to do that. I simply lacked the needed experience.

This is why, especially for new entrepreneurs, it’s not just about the money. It’s about getting smart money. When you take seed investment from First Round Capital or Union Square Ventures you don’t just get money. You get access to very smart people who can help you control your budget and understand your next steps. Taking the same money from your rich uncle will simply won’t be enough.

This is an extremely important point to think about as when raising seed money, you don’t have much room for mistakes. If you raised 5 million dollars and after six months found out you are in the wrong direction, you still have enough runway to make a u-turn. But if you raised just two hundred thousands such a mistake means the end of your startup.

From that same reason, when talking with new entrepreneurs I recommend other them to put some work on building the right advisory board from day one. Surround yourself with smart and experienced people who are willing to give you more than a name, but also time. Ask them a lot of questions and share your thoughts all the time. The right people on your side are worth any equity you will give them.

So to sum it up – I’m a big believer in raising smaller amount of capital in the early days. With the right help it can take you very far and put you in a better position when going for the 5+ million round.

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Posted in Start ups, VC, Web 2.0

Tags: investments Seed Money startups VC