Month: December 2012

One of the (many) benefits of being an early stage private company is that you don’t have to forecast your revenue and earnings to the public to judge 

It’s great because you can change it without having a massive impact on your company quarter to quarter. 

Often times when we see early stage startups predict revenue they almost always get it wrong. Even the best performing companies will get it wrong as it often takes longer and is harder to scale revenue that originally believed.  That’s why we don’t really obsess on revenue forecasts, particularly in an early stage, capital efficient company.

But while revenue plans aren’t written in stone in those early days, your expense forecast shouldnt be either. 

The timeline the company originally came up when raising that last round was likely something like the classic, “this will last 18 months”. That’s a perfectly fine approach as we don’t like to see a financing last the company less than that. 

But there is nothing about that expense plan that should be written in stone. I recommend working backwards and decide if you have enough time to make the progress you need. Revisit your assumptions Don’t take anything for granted. If you need more time then slow down the burn rate. This means either reducing that aggressive hiring plan you originally came up with, or you may need to reduce the team. Neither are exciting but not giving the company enough time can be much more painful. 

I’ve been through all of these scenarios, as an investor, board member and from working inside startups. Staying lean and mean is always better than being forced into fund raising. 

There are a lot of wars in the mobile and social space these days.

Perhaps, the wars are in every sector but I’m focused on mobile and social so I see it more.

Anyway, Google is unique because they build apps and they build a platform (android).

Several months ago, I was thinking out loud if Google would make a version of Maps for iOS that would be as good as their Android version. There were varied opinions if Google would do that. Many believed Maps is a killer mobile app and Google would keep it for themselves. 

I was hoping they would put down their weapons and focus on their users first and wrote this at the time.

This is the opportunity for Google to change the cycle of history and these platform wars. I’d love to see Google step up and create a kick ass version of Maps for iOS *and* Android. It would take courage and conviction and it would be inspiring. 

Last week Google did just that. They build a kick ass version of Maps for iOS. And during that same week they build a kick ass version of Gmail for iOS. It has replaced the native mail app for me. 

Google gave some folks one less reason to buy an Android phone. But I’m delighted they are paying attention to their users first vs giving their platform and unfair advantage. And for these decisions, I say, good on you Google.

There are plenty of other areas where Google and other companies in the mobile and social space can put down their weapons, call and truce and take care of their users. But last week was a refreshing start and I’m happy about that. 

Hi.

I have a Leica M9-P and it isn’t an easy camera to make photographs in low light. 

It can get noisy about ISO 1000. And the lack of autofocus makes it even more challenging at times. But I’m still pleased with the results. However low light plus movement is something I haven’t been able to figure out. 

If you aren’t used to shooting with a rangefinder it will take a lot of practice. I also have a few other cameras in my arsenal that I will carry if I know in advance the lighting will be tricky. 

“I’m not looking to fund startups that rely on advertising”

I heard this from another investor yesterday.

There is no question that building a company around an advertising business requires significant scale. Fred has a great post highlighting the facts about CPM rates over time.

And here’s the thing.

Building a company around advertising has always been hard. And so is building an enterprise company. Or an ecommerce company. Or a marketplace. Or anything of value. There is not just one way to make things work and none are easy.

Much of the reaction to consumer startups seem to have come from Facebook’s IPO and subsequent market valuation.

Yes, the company today isn’t worth $100B. Today.

Will it be someday ? Probably.

What’s it worth today? Something like $60B.

What’s the problem again?

I think in uncertain times we need to step back and figure out what works and what doesn’t work. I’m all for that.

But in my mind themobile and the consumer market are alive and well.

The great ones are making it work. They are delighting their users every day without spending a dollar on customer acquisition. Their users count on them. They get pissed when the service has an outage and they smile inside when the app does something magical.

Re ad models. Let’s not paint with a broad brush. Let’s talk about the ads that are built on faulty premise. It’s not online ads. Generic CPM rates are coming down as targeting/retargeting/ and data are going up. Native ads that google pioneered with Adwords are finding their own in places like fb, twitter, and now tumblr and foursquare. Native ads aren’t the new black. We’ve seen and had them for awhile but few have taken the time to get it right. But we are all learning fortunately. Native ads done right plus earned media is a compelling value proposition

TV ad dollars is the big thing we should all be talking about. Not internet or mobile. I submit that mobile is completely underhyped. And TV is way overhyped.

Why TV ad dollars are constant year over year when DVR penetration is on the rise and mobile is sky rocketing doesn’t compile for me. There is only one reason why we have DVRs and that is to skip the ad entirely. People say it’s because we all love our TVs and the reach is beyond anything else we can get elsewhere. Yes we do love our TVs but we hate those ads. They aren’t native. They are hostile and get in my way.

I’ve got a hunch that Facebook is going to have a surprisingly great Q4 and beat their number. The stock price will rise. Will those VCs come back to the consumer sector? I have no idea but it will be interesting to watch.