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17,999 | lupin_sansei | 2007-04-30T02:29:08 | (Funny) Java Programmers wanted | null | http://www.hupi.ch/FunStuff/Schwachsinn/IndianTrain2.jpg | 3 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,010 | lupin_sansei | 2007-04-30T03:14:00 | NeuroSky - Brain wave controlled toy startup | null | http://news.yahoo.com/s/ap/20070429/ap_on_hi_te/mind_reading_toys | 8 | 0 | null | null | null | no_article | null | null | null | null | 2024-11-07T22:37:31 | null | train |
18,012 | Sam_Odio | 2007-04-30T03:21:20 | how to upvote without losing your place on the page | null | 8 | 8 | [
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] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,034 | kirsten | 2007-04-30T04:42:06 | Bebo gets former VP of MTV | null | http://mashable.com/2007/04/29/bebo-vp/ | 3 | 0 | null | null | null | no_error | Bebo Hires MTV VP | 2007-04-30T03:47:17+00:00 | null |
Credit:
Bebo announces today the appointment of Angel Gambino as their Vice President of Music, based in London.This is a newly-created position for the social networking company, and Gambino will be responsible for helping artists and labels to leverage the sprawling reach of Bebo's 31 million users across the globe. She will also be devising partnerships between artists and brands and retailers. As Bebo is used for self-promotion and branding purposes, they've selected Gambino to ensure that businesses and artists alike are able to best use socia networking marketing practices, which includes widgets, SMS integration and their new feeds service, making these types of partnerships lucrative for Bebo as well.
| 2024-11-08T00:49:13 | en | train |
18,045 | Gretha | 2007-04-30T06:19:56 | Can Microsoft visualise the future of search? | null | http://www.vecosys.com/2007/02/15/can-microsoft-visualise-the-future-of-search/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,047 | henryw | 2007-04-30T06:25:56 | PHP Online CRUD Scaffold File Maker (Paste Export Table SQL) | null | http://www.spotstart.com/php-crud-scaffold/ | 4 | 5 | [
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18,054 | Sam_Odio | 2007-04-30T07:29:20 | Yahoo answers Google/DoubleClick, buys Right Media for $680M | null | http://venturebeat.com/2007/04/30/yahoo-answers-googleclick-buys-right-media-for-680m/ | 4 | 1 | [
18056
] | null | null | null | null | null | null | null | null | null | train |
18,055 | Sam_Odio | 2007-04-30T07:31:43 | More info on Yahoo's acquisition of Right Media | null | http://gigaom.com/2007/04/30/yahoo-rightmedia/ | 3 | 1 | [
18057
] | null | null | http_other_error | 520: Web server is returning an unknown error | null | null |
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| 2024-11-08T04:32:00 | null | train |
18,060 | mattjaynes | 2007-04-30T07:54:17 | Australian Press Prank On Wikipedia's Jimmy Wales | null | http://www.techcrunch.com/2007/04/29/australian-press-prank-on-wikipedias-jimmy-wales/ | 1 | 0 | null | null | null | Failed after 3 attempts. Last error: Quota exceeded for quota metric 'Generate Content API requests per minute' and limit 'GenerateContent request limit per minute for a region' of service 'generativelanguage.googleapis.com' for consumer 'project_number:854396441450'. | Australian Press Prank On Wikipedia's Jimmy Wales | TechCrunch | 2007-04-30T02:47:42+00:00 | Michael Arrington | update: The video of this is now available.
Wikipedia founder Jimmy Wales spoke at a education.au conference in Sydney, Australia last week. After his talk he took questions.
As reported by the Brisbane Times, Andrew Hansen raised his hand as a member of the press and was selected to ask a question. What Wales didn’t know is that Hansen is part of the cast of a wildly popular public television show in Australia called The Chaser’s War on Everything, a weekly half hour satire/prank show.
Hansen said “Ah, Jimmy, um, look I just have 10 questions,” and then fired off ten questions in a row, not waiting for answers (It’s normal at events like this for reporters to ask a follow up question at the same time as the initial question to save time). This is a regular prank by the cast of the show, called “Mr. Ten Questions.”
His questions:
First, how are you enjoying Australia?
Second, how do our computers compare to the ones in America?
Third, why does everyone in IT look so nerdy, yet you look like a daytime soap star?
Fourth, Mac or PC – do you really give a shit?
Fifth, there are 1.7 million articles on Wikipedia; how long did it take you to write them all?
Sixth, Craig Reucassel’s a bit unhappy with the photo on his page. Could you upload a better one maybe for him?
Seventh, my dog is getting some scabs under his chin. I don’t know if you can bring him in the number of a local vet?
Eighth, Jessica Rowe and Peter Overton – will it last?
Ninth, cracked pepper?
Tenth, how do you feel about the fact that when I looked you up on Wikipedia this morning I changed your page to say that you were a teenage drug lord from Malaysia?
To his credit Wales attempted to respond to four of the questions. :-)
| 2024-11-07T20:17:35 | null | train |
18,064 | mattjaynes | 2007-04-30T08:02:39 | Hot New YC.News Hangout! | null | http://www.techcrunch.com/2007/04/29/iac-launches-zwinktopia-at-peak-of-virtual-world-hype/ | 1 | 0 | null | null | null | no_error | IAC Launches Zwinktopia At Peak of Virtual World Hype | TechCrunch | 2007-04-30T03:55:49+00:00 | Michael Arrington |
The timing couldn’t be much better for InterActiveCorp to launch Zwinktopia, a new virtual world for young teens. Other virtual worlds, such as Gaia, Habbo Hotel, Cyworld, Neopets, Club Penguin, Webkinz and others, are exploding in terms of unique monthly visitors and total time spent at the sites.
Until today, IAC’s Zwinky was a site to make customized avatars, choosing from 10,000 different outfits, accesories and other items, and embed them onto other websites such as MySpace. Users could also become friends with other users and enage in basic social networking activities. See Stardoll as well in this space.
Most of the functionality at Zwinky is accessed via a non-mandatory browser toolbar that users install. Zwinky says that they have 20 million active toolbars that were used in March 2007. Part of Zwinky’s business model is to collect search advertising revenues from toolbar usage.
Today Zwinky will add a virtual world to the site called Zwinktopia – users can use their avatars to roam around the world, chat with other users and engage in activities to earn Zbucks, the virtual currency of Zwinktopia. Zbucks can be used to buy virtual clothing and other goods.
Zwinky is part of the Fun Webs group at IAC, which includes Smiley Central, Cursor Mania and other sites and generates over $100 million in annual revenues. The Fun Webs group is part of the Consumer Applications and Portals group (iWon and Excite are within this group) and is led by Scott Garell.
Zwinky alone has 4.7 million worldwide unique visitors in March (Comscore), far more than Second Life and the other competitors listed in the first paragraph above. If a reasonable number of them can be converted into exploring Zwinktopia, it will become the largest immersive world outside of the gaming sites like World of Warcraft. See Comscore comparision data below (U.S. only).
See GigaOm’s recent article on Gaia, which is probably closest to Zwinktopia in functionality.
Update: The company will be running the television ad promoting Zwinktopia embedded below on NBC on Monday.
http://video.google.com/googleplayer.swf?docId=-4628271642650138617&hl=en
Most Popular
Michael Arrington most recently Co-Founded CrunchFund after leading TechCrunch to a successful exit with AOL. His venture investments include Uber, Airbnb and Pinterest. Michael was the Editor of TechCrunch, which he founded in 2005. In 2008 Time Magazine named Michael “One of the World’s 100 most influential people”. Michael also practiced securities law at O’Melveny & Myers and Wilson Sonsini Goodrich & Rosati.Michael graduated from Stanford Law School and
Claremont McKenna College.
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| 2024-11-07T20:05:24 | en | train |
18,065 | danielha | 2007-04-30T08:04:49 | Big Money in Little Screens - New York Times | null | http://www.nytimes.com/2007/04/20/technology/20mobile.html?ex=1192939200&en=1b627cc93492f34f&ei=5087&mkt=techlink2 | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,075 | danw | 2007-04-30T09:44:06 | Kiva is one of the best services for entreprenuers on the web - OpenCoffee Club | null | http://www.opencoffeeclub.org/forum/topic/show?id=609012%3ATopic%3A3545 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,076 | bizcurious | 2007-04-30T09:54:57 | I still don't understand startup finance; would MBA help? | null | 2 | 3 | [
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] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,089 | PhilipBaddeley | 2007-04-30T12:51:19 | Dedicated to helping people understand equity using graphical tools and a database, from Cambridge, UK | null | http://www.equityfingerprint.com/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,094 | bootload | 2007-04-30T13:01:47 | Sun's Fortran replacement goes open-source | null | http://news.com.com/Suns+Fortran+replacement+goes+open-source/2100-7344_3-6150063.html | 3 | 5 | [
18140,
18096,
18132
] | null | null | no_article | null | null | null | null | 2024-11-08T07:43:20 | null | train |
18,095 | bootload | 2007-04-30T13:02:56 | Programming Language Research Group (Fortress) | null | http://research.sun.com/projects/plrg/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,097 | gibsonf1 | 2007-04-30T13:35:37 | Video: Another way to speed up Firefox | null | http://reviews.cnet.com/4660-10621_7-6728783.html?tag=bubbl_4 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,098 | gibsonf1 | 2007-04-30T13:40:00 | Microsoft opens up on Web strategy at Mix07 | null | http://news.com.com/Microsoft+opens+up+on+Web+strategy+at+Mix07/2100-1012_3-6179901.html?tag=nefd.lede | 2 | 0 | null | null | null | no_article | null | null | null | null | 2024-11-08T07:41:59 | null | train |
18,099 | gibsonf1 | 2007-04-30T13:42:07 | So much for the 'new and improved' GPL | null | http://news.com.com/So+much+for+the+new+and+improved+GPL/2010-7344_3-6179947.html?tag=nefd.top | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,100 | gibsonf1 | 2007-04-30T13:45:52 | EarthLink rethinking muni Wi-Fi? | null | http://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=19&entry_id=15880 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,101 | gibsonf1 | 2007-04-30T13:46:24 | Lifting the lid on government with Google | null | http://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=19&entry_id=15973 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,102 | gibsonf1 | 2007-04-30T13:47:51 | Using the Web to navigate California freeway collapse | null | http://www.webware.com/8301-1_109-9713810-2.html?tag=blog | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,103 | Sam_Odio | 2007-04-30T13:49:04 | TechCrunch coverage of Yahoo/Right Media acquisition | null | http://www.techcrunch.com/2007/04/29/panama-not-enough-to-battle-google-yahoo-acquires-rightmedia/ | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,105 | jagrine | 2007-04-30T13:59:27 | Go BIG Launches 'Projects' Posting Service | null | http://www.gobignetwork.com/wil/2007/4/30/go-big-network-launches-service-to-help-entrepreneurs-find-talent-for-startup-companies/10142/view.aspx | 8 | 7 | [
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] | null | true | fetch failed | null | null | null | null | 2024-11-08T08:55:15 | null | train |
18,107 | Sam_Odio | 2007-04-30T14:04:26 | More about Xobni financing | null | http://www.bizjournals.com/masshightech/stories/2007/04/30/story16.html | 14 | 9 | [
18466,
18122
] | null | null | no_article | null | null | null | null | 2024-11-08T01:47:17 | null | train |
18,112 | dmarques1 | 2007-04-30T14:51:15 | WSJ: Tech entrepreneurs looking for seed money have more places to turn these days | null | 18 | 8 | [
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18124,
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] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,123 | Sam_Odio | 2007-04-30T15:21:01 | Web 2.0 Shows Signs Of Becoming Bubble 2.0 | null | http://www.startupjournal.com/runbusiness/failure/20070423-dvorak.html | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,125 | sabat | 2007-04-30T15:21:51 | Acquisition Exit: it's not just Google & Yahoo | null | 14 | 5 | [
18136,
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18127
] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,130 | Sam_Odio | 2007-04-30T15:33:19 | Entrepreneurship in Silicon Valley During the Boom and Bust (interesting conclusions, see comments) | null | http://www.scribd.com/doc/41507/Entrepreneurship-in-Silicon-Valley-During-the-Boom-and-Bust- | 2 | 2 | [
18133
] | null | null | null | null | null | null | null | null | null | train |
18,131 | veritas | 2007-04-30T15:33:29 | GigaOM: Why Hollywood suddenly loves tech? | null | http://gigaom.com/2007/04/30/why-hollywood-suddenly-loves-tech/ | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,134 | veritas | 2007-04-30T15:34:10 | YouTube Launches Active Share | null | http://mashable.com/2007/04/30/youtube-active-share/ | 3 | 1 | [
18189
] | null | null | null | null | null | null | null | null | null | train |
18,139 | veritas | 2007-04-30T15:54:39 | SplashCast Expands Media Player | null | http://www.techcrunch.com/2007/04/30/splashcast-plays-itunes-and-beyond/ | 1 | 0 | null | null | null | no_error | SplashCast Expands Media Player | TechCrunch | 2007-04-30T15:10:43+00:00 | Contributor | SplashCast, an embeddable Flash media player, is improving its product today. They are now allowing publishers to turn any RSS feed with a media enclosure, such as a podcast or videocast, into a channel on their player. Previously SplashCast only allowed RSS feeds from YouTube and Flickr. Now, any feed can be added.
The best way to understand SplashCast is just to look at the player, which we’ve embedded below. Feeds are organized into channels, making it possible to show your favorite videos, podcasts, and photos from within one player updated through RSS. SplashCast will continuously update the shows on the channel as new content is added.
Text based RSS feeds have had several multi-channel embeddable widget based platforms, including Grazr and SpringWidgets. Multi-channel video and audio RSS feeds are a smaller category, mostly consisting of widgets that play only your own content. Along with SplashCast, Cozmo.tv has been helping develop multi-channel video players updated via RSS, but only for social video sites YouTube and Blip.tv. VodPod has also released a new widget that plays RSS feeds of videos from social video sites.
http://web.splashcast.net/go/so/3/p/JWLU4286CR
| 2024-11-08T20:08:53 | en | train |
18,154 | sbraford | 2007-04-30T16:34:07 | The Art of Execution | null | http://blog.guykawasaki.com/2006/01/remember_the_sc.html | 10 | 4 | [
18238,
18248,
18219
] | null | null | null | null | null | null | null | null | null | train |
18,156 | usablecontent | 2007-04-30T16:39:49 | TargetSpot Targeting Online Radio Ads | null | http://startupmeme.com/2007/04/30/targetspot-targeting-online-radio-ads/ | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,157 | sbraford | 2007-04-30T16:47:02 | Web 2.0 Lolcat | null | http://www.flickr.com/photos/ceonyc/473567640/ | 1 | -1 | null | null | true | null | null | null | null | null | null | null | train |
18,159 | schoudha | 2007-04-30T17:11:03 | Got Roomfuls of Stuff? Now Sites Will Help Keep Track of It | null | http://www.nytimes.com/2007/04/30/technology/30ecom.html?ex=1335585600&en=e83218ec96ade087&ei=5090&partner=rssuserland&emc=rss | 5 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,160 | mojuba | 2007-04-30T17:13:25 | The Long Hallway: on building virtual companies | null | http://alistapart.com/articles/longhallway | 7 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,168 | usablecontent | 2007-04-30T17:33:05 | eBay Launches ToGo Widgets For Any Listing | null | http://www.techcrunch.com/2007/04/30/ebay-launches-togo-widgets-for-any-listing/ | 2 | 0 | null | null | null | no_error | eBay Launches "ToGo" Widgets For Any Listing | TechCrunch | 2007-04-30T15:54:36+00:00 | Michael Arrington |
[ebay width=”355″ height=”300″ itemid=”300106376259″ query=”porsche” ]
As you can see with the embedded Flash widget above, eBay is now letting users embed information about any listing or group of listings directly into a website. Their hope is to encourage bloggers and social network users who discuss famous listings to embed the information right into the page. The service will be available at togo.ebay.com this morning.
There are three types of widgets. Example of all three can be seen on this test blog set up by eBay. The first, embedded above, shows information on a single listing. users can mouse over the seller to get additional information, or do a search with the results returned within the widget itself. Users can also clone the widget for their own site. There is no requirement that the person creating the widget be the seller of the item.
The second type of widget shows up to ten separate items. The pictures rotate in a slide show, and when a viewer clicks on one, it replaces the slideshow with information about that item in the same format as the first widget. The third type of widget shows picture results based on a search query. Like the second widget, clicking on any picture shows information about that listing.
These widgets are just for fun and to generate discussion around interesting auctions, not for revenue generation by publishers. Ebay provides affiliate tools at affiliates.ebay.com and the company says that they will evolve those tools separately over time to meet the requests of affiliates. See our recent post on AuctionAds (one of our current sponsors) for eBay listing widgets that pay out affiliate fees.
Robert Scoble interviewed the team and got a demo:
http://www.podtech.net/player/podtech-player.swf?bc=712e3ef9-14ea-459a-a3da-ffe71b6b33b4
Most Popular
Michael Arrington most recently Co-Founded CrunchFund after leading TechCrunch to a successful exit with AOL. His venture investments include Uber, Airbnb and Pinterest. Michael was the Editor of TechCrunch, which he founded in 2005. In 2008 Time Magazine named Michael “One of the World’s 100 most influential people”. Michael also practiced securities law at O’Melveny & Myers and Wilson Sonsini Goodrich & Rosati.Michael graduated from Stanford Law School and
Claremont McKenna College.
View Bio
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| 2024-11-08T13:27:54 | en | train |
18,169 | usablecontent | 2007-04-30T17:34:44 | O'Reilly Radar: We'd Love To Hear Your S3 Stories...And Numbers | null | http://radar.oreilly.com/archives/2007/04/wed_love_to_hea.html | 3 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,170 | usablecontent | 2007-04-30T17:37:00 | Google Seeks Clearer Path to State Data - New York Times | null | http://www.nytimes.com/2007/04/30/technology/30data.html?ex=1335585600&en=4f3da1548f6e2489&ei=5088&partner=rssnyt&emc=rss | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,173 | usablecontent | 2007-04-30T17:45:45 | Reuters Advances Development of Search Capability With The Acquisition of Clearforest (Apr. 30, 2007) | null | http://www.clearforest.com/whatsnew/PRs.asp?year=2007&id=109 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,175 | usablecontent | 2007-04-30T17:49:23 | Incentives Matter: Why Comments on Digg Are So Bad (Really Thought Provoking) | null | http://www.25hoursaday.com/weblog/PermaLink.aspx?guid=d722bf75-58a7-4e3a-8134-53ef6caeb007 | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,176 | nickanderson | 2007-04-30T17:50:15 | Masters of The Blogosphere: The 25 Most Influential Blogs | null | http://www.ebizmba.com/articles/most-popular-blogs.html | 2 | -1 | [
18177
] | null | true | null | null | null | null | null | null | null | train |
18,180 | entrepreneur | 2007-04-30T17:58:37 | Maximize Your Self Concept for Business Success | null | http://mindfulentrepreneur.com/blog/2007/04/30/maximize-your-self-concept-for-business-success/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,184 | Readmore | 2007-04-30T18:20:03 | News.YC site advice - What do you think about the new Klipboardz look? | null | http://www.klipboardz.com | 3 | 9 | [
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18196,
18209,
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18251
] | null | null | null | null | null | null | null | null | null | train |
18,185 | brett | 2007-04-30T18:21:37 | Bloomberg.com: Supreme Court Clears Way for More Patent Challenges | null | http://www.bloomberg.com/apps/news?pid=20601087&sid=aHigP6BkC8pE&refer=home | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,193 | danw | 2007-04-30T18:38:20 | dupe | null | http://www.paulgraham.com/guidetoinvestors.html | 2 | -1 | null | null | true | no_error | The Hacker's Guide to Investors | null | null | April 2007(This essay is derived from a keynote talk at the 2007 ASES Summit
at Stanford.)The world of investors is a foreign one to most hackers—partly
because investors are so unlike hackers, and partly because they
tend to operate in secret. I've been dealing with this world for
many years, both as a founder and an investor, and I still don't
fully understand it.In this essay I'm going to list some of the more surprising things
I've learned about investors. Some I only learned in the past year.Teaching hackers how to deal with investors is probably the second
most important thing we do at Y Combinator. The most important
thing for a startup is to make something good. But everyone knows
that's important. The dangerous thing about investors is that
hackers don't know how little they know about this strange world.1. The investors are what make a startup hub.About a year ago I tried to figure out what you'd need to reproduce
Silicon Valley. I decided the
critical ingredients were rich people
and nerds—investors and founders. People are all you need to
make technology, and all the other people will move.If I had to narrow that down, I'd say investors are the limiting
factor. Not because they contribute more to the startup, but simply
because they're least willing to move. They're rich. They're not
going to move to Albuquerque just because there are some smart
hackers there they could invest in. Whereas hackers will move to
the Bay Area to find investors.2. Angel investors are the most critical.There are several types of investors. The two main categories are
angels and VCs: VCs invest other people's money, and angels invest
their own.Though they're less well known, the angel investors are probably
the more critical ingredient in creating a silicon valley. Most
companies that VCs invest in would never have made it that far if angels
hadn't invested first. VCs say between half and three quarters of
companies that raise series A rounds have taken some outside
investment already.
[1]Angels are willing to fund riskier projects than VCs. They also
give valuable advice, because (unlike VCs) many have been startup
founders themselves.Google's story shows the key role angels play. A lot of people know
Google raised money from Kleiner and Sequoia. What most don't realize
is how late. That VC round was a series B round; the premoney
valuation was $75 million. Google was already a successful company
at that point. Really, Google was funded with angel money.It may seem odd that the canonical Silicon Valley startup was funded
by angels, but this is not so surprising. Risk is always proportionate
to reward. So the most successful startup of all is likely to have
seemed an extremely risky bet at first, and that is exactly the
kind VCs won't touch.Where do angel investors come from? From other startups. So startup
hubs like Silicon Valley benefit from something like the marketplace
effect, but shifted in time: startups are there because startups
were there.3. Angels don't like publicity.If angels are so important, why do we hear more about VCs? Because
VCs like publicity. They need to market themselves to the investors
who are their "customers"—the endowments and pension funds and
rich families whose money they invest—and also to founders who
might come to them for funding.Angels don't need to market themselves to investors because they
invest their own money. Nor do they want to market themselves to
founders: they don't want random people pestering them with business
plans. Actually, neither do VCs. Both angels and VCs get deals
almost exclusively through personal introductions.
[2]The reason VCs want a strong brand is not to draw in more business
plans over the transom, but so they win deals when competing
against other VCs. Whereas angels are rarely in direct competition,
because (a) they do fewer deals, (b) they're happy to split them,
and (c) they invest at a point where the stream is broader.4. Most investors, especially VCs, are not like founders.Some angels are, or were, hackers. But most VCs are a different
type of people: they're dealmakers.If you're a hacker, here's a thought experiment you can run to
understand why there are basically no hacker VCs: How would you
like a job where you never got to make anything, but instead spent
all your time listening to other people pitch (mostly terrible)
projects, deciding whether to fund them, and sitting on their boards
if you did? That would not be fun for most hackers. Hackers like
to make things. This would be like being an administrator.Because most VCs are a different species of people from
founders, it's hard to know what they're thinking. If you're a
hacker, the last time you had to deal with these guys was in high
school. Maybe in college you walked past their fraternity on your
way to the lab. But don't underestimate them. They're as expert
in their world as you are in yours. What they're good at is reading
people, and making deals work to their advantage. Think twice
before you try to beat them at that.5. Most investors are momentum investors.Because most investors are dealmakers rather than technology people,
they generally don't understand what you're doing. I knew as a
founder that most VCs didn't get technology. I also knew some made
a lot of money. And yet it never occurred to me till recently to
put those two ideas together and ask "How can VCs make money by
investing in stuff they don't understand?"The answer is that they're like momentum investors. You can (or
could once) make a lot of money by noticing sudden changes in stock
prices. When a stock jumps upward, you buy, and when it suddenly
drops, you sell. In effect you're insider trading, without knowing
what you know. You just know someone knows something, and that's
making the stock move.This is how most venture investors operate. They don't try to look
at something and predict whether it will take off. They win by
noticing that something is taking off a little sooner than everyone
else. That generates almost as good returns as actually being able
to pick winners. They may have to pay a little more than they would
if they got in at the very beginning, but only a little.Investors always say what they really care about is the team.
Actually what they care most about is your traffic, then what other
investors think, then the team. If you don't yet have any traffic,
they fall back on number 2, what other investors think. And this,
as you can imagine, produces wild oscillations in the "stock price"
of a startup. One week everyone wants you, and they're begging not
to be cut out of the deal. But all it takes is for one big investor
to cool on you, and the next week no one will return your phone
calls. We regularly have startups go from hot to cold or cold to
hot in a matter of days, and literally nothing has changed.There are two ways to deal with this phenomenon. If you're feeling
really confident, you can try to ride it. You can start by asking
a comparatively lowly VC for a small amount of money, and then after
generating interest there, ask more prestigious VCs for larger
amounts, stirring up a crescendo of buzz, and then "sell" at the
top. This is extremely risky, and takes months even if you succeed.
I wouldn't try it myself. My advice is to err on the side of safety:
when someone offers you a decent deal, just take it and get on with
building the company. Startups win or lose based on the quality
of their product, not the quality of their funding deals.6. Most investors are looking for big hits.Venture investors like companies that could go public. That's where
the big returns are. They know the odds of any individual startup
going public are small, but they want to invest in those that at
least have a chance of going public.Currently the way VCs seem to operate is to invest in a bunch of
companies, most of which fail, and one of which is Google. Those
few big wins compensate for losses on their other investments. What this
means is that most VCs will only invest in you if you're a potential
Google. They don't care about companies that are a safe bet to be
acquired for $20 million. There needs to be a chance, however
small, of the company becoming really big.Angels are different in this respect. They're happy to invest in
a company where the most likely outcome is a $20 million acquisition
if they can do it at a low enough valuation. But of course they
like companies that could go public too. So having an ambitious
long-term plan pleases everyone.If you take VC money, you have to mean it, because the structure
of VC deals prevents early acquisitions. If you take VC money,
they won't let you sell early.7. VCs want to invest large amounts.The fact that they're running investment funds makes VCs want to
invest large amounts. A typical VC fund is now hundreds of millions
of dollars. If $400 million has to be invested by 10 partners,
they have to invest $40 million each. VCs usually sit on the boards
of companies they fund. If the average deal size was $1 million,
each partner would have to sit on 40 boards, which would not be
fun. So they prefer bigger deals, where they can put a lot of money
to work at once.VCs don't regard you as a bargain if you don't need a lot of money.
That may even make you less attractive, because it means their
investment creates less of a barrier to entry for competitors.Angels are in a different position because they're investing their
own money. They're happy to invest small amounts—sometimes as
little as $20,000—as long as the potential returns look good
enough. So if you're doing something inexpensive, go to angels.8. Valuations are fiction.VCs admit that valuations are an artifact. They decide how much
money you need and how much of the company they want, and those two
constraints yield a valuation.Valuations increase as the size of the investment does. A company
that an angel is willing to put $50,000 into at a valuation of a
million can't take $6 million from VCs at that valuation. That
would leave the founders less than a seventh of the company between
them (since the option pool would also come out of that seventh).
Most VCs wouldn't want that, which is why you never hear of deals
where a VC invests $6 million at a premoney valuation of $1 million.If valuations change depending on the amount invested, that shows
how far they are from reflecting any kind of value of the company.Since valuations are made up, founders shouldn't care too much about
them. That's not the part to focus on. In fact, a high valuation
can be a bad thing. If you take funding at a premoney valuation
of $10 million, you won't be selling the company for 20. You'll
have to sell for over 50 for the VCs to get even a 5x return, which
is low to them. More likely they'll want you to hold out for 100.
But needing to get a high price decreases the chance of getting
bought at all; many companies can buy you for $10 million, but only
a handful for 100. And since a startup is like a pass/fail course
for the founders, what you want to optimize is your chance of a
good outcome, not the percentage of the company you keep.So why do founders chase high valuations? They're tricked by
misplaced ambition. They feel they've achieved more if they get a
higher valuation. They usually know other founders, and if they
get a higher valuation they can say "mine is bigger than yours."
But funding is not the real test. The real test is the final outcome
for the founder, and getting too high a valuation may just make a
good outcome less likely.The one advantage of a high valuation is that you get less dilution.
But there is another less sexy way to achieve that: just take less
money.9. Investors look for founders like the current stars.Ten years ago investors were looking for the next Bill Gates. This
was a mistake, because Microsoft was a very anomalous startup. They
started almost as a contract programming operation, and the reason
they became huge was that IBM happened to drop the PC standard in
their lap.Now all the VCs are looking for the next Larry and Sergey. This
is a good trend, because Larry and Sergey are closer to the ideal
startup founders.Historically investors thought it was important for a founder to
be an expert in business. So they were willing to fund teams of
MBAs who planned to use the money to pay programmers to build their
product for them. This is like funding Steve Ballmer in the hope
that the programmer he'll hire is Bill Gates—kind of backward,
as the events of the Bubble showed. Now most VCs know they should
be funding technical guys. This is more pronounced among the very
top funds; the lamer ones still want to fund MBAs.If you're a hacker, it's good news that investors are looking for
Larry and Sergey. The bad news is, the only investors who can do
it right are the ones who knew them when they were a
couple of CS grad students, not the confident media stars they are
today. What investors still don't get is how clueless and tentative
great founders can seem at the very beginning.10. The contribution of investors tends to be underestimated.Investors do more for startups than give them money. They're helpful
in doing deals and arranging introductions, and some of the smarter
ones, particularly angels, can give good advice about the product.In fact, I'd say what separates the great investors from the mediocre
ones is the quality of their advice. Most investors give advice,
but the top ones give good advice.Whatever help investors give a startup tends to be underestimated.
It's to everyone's advantage to let the world think the founders
thought of everything. The goal of the investors is for the company
to become valuable, and the company seems more valuable if it seems
like all the good ideas came from within.This trend is compounded by the obsession that the press has with
founders. In a company founded by two people, 10% of the ideas
might come from the first guy they hire. Arguably they've done a
bad job of hiring otherwise. And yet this guy will be almost
entirely overlooked by the press.I say this as a founder: the contribution of founders is always
overestimated. The danger here is that new founders, looking at
existing founders, will think that they're supermen that one couldn't
possibly equal oneself. Actually they have a hundred different
types of support people just offscreen making the whole show possible.
[3]11. VCs are afraid of looking bad.I've been very surprised to discover how timid most VCs are. They
seem to be afraid of looking bad to their partners, and perhaps
also to the limited partners—the people whose money they invest.You can measure this fear in how much less risk VCs are willing to
take. You can tell they won't make investments for their fund that
they might be willing to make themselves as angels. Though it's
not quite accurate to say that VCs are less willing to take risks.
They're less willing to do things that might look bad. That's not
the same thing.For example, most VCs would be very reluctant to invest in a startup
founded by a pair of 18 year old hackers, no matter how brilliant,
because if the startup failed their partners could turn on them and
say "What, you invested $x million of our money in a pair of 18
year olds?" Whereas if a VC invested in a startup founded by
three former banking executives in their 40s who planned to outsource
their product development—which to my mind is actually a lot
riskier than investing in a pair of really smart 18 year olds—he
couldn't be faulted, if it failed, for making such an apparently
prudent investment.As a friend of mine said, "Most VCs can't do anything that would
sound bad to the kind of doofuses who run pension funds." Angels
can take greater risks because they don't have to answer to anyone.12. Being turned down by investors doesn't mean much.Some founders are quite dejected when they get turned down by
investors. They shouldn't take it so much to heart. To start with,
investors are often wrong. It's hard to think of a successful
startup that wasn't turned down by investors at some point. Lots
of VCs rejected Google. So obviously the reaction of investors is
not a very meaningful test.Investors will often reject you for what seem to be superficial
reasons. I read of one VC who
turned
down a startup simply because
they'd given away so many little bits of stock that the deal required
too many signatures to close.
[4]
The reason investors can get away
with this is that they see so many deals. It doesn't matter if
they underestimate you because of some surface imperfection, because
the next best deal will be almost as good.
Imagine picking out
apples at a grocery store. You grab one with a little bruise.
Maybe it's just a surface bruise, but why even bother checking when
there are so many other unbruised apples to choose from?Investors would be the first to admit they're often wrong. So when
you get rejected by investors, don't think "we suck," but instead
ask "do we suck?" Rejection is a question, not an answer.13. Investors are emotional.I've been surprised to discover how emotional investors can be.
You'd expect them to be cold and calculating, or at least businesslike,
but often they're not. I'm not sure if it's their position of power
that makes them this way, or the large sums of money involved, but
investment negotiations can easily turn personal. If you offend
investors, they'll leave in a huff.A while ago an eminent VC firm offered a series A round to a startup
we'd seed funded. Then they heard a rival VC firm was also interested.
They were so afraid that they'd be rejected in favor of this other
firm that they gave the startup what's known as an "exploding
termsheet." They had, I think, 24 hours to say yes or no, or the
deal was off. Exploding termsheets are a somewhat dubious device,
but not uncommon. What surprised me was their reaction when I
called to talk about it. I asked if they'd still be interested in
the startup if the rival VC didn't end up making an offer, and they
said no. What rational basis could they have had for saying that?
If they thought the startup was worth investing in, what difference
should it make what some other VC thought? Surely it was their
duty to their limited partners simply to invest in the best
opportunities they found; they should be delighted if the other VC
said no, because it would mean they'd overlooked a good opportunity.
But of course there was no rational basis for their decision. They
just couldn't stand the idea of taking this rival firm's rejects.In this case the exploding termsheet was not (or not only) a tactic
to pressure the startup. It was more like the high school trick
of breaking up with someone before they can break up with you. In
an earlier essay I said that VCs were a lot like high school girls.
A few VCs have joked about that characterization, but none have
disputed it.14. The negotiation never stops till the closing.Most deals, for investment or acquisition, happen in two phases.
There's an initial phase of negotiation about the big questions.
If this succeeds you get a termsheet, so called because it outlines
the key terms of a deal. A termsheet is not legally binding,
but it is a definite step. It's supposed to mean that a
deal is going to happen, once the lawyers work out all the details.
In theory these details are minor ones; by definition all the
important points are supposed to be covered in the termsheet.Inexperience and wishful thinking combine to make founders feel
that when they have a termsheet, they have a deal. They want there
to be a deal; everyone acts like they have a deal; so there must
be a deal. But there isn't and may not be for several months. A
lot can change for a startup in several months. It's not uncommon
for investors and acquirers to get buyer's remorse. So you have
to keep pushing, keep selling, all the way to the close. Otherwise
all the "minor" details left unspecified in the termsheet will be
interpreted to your disadvantage. The other side may even break
the deal; if they do that, they'll usually seize on some technicality
or claim you misled them, rather than admitting they changed their
minds.It can be hard to keep the pressure on an investor or acquirer all
the way to the closing, because the most effective pressure is
competition from other investors or acquirers, and these tend to
drop away when you get a termsheet. You should try to stay as close
friends as you can with these rivals, but the most important thing
is just to keep up the momentum in your startup. The investors or
acquirers chose you because you seemed hot. Keep doing whatever
made you seem hot. Keep releasing new features; keep getting new
users; keep getting mentioned in the press and in blogs.15. Investors like to co-invest.I've been surprised how willing investors are to split deals. You
might think that if they found a good deal they'd want it all to
themselves, but they seem positively eager to syndicate. This is
understandable with angels; they invest on a smaller scale and don't
like to have too much money tied up in any one deal. But VCs also
share deals a lot. Why?Partly I think this is an artifact of the rule I quoted earlier:
after traffic, VCs care most what other VCs think. A deal that has
multiple VCs interested in it is more likely to close, so of deals
that close, more will have multiple investors.There is one rational reason to want multiple VCs in a deal: Any
investor who co-invests with you is one less investor who could
fund a competitor. Apparently Kleiner and Sequoia didn't like
splitting the Google deal, but it did at least have the advantage,
from each one's point of view, that there probably wouldn't be a
competitor funded by the other. Splitting deals thus has similar
advantages to confusing paternity.But I think the main reason VCs like splitting deals is the fear
of looking bad. If another firm shares the deal, then in the event
of failure it will seem to have been a prudent choice—a consensus
decision, rather than just the whim of an individual partner.16. Investors collude.Investing is not covered by antitrust law. At least, it better not
be, because investors regularly do things that would be illegal
otherwise. I know personally of cases where one investor has talked
another out of making a competitive offer, using the promise of
sharing future deals.In principle investors are all competing for the same deals, but
the spirit of cooperation is stronger than the spirit of competition.
The reason, again, is that there are so many deals. Though a
professional investor may have a closer relationship with a founder
he invests in than with other investors, his relationship with the
founder is only going to last a couple years, whereas his relationship
with other firms will last his whole career. There isn't so much
at stake in his interactions with other investors, but there will
be a lot of them. Professional investors are constantly trading
little favors.Another reason investors stick together is to preserve the power
of investors as a whole. So you will not, as of this writing, be
able to get investors into an auction for your series A round.
They'd rather lose the deal than establish a precedent of VCs
competitively bidding against one another. An efficient startup
funding market may be coming in the distant future; things tend to
move in that direction; but it's certainly not here now.
17. Large-scale investors care about their portfolio, not any
individual company.The reason startups work so well is that everyone with power also
has equity. The only way any of them can succeed is if they all
do. This makes everyone naturally pull in the same direction,
subject to differences of opinion about tactics.The problem is, larger scale investors don't have exactly the same
motivation. Close, but not identical. They don't need any given
startup to succeed, like founders do, just their portfolio as a
whole to. So in borderline cases the rational thing for them to
do is to sacrifice unpromising startups.Large-scale investors tend to put startups in three categories:
successes, failures, and the "living dead"—companies that are
plugging along but don't seem likely in the immediate future to get
bought or go public. To the founders, "living dead" sounds harsh.
These companies may be far from failures by ordinary standards. But
they might as well be from a venture investor's point of view, and
they suck up just as much time and attention as the successes. So
if such a company has two possible strategies, a conservative one
that's slightly more likely to work in the end, or a risky one that
within a short time will either yield a giant success or kill the
company, VCs will push for the kill-or-cure option. To them the
company is already a write-off. Better to have resolution, one way
or the other, as soon as possible.If a startup gets into real trouble, instead of trying to save it
VCs may just sell it at a low price to another of their portfolio
companies. Philip Greenspun said in Founders at Work that Ars Digita's VCs did this to them.18. Investors have different risk profiles from founders.Most people would rather a 100% chance of $1 million than a 20%
chance of $10 million. Investors are rich enough to be rational
and prefer the latter. So they'll always tend to encourage founders
to keep rolling the dice. If a company is doing well, investors
will want founders to turn down most acquisition offers. And indeed,
most startups that turn down acquisition offers ultimately do better.
But it's still hair-raising for the founders, because they might
end up with nothing. When someone's offering to buy you for a price
at which your stock is worth $5 million, saying no is equivalent
to having $5 million and betting it all on one spin of the roulette
wheel.Investors will tell you the company is worth more. And they may
be right. But that doesn't mean it's wrong to sell. Any financial
advisor who put all his client's assets in the stock of a single,
private company would probably lose his license for it.More and more, investors are letting founders cash out partially.
That should correct the problem. Most founders have such low standards
that they'll feel rich with a sum that doesn't seem huge to investors.
But this custom is spreading too slowly, because VCs are afraid of
seeming irresponsible. No one wants to be the first VC to give
someone fuck-you money and then actually get told "fuck you." But
until this does start to happen, we know VCs are being too conservative.19. Investors vary greatly.Back when I was a founder I used to think all VCs were the same.
And in fact they do all look
the same. They're all what hackers
call "suits." But since I've been dealing with VCs more I've learned
that some suits are smarter than others.They're also in a business where winners tend to keep winning and
losers to keep losing. When a VC firm has been successful in the
past, everyone wants funding from them, so they get the pick of all
the new deals. The self-reinforcing nature of the venture funding
market means that the top ten firms live in a completely different
world from, say, the hundredth. As well as being smarter, they
tend to be calmer and more upstanding; they don't need to do iffy
things to get an edge, and don't want to because they have more
brand to protect.There are only two kinds of VCs you want to take money from, if you
have the luxury of choosing: the "top tier" VCs, meaning about the
top 20 or so firms, plus a few new ones that are not among the top
20 only because they haven't been around long enough.It's particularly important to raise money from a top firm if you're
a hacker, because they're more confident. That means they're less
likely to stick you with a business guy as CEO, like VCs used to
do in the 90s. If you seem smart and want to do it, they'll let
you run the company.20. Investors don't realize how much it costs to raise money from
them.Raising money is a huge time suck at just the point where startups
can least afford it. It's not unusual for it to take five or six
months to close a funding round. Six weeks is fast. And raising
money is not just something you can leave running as a background
process. When you're raising money, it's inevitably the main focus
of the company. Which means building the product isn't.Suppose a Y Combinator company starts talking to VCs after demo
day, and is successful in raising money from them, closing the deal
after a comparatively short 8 weeks. Since demo day occurs after
10 weeks, the company is now 18 weeks old. Raising money, rather
than working on the product, has been the company's main focus for
44% of its existence. And mind you, this an example where things
turned out well.When a startup does return to working on the product after a funding
round finally closes, it's as if they were returning to work after
a months-long illness. They've lost most of their momentum.Investors have no idea how much they damage the companies they
invest in by taking so long to do it. But companies do. So there
is a big opportunity here for a new kind of venture fund that invests
smaller amounts at lower valuations, but promises to either close
or say no very quickly. If there were such a firm, I'd recommend
it to startups in preference to any other, no matter how prestigious.
Startups live on speed and momentum.21. Investors don't like to say no.The reason funding deals take so long to close is mainly that
investors can't make up their minds. VCs are not big companies;
they can do a deal in 24 hours if they need to. But they usually
let the initial meetings stretch out over a couple weeks. The
reason is the selection algorithm I mentioned earlier. Most don't
try to predict whether a startup will win, but to notice quickly
that it already is winning. They care what the market thinks of
you and what other VCs think of you, and they can't judge those
just from meeting you.Because they're investing in things that (a) change fast and (b)
they don't understand, a lot of investors will reject you in a way
that can later be claimed not to have been a rejection. Unless you
know this world, you may not even realize you've been rejected.
Here's a VC saying no:
We're really excited about your project, and we want to keep in
close touch as you develop it further.
Translated into more straightforward language, this means: We're
not investing in you, but we may change our minds if it looks like
you're taking off. Sometimes they're more candid and say explicitly
that they need to "see some traction." They'll invest in you if
you start to get lots of users. But so would any VC. So all they're
saying is that you're still at square 1.Here's a test for deciding whether a VC's response was yes or no.
Look down at your hands. Are you holding a termsheet?22. You need investors.Some founders say "Who needs investors?" Empirically the answer
seems to be: everyone who wants to succeed. Practically every
successful startup takes outside investment at some point.Why? What the people who think they don't need investors forget is
that they will have competitors. The question is not whether you
need outside investment, but whether it could help you at all.
If the answer is yes, and you don't take investment, then competitors
who do will have an advantage over you. And in the startup world
a little advantage can expand into a lot.Mike Moritz famously said that he invested in Yahoo because he
thought they had a few weeks' lead over their competitors. That
may not have mattered quite so much as he thought, because Google
came along three years later and kicked Yahoo's ass. But there is
something in what he said. Sometimes a small lead can grow into
the yes half of a binary choice.Maybe as it gets cheaper to start a startup, it will start to be
possible to succeed in a competitive market without outside funding.
There are certainly
costs to raising money. But as of this writing the empirical
evidence says it's a net win.23. Investors like it when you don't need them.A lot of founders approach investors as if they needed their
permission to start a company—as if it were like getting into
college. But you don't need investors to start most companies;
they just make it easier.And in fact, investors greatly prefer it if you don't need them.
What excites them, both consciously and unconsciously, is the sort
of startup that approaches them saying "the train's leaving the
station; are you in or out?" not the one saying "please can we have
some money to start a company?"Most investors are "bottoms" in the sense that the startups they
like most are those that are rough with them. When Google stuck
Kleiner and Sequoia with a $75 million premoney valuation, their
reaction was probably "Ouch! That feels so good." And they were
right, weren't they? That deal probably made them more than any
other they've done.The thing is, VCs are pretty good at reading people. So don't try
to act tough with them unless you really are the next Google, or
they'll see through you in a second. Instead of acting tough, what
most startups should do is simply always have a backup plan. Always
have some alternative plan for getting started if any given investor
says no. Having one is the best insurance against needing one.So you shouldn't start a startup that's expensive to start, because
then you'll be at the mercy of investors. If you ultimately want
to do something that will cost a lot, start by doing a cheaper
subset of it, and expand your ambitions when and if you raise more
money.Apparently the most likely animals to be left alive after a nuclear
war are cockroaches, because they're so hard to kill. That's what
you want to be as a startup, initially. Instead of a beautiful
but fragile flower that needs to have its stem in a plastic tube
to support itself, better to be small, ugly, and indestructible.Notes[1]
I may be underestimating VCs. They may play some behind the scenes
role in IPOs, which you ultimately need if you want to create a silicon
valley.[2]
A few VCs have an email address you can send your business
plan to, but the number of startups that get funded this way is
basically zero. You should always get a personal introduction—and
to a partner, not an associate.[3]
Several people have told us that the most valuable thing about
startup school
was that they got to see famous startup founders and realized
they were just ordinary guys. Though we're happy to provide this
service, this is not generally the way we pitch startup school to
potential speakers.[4]
Actually this sounds to me like a VC who got buyer's remorse,
then used a technicality to get out of the deal. But it's telling
that it even seemed a plausible excuse.Thanks to Sam Altman, Paul Buchheit, Hutch Fishman, and Robert
Morris for reading drafts of
this, and to Kenneth King of ASES for inviting me to speak.
Comment on this essay. | 2024-11-08T00:11:25 | en | train |
18,206 | farmer | 2007-04-30T19:21:59 | The Truth About the Pay Gap | null | http://reason.com/news/show/119920.html | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,212 | msgbeepa | 2007-04-30T19:30:18 | Stock Market Prediction Widget Game Launched | null | http://www.media-sight.net/2007/04/jambaz-stock-market-prediction-widget.html | 1 | -1 | null | null | true | null | null | null | null | null | null | null | train |
18,218 | ereldon | 2007-04-30T20:43:42 | Financial Times - Dotcoms start to be lords of their domains | null | http://www.ft.com/cms/s/a504d91e-afcc-11db-94ab-0000779e2340.html | 4 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,220 | edgarh | 2007-04-30T21:17:48 | Learn how the best ones make their money: Getting info from public companies | null | http://www.robertoalamos.com/learn-how-the-best-ones-make-their-money | 4 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,223 | gibsonf1 | 2007-04-30T22:04:52 | Bringing Archive Content Online Adds To The User-Generated Content Avalanche | null | http://www.sfgate.com/cgi-bin/blogburst/display/tech_web20?bbPostId=Cz5gJDVpTG95sCz6p5btZcwcKhCzEoJ7eiEB9qHCz52gea0O18fS | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,224 | gibsonf1 | 2007-04-30T22:18:20 | High-tech jobs in state rebound for first time since dot-com bust | null | http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/04/24/MNGJGPE9PP1.DTL&type=tech | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,227 | madanella | 2007-04-30T22:25:07 | Is it bad to compete with small businesses? | null | 2 | 5 | [
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18229,
18247
] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,228 | mattjaynes | 2007-04-30T22:26:11 | PyDigg - A Python Toolkit for the Digg API | null | http://neothoughts.com/2007/04/30/pydigg-a-python-toolkit-for-the-digg-api/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,230 | mattjaynes | 2007-04-30T22:30:45 | Giving Great Presentations: How To Not Throw Up | null | http://www.randsinrepose.com/archives/2007/04/30/how_to_not_throw_up.html | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,231 | rokhayakebe | 2007-04-30T22:32:28 | Bubble 2.0? LOL. So what. Who cares? | null | 1 | 2 | [
18232
] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,233 | nostrademons | 2007-04-30T22:49:47 | Bootstrapacitor - A meta-startup to keep your energy levels up | null | http://www.bootstrapacitor.com/ | 5 | 12 | [
18234,
18265,
18351
] | null | null | null | null | null | null | null | null | null | train |
18,235 | usablecontent | 2007-04-30T23:02:55 | Appirio Brings Salesforce to Google Personalized HomePage | null | http://startupmeme.com/2007/04/30/appirio-brings-salesforce-to-google-personalized-homepage/ | 3 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,237 | usablecontent | 2007-04-30T23:10:46 | Google Personalization Workshop: Gadget Maker and More | null | http://blog.outer-court.com/archive/2007-04-30-n90.html | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,242 | bootload | 2007-04-30T23:34:13 | WebFS: a Web of Data | null | http://www.zefhemel.com/archives/2007/03/04/webfs | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,243 | Sam_Odio | 2007-04-30T23:34:15 | Term Sheet Hacks: The Cheat Sheet | null | http://www.venturehacks.com/term-sheet-hacks | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,244 | bootload | 2007-04-30T23:35:24 | Spinning a Web Search (1996) | null | http://www.library.ucsb.edu/untangle/lager.html | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,245 | sergiutruta | 2007-04-30T23:36:55 | Startups - Great ideas vs. Great experiences | null | http://www.sergiutruta.com/2007/05/01/startups-great-ideas-vs-great-experiences/ | 1 | 3 | [
18268,
18254
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18,266 | usablecontent | 2007-05-01T00:47:45 | MIX07: Q&A with Ray Ozzie and Scott Guthrie | null | http://blogs.zdnet.com/BTL/?p=4951 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,269 | usablecontent | 2007-05-01T01:08:57 | Evite threatens to sue Socializr for copyright infringement | null | http://venturebeat.com/2007/04/30/evite-threatens-to-sue-socializr-for-copyright-infringement/ | 3 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,272 | 3d | 2007-05-01T01:20:18 | Sorry, Paul. You're a smart guy, but my fortune cookie disagrees with you. | null | http://i11.tinypic.com/67ir2x5.jpg | 16 | 6 | [
18387,
18287
] | null | null | null | null | null | null | null | null | null | train |
18,275 | lupin_sansei | 2007-05-01T01:28:12 | Vote up if you want YC to remember your cookie for longer than a few hours | null | null | 78 | 15 | [
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18292,
18333
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18,276 | lupin_sansei | 2007-05-01T01:28:46 | Required reading for Entrepreneurs: "Economics in One Lesson" | null | http://jim.com/econ/contents.html | 7 | 3 | [
18277,
18432,
18338
] | null | null | http_404 | Not Found | null | null | 404The page you are looking for doesn't exist or has been moved | 2024-11-08T16:11:47 | null | train |
18,278 | aston | 2007-05-01T01:30:26 | Why not just keep both YC programs in Silicon Valley? | null | http://news.ycombinator.com/comments?id=18141 | 13 | 1 | [
18306
] | null | null | null | null | null | null | null | null | null | train |
18,279 | omouse | 2007-05-01T01:33:33 | Ask YC: How's jaCal (my organizer app) look so far? | null | http://jacal.webhop.org/ | 1 | 10 | [
18340,
18509,
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18282
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18,280 | danielha | 2007-05-01T01:36:06 | Rebrand & New Features: Google IG To Relaunch as iGoogle | null | http://www.techcrunch.com/2007/04/30/rebrand-new-features-google-ig-to-relaunch-as-igoogle/ | 4 | 1 | [
18286
] | null | null | null | null | null | null | null | null | null | train |
18,285 | usablecontent | 2007-05-01T01:47:59 | Google Responds to Viacom's $1 Billion Law Suit | null | http://startupmeme.com/2007/04/30/google-responds-to-viacoms-1-billion-law-suit/ | 3 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,289 | mattjaynes | 2007-05-01T02:37:36 | (Includes interview w/ YC's Inkling founders) Web 2.0: Return of the dot-com | null | http://www.suntimes.com/business/363986,CST-FIN-Net30.article | 3 | 2 | [
18290,
18381
] | null | null | null | null | null | null | null | null | null | train |
18,294 | mtarifi | 2007-05-01T03:03:10 | Online Pornography: A Disciplined Business | null | http://www.nytimes.com/2007/04/29/magazine/29kink.t.html?pagewanted=1&ei=5124&en=802f9b879941be4b&ex=1335585600&partner=digg&exprod=digg | 8 | 1 | [
18457
] | null | null | null | null | null | null | null | null | null | train |
18,304 | mattjaynes | 2007-05-01T04:22:29 | States open databases for Google searches | null | http://www.mercurynews.com/breakingnews/ci_5783399 | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,305 | mattjaynes | 2007-05-01T04:27:13 | OpenLaszlo on Adobe's and Microsoft's open source RIA moves | null | http://weblog.infoworld.com/openresource/archives/2007/04/openlaszlo_on_a.html | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,307 | mattjaynes | 2007-05-01T04:33:31 | BuddyTV Gets First CRV $250K Loan (Anyone surprised that they've only done one so far?) | null | http://www.thealarmclock.com/mt/archives/2007/04/buddytv_gets_fi.html#Permalink | 2 | 2 | [
18309,
18320
] | null | null | null | null | null | null | null | null | null | train |
18,308 | tocomment | 2007-05-01T04:35:09 | How to get/make a Logo for Your Startup? | null | null | 24 | 21 | [
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18,311 | mattjaynes | 2007-05-01T04:37:16 | U.S. Video Startups Raised $682M Last Year | null | http://newteevee.com/2007/04/30/us-video-startups-raised-682m-last-year/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,312 | mattjaynes | 2007-05-01T04:40:36 | Top 10 Ways to Suffocate an Entrepreneurial Ecosystem | null | http://www.scottburkett.com/index.php/atlanta-business-scene/2007-04-30/top-10-ways-to-suffocate-an-entrepreneurial-ecosystem.html | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,313 | mattjaynes | 2007-05-01T04:42:46 | The World is Neither Flat nor Spiky, It is... | null | http://www.horsepigcow.com/2007/04/28/the-world-is-neither-flat-nor-spiky-it-is/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,315 | mattjaynes | 2007-05-01T04:45:11 | 80% of Internet Users Will Have a Virtual Life By 2011 | null | http://www.whatsnextblog.com/archives/2007/04/gartner_80_of_internet_users_will_have_a_virtual_life_by_2011.asp | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,316 | mattjaynes | 2007-05-01T04:47:23 | VCs start to feel the cold shoulder | null | http://startupaddict.blogspot.com/2007/04/vcs-start-to-feel-cold-shoulder.html | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,322 | unfoldedorigami | 2007-05-01T05:27:41 | Books for Entrepreneurs | null | http://www.burningdoor.com/askthewizard/2007/04/books_for_entrepreneurs.html | 3 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,323 | unfoldedorigami | 2007-05-01T05:36:40 | The Hacker's Guide to Investors | null | http://www.paulgraham.com/guidetoinvestors.html | 1 | 0 | [
18330
] | null | true | no_error | The Hacker's Guide to Investors | null | null | April 2007(This essay is derived from a keynote talk at the 2007 ASES Summit
at Stanford.)The world of investors is a foreign one to most hackers—partly
because investors are so unlike hackers, and partly because they
tend to operate in secret. I've been dealing with this world for
many years, both as a founder and an investor, and I still don't
fully understand it.In this essay I'm going to list some of the more surprising things
I've learned about investors. Some I only learned in the past year.Teaching hackers how to deal with investors is probably the second
most important thing we do at Y Combinator. The most important
thing for a startup is to make something good. But everyone knows
that's important. The dangerous thing about investors is that
hackers don't know how little they know about this strange world.1. The investors are what make a startup hub.About a year ago I tried to figure out what you'd need to reproduce
Silicon Valley. I decided the
critical ingredients were rich people
and nerds—investors and founders. People are all you need to
make technology, and all the other people will move.If I had to narrow that down, I'd say investors are the limiting
factor. Not because they contribute more to the startup, but simply
because they're least willing to move. They're rich. They're not
going to move to Albuquerque just because there are some smart
hackers there they could invest in. Whereas hackers will move to
the Bay Area to find investors.2. Angel investors are the most critical.There are several types of investors. The two main categories are
angels and VCs: VCs invest other people's money, and angels invest
their own.Though they're less well known, the angel investors are probably
the more critical ingredient in creating a silicon valley. Most
companies that VCs invest in would never have made it that far if angels
hadn't invested first. VCs say between half and three quarters of
companies that raise series A rounds have taken some outside
investment already.
[1]Angels are willing to fund riskier projects than VCs. They also
give valuable advice, because (unlike VCs) many have been startup
founders themselves.Google's story shows the key role angels play. A lot of people know
Google raised money from Kleiner and Sequoia. What most don't realize
is how late. That VC round was a series B round; the premoney
valuation was $75 million. Google was already a successful company
at that point. Really, Google was funded with angel money.It may seem odd that the canonical Silicon Valley startup was funded
by angels, but this is not so surprising. Risk is always proportionate
to reward. So the most successful startup of all is likely to have
seemed an extremely risky bet at first, and that is exactly the
kind VCs won't touch.Where do angel investors come from? From other startups. So startup
hubs like Silicon Valley benefit from something like the marketplace
effect, but shifted in time: startups are there because startups
were there.3. Angels don't like publicity.If angels are so important, why do we hear more about VCs? Because
VCs like publicity. They need to market themselves to the investors
who are their "customers"—the endowments and pension funds and
rich families whose money they invest—and also to founders who
might come to them for funding.Angels don't need to market themselves to investors because they
invest their own money. Nor do they want to market themselves to
founders: they don't want random people pestering them with business
plans. Actually, neither do VCs. Both angels and VCs get deals
almost exclusively through personal introductions.
[2]The reason VCs want a strong brand is not to draw in more business
plans over the transom, but so they win deals when competing
against other VCs. Whereas angels are rarely in direct competition,
because (a) they do fewer deals, (b) they're happy to split them,
and (c) they invest at a point where the stream is broader.4. Most investors, especially VCs, are not like founders.Some angels are, or were, hackers. But most VCs are a different
type of people: they're dealmakers.If you're a hacker, here's a thought experiment you can run to
understand why there are basically no hacker VCs: How would you
like a job where you never got to make anything, but instead spent
all your time listening to other people pitch (mostly terrible)
projects, deciding whether to fund them, and sitting on their boards
if you did? That would not be fun for most hackers. Hackers like
to make things. This would be like being an administrator.Because most VCs are a different species of people from
founders, it's hard to know what they're thinking. If you're a
hacker, the last time you had to deal with these guys was in high
school. Maybe in college you walked past their fraternity on your
way to the lab. But don't underestimate them. They're as expert
in their world as you are in yours. What they're good at is reading
people, and making deals work to their advantage. Think twice
before you try to beat them at that.5. Most investors are momentum investors.Because most investors are dealmakers rather than technology people,
they generally don't understand what you're doing. I knew as a
founder that most VCs didn't get technology. I also knew some made
a lot of money. And yet it never occurred to me till recently to
put those two ideas together and ask "How can VCs make money by
investing in stuff they don't understand?"The answer is that they're like momentum investors. You can (or
could once) make a lot of money by noticing sudden changes in stock
prices. When a stock jumps upward, you buy, and when it suddenly
drops, you sell. In effect you're insider trading, without knowing
what you know. You just know someone knows something, and that's
making the stock move.This is how most venture investors operate. They don't try to look
at something and predict whether it will take off. They win by
noticing that something is taking off a little sooner than everyone
else. That generates almost as good returns as actually being able
to pick winners. They may have to pay a little more than they would
if they got in at the very beginning, but only a little.Investors always say what they really care about is the team.
Actually what they care most about is your traffic, then what other
investors think, then the team. If you don't yet have any traffic,
they fall back on number 2, what other investors think. And this,
as you can imagine, produces wild oscillations in the "stock price"
of a startup. One week everyone wants you, and they're begging not
to be cut out of the deal. But all it takes is for one big investor
to cool on you, and the next week no one will return your phone
calls. We regularly have startups go from hot to cold or cold to
hot in a matter of days, and literally nothing has changed.There are two ways to deal with this phenomenon. If you're feeling
really confident, you can try to ride it. You can start by asking
a comparatively lowly VC for a small amount of money, and then after
generating interest there, ask more prestigious VCs for larger
amounts, stirring up a crescendo of buzz, and then "sell" at the
top. This is extremely risky, and takes months even if you succeed.
I wouldn't try it myself. My advice is to err on the side of safety:
when someone offers you a decent deal, just take it and get on with
building the company. Startups win or lose based on the quality
of their product, not the quality of their funding deals.6. Most investors are looking for big hits.Venture investors like companies that could go public. That's where
the big returns are. They know the odds of any individual startup
going public are small, but they want to invest in those that at
least have a chance of going public.Currently the way VCs seem to operate is to invest in a bunch of
companies, most of which fail, and one of which is Google. Those
few big wins compensate for losses on their other investments. What this
means is that most VCs will only invest in you if you're a potential
Google. They don't care about companies that are a safe bet to be
acquired for $20 million. There needs to be a chance, however
small, of the company becoming really big.Angels are different in this respect. They're happy to invest in
a company where the most likely outcome is a $20 million acquisition
if they can do it at a low enough valuation. But of course they
like companies that could go public too. So having an ambitious
long-term plan pleases everyone.If you take VC money, you have to mean it, because the structure
of VC deals prevents early acquisitions. If you take VC money,
they won't let you sell early.7. VCs want to invest large amounts.The fact that they're running investment funds makes VCs want to
invest large amounts. A typical VC fund is now hundreds of millions
of dollars. If $400 million has to be invested by 10 partners,
they have to invest $40 million each. VCs usually sit on the boards
of companies they fund. If the average deal size was $1 million,
each partner would have to sit on 40 boards, which would not be
fun. So they prefer bigger deals, where they can put a lot of money
to work at once.VCs don't regard you as a bargain if you don't need a lot of money.
That may even make you less attractive, because it means their
investment creates less of a barrier to entry for competitors.Angels are in a different position because they're investing their
own money. They're happy to invest small amounts—sometimes as
little as $20,000—as long as the potential returns look good
enough. So if you're doing something inexpensive, go to angels.8. Valuations are fiction.VCs admit that valuations are an artifact. They decide how much
money you need and how much of the company they want, and those two
constraints yield a valuation.Valuations increase as the size of the investment does. A company
that an angel is willing to put $50,000 into at a valuation of a
million can't take $6 million from VCs at that valuation. That
would leave the founders less than a seventh of the company between
them (since the option pool would also come out of that seventh).
Most VCs wouldn't want that, which is why you never hear of deals
where a VC invests $6 million at a premoney valuation of $1 million.If valuations change depending on the amount invested, that shows
how far they are from reflecting any kind of value of the company.Since valuations are made up, founders shouldn't care too much about
them. That's not the part to focus on. In fact, a high valuation
can be a bad thing. If you take funding at a premoney valuation
of $10 million, you won't be selling the company for 20. You'll
have to sell for over 50 for the VCs to get even a 5x return, which
is low to them. More likely they'll want you to hold out for 100.
But needing to get a high price decreases the chance of getting
bought at all; many companies can buy you for $10 million, but only
a handful for 100. And since a startup is like a pass/fail course
for the founders, what you want to optimize is your chance of a
good outcome, not the percentage of the company you keep.So why do founders chase high valuations? They're tricked by
misplaced ambition. They feel they've achieved more if they get a
higher valuation. They usually know other founders, and if they
get a higher valuation they can say "mine is bigger than yours."
But funding is not the real test. The real test is the final outcome
for the founder, and getting too high a valuation may just make a
good outcome less likely.The one advantage of a high valuation is that you get less dilution.
But there is another less sexy way to achieve that: just take less
money.9. Investors look for founders like the current stars.Ten years ago investors were looking for the next Bill Gates. This
was a mistake, because Microsoft was a very anomalous startup. They
started almost as a contract programming operation, and the reason
they became huge was that IBM happened to drop the PC standard in
their lap.Now all the VCs are looking for the next Larry and Sergey. This
is a good trend, because Larry and Sergey are closer to the ideal
startup founders.Historically investors thought it was important for a founder to
be an expert in business. So they were willing to fund teams of
MBAs who planned to use the money to pay programmers to build their
product for them. This is like funding Steve Ballmer in the hope
that the programmer he'll hire is Bill Gates—kind of backward,
as the events of the Bubble showed. Now most VCs know they should
be funding technical guys. This is more pronounced among the very
top funds; the lamer ones still want to fund MBAs.If you're a hacker, it's good news that investors are looking for
Larry and Sergey. The bad news is, the only investors who can do
it right are the ones who knew them when they were a
couple of CS grad students, not the confident media stars they are
today. What investors still don't get is how clueless and tentative
great founders can seem at the very beginning.10. The contribution of investors tends to be underestimated.Investors do more for startups than give them money. They're helpful
in doing deals and arranging introductions, and some of the smarter
ones, particularly angels, can give good advice about the product.In fact, I'd say what separates the great investors from the mediocre
ones is the quality of their advice. Most investors give advice,
but the top ones give good advice.Whatever help investors give a startup tends to be underestimated.
It's to everyone's advantage to let the world think the founders
thought of everything. The goal of the investors is for the company
to become valuable, and the company seems more valuable if it seems
like all the good ideas came from within.This trend is compounded by the obsession that the press has with
founders. In a company founded by two people, 10% of the ideas
might come from the first guy they hire. Arguably they've done a
bad job of hiring otherwise. And yet this guy will be almost
entirely overlooked by the press.I say this as a founder: the contribution of founders is always
overestimated. The danger here is that new founders, looking at
existing founders, will think that they're supermen that one couldn't
possibly equal oneself. Actually they have a hundred different
types of support people just offscreen making the whole show possible.
[3]11. VCs are afraid of looking bad.I've been very surprised to discover how timid most VCs are. They
seem to be afraid of looking bad to their partners, and perhaps
also to the limited partners—the people whose money they invest.You can measure this fear in how much less risk VCs are willing to
take. You can tell they won't make investments for their fund that
they might be willing to make themselves as angels. Though it's
not quite accurate to say that VCs are less willing to take risks.
They're less willing to do things that might look bad. That's not
the same thing.For example, most VCs would be very reluctant to invest in a startup
founded by a pair of 18 year old hackers, no matter how brilliant,
because if the startup failed their partners could turn on them and
say "What, you invested $x million of our money in a pair of 18
year olds?" Whereas if a VC invested in a startup founded by
three former banking executives in their 40s who planned to outsource
their product development—which to my mind is actually a lot
riskier than investing in a pair of really smart 18 year olds—he
couldn't be faulted, if it failed, for making such an apparently
prudent investment.As a friend of mine said, "Most VCs can't do anything that would
sound bad to the kind of doofuses who run pension funds." Angels
can take greater risks because they don't have to answer to anyone.12. Being turned down by investors doesn't mean much.Some founders are quite dejected when they get turned down by
investors. They shouldn't take it so much to heart. To start with,
investors are often wrong. It's hard to think of a successful
startup that wasn't turned down by investors at some point. Lots
of VCs rejected Google. So obviously the reaction of investors is
not a very meaningful test.Investors will often reject you for what seem to be superficial
reasons. I read of one VC who
turned
down a startup simply because
they'd given away so many little bits of stock that the deal required
too many signatures to close.
[4]
The reason investors can get away
with this is that they see so many deals. It doesn't matter if
they underestimate you because of some surface imperfection, because
the next best deal will be almost as good.
Imagine picking out
apples at a grocery store. You grab one with a little bruise.
Maybe it's just a surface bruise, but why even bother checking when
there are so many other unbruised apples to choose from?Investors would be the first to admit they're often wrong. So when
you get rejected by investors, don't think "we suck," but instead
ask "do we suck?" Rejection is a question, not an answer.13. Investors are emotional.I've been surprised to discover how emotional investors can be.
You'd expect them to be cold and calculating, or at least businesslike,
but often they're not. I'm not sure if it's their position of power
that makes them this way, or the large sums of money involved, but
investment negotiations can easily turn personal. If you offend
investors, they'll leave in a huff.A while ago an eminent VC firm offered a series A round to a startup
we'd seed funded. Then they heard a rival VC firm was also interested.
They were so afraid that they'd be rejected in favor of this other
firm that they gave the startup what's known as an "exploding
termsheet." They had, I think, 24 hours to say yes or no, or the
deal was off. Exploding termsheets are a somewhat dubious device,
but not uncommon. What surprised me was their reaction when I
called to talk about it. I asked if they'd still be interested in
the startup if the rival VC didn't end up making an offer, and they
said no. What rational basis could they have had for saying that?
If they thought the startup was worth investing in, what difference
should it make what some other VC thought? Surely it was their
duty to their limited partners simply to invest in the best
opportunities they found; they should be delighted if the other VC
said no, because it would mean they'd overlooked a good opportunity.
But of course there was no rational basis for their decision. They
just couldn't stand the idea of taking this rival firm's rejects.In this case the exploding termsheet was not (or not only) a tactic
to pressure the startup. It was more like the high school trick
of breaking up with someone before they can break up with you. In
an earlier essay I said that VCs were a lot like high school girls.
A few VCs have joked about that characterization, but none have
disputed it.14. The negotiation never stops till the closing.Most deals, for investment or acquisition, happen in two phases.
There's an initial phase of negotiation about the big questions.
If this succeeds you get a termsheet, so called because it outlines
the key terms of a deal. A termsheet is not legally binding,
but it is a definite step. It's supposed to mean that a
deal is going to happen, once the lawyers work out all the details.
In theory these details are minor ones; by definition all the
important points are supposed to be covered in the termsheet.Inexperience and wishful thinking combine to make founders feel
that when they have a termsheet, they have a deal. They want there
to be a deal; everyone acts like they have a deal; so there must
be a deal. But there isn't and may not be for several months. A
lot can change for a startup in several months. It's not uncommon
for investors and acquirers to get buyer's remorse. So you have
to keep pushing, keep selling, all the way to the close. Otherwise
all the "minor" details left unspecified in the termsheet will be
interpreted to your disadvantage. The other side may even break
the deal; if they do that, they'll usually seize on some technicality
or claim you misled them, rather than admitting they changed their
minds.It can be hard to keep the pressure on an investor or acquirer all
the way to the closing, because the most effective pressure is
competition from other investors or acquirers, and these tend to
drop away when you get a termsheet. You should try to stay as close
friends as you can with these rivals, but the most important thing
is just to keep up the momentum in your startup. The investors or
acquirers chose you because you seemed hot. Keep doing whatever
made you seem hot. Keep releasing new features; keep getting new
users; keep getting mentioned in the press and in blogs.15. Investors like to co-invest.I've been surprised how willing investors are to split deals. You
might think that if they found a good deal they'd want it all to
themselves, but they seem positively eager to syndicate. This is
understandable with angels; they invest on a smaller scale and don't
like to have too much money tied up in any one deal. But VCs also
share deals a lot. Why?Partly I think this is an artifact of the rule I quoted earlier:
after traffic, VCs care most what other VCs think. A deal that has
multiple VCs interested in it is more likely to close, so of deals
that close, more will have multiple investors.There is one rational reason to want multiple VCs in a deal: Any
investor who co-invests with you is one less investor who could
fund a competitor. Apparently Kleiner and Sequoia didn't like
splitting the Google deal, but it did at least have the advantage,
from each one's point of view, that there probably wouldn't be a
competitor funded by the other. Splitting deals thus has similar
advantages to confusing paternity.But I think the main reason VCs like splitting deals is the fear
of looking bad. If another firm shares the deal, then in the event
of failure it will seem to have been a prudent choice—a consensus
decision, rather than just the whim of an individual partner.16. Investors collude.Investing is not covered by antitrust law. At least, it better not
be, because investors regularly do things that would be illegal
otherwise. I know personally of cases where one investor has talked
another out of making a competitive offer, using the promise of
sharing future deals.In principle investors are all competing for the same deals, but
the spirit of cooperation is stronger than the spirit of competition.
The reason, again, is that there are so many deals. Though a
professional investor may have a closer relationship with a founder
he invests in than with other investors, his relationship with the
founder is only going to last a couple years, whereas his relationship
with other firms will last his whole career. There isn't so much
at stake in his interactions with other investors, but there will
be a lot of them. Professional investors are constantly trading
little favors.Another reason investors stick together is to preserve the power
of investors as a whole. So you will not, as of this writing, be
able to get investors into an auction for your series A round.
They'd rather lose the deal than establish a precedent of VCs
competitively bidding against one another. An efficient startup
funding market may be coming in the distant future; things tend to
move in that direction; but it's certainly not here now.
17. Large-scale investors care about their portfolio, not any
individual company.The reason startups work so well is that everyone with power also
has equity. The only way any of them can succeed is if they all
do. This makes everyone naturally pull in the same direction,
subject to differences of opinion about tactics.The problem is, larger scale investors don't have exactly the same
motivation. Close, but not identical. They don't need any given
startup to succeed, like founders do, just their portfolio as a
whole to. So in borderline cases the rational thing for them to
do is to sacrifice unpromising startups.Large-scale investors tend to put startups in three categories:
successes, failures, and the "living dead"—companies that are
plugging along but don't seem likely in the immediate future to get
bought or go public. To the founders, "living dead" sounds harsh.
These companies may be far from failures by ordinary standards. But
they might as well be from a venture investor's point of view, and
they suck up just as much time and attention as the successes. So
if such a company has two possible strategies, a conservative one
that's slightly more likely to work in the end, or a risky one that
within a short time will either yield a giant success or kill the
company, VCs will push for the kill-or-cure option. To them the
company is already a write-off. Better to have resolution, one way
or the other, as soon as possible.If a startup gets into real trouble, instead of trying to save it
VCs may just sell it at a low price to another of their portfolio
companies. Philip Greenspun said in Founders at Work that Ars Digita's VCs did this to them.18. Investors have different risk profiles from founders.Most people would rather a 100% chance of $1 million than a 20%
chance of $10 million. Investors are rich enough to be rational
and prefer the latter. So they'll always tend to encourage founders
to keep rolling the dice. If a company is doing well, investors
will want founders to turn down most acquisition offers. And indeed,
most startups that turn down acquisition offers ultimately do better.
But it's still hair-raising for the founders, because they might
end up with nothing. When someone's offering to buy you for a price
at which your stock is worth $5 million, saying no is equivalent
to having $5 million and betting it all on one spin of the roulette
wheel.Investors will tell you the company is worth more. And they may
be right. But that doesn't mean it's wrong to sell. Any financial
advisor who put all his client's assets in the stock of a single,
private company would probably lose his license for it.More and more, investors are letting founders cash out partially.
That should correct the problem. Most founders have such low standards
that they'll feel rich with a sum that doesn't seem huge to investors.
But this custom is spreading too slowly, because VCs are afraid of
seeming irresponsible. No one wants to be the first VC to give
someone fuck-you money and then actually get told "fuck you." But
until this does start to happen, we know VCs are being too conservative.19. Investors vary greatly.Back when I was a founder I used to think all VCs were the same.
And in fact they do all look
the same. They're all what hackers
call "suits." But since I've been dealing with VCs more I've learned
that some suits are smarter than others.They're also in a business where winners tend to keep winning and
losers to keep losing. When a VC firm has been successful in the
past, everyone wants funding from them, so they get the pick of all
the new deals. The self-reinforcing nature of the venture funding
market means that the top ten firms live in a completely different
world from, say, the hundredth. As well as being smarter, they
tend to be calmer and more upstanding; they don't need to do iffy
things to get an edge, and don't want to because they have more
brand to protect.There are only two kinds of VCs you want to take money from, if you
have the luxury of choosing: the "top tier" VCs, meaning about the
top 20 or so firms, plus a few new ones that are not among the top
20 only because they haven't been around long enough.It's particularly important to raise money from a top firm if you're
a hacker, because they're more confident. That means they're less
likely to stick you with a business guy as CEO, like VCs used to
do in the 90s. If you seem smart and want to do it, they'll let
you run the company.20. Investors don't realize how much it costs to raise money from
them.Raising money is a huge time suck at just the point where startups
can least afford it. It's not unusual for it to take five or six
months to close a funding round. Six weeks is fast. And raising
money is not just something you can leave running as a background
process. When you're raising money, it's inevitably the main focus
of the company. Which means building the product isn't.Suppose a Y Combinator company starts talking to VCs after demo
day, and is successful in raising money from them, closing the deal
after a comparatively short 8 weeks. Since demo day occurs after
10 weeks, the company is now 18 weeks old. Raising money, rather
than working on the product, has been the company's main focus for
44% of its existence. And mind you, this an example where things
turned out well.When a startup does return to working on the product after a funding
round finally closes, it's as if they were returning to work after
a months-long illness. They've lost most of their momentum.Investors have no idea how much they damage the companies they
invest in by taking so long to do it. But companies do. So there
is a big opportunity here for a new kind of venture fund that invests
smaller amounts at lower valuations, but promises to either close
or say no very quickly. If there were such a firm, I'd recommend
it to startups in preference to any other, no matter how prestigious.
Startups live on speed and momentum.21. Investors don't like to say no.The reason funding deals take so long to close is mainly that
investors can't make up their minds. VCs are not big companies;
they can do a deal in 24 hours if they need to. But they usually
let the initial meetings stretch out over a couple weeks. The
reason is the selection algorithm I mentioned earlier. Most don't
try to predict whether a startup will win, but to notice quickly
that it already is winning. They care what the market thinks of
you and what other VCs think of you, and they can't judge those
just from meeting you.Because they're investing in things that (a) change fast and (b)
they don't understand, a lot of investors will reject you in a way
that can later be claimed not to have been a rejection. Unless you
know this world, you may not even realize you've been rejected.
Here's a VC saying no:
We're really excited about your project, and we want to keep in
close touch as you develop it further.
Translated into more straightforward language, this means: We're
not investing in you, but we may change our minds if it looks like
you're taking off. Sometimes they're more candid and say explicitly
that they need to "see some traction." They'll invest in you if
you start to get lots of users. But so would any VC. So all they're
saying is that you're still at square 1.Here's a test for deciding whether a VC's response was yes or no.
Look down at your hands. Are you holding a termsheet?22. You need investors.Some founders say "Who needs investors?" Empirically the answer
seems to be: everyone who wants to succeed. Practically every
successful startup takes outside investment at some point.Why? What the people who think they don't need investors forget is
that they will have competitors. The question is not whether you
need outside investment, but whether it could help you at all.
If the answer is yes, and you don't take investment, then competitors
who do will have an advantage over you. And in the startup world
a little advantage can expand into a lot.Mike Moritz famously said that he invested in Yahoo because he
thought they had a few weeks' lead over their competitors. That
may not have mattered quite so much as he thought, because Google
came along three years later and kicked Yahoo's ass. But there is
something in what he said. Sometimes a small lead can grow into
the yes half of a binary choice.Maybe as it gets cheaper to start a startup, it will start to be
possible to succeed in a competitive market without outside funding.
There are certainly
costs to raising money. But as of this writing the empirical
evidence says it's a net win.23. Investors like it when you don't need them.A lot of founders approach investors as if they needed their
permission to start a company—as if it were like getting into
college. But you don't need investors to start most companies;
they just make it easier.And in fact, investors greatly prefer it if you don't need them.
What excites them, both consciously and unconsciously, is the sort
of startup that approaches them saying "the train's leaving the
station; are you in or out?" not the one saying "please can we have
some money to start a company?"Most investors are "bottoms" in the sense that the startups they
like most are those that are rough with them. When Google stuck
Kleiner and Sequoia with a $75 million premoney valuation, their
reaction was probably "Ouch! That feels so good." And they were
right, weren't they? That deal probably made them more than any
other they've done.The thing is, VCs are pretty good at reading people. So don't try
to act tough with them unless you really are the next Google, or
they'll see through you in a second. Instead of acting tough, what
most startups should do is simply always have a backup plan. Always
have some alternative plan for getting started if any given investor
says no. Having one is the best insurance against needing one.So you shouldn't start a startup that's expensive to start, because
then you'll be at the mercy of investors. If you ultimately want
to do something that will cost a lot, start by doing a cheaper
subset of it, and expand your ambitions when and if you raise more
money.Apparently the most likely animals to be left alive after a nuclear
war are cockroaches, because they're so hard to kill. That's what
you want to be as a startup, initially. Instead of a beautiful
but fragile flower that needs to have its stem in a plastic tube
to support itself, better to be small, ugly, and indestructible.Notes[1]
I may be underestimating VCs. They may play some behind the scenes
role in IPOs, which you ultimately need if you want to create a silicon
valley.[2]
A few VCs have an email address you can send your business
plan to, but the number of startups that get funded this way is
basically zero. You should always get a personal introduction—and
to a partner, not an associate.[3]
Several people have told us that the most valuable thing about
startup school
was that they got to see famous startup founders and realized
they were just ordinary guys. Though we're happy to provide this
service, this is not generally the way we pitch startup school to
potential speakers.[4]
Actually this sounds to me like a VC who got buyer's remorse,
then used a technicality to get out of the deal. But it's telling
that it even seemed a plausible excuse.Thanks to Sam Altman, Paul Buchheit, Hutch Fishman, and Robert
Morris for reading drafts of
this, and to Kenneth King of ASES for inviting me to speak.
Comment on this essay. | 2024-11-08T00:11:25 | en | train |
18,324 | nickb | 2007-05-01T05:37:13 | Performance Tuning Best Practices for MySQL (Google Video) | null | http://video.google.com/videoplay?docid=2524524540025172110&q=Google+engEDU | 7 | 1 | [
18342,
18528
] | null | null | null | null | null | null | null | null | null | train |
18,332 | ereldon | 2007-05-01T06:36:49 | WaPo: "Rulings Weaken Patents' Power" | null | http://www.washingtonpost.com/wp-dyn/content/article/2007/04/30/AR2007043001668.html?nav=rss_email/components | 2 | 0 | null | null | null | no_error | Rulings Weaken Patents' Power | null | By Robert Barnes and Alan Sipress |
The Supreme Court concluded a series of cases yesterday that weaken the protection given to patent holders, making it more difficult to get a patent and easier to challenge existing ones.
Patent experts said one of two cases decided yesterday -- KSR International v. Teleflex-- is the court's furthest-reaching ruling in the field for decades. The decision sends a clear message that the U.S. Patent and Trademark Office and lower courts must be more open in considering whether inventions are "obvious," a common ground for denying an application.
"Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, in the case of patents combining previously known elements, deprive prior inventions of their value or utility," Justice Anthony M. Kennedy wrote for a unanimous court.
In a separate case, the court ruled yesterday that Microsoft did not violate an AT&T patent when its Windows software was installed on computers manufactured overseas.
"The presumption that United State law governs domestically but does not rule the world applies with particular force in patent law," Justice Ruth Bader Ginsburg wrote in the 7 to 1 decision. Justice John Paul Stevens dissented, and Chief Justice John G. Roberts Jr. recused himself from the case.
Although the cases -- along with the earlier-decided MedImmune v. Genentech-- concerned different aspects of the law, experts said the cases collectively show a Supreme Court united in its belief that patent holders have received too much protection in the past.
"We now have a string of decisions that say the Supreme Court thinks we have too many patents and it's too hard to invalidate them," said Thomas C. Goldstein, a lawyer for Teleflex. "It's hard to miss that message."
The KSR and MedImmune cases together mean much less certainty for holders of thousands of existing patents, said John R. Thomas, a Georgetown University law professor who specializes in intellectual property. "The bottom-line effect is that interested parties have a greater ability to challenge patents and a greater possibility of prevailing."
The disputed patent in the KSR case was held by Teleflex and involved an adjustable gas pedal that combined two established elements, the pedal and an electronic sensor. KSR, a Canadian company, challenged the patent, and a lower court agreed.
But the U.S. Court of Appeals for the Federal Circuit, which was established to specialize in patent cases, said the combination was not obvious under its test that looked at whether some "teaching, suggestion or motivation" had anticipated it.
Kennedy said the appeals court's test was helpful but too rigidly applied.
Thomas said the court's ruling makes many existing patents vulnerable to court challenge because they were issued according to a standard the justices have now rejected. The KSR and MedImmune cases, which allowed companies that license technology to challenge the validity of the underlying patent, mean far more uncertainty for patent holders.
| 2024-11-08T02:00:30 | en | train |
18,341 | chmike | 2007-05-01T07:20:40 | Voting enhancement proposal | null | 1 | 1 | [
18347
] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,343 | brett | 2007-05-01T07:38:33 | Ask the Wizard: Fundraising: No-Shop Agreements | null | http://www.burningdoor.com/askthewizard/2007/04/fundraising_no_shop_agreements.html | 2 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,345 | mattjaynes | 2007-05-01T07:41:11 | An *Initiate* of the Bayesian Conspiracy | null | http://www.codinghorror.com/blog/archives/000850.html | 6 | 1 | [
18419
] | null | null | null | null | null | null | null | null | null | train |
18,348 | mattjaynes | 2007-05-01T08:59:00 | AWS (S3, EC2, etc) Reduces Bandwidth Prices (incl. bulk bandwidth discounts) | null | http://www.amazon.com/gp/browse.html?node=16427261 | 8 | 3 | [
18405,
18379
] | null | null | null | null | null | null | null | null | null | train |
18,349 | rms | 2007-05-01T09:11:18 | Does Silverlight matter?
| null | http://www.techcrunch.com/2007/04/30/silverlight-the-web-just-got-richer/ | 2 | 1 | [
18352
] | null | null | null | null | null | null | null | null | null | train |
18,355 | MobileDigit | 2007-05-01T10:14:32 | On Not Allowing Users to Register | null | 1 | 3 | [
18356,
18358
] | null | null | invalid_url | null | null | null | null | 2024-11-08T16:37:59 | null | train |
|
18,357 | ulfstein | 2007-05-01T11:10:09 | Matt Haughey's site about everything he's learned setting up and running a business around his blogging empire. | null | http://fortuito.us/ | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,361 | youngnh | 2007-05-01T12:05:29 | Vote on news.yc without reloading the page -- Greasemonkey script | null | http://userscripts.org/scripts/show/8951 | 19 | 10 | [
18388,
18481,
19047,
18421,
18480,
19172,
18548,
18477
] | null | null | null | null | null | null | null | null | null | train |
18,367 | gibsonf1 | 2007-05-01T12:47:57 | Ozzie's quiet revolution at Microsoft | null | http://news.com.com/Ozzies+quiet+revolution+at+Microsoft/2008-1012_3-6180428.html?tag=nefd.lede | 4 | 0 | null | null | null | no_article | null | null | null | null | 2024-11-07T23:59:24 | null | train |
18,368 | gibsonf1 | 2007-05-01T12:49:37 | Video sharing for dummies | null | http://news.com.com/Video+sharing+for+dummies/2100-1041_3-6180402.html?tag=nefd.lede | 1 | 0 | null | null | null | no_article | null | null | null | null | 2024-11-08T15:24:37 | null | train |
18,369 | gibsonf1 | 2007-05-01T12:51:06 | Contest winner: Vista more secure than Mac OS | null | http://www.macworld.com/news/2007/04/30/daizovi/index.php | 1 | 0 | null | null | null | null | null | null | null | null | null | null | train |
18,370 | Sam_Odio | 2007-05-01T12:51:12 | Google To Viacom: We'll see you in court - and we want a jury trial | null | http://www.businessweek.com/the_thread/techbeat/archives/2007/04/google_to_viaco.html | 5 | 0 | null | null | null | null | null | null | null | null | null | null | train |
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