drag2share: Fred Wilson: The Less Money You Raise, The More Successful Your Startup Will Be


airbus a380 takeoff

Running out of money is one sure way to kill a startup. But Union Square Ventures’ Fred Wilson suggests raising too much can also kill startups too.

He’s been in the venture game for multiple decades with a portfolio consisting of Tumblr, Foursquare, Kickstarter and Etsy. He has come to this conclusion:

“The fact is that the amount of money startups raise in their seed and Series A rounds is inversely correlated with success. Yes, I mean that. Less money raised leads to more success. That is the data I stare at all the time.”

Wilson advises startups to operate as lean as possible (Tumblr went two years before hiring a third employee, he points out). Also, don’t worry about how long the money you have will last. If you build something great, the money will follow.

“Getting somewhere fast is the game [startups] should be playing,” Wilson writes. “f you can get the plane to take off, the length of the runway matters less. If you can’t, there is no runway long enough for you.”

Head over to AVC for the full post.

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Thursday, September 19th, 2013 news No Comments

Hey startups, naming your funding round wrong could cost you millions

While raising outside capital is not the only way to obtain financing for a startup, it seems to be the preferred method for new technologies where revenue or a business model is unclear. A common trend is emerging: more often than not, I hear that folks are raising their “seed round,” typically …

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Tuesday, September 17th, 2013 digital No Comments

Tough Times For NEA, A VC Firm That Put Big Money Into 3 Failing Startups Lot18, Viddy And Beachmint


wine glass shatter shot explode

If you follow the world of startups, you know Beachmint, Lot18 and Viddy have all made headlines over the past few years.

Initially, they were recognized for raising big rounds of financing from notable investors. Each has raised more than $35 million (and in Beachmint’s case more than $70 million) to date. Now, they’re suffering management changes, layoffs, and some of their products are shutting down. Two of them, Viddy and Beachmint, are reportedly returning close to $20 million to investors.

Beachmint is a celebrity-endorsed e-commerce company, Viddy is a social video app with filters, and Lot18 is a wine sales platform.

The common factor in all of those companies, besides their initial hype and struggles, is one of their investors, New Enterprise Associates (NEA). NEA invested in Lot18’s Series B and Series C rounds totaling $40 million. It invested in every Beachmint round of financing totaling $73.5 million. And it invested in Viddy’s $30 million round.

NEA also invested in Loosecubes, a startup that went belly up just as NEA was joining a $7.8 million round of financing in it last summer. Then there’s SAY Media, another NEA investment which recently suffered significant layoffs.

Battery Ventures is also paying the price for similar investments. Battery Ventures was invested in Viddy prior to NEA’s $30 million round as well as Loosecubes.

That’s not to say either firm is in trouble. It takes years to know how a VC’s portfolio will fair. NEA has a giant $2.6 billion fund that it raised in July 2012 to keep it running for a long time. All it takes is one or two home runs to return an entire fund. And NEA has gotten its hands in a number of promising startups, such as 10gen, Duolingo, BuzzFeed and Braintree.

But it’s hard to ignore that over the past two years, a few of it’s biggest picks have gone south.

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Wednesday, July 3rd, 2013 news No Comments

IT Pros Are Using LinkedIn In A Surprising Way: To Shop For Enterprise Tech (LNKD)


superfly office tour

Enterprise technology is a $1 trillion market. It’s also become a hot focus for startups and investors as new tech ranging from big data to software-defined networking upend the old-school stuff.

Before writing checks for projects that may cost their companies tens of thousands up to a million dollars, IT pros will naturally do their homework.

And they are increasingly doing that homework by crawling social networks to find out what others are saying about the product.

So LinkedIn conducted a survey to find out exactly what IT pros were doing with LinkedIn and other social networks.

The results show IT professionals have three times more connections on LinkedIn than the average user, and they are using them for everything from gabbing with their peers about tech, to getting product demos.

LinkedIn hired Forrester to do one study and Research Now to do another on how IT pros use LinkedIn, Twitter and Facebook.

Buying new tech for employees can be daunting: there’s lots of options, complicated multi-year contracts and government regulations.

IT pros use their social network peeps to help narrow down the choices.


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Wednesday, May 22nd, 2013 news No Comments

Google Lowers Prices To Try And Kill Amazon’s Cloud (GOOG, AMZN)


Google Shailesh Rao

Remember Compute Engine, Google’s Amazon-killer cloud that launched in a “limited preview” this June?

So far it hasn’t exactly knocked Amazon from its pedestal.

So Google’s trying an age-old tactic: lowering prices.

At the time it was announced, Google said it would be faster and cheaper than Amazon’s cloud, offering “50% more power per dollar” – which translated to being 37% cheaper.

But that apparently wasn’t cheap enough, because Google just dropped prices another 5%, Shailesh Rao, director of new products and solutions in the Google Enterprise unit, told InformationWeek

It also added a bunch of new configuration options to make it more in line with all the things Amazon offers.

Rao says that Compute Engine wants to bring more startups onto its cloud. Startups are what propelled Amazon’s cloud services to become the most popular. One reason why startups are wary is because Compute Engine is still in “limited preview.” That’s a fancy way of saying that its still in beta mode.

Google hasn’t committed to a timeline when it’s cloud will leave beta and become a full-fledged service, Rao says.

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Monday, November 26th, 2012 news No Comments

The Entire Advertising Industry Is Shifting To This Strategy


twitter promoted tweets ads

Native monetization is a fast growing form of digital advertising that is changing the complexion of the advertising industry in New York.

Native advertising refers to ad strategies ad strategies that allow brands to promote their content into the endemic experience of a site in a non-interruptive, integrated way.

From Twitter’s Promoted Tweets, to Facebook’s Sponsored Stories, to YouTube’s TrueView Video Ads, the major social platforms have doubled down on native ad formats.

Dozens of traditional and upstart publishers, such as Forbes, The Awl, Thought Catalog, and The Huffington Post are following suit. The growth of this form of advertising has affected all corners of the advertising ecosystem in New York ranging from creative and media agencies, to publishers, to startups and investors.

Native ads are attractive to brands because they allow their content to become part of the fabric of a website or app. For example, the main use of Twitter is to read and create Tweets, so to create an advertising experience that is native to the experience of their platform they built “Promoted Tweets.” This allows brands to be part of the main use case of the site, rather force brands to put their ads in easily ignored display ads sitting to the right of their Tweet stream or interruptive mediums like interstitials and video pre-roll ads that force a user to see them before being able to use the site.

 Native ads are fundamentally different from traditional online marketing mediums like display and pre-roll, as they are driven more by original brand content instead of traditional commercials, and by voluntary engagement and sharing instead of interruption.

As a result of the industry-wide shift to native monetization, creative and media agencies are creating new departments and roles to help brands create, distribute, and measure native content; New York publishers are rolling out their own native ad models; brands are aggressively experimenting with native ad campaigns; and investors are backing startups built on the native advertising vision.

Here are a few ways different NYC industries are being transformed by native advertising:

1)    Creative Agencies –Because native ad formats do away with many of the limitations of earlier ad formats – such as time constraints for pre-roll video ads, and size or content constraints on display and banner ads – creative agencies have been freed up to produce a vast new array of brand content. New York creative agencies like Mother, SS+K, TBWA, and Droga5, are continually producing creative that transcends the traditional commercial spot that people are forced to watch to standalone content that people actively choose to experience and share.

2)    Media Agencies – Native ad budgets won’t grow unless media agencies can measure their impact on brand reach, loyalty, and conversion. Facebook Likes, Re-Tweets and YouTube Views already pose a challenge for traditional media ROI analysis, and as new platforms emerge with native ad products, such as Twitter and Spotify, media agencies will have to further expand their research and analysis teams. To get ahead of this new morass of media complexity, many media agencies are re-structuring their organizations around social media and are deploying new tools and metrics to bring transparent buying and measurability to native advertising. Digitally-focused media agencies like Horizon, Razorfish and MEC, which recently announced a new proprietary tool called Crossmedia to improve their measurement capabilities across multi-media campaigns, are examples of agencies that are moving aggressively to evolve their organizations to be able to harness the complexity of social media measurement and maximize the opportunity of native ads.

3)    Venture Capitalists – As Microsoft’s recent multi-billion dollar writedown of aQuantive suggests, there are serious concerns about the future of traditional display advertising and investors are in turn going to take a hard look at any future investments that rely on display ad revenue. Conversely, investors like Fred Wilson, Partner at New York’s Union Square Ventures and one of the earliest proponents of native monetization, are invested in native ad platforms like Twitter and Foursquare.

      4) Startups – The New York startup scene is white hot. Native advertising is one of the biggest drivers of this growth, leading to huge acquisitions like Buddy Media, a social enterprise software company recently acquired by Salesforce for $689 million, and promising new companies like Percolate, a content marketing platform focused squarely on helping brands create content for the social web. Startups based in New York have a unique opportunity to work right around the corner from the heart of the advertising industry at a time when brands and agencies are hungry for new tools and ideas to help them maximize the opportunity with native ads. Both advertisers and publishers are looking for new partners to create new scalable advertising experiences that will make a genuine impact for their brands and bottom line, so expect to see more native ad-focused startups emerge in the next year.

5)    Publishers – Social content publishers are re-thinking the design of their sites and monetization models to be more native to their content experience. Hugely popular New York-based social publishers like The Cheezburger Network, Thought Catalog, The Awl, and Gawker have all been very active in experimenting with new forms of native ad formats.  To execute this evolution requires new site designers, editorial teams that can innovate and re-define the sponsored post model, and sales teams trained in selling native placement. As these companies continue to grow their audiences, innovate on the native ad model and come up with native ad solutions that can scale, much larger traditional media companies like Hearst, Time and Conde Nast are likely to take notice and explore native ad formats across their portfolio sites.

Dan Greenberg is the founder & CEO of Sharethrough, the native video advertising company. Dan has been honored as an AdAge “Media Maven” and was recently named to the Forbes “30 under 30″ list. You can find him on Twitter at @dgreenberg. 

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Monday, July 16th, 2012 news No Comments

NYC’s Made in New York Digital Map lets you see who’s hiring in the tech field


NYC's 'Made in New York Digital Map' lets you see who's hiring in the tech field

You can’t deny Mike Bloomberg’s often coming up with different ways to involve New Yorkers in tech-related bits. On this occasion, Mayor Bloomberg & Co. have introduced a novel way for citizens of The Big Apple — and others who plan on making the move — to find jobs in the technology sector. Dubbed “Made in New York Digital Map,” the service aims to make it easier for folks to see which tech companies are seeking engineers, designers, developers, etc. At the moment there’s more than 325 outfits looking for new hires, with over “thousands of jobs” being up for grabs. Mayor Bloomberg says this is only the beginning and he’s encouraging startups to set up shop here in the City, as he believes this “is the place to be if you’re a growing tech startup.” You can take a tour of the Digital Map now via the source link below.

NYC’s Made in New York Digital Map lets you see who’s hiring in the tech field originally appeared on Engadget on Tue, 15 May 2012 14:53:00 EDT. Please see our terms for use of feeds.

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Tuesday, May 15th, 2012 news No Comments

Why $1 Billion Is A Good Price For Instagram


If you look at how much Facebook paid for Instagram on a per user basis, you can see that it got a very good deal, says Andy Baio at Wired.

Baio, who has built a few startups in his day, compiled data on big acquisitions over the last ten years to argue that Instagram is not a sign that we’re in another tech bubble. As you can see, the per user price Facebook paid is cheap compared to other big acquisitions.

chart of the day, startups cost per user, april 2012

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Thursday, April 12th, 2012 news No Comments

SeedTable Is A Stunning New Way To Interrogate CrunchBase


Screen Shot 2012-03-08 at 10.22.40

I have a love/hate relationship with CrunchBase. On the one hand, it has great information about startup tech companies. On the other hand, it relies on a wiki-like structure which means it is sometimes not updated as frequently or as accurately as old-style databases which used to employ people go over the data regularly. However, its wikiness means it can be free – pretty useful for the entrepreneur! Perhaps the real unsung hero of CrunchBase is its API which means third party developers can whip up new things with the data. The latest is SeedTable, a new project from Imran Ghory, a founder of CoderStack.

Ghory has built a brand new interface to CrunchBase which exposes a few things CrunchBase itself can’t right now due to the limitation of its interface. And it really is very good. A quick tip: start typing in the name of a city in the search box.

“I wanted to see how London was doing compared to other cities in terms of startups,” Ghory told me. In building SeedTable he realised it was also really useful for discovery, thus you could click London, then Consumer Web, then see who had backed those companies.

So we can now see the ‘Most Active Cities’ (in the last 12 Months) in terms of startup funding are San Francisco, New York and London. However, there are separate figures for Palo Alto and Mountain View, which suggests Silicon Valley remains head and shoulders above the rest overall.

Drilling down to a city, say London, we can see historic trends such as a big hump when many companies were founded in 2008-2011, and we can see VC, Angel and Exits tacking upwards.

One anomaly Ghory found was that companies often only add themselves to CrunchBase after they have funding, which throws their founding data out of whack. If people just entered super-accurate information, and did it early, we’d see better data. (Anyone can add anything to CrunchBase).

SeedTable also exposes the top Angel rankings by investment count in London. This includes The Accelerator Group, Stefan Glaenzer, Index Ventures, Eden Ventures, Seedcamp and Sherry Coutu. The same listing for most active VCs lists Index Ventures, Accel Partners, Eden Ventures, Balderton Capital and Pentech Ventures.

Of course, this only relies on CrunchBase, which needs to be maintained and updated.

When you get to places like Istanbul, CrunchBase starts to show its gaps, with far less data available, even though it’s clear the city is in a tech boom. At least the upward graph is there on founded companies.

SeedTable is an example of data being made a great deal more useful via interface. I can see myself using it almost as much as CrunchBase.

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Thursday, March 8th, 2012 news No Comments

Holy SMOKE! Pinterest Is The Fastest Growing Site Ever


Pinterest UP kid halloween

Social image-sharing site Pinterest, which is the toast of Silicon Valley and the VC world, has passed 10 million users after only 9 months.

TechCrunch reports that it got exclusive stats from ComScore showing that Pinterest had 11.7 million unique monthly visitors in January 2011. That’s up from only 7.5 million in December…and a scant 418,000 last May.

That’s the fastest growth ever for a standalone site.

Users aren’t spending that much time at the site — about 90 minutes a month, compared with 7 hours for Facebook. But it’s clear that Pinterest is a huge phenomenon.

Most interesting, it took off among non-techies first. That’s a great reminder for startups trying to stand out — the world is a lot bigger than your friends who work at tech companies. Sometimes, you have to get outside the bubble.

See also: The Secret To Pinterest’s Astounding Success.

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Tuesday, February 7th, 2012 news No Comments

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

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