Go Big or Go Home

IVentures10 Partners with Mozilla

IllinoisVentures announced today a  partnership with Mozilla to take its IVentures10 program to the next level.  iVentures10, sponsored by IllinoisVENTURES, is a new kind of summer intern program for computer science students with a great idea for a software or web based start-up company. During the 10 summer weeks, student teams will develop their idea into a working prototype and lay the groundwork to launch their start-up. For more information, visit http://www.iventures10.com.

The program will now be open to students world wide interested in developing on the Mozilla weave/prism platform and coming to Champaign for the summer to start their company.  Weave is a open platform by Mozilla that will enable next generation web applications by giving users to control their personal information through integration with the Firefox browser.  Here is an example use case from their web site,

Personalization made portable - Myk likes to visit his Mom on weekends. He doesn't have a laptop, so he uses his mom's computer when he visits. He used to be annoyed because, though he installed Firefox on his Mom's PC, he missed having easy access to his favorite sites and RSS feeds, and having to remember all his account names and passwords. He logs into his Mozilla account and his personalized experience returns. And, just as importantly, when he logs out, all of the cookies, bookmarks and other information is cleared from his Mom's PC so that she doesn't accidentally log in to his email account or anything else he was browsing.

As a part of the partnership, Mozilla Labs people will come to Champaign to train students on how to best use the platform.  Mozilla will then promote the applications through their various channels at the end of the programb.  It will be exciting to see what new IV10 ideas are incubated and launched through this partnership.

Vote to Increase H1B Visa Quota

Image via Wikipedia

As a venture capitalist involved in University technology transfer deals, I am pleased to see some movement on the obvious issue - that is to dramatically increase the quota on H1B visa and permanently account for growth.  See the article House Republicans Move to Increase H1B Visas .

The USA, hands down, has the best science education system in the world.  As such, a large and growing percentage of advanced science degree's are earned by foreigners.  Not just any foreigners either, but the smartest, most innovative foreigners.  Logic might say, "hey, if we educate them here in this country, we may want require them to stay for a period of time to work to add value to our economy".  We have the opportunity to attract and retain the best and brightest in the world!  Instead, current H1B Visa policies makes it very difficult for them to stay and we send them home.  Yes, we educate them and send them home.  As manufacturing moves overseas, our biggest advantage in the world is our ability to  out-innovate our competition.  USA educated foreigners that want to stay to work should be able to - period, end of sentence.

The next battle to to give start-ups a fair shake at the quota.  How does a start-up compete with a team of Microsoft or Intel lawyers who are charged to suck up the entire quota as fast as possible?

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Valuing Start-up Companies

Image from Wikipedia

I once again was asked what method I use to calculate the valuation of start-ups.  Warren Buffet said it best in the year 2000 on valuing start-up companys,  "If I taught a class, on my final exam I would take a start-up Internet company and ask my students, 'How much is this company is worth?' Anyone who would answer, I would flunk."  I love that quote because it highlight how inexact valuing start-up is.  But that doesn't help matters.  Venture investors still need to value businesses even in the earliest stages.

Valuations for start-ups tend to be stage bracketed and increase as key risks in building the business are mitigated (premiums to the stage bracket ranges may be applied if super management is in place from the start or the start-up is in a frothy market like energy).  Those key risks include management risk, technology risk, market risk and financing risk.  These risk are reduced as a business travels through its life cycle: pre-product/pre-revenue, post-product/early-revenue, post-product/scaling revenue.  As a company reaches maturity, more traditional cash flow based valuations can be employed. 

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Context is Everything

Source: Wikipedia

Understanding context is one of the the big chasms that we have been trying to cross in internet applications over the last five or so years.  Its right up there with understanding natural language.   Search would be smarter if it knew the context in which you were thinking; online advertising would be more effective with context' music recommendations would be smarter with context and so on and so forth.

Many, many start-up have tried to to bring context to web applications.  None have done an outstanding job so far.  An early technology out of Northwestern University called Watson, attempted to watch what you were writing in a Word document and offer web links to research that might be useful.  They are now called Media River and have changed their model.  Personify attempts to classify web pages.  Surf Canyon has developed a browser plug-in that refines google searches to make them more context sensitive.  It watches what links in the search list you click on and re-orders the results accordingly.  It attempts to solve the "Jaguar" search problem - am I looking for the animal, car or operating system?

Zemanta is one of the latest context tools that attempts to recommend contextually related content and pictures to bloggers.  They have a implemented their solution very elegantly using Firefox extensions.  All you have to do is install the plugin, go your supported blog platform and the tool magically appears.  As you can see from the suggestions below, the technology has a way to go.  It seems to be only using key words, not context.  The nice implementation helps overcome the questionable recommendation.

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Avoid Techno Speak

Source: Wikipedia

I was in Arlington Texas yesterday at a conference called the World's Best Technologies (WBT) Showcase.  No I'm not kidding, that was really the name of the conference.  The conference was targeted at University commercialization folks and start-ups derived from University research.  I was asked to speak on the topic of Financing University Entrepreneurial Start-ups.  We discussed all of the classic issues that plague University start-ups from licensing to getting "gap funds".

In the afternoon, I attended a session called, 2008 Hot Investment Markets and Sizzling Sectors.  The Panel was moderated by Bill Reichert of Garage Technology Ventures.  Bill asked the panelists what trends they saw and technologies would be the next big thing.  Bill did a great job encouraging them to talk about pain points and solutions in plain English, so everyone could understand.  Bill then opened the mic to audience and it was a complete disaster.  Speaker after speaker spoke in techno-babble such that you had no idea what the company was doing.  You'd hear stuff like

"our technology allows you to effeciently generate ultraspecific molecular signatures for the identification of target genomes in the presences of background genomes"  or

"we have identificed a previously unrecognized physical phenomenon and patented a device that enables the compay to see checmical reactions, biological reactions and radioactivity based on their specific and unique electromagnetic radiation characteristics"

Over and over again, Bill tried to ask, so what is the problem and what is the solution? 

It reminded me, that no matter how complex the technology, you MUST be able to describe it and its benefits in plain english to the average Joe.

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Elements of Sustainable Companies

Source: Shutterstock

As an entrepreneur, it is easy to quickly get in the weeds.  Sometimes you wake up in a cold sweat wondering what the heck you are doing and whether or not you are doing the right things.  Its not new, but Sequoia Ventures has published a piece called Elements of Sustainable Companies which is worth a read.  Tick off what you are doing against this list.

         

Elements of
Sustainable Companies

            

Start-ups with these characteristics often foretells the success of a business and the likelihood of it becoming a sustainable, enduring company. We like to partner with companies that have:

            

Clarity of Purpose

            

Summarize the company's business on the back of a business card.

            

Large Markets

            

Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.

            

Rich Customers

            

Target customers who will move fast and pay a premium for a unique offering.

            

Focus

            

Customers will only buy a simple product with a singular value proposition.

            

Pain Killers

            

Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.

            

Think Differently

            

Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.

            

Team DNA

            

A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. "A" level founders attract an "A" level team.

            

Agility

            

Stealth and speed will usually help beat-out large companies.

            

Frugality

            

Focus spending on what's critical. Spend only on the priorities and maximize profitability.

            

Inferno

            

Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.

       

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One Llama Launches Music Search on Apple iPHone

Source: Wikipedia

One Llama Media Inc.,  has announced the launch of its Apple iPhone web application today. Apple iPhone users can now discover new music and watch music videos on-the-go using the One Llama music search service. Users access the service by simply navigating directly to www.onellama.com from the web browser on their iPhone.  Users can then search for artists and songs, find other similar songs, and watch the corresponding music videos from their phone.

They built this exciting application by integrating the One Llama music search technology with YouTube and Apple’s iPhone published open APIs.  They mapped their music database of over 1.4 million tracks to online music videos. Very cool mashup!

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ShareThis Raises $15 Million

   

    

SAN FRANCISCO, March 13 /PRNewswire/ -- ShareThis, the company that
makes online sharing easy, today revealed that it has raised a $15 million
round led by Draper Fisher Jurvetson (DFJ) to support the rapid adoption
and usage of its market-leading sharing service. ShareThis simplifies
social media services by consolidating address books so that anything can
be shared easily and seamlessly, without even leaving a webpage. ShareThis'
one-click sharing button enables sharing and viral distribution of content
across social networks, affiliate groups, news sites, blogs, photo sites,
communities and more.

  
    Within four months from its November 2007 launch, ShareThis has already
demonstrated impressive usage with adoption of the ShareThis button growing
at over 50% each month. While ShareThis already offers unparalleled
integration with the leading social networks, email, IM, and mobile, the
new investment will now allow ShareThis to accelerate the roll-out of new
services to the thousands of publishers who deploy the ShareThis button on
their sites. The company will also increase the number of social media
services across which it allows consumers to share content and extend the
media platforms where content can be distributed.

    ShareThis' popularity is driven by the fact that it is the simplest,
yet the most comprehensive way to easily and spontaneously send, post,
bookmark, rate, recommend and tag online content. ShareThis is also the
preferred sharing option across leading blogging platforms including
Blogger, WordPress, and TypePad.

    "We invested in ShareThis because we believe that social media is
fundamentally about sharing," said Emily Melton, Director at Draper Fisher
Jurvetson. "ShareThis has made sharing so simple that publishers and
consumers are driving the use of the ShareThis button at an incredible
rate."

    "We are delighted to announce Draper Fisher Jurvetson as one of our
main investors. Their track record in backing companies that have changed
markets is outstanding," noted Tim Schigel, CEO of ShareThis. "Our vision
is to change the way that people share things online, by making it possible
to share any way you want, without even leaving the webpage you're on. This
investment, and the growth we're experiencing, is proof that there is great
demand for simple sharing solutions."

    About ShareThis

    With the click of one button, ShareThis is the easiest way to share
things online. ShareThis imports address books so that anything can be
shared immediately, without even leaving a webpage.

    ShareThis raised a $6 million Series A round in 2007 with investors
including: Blue Chip Venture Company, Illinois Ventures, DFJ Mercury, Queen
City Angels and RPM Ventures. ShareThis' CEO, Tim Schigel, led Blue Chip's
investment in ShareThis. Such was Tim's belief in the potential for the
company and in the market for sharing content online, he left the world of
private equity after almost 10 years of high-profile success, to join
ShareThis as CEO.

    ShareThis' exceptional management team comprises industry leaders with
experience gained within international media, marketing and technology
companies including: Advertising.com, AOL, and Nielsen Buzzmetrics.



     Media Inquiries
     Kathy Johnson
     Consort Partners
     sharethis@consortpartners.com
     Tel: +1 415 823 9566

 

SOURCE ShareThis

Persistant Search

Imagine a search application that would scan the web (blogs, pages, chat, et all) and all your private data sources within a domain, and keep you up to date on key topics, trends in those topics. You may use the application through a dashboard that lists all of the relevant documents under a topic, but then says that if you read these three, you don't need to read the 1,256 others. You would use this dashboard daily or more. Compare this dashboard idea with how you get information today via one off searches and key word alerts. Persistent search would be an anaysts dream. It can do this because the application is reading all of the unstructured text, drawing linkeages between key ideas and summarizing them for you automagically. Ontologogies are the key and bring all of this information into context and are the key to making persistent search a reality. According to RiverGlass, ontologies are the description of entities, relationships, terms, concepts that consitute the knowledge of a domain. Ontologies are a layer to the Riverglass application architecture that interacts with their analytics that make true persistent search a reality.

The Pipeline

With skyrocketing oil prices, we hear a lot about pipelines these days.  A broken oil/gas pipeline is devastating and a very expensive problem to fix.  Likewise, a broken sales pipeline is equally as devastating to a start-up company.  In fact, I will go as far to say that the biggest milestone a start-up can achieve is proving out "lead to close metrics" in their sales pipeline.  Salesforce.com is a great tool to use to manage these metrics.  By that I mean, being able to demonstrate the number of days/months it takes from a cold lead through closing a sale, and all the associated steps.  The lore of a sales pipeline is critical to understand and analyze.

* Many start-up think that they are on their way from a few big name, evangelical sales.  These are sales generated because the customer was the golfing buddy of a CEO or Board member.  Although it great logo-ware for your website, and the short term cash (which is nice), it does little to prove that your company is ready to scale.    
* More leads the better.  Sure, you need a critical mass of leads to make your sales metrics work, but too many leads is like too much vitamin C.  Understand all the critical sales elements that make your pipeline hum before you scale up your leads - your messaging, ROI equation, vertical market case studies, etc.  You can waste good leads if you pursue too many before all the components are in balance.    
* All of your sales require severe customization.  If every sale you make requires a ton of customization, your product is not ready to scale.  Fix it before you add more leads and more sales people.