I posted my Three P’s of Venture Capital a few weeks back – Product, People and Potential.
There’s another component that I take into consideration as well: Escape Velocity
In physics, escape velocity is the minimum speed needed for an object to “break free” from the gravitational attraction of a massive body.- Wikipedia
E.g. you need to be going fast enough to overcome the Earth’s gravitational pull. Or, for startups, you’ve got to have enough momentum and acceleration to break away… There are several components to this, and they don’t all have to be there, but one of them gives you the fuel you need….
1) Lots of funding. This is pretty straight forward – you have cash to do everything fast – and if you really raise a lot of money, implement the King Maker Strategy, e.g. raise so much funding you can guarantee your own success.
2) Office in the US (or plans to have one quickly) – either NYC or SF. Depending on where customers and partners are. This also gets you closer to your most likely acquirers. Keep R&D wherever you have it, and head West.
3) Connections. You need intros and doors to be opened. What’s that you say? “But that’s your job Mr VC to make intros” True, it is, and it’s something that all VCs do to varying extents. But you need your own networks – maybe you’re an ex-Googler or you went to Stanford, Oxford, Cambridge, Harvard or your co-founder did, etc. The old adage “it’s not what you know, it’s who you know” still matters. More than you possibly realize. You can borrow this from your investors, but you need to bring some of your own connections to the party. If you don’t have them, start making them. You will need them.
4) Chutzpah. Use this if you’re short on any of the above. With enough will, charisma, sheer determination and a bit of luck, you can break away. But this one is more of an art, but I have seen it in action – and it’s impressive.
I’m sure there are a few more I could add (great design comes to mind) – and feel free to add any in the comments below.
Hopefully this gives more color on what’s going on inside my head when I’m thinking about an investment…and what you need to make it as an entrepreneur.
I picked up an Android device earlier in the year – I’ve been watching the platform and app ecosystem develop, and decided it was time to make the jump…
That’s a huge deal for me, the Apple Fan Boy, bought a non-Apple piece of hardware. Turns out, the hardware switch wasn’t as critical as the software switch. And I don’t mean the OS.
I stopped buying any content from Apple a long time ago. Sure, I used iBooks to test it out, but that’s all. No Apple content lived on my iPhone. When you buy digital content from Apple, you don’t actually own it, so getting your iTunes library, iBooks library, etc onto an Android device is a no go.
Having options (for portability) is very important; owning your data (or content) is more important. And, as we all know, if you can’t take something with you, it’s not yours…
In many ways, I now care less and less about owing content, and more about content portability, or more importantly accessibility. Cloud services like Spotify and We7 have made my music life so much easier. Password = Music. What could be easier?
Amazon’s Kindle Cloud Reader is all about accessibility (and circumnavigating the 30% Apple App Store tax). Via Amazon’s Cloud Reader, Password = Book Collection. On my iPhone, iPad, Android and Desktop. Easy.
Photos are slightly better than purchased content, but Apple still makes your life difficult. Photos on your photo roll in iOS will live there (mostly) thanks to restrictions by Apple. The new iCloud sync means they get backed up, but online access/sharing would be better. Password=Camera roll restore, which great, but… for Android, Lightbox is pioneering the way with an awesome “connected photo roll”. Lose your phone, log back in, and all your pictures are there. And there’s a great online gallery where you can edit and share, so Password = Photos. Easy.
Everything else I use lives in the cloud anyway… which I can get ubiquitous access to. The implication there is, data security will mean everything in the future. Both Google and Facebook (!!) will allow you to export and backup the data you’ve stored with them. Definitely a good alternative if you’re storing all your pictures and memories online. Look for a future post on data security-“it’s 4am, do you know where your data is?”.
Facebook is going to be irrelevant in 10 years time. Google has lost the search war. Microsoft has lost the desktop war.
We live in exciting times. Change is in many ways the only constant we have. I started the post with what many would consider heresy- if you don’t believe me, or disagree, you have forgotten the rise and fall of all tech companies.
Altavista. Yahoo! – these were the kings of the search engine mountains before a little company called Google arrived. Google was the king of search on the web, and I would argue they still are. But they’ve already lost the mobile search war… Foursquare is far and away my favorite mobile search tool – I need to find a place to eat nearby, figure out if it’s good, and then move on to my next stop. Google fails miserably at this task, and fourquare shines…
Facebook connects you with lots of people you lost contact with 10 years ago. You’re so excited to reconnect. And then you remember why you forgot about them: “Just gave kitty some more milk!”. Yay. Please kill me now… I posted ages ago that the future of the web was all about privacy and intimacy… group chats are still trying to figure themselves out, but current examples are beluga or groupme. They’re amazing and very useful for communicating with small groups of people that matter. I’d be willing to bet you spend more time in this class of apps in 5 years time than on Facebook (or rather that anyone under twenty will. That may or may not be you in 5 years time.)
Finally, in my mind, there are two reasons we use any given app or service 1) raw utility. it works, you use it. Wikipedia is a great example. 2) peacocking. Part of what makes apps gain great popularity is an ability to make a user appear cooler than his/her peers. Using facebook 4 years ago was very cool, very cutting edge. Today, you’re one in 500 million. Using beluga? Congratulations! you and many thousands of other people are using it too (oh wait, facebook acquired beluga. smart move. maybe it will take a little longer to become irrelevant)…. Using google 10 years ago gave you a search edge, today, you’d better be using Quora, etc.
The list of companies is endless, but one of my final favorites is Myspace –> which has been replaced by Soundcloud…. a large part of my job is to try to figure out what’s hot next… the problem is no one can actually see beyond the event horizon. The mobile is a huge disruptor right now – and is driving the up and coming companies I’ve mentioned in this post. It’s a fun game to play, trend spotting and finding cool, useful apps… if you’ve got favorites as well, post them in the comments, or send them via twitter @jasonball. I’d love to know what’s hot. or not. but please don’t send me a note about geocities.
I spotted today that Gowalla is innovating on the business model front:
Companies (or anyone really) can get a custom stamp for their spot (vs a generic coffee cup, etc), plus the spot gets special promotion inside Gowalla. Prices vary, but a spot tomorrow in Austin is only $150. But, if you want to promote your spot for next August in San Francisco, it’ll cost you a little over $1,000.
I’m thinking these could make great Christmas presents. Find out more and get your own badge here.
I picked up the May copy of Wired’s UK edition this week. I’ve always preferred the US version since I’m not in the US- it keeps me up to speed on what’s happening there- but it hit me how powerful the UK version is for the European start-up scene.
Enter the Wired 100 People.
Everyone knows the legends in the Valley, and everyone goes on and on about the Valley (it *is* a special place afterall). I’ve been here for 10 years and Europe has always had problems gaining start-up momentum – there’s no epicenter, there’s no critical mass- and there are no Heros.
Wired is creating local Heros, and I applaud them for it. Singling out successful entrepreneurs, investors, inventors- and holding them up – is something Europe desperately needs. It’s not going to instantly make a scene- but the Wired 100 + the Silicon Alley map they produced last year + …. starts to create a sense of community. And that’s just what Europe needs.
(Also, special congratulations to you Reshma for coming in at number 12. Reshma Sohoni is CEO of Seedcamp- another group that’s doing a great job building a strong European start-up scene. If you’re just starting out, and you don’t know about Seedcamp- you need to get to one of their mini seedcamps as soon as you can.)
Good post over at Genuine VC yesterday covering the History of the Web:
…a transition among three distinct phases of consumers’ primary activity online from receiving, to hunting, and now doing…
Receiving, Hunting, Doing is a good indication of what we’ve seen so far- and I think we’re going full circle to "Receiving" again- only this time from intelligent sources.
Two examples are Kwiry or Tripit. With Tripit, you email them your travel itneratry and they scour the web in the background and send you a nice package of maps, directions, thoughtful suggestions, etc.
…I also think there’s a huge opportunity to get to data sooner via the sensor revolution. When phones report location, when phones listen to ambient sound, when credit cards report spending patterns, when cars report their miles traveled, when we’re increasingly turning every device into a sensor for the global brain, there will be more and more sources of data to be mined…
All of which means the process is reversing: doing by machines, hunting by spiders and receiving by users- remix and repeat.