Box.net released a killer new widget today. I can’t for some reason copy the code using firefox on my Mac, but I sent them an email to see what they have to say.
So why is this widget so cool? Well, it’s a music player. It’s a photo sharing tool. It’s a way to distribute large files. In other words, it’s just an incredibly useful tool with numerous applications.
Beyond its utility, there are a couple of other things to note.
I have not seen a widget that does a better job of enabling new sign-ups (and logins) through the body of the widget. To date, services that require registration have had a real hard time making effective use of widgets. Opening up a new browser window and forcing someone to join or sign in is just so ….. clunky. It sort of defeats the whole point of being a distributed service.
Box.net does an extremely elegant job of making new sign ups fast, easy, and painless – all within the body of the widget. Anybody who has been grappling with how to reconcile forced registrations with widgets should definitely take a few minutes to try out Box.net’s solution. You might learn something – I know that I did.
So what are the implications of this? Let’s say that I’m reading a blog and there’s a music track that I like being shared via a Box.net widget. Without ever leaving the blog, I can grab the music track, join Box.net, and set up my own Box.net widget pre-loaded with that music track. And of course, it doesn’t have to be a music track. It could be a photo, a presentation, a whitepaper. It’s easy to imagine Box.net enabling a rapid spread of files around the Web.
The other thing that I love about this widget is how it fits into Box.net’s business model. Box.net makes money by charging folks for file storage. They give you up to 1GB of file storage for free, and up to 5GB for $4.99 per month. What the widget does is to sign up people for the free trial version of the service, all within the user experience of the widget publisher site.
By providing a one click “Share in my Box” functionality, Box.net is effectively leveraging the content of the widget publisher to propagate its widgets – and more importantly, sell its file storage service. The beauty is that folks don’t even know they’re signing up for a free trial of a file storage service – they are just grabbing a piece of media that they like for their blog. It’s brilliant. From a business model perspective, it’s far more intuitive than say, YouTube’s widget strategy.
So while the debate continues about whether widgets can ever make money, Box.net has quietly built a widget that will drive qualified lead after qualified lead to their revenue engine.
Web 2.0: Buzz-Monitoring and Tracking | Smashing Magazine is a pretty killer blog post on how to measure our blog or any site’s buzz online. A definite must read for those that care.
Valleywag has a post talking about the hype around widgets. DJI also bags on the perilous business model of widgets. The commentary talks about how “digital bling” as widgets have been described are a distraction to blogs and slow down pageviews. And where’s the business model?
I agree that many widgets are bling and that their value comes and goes with the whims of Myspace users. But I have been talking about these widgets as “dumb”, they are only glorified banner ads with a feature to allow ease of copying. What is needed is a “smart” widget that takes on the qualities of a simple application. A small intelligent widget can be an amazing tool for advertisers, brand advocates, nonprofits, most anyone that wants user generated advocacy to carry them into the social media space. That is exactly what we are working on at Netvocate and I believe we are going to show that there is a huge business around “smart” widgets. We may even help educate other widgets to raise their status 😉
Ever wonder what investors are thinking when you make a presentation? Following are the questions to address. I grabbed this off a couple angel investor docs given to me over the years I think.. it was an old post on my other blog.
1) WHAT IS YOUR VISION? – What is your big vision? – What problem are you solving and for whom? – Where do you want to be in the future?
2) WHAT IS YOUR MARKET OPPORTUNITY AND HOW BIG IS IT? – How big is the market opportunity you are pursuing and how fast is it growing? – How established (or nascent) is the market? – Do you have a credible claim on being one of the top two or three players in the market?
3) DESCRIBE YOUR PRODUCT/SERVICE – What is your product/service? – How does it solve your customer’s problem? – What is unique about your product/service?
4) WHO IS YOUR CUSTOMER? – Who are your existing customers? – Who is your target customer? – What defines an “ideal” customer prospect? – Who actually writes you the check? – Use specific customer examples where possible.
5) WHAT IS YOUR VALUE PROPOSITION? – What is your value proposition to the customer? – What kind of ROI can your customer expect by using buying your product/service? – What pain are you eliminating? – Are you selling vitamins, aspirin or antibiotics? (I.e. a luxury, a nice-to-have, or a need-to-have)
6) HOW ARE YOU SELLING? – What does the sales process look like and how long is the sales cycle? – How will you reach the target customer? What does it cost to “acquire” a customer? – What is your sales, marketing and distribution strategy? – What is the current sales pipeline?
7) HOW DO YOU ACQUIRE CUSTOMERS? – What is your cost to acquire a customer? – How will this acquisition cost change over time and why? – What is the lifetime value of a customer?
8) WHO IS YOUR MANAGEMENT TEAM? – Who is the management team? – What is their experience? – What pieces are missing and what is the plan for filling them?
9) WHAT IS YOUR REVENUE MODEL? – How do you make money? – What is your revenue model? – What is required to become profitable?
10) WHAT STAGE OF DEVELOPMENT ARE YOU AT? – What is your stage of development? Technology/product? Team? Financial metrics/revenue? – What has been the progress to date (make reality and future clear)? – What are your future milestones?
11) WHAT ARE YOUR PLANS FOR FUND RAISING? – What funds have already been raised? – How much money are you raising and at what valuation? – How will the money be spent? – How long will it last and where will the company “be” on its milestones progress at that time? – How much additional funding do you anticipate raising & when?
12) WHO IS YOUR COMPETITION? – Who is your existing & likely competition? – Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner? – What are their strengths/weaknesses? – Why are you different?
13) WHAT PARTNERSHIPS DO YOU HAVE? – Who are your key distribution and technology partners (current & future)? – How dependent are you on these partners?
14) HOW DO YOU FIT WITH THE PROSPECTIVE INVESTOR? – How does this fit w/ the investor’s portfolio and expertise? – What synergies, competition exist with the investor’s existing portfolio?
15) OTHER – What assumptions are key to the success of the business? – What “gotchas” could change the business overnight? New technologies, new market entrants, change in standards or regulations? – What are your company’s weak links?
Here’s a great ebook from Seth Godin on Really Bad Powerpoint (and how to avoid it)
Allen’s Blog: Ten Commandments for Entrepreneurs
1) Meet with the right partner at the VC firm. Try to get your idea and meeting with the person that has the most appropriate background for your idea.
2) Be on time! Duh! Actually be early so you can set up your laptop, hook up to the projector, get access to the wireless hub, have a glass of water, and breath
3) Tease. Don’t cram several meetings into one. The objective of the first meeting is to get a second. Tell them you have a great technology idea, being implemented by a great team, and attacking a huge market in the midst of a transition. Crisply and clearly reduce a complex business message into a short set of slides that intrigues the audience and makes them want to find out more. The same tactic with the Exec Summary.
4) Know your audience. Either read up before the meeting or ask questions about domain experience, companies in their portfolio, etc. Don’t get surprised by who knows what and bore them with redundant background info.
5) Get to the point. Tell the audience what you are doing right away. “What problem is my startup solving?”
6) Describe your idea by analogy. Compare it to what else has been in the market. Google adwords for widgets.
7) 13 slides. Check out Guy’s 10/20/30 rule for presentations
8) Know, but admit when you don’t. 1) know a lot, (2) know what you don’t know and (3) admit it when asked — will get you a lot farther down the road.
9) Know your competitors and list them. Be intimate with strengths and weaknesses.
10) Listen well to questions and answer quickly. Don’t play the ego game and followup on points in dispute after the meeting.
How to Double Your Valuation
That got your attention, didn’t it? Maybe I learned something from all those enlargement offers in my email after all.
Now, let’s get down to business. I re-learned something last week. Focus sells. Duh. I’ll be specific. Last week I saw two remarkably different pitches, both from companies with great technology. One sold the generality of what they could do, telling a Big Story. The other told a Focused Story about an existing customer base they were going to serve better. .They explicitly avoided in the pitch any mention of where else their technology might apply. That was the voice over in the conversation around the pitch. All other things were equal — limited management team, pre-launch, working alpha.
I struggled with the Big Story Company, befuddled about who would really use this. I jumped out of my chair (metaphorically) to chase the Focused Story, because I could envision so many more uses beyond the first beachhead market. VCs are great at imagining a big Future, but most of us want an anchored Present. The Big Story Company was hoping for a valuation $10M pre-money. The Focused Story already had a term sheet at $20M when we met.
There is an enormous temptation in startups to think and talk expansively about a long-term vision centered on the technology of the Company. That vision often includes the word enable as in we will enable … That’s your first clue. Enable is one of those value-halving words. So are Discover, Context, Create, and Build. All those words really say, The proof of value is left to someone else. That applies equally to the valuation. The proof of value is left to someone else because we can’t articulate it.
Companies started by technologists routinely fall into this trap. (I mean both business and engineering technofiles, BTW) They don’t start with the intent of solving a specific problem. They start with the intention of “leveraging” a specific technology. The fact that the technology is a piece of many potential futures seduces the team to think they have a big opportunity. It is uncomfortable for the team to commit to a market because they don’t know the end user. There are two solutions to this. Turn inward and build technology, or turn outward and recruit people who do understand the solution. It is dilutive, but if it doubles your value, you can’t afford not to do it.
Years ago I was on the board of a company that had phenomenal technology for building predictive models from text or data. The team had identified potential applications in CRM, online advertising, search, database marketing, customer support, and others. The CTO referred to the product as a bolt-on brain, because it made many existing applications much smarter. The problem was that the technology was 10% of any given solution, even though it was the piece that differentiated the rest of the system. Capturing the other 90% required domain expertise not present in the team. The Company never went deep, straddling several potential markets. They were eventually acquired for the team and tech, not for the book of business it created. It was an unsatisfying outcome for nearly everyone. It was positive, but vastly under the potential.
So how do you double your valuation? Pick one application; serve one type of customer and be in that business. Show how you can conquer a specific set of competitors by virtue of the technology, but don’t be in the technology business. If you can persuade your investors that the first beachhead is attainable and interesting, you will get credit for subsequent applications and the big, horizontal play. Tell a story that shows you understand who your customer is, how to get to them, and why they will buy or use your product/service. Show how powerful the technology and team are, but stay on message about the focus. Let us imagine the Future.
* Don’t enable – solve
* Don’t provide context – provide conclusions
* Don’t ask customers to build – ask them to use
Technology is raw material. Create finished goods.
Enhance your value with this Vi@gr@ for startup companies. Your partners will love you for it.
The New York Times just posted a story about widgets… this really is going to be the year of the widgets.
Pew: 14 Million Online Political Activists in U.S. Today | Personal Democracy Forum.
23% of campaign internet users has either posted their own political
commentary to the web via a blog, site or newsgroup (8%); forwarded or
posted someone else’s commentary (13%); created political audio or
video (1%); forwarded someone else’s audio or video (8%). ‘That
translates into about 14 million people who were using the ‘read-write
Web’ to contribute to political discussion and activity,’ the study’s
authors Lee Rainie and John Horrigan write.
* The most common use of the net is to find out candidate positions on issues or voting records, followed by efforts to check the accuracy of claims made by them or about them.
Imagine a political candidate in 2008 using Chipin (Netvocate) to publish and share his/her positions via video/audio. That could be updated depending on the site the widget is located or the viewer….
Tom Evslin write today about why it takes Web 2.0 companies more money to get started than the $2000 for Digg or the small initial investments to launch facebook or YouTube. Fractals of Change: Web 2.0 %u2013 Greater Initial Investments Required
So, if you’re just now starting up, don’t get blinded by the successes of the first people to realize a platform could be built and operated on the cheap. You already missed that wave. Now, unless you are extraordinarily lucky or well-connected, you aren’t going to succeed in publicizing your new service and getting up to a critical mass of content or subscribers or both unless you raise or have enough money to create initial awareness or value. There is too much clutter from which you must emerge.