How to Get in TechCrunch

How to Get in TechCrunch:

Here’s a video of Guy Kawasaki in an interview with Mike Arrington of TechCrunch.

The salient question that Mike answers is, ’How do I get my company in TechCrunch?‘ The short story is:

  1. The ‘standard answer’ is to send an email to editor@techcrunch.com and take your chances. Thirty pitches come in per day this way.

  2. The most effective way is to get a referral from a venture capitalist or someone ‘known’ who can speak on your behalf. Ten per come per day this way. Thirty plus ten equals forty, and he runs four stories per day, so you might think that ten percent make it. However, many of his stories are internally generated (followups, reports on what big companies do, etc.), so the actual percentage is much less.

  3. The key is how good the company is, not the ‘slickness’ of the pitch. For example, an unpolished pitch for a great company will get through. Also, a great pitch for a lousy company won’t. Basically, you should assume that the bull-shiitake detector is always on.

  4. Speaking of bull shiitake, specifically don’t use descriptions such as ‘revolutionary,’ ‘Web 2.0,’ ‘huge,’ ‘change the way you’ll use the Internet,’ and ‘disruptive.’ This is what Mike calls ‘cheap adjectives,’ and they are kisses of death in Michael’s eyes.

  5. To describe what you do, you should provide a tangible frame of reference instead of using the usual bull shiitake. For example, one pitch that worked is ‘YouTube for PowerPoint.’ Many entrepreneurs are loath to mention other products and prefer cheap adjectives. This is a mistake.

  6. Finally, only the first two or three sentences count. If you don’t capture him that quick, you’re hosed.

In short, you should approach TechCrunch as you would a venture capitalist except that TechCrunch doesn’t write checks, but it can get you in front of 250,000 or so people.

(Via Bona tempora volvant–by Guy Kawasaki.)

The Charles River Ventures Quickstart Calculator

The Charles River Ventures Quickstart Calculator: “

calculator2.bmpReader Dave Lavinsky has created a nifty calculator for entrepreneurs wanting to know how their seed and subsequent rounds affect their ownership in a start-up.

He calculates the seed round on the ‘QuickStart’ formula popularized by Charles River Ventures, which we wrote about last week. CRV is writing small checks in return to start-ups in exchange for getting a discount on an investment in a company’s first round.

The calculator allows up to 5 rounds of financing and shows the equity that the management team, CRV (in this case), and other investors get. You can view the calculator here.

calculator.bmp

(Via VentureBeat.)

Knowing when to hold ’em

Knowing when to hold ’emis a great article by Evan Williams today… his post follows: “

Barry Diller actually said something Tuesday at Web 2.0 that was pretty good. In response to a question from an entrepreneur, apparently about whether he should sell his successful web enterprise, Barry said: ‘Don’t sell. The way you build equity is to hold on.’

Which got me to thinking about lots of web companies that have had ‘successful exits’ and wondering if maybe they shouldn’t have been so hasty.

What if Flickr hadn’t sold?

What if del.icio.us hadn’t sold?

What if MySpace hadn’t sold?

What if Blogger hadn’t sold?

Apologies, again, for using Alexa graphs to demonstrate a point. But it’s safe to say that all these properties have grown dramatically since their sale. If you imagine these are stock charts, you would probably conclude that the sellers would have been wise (/lucky) to hold on a little longer.

Now, that’s rather simplistic, isn’t it? You have to ask yourself several things before coming to such a conclusion. You have to ask, first:

How much was the acquiring company responsible for the growth following acquisition?

This is easy to conclude in the MySpace case: hardly at all. Does Fox even have the capability to bring measurable traffic to MySpace? Perhaps in the form of massive TV commercials, but that hasn’t happened.

But in the other cases, obviously Yahoo! and Google have the ability to introduce these fledgling products to many millions of people. That’s definitely part of the promised benefit of these deals. But does it happen?

On the Yahoo! homepage, there’s a link to Yahoo’s product that competes with Flickr. And on their entire site, only a few obscure mentions of Flickr are found.

Same with del.icio.us.

Perhaps they’ve done other things I’m not aware of, like free ad campaigns or emails or marketing dollars (but marketing dollars doesn’t really count as using their distribution). I’m going to go out on a limb and say that very little of these services’ growth was due to Yahoo’s massive distribution power.

How about in the case of Blogger? Blogger is linked on Google’s ‘even more’ page and, in the Google Toolbar, if you go to Options / More, you can turn on a BlogThis! button. Other than that, again, a few obscure mentions. They once ran a homepage promotion for Blogger on non-US Google sites, which had a nice impact for a few days. And the toolbar button brought in quite a few users for a brief while in 2003, when it was on by default, before they hid it. The ‘even more’ page does not have a significant impact.

No, Blogger has grown, for the most part, without tapping into Google’s huge reach.

But the second question you have to ask is:

Have the acquirers stopped imminent doom from happening?

This isn’t as obvious of a benefit of getting acquired as distribution, but it can happen. For example, if rumors are to be believed, YouTube may have melted under the pressure of lawsuits had the awesome power of Google’s attorneys not come in to save the day.

For the services mentioned above, although you never know what’s going on behind the scenes, but it’s hard to imagine such a scenario. I’m assuming, in all cases, that these companies would have acquired reasonable funding had they not sold. (Flickr and Blogger had offers on the table, and Delicious had just raised some.) That being the case, most problems are solvable.

One of the promised benefits of going to a Yahoo! or Google is scalability. Maybe they’ll save you from doing a Friendster (which probably would have been better off selling). I don’t know about Flickr, but I know del.icio.us is moving, or has recently moved, to some Yahoo! infrastructure that is purportedly quite nice. (If they have moved, it wasn’t very long ago.)

As for Blogger, this was definitely something we needed and looked forward to. There was no way our codebase in early 2003 would support the load of today. However, until the most recent version, which is in beta now, Blogger has run on 90% homegrown code. Not code that we came there with, but code that was written specifically for Blogger (and the same database). There just wasn’t any magical Google scaling device we could port to.

Of course, we ran on Google hardware and network, took advantage of Google libraries here and there, and had great Google-recruited engineers working on it. Also, as I’m sure with all of these services (save MySpace), we had parent-company ops and security folks who may have averted a disaster or two. But these aren’t the core things that tend to illicit or prevent growth.

So, this is pure speculation, but it’s hard to say that any of these sites would have been taken down, or seriously hindered, were it not for getting acquired.

As long as you’re asking these questions, you should probably ask:

Would they have grown even more had they not been acquired?

Who knows. But it’s not beyond the realm of possibility that these sites have been hindered after acquisition by a lack of flexibility or by having fewer resources to do what they needed to do than they would have otherwise, because they had to compete for them internally instead of buying them on the open market.

Just a thought.

Am I saying these companies shouldn’t have sold?

No. There are still many other things to consider. For example, if you traded one stock for another stock that grew even faster, that would still be a good deal from a financial perspective. Also, from a financial perspective, it’s possible that your further funding may have diluted you more than your growth made up for.

Or, not the case for any of those mentioned above, but if you just got offered a ridiculous price, despite not having a lot of substance to your business, you might regret not taking it.

Or if you just don’t want to hack it out on your own—which I know is the case for some tiny startups that have gotten acquired by Google before really getting going—that’s a legitimate reason. (In the vast majority of cases, the opposite is true, and founders beat their heads against brick walls in the big company for a couple years until escaping.) Or if you’re just not interested in your thing anymore and want to move on, it can be great to find a stable home for it (not that acquirers don’t often kill entrepreneur’s babies on a whim).

All I’m saying is that you often hear about companies that should have sold when they had the opportunity, but you rarely hear about companies that shouldn’t have.

And that Barry Diller has a point: Sometimes you should hold on.

Addendum! Kevin Fox writes in with several excellent points, not all of which I had thought about, but all of which I agree with. From Kevin:

An additional aspect that’s important to consider is to what degree predicted performance is built in to the offer price. Even if Alexa traffic charts were accurate measures of traffic over time, they alone tell us nothing about the estimated future traffic at various points along the way. Thinking about Web 2.0 timing is much more like buying and selling tech stocks than it is trading commodities.

Take any significant Web 2.0 acquisition and try to estimate what the annual growth would have to be for the price paid to be a fair price. How much will Myspace have to grow to pay back Fox for its half-billion dollar bill? While P/E and PEG ratios are part of the standard vocabulary when valuing stocks, their equivalent (most 2.0 acquisitions are still in the red, rendering these numbers undefined) is just as important as their current web footprint.

Finally, hindsight usually favors waiting since people forget about the companies that didn’t sell when their growth estimates were higher than their actual outcome. Just like mutual fund companies that start dozens of funds a year and only keep the ones that perform well, the persistence of memory (or lack thereof) is a confounding factor. There will always be success stories, and there will always be failures. I would guess (and you would have more experience than I in this) the ability to hedge your bet and cash out weighs heavily on the minds of founders of promising companies with negative cashflow.

Of course, another factor is often a founder’s desire to be an eternal entrepreneur. There comes a point when you want to do something new, whether it’s changing to a different project at your new parent company or leaving to start the adventure all over again.

This is an attitude I admire. 😉

Right on. So, in conclusion: You never know.

(Via evhead.)

So little time

From Adam Justo’s blog:

“I’m reminded of how difficult it is to create something that people want to use while simultaneously making a profit from it.

It’s easy to create something that people want, whether it’s a product or service. The question is, are people willing to pay, and, if so, how much? If they’re not willing to pay, can you translate the bodies/eyeballs into a workable business via advertising revenue? If you can, how much work will it take to make that process happen, both in terms of finding the advertisers and figuring out how to make their advertising pay dividends so that they continue to want to be associated with you?

In many startups, especially Internet startups, the first step is in building the offering. If it’s good enough to attract attention, you then have to convert some of that attention to actual money. And while you’re trying to get to a healthy monetization level, you still need to provide all the things you provided to begin with that brought you the visitors/customers in the first place. And you have to do this double work with the same staff you had when you were doing half the work, which already seemed like more than twice the work that most humans could reasonably handle.

Even more difficult, if your business has ramped up to a decent level but not home-run territory, and the money’s starting to run low, you may have to shift gears to monetization before you’d like to, thus forcing you to somewhat take your eye off the ball in terms of providing the service or product that brings you customers in the first place.

It’s no wonder that sometimes the details get lost in the shuffle, or that as a business owner you simply have to choose what is the most important thing that needs to get done at a particular time, and live with the fact that there is something else that needs attention but will not be getting it at the moment.

And yet everyone wants to be an entrepreneur these days.”

The Art of the Executive Summary

So what happens when you start one company and stumble into an entirely new opportunity that in some ways is many times larger than your original concept. Well, you build on what you have already done and be agile enough to realize a new opportunity. We are still very much focusing on launching chipin.com and have a product roadmap to enhance the system once it is launched for our core client base. But in order to raise the VC level Series A we need, we have to show why we are the next big disruptive business. Well, Netvocate is going to bit it.

So I am now reworking our preso, exec summary and bplan. Of course to keep things in perspective, I had a quick look at Guy’s short article on what should be included. I have found there is no such thing as a template, but by looking at several resources it helps create a check list of what I want to include.The Art of the Executive Summary: “”

Also… blogging for change!

Call For Change

A simple post about leadership

A simple post about leadership: “

I’m reminded — and I need to remind myself — that leadership is made up of many things.’ One component that I want to emphasize today is simplicity. Leadership is about making things simple. The world is a complex thing. In fact, the fourth law of business is that businesses tend to complexity.’ The leader of a business must fight this complexity — and communicate simplicity to the world, to customers, and to employees.’

The woeful story of Friendster, and lessons

The woeful story of Friendster, and lessons: “

friendster.bmpGary Rivlin, of the New York Times, has just written the best overview yet of the terrific bungle of social networking company, Friendster.

Jonathan Abrams, founder of Friendster, had a great initial vision, and sparked the social networking revolution by allowing friends to hook up with others. The company had an amazing lead, and potential.

But when he took money from high-profile venture capitalists, he paid a high price: These mostly ‘50-year-old white guys’ had their own ideas about how to run the company, and they got more heavy-handed when they realized how much Abrams was ‘over his head.’ In short, everyone was a fault, and it is a great lesson for entrepreneurs.

Here is the tragedy: Had one coherent vision won out, either Abrams’ initial vision for the more ‘closed’ version limiting people to communicate with profiles of their friends, or the more open model adopted by MySpace, the company may have succeeded. Had it forcefully implemented the ‘closed’ version, with conviction, it would have learned, like Facebook did, that gradual opening to others made sense. It could have evolved as it learned. Instead, it seems, the company was mired in indecision. Each executive change (happening every six months to a year) meant a new strategy, a change of course. And once Abrams was out — however arrogant he may have been — so was Friendster’s soul.

Aside from caution, the story also offers hope: If you’ve got a good idea and vision, you can succeed against a seeming formidable competitor that has all the money and best minds at its disposable.

(Via VentureBeat.)