A few quick links today that you may find interesting:
MediaPost’s take on some recent news in the search engine space. Obviously Bing is getting some serious press; the demo video looks pretty cool. I personally don’t get the use case for WolframAlpha, but maybe I just haven’t played with it enough. I can’t imagine it is healthy for a single company to dominate the search market. I realize that data is very powerful in the search space, so there are to a certain extent some natural barriers to entry at scale, but can’t there be some alternative algorithms that also kick butt and return the best results quickly? If the average searcher is searching 4 times per search, then I can’t imagine that the war is won quite yet.
A former colleague of mine from Atlas Venture has joined a new venture capital fund here in the Boston area. Eric Hjerpe has joined Jo Tango at Kepha Partners, a $100 million fund. Eric is a great technology company executive and I really enjoyed working with him at Atlas. (In fact, by working with him I really realized my major shortcoming as a VC, my lack of operating experience. And I say that in a very positive way, I just realized from being around him that I had a long ways to go if I wanted to grow up to be a real VC.) If you can take his money and get him on your startups board you should!
Fred Destin, another partner I worked with at Atlas Venture, has just put up a great post on his blog on the subject of “ignorant founders do it better.” I love the tone of Fred’s post and the premise – the best founders to not assume that their understanding of their startup’s end market and customers are prefect. Only by questioning and testing everything, and by being hyper-responsive to market feedback, can a startup be successful. Great post; check it out.
Finally, this one is tweeted everywhere but I think it’s very well written. Brad Feld lists 8 tips for interacting with venture capitalists in Entrepreneur Magazine.
May 29th, 2009 at 7:29 pm
Healy,
Another great post. Especially the link to Fred's "ignorant founders do it better." I can relate to this from my recent experiences. My initial business model has been turned upside down from rapid fire adjustments to market feedback. It led me to generalize that in any emerging new market, all founders are equally ignorant at the outset, but the ones who are receptive to market feedback and a flexible mind can go much further. The flip side though is how to gain VC interest by pleading ignorance. Perhaps seed and pre-revenue stage financing should ask the Entrepreneur to skip the Powerpoint and Excel and simply pitch the Hypothesis and the things the founder does not know at all but is planning to discover by testing. It is almost like a science experiment, a hypothesis at first followed by testing and feedback, revised hypothesis, and repeat this until one converges on a viable business model and a product specs. I am not sure any VC would fund such a blank slate with vague feel for the yet-to-emerge market.
Big winners are products which create new markets – Apple II, iPOD, IBM PC, Digital Camera, etc.
Entrepreneurs propose, Markets dispose.
Nat
May 29th, 2009 at 9:27 pm
I like how you say "the ones who are receptive to market feedback… can go much further." It sounds like you are rapidly iterating at your current venture, and I wish you luck in hitting that eventual golden end-market!
As to your second idea, I do not think that something so nebulous would easily get funded. However, setting specific milestones with costs/times associated with them (more like the thesis testing that you are referring to) are things that investors really want/need. I would not at all recommend just trying to pitch an investor without having a pretty organized method of presenting the idea – that is why powerpoint helps. It is very easy to come across as disorganized, which is a major reason VCs pass on many founders. I'd highly recommend using a slide deck if only for the purpose of keeping yourself organized in front of the investor.