I’ve got news for Wade Roush of Xconomy - the Barron Building in Central Square better not be the new Boston “startup hub.” Because otherwise, we are all going to die.
See the following tweet stream captured in my Tweetdeck account, from 9:42 to 9:51 pm tonight:
On the plus side, there is AT&T reception in the elevator. Maybe the only place in Boston where you can get 3 iphones all online at the same time!
One of the co-founders of my company recently posted his thoughts after attending the Startup Lessons Learned conference, from the perspective of a startup product manager. It’s worth a read!
My occasional co-blogger Prasad Thammineni was recently featured on Amex’s OPEN Forum.com, sharing four intuitive ways that he promotes innovation around the OfficeDrop office. (OPEN Forum is a pretty interesting strategy by American Express to offer their small business card owners a place to share best practices on running their companies.)
Prasad lists a few of the things we try to do at OfficeDrop to be more innovative… As with the OfficeDrop name change process, Prasad makes sure to employ all of the clever minds around the office, not just the over paid ones like mine…
The Wall Street Journal just published a piece on the changes in composition of the investors who invest in VC funds. In 2009 venture capitalists got money from all the traditional sources (endowments, pension funds, insurance/financial investors, fund of funds, etc.) However, in 2009 there was a major change - “Endowments and foundations saw their share of the overall venture capital pool fall to 3.2% in 2009 from 13.1% in 2008,” according to the report.
Obviously we all read about how stressed for cash schools and other foundations were last year, which probably caused most of this drop.
Endowments and foundations are the limited partners (investors in funds) that VCs like to brag about. “Yeah, Harvard and Yale are invested in our fund.” These LP’s are not only high profile, but are usually also considered the most sophisticated investors. If these groups don’t come back from the dead in the next couple of years and recommit to the venture asset class, will the industry be forced to dramatically shrink? (The venture industry size isn’t something I have time to blog about right now, sorry!)
Good news for the New England early stage startup community - venture capital investing rebounded from last year’s lows. $789 million in VC was invested in New England in Q1 2010 vs. only $408 million in Q1 2009. This is a significant pop, and gets us closer to the 2008 and 2007 totals of $872 and $984 million. I’ve pasted in a couple of charts from data I took from the spreadsheets posted on peHUB.
Overall, peHUB says:
Venture capitalists invested $4.7 billion into 681 U.S. companies during the first quarter of 2010, according to MoneyTree data released today by PricewaterhouseCoopers, the National Venture Capital Association and Thomson Reuters (publisher of peHUB). This represents a decrease in both deals and dollars from the preceding quarter — by 18% and 9%, respectively — but an increase over the first quarter of 2009.
I’ve started spending time on Quora, a question and answer site that is pretty cool. Quora let’s me follow particular topics and lines of questions, some of which are near and dear to my heart like online marketing and venture capital. One of the best parts of the service is that I can connect and follow my friends/connections and see what topics they are answering/following. Well, imagine my surprise when I saw my friend’s profile (I’ve redacted his identifying information in case he finds this public exposure embarassing):
Basically, any of your connections can “suggest” you follow a topic. And it currently appears that you are forced to follow that topic. And the result could be pretty funny. Please note that I’m not at all suggesting that sexual orientation is at all a funny topic - I’m just suggesting it is funny that you can pretty much force your contacts to broadcast that they are following anything that you want.
Despite the awesome little bug I recommend you check out Quora. I think it is a useful service.
This is my profile on Quora (you’ll need to log in to see it). Check it out and connect with me - but first you have to promise not to sign me up for any topics without my permission! http://www.quora.com/Healy-Jones
Looks like Apple is going to have to delay the international launch of the iPad due to higher than expected demand in the US. The company said in a press release:
Although we have delivered more than 500,000 iPads during its first week, demand is far higher than we predicted and will likely continue to exceed our supply over the next several weeks as more people see and touch an iPad™. We have also taken a large number of pre-orders for iPad 3G models for delivery by the end of April.
Faced with this surprisingly strong US demand, we have made the difficult decision to postpone the international launch of iPad by one month, until the end of May. We will announce international pricing and begin taking online pre-orders on Monday, May 10. We know that many international customers waiting to buy an iPad will be disappointed by this news, but we hope they will be pleased to learn the reason—the iPad is a runaway success in the US thus far.
This is an interesting development. I am a bit surprised that 1) expectations were only for half a million in the first few weeks because I believe that I”ve seen estimates from analysts that showed much higher projections and 2) this does indicate that the iPad is doing well, even though I was under the impression that they actual success wasn’t matching the hype. Good for Apple!
Healy Jones | 
Business plans, Innovation, Operational strategy, Startable, venture capital industry | 
04 11th, 2010| 
CommentsI have just re-read for the third time Steve Blank’s awesome post on business plans vs. business models. I have been thinking about something writing along a similar idea for quite a while, but obviously don’t have the same level of experience as Steve Blank! However, since I’m currently living this I feel like I can justifiably write about it.
My startup, OfficeDrop, doesn’t have the traditional 30 to 60 page word processor written business plan. We’ve written a lot down, but haven’t created a traditional 60 page business plan to supposedly guide our growth. And the writing we do do is usually done in a slide deck.
Steve writes about capturing a business model on slides. We’ve sure got a lot of slides! They are a good way to put our thoughts together and communicate them with each other and our investors.
I think the most important document in our startup is our financial model, which is build in a spreadsheet. It “memorializes” our assumptions and contains our results from operations. (I say memorializes in quotes because our assumptions change pretty quickly.) I call it our “business model.”
I prefer spreadsheets for business models, probably because of my financial background. I like the ability to put the important assumptions into a “living” sheet, so that when an assumption is changed the entire output changes and then compare actuals to our key assumptions. You don’t quite get that flow in a PowerPoint presentation or a Word doc.
We need to know how much experimenting we can do with our current pot of cash. We also need to carefully monitor the cash we gain from our revenues. As the marketing guy, I also need to understand the cost of acquiring a customer and how much they are worth - (stuff like churn rate and average monthly revenue per customer really matters to me.) A spreadsheet allows me to automatically update at the end of each month and compare against the assumptions. Oh yeah, and understanding the initial cash flows of our startup is pretty important. Spreadsheets do that, not Word docs or PPT.
Spreadsheets do have problems capturing some of the pivots a startup has to do. For example, we have just release a free desktop scanning software download that helps get paper scanned directly into Google Docs from most standard scanners. This is a pretty big departure with our current model of providing subscription scanning services and online document management. But it is a test that plays off our all of the technology we developed and all our experience in cost effectively scanning small batches of paper documents.
What is the problem with a spreadsheet as the basis for a business model during a pivot? Well, I think we understand the costs of launching our desktop software, which are captured in the spreadsheet. But the upside is a lot more complicated. The issue I find when introducing a potentially major change in a business model captured in a spreadsheet is that it takes a freaking long time to create a legitimate Excel model vs. a legitimate potential strategy captured in a PowerPoint slide. But as we test our assumptions and generate data, I’ll be sure to fill out our spreadsheet and see where the chips are falling.
On a side note:
I do think business plans have a purpose and could be useful for a traditional set of startups. If I was launching a restaurant or a law firm, I’d probably write a business plan. Obviously I like to write, and putting things down in a structured business plan could be helpful when business innovation is less important than finding a way to make an existing business concept work. The nice thing about a lot of the business plan templates floating around is that they are a bit like Mad Libs for starting a business. But I’d still build a financial model spreadsheet!
I guess it’s not a big surprise, but online advertising spending shrank in 2009 by 3.4%, according to the Interactive Advertising Bureau. There is a good article on MediaPost discussing the various sectors growth last year and forecasts for this year.
NorthBridge, a well known Boston and California venture firm is sponsoring a seed competition. Details below:
I got this email from a friend at NorthBridge about a new seed competition that they are putting on. I don’t love the right to invest clause, but the $50k investment is a real amount and could potentially help a group of younger founders get their company rolling. See information in the document below; I am not affiliated with the competition or VC so you’ll need to follow the directions at the bottom of the page to get more info on the competition and submit your idea.
