An idea is simply that. An idea.
Ask my business partners—I usually have 2-3 of them every day. Just because we fire around an idea doesn’t mean we’ll try to make it a business. By now I’m sure you’ve seen or heard that Mark Zuckerberg “stole” the idea for Facebook from a couple other students at Harvard. I simply laugh in disgust at the accusation. Bottom line for the other guys: they had to do absolutely nothing to cash in for millions in a lawsuit. What a joke. Ideas are cheap. Having an idea is very very different than successfully implementing that idea.
Six things every startup entrepreneur should keep in his/her back pocket:
1. Attack a real problem in a big market
Every single startup that launches should try to be a painkiller (not a vitamin) (very few are painkillers) to a real problem in a big market.
2. Maintain a technical or proprietary advantage over competitors
What is it that makes your company, product, and service better than the rest? Better, faster, cheaper is not necessarily an advantage.
3. A rockin’ team.
The preference here is a bunch of geeks who love solving big problems. Heavy engineering backgrounds seem to be better. The team should innovate and break stuff often.
My ideal startup CEO job post: Passion. Passion. Passion. Preference given to the person who has failed before. Numerous failures even better.
4. Measurable traction in the market
How many users? How fast is the company growing? Where will the company be in 3-5 years?
5. Revenue model
Hoping for Google to buy you out is not a revenue model. You must show a real revenue model and why it will work (and/or continue to work).
I’m convinced that the startup game is at least 10% luck – maybe more. At the end of the day you can master everything in your can control and still be unlucky. *Note: Passion helps you be lucky.
My dream job:
Let me caveat this with the fact that I love my job and everything it’s given me. In fact, I may stay involved in it for a long long time. However, nobody wears the uniform forever, so here is my dream job (besides being a rock star). Maybe I’ll start doing this when I’m 40?
I want to be an early stage startup investor managing a $5M-$25M fund. Ideally, I’ll have a 3-5 person team that invests $100K-$250K / month in early stage startups. I don’t want to be a VC. It’s too much noise. Too many partners and too much cash to waste time in seed rounds. We’ll be a hybrid angel / super angel. We’ll help mentor and advise startups. After all, angels do better.
Ultimately, this drives from an inner passion to help really smart people solve really big problems at the cutting edge of innovation (and help them pay for milk and bread after thousands and thousands of hours in sweat equity).
Groupon will be bigger than Twitter (and on par with Facebook's growth) and have 150M+ users by the end of 2011.
Here is why I love Groupon (and why it will be bigger than Twitter and on par with Facebook):
In my own words: Groupon is enhancing the backbone of our economy by providing small businesses with new (and repeat) customers while making consumers happy, businesses happy, and stakeholders happy. Let’s face it, small businesses are the backbone of our economy and yet before Groupon, most of them had no idea how to leverage social media to drive more customers through their doors. Groupon is changing all that.
Groupon takes advantage of the competitive nature within all of us by sending a daily deal at a 50% - 90% discount off the regular price. It gets us off the couch and into the game, tour, helicopter lesson, or skydiving adventure that we’ve all wanted to do. The huge discount makes consumers feel like they’ve won and the competition to tip the deal makes everyone want to buy fast and often. It’s the sexiest way to try new things. The bottom line is that Groupon drives new customers to new markets faster than any other way possible.
Groupon will announce an IPO by 2012. Groupon will have revenue of $150M - $200M / month by the end of 2011. Groupon will have 150M+ users by the end of 2011.
Facebook growth: Sure, there are 6.7B+ people on the planet but the actual number online is much much lower. Facebook peaks at 1B registered users. Smaller niche focused social media sites in other countries see more growth. Facebook announces an IPO by 2012.
Twitter is still trying to justify its revenue model. Is it a real business or just a free real-time information stream? I think it's both.
Startup valuations are still high. Get over it. $150K-$250K in $1M-$1.5M pre-money is still the norm. Forget the VC collusion argument. It's dead. Cartels, collusion, and price fixing? Who cares? It's not reality. Startup valuations are determined by the market. Angels and super angels continue their dominance.
Apple and Google continue their takeover of the mobile market. Blackberry begins its slow death because of a failure to innovate. Exceptional email is not a painkiller.
Entrepreneurship is About Happiness, Not Wealth:
A truly awesome post by one of my business partners