Thoughts on technology start-ups in Scotland
June 29, 2012 Leave a comment
Chris McCann of StartupDigest has written a great series of summaries based on Blake Masters notes on Peter Thiel’s (PayPal Founders) startup class at Stanford. Yes, this is a convoluted path, but the thinking is outstanding. Just follow the link!
Peter Thiel’s Secrets of Starting Companies
June 26, 2012 1 Comment
Raising funds from Angel and VC investors is a colossally time consuming exercise, and all the time that founders spend raising money is time spent not developing the product, talking to customers or building the team. Most companies that set out to raise investment will not succeed – meaning that this time and effort is wasted.
June 22, 2012 Leave a comment
A/B testing is when a website randomly shows users two (or more) different versions of a web page, and measures which achieves better results. The results may be click-throughs to other pages, sign-up for a newsletter, registration on the site, or making a purchase.
It is widely considered a big step towards “scientific marketing” – analytics could show what was wrong with a site, but A/B testing helped the owner to understand what was better.
This article points out that we are in danger of being so pleased with ourselves for investing A/B testing, we’ve stopped innovating. It proposes a better solution: 20 lines of code that will beat A/B testing every time. This is a bit more technical than most links I post, but should be comprehensible to anyone with an interest in websites – I certainly found in interesting and it gave me some new ideas!
June 19, 2012 1 Comment
Will the investor you pick have more money if you need it?
It is a big step for a company to take on its first external investment, and a huge amount of time and effort will go into closing the deal. Even before getting there however, it is important to look at what comes next.
Some companies will need a little money at the seed stage, but will subsequently be able to grow organically based on customer revenues. Others, especially in the biotech and semiconductor sectors are likely to need millions before their first product comes to market.
There are a number of different sources of investment, with different compatibility problems…
June 16, 2012 Leave a comment
Sorry I’m late with this one so it’s actually coming on a Saturday!
Andrew Chen has written an interesting piece entitled Stop asking “But how will they make money?”. He is advocating the idea that for internet startups the Google/Facebook model is valid – that if you can build a large enough user base then monetisation can, and should wait, and is easy. It’s an interesting read, but I’d love to know what people in Scotland think?
I agree that internet businesses are different in many ways, but I think that pursuing early opportunities for monetisation makes businesses much more credible to European (and especially Scottish) investors who haven’t had past successses using the “wait for monetisation” model, and don’t yet see beyond the lessons of the .com bust.
The question is, will a preference for the relatively small proportion of internet businesses thatcanmonetise early result in European (and especially Scottish) investors missing out on the really big plays? Google, LinkedIn, Facebook and Instagram all followed the “eyeballs then money” model, and probably couldn’t raise investment here even now. E-commerce businesses like eBay, Amazon and PayPal all monetised early but lost cash for many,many years – and I suspect would still look like unattractive propositions here.
Most agree that Facebook and Instagram pricing represent some sort of bubble, but is it one that merely needs a little deflation, or are we heading for another .com style bust?
Are local investors missing out? Or is there another internet bust coming, which our investors are successfully insulating themselves from?
June 12, 2012 1 Comment
Pick an investor, any investor…
There are lots of angels, angel groups, and Venture Capitalists listed on websites on the internet, but many have tight investment criteria. Most invest in only a specific range of deal sizes. Many are specialist by industry sector and location. Some are always looking for a strong patent portfolio, or other protectable IP. If I am raising £50k for a new social media website, any time spent talking to a specialist biotech VC who typically invests £10m at a time is likely to be wasted. Fortunately, it isn’t too hard to find out who is worth talking to.
June 8, 2012 Leave a comment
Thanks’s to the NPR website for this great story about a business born out off frustration and opportunism.
June 5, 2012 Leave a comment
You can’t have a team without players…
When I say I work with startup companies, people keep saying to me “Oooh, that must be difficult in the current economic climate”. In many ways I find things aren’t that bad. The total paralysis in the immediate aftermath of the crisis is largely behind us. Big companies are still looking for ways to make or save money. Many are also sitting on decent cash reserves as a result of a cautious approach in recent times, and we’ve started seeing some of this directed to making acquisitions, which is good news for all. Levels of investment by angels are fairly consistent, and are swinging back towards a balance between supporting existing investees and putting money into new companies. Things could be better, but they could be a lot worse.
The one area that is really killing us is recruitment – it is incredibly difficult to hire the right people at the moment. Why should this be the case when so many people have been made redundant from companies of all types, and unemployment is relatively high? Here are my thoughts on the reasons why recruitment in startups is being so badly affected.
June 1, 2012 Leave a comment
This Friday’s link is to quite an old TechCrunch article, but one I keep coming back to. It’s very fashionable to write off Microsoft these days, as we watch companies like Apple, Facebook and Google doing spectacular things in the market. There are still vast amounts of money to be made in the Microsoft ecosystem, and this post is a great reminder of how huge Microsoft still is, and the impact it has on our lives. Love them or hate them, some of these numbers are so at odds with popular commentary that this is worth reading.
MG Seiglers commentary on Microsoft’s Passive Aggressive Numbers Post
