Netvibes Activity Feed

Leave a reply

I am a huge Netvibes user. I find it’s one of the best start page/RSS reader aggregator services out there. Before Netvibes, I used My Yahoo! but somehow Netvibes’s GUI seems a bit easier to use.
I just discovered that you can publish a feed of everything you do on Netvibes. I’ve been looking for this function in other services but am ecstatic that it’s here. So now, I plan on sending every article I read to my Netvibes activity feed. If you’re curious what I read across my RSS feeds, subscribe to it! I’m also putting this link in my right hand column of this site.

Deciphering iPhone Emails

Leave a reply

With all of my buddies on iPhones and also seeing them being way too busy and typing at lightspeed, I’ve seen a plethora of emails with what seems to be…gibberish words…in between readable text.
It took me a minute, but I figured out that it was the fact that the senders were super busy iPhone users and trying to type emails super fast, but unfortunately typing too fast to react to the iPhone’s auto-correct dictionary, or even caring what the auto-correct comes up with.
The auto-correct function is cool in some ways, but it takes some getting used to, and especially if you have big fingers, you tend to blur over to the adjacent keys more often.
To me, it’s an interesting solution to typing on tiny keys on a flat touchscreen. However, I find it’s hard to adjust to, even when I’m consciously looking for it. I hope the rumors of a foldout keyboard are true, as I think that learning this new style may not be quick enough for even the most impatient, quick typers.
But it does generate sometimes amusing emails which produce a WTF from me as I read them!

Our Economy Sucks, Raise More Money Now

Leave a reply

Our subprime mess is very much underway and the economy is suffering from that and a host of other issues. When consumers feel the pinch, that means they buy less, and companies don’t make as much money, and then they spend less on advertising and also on acquisitions. This is important to both startups and us investors: consumers spend less, so they are less willing to buy products and services from a company. Companies spend less and then they slowdown their advertising spend. Stats show that advertisers will maintain their online ad budgets when compared to offline budgets (woe to offline operations who are heavily dependent on advertising for revenue), but I can’t help but wonder how much online advertising could have grown MORE if our economy wasn’t so bad. Last as companies pull back and preserve cash, they will be less likely to acquire all these nice startups that we’re working on now. Granted, the wiser and the more resourced companies will actually go on a buying spree, but they’ll be after the startups at super cheap prices since they’ll be lower performing towards the end of the year as revenues become tougher. Beware the corporate development folks who seem to slow down a bit; they’re just waiting for you to go through your cash reserves and get to a more desperate place by end of year and snap you up at a discount!
When I meet startups, I am now telling them to raise more than they were thinking. I try to get them to run the numbers and to figure out how to survive until at least the second half of 2009, or further if possible. I want them to survive through the economic downturn and not be dependent on additional money until then. I tell them to expect that any revenue projections will be missed towards the end of this year, and advise them that if they try to raise money on poor metrics AND they have run out of money, they will have an extremely hard time doing it.
A lot of entrepreneurs are still coming to me with raising $100k-$300k in their plans. Then I try to convince them of the economic issues and that unless you can survive for 1.5 years on $300k, you’d better change the plan. Not all of them listen though. It will be interesting to see if I am right. To me, you should be at least $500k, even better upwards of $1-1.5MM, whereas in a decent economy, you could get by with $300k-$1MM.
Some of them only want to survive 6-9 months to get a prototype up and raise money on that. In a better economy, I would say that this is not a bad scenario. However, in today’s world, I tell them that if they are getting traction on an idea in investors’ eyes, that they should leverage that inertia and get more money now. If they build a prototype and are not gaining traction in a down economy, it’s only going to show that you could not gain traction and investors be much less likely to participate as they look for positive metrics. It’s much better to raise money on a beta and/or the idea and get as much money as you can now, and to plan on survival on minimal or no revenues for 1.5 years.
Another issue with the 6-9 month plan: August and the holidays. Running out of money by August really sucks for fund raising. This is because the venture community goes on summer vacation and it’s nearly impossible to find someone to get a meeting. You have to wait until they all get back in September. Then you have about a two month window everyone gets distracted once again because it’s Thanksgiving and then Christmas. From about mid-November to first/second week of January, the venture community goes on vacation, peoples’ minds are on the holidays and families and not on funding you.
If you’re an entrepreneur reading this now: raise more cash than you think, expect that any revenue projections you have will be missed, and try to plan to survive on minimal or no revenues until at least the latter half of 2009, and raise all that money now while you have investor inertia.

Intuition, Gut Feel, and Seduction

1 Reply

A little while back I sat with another experienced angel investor and the topic of gut feel came up, as it relates to angel investing.
It was funny for both of us that for all the analysis we can do on a new startup’s prospects, that if our gut said no, we’d not invest. How interesting to use such a undefined force and feeling to make such a prominent decision!
After I left Yahoo, I resolved to develop and listen to my intuition more. I really searched down deep inside myself and really tried to become sensitive to the most minute feelings that emerged about anything. I trained myself to be acutely aware of the good and the bad, and those nagging feelings of doubt or uncertainty. Then, once I could identify those feelings, then I told myself that I would act on them and never ignore them. This is because in the past, I feel that I have ignored my intuition and this has resulted in me getting into some really bad situations.
When I meet an entrepreneur for the first time, my intuition is on high alert. I search my feelings as I hear them talk to me about their business. I not only attune myself to pitch he is presenting, but also to who he is. Is there elation on the idea or some nagging uncertainty? Do I feel this person is trustworthy or not? These and more.
However, what can stymie intuition in the world of angel investing is seduction. This is when the pitch and/or the person delivers such an incredible perceived opportunity that it’s like seeing the hottest, sexiest woman walk into a bar and you just can’t resist. You’re hooked emotionally and you’re already reaching for your checkbook. Somehow, the seducer has blown past all your defenses and even your intuition seems suckered.
This happened to me in a pitch not too long ago. The pitch was perfect. It was seductive. It claimed solving so many problems and the benefits and monetization were straightforward. The team was experienced and veterans of the Internet, so no problem on solving any kind of technical challenge. But I countered by saying to myself that hottest, sexiest woman is still a person despite what we perceive is her perfection, and thus means she can’t be perfect since she is only human. Thus, for this pitch, however sexy it was, I refused to fall under its spell and viewed it with objective eyes. I brought my intuition back online and ultimately felt too uneasy about it to participate.
Walk away from that hot, sexy woman – hardest thing you can do sometimes.
Avoiding seduction is crucial. We have to train ourselves to not fall under the witch’s spell and view the entrepreneur and the opportunity with objective eyes.
This brings back the clarity of our gut and intuition, which we must cultivate to make sure we are not doing something that we’re not comfortable with.
In Blink by Malcolm Gladwell, he doesn’t like using the word intuition but instead he calls it a form of unbelievably quick thinking. For me, it’s both. It’s both the gut, the emotional aspect of immediate, primal reaction to something, and the incredibly rapid thought that allows us to make an instantaneous decision. One is cultivated within ourselves and our feelings, the other via years of experience in dealing in a certain area of expertise.
What does it mean exactly when we pass on an opportunity via gut feel?
Just because we pass on an idea does not mean that we think an idea will fail. It might actually succeed. However, I do believe that it truly means that we are not the right people to be involved and that our gut is telling us that, given who we are, how we work, etc, that this project is not right for us.
For the entrepreneur that gets passed due to gut feel, don’t feel bad. In the end, it will be better if we didn’t work together. Go and be successful, but just with someone else.

Incubation 201: Should You Incubate?

Leave a reply

My last post Incubation 101 went over basic concepts which I think are essential to the success of any incubation operation. Basically, I think that risk of failure increases exponentially if you don’t follow these concepts in their entirety.
In this post, I want to bring out some subtle points mentioned in the previous post which refer to whether or not you SHOULD incubate at all. I assume that if you are thinking about incubating, that somehow you’ve reached a point in your career/life where you CAN incubate. But does it mean you should?
What are YOU personally willing to do?
Self-examination and knowledge is very important. You need to figure out exactly HOW you can contribute to incubation and the nurturing of ideas into businesses. Then you need to figure out what really motivates you and how you gain satisfaction, relative to the kind of participation you’re willing to give.
Are you willing to jump back into the startup life of working 24/7?
If you’re not in a position to go back to startup life, then you shouldn’t incubate your own ideas. Remember, the idea originator has the resonance with the idea, and is best poised to take an idea to a successful conclusion. If you’re not willing to do that, that’s a clear sign you shouldn’t incubate. Transferrence of an idea to someone else is nearly impossible and substantially decreases chances for success. Incubating at arm’s length is still possible.
Do you have incredible, kick-ass product ideas and want to see them flourish?
This is better than having dumb ideas, or ideas that others are working on, or no ideas at all. You shouldn’t incubate your ideas if you don’t have great ideas to begin with. Again, maybe you should incubate at arm’s length.
Being the “Guy at the Top”
The most dangerous thing you can do with incubation is try to be the “guy at the top” who directs things but doesn’t get involved in the day to day of any incubated operation. You generate great ideas, and then hire a team to execute that idea, and then think you can sit back and watch the idea flourish, grow big, and you reap the benefits while being able to kick back and just manage it all.
Incubating Your Own Ideas
So you have great ideas and are willing to go back into the startup world. Incubation is a great way to figure out what to do next, if you have the resources to work on many things simultaneously. You will need to be personally involved in the day to day of each incubated idea, and you’ll most likely max out at around 3-4 ideas, perhaps less.
Follow the principles in Incubation 101 and you’ll do great.
Managing Incubation at Arm’s Length
So you don’t have great ideas, OR you aren’t willing to put yourself back into startup mode regardless of whatever ideas you have.
My advice to you, is to let go of any notions that you be the “guy at the top” and find another way to help others with their ideas. Reorient your values and take great pleasure in watching others’ flourish with their own ideas, but contribute in ways that allow you to be involved.
This can be through advisorships and/or investments. Provide value to your entrepreneurs as you invest money in their ideas and they will come to you for help. Create a positive relationship and you can gain some satisfaction in knowing that you contributed to the success of their idea.
Raise a venture fund and support people more through cash, if you aren’t so helpful in other ways. Keep the incubated ideas and companies at arm’s length as much as possible to maximize incentives and reduce your exposure to ideas that aren’t going anywhere. Again, follow the principles in Incubation 101 and you’ll minimize risk and maximize your chance of finding something great.
My Personal Experience
Back in early 2006, I attempted to raise a venture fund with an incubation component. I was having a hard time raising it, and ultimately this caused me to get involved with startups in a different way. Looking back, I was glad that I didn’t fully realize the incubation operation as I think it would have gotten to a bad place.
In my self-examination, which happened much later, I discovered:
1. I was not willing to put my personal time into any one idea. This would have lead to a bunch of ideas run by me, the “guy at the top”. This would have been a risk increasing move.
2. I really didn’t have great ideas. I had some, but none that were earth shattering. I didn’t have a way to generate great ideas but would have tried to execute some mediocre ideas, again increasing risk.
3. I realized I was much better at taking someone else’s ideas and making them even better.
Thus, I am today at something-like incubating at arm’s length. I feel that I have yielded a much better risk profile through my work with startups across a number of great ideas and entrepreneurs, and leveraging my personality preference for making an existing idea better versus coming up with a great idea myself. I also have higher personal satisfaction working in this fashion.
Read Incubation 101, do the self-discovery, and do incubation the right way for YOU.

Incubation 101

Leave a reply

Over the last few months, I spent some time interviewing a whole bunch of people about incubating businesses. It was very enlightening not for the information I uncovered, but the fact that it just brought to the forefront of consciousness things I already knew.
Incubation has had a bad reputation over the years, especially the large ones like IdeaLab and Internet Capital Group that raised enormous sums of money but didn’t return nearly what they were supposed to. When I tried to raise my own venture fund 2 years ago and wanted to include an incubation component, I was advised unilaterally to not call it an incubator or else I would get nowhere fast! Investors had been burned way too much on the incubator model in the past to trust new ones.
Yet incubation is sexy. Generate new, cool ideas. Create new businesses. Find the next Google. Unbridled innovation, unlimited success! Wow!
If only it were that easy or certain. Incubation is really hard, but in my research I’ve uncovered some guiding principles which make incubation viable and possible as a strategy.
Here are the highlights:
Incubation works nicely for internet projects
Developing products and services for the internet has gotten so cheap and easy that invested capital can be very small relative to other industries.
Incubation is HARD
It’s not easy to come up with a great new business. Attempting it is not for those wishing for a quick win. You have to be patient, focused, and be able to let go of projects that aren’t getting anywhere or waste too much of your time and resources.
Go cheap
The less money you spend, the less money you need to properly incubate. Testing ideas as cheap as possible reduces overall investment. Don’t invest a ton in infrastructure liking buying a pretty building and cool office furniture. Outsourcing can help with being cheap especially in the international marketplace for talent.
Build fast
Get your concepts out there fast and test. Being slow means competitors can get into a space before you can test properly. Also, the more ideas you can generate and test, the more chances you have of hitting on something worthwhile.
Fail and remove fast
If something is failing, close it down fast! Have the discipline to kill projects that aren’t working. Throwing money at failing projects doesn’t solve the problem either. The ability to let go of bad projects is extremely important. Otherwise, projects that are sitting around languishing just waste money and effort to keep afloat.
Go wide…Carefully
Risk is reduced if you cast your net wide of ideas to try. Throwing all your eggs into one or a small number of baskets increases risk substantially of failure. But go wide carefully, meaning don’t stretch your resources too thinly.
The founder of an idea needs to go with that business
It is nearly impossible to properly transfer an idea to someone else. Trying to do so raises risk tremendously. To reduce risk, the person who comes up with an idea should stay with that idea, should that idea blossom into a business. This is because the originator of an idea typically has some intrinsic resonance with that idea as a business, and is the right person to build, innovate, and nurture it.
If you are not willing to take an idea through to its proper conclusion, my advice to you is to re-examine your life and what you want to do. If you’re not willing to jump back into a startup, then I would tell you to just let others develop their own ideas and let go of your own. Take pleasure in nuturing others and their ideas into great businesses. Raise a venture fund and help others do well.
The team members also should go with that business
Shared resources developing an idea is a nice concept, but to reduce risk, as soon as an idea starts taking off, the development and product team should immediately be deployed on that project. Switching people on a project is hugely problematic and wastes time in education, learnings, and experience.
Any resources working in an incubator should be told beforehand that if they work on an idea, they can’t just sit around and keep coming up with new ideas; they need to see the blossoming idea through to its conclusion. If anyone can’t buy into that model, then they should find a job somewhere else.
Keep resources at arm’s length
The more resources you can keep not on recurring payroll, the better. It’s easier to remove people who aren’t working out, or shut down projects. Hire the teams on projects that are flourishing to the corporations in which those projects reside.
Build a rolodex of resources you can deploy at a moment’s notice. Find great people who are willing to give you great rates and can do great work.
Be disciplined in a process for evaluation
Set clear checkpoints for your incubated projects. If they do not reach basic minimum levels, then they should be shut down ruthlessly. Budgets, time, goals all can be used to create checkpoints.
Incentives are key
Nothing motivates people better than survival instinct and a life or death deadline. The survival instinct is activated when they know they’re going to run out of money (like their salary, their means for eating and paying rent, etc.) if they aren’t successful. The life or death deadline is activated when they know they’re not going to get any more resources or help beyond a certain point. So they MUST be successful or else they’re gonna starve.
On the other side of the coin, it is highly motivational to know that their success is also tied to success of their project in a large and singular manner.
Paying them a regular salary from the overall incubator pool is not motivating enough; it makes them too comfortable knowing that they could fail on any idea but still are able to go on surviving. It also severely reduces their urgency, knowing that they’re still going to get a paycheck whether or not it launches today or 3 months from now.
Giving them large ownership in a separate corporation formed from their project is. Tying their salary to the separate corporation is even better.
Forming a separate corporate entity per project increases clarity in ownership and process
Keeping projects internally makes it difficult to track and assign costs properly to each project. When you have a separate corporation each with its own budget and resources, tracking becomes easier.
It also makes it clear who owns what part of what corporation, and how much of it. Keeping projects internally removes that fact as you’re part of and being paid by the whole.
This clarity extends to funding as well. When an entity is running out of money, you have to take an official step to put more funds into that corporation’s bank account, along with all the ramifications in doing so in ownership, and why you have to do so. It really makes you think twice about funding a business that may be faltering or flawed.
As mentioned before, when peoples’ salaries are tied to the corporation, then incentives are highly aligned with the success of that corporation, and not blurred with the whole incubator.
Some ideas require a sustainability component to be fully tested
A recurring theme among internet products is that ideas can be launched quickly and once it’s out there, people will come and use it, love it, and it will grow. Banking on an idea to grow organically by itself is a recipe for disaster. The problem is that not many ideas have the ability to do so. We often fool ourselves that by launching a new idea live, that people will just come and use it and it will be the next Google. It might happen, but probably won’t. Then we get frustrated wondering why it isn’t growing, and often end up thinking that the idea sucked and we should close it down.
However, it is deceptive to think that an idea which does not grow organically is a failure. The reality is that the idea might actually be good, but just requires people, time, money, and smarts to apply to it and then it might grow. Thinking through the sustainability of a launched idea and how that can be supported for at least some period of time is really important.
Incubation works great if you’re personally trying to figure out what to do next
If you have some personal capital and want to find a new idea to work on, incubation could be for you. I’ve talked to a number of people who have employed incubation at a personal level successfully. Instead of working on just one idea, they launch 3-4 and work on all simultaneously. Each idea gets funding and their own team. At the end of the process, the most successful idea survives. The other projects are closed down or sold, and you become CEO of the surviving, thriving business.
It could work much better than working on singular idea and trying to determine if that idea is the right one or not. Or working ideas serially. Being serial takes up a lot more time than doing things in parallel.
Yes it takes a lot of time and effort, and requires a multi-tasking brain. But if you’re a startup person, you’re probably used to working like that anyways.
Find great startup people
Seems basic right? It’s actually harder than you think.
Find creative, hard working, caffeinated people who are smart and motivated AND can take a project to a conclusion. Too many people float at the creative, idea stage and don’t have what it takes to stay with an idea over time and develop it. Discovering people who are like this is very hard, so beware.
As mentioned previously, keeping them at arm’s length makes it easier to get rid of inappropriate people. Be ruthless in culling people who aren’t working out.
Young people are great. They can work for long hours, live cheaply, have almost no other attachments in their lives. They will try stuff because they don’t know better, unlike us old, jaded, experienced people. They’re not so great because they don’t have enough business experience to know how to take a business further.
Build an idea with revenue generation on the mind from day one
If an idea is generating money, its ability to sustain itself grows dramatically. Creating products which bank on the free model and gain lots of users, but have no concept or plan for short term revenue, is great for people who have a powerful investor as backer and who is willing to fund growth beyond that point. For an incubator, I would say that this is not a good path to go down and substantially increases risk of failure.
Revenue generation sustains the incubation process
Following on the last principle, if you can find a way to generate revenue immediately, then the incubation process can be self-funded and sustaining, and opens up the ability to try new ideas without deploying more outside capital.
Good luck with your incubation efforts, and I’d love to hear how you’re doing if you are going to incubate new businesses.

Exploratory Products vs. Utility Products

1 Reply

Over this last year, the topic of exploratory products versus utility products has come up so many times. And I’ve always felt uncomfortable with products that engage users because it helps them “discover” or “explore” something.

“Discovery” and “exploration” are always so alluring terms. Throughout human history, we’ve always envied the explorer. Christopher Columbus set out to discover the New World. Lewis and Clark went looking for a way to the Pacific Ocean. Neil Armstrong sets his foot on Lunar soil and declares, “That’s one small step for man, one giant leap for mankind.” Even watching Star Trek with the Enterprise on their 5 year mission to explore new worlds, we can’t help but wish we were on the Enterprise alongside Captain Kirk and Mr. Spock. It sounds so wonderful, so romantic, and speaks to our ingrained cultural tendencies that achieving, discovering, and exploring makes us feel that blazing new territory like pioneers puts us out of the comfort zone and sets our senses afire, and takes us out of our normal, boring lives.

First, I think that there is a segment of the population with a natural “gene” for exploration. I personally know people whose first inclination every morning right when they get up is to go to click randomly on news articles or websites, like StumbleUpon or Digg, or Del.icio.us. They always do this before doing anything else.

Second, I think there are differences in the manifestation of the “exploration gene” based on age. Young people seem to engage in more exploratory behavior. But once young people grow older, they get more responsibilities, their time gets occupied by a whole bunch of things, their lives get so full that there is little or no time for exploration unless you have a natural “gene” for exploration.

To me, exploration is either an activity relegated to a small population relative to the whole, or one that does not sustain itself as a person ages. Given this belief, I think there is a tremendous amount of risk associated with products that depend on “exploration” and “discovery” as the main reasons why users would want to and/or continue using a product.

What’s the difference between an exploratory product and a utility product?

Utility products are those which depend less on exploration and discovery as primary tenets. Instead, utility products work their way into our lives because they are essential and we gain continual value from our usage and interaction with the product.

Here’s an example. News sites like NYTimes.com are utility sites. We consume news every day and find value from that by being informed. But they also introduce exploration to keep things interesting with their Most Emailed Stories module. But it’s not the focus of the site; it’s secondary.

Another example: StumbleUpon. I consider StumbleUpon a classic exploration site. You go there because you don’t know what you’ll find. You have to like discovering new websites and are ok with spending your valuable time doing so. But yet traffic over the last year has been dropping.

Here are the Alexa graphs for NYTimes and StumbleUpon:




Do you want your product’s graph to look like NYTimes.com or StumbleUpon?

My basic tenet is:

If you want a chance at success, you must make your product essential from a utilitarian point of view. You can use exploration to make your product more interesting, but if you make exploration your main purpose, you’ll reach a topping out point of users and potentially decline over time.

Is it a perfect rule? No, of course not. I am sure if we thought hard enough, we could think of some sites who are successful at employing exploration as their main purpose. However, I’m talking about risk reduction of failure and increasing the probability of success dramatically in my opinion. Wouldn’t you want to reduce the risk of failure by a great amount?

My Book is Being Written!

1 Reply


After all these months, I finally am moving on my book! I found someone to help me extract all these facts out of my head, which is a critical starting point. I’m not a natural writer; I can’t sit down and just regurgitate tons of text on demand. It takes me effort. But having someone who is knowledgeable AND able to editorialize and write extract all this information from my mind is a godsend for the book’s process.
She interviews me, digs into areas to find out more information, makes notes on things that require more research. Having a “brain extractor” work with me has also helped me think through how this book should be formatted and ultimately end up. My next step is to get a few paragraphs written and then finalize how I want to publish this book…

When the CFO leaves…Part II

Leave a reply

Today’s headline from Silicon Alley Insider reads:
Google Disaster: Comscore Reports Awful January
Reading this article (and numerous other articles about slowing Google growth) and watching GOOG drop from its 52 week high of 747.24 to today’s price of 452.31, I thought back to my post from last September, When the CFO leaves… which I posted upon learning that the Google CFO was intending to leave.
I hate making predictions. I hate putting it out there like that because it sucks when I’m wrong. But looking at GOOG today and all the news over the last few weeks about the impending slowdown in Google revenue growth, I cannot help but wonder that perhaps I could be right on this one.
Now, this post is not about Google the company. Google is still a great company and is doing many great things. But as any person who knows anything about stock trading, stock prices are often more reflective of emotion and feelings about the company and not so much actual performance of the company. So we’re talking about sensing when a stock price has peaked and when it’s time to get out of a certain stock.
Who has great “stock sense”, especially the “stock sense” of their own company? The CFO.
Once again, I see the CFO of a great public company get out of a company whose prospects are riding high. But the CFO is a smart guy; he has access to both proprietary information within the company and also tons of analytical information from external sources about the company, its competitors, and the economy, and the opinions of all his buddies in the financial community. This is far more information than you or I could get hold of. Couple that with a great sense for money and he can predict when the stock is going to peak and, perhaps, when he should exit and take the gains off the table.
So when Google’s CFO announced his departure late last year, I could not help but wonder that GOOG was going to take a plunge within a year. It sure looks that way now.
When the CFO leaves, it’s time to sell all your company’s stock…NOW.