Scaling a startup

The two keys to scaling a startup | The Starting Gate: "To build a really large new company, one needs a high quality, well thought out idea and design thinking is one proven technique to produce such ideas. To increase the likelihood of realizing the market potential of the idea, execution is key and business model development is an effective process to formulate the execution strategy."

more news below

Follow @vcexp

Blogger Mocks Silicon Valley, Dumb Money

Disruptions: A Blogger Mocks the Denizens of Silicon Valley - NYTimes.com: " . . . John Cook, editor of Gawker, said he and Mr. Denton decided to restart Valleywag after seeing a return of excessive spending and obnoxious behavior in the Valley and a “lot of indications of dumb money,” like the $6 million given to Ms. Morin’s start-up. “The Valley is a target-rich environment for someone who is looking to expose profligacy, ego and self-regard,” Mr. Cook said. “There’s just so much cluelessness about wealth and privilege, and there’s so much completely unearned money changing hands.”. . ."

more news below

Follow @vcexp

VCs, Dumb Money, Silicon Valley, Poor Returns

10-Year Study Erases VC 'Smart Money' Claims -SVW: " . . . It's easy to see how "smart money" VCs end up with dumb money returns, when they herd into the same types of me-too startups and ruin the market for each other; or force their portfolio companies to pivot their business plans based on the trend du jour in their Twitter streams. Add to that, imposing toxic term sheets onto a startup's founders -- and it's no wonder they are increasingly despised in startup communities on both coasts. The VCs are extraordinarily bad at picking winners. It might be better to assign investments to a wide variety of startups on a lottery basis. . . ." (read more at link above)

more news below

Follow @vcexp

A Google boost to London start-ups (video)

Google's boost to London's start-up scene – Business 360 - CNN.com Blogs: "Traditionally, Silicon Valley and New York have been the main places for entrepreneurs to launch their businesses. Now, however, other centers are emerging as start-up hotbeds. Google Campus, opened in London last year, has been at the forefront of the city's start-up scene. . . ."

more news below

Follow @vcexp

Innovation, Capitalism, Entrepreneurs

Why Innovation Is Still Capitalism’s Star - NYTimes.com: " . . . Edmund S. Phelps, a professor of economics at Columbia University and a Nobel laureate, has written an interesting new book on the subject. It’s called “Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge and Change” (Princeton University Press), and it contains a complex new analysis of the importance of an entrepreneurial culture. Professor Phelps discerns a troubling trend in many countries, however, even the United States. He is worried about corporatism, a political philosophy in which economic activity is controlled by large interest groups or the government. Once corporatism takes hold in a society, he says, people don’t adequately appreciate the contributions and the travails of individuals who create and innovate. An economy with a corporatist culture can copy and even outgrow others for a while, he says, but, in the end, it will always be left behind. Only an entrepreneurial culture can lead. Is the United States really becoming corporatist? I don’t entirely agree with such a notion. Even so, President Obama has been talking a lot about innovation as a job creator this year, and while some of his intentions may be good, I’m afraid that some of his proposals look a little corporatist, and might suppress individual initiative. . . ."

more news below

Follow @vcexp

Science of the Deal, Google Ventures

Google Ventures Stresses Science of Deal, Not Art of the Deal - NYTimes.com: " . . . Unlike venture capitalists of old, the company’s rising V.C. arm focuses not on the art of the deal, but on the science of the deal. First, data is collected, collated, analyzed. Only then does the money start to flow. Google Ventures and its take on investing represent a new formula for the venture capital business, and skeptics say it will never capture the chemistry — or, perhaps, the magic — of Silicon Valley. Would computer algorithms have bankrolled David Packard or Steve Jobs? Foreseen the folly of Pets.com? . . . " (read more at link above)

more news below

Follow @vcexp

Digital Capital, Employee Productivity, Revenue Per Employee

Measuring the full impact of digital capital | McKinsey & Company: " . . . One clue suggesting that a company might face emerging digital challenges is the existence of businesses that have unusually high levels of revenue per employee in adjacent market spaces. Amazon.com’s employee productivity, for example, is double that of traditional retailers. Netflix, similarly, generates more revenue per employee than traditional cable operators do, by leveraging intangibles such as its highly evolved recommendation algorithms. Unusual financial profiles are another warning sign. Since digital funding is counted as operating expenditure, digital leaders often have small capital-investment levels relative to their size and growth potential. They also borrow less, both because they may not need to (some reap sizable market rents from, for example, search licensing fees or patent income) and because banks may be less likely to lend against intangible assets. . . ."

more news below

Follow @vcexp

Miami a hot spot for VCs

Miami: A hot spot for venture capitalists | The Starting Gate: "A few weeks ago, I had my first-ever opportunity to visit the Miami startup ecosystem. I was visiting as part of Terrapinn Private Equity World, a leading private equity conference for the Latin American technology community. You might assume the event took place in Sao Paolo or Mexico City, but no, it was in Miami, and will be again in 2014. The decision to host the conference in Miami is hardly unfounded. Miami is one of the fastest growing new startup hubs in the US. As a VC, Miami is exactly the sort of place I love to invest in: a city filled with entrepreneurs who not only want to be successful in their own endeavors, but also strive to create a sustainable infrastructure for others to succeed after they do. Miami has many of the assets of an entrepreneurial hub, notably a flourishing creative community, and a strong public university system. . . . " (read more at link above)

Read more here: http://miamiherald.typepad.com/the-starting-gate/2013/08/miami-a-hot-spot-for-venture-capitalists.html#storylink=cpy

more news below

Follow @vcexp

Saying No, Saying Yes, Profitable Business

Small-business owners often have trouble turning down business. As a result, they often end up extremely busy doing unprofitable work.

The Value of Saying No - NYTimes.com: " . . . .She took my advice and started to say no. And an interesting thing happened. The profit at her firm increased, and it became easier for potential customers to recognize her specialty. When the firm decided to specialize, it made a commitment to an industry about which it had specialized knowledge. Now, the portfolio that potential customers look at has other specialty food companies. They can easily see how the firm’s work helps specialty food companies get their message across. Most of us in business have never really learned how to say no. We are afraid that if we don’t say yes to everybody who walks in the door, no one else is ever going to walk in. When the graphic artist started to say no, she created capacity in her business to say yes to high-value and high-profit customers, clients she really could help. Instead of starting from scratch every time a new project appeared, she could start from a base of knowledge. Saying no to the person who doesn’t fit leaves you room to say yes to somebody who does.. . ." (read more at link above)

more news below

Follow @vcexp

Rebranding: From YouSendIt to Hightail

Why YouSendIt had to change its name - Fortune Tech: " . . . The question now for Garlinghouse is whether the rebranding will be enough. With $49 million in funds raised since it was founded in 2004, YouSendIt is not cash flow positive. And while Hightail's 43 million-strong userbase isn't small, it's a far cry from the 175 million that rapidly growing startup Dropbox trumpeted earlier this week. Although, as Garlinghouse, quickly notes, YouSendIt has managed to grow its userbase without requiring hundreds of millions of dollars in backing – a reference to fellow enterprise-focused competitor Box, which raised $150 million during its latest round of funding and is eyeing an IPO by 2014. There's also the issue of whether Hightail will alienate some long-time users who have long since grown comfortable with the old YouSendIt. Garlinghouse admits that may happen with a very small minority but says the new service's ease-of-use will earn even more customers. Indeed, Hightail may not be cash flow positive, but with the rebranding, the company hopes it will have a better shot at competing. Says Garlinghouse simply: "We wanted to be in, be real, and be bold."" (read more at link above)

more news below

Follow @vcexp

Roger Lee on Next Big Thing and Biggest Mistake of Entrepreneurs

Elevator Pitch: Roger Lee of Battery Ventures | SiliconBeat: "Q: WHAT’S THE BIGGEST MISTAKE ENTREPRENEURS MAKE? A: Bad hiring. They either hire the wrong people, and/or they don’t remove them quickly enough . . . Most entrepreneurs have a bold vision, but they need to complement that with great execution. If they don’t hire the right people, great execution is nearly impossible.
Q: WHAT’S THE NEXT BIG THING GOING TO BE?
A: I think the entire enterprise software stack will get rebuilt over the next 10 years. Enterprise software will look much more like Google/Apple/etc. and much less like Microsoft/Oracle/Salesforce/etc. It will be beautifully designed; be ‘bought’ (not ‘sold’) through freemium models; will incorporate ‘Big Data’ to make end-users more productive; and will factor in mobility from day one." (read more at link above)

more news below

Follow @vcexp

Silicon Valley VC deals fall, VC climate change

Silicon Valley VC deals fall to $2.6 billion in the second quarter, the worst since 2009 - Silicon Valley Business Journal: " . . . Venture capitalist Ben Horowitz addressed the “climate change” around venture capital in a blog post earlier this week, where he said valuations for many startups were falling, with VCs increasingly pushing entrepreneurs to accept “down rounds.” “Hoping that the fundraising climate will change before you die is a bad strategy because a dwindling cash balance will make it even more difficult to raise money than it already is,” Horowitz wrote. “You need to figure out how to stop the bleeding, as it is too late to prevent it from starting.”.  .  ."

more news below

Follow @vcexp

Venture Capital, Diversity, Density

The Connection Between Venture Capital and Diverse, Dense Communities - Richard Florida - The Atlantic Cities: " . . . venture capital investment is positively associated with both density measured as people per square mile (.52, .38) and even more so with population-weighted or concentrated density (.64, .55). In addition to this, there is an interesting connection between the way we commute and the geography of venture capital investment and start-up activity. Venture capital investment, according to her analysis, is negatively associated with the share of commuters who drive to work alone . . . Taken together, these findings are suggestive of an urban shift in venture capital and start-up activity. The reasons for this, as I've noted previously, include the urban preferences of a growing segment of tech talent, the changing nature and speed of technology, and the tight clustering of end-users and consumers in urban centers . . . When all is said and done, venture capital and start-up activity today is associated with denser, more talent-driven, more diverse and innovative metros, reflecting the increasingly spiky nature of America's economic landscape. . . ."

more news below

Follow @vcexp