Tag Archives: entrepreneur

The unfundable world-changing startup

Some startups are just unfundable but are developing things that change the world. In Barcelona I’ve found one. It won’t be my last, especially since venture capital is a LOT harder to get lately. I’ve been hearing a lot about deals that are falling through because the VCs are lowering valuations by a lot. As Ron Conway told me a few weeks ago it is a buyer’s market for VC now and they can pretty much demand anything they want.

But, this startup probably wouldn’t get funded in usual times. It’s sad, too, because it’s a technology that I really want. In fact, I want it to much that I videoed the founder showing it off so you can get excited about it too.

So, what is it? It’s a database that acts like a wiki. Sounds lame, right? But that’s why it’s unfundable. You need to spend some time with it to get why this is a world changing technology. The inventor, Terry Jones, has been working on it for 11 years. It is very significant new technology. Here, watch Terry on four videos:

Part I. 10 minutes.
Part II. 26 minutes.
Part III. 18 minutes.
Part IV. 11 minutes.

Terry’s blog is here. His company is called “Fluid Info.”

The videos got a long conversation going over on FriendFeed.

Fluid Info will be released in early 2009.

So, why is it unfundable?

1. It’s too general. VC’s don’t like to fund things that really will end up competing with Google or Microsoft. That’s too massive of a challenge and, despite their protestations to the contrary, VCs generally only invest in things that are more defendable than a general “take on Oracle and Microsoft and Google” approach.
2. Terry doesn’t have a team of stars. VCs tell me they say no thousands of times per year. What gets them to say yes? When there’s a team of stars that they’ve worked with before. Terry is just a visionary, to build a business the VC way you need to have a finance guy, a guy who is good at PR, someone who has done it before that can make the VCs feel comfortable. And, you need someone who is expert at the business model being proposed (ie, done it before).
3. Terry doesn’t have adoption. It hasn’t been deployed. He doesn’t have millions of users. VCs are now pretty much only funding things that are seeing sizeable growth and have some track record.
4. The technology is too hard to explain. After watching these videos for an hour you’ll be as excited as I am, but that’s too long. VCs want to understand the real proposition and pain point that it’s solving in a minute or two. Any longer and they’ll just say no.
5. He lives in a place far away from most VCs (most VCs are still in Silicon Valley, or Tel Aviv, Israel, Shanghai, China, London, Tokyo — it’s hard to find VCs outside of those places). That still is a barrier because most early-stage investors, like Jeff Clavier, tell me they will only fund things that are easy for him to drive to. That might be unfair in the age of Twitter and Skype, but a lot of funding events happen because of personal relationships and it’s hard to have those relationships happen when the visionary lives thousands of miles away.

Anyway, I can’t wait to use Terry’s new database and congratulate him on seeing his dream through. How many people would have given up? Hint: visionaries don’t give up on their vision just because they hear “no” a few times.

It’s why I’m very happy I got to spend a few hours over the past couple of days with him. Oh, and thanks to Tim O’Reilly for introducing us on Twitter.

A taxi business in Shanghai, China?

One of the best VCs in the world is Gary Rieschel. He started Softbank and now is EMD at Qiming Venture Partners. When I visited him in China, he took me into a taxi where he showed me one of the businesses he was investing in. Cool conversation about China enterpreneurship too.

As to China, I’m still processing our trip. It was mind bending. Lots of photos are up on my Flickr feed. But what would you like to know that I learned there?

2,000 "no's" a year

Allegis Capital says no to 2,000 companies a year. Since I was on stage at TechCrunch 50 seeing a bunch of startups, I wanted to have a conversation with one of the top venture capitalists in the world. Here’s the founder of Allegis Capital, Bob Ackerman, who gives me a 34-minute rundown of his view of what’s happening in the capital markets today.

My best question? “How do you earn a no?” After all, his firm says no 2,000 times a year. His answers are fun (that part of the interview starts at about 19 minutes into the video). After the camera was off he told me the best way to earn a no is not to try at all.

If you’re thinking of starting a company you should listen to this video, it’ll help you get your plans ready so you don’t hear “no” when you ask for capital.

I also ask him why, when companies like SmugMug are doing well and haven’t taken venture funds, should I take VC at all to build my company?

Oh, and don’t miss why he turned down Akamai. That’s a hillarious story, starts at about 25 minutes into the video.

The best comment on Twitter and architecture I've seen

It’s the comment left by Michael Kowalchik, aka “MikePK” in response to Matthew Ingram’s post about Twitter’s architecture (or the lack thereof). He’s the CTO of Grazr and makes an important point that every entrepreneur should read. So should every pundit who is giving Twitter crap about being down right now. It is the most important comment I’ve seen in weeks in another blog.

This one comment made me look at Grazr yet again. In the comment Mike seemed disappointed about why the market didn’t show up to enjoy his great architecture. Got me thinking about why Grazr doesn’t have many users and, therefore, doesn’t have Twitter’s scaling problems. Either way, read the comment that Michael left over on Ingram’s blog. The rest of this is just a rant, with a bonus rant about why FriendFeed isn’t going to be Twitter either.

+++++++++++++++++++++++

Here’s why Grazr is no Twitter:

1. Grazr’s name sucks. I HATE HATE HATE “Flickr” copy names. Er, Web 2.0 names. It’s so hard to tell other people about things when you introduce misspellings into them. Here, what’s easier to tell someone else about “FriendFeed” or “Grazr.”
2. Grazr solves a problem normal people don’t have. I think Dare Obasanjo is right, too many companies are trying to solve a problem only the weirdos in society (like me) are having. I explained this on the Gillmor Gang on Friday: I’m a noise junkie. Only one out of 100,000,000 people will be like me. If you think you can build a business just on those weirdos like me or Mike Arrington or Louis Gray will ever use, then go for it. But you don’t need an enterprise-level architecture to keep the two of us happy. Look at Grazr: how many people have too many feeds or want access to more? Only a very small percentage. Who wants to tell their friends what they are eating for lunch? A whole lot more people.
3. Grazr’s UI is too confusing. Look at all the hottest services lately. They are simple, simple, simple. Easy to get into and easy to use. Way too much use of color, too. Why? Put this sucker in front of an eye tracking research project and you’ll see why: you don’t know where to look so your eye gets confused and when it does that the next thing that happens is I look for the “back” button to get the hell out of there.
4. Grazr has a focus on A-list blogs. Who wants to read those things? I’d rather read the blogs from my friends. Those A-list assh***s? I already see too much of them in other places.
5. Grazr’s language is cold. No personality. At least Twitter has the “Fail Whale” with lots of little birds. It has a personality. Grazr? Look at the terms they use for their categories. Business. Celebrity. Gaming. Health. Music. Yahh, yahhh, yahhh, boring!
6. Nothing is moving on Grazr’s home page. I’ve been staring at this for five minutes and nothing has moved. Compare to Twitter Vision — which is more inviting? I even refreshed and nothing on the home page changed. Now go to Twitter or FriendFeed or Jaiku or Pownce. Click on the “everyone” feeds on FriendFeed. Refresh. Refresh. Refresh. Refresh. Refresh. Do you see new stuff? I do. It makes me feel like something is happening on those services and that there’s tons of users. Oh, wait, there are.
7. Grazr has UI that looks like Microsoft’s Windows. Enough said. I know what they are trying to do, but look at FriendFeed’s widget on my blog. Does it look like Windows? No, it’s customized so it fits into my blog’s design.

But, go back to the comment that Michael left. That’s exactly true. I’d rather have Twitter with all of its scalability troubles than a perfect system without any users.

END GRAZR RANT, START FRIENDFEED RANT

That’s why we’re all staying with Twitter. Now, if someone can figure out how to build a perfect system AND get the users to move, then we’ll talk again. FriendFeed is close, but isn’t going to be it. Why? Four reasons:

1. No realtime yet. When I can participate in FriendFeed by using an instant messaging client like Google Talk, then we’ll have realtime. Right now it’s pseudo real time and not wholly satisfying.
2. No SMS compatibility. Can I post to FriendFeed and get messages out of FriendFeed via a cell phone’s SMS feature? Not yet. How many cell phones are being sold everyday? In China alone they are selling six million new ones a month! Now THAT is a market Dare Obasanjo could get excited about!
3. No ability to see a river of noise. Everything on FriendFeed gets reordered based on participation. I want to see just a strict reverse-chronological view.
4. Poor querying abilities. I can’t tell the search to just show me every item that has “n” likes. For instance, I want to see only the popular items sometimes. I can’t do that. Same with comments. I want to see only those items that have lots of community engagement. I can’t. Steve Gillmor asks for this feature another way: he loved Twitter’s track feature. I can’t do that in FriendFeed either.

Oh, well, I’m off on a FriendFeed rant. Enough of that. Thanks Michael for making me think in a different way. What a great comment.

Tale of two businesses: exciting vs. boring

Yesterday I visited two businesses: one exciting, Sliderocket, and one boring, Bluepulse.

First, about Sliderocket, it’s a new presentation tool. Here is a video I shot with my cell phone yesterday with the CEO. I’ve been using it for my presentations and it’s a TON better than either Microsoft’s PowerPoint or Apple’s Keynote for giving presentations. We filmed a demo yesterday that’ll be on FastCompany.tv in June. This thing is sexy, visual, and well integrated into Web services like Flickr and Salesforce. In other words, it’ll get lots of hype from tech blogging journalists like you read over on TechCrunch.

But the second, BluePulse? You probably haven’t heard of them, but they have customers in 198 countries, have hundreds of millions of messages flying around their social network (which is only for users who have mobile phones) and have been grabbing up Silicon Valley’s top talent — they just got Christopher Nguyen who was director of engineering at Google. You can see part of that team in the video I filmed yesterday.

In a future interview that’ll be up on FastCompany.tv in a few weeks where we met former Google executive (this is the same office where YouTube started, by the way).

So, which one is more likely to succeed?

I have to bet on Bluepulse. Here’s why:

1. Market. The cell phone market is growing much faster than the market for PCs or Macs.
2. Competition. Bluepulse wins here big time. Why? Well, let’s assume you’re a kid in India and you get a new cell phone. Do you know of a social network for that cell phone? No. So, BluePulse isn’t having to convince you not to use an entrenched competitor. But look at Sliderocket. If that same kid gets a new laptop he’s probably heard of Microsoft Office and his friends probably use PowerPoint and so, now you’ll have to convince him that Sliderocket, something he hasn’t heard of, is better. That’s a LOT tougher of a job than Bluepulse has ahead of it.
3. Monetization. Bluepulse is building up HUGE engaged audiences that it knows a LOT about. Think about the things that a social network learns about you. Heck, start with just your location. This is stuff that advertisers will pay big bucks for. Someone using a presentation tool? You’ve gotta charge them cause advertising won’t fly in that business model. That’s a LOT tougher of a business to build.
4. Usecases. One thing is going to be working against Sliderocket for at least a few months: Powerpoint works offline. Now, Sliderocket has an interesting answer there (they are building an offline client with Adobe’s AIR technology) but that isn’t finished yet, so when Sliderocket comes out in July you won’t be able to develop presentations in a plane (you will be able to play them, but the real offline client will come later).

So, add all these things up and you’ll see that the more boring Bluepulse is far more likely to build a world-class business that we all talk about than Sliderocket does.

That all said, Sliderocket is one hell of a great product and I can’t wait to show you that sexy demo.

What do you think? Which business would you rather own?