LaunchBox Blog

We live in a world where progress is measured in hours and days and where we are in a constant race to launch a new company, a new product, or a new feature. Who are we racing against - is it to meet our own expectations, to demonstrate worthiness to our investors, or is it to stay ahead of the competition? Regardless, the race comes at a cost. The cost may be the family and friendships we lack time to give attention to during the endless race, the cost may be our own life savings, the cost may be our health, or some combination of the above. At the same time, running at this fast pace for extended periods may cause burnout - maybe not today or tomorrow, but at some point people need to take a break.

What prompted me to put these thoughts on paper? I've been on such a break for the past few days. By day, I've been enjoying the fresh cool mountain air on the ski slopes. By night, I'm making sure that I've fully caught up on required communications and work. Is this a complete break - no. However, it is enough to reenergize.

So my advice to you is to take a few days off (maybe not completely) and go do something for you that is not work related. Your company will survive, the people working with you will still get things done in your absence and you will be more productive and energetic when you refocus on work.

Labels: Advice, Health, leadership, rest

Congratulations to LaunchBox Digital advisor Chris Schroeder. His company, The Health Central Network, just received an investment from IAC. Barry Diller will join THCN's Board. Previous investors include Polaris, Sequoia, Carlyle, and Allen and Company.

The online health space is a dynamic one that has attracted a lot of attention and investment over the past year or so. Chris is an extremely talented executive - keep your eye on Health Central.

At Techcrunch40 a few months ago, I had the pleasure to run into the CEO and CTO of Docstoc, an LA-based startup looking to be the "Youtube for documents". Well, it has been a number of weeks since I last visited the site, and it looks like it is starting to get some real traction, in terms of user-contributed content.

If you are looking for things like draft term sheets, sample pitch documents to investors, or financial models to use for your own early stage company, it is well worth a visit!

Try it and give us your feedback: www.docstoc.com

A great debate has been raging on the blogosphere over the last week or two on Twitter’s business model, or more appropriately, lack thereof.

Allen Stern kicked off the debate with his post, provocatively titled “Is Twitter F’d?” The piece questioned whether Twitter, despite its strong usage, has “hurt” itself by not developing a sustainable business model. Allen contrasted Twitter with Pownce, which is planning an ad model and a premium product from the get go.

Jason Calcanis, and Fred Wilson weighed in with a simple response: The team should put all of their energy into driving user adoption and getting to scale, and not worry about monetization right now. Get to 10 million users. Once they get there, monetizing will be easy. Fred also points out that Google, YouTube, Facebook all launched and grew without a business model.

Many of the responses were along the vein of 'Dude, It’s 1999 all over again."

There obviously is no one “right” answer. I agree that if you can get to 10 million users, you’ll be able to monetize. I think the biggest challenge for Twitter to get to that mark will be extending its reach beyond the early adopter crowd into a more mass audience.

I think the debate has a few important takeaways for startups:

• The “no business model” approach is a high risk (and potentially high reward) strategy. The biggest risk is that by definition, without revenues, such a business requires capital. Funding is plentiful now, and the current flavor du jour is to fund meaningful customer adoption. That can change over night.
• Focus matters. The primary argument for Twitter’s current strategy is a bandwidth one. The team can only do so many things well. As Fred Wilson argues, every ounce of energy spent on monetization risks taking the eye off the ball on user growth. Whether or not you agree that Twitter is focused on the right things, the focus/bandwidth point is spot on.
• Investor alignment matters. Given limited bandwidth, entrepreneurs should make sure their investors are on the same page in terms of where the business is focused (which Twitter has done; Fred Wilson is an investor in Twitter). Note also, that some commentators have suggested Twitter’s model is one that’s built for an early exit rather than a sustainable long-term business. Again, another point that you want to make sure there is alignment with investors.
• Milestones matter. We have all seen plenty of business plans with hockey stick projections that yield a 10 million user base. The reason that we can have this conversation about Twitter is because it has a viable shot at 10 million. This really is a question of probability: what are the probabilities a business can grow along different trajectories. And those probabilities will be driven by underlying operating metrics like viral propagation rates, take-up rates on the Twitter API, etc. My advice to any entrepreneur is to make sure you understand what those key drivers are, and establish hard milestones and checkpoints to identify what trajectory the business is on at different points in time. Hockey stick projections aside, does the hard evidence suggest that you're really on a trajectory to get there?
  

Labels: business model, monetization, twitter

We will be streaming tonights LaunchBox Digital Entrepreneur Panel Discussion at George Washington University. The event starts at 6:30 pm and the stream will be available via the link below.

http://www.ustream.tv/channel/istrategylabs

Thank you very much to Peter Corbett of iStrategyLabs for providing the streaming capability for tonights event.

This coming Wednesday (1/16) at 6:30 pm, LaunchBox Digital is hosting an entrepreneur panel with the George Washington University Entrepreneurs Club. Come hear the panel of local entrepreneurs discuss their experiences starting a technology business. Here are the details:

Date: Wednesday, January 16, 2008
Time: 6:30 pm – 8:00 pm
Address: 2201 G Street, NW, Washington, DC 20052
Building: Duques Hall
Room 552
Here's a map of the area surrounding the building:
GWU School of Business

Panelists:

Sean Greene, Founder LaunchBox Digital and founder and ex-CEO Away.com, an online adventure travel service that he sold to Orbitz

Jon Jackson, Founder and CEO Mobile Posse, a mobile advertising solution for carriers

Andrew Ryan, Founder and CEO ARC Solutions, a hosted solution for management of membership based organizations

Thom Wallace, Co-Founder emPivot, a video sharing website and an aggregator of green-related media content

Labels: DC Event, Entrepreneurs, Panel Discussion

In response to a comment, here is a short incomplete list of resources that highlight some local metro DC tech and new media networking groups and events:

www.dctechevents.com
http://www.capcabal.net/2ndTuesday/index.htm
http://refresh-dc.org/
http://nextdc.stikipad.com/wiki/
http://www.socialtimes.com/events/

Back in September, Jason Calacanis published an informative piece on the CEO/CTO relationship and the debate on allocating resources to develop product for demonstration purposes vs for scale and market delivery.

Occassionally, I am dazzled by presentations and demos only to experience buzz kill when told that what I've just seen is months away from being market ready. I welcome the vision of the opportunity when presented with a far reaching demo, but I prefer this to be prefaced with the reality of the current product status. At the same time, I think real market traction with existing product is an indication that you are on track. It is a fine balance to develop for investor/press impression versus market delivery. When in doubt, I would err on proof of concept and market delivery.

Labels: Advice, product, resource allocation

In the past few months, I've been to a number of great tech oriented networking events in the metro D.C. area. It is great to see a vibrant and dynamic local entrepreneurial community and I've enjoyed meeting many entrepreneurs. I'm flattered that many of them have shared their elevator pitches and business concepts with me. I'd like to share some ideas on how to capture my attention and the attention of other angels/vcs at these events:

1. Draw me in to the conversation by telling me about the problem you're solving
2. Convince me that its a real problem
3. Tell me how your company is solving the problem
4. Direct me to your website and invite me to see a demo of your product

Often times I'm approached by an entrepreneur who wants to lead with the product/service they've built. While I enjoy learning about cool products and services and thinking about how the product/service meets a market need, in a networking setting where I'm having conversations in succession it will be more effective to spoon feed the information to me. If you set the stage for me, I'll be more likely to engage in a thoughtful discussion.

I look forward to seeing you at future local networking events.

Labels: Advice, elevator pitch, investors, networking