Archive for February, 2008
« Previous EntriesTechCrunch UK: The news wrap
Friday, February 29th, 2008
Courtesy of TechCrunch UK, starting from this week I’ll be giving you a run-down of what’s been happening in the UK, Ireland and - where possible - a little of what’s going on in the rest of European startup scene. Hopefully you’ll find this useful.
Last.fm, the UK startup CBS bought, said it was getting a lot of traffic from its widgets. On March 14 Ireland finally gets the iPhone about three months after the UK, courtesy of UK-based carrier O2, which has the exclusive contract. Meanwhile Ireland-based voice apps startup VoiceSage closed a €3m round. The UK’s Squa.re launched a so-so video portal, but at least it had great video of Keira Knightley. The etsy-like ShopWindoz launched a strike into the UK from its Berlin base. TwitPlus arrived as another file-sharing service for Twitter users. Hot startup Dopplr continued to add new features. Fav.or.it, the RSS reader with integrated commenting (a story TCUK broke), launched its beta to an invite-only crowd. Mobile outfit 3Bill acquired ProfileHeaven. Behavioural targeting company Phorm launched its service with a bunch of UK ISPs and publishers (this is quite a new field for the UK). The number of German start-ups tripled in 2007. UK startups tried to figure out if we had the equivalent of Bucks of Woodside, and fretted about the price of office space, their exit strategy and VCs leaving early stage. Ireland-based reviews aggregator LouderVoice prepped a new version. Badoo, the international social network, hit 13 million users. Kublax, which syncs bank accounts, utilities, and loyalty schemes, won funding, as did Bragster. Buzzspotr, which mashes Twitter users with Google maps, launched a beta. UK broadcasters leant on startups steaming video of their shows. We reviewed the Pixenate image editor, MyMapTracks, FreewireTV, Tipped and FreeAgentCentral.
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from TechCrunch
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on Feb 29, 2008, 3:34PM
Have You Considered Bootstrapping Your Business For Success?
Friday, February 29th, 2008The post below was written by Javier Rojas, managing director at Kennet Partners.
What if I told you that some of the leading public companies got there without taking early venture capital funding?
Microsoft, Dell, CISCO, Oracle, and eBay all bootstrapped. Its a well kept secret, and for good reason. These founders took a different path to profitability and ultimately IPO, and because of that also made a lot more money than they might have otherwise. Not only are they THE leaders in their respective fields, but they attained that leadership by bootstrapping until they were between $4 and $60 million in revenues. Many other industry leaders have followed suit, including Siebel Systems, Checkpoint Software, and Broadcom. In fact, dozens of companies have bootstrapped through the early years forgoing paychecks for a higher stake in the company, focusing on customers and real revenues rather than market sizing and early valuations. For an early-stage business seeking venture capital, there are compelling reasons to also consider bootstrapping. Its a smart way to build a great business.
How It Works
Bootstrapping happens when a company develops with little or no outside funding. The company opts to fund its primary development and growth through internal cash flow using real customer revenues. The founders and a restricted set of early employees often forgo paychecks for equity in the company. Eventually these companies operate at a breakeven or profitable performance level by necessity. Some companies formed from breakeven or cash-positive corporate divestitures share these same qualities.
Bootstrapped companies find ways to generate revenue and sustain growth through consulting engagements, non-recurring engineering (NRE) engagements, value-added reseller (VAR) agreements, customer retainer fees, divestitures or protected supplier contracts with a parent company for a defined period of time, the classic moonlighting, and even waived compensation. They learn to generate revenue that funds growth and expansion until reaching a level of growth where it no longer makes sense to go it alone.
Building Great Companies
While not conventional for every business, bootstrapping does build great companies. There are numerous justifications for bootstrapping, namely establishing a solid foundation for future growth, product development, expansion, and market leadership. When a company becomes self-sufficient, early customer focus becomes baked into the companys DNA. Bootstrapped companies must listen to their customers and react to what they are saying. They must develop products the marketplace will purchase, so often market-test their products and involve their customers. Executives who arent fundraising and appealing to investors are able to focus more time on customers, managing growth and building the company at a time when customer acquisition is necessary for sustainability.
A second salient point is that capital allocation is more rational and less speculative among bootstrapped companies. Investments are more gradual, burn rates are more sustainable, time as a resource can be spread more evenly across the company and not impeded by external forces.
Finally, because there are fewer distractions, managers tend to be more focused and goals more closely aligned when a company bootstraps. Typically teams are smaller and have fewer projects in the hopper. And because bootstrapped companies cannot afford to simply throw money at a problem, they must focus on solving the real issue from internal matters with employees, to external customer issues, to developmental product concerns.
Angel Capital Is Patient
Angel capital can play an important role in a companys future, and companies often bootstrap with a little help from their friends and family. Typically this early capital represents a more patient investment in individuals who the investors know and trust rather than venture capital, which is third-party investment and carries a different level of accountability. Angel capital offers bootstrapped companies a financial resource without having to seek venture capital too early.
How Much Bootstrapping Is Enough
Raising money at the right time can transform a companys growth rate, so it is important to know when to raise capital. Companies should watch for signals that theyve outgrown bootstrapping:
Market growth rate is accelerating. If the market is growing faster than internal funding, you risk losing market share (and equity) by not sustaining growth.
Customers are buying products and sales are predictable. You can scale your sales team and/or channel effectively with the money you raise. As a rule of thumb, you should feel confident that you can predictably generate at least $2 in gross profit for every $1 in incurred sales and marketing expense. We recommend a $3:$1 ratio as an even safer barometer.
Complementary products or businesses become available. Is it time to expand your offerings through acquisition? Can you economically acquire new customers through a merger? If you are considering M&A; activity and need money to finance your growth, its time to raise capital.
The current economic cycle favors growth. The current economic cycle appears favorable to increased technology investment and you see new growth areas on the horizon.
Your balance sheets need strengthening or you want to diversify risk. Co-mingled balance sheets can be a major challenge for bootstrapped businesses. A prudent decision for the company may be imprudent for the founder (for example, scaling sales at the expense of cash-flow). Selling some shares offers founders a way to diversify their own risk.
Where Do You Go From Here
If youve bootstrapped long enough for any of these events to occur, youve done a pretty good job steering your ship on a steady path, have maintained an equitable stake in your company, and can begin to look for the right partners to help you grow. The question you now may ask is, What do I look for in an investor?
Dont simply look for an investor look for a partner with vested equity interest to help you grow. If you have ambitions of rapid growth, what are the steps to getting there? The right partner will have experience walking the same path as you, and can help to secure your success. The reality is that many parts of your business and how you manage it will need to change internally and externally. The right partner should help you achieve this by offering substantive contributions not just capital. Bottom line after coming this far is to find a partner not just an investor.
Take Note: Bootstrapping Is Not For Everyone
Some startup businesses don’t have the luxury of bootstrapping. Their market may be immediate and, therefore, they don’t have three or four years to patiently grow the business. As well, their business may be capital-intensive, requiring funding from inception. In some cases, the founders simply cant invest sweat equity in their business by forgoing pay for months and even years. Nevertheless, while bootstrapping doesnt work for everyone, for the entrepreneur who has the time and wherewithal to grow their business through diligence and hard work, it can lead to a great business and even greater financial rewards. Bootstrapping for many is a sure path to success.
Author:
Javier Rojas is a managing director at Kennet Partners and leads its US investment activities. He is currently on the board of Daptiv, Adviva, IntelePeer, NetPro Computing, MedeFinance, and Kapow Technologies. Prior to joining Kennet, he was a managing director of Broadview International and led their West Coast Software and Services practice. Javier specialized in advising high growth, early-stage companies on how to capitalize on emerging technology markets and partnering opportunities. He invested and/or advised on a number of successful companies and high value exits including Etek, Webex, Looksmart, Blue Mountain Arts, When.com and Rightworks. Previously, Javier was with Morgan Stanley. Earlier, he founded a software firm that developed products for capital markets interest rate and currency swap traders. He holds an MBA degree from The Harvard Business School and a BAS degree from Georgetown University.
Originally
from Under the Radar Blog
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on Feb 29, 2008, 1:43AM
The Next Web awards get going again
Friday, February 29th, 2008
The Next Web awards are back again to celebrate Europe’s startups: In collaboration with Techcrunch UK & France, Loogic & The Next Web Blog, The Next Web Conference will be organizing these awards for the second time. Vote for the most Entertaining site; Best Company & social site; Most influential Web Celebrity and Weblog; Rookie of the year and best On-stage Start-up at The Next Web Conference. Should be fun, especially as it’s run by those crazy guys in white suits you see at conferences. Very Amsterdam.
Originally
from TechCrunch UK
by
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on Feb 28, 2008, 9:51AM
TwitPlus shares files over Twitter
Friday, February 29th, 2008
TwitPlus is a new Twitter application based on the popular microblogging platform. It is basically a photo, video and file sharing system built on top of Twitter. It also works with secure files. A longer list of features being worked on includes timeline view, mobile access, API, desktop app, integration with Flickr and picture editing. The creator is Dan Field, of ClearMyMail, the UK firm which specialises in email spam filtering, so its clearly an interesting a different dirrection for him. TwitPlus is worth checking out.
Originally
from TechCrunch UK
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on Feb 28, 2008, 11:02AM
A little social innovation for the weekend?
Friday, February 29th, 2008
If you’re into the idea of putting your finely honed commercial web dev and strategy skills to the benefit of society then check out Social Innovation Camp 4th-6th April. The basic idea is to get a group of software developers and designers together with social entrepreneurs and people who fund/provide in-kind support to early stage start-ups for 48 hours over the weekend. Think of it as a cross between Seedcamp and a Hackday, but for social change. The ‘call for ideas’ lasts for another week - it closes on Friday 7th March. So far ideas submitted include Barcode Wikipedia, a tool for sharing cycle routes in London and an idea for how the web could help the UK prison system become a more humane institution for those with friends or family serving jail terms. The original idea and funding proposal came from Dan McQuillan of the Make Your Mark Campaign, Paul Miller, co-founder and CEO of web start-up, School of Everything and Christian Ahlert of OpenBusiness and Minibar. Funded from NESTA, Yahoo! is the tech partner and the Young Foundation is providing in-kind support.
Originally
from TechCrunch UK
by
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on Feb 28, 2008, 4:25PM
ShopWindoz brings etsy-like site to UK
Friday, February 29th, 2008
ShopWindoz is a new startup enabling independent design labels to build a business online with a few clicks. It’s an Etsy-esque site aimed at ‘micro-brands’ with niche design products. The site originally went live in November of last year in Germany but this week was launched in English, aiming at the UK market. Initially, products are mostly from Berlin based designers but the aim is to hook in UK designers who tend to face high costs and competition.
ShopWindoz is not the only new European site aiming at this long tail of niches, another is the recently launched Moli, a US-owned site with $30m in backing. Interestingly ShopWindoz founder Darryl Feldman is an Englishman in Berlin who was most recently head of Yahoo!’s product development efforts across Europe. The jury is out on whether the more ’social shop’ based approach of ShopWindoz or the ’social networking, plus a shop’ idea of Moli will prevail. Horses for courses, perhaps, but history shows that startups which are more focused tend to win out.
Originally
from TechCrunch UK
by
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on Feb 28, 2008, 4:52PM
SQUA.RE - luxurious but locked-down video
Friday, February 29th, 2008
If you like watching moody-looking (or are they just bored?) models standing around in the background of a TV commercial shoot, while Keira Knightley walks around in curlers, then I have the very web TV channel for you. SQUA.RE is an online video portal (yes, I said portal) dedicated to luxury and style. Its various channels around luxury and fashion are delivered via Flash and look pretty damn expensive to make to be honest. The company behind this is based in Notting Hill, one of the most expensive parts of London and has 25 staff, including part time people and people working from other cities (Paris, Monaco…).
The co-founders are Olivier Bassil (a self-described socialite), Jeremy Genin, CEO Paul-René Albertini (most recently Chairman and CEO of Warner Music International) and Jacqui Timothy, Chief Operating Officer (formerly a manager in Accenture London’s Media & Entertainment practice). I can just imagine the suits these guys wear (and yes, I’m slightly jealous).
Now, the problem is that despite the site’s smart focus on one market (18-35 year olds interested luxury goods) none of the media they are generating is portable outside of the site. I can’t embed the video into another site. This doesn’t make any sense at all. I don’t care that it is organised into channels. I want to put Keira Knightley on my blog/social profile! In a way they could just dump the channels and put up a list of embed codes. Set your media free guys.
To me this is a TV 1.0 model shoe-horned online. The video is great, but it’s wasted stuck on this old-fashioned ‘portal’ site. And their advertisers can’t be getting that much value out of it.
Originally
from TechCrunch UK
by
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on Feb 28, 2008, 5:24PM
VoiceSage wins €3m round for voice apps
Friday, February 29th, 2008
Making voice calls from within the browser, and the growing links between voice applications and the web of data is a big trend online today. Last December Ribbit, a startup that calls itself “Silicon Valley’s first phone company,” launched a bid to spread Flash apps for voice.
Now another startup, is also aiming at voice and ‘messaging 2.0′ services from a different angle. Ireland-based VoiceSage, a hosted ’software as service’ Interactive Voice Messaging (IVM) company, is seen by some telco industry analysts as part of the next wave of “Telco 2.0″ and it’s just closed a €3m round from private Irish backers. The cash will be used to push further push into the UK.
The 12 person startup has already closed a deal with a leading catalogue company in Europe (Scots of Stowe & Otto), and some big banks, as yet unnamed. Its interactive messaging meshed with enterprise software means VoiceSage inhabits a space being called “Communications Enabled Business Processes” (CEBP), which is gaining traction in the voice world. VoiceSage also has a “click 2 Talk” technology which could integrate with contextual advertising.
Originally
from TechCrunch UK
by
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on Feb 29, 2008, 12:49AM
iPhone finally arrives in Ireland next month
Friday, February 29th, 2008As largely expected, the Apple iPhone will arrive in Ireland courtesy of UK-based carrier O2, which has the exclusive contract - from March 14th costing €399 (8GB) and €499 (16GB). Tariffs will range from a €45 to a €100 monthly charge. And it now looks like March 6th will be when Apple unveils the Software Development Kit for the device, which will allow outside developers to write native applications for the handset.
It will be interesting to see what Irish mobile startups make of development for the platform. Personally I am starting to think that any soical network worth its salt should really concentrate on iPhone development because the browser is so good and the kind of demographic that buys the iPhone is often interested in mobile apps.
Originally
from TechCrunch UK
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on Feb 29, 2008, 10:23AM
TechCrunch UK & Ireland Jobs board now open
Friday, February 29th, 2008
After a period involving a few technical issues, I’m happy to report that the TechCrunch UK & Ireland jobs board, otherwise known as CrunchBoard, is now open for business. As a special opening offer for all advertisers, it will cost just £20 per job for the first month of its operation. After that the price will revert to £50 per job posted, so feel free to get your jobs in at the discount ASAP.
The CrunchBoard job board gives you access to millions of technology and business savvy readers of TechCrunch, MobileCrunch, CrunchGear and other top technology blogs. CrunchBoard is permanently linked from these sites. So join other leading companies, such as Facebook, MySpace, CNET, Yahoo, Microsoft, Digg and others that have posted jobs with CrunchBoard.
UPDATE: Sigh, OK, so we seem to have a slight technical hitch, so hold off from posting jobs for today. Should be fixed by Monday.
Originally
from TechCrunch UK
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on Feb 29, 2008, 12:05PM