Stanford entrepreneur: If you’re 20 and you haven’t started a $1 million company, “you’re kind of a failure”
– Connie Loizos is a contributor for PE Hub, a Thomson Reuters publication. This article originally appeared here. –
Recently, New York magazine featured Feross Aboukhadijeh in a piece titled “Bubble Boys”. Aboukhadijeh is a Sacramento-born, 20-year-old computer science student at Stanford who has been characterized as among the school’s most heavily recruited students by a course adviser. The piece suggested he may ultimately be among those geeks to succeed the Mark Zuckerbergs of the world.
While perhaps a stretch, it’s easy to see Aboukhadijeh’s appeal. A year ago, Aboukhadijeh created a small media sensation with YouTube Instant, a site that invites visitors to scan YouTube videos in real time, and which Google was at one point interested in acquiring – along with Aboukhadijeh.
“They were talking about adding (the code) to YouTube and having me come on, but it never really worked out,” said Aboukhadijeh, who speaks quickly and breathlessly, like someone needing to get to wherever he’s next expected. “I’d only been in school for two years at that point. It seemed silly to stop and take a job. Then they said, ‘You can do an internship while you’re in school.’ But I wasn’t really interested in doing that. I knew that to do well (at Google), I’d need more than 15 hours a week. Also, when you join a new company, it takes three or four months before you’re even up to speed.”
Aboukhadijeh has some idea about what happens inside companies. Two summers ago, he scored an internship at Facebook, and it took “two months before I was going all out, doing stuff.” This past summer, Aboukhadijeh snagged another enviable internship, at the question-and-answer site Quora.
Still, Aboukhadijeh said he’d rather start his own company than work for someone else’s. At least, he thinks he knows that’s what he wants. Aboukhadijeh, who is starting his senior year, told me he’s applying for Stanford’s computer science master’s program and that he’ll “then possibly complete it or do something else, like put it on hold to go start a company.” A lot of his friends are making the same choice. “They’re saying, ‘I’d like to take a leave for a year or two and try something risky.’ And if it doesn’t work out, they can come back and finish their master’s degree. It’s kind of nice. Stanford is pretty flexible compared to most schools.”
The school has little choice, evidently. In fact, “probably half” of Aboukhadijeh’s friends are already working on projects that they think could become viable companies, he said.
Do you want to sell sugar water or do you want to change the world?
– Chris Dixon is the co-founder of Hunch and of seed fund Founder Collective. This blog originally appeared here. The views expressed are his own. –
“Do you want to sell sugar water for the rest of your life or come with me and change the world?” – Steve Jobs
I sometimes wish that instead of working on Internet and software projects, I worked on cleantech or biotech projects. That way, when I came home at night, I’d know that I had literally spent my day trying to cure cancer or prevent global warming. But information technology is what I know, and it’s probably too late for me to learn a new field from scratch.
That doesn’t mean information technology can’t improve people’s lives. Google’s search engine helps people find information, which, for example, makes cancer and cleantech researchers more productive. Skype (Dixon is an investor) allows companies to collaborate remotely, and connects people with friends and family around the world. In the area of information technology, we create infrastructure and hope that people use it for more good than bad.
That said, the best entrepreneurs seem to follow a path of increasing gravitas. Scott Heiferman started out selling online ads and is now creating new communities. Jack Dorsey created Twitter and is now democratizing payments so sole proprietors can compete on a level playing field with large companies. Elon Musk started with online payments and is now developing electric cars and space programs.
Founders of large companies sometimes also follow the path of increasing gravitas. Google is developing new energy technologies, self-driving cars and other world-changing technologies. Bill Gates devotes almost all of his time and money to charity.
The tech press is preoccupied with investments, trends, exits, and other “inside baseball” topics. But these are all means to an end. Investments provide fuel for entrepreneurs to convert ideas into products. Trends shape the terrain that entrepreneurs navigate. Exits provide financial incentives for investors and entrepreneurs.
Technology has not change the world. It makes everything worse. We consume more electricity than ever before and we still use coal to power up most of our gadgets. Coal emission is on the rise. So did they make a difference?
How the cloud changed venture capitalism
– Mark Suster is a former serial entrepreneur and a partner at Los Angeles-based venture capital firm GRP Partners. This article originally appeared on Suster’s blog “Both Sides of the Table”. The views expressed are his own. –
In this three-part series I will explore the ways that the venture capital industry has changed over the past five years that I would argue are a direct result of changes in the software industry, not the other way around. Specifically, Amazon has changed our entire industry in profound ways often not attributed strongly enough to them.
I believe the changes to the industry will be lasting rather than temporal change. Venture capital is in the process of its own creative destruction with new market entrants and new models of innovation at the precise moment that our industry itself is contracting.
I will argue that when the dust settles, although we will have fewer firms, each type will end up more focused on traditional stage segments that cater to the core competencies of that firm. The trend of funding anything from the first $25,000 to funding $50 million at a billion-plus valuation is unlikely to last as the skills and style to be effective at all stages are diverse enough to warrant focus.
I will argue that LPs who invest in VC funds will also need to adjust a bit as well.
Rewind
When I built my first company in 1999 it cost $2.5 million in infrastructure just to get started and another $2.5 million in team costs to code, launch, manage, market and sell our software. So it’s not surprising that typical “A rounds” of venture capital were $5 to $10 million. We had to buy Oracle database licenses, UNIX servers, a Sun Solaris operating system, Web servers, load balancers, EMC storage, disk mirrors for redundancy and had to commit to a year-long hosting agreement at places such as Exodus.
Entrepreneur Peter Yared: Social is “so over”
– Connie Loizos is a contributor to PE Hub, a Thomson Reuters publication. This story originally appeared here. –
Entrepreneur Peter Yared doesn’t mince words. In April, after TechCrunch misreported some of the circumstances around a Facebook employee’s termination, Yared wrote a widely read post titled “Why TechCrunch is Over” in which he called its founder, Michael Arrington, “insane,” adding that it “must be hard to live amidst a rapidly declining site.”
In more recent posts, Yared has called Twitter “primarily a broadcasting platform with very few active users” and unusable for “normal people.” He has also suggested that if he were to start a company today with either entrepreneurs Mark Pincus, Evan Williams, or Mark Zuckerberg, he’d go with Pincus “given what we now know” about Williams and Zuckerberg. (Both have been accused of elbowing their early co-founders out of the picture.)
It’s no surprise then that Yared — who has founded and sold four companies, including to Sun Microsystems, VMWare, and Webtrends — is very fun to chat up. I caught up with Yared recently. Our conversation has been edited for length.
You recently wrote at length about how Twitter could improve the customer experience, as well as make money. The company seemed to only half-kiddingly offer you a job afterward.
(Laughs.) Yeah, they were (very nice to me) for a while there.
Your advice was fairly comprehensive. What did you leave out, if anything?
Google is building cars and a number of other things. However, they are also making a strong attempt to enter the social space…and aside from the rather poor launch of the Google+ I really think they’ve got their concept nailed this time. If this turns out to be true, they have a strong chance at being the next big social media company.
To get the details read this article http://bit.ly/lTJS3l
Note to entrepreneurs: Your idea is not special
– Brad Feld is a managing director at the Boulder, Colorado-based venture capital firm Foundry Group. He also co-founded TechStars and writes the popular blog, Feld Thoughts. The views expressed are his own. –
Every day I get numerous emails from software and Internet entrepreneurs describing their newest ideas.
Often these entrepreneurs think their idea is brand new – that no one has ever thought of it before. Other times they ask me to sign a non-disclosure agreement to protect their idea. Occasionally the emails mysteriously allude to the idea without really saying what it is.
These entrepreneurs think their idea is special and magic. And they are wrong.
The great entrepreneurs are already focused on the implementation of their idea. They send me links to their website or software. They describe the business they are in the process of creating (or have already created). They point me to what they’ve done to implement their idea and show real users who validate that the idea is important. And they quickly move past the idea to the execution of the idea.
Google? Not the first search engine. Facebook? Not the first social network. Groupon? Not the first deal site. Pandora? Not the first music site. The list goes on. Even when you go back in time to the origins of the software industry: MS-DOS – not the first operating system. Lotus 1-2-3 – not the first spreadsheet.
The products and their subsequent companies became great because of execution. First, they had to execute on building a great product. Next, they had to execute on building a great business. Finally, they had to execute on scaling, sustaining, and evolving a great business.
I agree. with execution be paramount.
The ideas that I have had, and continue to have, jump into my mind have been counted into hundreds of usable ideas many worth billion or trillion dollar valuations – if launched with capable people. However, my execution and business skills suck, so the valuation is zero. The real question is how to integrate ideas guys and execution guys?
david.apexx@gmail.com
Silicon Valley recruiter on tech hiring frenzy: “Everyone’s desperate”
Robert Greene, the founder and CEO of Silicon Valley-based GreeneSearch Inc, specializes in recruiting hands-on talent for technology-focused companies, primarily startups. He provided his perspective on the current boom in technology hiring.
Q: How would you characterize the tech hiring market now? A: It’s very competitive right now. It’s been like that for a while; it’s probably heated up even more of late. You have the bigger companies – Groupon, Zynga, Google, LinkedIn, companies that have been proven and successful – and then you have all these startups. The supply doesn’t meet the demand.
Q: Is there an advantage to being a small company? A: The advantage they have over those (big) companies is that they can move really quickly. They’ll do everything in a day and make an offer and hope that person will accept right away before they get into the bigger companies. Those are their selling points. They have to move quickly, they have to be agile, have to have the compelling story, have to give equity, along with competitive salaries.
Q: Do you think we’re heading toward another tech bubble like we saw in 2000? A: I’ve been recruiting for seven years. I know back in the boom companies were offering cars and huge bonuses and stuff to attract engineers, and that’s not happening. I’m seeing real money – I’ve heard that Google is making huge counter offers, real money.
Q: How many offers are your top engineers getting? A: I had a guy out of Amazon in Seattle who had three offers. We’re seeing multiple offers. I had one instance where an offer was signed and Google countered and made him a huge offer back and he stayed at Google.
Q: Are you seeing companies looking less at top-tier schools? A: No, I’m not seeing them sacrifice the quality. Everyone’s desperate, trying to figure it out. I don’t know if there’s any simple solution other than move quickly, have a compelling story.
Q: How long do you think this boom will last? A: I hope it lasts for a while. Usually it goes in cycles. It’s been reported on more recently – but it’s been happening for a while. The news is on this now because of the LinkedIn IPO. Now there’s some real exits and big exits. We’re not going to have a time like we had in 2000 where companies didn’t have business plans or revenues and were going public. I’ve been hearing the B (bubble) word a lot – but I think it’s more realistic.
Exactly what are they looking for? More MBAs? Salesmen? Certainly not engineers.
from MediaFile:
Tech Summit Q&A, day 3: “Unsexy” tech companies
The third day of the 2011 Reuters Global Technology Summit saw a lot of discussion about the valuation and potential of "sexy" social networks and lesser known startups.
Saad Khan, Partner at CMEA Capital, talked about investing in LiveOps and Pixazza, two companies the former which he called "unsexy", and how they "stitch together the world's labor force."
One could say that Real Networks Chairman Rob Glaser, who saw his company's Real Player go from being the standard used in streaming media on the Web to a bit-player, is familiar with what is and isn't "sexy". Here he is talking about revamping his company around phenomena:
And Google Ventures Managing Partner Bill Maris questioned the value of social media startups:
"Are our smartest people working on our most difficult problems?"
Dave McClure: SEO still relevant
Dave McClure, venture capitalist and founding partner of the Silicon Valley tech incubator 500 Startups, remains a staunch advocate of search engine optimization and its benefits. He shares some of his thoughts about SEO with Reuters.
Q: Do you think it’s harder for startups to gain traction with SEO now that Google and other browsers seem to be more quality focused? A: People can build a history in three to nine months. It’s not forever. There’s quite a bit of traffic being driven by search and quite a bit of monetization.
Q: Besides technology startups, is SEO important to other small businesses, including those without a deep understanding of tech? A: Absolutely. There’s still a huge amount of traffic that comes from people typing into a search box. The point is, even though social (media) is rising in ascendancy, it’s going to take a long time for (SEO) to become irrelevant. To suggest that SEO is somehow over is basically predicating a future that’s 10 to 20 years out.
Q: What should small companies be doing to help assure success with SEO? A: You should build a great product, no question. There’s plenty of best practices that use anchor texts for links relevant to your site and content. Reach out and link to other people that are relevant sites and ask them to link to you.
Q: What’s changing now in SEO? A: I think there is rising prominence for social signals. I don’t know if they’re more valuable than search; they’re probably equally valuable at least in terms of driving traffic.
Realtime search engine Topsy raises $15 million
– Alastair Goldfisher is the Editor-in-Chief of the Venture Capital Journal and contributor for PE Hub, both Thomson Reuters publications. This article originally appeared on PE Hub. –
BlueRun Ventures, Ignition Partners, Founders Fund and angel investor Scott Banister (co-founder of Zivity) joined a $15 million Series C round for Topsy, the San Francisco, California-based company announced today.
Western Technology Investments joined the round, which brings to $30 million the amount of equity and debt that Topsy, a provider of real-time search engine services, has raised since 2008.
The company, which competes against Collecta, Crowdeye and TweetMeme, among others, says that the round of funding validates its social search services found on Topsy.com and used by media various sites, such as those operated by companies IDG Media, The Huffington Post and Discovery Communications.
Topsy analyzes social graphs across social media networks like Twitter (which sees 100 million tweets a day) to rank search results within seconds of being indexed. It can show what people are talking about in real-time. Topsy, whose founders previously launched anti-spam company Cloudmark Inc., counts angel investor Ron Conway as an advisor.
When I met co-founder Rishab Ghosh in January, I asked why launch a startup in the crowded search field, which is dominated by Google.
“We’re not just a general search site,” he said. “We believe we can grow Topsy as a destination site to show what people are talking about online in real-time. In the growing social media environment on the Web, this is where search is headed.”
Microsoft-i4i fight has big patent implications
What has been an interesting side show over the last few years, has taken on a much greater significance with the latest news that Microsoft’s appeal of a patent win by software minnow i4i will be heard by the Supreme Court.
When the two combatants eventual square off in Washington, D.C. sometime next spring, tech companies large and small will be closely following every legal punch thrown.
In the Microsoft camp will be heavyweights Google and Yahoo and trade groups such as the Computer & Communications Industry Association.
In the i4i corner will be all small firms who have ever patented a piece of software. Ironically this used to include Microsoft.
Loudon Owen, i4i’s chairman and CEO, was not surprised by the support Microsoft has received from Google and other tech giants in this fight.
“If a company already has a massive market share and a balance sheet that’s bigger than some small countries then, of course, it’s in their interest to maintain that position,” he said. Owen added it’s i4i’s assertion that the patent system is geared to help “innovative companies trying to acquire market share” to disclose their technology publicly in return for legal protection for their patents.
Many large firms view the U.S. patent system with some degree of skepticism, believing it leads to small firms patenting a piece of software in order to leverage it for a financial windfall at a later date.
what I mean is that if someone were to actually say “you are 20 and you haven’t started a 1M company??? you are a failure” I would say to that person ” you are an arrogant a$$ hole”…