Posts filled under: startups
First off, my hats off to any entrepreneur who is willing to put him/herself out there and take the risk to start a company, sell to customers, and raise money. I wish I could to it myself, but that’s another story.
I came across this article this morning: http://www.businessinsider.com/there-are-too-many-founders-raising-millions-of-dollars-without-any-plans-2013-4
A while ago, when I was a more avid reader of tech sites like BusinessInsider, Techcrunch, PandyDaily, and Betabeat, I noticed majority of stories about startups were rah-rah - everyone will conquer the world and every industry was going to be disrupted.
But over the last few weeks, I’ve noticed that writing has become more critical of both startups, founders, and investors. It’s about time!
It’s a great start to talking about the difficulty of building a sustainable business, how raising money is not success (already been beat to death), and money is too abundant.
There are many startups attempting to build content recommendation and curation algorithms. Their approches are varied and range from the simple to the very complex.
I would generally categorize the simple approach as using explicit profiles. Explicit profiles are built by asking directed questions (What are you interests?) and tracking usage (What articles have you read?)
The complex approach is to build implicit profiles. Implicit profiles are based on what you do, but also what you don’t do. This requires a lot more understanding of the content characteristics and mapping them back to the user profile. For example, you have be shown 10 different articles about a specific topic, but you only click on 1 of them. What was the reason you clicked on that specific article? What it the image? author? title? time of day? day of week? device (mobile/tablet/desktop)? What if you already read it from a different source?
Recommendation algorithms are designed to be safe. If you’re on Amazon looking at a book, you won’t be recommend a scooter. It will most likely recommend another book within the same genre and topic. This bodes well for a the explicit profile approach to work without the need a very strong implicit profile.
There are many other issues to overcome with content recommendations and curation, I don’t think implicit profiles will be the main hurdle.
Lots of change is going on in the startup investing landscape. Institutional seed funds/incubators/accelerators, acqui-hires (Gowalla), and now investment banks.
Goldman Sachs recently held a “Private Internet Company Conference” in Las Vegas. Why?
Because the internet landscape is changing and they don’t want to be left out. It takes small amounts of investment to get started, you can raise money quickly, and the path to IPO is getting shorter.
Upcoming and recent IPOs and their founding
Zynga - 7/2007
Yelp - 7/2004
Facebook - 2/2004
Groupon - 11/2008; 2011
Pandora - 1/2000; 2011
Linkedin - 5/2003; 2011
Google 1998; 2004
Amazon 1994; 1997
Yahoo 1994; 1996
Oracle 1977; 1986
Apple 1976; 1980
Microsoft 1974; 1986
What does this mean to startups and investors?
The investment banks want the IPOs and the mega-mergers. They don’t care about sub-$50 million fund raises or acqui-hires. So I think they’ll do their best to help out the both the investors and the entrepreneurs with introductions for hiring, investment, acquisition all in hopes of building the relationship to be at the front of the line for the big deal.
Birchbox has gotten a lot of great press and buzz in the startup community and it’s generating a lot of copy cats. Birchbox works because of a specific set of circumstances, to replicate for a different industry and audience will be challenging. Scott Brit wrote an excellent post about his attempt in the space.
Does the consumer have too many subscription services? Is it just wasteful spending? -especially in the current economic situation.
5 years ago, I only had a handful of subscriptions. Now I have more than I need. Below is a short list of subs that I’ve had in the past or ones that I’ve considered.
- Cable (TriplePlay - Damn you Time Warner)
- Mobile/Data - phone, data, mifi
- Insurance - Home, Car, Life, etc.