Business, work, and the path to and through the MBA.
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Some comments on an angel panel:
The Professor’s Answer: Doing the due diligence on 10 companies is extremely time consuming for the same payout.
The Angel’s Answer: If you want the small annual chunk, then sure, go for the annuity. He basically likened the small, profitable, slow-growth startup to an annuity, VS a large Facebook or LinkedIn to an IPO.
Google’s motto was URL: Ubiquity First, Revenue Later. It spawned a generation of startups that opted for first gaining a critical mass, and then figuring out how to make money. Think Twitter, Facebook, Tumblr, Instagram…
Things are different now. For the lot of us dreaming up ideas and paging through tens of 100s of piles of research and conducting surveys online and F2F, we are faced with quite the opposite: how to come up with two revenue streams: one from Year 1 to fund the business once the seed and bootstrapping won’t suffice, and then two to fuel the second stage of growth, the real money maker. For ex: Birchbox wasn’t the first in the subscription business. TestTube Beauty was. But Birchbox sold for $10. TestTube sold for about 3X that. Birchbox also added a retail component so the subscription sales = Revenue Source 1 to drive the engine until those subscribers convert to become buyers at the e-tail site, Revenue Source 2.
This winter I went to a party in Kendall Square where I spoke to many executives, among them someone from HP. He told me that nowadays startups that can prove the ability to sell get a year of funding. If you don’t meet the set deliverable in a year, the VC firm cuts you off. Maybe it’s because so many got burnt in the last bubble and so many current trends are social driven, but fail to show the conversion to revenue generating.
Nonetheless it’s a luxury to have the time to spend on an idea. Sadly when the idea seems feasible but just costs too much to gain the critical mass, it feels like that breakup you’ve been avoiding, that signficant other you’ve held on to because there was history or passion or both.
But that led me to a better a understanding of disruption vs. innovation, and where platforms and communication innovations come into all of this.
DISRUPTION, much as I’m tired of the word and concept, tends to come in the form of a platform on which other new technologies or products sit. It changes how you create, consume and buy. Think Facebook, Twitter, Google, Apple O.S., email, streaming TV.
INNOVATION introduces a new, often sexy way of buying, reading, watching, interacting. Think cell phone Apps, Square, LevelUp.
Now take something like Aereo. Where does it fit? Now think money transfer. Square isn’t changing how money flows between parties - the message is still the same, it’s just the medium, like most other cases, that has been altered.
The space I’m really interested in is how credit card and banking exchanges will change over time - how someone will innovate in such a way that the 2-3% credit card fee could change? How could we give to the homeless even without cash?
Sometimes it’s the smallest everyday occurrences that drive the biggest ideas.
I refuse to accept the cynical notion that nation after nation must spiral down a militaristic stairway into the hell of nuclear annihilation… I believe that even amid today’s mortar bursts and whining bullets, there is still hope for a brighter tomorrow… I still believe that one day mankind will bow before the altars of God and be crowned triumphant over war and bloodshed.
Angela Jia Kim, founder of Savor the Success, a social community for women entrepreneurs, interviews Stella and Dot Founder Jessica Herrin. Kim is great because she talks about real concerns as she herself juggles so many things. A former concert pianist, after she retired, she started the skincare company Om Aroma. She also runs Savor Spa in NYC’s West Village and the aforementioned social network, Savor the Success. Oh and she is married with a kid. She always keeps it real and always shares her struggles, concerns and success stories - her own and those in her network.
What is so special about glasses, I asked, when I read on DealBook that Amex and J.Crew’s CEO became the latest to invest in Warby Parker. Here’s what I came up with when I cut through the veil that are the displays/bios of down-to-earth hip businessmen that co-founded the startup.
If I’m being honest, am I jealous? Overwhelmed? A bit scared of how to start a business? Yes, to all of the above. But I think there’s potential and I’ve learned something from these guys already. There are many moving parts and elements to success and among them is to 1) know people - both your potential customers and your potential partners, and 2) question buying habits.
$50 million in seed, angel, and VC raised to date for glasses. Who knew? Not me. But I do now.
This post was originally published on The Levo League.
There is a perennial debate in Silicon Valley about why there are so few female founders of technology companies.
As a woman who works in tech, the answer is quite straightforward to me: most people in the tech industry are simply…