DealHorizon - the faster, easier way to create and share business plans
Personal investor in early-stage technology companies, including Skype (acquired by eBay), Postini (acquired by Google), Flarion (acquired by Qualcomm), Gracenote (acquired by S...
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Recent Posts
- Web services should be both federated and extensible
- Converts versus equity deals
- The bowling pin strategy
- Graphs
- Competition is overrated
- Pivoting
- Designing products for single and multiplayer modes
- Inside versus outside financings: the nightclub effect
- Steve Jobs single-handedly restructured the mobile industry
- There are three New York Cities
- While Google fights on the edges, Amazon is attacking their core
- Facebook is about to try to dominate display ads the way Google dominates...
- Old VC firms: get ready to be disrupted
- Twitter and third-party Twitter developers
- Underhyping your startup
- Size markets using narratives, not numbers
- Capitalism just like Adam Smith pictured it
- Stickiness is bad for business
- Developing new startup ideas
- The importance of investor signaling in venture pricing
Archives
- September 2010 (1)
- August 2010 (2)
- July 2010 (1)
- June 2010 (6)
- May 2010 (3)
- April 2010 (3)
- March 2010 (5)
- February 2010 (7)
- January 2010 (5)
- December 2009 (3)
- November 2009 (2)
- October 2009 (8)
- September 2009 (8)
- 2009 (16)
By Category
- External (70)
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Posted: Saturday 4 September 2010
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One of the most important developments of the web 2.0 era is the proliferation of full featured, bidirectional APIs. APIs provide a way to "federate" web services from a single website to a distributed network of 3rd party sites. Another important web 2.0 development is the proliferation of web Apps (e.g. Facebook Apps). Apps provide a [...]
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Posted: Tuesday 31 August 2010
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There has been a debate going on the past few days over whether seed deals should be funded using equity or convertible notes (converts). Paul Graham kicked it off by noting that all the financings in the recent YC batch were converts. Prominent investors including Mark Suster and Seth Levine weighed in (I highly recommend [...]
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Posted: Saturday 21 August 2010
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A huge challenge for user-generated websites is overcoming the chicken-and-egg problem: attracting users and contributors when you are starting with zero content. One way to approach this challenge is to use what Geoffrey Moore calls the bowling pin strategy: find a niche where the chicken-and-egg problem is more easily overcome and then find ways to hop from that [...]
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Posted: Thursday 22 July 2010
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It has become customary to use "graph" to refer to the underlying data structures at social networks like Facebook. (Computer scientists call the study of graphs "network theory," but on the web the word "network" is used to refer to the websites themselves).
A graph consists of a set of nodes connected by edges. The original internet [...]
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Posted: Saturday 26 June 2010
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Your #1 competitor starting out will always be the BACK button, nothing else. - Garry Tan
Suppose you have an idea for a startup, and then do some research only to discover there are already similar products on the market. You become disheartened and wonder if you should abandon your idea.
In fact, the existence of competing [...]
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Posted: Monday 14 June 2010
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My Hunch cofounders and I frequently ask ourselves: "If we were to start over today, would we build our product the same way we had so far?" This exercise is meant to counter a number of common cognitive biases, such as:
1. The sunk costs trap. People tend to overvalue past investments when making forward-looking investment decisions. [...]
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Posted: Saturday 12 June 2010
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The first million people who bought VCRs bought them before there were any movies available to watch on them. They just wanted to "time shift" TV shows - what we use DVRs for today. Once there were millions of VCR owners it became worthwhile for Hollywood to start selling and renting movies to watch on [...]
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Posted: Tuesday 8 June 2010
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At some point in the life of a venture-backed startup there typically arises a choice between doing an inside round, where the existing investors lead the new financing, or an outside round, where new investors lead the new financing. At this point interesting game-theoretic dynamics arise among management, existing investors, and prospective new investors.
If the [...]
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Posted: Sunday 6 June 2010
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With the introduction of the iPhone, Steve Jobs achieved something that might be unique in the history of business: he single-handedly upended the power structure of a major industry. In the US, before the iPhone, the carriers (Verizon, AT&T, Sprint, T-Mobile) had an ironclad grip on the rest of the value chain - particularly, handset [...]
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Posted: Friday 4 June 2010
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There are roughly three New Yorks.
There is, first, the New York of the man or woman who was born here, who takes the city for granted and accepts its size and turbulence as natural and inevitable.
Second, there is the New York of the commuter--the city that is devoured by locusts each day and spat out [...]
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Posted: Saturday 22 May 2010
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Google is fighting battles on almost every front: social networking, mobile operating systems, web browsers, office apps, and so on. Much of this makes sense, inasmuch as it is strategic for them to dominate or commoditize each layer that stands between human beings and online ads. But while they are doing this, they are leaving [...]
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Posted: Saturday 15 May 2010
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It is customary to divide online advertising into two categories: direct response and brand advertising. I prefer instead to divide it according to the mindset of users: whether or not they are actively looking to purchase something (i.e. they have purchasing intent).*
When users are actively looking to purchase something, they typically go to search engines [...]
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Posted: Sunday 2 May 2010
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If the U.S. economy were a company, the VC industry would be the R&D department. The financing for the VC industry comes from so-called LPs (Limited Partners) - mostly university endowments, pension funds, family funds, and funds-of-funds.
These LPs wield tremendous power, yet very few of them understand how startups or venture capital actually works. I [...]
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Posted: Saturday 10 April 2010
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I can’t remember the last time the tech world was so interesting. First, innovation is at an all time high. Apple, Google, Facebook, Twitter and even Microsoft (in the non-monopoly divisions) are making truly exciting products. Second, since the battles are between platforms, the strategic issues are complex, involving complementary network effects.
Twitter’s moves this week were [...]
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Posted: Tuesday 6 April 2010
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I recently tweeted:
New early-stage start up trend: get big quietly, so you don’t tip off potential competitors.
Chris Sacca agreed:
@cdixon Agreed. As of this morning, I have four companies who don’t want investors mentioning that they’ve been funded.
Business Insider took these tweets to mean "Stealth mode is back." But that’s actually not what I meant. The [...]
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Posted: Saturday 3 April 2010
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Anyone who has pitched VCs knows they are obsessed with market size. If you can’t make the case that you’re addressing a possible billion dollar market, you’ll have difficulty getting VCs to invest. (Smaller, venture-style investors like angels and seed funds also prioritize market size but are usually more flexible - they’ll often invest when the [...]
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Posted: Saturday 27 March 2010
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From far away, things that are very different look alike. I grew up in a family of musicians and English professors. To them, the entire financial industry seemed corrupt. When I worked in finance - first on Wall Street and then in venture capital - I saw that the reality was much more nuanced. Some [...]
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Posted: Thursday 25 March 2010
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It is common to hear entrepreneurs and investors talk about the high level of engagement (what we used to call "stickiness") of their website. They quite rightly believe that it’s better to have a more engaging user experience, as that generally means happy users. Unfortunately, the dominant advertising model on the web - Cost per [...]
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Posted: Sunday 14 March 2010
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If you want to start a company and are working on new ideas, here’s how I’ve always done it and how I recommend you do it. Be the opposite of secretive. Create a Google spreadsheet where you list every idea you can think, even really half-baked ones. Include ideas you hear about (make sure you [...]
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Posted: Thursday 11 March 2010
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Suppose there is a pre-profitable company that is raising venture financing. Simple, classical economic models would predict that although there might be multiple VCs interested in investing, at the end of the financing process the valuation will rise to the clearing price where the demand for the company’s stock equals the supply (amount being issued).
Actual [...]
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