Loudcrowd / Techstars / Open Coffee
Last.fm Flickr

28

Sep

When we were building Flickr, we worked very hard…a lot of what we then considered “working hard” was actually “freaking out”. Freaking out included panicking, working on things just to be working on something, not knowing what we were doing, fearing failure, worrying about things we needn’t have worried about, thinking about fund raising rather than product building, building too many features, getting distracted by competitors, being at the office since just being there seemed productive even if it wasn’t — and other time-consuming activities.

Caterina Fake - Working hard is overrated - Sept 25, 2009

Startups are hard. They require an insane amount of hard work and stress. But I like how Caterina calls out the difference between freaking out vs working hard.

(via bijan)

21

Sep

What about iTunes? Doesn’t that show people will pay for content? Well, not really. iTunes is more of a tollbooth than a store. They offer a convenient list of songs, and whenever you choose one they ding your credit card for a small amount, just below the threshold of attention. Basically, iTunes makes money by taxing people, not selling them stuff. You can only do that if you own the channel, and even then you don’t make much from it, because a toll has to be ignorable to work.

- Paul Graham - Post-Medium Publishing

From the perspective of Paul Graham’s description, wouldn’t all virtual goods transactions be “a tax?”

They seem to follow the pattern PG sets up with the iPod. Create an audience that is highly engaged in your product (such as Apple’s iPod, or a social game or MMO) and then offer a convenient set of additional content (music in iTunes, new items in Pet Society, new music and clothing in Loudcrowd). In that case, I’m not sure how you would argue that “even then you don’t make much from it” because there is a preponderance of evidence showing the opposite.

The lifetime value of a paying customer in these models is anywhere between $100-$200. Indeed, well performing social games are charging a “tax” that results in $.50-$1 per average daily active user a month. PG has investments in the space so I’m sure he’s aware of these numbers.

The lesson is not that digital content won’t sell, but that there are different types of digital content — and some won’t survive. There are particular characteristics of the $1b+ in music sales revenue in iTunes. Instead of dismissing iTunes as an abberation, we should study those characteristics, because they are replicable. Hardware is not even a mandatory trait, just a highly dedicated and engaged audience, along with some of the other conditions I’ve discussed in the past.

04

Sep

Best Entrepreneurship/VC Tumblr Blogs

benjaminpalmer:

TUMBLR PARTY!  Adding the 1/2 of this list I wasn’t already following. Nice work

Flattered to be included amongst an excellent group. Nice little community forming here, eh?

The company was on the rocks. We had zero revenue. We had been trying for four years to make something work. We were out of ideas.

One can never be reminded enough of the “long and winding road” that startups take. Thanks for sticking with it Alex & Eran. We’re looking forward to playing Beatles at the office.

From: How ‘horrendous failure’ led to Rock Band

01

Sep

Only at Google would “near future” just be an estimate. If you want to kill Google, it’s pretty simple, try adding customer support.

Only at Google would “near future” just be an estimate. If you want to kill Google, it’s pretty simple, try adding customer support.

27

Aug

The quickest path to $50m in revenue? Build fun.

The Wall Street Journal has a good piece, based on Christian Chabot’s blog post, about how long it takes to build a technology empire.

Turns out it takes an average of eight years to hit $50m in revenue, which is about the point when you can start thinking about things like going public. And this is for the top 100 largest software companies, so we’re talking about the biggest winners here. One of the most valuable companies ever founded, in any industry, in any country, took 8 years to hit $50m in sales, Microsoft. Oracle took 10. Locally I often point to the timelines of successes like iRobot and Harmonix and the time it took them.

But hey, let’s say you’re still trying to hit the obviously unrealistic five year projections  of a typical venture capitalist (unrealistic only from a purely factual, statistical basis you understand), what’s the fastest way to the top?

Thankfully Tableau’s study breaks down the companies by market segment… so I did a little extra simple math. Here were the averages for how long it took to hit $50m in revenue by market segment:

Network (Rackspace, Echelon): 10.6 years
Security (Symantec, Sourcefire): 8.2 years
Database (Netezza, Oracle): 8 years
Content Management (Adobe, Digital River): 7.5 years
Entertainment (Activision, EA): 6 years

Feeling impatient? Don’t start a networking company, start a gaming company. Of course, this is a limited study and breaks with our deep-seeded need to be working on “serious stuff.” But it’s actually not just historical, it seems to be repeating itself right now. At least three Social Gaming companies founded post 2007 will be, or already have, hit $50m in revenue in their first three years of business.

The interesting dichotomy that the data suggests is this: it will take longer than you expect to hit success, and building fun might actually accelerate that path.

Graph of top 7 public entertainment gaming companies revenue

10

Aug

While the members of the Beatles camp may not be avid gamers, they are savvy navigators of culture and commerce. With music sales in a freefall and radio’s clout on the wane, the vibrant video game industry is a prime source of exposure.

31

Jul

Secrets of the Amazon Cart

Comprehensive look at the tiny design changes that add up to mattering in conversions, great overview

30

Jul

12% Of Americans Purchasing Virtual Goods

Study: 12% Of Americans Purchasing Virtual Goods

20

Jul

Design of Playfish Games