Tuesday, October 28, 2008

The Funded - a perfect deck

Having done over 150 investor pitches across five companies, a concise and well-organized deck is critical to success. No deck will be "perfect," but here is what I learned.

First, the deck should evolve as you meet with investors and evaluate their reaction to each slide, so use version numbers with the file to avoid confusion when sending the deck around. Next, avoid revealing confidential information, such as pending business deals or secret release features. Finally, make sure that each slide is very concise, using one line of text per bullet and no more than six bullets per slide. If possible, use graphics or a chart instead of text.

The whole deck should take 20 to 30 minutes to get through without questions, assuming that half of the meeting will be questions. The ten slides that you need, in my experience, are:

1. Vision: What are you trying to do, and why are you doing it?

2. Market: What is the market you are addressing and the estimated value of this market over the next 5 to 10 years?

3. Team: Who are the key three to five executives (Vision, Operations, Tech, Sales, Marketing), and what are their specific qualifications in the target market?

4. Offering: What is your exact offering? If possible, present a three to five minute pre-recorded video demonstration.

5. Roadmap: Where are you in your offering release cycle and with respect to gaining traction?

6. Deals: What are your major partnerships, relationships, etc.? This slide should include various logos.

7. Differentiation: How are you different from your three main competitors? This slide should have a simple table.

8. Stats: What are the basic statistics of your company (Round, Investors, Employees, Location)?

9. Financials: What is your high-level projected P&L for the next two years plus the current and previous year, if available?

10. Capital: How much capital are you raising and what will it be used for?

This type of simple presentation has always worked for me. Please add any other ideas or lessons that have worked for you.

Sunday, October 19, 2008

Egypt named best country for outsourcing

via AllAboutEgypt

An industry analyst positions Egypt as the Middle East's clear winner to take advantage of the boom in global outsourcing, already worth an estimated $300bn in 2009.

The report, 'Can Middle Eastern Countries Fulfill the Eastern Promise,' developed by independent technology and research firm Yankee Group, examines the strengths and weaknesses of Middle Eastern markets - namely Egypt, UAE, Oman, Bahrain, Jordan and the Kingdom of Saudi Arabia (KSA) - as countries seeking to attract outsourcing dollars to their economies.

Egypt was assessed as having the strongest position based on its young population, sustainable and abundant talent pool of technologically skilled and multi-lingual university graduates. Its geographical position - close to Europe and Asia - coupled with strong government support are also factors which contribute to Egypt being an outsourcing hotspot.

The report highlights Egypt as the only Middle Eastern country generating a significant number of technical graduates and refers to the UN 2007 Human Development Index (HDI) which ranks 177 countries on the number of tertiary students in the fields of science, engineering, manufacturing and construction. Kuwait scored 33; Qatar, 35; UAE, 39; Bahrain, 41; Oman, 58; Saudi Arabia, 61; Jordan, 86; and Egypt, 112, compared to India, 128 and China, 81.

Multi-lingual capabilities are also a key factor in a country's attractiveness as an outsourcing destination. The report highlights Egypt as the 'only truly multi-lingual country' in the Arab world when comparing Middle Eastern countries for the seven key languages spoken in the BPO and ITO sectors. According to the report Egypt has an abundant talent pool of graduates fluent in English, Arabic, French, German, Italian, Spanish and Portuguese, whereas the UAE, KSA, Oman and Bahrain typically only possess English and Arabic language skills.

Companies using Egypt as a base for software development, technical support contact centers and research facilities include SpinVox, IBM, Intel, Microsoft, Cisco, Oracle, Satyam, Wipro, Orange, Alcatel, Teleperformance and Vodafone, among others.

Sunday, October 12, 2008

plan B on fund raising


Here's how most entrepreneurs approach venture capital funding raising. I call it Plan A. It's a plan and an outcome that no one talks about but happens all the time. I've been on both sides, so I should know.

  • Step 1: the entrepreneur cogitates: "Let's raise $1-2 million so we can focus on programming and marketing and not worry about raising money. We'll hit all our milestones and then go out for another $5 million in two years and get acquired or go public soon after that." Believe it or not, many companies raise the $1-2 million and sometimes more because venture capitalists compete for the deal.

  • Step 2: the entreprenur fantasizes: "Our most conservative forecast is one million users in the first six months. We need to scale to prepare for this, and the reason why VCs gave us money is that they want us to scale and win the land grab."

  • Step 3: the product is late, and the dogs don't eat the food. After six months, there are 10,000 users, not one million. The company has scaled up its expenses but for no reason. Money is tight, but the VCs are still clueless and accustomed to initial projections being off by orders of magnitude.

  • Step 4: Unbelievably, the company is still able to raise a second round of $5 million. Life is good. The entrepreneur "knows" that things are going to pick up so she scales up some more to prepare for the "hockey-stick" growth curve that coming soon.

  • Step 5: Another six months go by, and there's still no viral explosion. (To continue the hockey analogy, the handle, not the blade, is touching the ice.) The venture capitalists that the entrepreneur thought were true believers and BFFs (best friends for life) go to Demo and see three products that do the same thing that appear to be further along.

  • Step 6: Out of the blue, the lead-dog venture capitalist calls up the day after a partners meeting and says, "We just don't see how you're going to make it. We want to give your company a 'soft landing' by merging it with our online dogfood company. And we'll call some executives we know at Yahoo!, Google, and Fox Interactive to see if they're interested. We want our money back before you burn through it because my partners think this has gone on too long."

  • Step 7: The entrepreneur hangs up the phone in a state of shock. A week ago in a board meeting, no one said anything about shutting down the company. She thought that her investors were getting a little antsy but were fundamentally still behind her. She calls the investors "stupid, arrogant bastards who don't get it" in her staff meeting–conveniently forgetting that she's missed three years of forecasts by 90% and has burned through $3 million.

  • Step 8: The company rapidly implodes. No one wants to merge it with another dog in the venture capitalist's portfolio, and no one at Google, Yahoo!, or Fox Interactive is interested. This is a fundamental fact of companies: they are bought not sold. That is, an entrepreneur or investor can seldom call up logical buyers and get a deal done. All an entrepreneur can do is create a good company and pick up the phone when a buyer is calling.

    The company is sold for pennies on the dollar for what little assets (intellectual or physical) that it has. Some money is returned to the investors. The management team toys with two ideas: first, buying the company from the investors, but it quickly realizes that it created a dog that's not worth buying. Second, suing the investors for not fulfilling their fiduciary responsibility to the company, but when the lawyers laugh at this idea, the team gives it up too.

As readers of this Open Forum blog, I want you to be open to another way. I call this Plan B. In this plan, you take very little if any venture capital until you need capital to expand, not create, your product. Here's how it works:

  • Step 1: You dig, scratch, and claw yourself to $100,000 of funds from your friends and family. Maybe you work as a YCombinator company. You take no salary. You live with your parents, and you keep your day job at Microsoft. You hope your spouse doesn't get laid off. You have no office, but work virtually and meet your co-founders at Starbucks if you have to. Everything you use is Open Source or shareware.

  • Step 2: Rather than trying to boil the ocean ("the mobile sector"), you boil a tea kettle. Rather than paying to attend high-end conferences, you hang out in the lobbies of the hotels where the events are and meet the same people for free. Rather than hiring a PR firm, you suck up to bloggers and hope they cover your product. Rather than buying booth space, you get on Twitter and use it to gain a reputation for your product.

  • Step 3: You're late with your product too (because everyone is late), but you're not burning $250,000/month, and you don't have to tell increasingly greater lies at monthly board meetings. Finally, you release your prototype. TechCrunch covers your release because you wrote Mike Arrington a compelling one-paragraph message that you sent on a Friday afternoon because you know he reads email on weekends.

  • Step 4: This is where the miracle occurs–lo and behold, people like your product. (Truly, miracles have to occur whether you're bootstrapping or venture-capital funded. It's just that if you're bootstrapping, there's more time for the miracle to happen, and a smaller miracle suffices.) Month to month, you're showing 10-15% growth, and monetization, praise God, has started.

  • Step 5: Now you have options. First, you can contact venture capitalists with a company that's already shipping to raise capital to expand your business. This is a very different discussion than raising capital to build a product. Second, you can continue to bootstrap and grow by using your cash flow. Three, you can pick up the phone and agree to meet with Google, Yahoo!, Fox Interactive, or any other company that has noticed you.

Many readers of this blog are not tech entrepreneurs, but the merits of Plan B are the same for almost any type of business. You can try Plan A as long as you realize that the hard work begins after you raise venture capital, and you will need a bigger, faster miracle to make everyone happy. Or, you can just believe me: "Plan B, don't leave home without it."

Saturday, October 11, 2008

Thursday, October 09, 2008

all about podcasting

via http://socialcreativity.wordpress.com/


How To Create a Podcast - About.com's step-by-step tutorial for podcast beginners.
iLounge Guide to Podcast Creation - another guide for creating your own podcast for absolute beginners.
Podcasting Legal Guide - find about legal issues relevant to podcasting in this Creative Commons guide.



Pickstation - A Digg for podcasts and music.
Collectik - "Mixtapes for podcasts": find, share and organize podcasts.
Podbean - Free podcast hosting and publishing.
Castpost - Free hosting for audio and video clips.
HeyCast - A tool to create video podcasts. Essentially, HeyCast creates RSS feeds from any existing video files on the web. It doesn't provide hosting or sharing features.
Blubrry - A podcast network that lets you create a podcast and browse the podcasts of others.
Evoca - "YouTube for voice recordings": create audio recordings from your computer mic, your phone or Skype, share them with others and embed them on websites.
ThePodcastNetwork - A network of podcasts on a range of topics including business, entertainment and comedy.
MyPodcast - podcast hosting solution offering unlimited storage, bandwidth, and free templates for your podcasts.
PodServe - this service is still in alpha stage, but everyone's invited to try it out. It offers a hosting space for your podcast and a directory of user-created podcasts.
PodcastPeople - a service that enables you to post text, audio and video materials to your own customized show, and even earn some income from it through sponsors.
PCastBaby - free podcast hosting service offering 10MB of storage space and unlimited bandwidth.
Podomatic - create, find and share podcasts with this free service.
Blubrry - create your podcast on Blubrry; browse through other podcasts and create your personal playlist.


Podango - get free unlimited hosting for your podcast and share ad revenue with Podango 50/50.
Podbridge - Provides podcast metrics and advertising.
Podtrac - a service that connects podcasters with advertisers.



TourCaster - Find audio tours of your favorite cities and download them to your iPod.
iAudioGuide - Find audio guides for major world cities and download them to portable devices.


Veodia - Create live TV shows and convert them to video podcasts.
Blip.tv - A "video podcasting" service. Broadly similar to YouTube, but the focus is on independent creators, who get a share of revenue.



Podlinez - a simple service to listen to podcasts on your phone.
Gabcast - Record podcasts straight from your phone.
Yodio - Record audio from your phone, add photos and captions.


BlueGrind - Converts text (especially blogs) into podcasts.
Feed2Podcast - Convert any RSS feed into a podcast.
Talkr - Convert blogs to audio podcasts.
Odiogo - convert RSS feeds, text articles and blog posts to podcasts.


CastingWords - a podcast transcription service that converts podcasts to text for $0.75 minute. It employs human transcribers.



Grepr Podcasts - A directory that makes recommendations by finding patterns in your interests and comparing the interests of others.
Yahoo Podcasts - Explore podcasts, listen to them, subscribe to them and even create your own.
MobilCast - directory of podcasts and radio shows, complete with playlists.
PodcastAlley - a podcast directory with over 30,000 podcasts. Maintains a monthly top list.
DigitalPodcast - a simple, categorized podcast directory
Podcast.net - a very comprehensive podcast directory; contains tens of thousands of podcasts.
PodcastDirectory.com - a directory of podcasts with a top list, a list of featured podcasts, and categorization.
PodcastDirectory.org- a simple directory with a very clean layout.
Podfeed.net - on Podfeed you can host and share your podcast, find podcasts, as well as read and write podcast reviews.
iAmplify - A premium directory where you pay to download self-help podcasts.
Earkive - Directory that lets you listen to podcasts on your phone (mobile or landline)



Talkshoe - Create your own live talkshow or interactive podcast.
Waxxi - Audio shows streamed live, mainly with notable technologists. Once recorded, the live shows are available as podcasts.
NowLive - A social network that lets anyone create a live, interactive talk show. Stickam for audio, in some ways.


PodcastSpot - Offers both free and premium podcast hosting.
SwitchPod - a podcast hosting service, with unmetered bandwidth, statistics and even some promotional opportunities.
Hipcast - create audio, video materials and podcasts and post them to your blog.
Libsyn - Liberated Syndication will host your podcasts for a modest monthly fee.



Everyzing - Audio and video search engine.
Podscope - an audio and video search engine that searches the words spoken in podcasts.
Pluggd - Discover and share podcasts, and search for specific parts of podcasts using advanced search technology called HearHere.
PodNova - Podcast search and community.


Podcast Alley Forum - a well visited forum on everything related to podcasting.
DigitalPodcast Forum - a good forum for promoting your podcast.
World Podcast Forum - a fresh forum about podcasting.



Propaganda - Create professional podcasts including background music, jingles, crossfading and more. Windows only. Free trial, $49.95 to buy.
Audacity - Free, open source software for recording and editing audio. Versions for Mac OS X, Windows, GNU/Linux and other operating systems.
Adobe Soundbooth - Advanced audio editing from Adobe. Windows and Mac. Free trial, $199 to buy.
Wildvoice Podcast Studio - Record audio, add music and sound effects and upload to Wildvoice.com or other sites. Windows only.
SnapKast - Podcast creation for Windows. $79.99.


Odeo - Perhaps the most popular podcasting platform. It allows you to record audio within your browser, embed it anywhere and create your own audio channels.
Hipcast - Record high-quality audio right through the web browser or your phone. No additional software needed.
Gcast - Record, mix and broadcast your podcasts. You can record messages by phone and upload MP3 files from your computer.
Podomatic - This site lets you record video and audio online directly from your browser. You can also receive in line calls from listeners wanting to leave voice comments.
ClickCaster - create, broadcast and sell your very own radio shows and podcasts. You can record audio right from your browser or upload an existing MP3.
Wild Voice Shout Recorder - Online service that lets you record audio files through an intuitive interface but doesn't let you edit them or add special effects.


Enablr - make your podcasts indexed and searchable.
PodShow - a network that brings audio, video, podcasts, and music to your computer, iPod, mobile device, or television.
Divicast - enhance your podcast with images and text and share it with everyone.
Divvycast - where podcasting and music meet. Helps bands to create podcasts.
Podbop - Find bands in your city and download free MP3s to your iPod to preview their music ahead of the show.
Noisely - Enter a subject you're interested in, and Noisely serves up a selection of podcasts you'll like. Press play, and all the 'casts stream continuously until you stop them.

Wednesday, October 08, 2008

1$ a day .... all inclusive!

Boost Mobile, Cricket simplify rate plans

By Sue Marek  Comment |  Forward

With the economy in the tank, consumers may be looking for a cheap and easy wireless deal, and prepaid providers Boost Mobile and Cricket Wireless are looking to capitalize on that trend. Last weekLeap Wireless announced that its Cricket service would offer new daily rate plans called PayGo that provide customers with unlimited service for $1, $2 or $3 per day. The $1 plan includes unlimited local calling and voicemail, caller ID and three-way calling. The $2 plan offers the same as the $1 plan plus unlimited text and picture messaging. And the $3 plan adds unlimited U.S. long distance, international texting, mobile Web and directory assistance.

Now comes word from Boost Mobile that it is launching a new flat-rate of 10 cents per minute for all calls, no matter what time of day. The Boost Mobile plan, called Pay As You Go, lets customers pay by the minute without a long-term commitment. Plus they already can get unlimited nationwide push-to-talk service from Boost for a flat-fee of $1 per day.

J.D. Power and Associates' says that subscribers prefer flat-rate plans with unlimited minutes. In the company's annual prepaid wireless customers satisfaction study, the overall satisfaction among U.S. prepaid users is higher among those who subscribe to flat-rate plans with unlimited minutes vs. those who have per-minute pricing plans because of the cost advantages associated with the flat-rate plans.

Does it make sense to update your social networks via a voice call?

via Techcrunch UK
by Mike Butcher on October 6, 2008

Ping.fm, a fairly new service that lets you update your status on several social networks at once, has signed a deal with the UK's Spinvox whereby you can now update your status via a voice call. Ping.fm works on Twitter, Facebook, Jaiku, Pownce, LiveJournal, Tumblr, MySpace, Bebo and Friendster. It's not unlike Socialthing, another an activity aggregator. There is also HelloTxt which has been around since September 2007 and also has a mobile version.

But there's a slight problem. Facebook has plans to allow you to update your status on other socnets, which would potentially kill Ping.fm and others like it for at least a large part of the market (though not all of course).

That makes Ping.fm a feature, and the fact that Ping.fm is a project started by two guys in their spare time says a lot. So is this new Spinvox add-on of any real value? Does it make sense to call a number and suddenly update 30 social networks at once with "I'm on the train, looks like I'll be late for that meeting" or similar?

Christina Domecq, SpinVox co-founder and CEO says "Bloggers and other active social networkers are tired of being stuck in front of their computer screens, updating network after network to stay in touch with their friends." But that doesn't make sense to me - those guys are the mavens of this business - they actually love text input and, in my experience, can't stand having to call people. They will even hunt and peck on a terrible iPhone keyboard and download the Twitterific iPhone app to avoid calling people.

And as many have found, the real power of Twitter comes in turning it into a sort of 'cloud conversation'. If I used Ping.fm to have one single, blasted-out conversation across all socnets that would pretty much destroy my network. And annoy my friends/followers. Adding voice just confuses that.

And unfortunately SpinVox's "sexiest" service is not its integration with social networks, but it's voice to SMS service, which remains an utterly indispensible, though paid-for, add-on to your mobile. I can see Spinvox's desire to extend the service into socnets, but it is a mere incremental add-on to the existing service. This is a bit of extra code, nothing more. But at least it makes for a smart distribution ploy - this is very cheap viral marketing.

In fact, there's going to be more interesting ways for Spinvox to extend its platform and really this isn't the killer one. For me it's still voice to text or voice to email, or perhaps even voice to IM, which is going to be the best route. And there may even be ad-models to be wrapped around this because Spinvox's technology is smart enough to understand the content of the messages, making ad-targeting a plausible scenario.

Wednesday, October 01, 2008

VC Fund Raising Manual

via specific marketing 

VC funding

How do you successfully raise VC money?

When I was working as the VP of Analysis at Library House, a business information and research company focussed on high potential start-ups and specifically on venture capital-backed companies, I worked with dozens of VCs, analyzed well over a 1,000 start-ups, and saw many hundreds of start-ups pitch.

During my five year tenure, I have come to one fundamental conclusion: most companies don't raise funding, not because their company is not interesting enough, but rather because they don't actually understand how VCs think and work. They also do not understand the process of how to raise venture capital.

Today, I read an article by Josh Kopelman, in which he mentioned a ' Founder's Manual for Pitching a VC'. I think the notion of some sort of manual is a great idea. I personally think that although the pitch itself is important, it is just one component of many when raising VC funding. Starting with this article, I thought I would write up the 'VC Fund Raising Manual'. This will include not just the pitch, but effectively the whole process.

VC Fund Raising Manual

Outside of scope: I will not discuss whether find raising from VCs is a good or a bad thing or whether other options are more appropriate or how to compare them or how to choose. Or how to raise angel funding. Or how to bootstrap. I just can't find the time to explain them all.

This manual is for those that have already made up their mind that they want to raise VC funding. It explains the process of doing that.

In this manual, I will do a great deal of generalization and simplification. Please keep this in mind.


Overall, what one needs to understand when raising funding is that there is a highly conserved process of going about this. Most VCs follow this process. It is important that you understand this process and all the drivers that are important at each individual step. The VC fund raising process looks (more or less) as follows:

1. Identify relevant VCs - 8 weeks

2. Prepare documentation - 8 weeks (you select VCs at the same time)

3. Approach relevant VCs - 6 weeks

4. The pitch - 30 minutes

5. Commercial due diligence and further meetings - 10 weeks

6. Full partner pitch and issue of term sheet - 4 weeks

7. Term sheet negotiation - 4 weeks

8. Legal work - 4 to 8 weeks

9. Sign deal and money in the bank - 1 day

Total time for fund raising: 2 months preparation and on average 7 months actually raising the money. Please note that this is a gross generalization, it might be shorter or longer than this, but as a general assumption, this should be fine.

I will explain each step in detail using separate blog posts.