10 Steps to Innovation

via wonderful Found&Read

 

1. Don't take things for granted
2. Watch for inconveniences
3. Watch for possible gaps
4. Follow tech trends
5. Watch how your competitors work
6. Observe different people in different places
7. Capture every idea
8. Create a master list of problems
9. Review your master list of problems
10. Take action

Do as I say, not as I did

lovely article, again thanks to Found|Read

Last September, Ev Williams gave a speech about some of the mistakes he made as CEO of Odeo.

Since then, a lot has happened. We turned out to totally wrong about one thing: "So what's he doing to fix these mistakes? Not refunding the VCs their investment, that's for sure." That's exactly what Williams did just a month later , refunding his VCs and angels their $5 million stake.

Williams' fortunes have changed radically since then, as Obvious Corp, which he formed to buy Odeo, has also developed the smash hit web product of the season, a casual blogging tool called Twitter.

Williams said he created Obvious to pioneer "a new model for building and running web products," one that uses cheap and rapid development to test an idea before turning it into a company. So far, it appears to be working.

This week, Williams indulged us by reviewing the list of Odeo-screwups we covered last fall and, importantly, shared with us what he's doing differently this time at Twitter.

Mistake #1: "Trying to build too much"
Retake: Where Odeo had a mess of products, Twitter is singularly focused on the short-form shout-out. Tell your friends what it is that you're doing in 140 characters or less. The thrift and simplicity of Twitter posts are comparable to the site, which simply takes the messages from SMS, IM, web form, or third-party application and sends them back out. Says Williams via email, " It does very little. (In a good way.)"

Mistake # 2: We weren't the target users of our product
Remake: The makers of Odeo weren't podcasters and didn't listen to many podcasts themselves, so they lacked intuition for their users' needs. Twitter is the opposite, according to Williams, because it's a product his team uses and loves. "[Obvious employee] Jack Dorsey introduced the idea of Twitter to us, because he'd been wanting it for a long time. We built a prototype and started using it internally and, based on that, decided to invest further."

Mistake # 3: "Not adjusting fast enough"
Remake: Odeo couldn't compete when Apple introduced a competitor, but Twitter has tried to be more agile. Rather than stay bound to long-term strategic visions, Twitter has made many adjustments to its product over the last several months, aiding its astronomical growth this March.

Says Williams, "We didn't have the formula right for Twitter at first. We liked the app, but for the first few months, it wasn't clicking with users. We changed the positioning, the relationship model, and other things until it started working. I think we could have been faster, but we got there. Now we're trying to adjust to the scaling requirements."

Mistake # 4: "Raising too much money too early"
Remake: Williams' new theory is "Some things are perfectly worthwhile but don't need to be a company" in the "hits-driven" consumer web business , where anything less than a 45-degree trend on the growth chart considered flat-lining. Due to the pressure of responsibility to its funders, Odeo had to be a company before it had proved it was a successful product. Twitter hasn't raised any outside funding yet, though Williams says "It's likely we'll need to before long, but we're past the point where I think it would be too early."

Mistake # 5: "Not listening to my gut"
Remake: Williams says, "This has a lot to do with who I'm working with, what we're working on, raising money, etc. Safe to say, we're doing better in all departments."

Angel Funding Toolkit

Angel Funding Toolkit Posted: 11 Jan 2008 07:31 AM CST Aruni Gunasegaram has a great post up on GigaOm's Found|Read titled My Funding Toolkit.  It's a nice summary of stuff that Aruni has put together in the quest for her next round of angel funding.

via Ask the VC

Youth speaking about their handset preferences

interesting to take a look

http://www.youtube.com/watch?v=GbyEOmD-apk

 

via the [non-working] Wireless World Forum.

PhoneCasting Raises $500,000 Seed Funding

via MocoNews

 

Houston-based startup PhoneCasting has raised $500,000 from undisclosed angel investors. The company plans a service to let people listen to podcasts on a phone, and also create podcasts by recording them with the handset. PhoneCasting bought Podlinez and modified it into a white label service, and will offer its platform and services for free reports Tech Confidential . Founder and president Michael Sharp hopes to get a wide audience and sell advertising, and tie podcasts with affiliate marketing opportunities—"for example, if a podcaster reviewed the latest Stephen King novel, a listener could press a key to buy the book on Amazon.com (NSDQ: AMZN)". The proceeds will be split with 20 percent going to PhoneCasting and the rest to the podcaster. The company is seeking a $10 million first round.

Top Ten Myths of Entrepreneurship

great list of points via Guy Kawasaki blog

 

This is a guest post by Scott Shane as a follow up to his entrepreneurship test. He is the A. Malachi Mixon Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of seven books, the latest of which is The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By . Many entrepreneurs believe a bunch of myths about entrepreneurship, so here are ten of the most common and the realities that bust them:

1. It takes a lot of money to finance a new business. Not true. The typical start-up only requires about $25,000 to get going. The successful entrepreneurs who don't believe the myth design their businesses to work with little cash. They borrow instead of paying for things. They rent instead of buy. And they turn fixed costs into variable costs by, say, paying people commissions instead of salaries.

2. Venture capitalists are a good place to go for start-up money. Not unless you start a computer or biotech company. Computer hardware and software, semiconductors, communication, and biotechnology account for 81 percent of all venture capital dollars, and seventy-two percent of the companies that got VC money over the past fifteen or so years. VCs only fund about 3,000 companies per year and only about one quarter of those companies are in the seed or start-up stage. In fact, the odds that a start-up company will get VC money are about one in 4,000. That's worse than the odds that you will die from a fall in the shower.

3. Most business angels are rich. If rich means being an accredited investor –a person with a net worth of more than $1 million or an annual income of $200,000 per year if single and $300,000 if married – then the answer is "no." Almost three quarters of the people who provide capital to fund the start-ups of other people who are not friends, neighbors, co-workers, or family don't meet SEC accreditation requirements. In fact, thirty-two percent have a household income of $40,000 per year or less and seventeen percent have a negative net worth.

4. Start-ups can't be financed with debt. Actually, debt is more common than equity. According to the Federal Reserve's Survey of Small Business Finances, fifty-three percent of the financing of companies that are two years old or younger comes from debt and only forty-seven percent comes from equity. So a lot of entrepreneurs out there are using debt rather than equity to fund their companies.

5. Banks don't lend money to start-ups. This is another myth. Again, the Federal Reserve data shows that banks account for sixteen percent of all the financing provided to companies that are two years old or younger. While sixteen percent might not seem that high, it is three percent higher than the amount of money provided by the next highest source – trade creditors – and is higher than a bunch of other sources that everyone talks about going to: friends and family, business angels, venture capitalists, strategic investors, and government agencies.

6. Most entrepreneurs start businesses in attractive industries. Sadly, the opposite is true. Most entrepreneurs head right for the worst industries for start-ups. The correlation between the number of entrepreneurs starting businesses in an industry and the number of companies failing in the industry is 0.77. That means that most entrepreneurs are picking industries in which they are mostlikely to fail.

7. The growth of a start-up depends more on an entrepreneur's talent than on the business he chooses. Sorry to deflate some egos here, but the industry you choose to start your company has a huge effect on the odds that it will grow. Over the past twenty years or so, about 4.2 percent of all start-ups in the computer and office equipment industry made the Inc 500 list of the fastest growing private companies in the U.S. 0.005 percent of start-ups in the hotel and motel industry and 0.007 percent of start-up eating and drinking establishments made the Inc. 500. That means the odds that you will make the Inc 500 are 840 times higher if you start a computer company than if you start a hotel or motel. There is nothing anyone has discovered about the effects of entrepreneurial talent that has a similar magnitude effect on the growth of new businesses.

8. Most entrepreneurs are successful financially. Sorry, this is another myth. Entrepreneurship creates a lot of wealth, but it is very unevenly distributed. The typical profit of an owner-managed business is $39,000 per year. Only the top ten percent of entrepreneurs earn more money than employees. And the typical entrepreneur earns less money than he otherwise would have earned working for someone else.

9. Many start-ups achieve the sales growth projections that equity investors are looking for. Not even close. Of the 590,000 or so new businesses with at least one employee founded in this country every year, data from the U.S. Census shows that less than 200 reach the $100 million in sales in six years that venture capitalists talk about looking for. About 500 firms reach the $50 million in sales that the sophisticated angels, like the ones at Tech Coast Angels and the Band of Angels talk about. In fact, only about 9,500 companies reach $5 million in sales in that amount of time.

10. Starting a business is easy. Actually it isn't, and most people who begin the process of starting a company fail to get one up and running. Seven years after beginning the process of starting a business, only one-third of people have a new company with positive cash flow greater than the salary and expenses of the owner for more than three consecutive months.

The Art of the Sign Up Page

interesting article found thanks to Found|Read.