Our last investment in the old year is a novelty for us – our first investment in a startup from Italy. Founded by 23 year old entrepreneur Guk Kim, Cibando operates a popular iPhone app that makes it easy to find the best restaurants in Rome, Milan, Florence and other Italian cities.
What makes this significant (beyond its obvious significance for Cibando and for us) is that this is one of only a very small number of VC investments in Italy. So significant, at least, that the news got covered by TechCrunch and also made it to the online frontpage of Corriere della Sera, one of Italy's oldest and most reputable daily newspapers!
To say that Italy's early-stage funding ecosystem is underdeveloped is probably an understatement, at least that's what I've heard in the last few months. Not that it's that great in Germany, although with the rise of Berlin as Europe's new tech hub it's hopefully getting better. But in Italy it seems to be much worse – so bad that many of the serious Internet entrepreneurs from Italy leave their country to raise money elsewhere.
It might seem odd that we as a Berlin-based VC invest in Italy, but part of our strategy is to be somewhat location-agnostic. While the majority of our portfolio companies are based in Germany or Poland (homeland of Pawel and Lukasz) we're open to investing in other European countries and even outside of Europe. In fact, some of the best investments that Point Nine Capital (and/or I as an angel investor) made were in pretty unusual locations: myGengo (founded in Tokyo), Vend (founded in New Zealand), Zendesk (founded in Copenhagen) or Clio (founded in Western Canada) are great examples. Some of these companies later moved part or their operations to the US or even relocated completely, but that's another story.
Back to Cibando. You simply draw a circle on a map to select how far you’re willing to drive and select your preferred restaurant category. Cibando then lists the best restaurants that match your requests, along with reviews, mouth-watering photos and other helpful information. Think of it as a mobile version of Yelp or Qype but with several special twists. Buon appetito!
Sunday, January 01, 2012
Saturday, November 12, 2011
Targeting the Fortune 5,000,000
I've just read on TechCrunch that Peter Thiel, famous among other things for making one of the best investments in the history of mankind by investing in Facebook in its early days, said that he looks for platforms that are big among small businesses, not consumers. I couldn't agree more. Although there are of course plenty of exciting and profitable opportunites for consumer Internet startups, my main focus over the last three years has been on companies that provide a product, service or platform to small and medium-sized businesses. Some of the reasons:
- Consumer startups often (not always) need enormous scale in order to become profitable. This is particularly true for advertising-supported businesses where the ARPU (average revenue per user) is very low. That means that you need to raise a large amount of capital, and because it's usually a winner-takes-it-all model, you have to expect a "digital" outcome – either it becomes a big hit or you lose. There's nothing inherently wrong with that, but for me the threshold for making an investment like this is much higher than it is in a case where you can follow a lean startup approach and where the downside is more limited.
- Most of the large, old software players are focused on, and in some cases trapped into, the classic enterprise software sales model of selling complex, on-premise software for extremely high prices using large sales forces. Neither the products nor the distribution strategy work well for SMBs, which creates huge opportunities for startups to fill the needs of the Fortune 5,000,000 with easy-to-use, on-demand, pay-as-you go SaaS applications. Examples from my portfolio: FreeAgent (online accounting for freelancers in the UK), inFakt (online accounting for SMBs in Poland), samedi (resource planning for doctors in Germany), Vend (Web-based POS system) and many others.
- Over the last decade, the Internet entered almost every area of life and chances are that if you're looking for anything – ANYTHING – you'll do it online. It doesn't matter if you need a doctor, a haircut, a pizza, a taxi or a mechanic – either you're looking (and booking) online already or you will in a few years. More and more SMBs understand this, they know that being online is or will soon be critical to their business. This leads to huge opportunities for companies that help SMBs go and be found online. Portfolio examples: Lieferheld (restaurant delivery), DigitaleSeiten (online directories, e.g. for roofers), StyleSeat (platform for beauty professionales) and several others.
Tuesday, November 01, 2011
Latst day to vote at The Europas
On November 17, The Europas will be held, an annual awards for the Internet scene in Europa. My partners at Team Europe and Point Nine Capital and I are nominated in a few categories, so if you still need some inspiration on who you could vote for, here you go!
BTW, I feel bad about leaving a two months blogging hiatus with a self-serving post...but anyway. ;-) . A lot of the nominees are rallying people to vote for them, and the award is of course self-serving even for the organizer, TechCrunch Europe, which is encouraging all nominees to add banners and backlinks to their websites. So I'm in good company. But all joking aside, The Europas is a great event which features some of the best startups in Europe and celebrates entrepreneurship, something we can't do too much in Europe.
Now without further ado, here are the categories that we're nominated in:
Best European Startup Accelerator (Team Europe)
Best VC of the Year 2011 (Point Nine Capital)
Best exit 2011 (Brands4Friends acquired by eBay)
Best Angel or Seed Investor of the Year (Yours truly)
Here's the link to the voting page.
Bonus tip: In the Best Service Provider to Startups category my vote goes to the law firm Brown Rudnick for helping create the Seed Summit legal docs and for doing great work for European startups and investors in general.
BTW, I feel bad about leaving a two months blogging hiatus with a self-serving post...but anyway. ;-) . A lot of the nominees are rallying people to vote for them, and the award is of course self-serving even for the organizer, TechCrunch Europe, which is encouraging all nominees to add banners and backlinks to their websites. So I'm in good company. But all joking aside, The Europas is a great event which features some of the best startups in Europe and celebrates entrepreneurship, something we can't do too much in Europe.
Now without further ado, here are the categories that we're nominated in:
Best European Startup Accelerator (Team Europe)
Best VC of the Year 2011 (Point Nine Capital)
Best exit 2011 (Brands4Friends acquired by eBay)
Best Angel or Seed Investor of the Year (Yours truly)
Here's the link to the voting page.
Bonus tip: In the Best Service Provider to Startups category my vote goes to the law firm Brown Rudnick for helping create the Seed Summit legal docs and for doing great work for European startups and investors in general.
Sunday, August 21, 2011
Bored Meetings vs. Board Meetings
One thing I've been thinking about for a while is how to make Board Meetings as effective as possible. If you want to read some great posts about the topic by people who've been to many, many more Board Meetings (and apparently Bored Meetings!) than I, check out these links:
- Brad Feld's initial post on the topic back in 2004
- Reactions by Fred Wilson (post 1, post 2, post 3)
- More recent posts by Brad Feld and Fred Wilson, as well as Mark Suster
In my opinion it's not that much about whether a Board Meeting is boring or not (but the little pun makes for a good headline so I used it too). It's easy to have a good time in a Board Meeting – you talk about a variety of business issues, you learn from other Board Members' experiences, people tell anecdotes etc. It happens rarely that I'm bored in a Board Meeting, but non-boring does not yet equal effective.
The questions that I often ask myself after a Board Meeting are: What are the real, tangible, actionable results of the meeting? Was it worth the time, usually easily 4-5 man days if you count everyone's traveling time, or could the same have been achieved in a 1-2 hour conference call? For SF Bay Area startups, holding physical Board Meetings may be a no-brainer because everyone is close by anyway. But in Europe, getting all Board Members into one room usually means that at least half of them have to spend a day traveling.
The root cause why it's often hard to give a clear, positive answer to the question above (whether the meeting was worth it) is the dramatic information asynchronity between the founders and the investors with respect to the startup's business. It's just natural that the founders know ten times more about their business, but if the information asychronity is too large, the founders have to spend too much time of the Board Meeting updating the investors. Then it becomes an update meeting. (That has its own merits, but running through numbers and current developments isn't something you need an in-person meeting for. In my experience, one-to-many as well as one-to-one conversations can just as well be done over the phone or Skype. Many-to-many discussions about complicated stuff is where the advantages of a physical meeting come into play.)
Also, if the investors aren't sufficiently in touch with the company it'll be hard for them to provide valuable input, and most of the ideas and suggestions they come up with will be things which the founders have already thought about themselves months earlier.
So the most important thing that you as a founder can do in order to enable an effective Board Meeting is to provide a detailed Board Pack before the meeting itself. The Board Pack should be sent out at least 48 hours before the meeting to give the investors a chance to get simple questions clarified prior to the meeting. The investors of course need to do their part as well, i.e. read the Board Pack carefully and clarify questions before the meeting. The idea is to get almost the entire "update part" done prior to the actual meeting so that you have the whole meeting for the strategic or tactical questions that you'd like to discuss.
80% of the meeting's time should be allocated to these 3-4 questions and the goal should be that you leave the meeting with a conclusion/decision on these questions, or at least with significant progress and clear next steps. That means you may have to politely interrupt people to refocus the discussion. If information asynchronity is the #1 enemy of effective Board Meetings, the human tendency to digress is enemy #2. You have to fight both.
Finally, if there are no important questions that you'd like to discuss with your investors, don't hold a Board Meeting. Do an update call instead. Usually there's lots of things to discuss, but don't force it.
One last point, pre-Board updates every ~ 2 months are not enough to keep investors in the loop. If you want your investors to really know what's going on (and thus enable them to be much more helpful), send out a weekly update email with KPIs (or a link to your Geckoboard :-) ) and information on last week's progress, current problems and next week's priorities. That weekly email can and should be very brief so that it doesn't cost you much time to write it, but even just a couple of bullet points can be immensely helpful if they are provided routinely once a week (as a company gets bigger, bi-weekly or monthly updates are sufficient but in the early days I think weekly works best). Just like the founders should do their best to keep the investors in the loop, the investors of course should do their best to stay up-to-date as well – follow the company on Twitter, subscribe to the company's blog, read everything that's written by and about the company and its key competitors, and participate in the discussions on the company's "Board Basecamp" (a Basecamp site set up for the company's founders and investors, something which many of my portfolio companies have done and which is very valuable).
Wednesday, August 10, 2011
What we look for in early-stage SaaS startups
I recently wrote that investors (myself included) should do a better job of making their investment criteria transparent to founders. Today I'd like to tell you a bit more about what we at Point Nine Capital are looking for in SaaS startups (other sectors are something for another blog post).
To put it as simple as possible, the health of a SaaS business is mainly determined by two factors: Customer lifetime value (CLTV) and customer acquisition costs (CAC). One could almost say that CAC and CLTV are for a SaaS company what wholesale price and sales price are for a retailer. Just like a merchant needs to buy products and sell them at a higher price, a SaaS business needs to acquire customers at costs that are lower than the customers' lifetime value. Costs of goods sold are minimal for a company selling software over the Web, and costs like product development decrease as a percentage of revenue when you get to bigger scale. So for a bigger SaaS player, sales and marketing costs are the driver of profitability.
There are of course lots of other metrics and factors that you can look at in a SaaS company: How good is the product, how big is the market, how strong is the competition, what's the churn rate, is the company growing organically, how good is the team, to name just a few. But the interesting thing is that most of these other aspects are factored into CLTV and CAC already: If CAC are low, the product has to be good, otherwise it wouldn't be that easy to sell (exceptions apply). If CTLV is high, churn can't be that big. Similarly, if there are stronger competitors in the market, aggressively marketing a better product, it's unlikely that the company's CAC will be low. And if a company has a great CAC/CLTV ratio, the team almost has to be great because you have to execute well in all areas in order to achieve that.
Of course I'm not saying that everything is captured in those two metrics, and because they are based on present and historic data they won't reveal future developments of the industry that you're looking at. But at the minimum, looking at these two metrics is a great start when you as an investor evaluate a SaaS company.
Provided that there is some data on these two metrics, that is.
But early-stage SaaS companies which are still in public beta or just went live don't have this data yet. Getting meaningful data on your CLTV takes time, since calculating it based on the monthly churn rate of your first few customer cohorts isn't reliable. And it takes even more time until you get an idea of your CAC because you have to set up marketing programs, try various things, recruit and train sales people and so on, and of course improve the product, the on-boarding experience etc. along the way. I'd say it'll take you at least 6-12 months following your product's launch until you may have reasonably reliable data on CAC and CLTV if everything goes well – and much longer if you've got hiccups along the way.
As early-stage investors, we aim to invest in a company earlier than that so we have to look for other things – leading indicators for great CAC/CLTV ratios in the future, so to speak:
There are other factors that we look at, such as market size and competition, but the ones described above are among the most important ones. I hope this helps a bit – if you have any questions please leave a comment or email me.
To put it as simple as possible, the health of a SaaS business is mainly determined by two factors: Customer lifetime value (CLTV) and customer acquisition costs (CAC). One could almost say that CAC and CLTV are for a SaaS company what wholesale price and sales price are for a retailer. Just like a merchant needs to buy products and sell them at a higher price, a SaaS business needs to acquire customers at costs that are lower than the customers' lifetime value. Costs of goods sold are minimal for a company selling software over the Web, and costs like product development decrease as a percentage of revenue when you get to bigger scale. So for a bigger SaaS player, sales and marketing costs are the driver of profitability.
There are of course lots of other metrics and factors that you can look at in a SaaS company: How good is the product, how big is the market, how strong is the competition, what's the churn rate, is the company growing organically, how good is the team, to name just a few. But the interesting thing is that most of these other aspects are factored into CLTV and CAC already: If CAC are low, the product has to be good, otherwise it wouldn't be that easy to sell (exceptions apply). If CTLV is high, churn can't be that big. Similarly, if there are stronger competitors in the market, aggressively marketing a better product, it's unlikely that the company's CAC will be low. And if a company has a great CAC/CLTV ratio, the team almost has to be great because you have to execute well in all areas in order to achieve that.
Of course I'm not saying that everything is captured in those two metrics, and because they are based on present and historic data they won't reveal future developments of the industry that you're looking at. But at the minimum, looking at these two metrics is a great start when you as an investor evaluate a SaaS company.
Provided that there is some data on these two metrics, that is.
But early-stage SaaS companies which are still in public beta or just went live don't have this data yet. Getting meaningful data on your CLTV takes time, since calculating it based on the monthly churn rate of your first few customer cohorts isn't reliable. And it takes even more time until you get an idea of your CAC because you have to set up marketing programs, try various things, recruit and train sales people and so on, and of course improve the product, the on-boarding experience etc. along the way. I'd say it'll take you at least 6-12 months following your product's launch until you may have reasonably reliable data on CAC and CLTV if everything goes well – and much longer if you've got hiccups along the way.
As early-stage investors, we aim to invest in a company earlier than that so we have to look for other things – leading indicators for great CAC/CLTV ratios in the future, so to speak:
- Visitor-to-trial conversion rate. If it's high, it indicates that your target audience is interested in your product. It also says a lot about your ability to communicate the value of your product clearly and with few words, which is essential for products that are sold online. And obviously, the higher your visitor-to-trial conversion rate is, the lower is your CAC, all other things being equal.
- Trial-to-paying-account conversion rate. An extremely important metric, for obvious reasons. If people pay for your product, that's the best sign that you're delivering real value to them. And again, higher conversion means lower CAC.
- Engagement and retention of your early users. It's hard to get meaningful churn data within just a few months because companies often don't terminate their accounts right away when they stop using a SaaS product, especially if your product has a low price point. Therefore we have to look at usage metrics such as daily or weekly logins and various application-specific metrics to find out if a product is really used by its customers, which of course is the basis for a viable business and high CLTV in the future.
- Enthusiasm of your early users. Having a number of early users who are absolutely in love with your product is extremely valuable, even if it's a small number in the beginning.
Those users will recommend your product to everyone they know, give you great testimonials, help you get your first case studies, get the word out on Facebook and Twitter and maybe even help other customers in your support forums. And for us, these VIP users are a strong signal that you're solving a real pain and hence a strong indicator of product/market fit (which is the basis for low CAC and high CLTV).
- Your team. Last but not least and at the risk of stating the obvious, we only invest when we're extremely confident in the founder team. That doesn't mean that you have to be a serial entrepreneur or that we expect decades of experience (as much as we appreciate that!). As early-stage investors we're happy to work with young entrepreneurs who are smart, dedicated, talented and results-driven. We're happy to help you complete your team and coach you in areas like sales & marketing, SaaS metrics or fundraising which you may have limited expertise in. The one area where we think you do have to excel is your product. You have to be able to create an awesome product and a beautiful website that sells your product. You also have to "get" modern SaaS – that whole idea around consumerized business applications that are powerful yet easy-to-use and can be sold online using a low-touch sales model. We strongly believe that this need to be in the DNA of the founder team.
There are other factors that we look at, such as market size and competition, but the ones described above are among the most important ones. I hope this helps a bit – if you have any questions please leave a comment or email me.
Monday, August 01, 2011
The land of a thousand niches
I just came across a great blog which I hadn't been aware of yet: "VC Matters" (100 points if you get the pun), written by Rory O'Driscoll of Scale Venture Partners. Rory has an incredibly successful track record of SaaS investments, having invested in home-runs like Omniture, ScanSafe, Box.net, DocuSign, ExactTarget and many others. After reading through his posts I immediately added his blog to my RSS reader and to the "must-read list" of recommended resources that I maintain for the founders of the SaaS startups that I have invested in. I'd say Rory is one of the Top 3 VC bloggers about SaaS, the other two being David Skok of Matrix Partners and Philippe Botteri, who recently moved from Bessemer to Accel.
One of the things that Rory talks about is the surprisingly large size of a surprisingly large number of niches in business software:
As an investor in Propertybase (CRM for the real estate industry), Clio (practice management for lawyers), samedi (practice management for doctors), FreeAgent Central (accounting for freelancers) and other SaaS startups targeting vertical niches, I wholeheartedly agree. Each of these companies operates in a niche, but these niches are so large that each of these companies has the potential to become worth several hundred million dollars.
Rory continues:
One of the things that Rory talks about is the surprisingly large size of a surprisingly large number of niches in business software:
"A phrase that stuck in my mind from a 1994 software report, was the description of the business software market as a 'land of a thousand niches'. [...]
Business software, unlike either the consumer internet business, or the technology infrastructure business, is not a monolithic market, but instead is a series of separate vertical and horizontal opportunities. [...]
As a result there will be many medium sized, ie $1.0 Bn plus, SaaS technology companies built over the next five years to satisfy these various needs."
As an investor in Propertybase (CRM for the real estate industry), Clio (practice management for lawyers), samedi (practice management for doctors), FreeAgent Central (accounting for freelancers) and other SaaS startups targeting vertical niches, I wholeheartedly agree. Each of these companies operates in a niche, but these niches are so large that each of these companies has the potential to become worth several hundred million dollars.
Rory continues:
"A great example to me of a vertical is that has massively exceeded what I would have guessed as its potential is Real Pages. The company focuses on automating the process of managing residential apartment buildings. My gut would have been “niche vertical, not that interesting”. Turns out I was wrong. Real Pages has a$1.8Bn market capitalization and $200 MM in trailing revenue! I believe this is indicative of what will be a multi-year wave of SaaS based application software companies in specific verticals or functional areas, generating $1Bn valuations."That reminds me of StyleSeat, a startup that provides business tools and lead generation for the wellness & beauty industry and which Point Nine Capital has invested in. Correct me if I'm wrong, Pawel, but I think neither of us has a particular affinity with the wellness & beauty industry (I usually let my hair grow until my wife (thankfully) makes it clear to me that my look is absolutely unacceptable, and Pawel doesn't have a particularly maintenance-intensive hairstyle either). So initially we were a little skeptical about the market – until we learned that wellness & beauty is a $40B industry in the US, with about 250,000 beauty salons and employing about 850,000 people. Gotta love "niches" like this!
Monday, July 18, 2011
Greetings from the dark side
It's not really news any more because we've already announced it a few weeks ago, and TechCrunch and Gruenderszene wrote about it already. But I haven't written about it on this blog up until now, so in case you haven't heard about it yet here you go: I've teamed up with Team Europe to create Point Nine Capital, an early-stage VC which will follow in the footsteps of the highly successful Team Europe Ventures fund, which I've been working together with informally in the last two years.
So in other words, after more than a decade in entrepreneur-land and three years in angel-heaven I'm now going to the dark side of VC-underworld. That's bullshit, of course, but I needed an excuse to make that "went to the dark side" joke (which is starting to get trite, sorry) and post that picture which I found googling for "the dark side". And in fact, I'm not leaving angel-land completely, since our goal at Point Nine Capital is to be "The Angel VC", as the tagline below our logo says.
What that means is that although we are a (small) VC fund, we're acting more like your friendly angel investor – no large committees, faster decision-making and importantly, simple and founder-friendly terms. At the same time, entrepreneurs partnering with Point Nine Capital will benefit not only from my personal expertise and network but also from the vast experience of my partners and colleagues.
More information about Point Nine Capital is available on our website, and feel free to email me if you have any questions!
So in other words, after more than a decade in entrepreneur-land and three years in angel-heaven I'm now going to the dark side of VC-underworld. That's bullshit, of course, but I needed an excuse to make that "went to the dark side" joke (which is starting to get trite, sorry) and post that picture which I found googling for "the dark side". And in fact, I'm not leaving angel-land completely, since our goal at Point Nine Capital is to be "The Angel VC", as the tagline below our logo says.What that means is that although we are a (small) VC fund, we're acting more like your friendly angel investor – no large committees, faster decision-making and importantly, simple and founder-friendly terms. At the same time, entrepreneurs partnering with Point Nine Capital will benefit not only from my personal expertise and network but also from the vast experience of my partners and colleagues.
More information about Point Nine Capital is available on our website, and feel free to email me if you have any questions!
Wednesday, June 01, 2011
Saying "no"
Being an angel investor is a fantastic job. Every day you meet great new people, cool products, exciting technologies and interesting new business models. Nothing (in business life) is more exciting than seeing a company grow from two-guys-in-a-garage stage to become a relevant or maybe even dominant player in a large industry sector, and as an early-stage investor you have a realistic chance to be part of some of these success stories. Maybe it’s the best job next to being the Pope, to quote former German Vice Chancellor Franz Müntefering (he said that when he became Chairman of the Social Democratic Party in Germany, probably one of the scariest jobs in German politics).
There’s one thing that sucks though. You have to say “no” all the time. Whether you’re a private investor who invests his own money or a VC managing a fund, chances are that for every investment you make you’ll have to say “no” at least 20-50 times. If you make a couple of investments per year, that’s a lot of “no”s.
In fact, if you don’t see something like 20-50 startups for every investment that you make I think it’s unlikely that you’re doing a good job and that you’ll make money. It either means that you have poor deal flow (investor lingo for investment opportunities that you have access to), that you don’t have prudent investment criteria, or both. The best VCs see hundreds of deals for every investment because they have the best deal flow and invest extremely selectively. That’s even more “no”s.
Now, I don’t have an issue saying “no” to a founder after having taken the time to evaluate his startup carefully. Whether I’m not convinced of the product, think the market is too small or feel there’s too much competition – there are all kinds of possible reasons why I don’t want to invest in a company, they are legitimate, and I can share them with the founders. That kind of candid and competent feedback is almost always appreciated by the entrepreneur and will often help them focus more strongly on specific weaknesses of their business.
The problem comes in when there’s no specific reason for the rejection and the startup just didn’t excite you enough to make it into those maybe 10% of startups which you decide to give a full evaluation. In most of these cases most investors will say to the entrepreneur something along the lines of “We really like your concept but it’s a bit too early for us. We’d love to take another look when you have a little more traction”. Which is not untrue, but in many cases is just another way of saying “I don’t know the market well enough to form a real opinion. Somehow your product or your team doesn’t get me sufficiently excited relative to all the other deals that I have on the table. Or maybe I just don’t have enough expertise in what you’re doing. Whatever. Please come back when you can prove with real data that there’s a market for your product and that you’re able to sell it (and I hope that by that time you’re still interested in my money)”.
For the founder, answers like these are of course useless and can be quite frustrating, especially if he talks to dozens of investors and keeps getting similar feedback. That’s actually quite sad if you think about it – smart, young, passionate people who leave secure jobs to work 70+ hours a week to turn their vision into a reality get rejections and more or less useless feedback on what they may have to do differently.
So what can be done? Firstly, I think, it’s important for founders to understand that because of the large volume of potential investments which all VCs see, only a small percentage of the startups can get a close look. All VCs I know are very hard-working people but there are just not enough hours in the day to take a close look at every deal. Moreover, although whether or not your startups makes it into that small percentage is largely dependent on your story, there are also outside factors at work which you can’t control at all – for example, it depends on how many other attractive deals the VC has on the table when you start talking to him.
Secondly, many investors (myself included) could do a better job of making their investment criteria transparent – those factors which determine if you take a closer look at a startup or not. On most VC websites you’ll read something like “We look for exceptional teams which have built a great product to disrupt a large market”. Pretty vague. An example of someone who does it right is Bessemer Venture Partners. In their “6Cs of Cloud Finance” article they say, referring to the Customer Acquisition Costs Ratio of SaaS companies: “Anything above one means you should invest more money immediately and step on the gas (and please call Bessemer immediately because we want to fund you!) as your customers are likely profitable within the first year". Of course there's also a lot of gut feeling involved and VCs also have to trust their instincts when deciding which deals to pursue further – but it must be possible to distill some of this into criteria which others can understand.
So – I’ll post some details about my investment criteria here shortly. Promised. Until then I will occasionally point founders to this blog post to show them that I at least take the issue seriously.
There’s one thing that sucks though. You have to say “no” all the time. Whether you’re a private investor who invests his own money or a VC managing a fund, chances are that for every investment you make you’ll have to say “no” at least 20-50 times. If you make a couple of investments per year, that’s a lot of “no”s.
In fact, if you don’t see something like 20-50 startups for every investment that you make I think it’s unlikely that you’re doing a good job and that you’ll make money. It either means that you have poor deal flow (investor lingo for investment opportunities that you have access to), that you don’t have prudent investment criteria, or both. The best VCs see hundreds of deals for every investment because they have the best deal flow and invest extremely selectively. That’s even more “no”s.
Now, I don’t have an issue saying “no” to a founder after having taken the time to evaluate his startup carefully. Whether I’m not convinced of the product, think the market is too small or feel there’s too much competition – there are all kinds of possible reasons why I don’t want to invest in a company, they are legitimate, and I can share them with the founders. That kind of candid and competent feedback is almost always appreciated by the entrepreneur and will often help them focus more strongly on specific weaknesses of their business.
The problem comes in when there’s no specific reason for the rejection and the startup just didn’t excite you enough to make it into those maybe 10% of startups which you decide to give a full evaluation. In most of these cases most investors will say to the entrepreneur something along the lines of “We really like your concept but it’s a bit too early for us. We’d love to take another look when you have a little more traction”. Which is not untrue, but in many cases is just another way of saying “I don’t know the market well enough to form a real opinion. Somehow your product or your team doesn’t get me sufficiently excited relative to all the other deals that I have on the table. Or maybe I just don’t have enough expertise in what you’re doing. Whatever. Please come back when you can prove with real data that there’s a market for your product and that you’re able to sell it (and I hope that by that time you’re still interested in my money)”.
For the founder, answers like these are of course useless and can be quite frustrating, especially if he talks to dozens of investors and keeps getting similar feedback. That’s actually quite sad if you think about it – smart, young, passionate people who leave secure jobs to work 70+ hours a week to turn their vision into a reality get rejections and more or less useless feedback on what they may have to do differently.
So what can be done? Firstly, I think, it’s important for founders to understand that because of the large volume of potential investments which all VCs see, only a small percentage of the startups can get a close look. All VCs I know are very hard-working people but there are just not enough hours in the day to take a close look at every deal. Moreover, although whether or not your startups makes it into that small percentage is largely dependent on your story, there are also outside factors at work which you can’t control at all – for example, it depends on how many other attractive deals the VC has on the table when you start talking to him.
Secondly, many investors (myself included) could do a better job of making their investment criteria transparent – those factors which determine if you take a closer look at a startup or not. On most VC websites you’ll read something like “We look for exceptional teams which have built a great product to disrupt a large market”. Pretty vague. An example of someone who does it right is Bessemer Venture Partners. In their “6Cs of Cloud Finance” article they say, referring to the Customer Acquisition Costs Ratio of SaaS companies: “Anything above one means you should invest more money immediately and step on the gas (and please call Bessemer immediately because we want to fund you!) as your customers are likely profitable within the first year". Of course there's also a lot of gut feeling involved and VCs also have to trust their instincts when deciding which deals to pursue further – but it must be possible to distill some of this into criteria which others can understand.
So – I’ll post some details about my investment criteria here shortly. Promised. Until then I will occasionally point founders to this blog post to show them that I at least take the issue seriously.
Sunday, March 20, 2011
Developers, developers, developers…developers, developers, developers
If there’s one thing that all fast-growing technology startups have in common, it’s that they’re constantly looking for great developers. Microsoft CEO Steve Ballmer got it right:
My portfolio companies are no exception, almost all of them are looking for engineers in various roles right now. So – if you’re a great developer and you’re living in San Francisco, Edinburgh, Vancouver, Berlin, Cracow, London or Munich (or willing to relocate) and if you want to join one of the best SaaS companies in the world, check out these job postings.
Zendesk (San Francisco)
FreeAgent Central (Edinburgh)
Clio (Vancouver)
samedi (Berlin)
inFakt (Cracow)
Geckoboard (London)
Lead Developer
Propertybase (Munich)
P.S.: If you’re like me and you’re not an engineer I (probably) won’t have a job for you but I’ll buy you a brand new iPad 2 for a successful referral of a candidate for one of the positions listed above!
Friday, February 25, 2011
"Launching a web startup became 10x cheaper..."
The conventional wisdom is that starting a web business is (at least) 10x less expensive today than it was 10-15 years ago. It’s said that a decade ago, you needed millions of venture capital in order to launch an Internet startup whereas today, thanks to open-source software, cheap hardware and new ways to acquire users for free (in particular virally via Facebook/Twitter and with SEO via Google), you can do the same with a small fraction of that. And that, while great for entrepreneurs, makes it difficult for large VC funds with many hundred million dollars under management, to deploy their capital because startups ask for less money.
I’ve heard it dozens of times, from VCs, founders, bloggers and others. It’s almost like a mantra, part of the Web 2.0 creation myth, which everyone believes without challenging it. I always wondered if that theory is true, because it didn’t cost Christopher Muenchhoff and me more than about $100 to build and launch DealPilot.com in 1997. That, approximately, was the cost of one month of shared hosting, and in the second month, revenues paid for the hosting costs already. The first “big” investment was our own server, around $3000 as far as I remember. We did raise some money to expand the business later, but that was much later – around nine months after launching the service. So it clearly was possible to launch a state-of-the-art web service back then with little to no investment. DealPilot.com wasn't the only one, of course, I'm just using it as an example.
When I say “state-of-the-art”, I mean state-of-the-art based on 1997/1998 standards, of course. That's what was needed to be competitive. We of course wouldn’t have been able to build a video streaming site à la YouTube for $100 (hardware and bandwidth was too expensive), and launching an online shop would have been more expensive too (Magento didn’t exist yet). That’s logical, but trivial, and not what the theory wants to say, right?
In other words, I think the theory surely is that “starting a web startup in 2011 that is competitive in 2011 costs 10x less than it cost to build a web startup in 1998 that was competitive by 1998 standards”, right? (If the theory was “starting a web startup in 2011 that is competitive in 2011 costs 10x less than it cost to build a web startup in 1998 that was competitive by 2011 standards” that would of course be true, but I think it wouldn’t mean anything. Being competitive by 2011 standards (often) means that you need an iPhone app. In 1998 there was no iPhone. Get the point?)
And that is what I’m questioning.
Now, if the theory is wrong and it wasn’t that much more expensive to build a web business back then, why did startups raise so much VC at the end of the 1990s? One possible answer is simply “because they could” (and because everyone else did, and you didn’t want to be overtaken by better-funded, faster-growing competitors). Fuelled by a crazy IPO market, there simply was an incredible amount of venture capital available. Maybe that’s the real reason, or at least part of it, why it now appears that launching a web startup was so expensive in the 90s. What do you think?
Friday, February 04, 2011
Geckoboard – Your Business in Real-Time
I’m thrilled to announce that together with Robin Klein at Index Ventures, Dave McClure’s 500 Startups fund and my friend and former Atlas Venture partner Alexander Bruehl I’ve made an investment in Geckoboard. Geckoboard is a beautiful real-time status board that lets businesses keep an eye on all the indicators that matter to them.
It’s a bit like “Pageflakes for businesses” (although “Chartbeat for everything else” is probably a better analogy), which is one of the reasons why investing in Geckoboard was a pretty easy decision for me. Another reason is that Geckoboard will be provided as a web-based service, with a free trial and a pay-as-you-go subscription model. Exactly the kind of SaaS business that I’ve developed a focus on in the last two and a half years. Another reason was the huge demand for the product's beta invitations (one of my favorite requests for a beta invite is this tweet, but there are many more). And of course the fact that the company was founded by an extremely sharp guy, Paul Joyce. Yes, a lot of reasons.
I also have a strong bias for startups with websites and applications that look beautiful because I think that's crucial in a world of consumerized enterprise applications. The talent and the experiences to create software that looks and feels great is rare and probably under-rated, but Paul and his team have it. Check out how awesome Geckoboard looks, no matter if you view your dashboard on a large wall-mounted screen, a computer monitor, an iPad or an iPhone.
It’s a bit like “Pageflakes for businesses” (although “Chartbeat for everything else” is probably a better analogy), which is one of the reasons why investing in Geckoboard was a pretty easy decision for me. Another reason is that Geckoboard will be provided as a web-based service, with a free trial and a pay-as-you-go subscription model. Exactly the kind of SaaS business that I’ve developed a focus on in the last two and a half years. Another reason was the huge demand for the product's beta invitations (one of my favorite requests for a beta invite is this tweet, but there are many more). And of course the fact that the company was founded by an extremely sharp guy, Paul Joyce. Yes, a lot of reasons.
I also have a strong bias for startups with websites and applications that look beautiful because I think that's crucial in a world of consumerized enterprise applications. The talent and the experiences to create software that looks and feels great is rare and probably under-rated, but Paul and his team have it. Check out how awesome Geckoboard looks, no matter if you view your dashboard on a large wall-mounted screen, a computer monitor, an iPad or an iPhone.
Tuesday, January 11, 2011
To ask or not to ask (for the user's credit card), that is the question
I've just answered a question on Quora and thought it might be worth cross-posting it here. Just in case there's still someone who isn't using Quora yet (admittedly unlikely given their current growth rate which is absolutely incredible).
The question was:
* * * * *
I don't know the answer, and there probably is no general answer, but I recently put together a little model that helps to understand the determinants better:
Click here to open the Google spreadsheet
The blue values are sample (dummy) input values that you can change. The model is based on the following ideas and assumptions:
So far so good. You can see the number of paying customers for each of the two cases in row 40.
The next thing to look at is churn, i.e. users who cancel after you've charged them at least once (I'm using charged-at-least-once as the definition of a 'paying customer' in the model):
Using the data on customers, churn and your revenue (or gross profit) per customer per month you can now calculate if you're better off requiring (D48) or not requiring (E48) a CC upon signup. One last factor that I've included is the cost that it takes to serve a trial user, e.g. bandwidth and time from your support team, which may or may not be significant depending on the nature of your business.
There are of course a couple of caveats:
Feedback very welcome!
The question was:
"For web apps, is it better to ask for the credit card before their trial starts (e.g., on the signup page) or after their trial expires?"My Quora answer follows below.
* * * * *
I don't know the answer, and there probably is no general answer, but I recently put together a little model that helps to understand the determinants better:
Click here to open the Google spreadsheet
The blue values are sample (dummy) input values that you can change. The model is based on the following ideas and assumptions:
- There are two types of visitors: Those who sign up whether or not a credit card is required (let's call them Group 1) and those who sign up only if no credit card is required (Group 2). There is of course a third group, those visitors who don't sign up in neither case, but we don't need them here.
- If you require a credit card you have a certain visitor-to-signup conversion rate from the users of Group 1 (cell D8 and D32). And per definition, no signups from Group 2 users in that case (D33). If you move to a no-credit-card signup, on top of the signups from Group 1 (D9 and E32) you get a certain amount of signups from Group 2 users (E33) so your total visitor-to-signup conversion rate is higher (E34).
- Looking at the trial-to-paying conversion rate, let's assume there's a baseline conversion rate of Group 1 trial users in the CC-required case (D12 and D38). If you remove the CC requirement I would expect that rate to drop (D13 and E38), because a) trial users who have provided their CC already may feel higher 'pressure' to try the product within the trial period, they feel more 'invested' and are less prone to procrastination; and b) doing nothing is easier than actively terminating your account. Some users will forget to terminate or just don't care.
- Looking at Group 2 users, again of course no signups or customers in the CC-required case. In the no-CC case you'll be getting a certain amount of trial-to-paying conversions from those users (D15 and E39). I would expect that rate to be lower than the baseline conversion rate because Group 2 users are, on average, inherently less interested in your product than Group 1 users (more tirekickers).
So far so good. You can see the number of paying customers for each of the two cases in row 40.
The next thing to look at is churn, i.e. users who cancel after you've charged them at least once (I'm using charged-at-least-once as the definition of a 'paying customer' in the model):
- I would generally expect the churn to be higher in the first few months following conversion to paying because some users may still be in their 'extended trial period', even if they're paying already. Also, the longer your customers use your product, the more value they will hopefully derive from it so they get less and less likely to cancel (D19 vs. D 21).
- In the CC-required case I would expect that difference in early churn and later churn to be higher, maybe much higher, because many of the users who forgot to terminate within their free trial will terminate within the first months after subscription (D18 vs. D20).
Using the data on customers, churn and your revenue (or gross profit) per customer per month you can now calculate if you're better off requiring (D48) or not requiring (E48) a CC upon signup. One last factor that I've included is the cost that it takes to serve a trial user, e.g. bandwidth and time from your support team, which may or may not be significant depending on the nature of your business.
There are of course a couple of caveats:
- The sheet is completely useless until you've tested it and until can fill it with real data. The purpose of the model is NOT to replace real-life testing by making some assumptions and pretending that that lets you decide which option works better. Quite the opposite – the purpose of the model is to understand which parameters you should look at and measure.
- The model doesn't include all factors which may be relevant (their relevancy depends on your business, and I didn't want to make it too complex). For example, one question is if you consider tirekickers an asset (because even if they're not interested in buying your product yet, they may tell their friends about it or come back to you later) or a burden (because they divert resources away from the more strongly interested prospects). Another factor that I haven't included are different pricing plans – I've included just one price per customer per month.
Feedback very welcome!
Monday, January 10, 2011
Portfolio Update Part 4
Here's the fourth and last part of my 2010 portfolio update. The first three are here, here and here. The last (but definitely not least) update takes me back to Berlin, which is not only home to my portfolio company Momox, covered in the first update, but also to another great company that I've invested in together with XING-founder Lars Hinrichs: samedi.
samedi offers a SaaS booking and resource planning solution for doctors in Germany. In some ways, samedi is doing for physicians what Clio is doing for lawyers – provide an easy, secure way to manage your practice from any device that is connected to the Web. Using samedi, physicians and clinics can also easily offer their patients a way to conveniently make appointments online, 24 hours a day, 7 days a week. samedi also allows healthcare providers to optimize their practice workflow using a simple ERP solution and lets practices, health insurance companies and other players in the healthcare industry collaborate online.
Bringing the healthcare industry, which at least in Germany is pretty old-school and bureaucracy-ridden, into the Cloud age is a very tough nut to crack but there's a huge reward for the company that pulls that off. And if there's anyone who can do that, it's the founders of samedi, Katrin Keller and Dr. Alexander Alscher who have the relentless persistence (and the ability to do with very little sleep) that is necessary in that market. After a slow-ish start in 2008 and 2009, samedi started to take off in 2010. Having grown revenues six-fold in 2010, samedi is now used by more than 2,000 physicians and other health practitioners to manage more than one million patients. Thank you, Katrin and Alex, and on to a great 2011!
This was the last part of my little series. My other investments have not or not yet been announced, but expect to hear some exciting news pretty soon!
samedi offers a SaaS booking and resource planning solution for doctors in Germany. In some ways, samedi is doing for physicians what Clio is doing for lawyers – provide an easy, secure way to manage your practice from any device that is connected to the Web. Using samedi, physicians and clinics can also easily offer their patients a way to conveniently make appointments online, 24 hours a day, 7 days a week. samedi also allows healthcare providers to optimize their practice workflow using a simple ERP solution and lets practices, health insurance companies and other players in the healthcare industry collaborate online.
Bringing the healthcare industry, which at least in Germany is pretty old-school and bureaucracy-ridden, into the Cloud age is a very tough nut to crack but there's a huge reward for the company that pulls that off. And if there's anyone who can do that, it's the founders of samedi, Katrin Keller and Dr. Alexander Alscher who have the relentless persistence (and the ability to do with very little sleep) that is necessary in that market. After a slow-ish start in 2008 and 2009, samedi started to take off in 2010. Having grown revenues six-fold in 2010, samedi is now used by more than 2,000 physicians and other health practitioners to manage more than one million patients. Thank you, Katrin and Alex, and on to a great 2011!
This was the last part of my little series. My other investments have not or not yet been announced, but expect to hear some exciting news pretty soon!
Tuesday, January 04, 2011
Portfolio Update Part 3
Here's the third part of my 2010 portfolio review. If you're new here, please start with part 1, move on to part 2 and then (hopefully) return to this post.
The next stop is Crakow in Poland, home of inFakt.pl. inFakt.pl was founded in 2008 by two extremely sharp students of the Cracow University of Science and Technology who wanted to build a simple, easy-to-use, web-based invoicing and billing application for small businesses in Poland. I invested in the company together with Team Europe Ventures early last year.
2010 saw the company dramatically expand its product offering to become a complete accounting solution for SMBs in Poland and grow the team from just five people at the beginning of the year to 14 today. To date, more than 80,000 companies have signed up for the software, which is marketed using a freemium model, making us the largest provider of our kind in the Polish market. Dziękuję bardzo, Wiktor and Sebastian, and congrats on a very successful year!
Another investment that I made in 2010 is Propertybase. Propertybase, based in Munich, offers a simple-to-use yet powerful software solution (do you see a pattern here?) for people in the real estate industry. It offers real estate developers, agents and brokers a complete CRM solution which allows them to capture leads, create sale and lease offers and agreements, manage listings, track payments and more. Since the software is entirely web-based, users can enjoy all the SaaS advantages that make the movement from on-premise to on-demand so irresistible: Never worry about updates, backups and security, access to your data from anywhere, easy integration with other Cloud-based offerings.
Apparently the real estate industry worldwide has been waiting longingly for a solution like this: In 2010, Propertybase won customers from more than ten countries and four continents and grew its customer base by more than threefold. And our customers really love us – so far our churn has, amazingly, been zero. Thank you, Mike and Max, supa g'machd!
The next stop is Crakow in Poland, home of inFakt.pl. inFakt.pl was founded in 2008 by two extremely sharp students of the Cracow University of Science and Technology who wanted to build a simple, easy-to-use, web-based invoicing and billing application for small businesses in Poland. I invested in the company together with Team Europe Ventures early last year.
2010 saw the company dramatically expand its product offering to become a complete accounting solution for SMBs in Poland and grow the team from just five people at the beginning of the year to 14 today. To date, more than 80,000 companies have signed up for the software, which is marketed using a freemium model, making us the largest provider of our kind in the Polish market. Dziękuję bardzo, Wiktor and Sebastian, and congrats on a very successful year!
Another investment that I made in 2010 is Propertybase. Propertybase, based in Munich, offers a simple-to-use yet powerful software solution (do you see a pattern here?) for people in the real estate industry. It offers real estate developers, agents and brokers a complete CRM solution which allows them to capture leads, create sale and lease offers and agreements, manage listings, track payments and more. Since the software is entirely web-based, users can enjoy all the SaaS advantages that make the movement from on-premise to on-demand so irresistible: Never worry about updates, backups and security, access to your data from anywhere, easy integration with other Cloud-based offerings.
Apparently the real estate industry worldwide has been waiting longingly for a solution like this: In 2010, Propertybase won customers from more than ten countries and four continents and grew its customer base by more than threefold. And our customers really love us – so far our churn has, amazingly, been zero. Thank you, Mike and Max, supa g'machd!
Sunday, December 26, 2010
Portfolio Update Part 2
Continuing my little 2010 portfolio review (here's part 1), the next stop after San Francisco (Zendesk), Vancouver (Clio) and Berlin (Momox) is Edinburgh, home of FreeAgent Central. By launching a flurry of innovative new features such as multi-currency support or project profitability analysis, in 2010 the FreeAgent team has shown again who's setting the bar for online accounting. An incredibly powerful yet simple-to-use application is what 1000s of users love us for (as well as the press), and is the reason why we've won a Software Satisfaction Award for the second year. And there's more to come. 2010 has been a big year for the company in other ways as well: In March we announced that we've taken a minority investment from and entered into a strategic partnership with IRIS, the leading supplier of software for accountancy practices in the UK with over 14,000 practice customers (50% market share!). Kudos and a huge thank you go to Ed, Roan, Olly and everyone else at FreeAgent Central.
The next portfolio company takes me to Tokyo. Konnichi wa, myGengo. myGengo is a pretty recent investment of mine which I've done about half a year ago together with Dave McClure and other angel investors. myGengo is a crowdsourcing marketplace for human translations – think Amazon Mechanical Turk for translations. myGengo connects people who need translations with qualified translators in a way that's much more efficient than it used to be and thus allows it to offer high-quality translations done by certified translators at affordable prices. Thanks to this very clever idea, extremely strong execution and lots of innovations (like an iPhone translation service and a very smart API), as well as a rapidly growing list of language pairs, my Gengo has more than doubled translation volume and revenues in every quarter this year. Even so, the young startup is of course just scratching the surface of the huge, multi-billion dollar translation industry, which makes me extremely excited about the opportunity ahead. Thank you very much and doumo arigatou gozaimasu, Rob and Matt.
The next portfolio company takes me to Tokyo. Konnichi wa, myGengo. myGengo is a pretty recent investment of mine which I've done about half a year ago together with Dave McClure and other angel investors. myGengo is a crowdsourcing marketplace for human translations – think Amazon Mechanical Turk for translations. myGengo connects people who need translations with qualified translators in a way that's much more efficient than it used to be and thus allows it to offer high-quality translations done by certified translators at affordable prices. Thanks to this very clever idea, extremely strong execution and lots of innovations (like an iPhone translation service and a very smart API), as well as a rapidly growing list of language pairs, my Gengo has more than doubled translation volume and revenues in every quarter this year. Even so, the young startup is of course just scratching the surface of the huge, multi-billion dollar translation industry, which makes me extremely excited about the opportunity ahead. Thank you very much and doumo arigatou gozaimasu, Rob and Matt.
Saturday, December 25, 2010
Portfolio update (part 1)
As 2010 is drawing to a close I’d like to take a moment to give you a quick update on my angel investment activities and more importantly, thank the incredibly talented and hard-working people who have made it such an amazing year.
Since becoming a full-time angel investor in 2008 I’ve made 14 seed investments, with 4-5 additional ones being on the way. Except for two of my first investments that didn’t work out – rookie mistakes, fortunately pretty small ones – I’m absolutely blown away by the success of each and every company in my portfolio.
Some highlights:
Zendesk has had a phenomenal year. In May we announced that we’ve reached 5,000 paying customers. We didn’t publish an updated number since then but I think it’s no secret that the number of Zendesk lovers worldwide has continued to explode throughout the year. With a world-class management team and Board, one of the best products and brands in B2B software and a recent $19M cash infusion Zendesk is ideally poised to bring Cloud-based zen and good karma to even more people in 2011. Mange tak to Mikkel, Morten, Alex, Michael and the whole crew.
Speaking of the Cloud, 2010 may mark a tipping point with respect to the adoption of Cloud-based services in the legal technology field: In 2010 my portfolio company Clio, which provides a web-based practice management solution for solo lawyers and small law firms, has grown its customer base by more than 400%. The company also continues to launch new features and initiatives pretty much on a weekly basis, boasts (by far) the highest trial-to-subscription conversion rate that I’ve ever seen and has a ton of great new stuff in the pipeline. Thanks and merci to you, Jack and Rian, and your growing team of hand-picked rock-star developers and industry experts.
The development of Momox, which has bought more than 8.4 million used books, CDs, DVDs and games from private sellers since 2006, has been equally impressive. We’ve grown revenue by more than 2.5x , recruited two stellar executives to head logistics and marketing, moved to a new 85,000 square foot warehouse, relaunched our online shop, raised a couple of million Euros from Acton Capital Partners and scaled up the whole organization to make sure that we can handle our continued growth. Huge kudos to Christian Wegner and his 150+ people in Berlin for this gigantic and successful effort – jut jemacht!
More in part 2.
Since becoming a full-time angel investor in 2008 I’ve made 14 seed investments, with 4-5 additional ones being on the way. Except for two of my first investments that didn’t work out – rookie mistakes, fortunately pretty small ones – I’m absolutely blown away by the success of each and every company in my portfolio.
Some highlights:
Zendesk has had a phenomenal year. In May we announced that we’ve reached 5,000 paying customers. We didn’t publish an updated number since then but I think it’s no secret that the number of Zendesk lovers worldwide has continued to explode throughout the year. With a world-class management team and Board, one of the best products and brands in B2B software and a recent $19M cash infusion Zendesk is ideally poised to bring Cloud-based zen and good karma to even more people in 2011. Mange tak to Mikkel, Morten, Alex, Michael and the whole crew.
Speaking of the Cloud, 2010 may mark a tipping point with respect to the adoption of Cloud-based services in the legal technology field: In 2010 my portfolio company Clio, which provides a web-based practice management solution for solo lawyers and small law firms, has grown its customer base by more than 400%. The company also continues to launch new features and initiatives pretty much on a weekly basis, boasts (by far) the highest trial-to-subscription conversion rate that I’ve ever seen and has a ton of great new stuff in the pipeline. Thanks and merci to you, Jack and Rian, and your growing team of hand-picked rock-star developers and industry experts.
The development of Momox, which has bought more than 8.4 million used books, CDs, DVDs and games from private sellers since 2006, has been equally impressive. We’ve grown revenue by more than 2.5x , recruited two stellar executives to head logistics and marketing, moved to a new 85,000 square foot warehouse, relaunched our online shop, raised a couple of million Euros from Acton Capital Partners and scaled up the whole organization to make sure that we can handle our continued growth. Huge kudos to Christian Wegner and his 150+ people in Berlin for this gigantic and successful effort – jut jemacht!
More in part 2.
Monday, January 04, 2010
Keeping your "friends" list up-to-date
If you're reading this, chances are that you use at least three of four different social networking sites (or social bookmarking tools, microblogging services or other community sites) that let you “friend” or “follow” other people. I, for example, use Facebook, Twitter, LinkedIn and XING.
LinkedIn and XING I’ve been using for years and I find both sites to be invaluable tools for finding, connecting and staying in touch with people, as well as for checking references. Over the years both LinkedIn and XING have allowed me to get in touch with numerous people who otherwise would have been hard to contact. I think both sites are particularly valuable for younger people who do not yet have a large professional network, e.g. first-time entrepreneurs looking for angel investors, employees or business partners. It took me a little longer to adopt Twitter but meanwhile it has become one of my primary sources for news (and I became a reasonably active Twitterer). Facebook I don’t use very actively but it allows me to “follow” (almost) everyone who doesn’t use Twitter.
The challenge that comes with using multiple social networking sites is, of course, that you want to stay on top of all sites without wasting too much time. Meanwhile there are plenty of solutions to aggregate the news feeds of various social networks at one location. You can even do that with Pageflakes, despite the fact that the site is somewhat outdated by now (just look for the Facebook, Twitter, LinkedIn and XING Flakes in the Flake Gallery and add them to your page). However, to date I haven’t seen a single tool that automatically and easily keeps your friends list in synch across all sites.
What I’d like to be able to do is this: Whenever I make a new contact I’d like to check if the person is on Facebook/Twitter/LinkedIn/XING and connect with him or her. The tool could be integrated into Outlook, Apple Mail, Gmail and other desktop or web email applications. Right-clicking on any email address could bring up an “Add to my networks” option in addition to "Add to my address book".
Until someone develops a tool like this, here’s a workaround:
It’s not elegant, but it works, and at least it’s less effort than maintaining your contact lists manually. If you know a better solution, please leave a comment!
LinkedIn and XING I’ve been using for years and I find both sites to be invaluable tools for finding, connecting and staying in touch with people, as well as for checking references. Over the years both LinkedIn and XING have allowed me to get in touch with numerous people who otherwise would have been hard to contact. I think both sites are particularly valuable for younger people who do not yet have a large professional network, e.g. first-time entrepreneurs looking for angel investors, employees or business partners. It took me a little longer to adopt Twitter but meanwhile it has become one of my primary sources for news (and I became a reasonably active Twitterer). Facebook I don’t use very actively but it allows me to “follow” (almost) everyone who doesn’t use Twitter.
The challenge that comes with using multiple social networking sites is, of course, that you want to stay on top of all sites without wasting too much time. Meanwhile there are plenty of solutions to aggregate the news feeds of various social networks at one location. You can even do that with Pageflakes, despite the fact that the site is somewhat outdated by now (just look for the Facebook, Twitter, LinkedIn and XING Flakes in the Flake Gallery and add them to your page). However, to date I haven’t seen a single tool that automatically and easily keeps your friends list in synch across all sites.
What I’d like to be able to do is this: Whenever I make a new contact I’d like to check if the person is on Facebook/Twitter/LinkedIn/XING and connect with him or her. The tool could be integrated into Outlook, Apple Mail, Gmail and other desktop or web email applications. Right-clicking on any email address could bring up an “Add to my networks” option in addition to "Add to my address book".
Until someone develops a tool like this, here’s a workaround:
- Add all people who you’ve sent an email to to your address book.
(Apple Mail lets you do that automatically if you choose “Previous recipients” in “Windows”. I don’t know if there’s a feature like this in Outlook, but there are some third-party tools that will do that for you. Gmail, as far as I know, automatically builds your address book based on the emails that you send and receive, right?). - Export your address book to a file (e.g. .vcf).
- Upload your contact file to Facebook/LinkedIn/XING and choose the contacts that you want to connect with (make sure that you use the “See who’s already there” option as opposed to the “Invite” option to avoid spamming your whole address book with invitations!). Twitter unfortunately doesn’t let you upload contact files but you can upload your contact file to Gmail and have Twitter import your Gmail contacts (did I say it’s a workaround?).
- Repeat 1-3 every couple of weeks or months.
It’s not elegant, but it works, and at least it’s less effort than maintaining your contact lists manually. If you know a better solution, please leave a comment!
Thursday, September 24, 2009
Escaping spreadsheet hell
Have you ever seen someone get excited about accounting software? Yes, I mean the kind of software for which you used to need a diploma in number-crunching and a PhD in bean-counting in order to be able to use it.
Enter PC Pro’s review of FreeAgent, the web-based accounting tool that I’ve joined as an investor and advisor earlier this year.
This is not one of those product reviews where someone spends an hour testing five different applications and writes a roundup afterwards. No, this guy has spent a year working with FreeAgent, so his opinion is extremely well-founded. The article gives a good overview of what FreeAgent is all about and why it’s so much better than Sage (which is or at least used to be the de-facto standard accounting software in the UK).
I urge you to read the full article, but if you want the conclusion only, here you go:
Congrats to Ed, Olly and Roan at FreeAgent Central for building such an outstanding product – and for managing to turn an extremely unsexy product category into something which people get excited about!
Enter PC Pro’s review of FreeAgent, the web-based accounting tool that I’ve joined as an investor and advisor earlier this year.
This is not one of those product reviews where someone spends an hour testing five different applications and writes a roundup afterwards. No, this guy has spent a year working with FreeAgent, so his opinion is extremely well-founded. The article gives a good overview of what FreeAgent is all about and why it’s so much better than Sage (which is or at least used to be the de-facto standard accounting software in the UK).
I urge you to read the full article, but if you want the conclusion only, here you go:
FreeAgent ranks in my top couple of web applications of any sort. As an extremely busy person, I confess to almost enjoying doing the accounts now!
It’s rare that I feel able to recommend a product unreservedly: this is one of those occasions. FreeAgent starts at £15 per month for a sole trader and, given the range of features and ease of use, could easily become your most important application for administering your business.
Congrats to Ed, Olly and Roan at FreeAgent Central for building such an outstanding product – and for managing to turn an extremely unsexy product category into something which people get excited about!
Monday, August 17, 2009
Paul Graham on Enterprise Software
A link in today's TechCrunch posting about Y Combinator's "Request for Startups" idea brought me to an earlier "Startups ideas we'd like to fund" list, published by Paul Graham about a year ago. It's a terrific list of ideas, and I applaud Paul for sharing them (execution is everything!). If you're toying with the idea of founding an Internet startup and you're not sure what kind of business you're going to start, I highly recommend going through the list. I'm sure you'll find lots of inspiration.
One thing that I'd like to quote from the original article is the paragraph on Enterprise Software:
One thing that I'd like to quote from the original article is the paragraph on Enterprise Software:
Brilliant.Enterprise software companies sell bad software for huge amounts of money. They get away with it for a variety of reasons that link together to form a sort of protective wall. But the software world is changing. I suspect that if you study different parts of the enterprise software business (not just what the software does, but more importantly, how it's sold) you'll find parts that could be picked off by startups.
One way to start is to make things for smaller companies, because they can't afford the overpriced stuff made for big ones. They're also easier to sell to.
Wednesday, July 01, 2009
The Europas - Cast your votes!
"The Europas", the tech award that was brought into being by TechCrunch UK's Mike Butcher (profile, Twitter account), is getting a lot of attention in the tech world at the moment. The award, which "honors the best tech companies and startups across the web and mobile scene from across Europe, the Middle East and Africa", will be presented in a big ceremony on July 9 in London.
I'm delighted that two of "my" companies (i.e. startups where I'm an investor and active advisor) have been nominated in the Best Enterprise / B2B Startup category – congrats to Mikkel and the team at Zendesk and Ed and his team at FreeAgent Central.
If you're a happy Zendesk or FreeAgent Central customer or partner (or if you just want to do me a favour :-) ), please go ahead and vote for us. There's no registration required so it's really quick and easy to cast your vote. The voting deadline closes today at 23:59 GMT so you'll have to hurry up a little.
By the way, I am also nominated in the "Best Investor Personality" category. Most of the other investors on that list have a lot more experience than I and have helped many more startups succeed than I, but if you still want to vote for me, here's the link. :-)
I'm delighted that two of "my" companies (i.e. startups where I'm an investor and active advisor) have been nominated in the Best Enterprise / B2B Startup category – congrats to Mikkel and the team at Zendesk and Ed and his team at FreeAgent Central.
If you're a happy Zendesk or FreeAgent Central customer or partner (or if you just want to do me a favour :-) ), please go ahead and vote for us. There's no registration required so it's really quick and easy to cast your vote. The voting deadline closes today at 23:59 GMT so you'll have to hurry up a little.
By the way, I am also nominated in the "Best Investor Personality" category. Most of the other investors on that list have a lot more experience than I and have helped many more startups succeed than I, but if you still want to vote for me, here's the link. :-)
Tuesday, March 24, 2009
Guy Kawasaki's fun email signature
I just got an email from the famous (and with respect to his Twitter activity, some would say infamous) Guy Kawasaki. His email signature is really hilarious, which is why I want to share it with you:
Sent from a MacBook not an iPhone.(Replaced some details with Xs to protect his privacy in the unlikely case that he has any.)
--------------------------------------
Guy Kawasaki
Nononina, Inc.
360 xxxx Street, Suite 100
Palo Alto, CA 94301
http://alltop.com/
xxxx@xxxx.com (best way to get in touch)
650-838-xxxx office (you'll never get me here)
650-387-xxxx cell (Spinvox will convert voicemail to email so I don’t have
to listen to people ramble)
650-853-xxxx fax (what's a fax?)
http://twitter.com/guykawasaki (if you have no life)
http://blog.guykawasaki.com/ (if you want to see why I have no life)
http://holykaw.com/ (if you want to see how I have fun in my life)
Wednesday, March 04, 2009
Zendesk - Help Desk 2.0
Following my long-due update on Pageflakes here’s an update on what I’ve been doing since I’ve left Pageflakes. After spending some time with my family at a beautiful place in the sun, I started to look for new opportunities (to be perfectly honest I of course couldn’t resist researching new ideas while we were still on Barbados. Caribbean beaches and a DSL connection, what more can you ask for?). For various reasons I wasn’t yet ready to start my own thing again so I started to look for existing early-stage companies where I could come in as an angel investor and advisor. To some degree I “went to the dark side” (of funding) as it’s sometimes referred to but I’m really trying to be worthy of the term “angel” investor by really trying to help my companies in many different ways.
The first company I’ve made an investment in is Copenhagen-based Zendesk, founded in 2007 by a rock-star team around CEO Mikkel Asger Svane. This is no new news since it was announced last June and covered by Om Malik and others but I still wanted to blog about it here. If you don’t know Zendesk yet, the company offers a beautifully simple yet powerful on-demand help desk solution. You can buy and operate the system online and never have to worry about downtime, upgrades, security, backup or training. Setup is extremely easy and you can be up and running in hours.
Any business that serves more than a handful of customers needs a help desk solution in order to handle customer questions and support requests. Existing solutions are expensive, painfully difficult to set up and hard to use. Zendesk combines a professional-grade feature set with a beautifully simple Ajax-based user interface that resembles everyday web applications. If you want to have more productive and happier customer agents and want to save money along the way, check it out!
The first company I’ve made an investment in is Copenhagen-based Zendesk, founded in 2007 by a rock-star team around CEO Mikkel Asger Svane. This is no new news since it was announced last June and covered by Om Malik and others but I still wanted to blog about it here. If you don’t know Zendesk yet, the company offers a beautifully simple yet powerful on-demand help desk solution. You can buy and operate the system online and never have to worry about downtime, upgrades, security, backup or training. Setup is extremely easy and you can be up and running in hours.
Any business that serves more than a handful of customers needs a help desk solution in order to handle customer questions and support requests. Existing solutions are expensive, painfully difficult to set up and hard to use. Zendesk combines a professional-grade feature set with a beautifully simple Ajax-based user interface that resembles everyday web applications. If you want to have more productive and happier customer agents and want to save money along the way, check it out!
Monday, February 02, 2009
An update on Pageflakes
It’s again been a very long time that I wrote something here, and an even longer time that I wrote about Pageflakes or about what I’ve been doing since I left the company about a year ago. I did become a reasonably active Twitterer in the meantime though – the 140 character format is probably better suited for my literal talent! Anyway, I thought it’s time for a quick update.
One of my last blog posts about Pageflakes was about my attempt to convince Mike Arrington and Pete Cashmore that Pageflakes was the Next Big Thing, my goal for 2006 as I put it (half joke, half serious). While both of them were very skeptical about the whole thing in the beginning, Pete wrote a very favorable posting about us in October 2006. Convincing Mike was more difficult but he got more and more positive over time as well, covering our 2.0 relaunch as well as release “Flurry” and “Blizzard” (thanks, Dan, for introducing a nicer release terminology!).
With each of our major releases we made it easier to create a personalized page and to get all the best the Web has to offer on one page. I think we also raised the bar for the whole category of personalized homepages with each release. This is the result of a huge team effort, which the whole Pageflakes team can be very proud of, especially if you consider that our most important competitors were iGoogle, MyYahoo and (vastly better-funded) Netvibes.
Nevertheless, although we did get more and more users who loved Pageflakes and used it as their very own entry point to the Internet and did get considerable mindshare, especially in the Web 2.0 community, we (and the whole market, for that matter) never grew as fast as we hoped. One of the reasons was that as much as we tried to make the product as easy-to-use as possible, the barrier to adoption was still a tad too high for many users. Creating your personal page just never got as easy as watching a video on YouTube. YouTube offers users instant gratification. Your own Pageflakes page may provide you more value in the long term, but getting there also takes a little longer. Likewise, although we had considerable success in redefining the product category of personalized startpages into a more "social" one, Pageflakes never got (and never could get) as social as, say, MySpace. Although hundreds of thousands of users created an extremely diverse variety of Pagecasts and shared them with their friends or with the general public, the majority of our users just enjoyed their pages privately. That didn’t come as a surprise, of course – Pageflakes falls under the 90/9/1 rule whereas you have to connect with friends on social networking sites.
We did hope that the product would get more viral and social though, and in order to become the next Yahoo! (our slightly ambitious stated goal when we started at the end of 2005) we would have needed higher organic growth rates (ironically, if Yahoo! continues to fare as badly as it did in the last months, we can still become the next Yahoo! ;-) ). So when 2007 turned to a close, we had an award-winning product with a loyal user base that was growing but wasn’t big enough and wasn’t growing fast enough in order to monetize the service effectively in the near term. Around the same time, the appetite of VCs to fund companies like ours started to decrease, resulting in worsened terms for startups. In that situation, we thought our best choice was to partner with a large player that has a huge amount of users.
Many know the rest of the story: In April 2008 we got acquired by LiveUniverse, the new media company of MySpace founder Brad Greenspan. Unfortunately our initial enthusiasm about the deal started to fade away quickly since Pageflakes quickly started to suck. First just a little (no more new features), then more and more (bad customer service, sudden introduction of obtrusive ads on users’ pages without any communication, downtimes), and the last dark climax was an outage of about four days without any communication from LiveUniverse to its users, causing a ton of understandable complaints of Pageflakes users on Twitter. It took me a long time to admit this publicly and I really don’t like to badmouth the company that bought Pageflakes, but it’s time for me to say sorry to all Pageflakes users. If a super loyal Pageflakes user like Phil Bradley has to write a blog post like this, you know that you have crossed a line. Phil has been using Pageflakes for years and wouldn’t leave the service light-mindedly. But enough is enough – his post says it all.
As of right now, Pageflakes is up again but because of the almost complete lack of communication on behalf of LiveUniverse I don’t know how long it’ll stay up and running. The company told CNet's Webware on Friday that the downtime was due to a data center migration but I don’t know if it’s true. Other reports indicate that they are in trouble. I’ll continue to use Pageflakes for now and will keep my fingers crossed that LiveUniverse will change course. If you do have to shut down the service, dear Brad Greenspan, please give the users at least two weeks’ notice to save their data and move to another service. There are many legitimate reasons why a company can fail or why a service needs to be shut down. But you really have to make sure that users get a chance to save their valuable data. Failure to do this is not only puts Pageflakes users in trouble, it also undermines users' trust in the cloud in general. Thank you.
One of my last blog posts about Pageflakes was about my attempt to convince Mike Arrington and Pete Cashmore that Pageflakes was the Next Big Thing, my goal for 2006 as I put it (half joke, half serious). While both of them were very skeptical about the whole thing in the beginning, Pete wrote a very favorable posting about us in October 2006. Convincing Mike was more difficult but he got more and more positive over time as well, covering our 2.0 relaunch as well as release “Flurry” and “Blizzard” (thanks, Dan, for introducing a nicer release terminology!).
With each of our major releases we made it easier to create a personalized page and to get all the best the Web has to offer on one page. I think we also raised the bar for the whole category of personalized homepages with each release. This is the result of a huge team effort, which the whole Pageflakes team can be very proud of, especially if you consider that our most important competitors were iGoogle, MyYahoo and (vastly better-funded) Netvibes.
Nevertheless, although we did get more and more users who loved Pageflakes and used it as their very own entry point to the Internet and did get considerable mindshare, especially in the Web 2.0 community, we (and the whole market, for that matter) never grew as fast as we hoped. One of the reasons was that as much as we tried to make the product as easy-to-use as possible, the barrier to adoption was still a tad too high for many users. Creating your personal page just never got as easy as watching a video on YouTube. YouTube offers users instant gratification. Your own Pageflakes page may provide you more value in the long term, but getting there also takes a little longer. Likewise, although we had considerable success in redefining the product category of personalized startpages into a more "social" one, Pageflakes never got (and never could get) as social as, say, MySpace. Although hundreds of thousands of users created an extremely diverse variety of Pagecasts and shared them with their friends or with the general public, the majority of our users just enjoyed their pages privately. That didn’t come as a surprise, of course – Pageflakes falls under the 90/9/1 rule whereas you have to connect with friends on social networking sites.
We did hope that the product would get more viral and social though, and in order to become the next Yahoo! (our slightly ambitious stated goal when we started at the end of 2005) we would have needed higher organic growth rates (ironically, if Yahoo! continues to fare as badly as it did in the last months, we can still become the next Yahoo! ;-) ). So when 2007 turned to a close, we had an award-winning product with a loyal user base that was growing but wasn’t big enough and wasn’t growing fast enough in order to monetize the service effectively in the near term. Around the same time, the appetite of VCs to fund companies like ours started to decrease, resulting in worsened terms for startups. In that situation, we thought our best choice was to partner with a large player that has a huge amount of users.
Many know the rest of the story: In April 2008 we got acquired by LiveUniverse, the new media company of MySpace founder Brad Greenspan. Unfortunately our initial enthusiasm about the deal started to fade away quickly since Pageflakes quickly started to suck. First just a little (no more new features), then more and more (bad customer service, sudden introduction of obtrusive ads on users’ pages without any communication, downtimes), and the last dark climax was an outage of about four days without any communication from LiveUniverse to its users, causing a ton of understandable complaints of Pageflakes users on Twitter. It took me a long time to admit this publicly and I really don’t like to badmouth the company that bought Pageflakes, but it’s time for me to say sorry to all Pageflakes users. If a super loyal Pageflakes user like Phil Bradley has to write a blog post like this, you know that you have crossed a line. Phil has been using Pageflakes for years and wouldn’t leave the service light-mindedly. But enough is enough – his post says it all.
As of right now, Pageflakes is up again but because of the almost complete lack of communication on behalf of LiveUniverse I don’t know how long it’ll stay up and running. The company told CNet's Webware on Friday that the downtime was due to a data center migration but I don’t know if it’s true. Other reports indicate that they are in trouble. I’ll continue to use Pageflakes for now and will keep my fingers crossed that LiveUniverse will change course. If you do have to shut down the service, dear Brad Greenspan, please give the users at least two weeks’ notice to save their data and move to another service. There are many legitimate reasons why a company can fail or why a service needs to be shut down. But you really have to make sure that users get a chance to save their valuable data. Failure to do this is not only puts Pageflakes users in trouble, it also undermines users' trust in the cloud in general. Thank you.
Wednesday, May 07, 2008
The New Digital Divide
Shafqat over at Newscred, a digital newspaper which is currently in private alpha, wrote a good post titled "The New Digital Divide - Building Web Services for the Mainstream". His point is that the chasm between early adopters on the one hand and mainstream users on the other hand is getting larger:
Very true. While it's great to see all those new Web 2.0 ideas, innovations and technologies coming up every day, we (the Web 2.0 community) also have to avoid creating lots of products which no one else except ourselves is going to use any time soon.
If your startup's plan is to acquire millions of customers over the next few years (which is likely if you want to make money by selling ads), do a reality check and explain your idea to some "real" people among your friends and family.
Also read Josh Kopelman's great article about the same topic.
The mainstream don’t even use or understand RSS, but us techies have moved on to Twitter and FriendFeed.
Very true. While it's great to see all those new Web 2.0 ideas, innovations and technologies coming up every day, we (the Web 2.0 community) also have to avoid creating lots of products which no one else except ourselves is going to use any time soon.
If your startup's plan is to acquire millions of customers over the next few years (which is likely if you want to make money by selling ads), do a reality check and explain your idea to some "real" people among your friends and family.
Also read Josh Kopelman's great article about the same topic.
Tuesday, April 22, 2008
A nice way for your beta site to say "Feedback please"
Have a look at the screenshots below:
What do these otherwise completely unrelated Web 2.0 sites have in common? Instead of the good old "Send Feedback" link in the page footer, all three of them prominently feature a large, red, eye-catchy "beta feedback" badge.
If you click on the badge, a window that contains the feedback submission form pops up; usually instantly, without a full page reload, so you can type in your feedback right away. Often the background of the page is greyed out, producing a lightbox effect which puts the feedback form into full focus.
I think this is a smart advancement of the notorious Web 2.0 beta badge. If you’re featuring the "Send feedback" link so prominently, firstly and obviously more people will notice it and provide you with valuable comments, bug reports and suggestions. Secondly, you show your audience that you really care about what your users think. Consider using this emerging UI pattern - at least as long as you’re in public beta (which you might be forever).
What do these otherwise completely unrelated Web 2.0 sites have in common? Instead of the good old "Send Feedback" link in the page footer, all three of them prominently feature a large, red, eye-catchy "beta feedback" badge.
If you click on the badge, a window that contains the feedback submission form pops up; usually instantly, without a full page reload, so you can type in your feedback right away. Often the background of the page is greyed out, producing a lightbox effect which puts the feedback form into full focus.
I think this is a smart advancement of the notorious Web 2.0 beta badge. If you’re featuring the "Send feedback" link so prominently, firstly and obviously more people will notice it and provide you with valuable comments, bug reports and suggestions. Secondly, you show your audience that you really care about what your users think. Consider using this emerging UI pattern - at least as long as you’re in public beta (which you might be forever).
Sunday, February 03, 2008
Microhoo: I (almost, kinda, sort of) told you so ten years ago
When I was reading the news about the proposed Microsoft/Yahoo! deal, for some reason it recurred to me that I was speculating about Microsoft buying AOL in a Usenet forum back in 1997. Yahoo! isn't AOL and the idea was pretty far-fetched at that time, but interestingly enough Microsoft's rationale for buying Yahoo! at the beginning of 2008 looks similar to the rationale for buying AOL more than ten years ago.
Friday, December 08, 2006
Pagebull - your visual Internet search engine
A few days ago, Pagebull went from stealth mode into public beta. Pagebull is the latest brainchild of my good friend and long-term business partner Christopher Münchhoff. It's a new search engine that provides a radically new user interface: Instead of a text-based list of the sites that match your search query, it shows you a grid of large screenshots of those sites.
The idea behind Pagebull's approach is that when you go to a site, you'll often know after a second if the site has what your looking for or not - and an inappropriate amount of time is wasted going back and forth between Google and the "target" sites. Pagebull now lets you glance over nine or more screenshots at a time, saving you the effort of clicking from one target site to the next.
What's interesting is that Pagebull benefits from two important industry trends: More bandwidth and larger screens. Using Pageflakes on a 30" screen and a super-fast cable connection must be fun!
It would be interesting to conduct a study to find out how much time Pagebull saves an average Internet user who spends, say, an hour per week on Google. Then just extrapolate that to all American office workers, and the US economy can probably save a few billion worth of productivity per year. ;-)
Seriously: Pagebull will not drive Google out of business any time soon, but it's an extremely impressive, innovate approach to improve the search engine user experience on the Web.
Try it!
The idea behind Pagebull's approach is that when you go to a site, you'll often know after a second if the site has what your looking for or not - and an inappropriate amount of time is wasted going back and forth between Google and the "target" sites. Pagebull now lets you glance over nine or more screenshots at a time, saving you the effort of clicking from one target site to the next.
What's interesting is that Pagebull benefits from two important industry trends: More bandwidth and larger screens. Using Pageflakes on a 30" screen and a super-fast cable connection must be fun!
It would be interesting to conduct a study to find out how much time Pagebull saves an average Internet user who spends, say, an hour per week on Google. Then just extrapolate that to all American office workers, and the US economy can probably save a few billion worth of productivity per year. ;-)
Seriously: Pagebull will not drive Google out of business any time soon, but it's an extremely impressive, innovate approach to improve the search engine user experience on the Web.
Try it!
Friday, November 03, 2006
Pageflakes 2.0
About two weeks ago we launched a new version of Pageflakes and it's time to finally announce it here, too! If you go to the site, you will notice the big facelift that the site received. The fresh new look might be the most visible change, but it's by far not the only one. The long list of improvements and new features of the new version includes:
- Page Templates
Dozens of pre-created page templates for topics like work, family, sports, finance, entertainment, education and much more. Now it takes just a mouse click to add a whole page with the best modules for a certain topic area. - Feeds and Podcasts
A Feed Directory and a Podcast Directory with hundreds of news feeds and podcasts from all over the world and for almost every category. - Community Site
A new Pageflakes community environment at www.pageflakes.com/community which allows you to search, submit, rate and discuss flakes and do much more. - Share your page!
Setting up a shared page with other users is now easier than ever. - Public pages
A Public Pages Gallery of all the pages which Pageflakes users have published.
Thursday, November 02, 2006
Ugenie unlocks hidden savings
TechCrunch today profiled a new comparison shopping site called Ugenie. What makes Ugenie different from most (all?) other similar sites is that the service not only finds the best price on a single item but also the best total price on any bundle of books, CDs, DVDs or games that you happen to be interested in.
Ugenie finds the best bottom-line prices for you, taking into account shipping costs, taxes and discounts. What's more, the service also takes into account that sometimes it's cheaper to pay all items from one merchant but in other cases it's cheaper to spread an order across several shops. If you think about the number of possible combinations to buy, say, five items from 35 shops, that's quickly becoming pretty complicated. And remember that in addition to the plain item prices, Ugenie also needs to take into account shipping costs, which can depend on various factors like the number of items, the order price and the order weight, or a combination thereof. The fact that taxes can depend on the location of the shop as well as the location of the customer doesn't make it easier.
Why am I writing about Ugenie? Because I really like the feature described above, because it's a cool service and because I remain interested in the comparison shopping space ever since co-founding comparison shopping site DealPilot.com (formerly called Acses) in 1997. But also because I couldn't resist telling the world that we invented the "best price for a bundle of items" feature back in 1998. ;-)
Here's the proof:
What you're seeing here is the "Comparison Shopping Cart" (that's how we coined it) of a user who's looking for a book, a movie (no, not a DVD, a VHS cassette!) and a CD. If the user scrolls down he'd see a list of all offers, taking into account all those factors described above.
Don't worry guys, we didn't patent it. Good luck with Ugenie!
Ugenie finds the best bottom-line prices for you, taking into account shipping costs, taxes and discounts. What's more, the service also takes into account that sometimes it's cheaper to pay all items from one merchant but in other cases it's cheaper to spread an order across several shops. If you think about the number of possible combinations to buy, say, five items from 35 shops, that's quickly becoming pretty complicated. And remember that in addition to the plain item prices, Ugenie also needs to take into account shipping costs, which can depend on various factors like the number of items, the order price and the order weight, or a combination thereof. The fact that taxes can depend on the location of the shop as well as the location of the customer doesn't make it easier.
Why am I writing about Ugenie? Because I really like the feature described above, because it's a cool service and because I remain interested in the comparison shopping space ever since co-founding comparison shopping site DealPilot.com (formerly called Acses) in 1997. But also because I couldn't resist telling the world that we invented the "best price for a bundle of items" feature back in 1998. ;-)
Here's the proof:
What you're seeing here is the "Comparison Shopping Cart" (that's how we coined it) of a user who's looking for a book, a movie (no, not a DVD, a VHS cassette!) and a CD. If the user scrolls down he'd see a list of all offers, taking into account all those factors described above.
Don't worry guys, we didn't patent it. Good luck with Ugenie!
Tuesday, October 03, 2006
Pete is now a believer, Mike coming soon
When we launched Pageflakes, two of the Top Five Web 2.0 bloggers - Mike Arrington from TechCrunch and Pete Cashmore from Mashable - were very sceptical about Pageflakes. They thought we were too late and also questioned the viability of the whole AJAX startpage model.
We took up the challenge, and in some blog comments I wrote that one of my goals for 2006 is to convince these two chaps that Pageflakes is the Next Big Thing. I guess we're not that far yet, but we already have a triumph to celebrate. See what Pete blogged yesterday:
We took up the challenge, and in some blog comments I wrote that one of my goals for 2006 is to convince these two chaps that Pageflakes is the Next Big Thing. I guess we're not that far yet, but we already have a triumph to celebrate. See what Pete blogged yesterday:
Pageflakes - I was dead wrong about Pageflakes. When the product was heading for launch, I told co-founder Christoph Janz that the start page market was already too crowded. As it turns out, Pageflakes is now one of the top ajax homepages, putting your feeds, videos and pictures together on a collection of tabbed pages. Christoph also (wisely) ignored me when I said I didn’t like the name - I seem to remember that SoleSite was the other option.We still have 89 days left to convince Mike, too. Stay tuned!
Wednesday, September 13, 2006
The third generation of Internet usage
Richard MacManus started an interview series on Read/WriteWeb. In the first one he asked Judy Gibbons of Accel about her thoughts on the "next generation web". Read it here.
Richard asked Judy for a few examples of companies that are under-hyped. Judy's answer:
While we can't complain about not getting enough attention, I do completely agree with Judy that most people haven't yet fully realized the impact which startpages like Pageflakes and Netvibes can have in the future. Currently both Pageflakes and Netvibes appeal mainly to early adopters like you and me – TechCrunch readers who manage their bookmarks with Del.icio.us, upload their photos at Flickr and use a bunch of other Web 2.0 services which 90% of the general population never heard of.
But what you see on sites like Pageflakes today is a mere glimpse of what they can offer in the future (stay tuned!). As they cover more and more parts of users' digital lives, offer access to an ever increasing variety of mainstream services and become easier to use for casual Internet users, they will indeed be able to represent the "third generation of Internet usage", as Judy put it. If you will, companies like Pageflakes strive to become for Web 2.0 what AOL and Yahoo were for Web 0.5 and what Google is for Web 1.0.
Richard asked Judy for a few examples of companies that are under-hyped. Judy's answer:
Personal home pages like Pageflakes & Netvibes. These represent the third generation of Internet usage: first portals because there was little content and it was hard to find; second search because there was an ever increasing amount of content if you could only track it down; now personalized 'pull' home pages, because most sophisticated users know what content and apps they want to check into every day - and they want these brought to them to improve productivity.
While we can't complain about not getting enough attention, I do completely agree with Judy that most people haven't yet fully realized the impact which startpages like Pageflakes and Netvibes can have in the future. Currently both Pageflakes and Netvibes appeal mainly to early adopters like you and me – TechCrunch readers who manage their bookmarks with Del.icio.us, upload their photos at Flickr and use a bunch of other Web 2.0 services which 90% of the general population never heard of.
But what you see on sites like Pageflakes today is a mere glimpse of what they can offer in the future (stay tuned!). As they cover more and more parts of users' digital lives, offer access to an ever increasing variety of mainstream services and become easier to use for casual Internet users, they will indeed be able to represent the "third generation of Internet usage", as Judy put it. If you will, companies like Pageflakes strive to become for Web 2.0 what AOL and Yahoo were for Web 0.5 and what Google is for Web 1.0.
Friday, August 25, 2006
Long time no blog
I warned you in my very first posting that I'm lazy about writing and that I didn't know how frequently I would post something. But four months without a posting, I didn't know that I'd be that bad! I probably chose the worst possible timing for starting a blog, since I started it around the same time when we founded Pageflakes.
Trying to become the #1 startpage in the world doesn't leave you a lot of time for anything else. :-) But I should at least give you a little update on what's been keeping me so busy:
Trying to become the #1 startpage in the world doesn't leave you a lot of time for anything else. :-) But I should at least give you a little update on what's been keeping me so busy:
- Hari K. Gottipati of O'Reilly and Barbara Krasnoff of InformationWeek just picked Pageflakes as the Ajax king in the "webtop" category - ahead of Google and Microsoft. Read the story here and here (And after that, digg it!)
- About two weeks ago we released our all-new RSS reader. The new version lets you read all your favorite blogs and needs feeds in one window and offers various different views to meet everyone's individual reading habit.
- You can now customize your page even more by choosing from different color schemes and changing the number of columns.
- Maybe the coolest of all features, we've recently added the ability to share pages with selected friends as well as to make pages public.
- In addition we've added numerous flakes, bringing the flake count close to 100. For example, you can now read and write emails from your startpage with Mail Flake; watch videos with Metacafe Flake, Revver Flake and YouTube Flake; keep track of your social network with openBC Flake, and so much more. Check them out in our Flake Gallery.
Despite these new features, please keep in mind that we're still in beta and that we haven't even delivered 5% of what we plan for the future. Back to work - see you at my next posting, presumably around Christmas! ;-)
Thursday, April 06, 2006
The Hottest Web 2.0 Betas
The "Museum of Modern Betas", a site that is dedicated to keeping track of all those new Web 2.0 apps that are popping up every day, added a great resource to its site: The hottest betas in the webosphere. The list is based on the number of bookmarks at del.icio.us added within the last 7 days, which is a really interesting parameter. Pretty interesting for everyone who tries to discover successful startups before everyone else does (VCs, journalists,...).
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