Geek News and Musings

In order to get startups and entrepreneurs thinking about the most effective ways to pitch their businesses, Adeo Ressi of Founder Institute has been encouraging his founders to boil their mission statements down to one sentence, using a simple formula. George Zachary of Charles River Ventures asked Ressi to come up with a format for startup pitches, because he has been hearing so many different people pitching in umpteen different ways. Tech bloggers, investors, partners, founders, and many in between are intimately familiar with this: The seemingly infinite permutations entrepreneurs have devised for their pitches. Some work, and many don’t.

Robin’s post yesterday covered Ressi’s formula in detail, and he even encouraged entrepreneurs to send us their one sentence pitches. And that they have. (More to come on that.)

Now, I happen to agree with both Adeo and Robin: Whittling pitches down to a bite-sized chunks can be a great exercise for founders. Entrepreneurs, whether first-timers or not, can always stand to improve the ways in which they describe their company. Time is money, and the more quickly and effectively you can pitch your business, the better your chances of grabbing the attention of investors, bloggers, partners, etc.

Of course, one sentence pitches should be an exercise to get you articulating what your business really does well — better than everyone else — but not the end game. One sentence descriptions can result in vagueness, hyperbole, and buzzword orgies.

Encouraging more effective expression in mission statements is a good thing, but spewing forth a string of meaningless signifiers and buzzwords? Nope. That will just cause us to go on screensaver, or call security. There’s a fine line. Grooveshark for hugs? Stop it.

So, here we have the flip side of the coin, the devil’s advocate — some terrific examples of what can happen when the one-sentence pitch goes too far. Stay away from these, and you’re off on the right foot. For starters, there’s Now That’s What I Call Startups, developed by Reuben Pressman and Hunter Payne to assist founders in eliminating the “low hanging fruit” during the ideating process. Does your pitch sound eerily similar? Then it might be time to consider a pivot.

Now That’s What I Call Startups joins other startup generators, like It’s This For That, which highlights the annoyingly familiar habit (of which we’re all guilty) of drawing crappy ad hoc analogies when describing startups. It’s the “Airbnb for X” problem. The analogy can work, but only sparingly, and it better be extremely accurate.

For good measure, there’s also Startup Idea Generator, and Smore’s awesome Y Combinator parody, Y Kombinator, which generates landing pages for startups that are obviously immune from the deadpool.

Or, perhaps you’re a coder who happens to be short on ideas, in which case you should check out Justin Windle’s hilarious mashup for technical projects created using the WTF Engine. So, put on a pot of tea, and get coding.

Refining your pitch until it sings is an essential process, and some of these sites will no doubt help to get your juices flowing. But for the love of all that’s holy, be careful. You don’t want to become these guys. (We’re looking at you, product people.)

Courtesy of FI, here are some actual pitch resources for startups.

Happy New Year, Boingers. Have fun tonight, but don’t drive drunk. Or tipsy. Or whatever it is you decide to call it when you’re inebriated enough that your reflexes and attention aren’t operating at top level. Personally, I feel that this is what public transit is for. But if you don’t have access to that where you live/party, please designate a driver or look into other transportation options. In some places in the U.S., AAA is offering free transportation services to all comers—whether or not you're a member. It’s not available everywhere though. In fact, large swaths of the country are not covered by this program. So don’t trust Facebook and just assume you can dial a 1-800 number from wherever you are. Plan ahead! The DOJ has a much-more-comprehensive list of sober ride programs in your area.

Quinn Norton continues her excellent history of Anonymous for Wired, this time visiting the shift in the movement from pure transgression to political activism, and the way that this played out among Anons themselves:

Anonymous fundamentally produces two things: spectacle and infrastructure hacking. They create scenes the media often can’t resist, but they also tend to be ones that the media isn’t very good at understanding. The rest of the time they create or destroy online infrastructure, much of which never directly gets noticed. Op Payback & Assange combined the two, but were mainly spectacle. None of the attacks disrupted the function of the targeted entities for long, if at all, but that was missed by much of the media, who instead confused people into believing that they wouldn’t be able to use their Visa or MasterCards to buy gas or groceries, thanks to Anonymous.

Anonymous 101 Part Deux: Morals Triumph Over Lulz

Many Kindle reviews noted the sluggish performance of the Silk browser, but you can quickly increase the speed by changing a few settings. In addition to turning off Flash and changing the browser from desktop to mobile view, turning of Silk’s touted acceleration feature will all make Silk faster. More »

Many popular new year resolutions such as “lose 25 lbs” or “run a marathon” are actually goals, not resolutions. If there is a specific achievement it’s a goal, but permanent changes to your life are resolutions since you keep doing them every day and not just until a specific achievement is reached. More »

iOS: If you’re a Twitter fan looking for a way to keep up with your tweets while driving or exercising, Tweet Speaker will read your tweets out loud. You can hear your regular timeline, mentions, or any of your lists; hit play and you’ll hear your tweets. More »

Editor’s note: Contributor Ashkan Karbasfrooshan is the founder and CEO of WatchMojo.  Follow him @ashkan.

Company founders are the quintessential cheerleaders, promoting their vision and company every chance they get.  But that doesn’t mean that they are necessarily the best at two core functions: selling and fundraising (and many are bad at both but excel at other functions, like technology).

While generating revenue and raising capital require a lot of the same traits, in my experience those who are good at one tend to be poor at the other.

Always Be Closing: Coffee is for Closers

Some salespeople are driven by money, others less so – but all are driven to close the deal.  The more deals we secure, the better, and if in the process we generate more revenue for our organization and ourselves, then great.

Most salespeople will tell you that selling is an art.  But negotiating to sell software or advertising (or any product or service, for that matter) is very different than trying to secure funding.  In fact, I’ve learned if you’re really successful at sales then you’re almost doomed at fundraising.

What does it take to be a great salesman?

Ultimately, selling a good or service requires that

1-    you hustle;

2-    you always follow up;

3-    you don’t take no for an answer;

4-    you offer more and more value until you close the deal.

When I was studying finance to pursue a career in investment banking, I was working in customer service for a large bank.  Repeatedly I was told that I would make a great salesman, which to a young finance grad was as complimentary as telling a woman she is handsome.  Eventually I landed at a nascent online publisher and ended up in ad sales and sold a lot of ad deals despite the worst ad market since the Great Depression.  The publisher in question has now evolved as a must-buy for most media buyers, but at the time it was a fairly unknown brand deemed way too racy for most mainstream marketers.  I wasn’t driven by money, but I was good at selling… so until I figured out what I wanted to do next, I kept selling (and writing).

After that company was acquired, I cashed in my shares and left my sales job to start WatchMojo, where despite having the ability to bootstrap and self-finance the company I sought to raise capital because I wanted to build a really big company, fast, and because I felt that it would give me street cred, but, I was remarkably bad.  I don’t think I was that bad, but the result (or lack thereof spoke for itself).

To be fair, maybe I was bad at fundraising because:

a)     I didn’t have to raise capital, knowing I could rely on the proceeds of the sale and my sales commissions, so I wasn’t desperate enough to accept draconian clauses;

b)     I started a content company and investors are generally adverse to content;

c)     My company was based in Montreal,

d)     Me just doing a bad job of it.

In all honesty it was likely all of the above.  In any case, throughout the journey, I learned that selling a good or service is nothing like selling your stock.

What does it take to be a great fundraiser?

It occurred to me that as good as I was at selling (though I had no desire to be a salesman again per se), fundraising required a different set of skills and techniques.  You have to:

I-              Play hard to get, “be a challenge” and pretend that you’re just not all that into the other party;

II-            Create the illusion that the “train is about to leave the station” unless an investor signs on;

III-          Be disciplined and go through periods of time without following up with the interested investor, because the saying “absence makes the heart grow fonder” applies here, too.

IV-           Ultimately, be less than sincere.  Push someone to table the term sheet to shop it around, even if you have no intention of honoring it.

These are fundamentally different traits and behaviors than when you are selling a good or service.

Scarcity

The main difference between selling and fundraising is the outcome: unless you’re selling a unique asset like real estate, when you sell someone something, you are not precluded to working with others or selling the same good to someone else: you can keep selling the same asset over-and-over again.

In advertising, even if you sell someone an ad spot, you can sell the same spot to someone else on another day, or better yet: create a new ad unit.

In fundraising, once you close a deal, you are technically married to the investor, for better or worse.

Why are the greatest salespeople doomed at fundraising?

Ultimately, a great salesperson will be able to unearth revenue, and keep the lights on. They say the best form of equity is sales. Perhaps, but if that’s the only route you take, you might end up selling yourself short.

I’m not saying that some people aren’t born to do both well, many people are.  But if you have been good at one and think you will naturally be good at the other, think again—there’s a good chance that the skills required in one aspect of business is fundamentally different than those required for the other.

Photo credit: Nicolay Stanev/Shutterstock

One of the defining trends of modern web companies is that the top ones have been choosing to raise giant, private late-stage funding rounds instead of going public. In 2011, some of these rounds got so big that they passed the other types of companies that typically raise the biggest fundings each year — manufacturing and infrastructure technology companies that need to heavily invest in real-world goods to scale their businesses.  Look at the ten companies that raised the most money this year in CrunchBase.

Facebook is at the top of the list this year with its $1.5 billion round in January led by Goldman Sachs and Digital Sky Technologies. Groupon is close behind, with a $950 round led by DST, with Morgan Stanley and a long line of venture and private equity firms in the mix. The rest of the list is dominated by web companies, too — Zynga, Twitter and LivingSocial are next.

In the previous four years, most of the ten largest investments have been in cleantech, biotech, electronics, networking and other industries of the less virtual sort. In 2011, the only two companies squarely in hardware-oriented businesses are wireless networking company LightsSquared and white-label healthcare device manufacturer Kaz.

While it’s true that big web companies have been putting hundreds of millions of dollars into physical goods like data centers and servers, they’ve also been using large portions of these fundings for something that to buy shares back from early investors and employees. Up until recently, the main way stockholders made money was by selling their stakes on the public market.

The other side of this trend is that public investors aren’t able to get their money into companies when they’re still at peak growth phases. The private equity and venture firms getting into the later stage deals are instead the ones benefiting from the differences in valuations (that is, unless the late-stage valuations are so high that they exceed the eventual public offering prices, and leave the investors underwater).

So, why are web companies waiting to go public? One main rationale is that they don’t want to be subject to the quarter-by-quarter profit growth demands of public investors. Instead, they want to focus on building long-term businesses free of outside interference. They may also not like the often-ugly IPO markets — for good reason, judging by the mixed public performances of Groupon and Zynga. Or the increasingly heavy regulatory costs.

Anyway… the late-stage web funding trend is still playing out. Facebook is widely expected to go public early next year, and Twitter and LivingSocial likely will too, later on at some point.

Meanwhile, a new crop of web-oriented companies are also raising big new rounds at valuations of around $1 billion, including AirBnB, Dropbox, Spotify and Gilt Groupe. Each of these is in an earlier stage of life than the companies in the top ten, and may be raising big amounts now for other reasons, like easy terms offered by lots of eager investors. Earlier-stage companies appear to be some of the few bright spots in a world that is offering mostly poor investor returns.

Lots of people are looking for “beater” cars these days. These cars may not have a smooth ride or many features, but they do have the lowest per-mile cost of ownership and they’re great for students, debt assassins, and those who need a car but don’t want to pay for a newer one. BeaterReview gives the lowdown on 40+ of these cars, from the 3-valve 93-2000 Geo Metro to the 76-86 Mercedes W123 series. More »

The Gillmor Gang — John Borthwick, Robert Scoble, John Taschek, Kevin Marks, and Steve Gillmor — wound up the Old Year and previewed the next one. In fact, we are already well into Social Spring, what with SOPA, Go Daddy, the media scramble, Louis C.K. and the $5 download, Spotify and the independents, Apple AlmostTV, Microsoft irrelevancy, and the end of email.

We’ve had fun, and while we’re at it, please consider helping my daughter’s Creative Arts Charter School in San Francisco recover from a five-alarm fire. Thanks to everyone who showed up this year, and especially those who didn’t.

@stevegillmor, @borthwick, @scobleizer, @jtaschek, @kevinmarks
Produced and directed by Tina Chase Gillmor @tinagillmor

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