Jof Arnold's Web hacks and Opinions - Latest Comments in Devils advocate on the “VCs will die meme”

Re: Devils advocate on the “VCs will die meme”

Jof Arnold — Tue, 09 Dec 2008 14:56:37 -0000

Really need to fix pingbacks on this blog. Here's Ben's reply in lieu of a quick fix: http://redcatco.com/blog/le...

Re: Devils advocate on the “VCs will die meme”

Babul — Mon, 08 Dec 2008 07:21:40 -0000

Perhaps one of the best articles I've read from you Jof and one that makes a lot of common sense more common (in a good way). Businesses should be built and created and run like businesses and not on the trends of the few exception cases out there.

Re: Devils advocate on the “VCs will die meme”

padajo — Mon, 08 Dec 2008 07:04:45 -0000

Excellent article. I've tried 2 startups in the last few years, and both have been started around discussions like "we'll make millions" or "it's a guaranteed trade sale" or similar.

I've come to similar conclusions around the fact that actually, it's hard work building a startup and the winners are not the flukey ones, but the ones that are business oriented to start with.

Re: Devils advocate on the “VCs will die meme”

psd — Mon, 08 Dec 2008 06:49:44 -0000

You only have to watch the BBC Dragons' Den (not the awful, US, mutation) to see the value many apparently successful startups place in VC, it's not just the cash injection which makes them willing to give up sizable portion of their equity, but the injection of contacts and expertise and "skin in the game" likely to take then to the next level.

Re: Devils advocate on the “VCs will die meme”

cuan — Mon, 08 Dec 2008 06:00:59 -0000

Hey Jof,
Great article, and agree with your points. VC money is seen as the holy grail, and while it is for some, it can come at a high price, (in terms of Equity and an "outsider" now having an opnion you may have to listen to)....
its time to make some features that make money...

Re: Devils advocate on the “VCs will die meme”

danvers — Mon, 08 Dec 2008 05:52:51 -0000

Jof,

If the iphone app business doesn't work out, you clearly have a future as an industry commentator. I think the only other point to make (which you hint at, but are maybe too polite to say) is that the web community can't understand why people wouldn't use an app if it is so great. The truth is that many people are still getting to grips with Amazon, eBay and the other web giants to start entrusting huge amounts of their day to day lives to tiny web start ups. That said, I've seen the light and am sure web tech will remain a growth area that outperforms the wider economy by a country mile over the next few years.

Re: Devils advocate on the “VCs will die meme”

stewart townsend — Mon, 08 Dec 2008 05:33:03 -0000

Jof good valid points, and working with Startups/Entrpreneurs and Investors, there is a commom misconception that getting VC investment means you have made it big time, can buy the car and house, sit on the beach and chill.......and that you then gt high celeb status, lets not forget VC investment means forgiving control of your baby, using the money wisely to be lean and mean, whilst looking to make a large exit for the investors, 200m etc, not 10m, they want a lot back. Also in terms of viral, marketing etc, this takes time effort and some coordinated skills, I stroll across many a startup/customer who is working on ad revenue coming in, but no ad spend going out to get the word out, the web and world cross over in different areas, but all require some investment to be heard above the noise.

Re: Devils advocate on the “VCs will die meme”

Jesse — Sun, 07 Dec 2008 16:47:37 -0000

Great article, and one that I can relate to with a very similar background as you. You hit the nail on the head with your statement that those decreeing the death of the VC are techs. There are plenty of emerging markets... Consumer Internet just happens to no longer be one of them.

btw, I hit your site here from TC... ahh viral marketing :)

Re: Devils advocate on the “VCs will die meme”

Jof Arnold — Sun, 07 Dec 2008 14:13:22 -0000

Thanks for that - a perfect example of what I was thinking of when I wrote the post. I'll rant about "perception versus reality" later, but I agree many of those companies with apparently humble beginnings have a lot more to them then their cleverly-constructed bios and press releases would tell.
By the way, I'm not necessarily advocating VC money versus growing organically, but I think people should consider their options carefully and that's only possibly when in possession of all the facts. Or to put it another way; engineer options into your business plan so that you *can* take money, on good terms, ahead of when you need it.

Re: Devils advocate on the “VCs will die meme”

MIGHTYBIGMEDIA — Sun, 07 Dec 2008 13:48:11 -0000

When launching my company I bought into the, "Why take money?... I'll go viral" school of thought and actually turned down some investment... wanted to keep that 100% share. Well, the money went to a friend and former colleague who was also launching a start-up. Fast forward 6 months. I hit unforeseen snags with partners, he did too... but money got him over the hump while I'm still climbing that hill. More often than not, money makes the difference. Don't buy into the "Apple started in a garage" legend... in the vast majority of instances there's a hidden chapter in the story that is rarely reported ... the warm path lined with money.

Re: Devils advocate on the “VCs will die meme”

clark — Sun, 07 Dec 2008 12:25:37 -0000

great article on a lot of fronts - i've been in web startups for 10 years and can't really disagree with any of yr points

Re: Devils advocate on the “VCs will die meme”

Jof Arnold — Sun, 07 Dec 2008 10:16:43 -0000

Thanks Jake. I hadn't thought of covering B2B in my rant but that's a good point - viral doesn't work so well for businesses anyway.

I'm watching Spend Meter with a lot of interest... and hopefully you'll keep an eye on our GymFu, FuApps, HasFu or whatever it'll be called. Starting an iPhone apps company has really sharpened me to the void that exists between tech startups expectations and the realities of marketing. I'm not 100% convinced I understand it yet, but what I'm learning so far is completely turning my knowledge of the industry on its head. They really ought to teach this stuff at schools.

Re: Devils advocate on the “VCs will die meme”

thinkingfox — Sun, 07 Dec 2008 10:10:10 -0000

Great article.

I think too many web startups think viral, getting on TC/RRW/etc is the way to make it big - I speak to lots of people who think that it's important. If you're a B2B app this isn't the best route to market -Tactile CRM, one of our products, isn't targeted at those who are massively into social media, it's small business owners and they read different publications.

The marketing side of things is where the VC money/spend is important as you say - we proved this with Spend Meter - we built the app in 3 days last week - minimal outlay on tech, tried to make it viral (with a bit of success, but not much) - but the long term success will be based around how much we spend on marketing it.