Most other countries use washing machines with much less capacity and water ue (side loaders vs. top loaders), have different toilet flushing systems with smaller loads, and generally put a much higher premium on drinking water. If you compare the US to the UK, also take into account the very different climate. Due to the relatively tame and wet weather, there is almost no irrigation in the UK. Case in point: There is no place like Vegas, in the middle of the desert, with golf courses and fountains all over the place.
Such an incredible person. I've met him a couple of times, and he was always smiling, inquisitive and much nicer than you would ever expect. The good go early.
Before it's the next big thing? That would mean acquiring all good small startups that are active in _some_ space they are interested in, without waiting for the decision on who's the best. Again, fear does not make good decisions.
Can Twitter (or Facebook, or anyone else for that matter) still build the next big thing internally? Are these companies still as 'startup' as they think they are, or are they now too slow and bureaucratic to come up with products unrelated to their own core functionality?
A follow question: should they even come up with the new cool thing, or should they focus on their core offerings and simply buy break out successes when they are apparent?
In my opinion, both FB and Twitter are overestimating their chances here, like any incumbent always does (see Christensen). The questions "what if Google does this" is dismissed by every founder, because obviously Google is too focused on its core mission to make the success of a new social app the forefront of its development efforts.
Both companies are focusing more and more on being platforms for others, rather than building and testing all new paradigms themselves. This is what being the incumbent allows you to do, taking much larger risks, with larger payoffs. Launching a lot of small apps with cool ideas certainly shouldn't be their core business when they need to figure out how to deal with their growing developer ecosystem (again, something both companies are struggling with).
Acting on fear, which both companies did with their recent apps, certainly isn't the right strategy. But maybe I'm wrong and Twitter and Facebook are the only companies that can escape the innovator's dilemma?
BTW - Google is doing fine on that front with self driving cars and rockets, despite their not so apparent track record in social.
Yes, this is what they would do if they understood UX. But that’s not what VCs are for.
What VCs really would do if they understood UX the way the OP implies is build a firm that tries to invest in slowly growing, sustainable companies, with extremely long term outlook and real, sometimes un-measurable value to all stakeholders. Arguably the underlying mantra “small is beautiful” is not one for the VC industry. Also, these will not be companies that can be sold easily or timely (much less at crazy valuations due to cancerous growth), so the VCs themselves would not be very successful.
There’s a conundrum for an investor in building these kinds of companies: in comparison to their peers, they would most likely make less money (given the same kind of investment process, style, mechanism). That’s why bootstrapped companies with little to no outside funding can stay more focused, more consumer and employee friendly, and thus, more “integer”.
What the VC needs is a longer time horizon, lower exit expectations, and more leeway for the entrepreneurs they back in several categories. Now, the good news is some firms are thinking more and more like that, and also the general industry shifts allow more companies to be bootstrapped to work without or with only little outside capital.
Firms that seem to operate this way are the likes of Betaworks, OATV, and a few angel funds, mostly in New York and SF.
Industry shifts that help are the ease of develop&deploy of today’s technology, developer led companies that can build their own product without much capital, and the very easily accessible, and scalable, international market of app stores, webapps, and creative business models.
If you don’t like VCs, you can build your company without them. If you want to keep working on your own terms, you can. If you talk about disrupting, don’t just disrupt the industry your product serves, also take advantages of the disruption in the industry serves you.
Disclaimer: I do not think VCs are that bad, and I certainly know tons of awesome VCs that understand UX. Like, for real.
Good on Joel for pointing out what many have been thinking and saying. Doing it as one of the few relevant startup bloggers in Germany makes it even more important. Overall, I think there are a few rough patches in the post, but I agree with the sentiment.
I do think that e.g. 6WK are doing the right thing, so it's kind of counter intuitive to point them out. They have scaled back the hype, focused on their well growing product WL again, and have made some tough decisions.
Wow, the smugness and adversity to Marissa Mayer is really evident here. Did these two have a run-in in the past or is that just KS's style of reporting?
Actually - we do have cohorts, just a little nuanced from the 3-month programs. Due to the distributed nature of the onboarding and investments (locally in the markets we cover), we decided to kickstart the individual startups monthly. We have a rolling program throughout the year, but the annual Seedcamp Week with Demo Day is completely separated by annual class.
In terms of focus, we haven't changed: product focused teams from all around Europe (and beyond now), at seed stage, at standard investment. Happy to chat and give you more input, of course.
We don't force anyone to move their startup to London. We do suggest the new teams spend some time with us here, as it's valuable to them to be part of what is going on here - a lot of the teams come from eastern Europe where there is much less of a tech (and investment) scene. Being in London for some time enables them to take part in that, make the right connections, and then move back, here, or on - often to the US.
Almost no tax breaks for startups, and healthcare and employee taxes are regulated very closely to normal German laws.
Shockingly, recently the govt seems to have decided that angel investors and even founders will not be eligible for certain tax breaks, and instead will be taxed on income tax level for capital gains.
- Is the UK market simply more competitive, and is the fight over individual customers tougher? I.e. need the "other" smartphones be cheaper to compete?
- Besides the hardware, what are potential cost drivers? It seems that the UK networks are much stronger and more ready to deal with the iPhone/smartphone traffic vs. the US - yet the prices are cheaper.
- On competition: servicing a smaller country like the UK is much easier and less capital intensive than servicing the large USA. As networks are about nationwide coverage, the big 3 in the US can dictate prices much easier. Also, setting high roaming prices for smaller networks' users will discourage competition from below. Is regulation good for the UK customers? (there's a lot of roaming regulation in the EU and UK)
- In the UK, especially Blackberry is still a very strong contender in the smartphone segment. Anecdotal evidence: kids very often own Blackberries and are addicted to BBM here. Why are UK customers more "gullible" to buy a Blackberry vs the US? I would chalk it up to the difference in sophistication of the mobile usage.
TL; DR: Smartphones & data plans are hella expensive in the US.
Great post and great ideas. Mathematically, it's definitely a pretty perfect solution, but there are other factors that come into play. Most importantly, the reason for the acquisition, and the fact who company B wants/needs to make happy:
The reasons might be a) fire sale, b) talent acquisition, c) product/asset buy, or d) merger (increasing value of the company from a to d).
in a) it will most likely go only to the investors, so scenario 1 in your case. The founders will probably not even transition, as only the assets are bought to be re-used by company B. Founders don't get money or stock, as they haven't built a successful company, yadda yadda (that's what liq prefs are for).
in b) the acquiring company will most likely want to keep the founders happy, not the investors. Like a), it's often not the best performing business, but B wants A's team to work for them. The investors will be made happy, and the founders will either receive stock outright, or get great employment contracts with lots of options. Recently, it seems to have happened more often that investors didn't end up getting lots of the proceeds, but founders were very handsomely rewarded afterwards (on a trust basis). The Milk acquisition by Google seems to have happened like that (according to le bloggers), and there's word about many more instances where the investors got screwed by handshake agreements that turned into a nice payout for the entrepreneur afterwards. This is again not a question of good vs evil, but simply a question of who has control of the deal. This situation is now finding the way into legal docs (I am sure the lawyers can weigh in).
c) is the most obvious case for your solution - company B wants to make everybody happy so the investors agree to a sale, and the founders stay on as employees of the acquiring company. But again, this depends on who the decision power lies with, and who needs to get a sale, fast. Because the company is a much smaller part of the resulting company, control needs to be ceded (depending on the A-investors' power).
in d), the investors of company A will probably want to keep control of their stock. If it is a merger of equals, this control would have to be granted, because they would otherwise not agree to a sale.
On top of that, there are other things to consider:
- How is the acquisition paid for? You assume new stock, but it might be part cash, part options from an existing pool, part share transfers from other shareholders...
- What are the pay out horizons for individual investors and shareholders (especially if angels or a complicated structure is involved)
"Final Cut Studio can be purchased for $999 (or $899 for educational buyers). That's the same price the suite was being sold for as of July 2009, but $700 more than its newer replacement, Final Cut Pro X."
He absolutely is. Surprisingly, html5 apps haven't gone very big (even as installed bookmarks on the homescreen, or with the use of local caching, effectively mimicking an actual app) - at least in comparison with any meaningful iOS app.
Now, when Apple launched the iPhone, it only had webapps. One of the very good examples is the iPhone user guide, which is linked from within the Safari bookmarks, and which is a super smooth html5 experience. Based on the complexity of iOS app creation, i think it might even be possible that Apple did not originally want to publish the App store, SDK, etc (huge chunk of salt).
Anyways - the App store works because it makes money for developers. The html5 story does not, as it does not make money for developers, even if the experience for the user can be almost as good (or better than shitty apps, plus cross-platform).
Now, until there was a way to properly pay for mobile web apps, in the browser, not many ressources will be focused on html5. I hope this move from Apple will change this, and establish a standard before Apple will integrate iTunes payments in mobile safari to lock you out of that 30% chunk of revenues as well.
There are no real details about how many jobs will be cut, or where.
The quote "20.000 is a pretty significant number in Finland" seems to be related to the total number of Nokia jobs in Finland, not the amount to be cut. I think it's safe to say that the majority of jobs will be cut elsewhere, since Nokia will do all but severe any relationships with the government that has treated them very well.
Now as for Google's announcement - easy, right? Just a short notice and piggybacking for some PR. They are pissed for obvious reasons, so it's an understandable move (although their reactions were remarkably snark).
Overall, pretty sensationalist reporting, which is even more obvious when seeing how the writer dances along the fine line of using big numbers without clear language.
- We see more than 200 companies a year at Seedcamp Events. A lot of them get external funding, and very often from people they have met at one of the events. I think that's the strongest "no" you can have.
- Other accelerators are also quite open about their process, and on hackernews you see many startups telling their story about how they did not make it through.
- Often, companies use the feedback, advice, and all of the connections they made during the day for a change in their business model or focus. In my opinion, that's the best confirmation of the value of these events (you see Ben from Geomium agrees).
