Urgent Speed

Publisher Monetization Tools – Useful list for Angels

Steve Spalding's article “21 Great Advertising Networks For Publishers” is the best round up of services for publishers to monetize traffic I have seen in a long time.  I linked to the article because I thought it might also be useful for start-ups that need to advertise as well as Angels investors,  looking to better understand the (still growing) on-line advertising market. 

HP steals from government playbook..or.. How to get impressive sounding market size

Early stage entrepreneurs and investors almost always want to understand “The addressable market”.

As a general rule of thumb, bigger is better.  Growing beats shrinking, and global trumps local (especially if it includes everyone online and/or all of China).

Ambitious entrepreneurs want to understand how their company will become a multi-billion dollar world changer.   Investors want to understand how their investment is going to keep their kid’s kids in extended inheritance disputes well in to the twenty second century. 

How you define the market is KEY to attracting talent, and capital. 

Defining the market can be tricky because often the best markets don’t even exist.  That is; don’t exist yet.

Think of a world before Radio, TV, Automobiles or Personal Computers.  Early on, how would you define those markets?

In the 40s one executive defined the global market for computers as "maybe a dozen".

Truly pioneering companies often sell something the world is not yet demanding.  This can be discouraging for an entrepreneur, but the great ones persevere.   Just think of it as “unencumbered by predefined demand”.

Radio, Automobile, TV, and Personal Computers all were developed in the HOPE that a larger market would emerge.

In the 60s many people thought the entire addressable market for cell phones consisted of only Maxwell Smart!

 

In the late 1970s, the market for micro-personal-pocket-sized-headset-music was about zero.  Sounds risky!

This was before Sony launched the “Walkman”.  Yet even then, the market for consumer electronics, radios, or cassette players was Billions.

 

When the Sony Founder was describing the WalkMan opportunity to potential hires and investors do you think he pointed to zero or to billions? 

So size does matter, but is how you talk about it can matter even more. Which brings me to government, they sure know how to talk. 
(BTW; I would have titled my post “size matters”, but I did not want a red flag from the ant-spam-algorithms).

When government talks about saving (or investing) they don’t say $10 billion a year.   Yearly numbers may be practical for executives who are accountable to quarterly projections, but it’s not going to generate press inside the beltway.  Savvy Politicians say “$100 Billion dollars by 2017”,   Sounds impressive!   Adding a few more years can really pad the numbers.

I am not recommending you use this technique as an entrepreneur, but HP decided to try it out.  It looks like it worked.

Recently HP announced:

“A continuation of their Print 2.0 strategy. The strategy is heavily focused on leveraging Web-based services in trying to capture a significant share of the growing number of digital pages printed each year. According to HP, 53 trillion digital pages are forecast to be printed in 2010, creating a market valued at more than $296 billion.”

Bravo HP, plenty of media pick up.  They could have said a trillion dollars by 2017. Just as accurate, but a trillion would have been ignored as over-hype. They could have said billions a month. Just as accurate, but that also would have been ignored as underwhelming.  HP got it just right.

Any way you measure the market for printed business documents (i.e.; Business Plans, proposals, PowerPoint presentations, training material, etc.) is large and growing. However in 1999, when we were first raising money for Mimeo.com, we had some trouble convincing investors there was a market for printing documents over the internet.  Luckily, we were able to convince a few investors of the market potential, and today Mimeo has over 450 employees who profitably services thousands of companies, delivering documents to a market that could have been defined as “almost nothing” a decade ago.

For entrepreneurs worn down by accusations that their market is too small, I encourage you to persevere.   Ignore those potential investors that are too small mined grasp your market’s potential.    For entrepreneurs building next generation music sites; your market is too small, give up.

Did InterWest get it Right with Right90?

I am confused… or maybe I found another proof point that there is too much money chasing too few good deals.   I noticed in yesterdays VentureWire that Right90 raised a $12 million Series B financing in a round lead by InterWest Partners. 

At first glance this makes perfect sense; Right90 is focused on real-time sales forecasting via a SaaS model.  Right90’s web site claims:

“Right90 extends your CRM investment by providing insight into your sales forecasts, so you can make your number, maximize your compensation and increase your sales productivity.  Right90 combines an intuitive interface, deep analytics and a flexible on-demand platform, so sales reps and executives can get a more accurate and real-time view of their sales performance.”

Sounds great!  I wish them luck, and want them to succeed.  Anyone who has ever had to make the quarter, or manage a large sales force can attest to the criticality of this business process.  Sales executives are easy to find and very sympathetic buyers, thus potential investors can check the “addressable market” box. CEOs and CFOs also have a strong financial interest in getting the numbers right, so I am sure that can’t hurt their revenue potential. 

So why don’t I like this deal?… (not that I was asked); To me this smells like a salesforce.com feature, not a stand alone business. 

Salesforce is a great service.  In 2000 we had a bakeoff between Salesforce and Siebel, at Mimeo.com and the ready to use Salesforce service blew the doors off Siebel’s 6 month to deploy, $160,000 solution.   Salesforce convinced me of the inherent benefits of SaaS models for everyone involved.    Salesforce keeps adding customers, and keeps adding features.   I believe sooner or later they will add Right90 functionality, so why would Right90 ever be worth more than Salesforces cost to build the functionality?   Maybe Right90 is getting traction outside the Salesforce customer base?

I can see why InterWest would be attracted to this problem-space.  I am sure they invested much more time thinking about Right90 than I have.  According to thefunded.com, InterWest is savvy, so I must be missing something?

Can someone explain why Right90’s upside is not capped by a dependency on Salesforce? 

180 Useful Questions for Launching a Business

Andy Sacks and Ed Sim recently had several good posts about Questions entrepreneurs should ask themselves.  Seemed like a good time to share a list of questions I have found useful as both an entrepreneur and investor. 

If you’re considering starting, joining, or investing-in a start-up you are welcome to download the Useful Questions for Launching a Business. 

Roger and I have evolved the list over the last few years because we strongly believe:

If you follow a more organized process of planning a business, you will have a more predictable outcome.   

enjoy…

Analysis, Research and Due-Diligence

1. How will this company make money?
2. Is the consumer clearly defined?
3. Is the customer involved in defining the product or service?
4. How are you going to satisfy the market?
5. Are there significant barriers to entry?
6. Can the company gain significant advantage and/or enhanced revenue by moving quickly?
7. Is the total market for the venture’s products or services large and/or growing rapidly?
8. Is the venture business-to-business?
9. Who are the current competitors?
10. Will technology be used to gain an advantage?
11. Who is likely to be a competitor in the future?
12. What is the present size of the market?
13. What is the market's growth potential?
14. Who are your five nearest competitors by name?
15. How will your operation be better than competitors?
16. How is competitor business: steady? increasing? decreasing? Why?
17. How are competitor operations similar and dissimilar to yours?
18. What are competitor strengths and/or weaknesses?
19. What can we learn from watching competitor operations?
20. How can we monitor competition in the future?
21. Do we add value to the project (besides money)?
22. Does the effort reward us for what we bring to the project beyond money?
23. Is it an enjoyable or interesting business?
24. What metrics are used in this industry?
25. Is the opportunity in the area of interest and expertise for the team?
26. What external factors will affect the venture?
27. What’s our maximum downside in time and money?
28. What can be learned about your kind of business from outside sources (trade suppliers, banks, other business people, and publications)?
29. What prospective trade suppliers can we talk with to find out what managerial and/or technical help they will provide?
30. How did you arrive at the price? Is it profitable?
31. Are there positive external trends?
32. How will margins improve over time?
33. What agencies and jurisdictions could be applicable with this business?
34. What are the regulatory issues?
35. What insurance is available or used in this type of business?
36. What do insurance carriers feel is important to control risk?
37. What is the reputation liability of this business?
38. What is the maximum legal and financial liability?


Pre-Sell, Prototype and Mock-up


39. What letters of intent from prospective suppliers or purchasers can we get?
40. Why can you service the market better than your competition?
41. Who are the customers or clients? What occupation?
42. What is our competitive advantage?
43. What will be special and unique about this business?
44. What will be the contract / terms of the offering?
45. What type and level of customer service will need to be offered with this product?
46. What is the required timeframe (release schedule) for product rollouts?
47. What price do you anticipate getting for your product or service?
48. Is the price competitive?
49. Are there ways to more intimately involve prospective customers?
50. Will you have superior design?
51. Will you have superior service, speed or data freshness?
52. What levels of quality will you offer, and how will the customer measure quality?
53. Why will someone pay you price?
54. How knowledgeable and sophisticated is the customer?
55. What products/services do your prospective customers currently use?
56. How much of the system (or service) can be simulated or mocked up?
57. What value propositions are most important (and resonate)?


Marketing and Promotion


58. What mediums will be used to reach customers?
59. What words should customers associate with this company?
60. How, and what type of publicity will help sales?
61. Is there an association that should be joined (or started) to communicate with prospects?
62. Is there a book that can be writhen to promote this business?
63. Who is the ideal spokes person?
64. Who are all the potential evangelists?
65. How will you attract and keep your share of the market?
66. How can you expand your market?
67. How will the reputation and buzz expand over time?
68. As the market grows, will your share increase of decrease?
69. What percent of the market will you have?
70. What market you intend to service, the size of the market, and your expected share?
71. What is the optimal release schedule for product rollouts, from a promotions standpoint?
72. Who exactly is your market? Describe characteristics: occupation, gender, tenure, profession, revenue, etc, of your various market segments


Planning


73. Why and when will the business be profitable?
74. Does it realistically have upside potential?
75. What capital equipment will be required?
76. What is critical for success?
77. What can be done to increase focus, and reduce distractions?
78. What metrics will be used to monitor success?
79. What will quarterly sales look like?
80. Is the business seasonal?
81. What will earnings, cash flow and the balance sheet look like?
82. What return on equity should be expected?
83. How will taxes impact earnings and cash flow?
84. What is a reasonable release schedule for product rollouts?
85. What is the optimal release schedule for product rollouts?
86. What is the contingent release schedule for product rollouts?
87. How can we strengthen and protect our advantage?
88. When is the ideal date to open the business?
89. Why you have chosen your particular office location(s)? And where would be ideal?
90. What hours/days will the business operate?
91. What are the key milestones, dependencies and deadlines?
92. Under what conditions should the company be shutdown?
93. How would it be shut it down?
94. What special advantage do you offer that may justify a higher price?
95. Will you offer credit to your customers (accounts receivable)? Can you afford to extend credit? Can you afford bad debts?
96. Are there other organizations that offer the “state-of-the-art” approaches to sub-processes?
97. What is the ideal business background for the team?
98. How is the teams experience relevant to this enterprise?
99. What are the costs of protecting the intellectual property?
100. What is the intellectual capital/property required to build and run this business?
101. What is the Strategy/Approach for protecting the IP?
102. What new Intellectual Property will be created in building this business? - Processes and procedures

-Data
-Brad and Reputation 
-Contracts and Relationships 
-Code and Software 

103. Other than customers, what are/will be the valuable relationships created?
104. What approaches are used abroad or in other markets?
105. What are the attributes and/or salient features of your present or desired business location?
106. Ideally, how would the office be laid out?
107. How much space do you need?
108. Are there current or future stakeholders that can contribute to customer acquisition?
109. Are there current or future stakeholders that can contribute by reducing cost, increasing intellectual property or reduce risks?


Recruiting and Team >br />

110. Are the founders knowledgeable and passionate about their project?
111. Who has pride of ownership?
112. Does the team have a competitive advantage?
113. Has the team worked together before?
114. Is (and will) the team in the same physical lactation?
115. Does the team have a stake in the success of the project?
116. Does the team have at least one full-time dedicated person?
117. Does the team have intimacy with the market, its distribution channels and other key players?
118. Does the team possess a complementary skill set?
119. Does the team possess the energy, drive and intelligence to complete the project?
120. Is the team able to attract excellence?
121. Is the team able to focus on the most appropriate component of the business and/or market?
122. Is the team appropriate for the idea?
123. Is the team honorable, realistic and street-smart?
124. Is the team known in its industry?
125. Is the team realistic about what is needed (sacrifices, economic and time) will be needed to make the company a success
126. Is the team willing to attract excellence and the right people?
127. Who else is involved?
128. Who is (or will be) asking for money?
129. What management and other personnel are required and available for the operation?
130. What are all the roles and responsibilities?
131. What are the weaknesses of the initial or proposed team (Skills, knowledge, aptitude)?
132. What certifications or licenses are required of the team?
133. How can we compensate for weaknesses in the team?
134. How will responsibilities change over time?
135. How will the team be compensated, is it appropriate?
136. Are there other incentives or motivations for the team?
137. Is everyone’s interests aligned?
138. What skills are needed in the near term on the board of advisors?
139. Long term, what skills are needed on the board of advisors?
140. What organizational weaknesses or threats should the board be prepared to assist?


Funding


141. How should the business be structured?
142. Who are the other investors that would be interested in this opportunity?
143. How much money is being requested?
144. What is the money needed for?
145. How much money is needed before other investors would be interested?
146. Are there ways to improve cash flow or collections?
147. Are there opportunities for vendor financing?
148. Are there opportunities for customer financing?
149. Is there a financing contingency plan?
150. How will the funds benefit the business?
151. How will the funds be repaid?
152. Why does the loan or investment make sense?
153. Is it appropriate to involve a third party in the funding process (a “finder”)?
154. What happens if the financing schedule needs to change?
155. If more funds were available, how would the incremental funds be used?
156. Why will investment (debt/equity) make the business profitable?


Information Technology


157. Is the venture technology based, and/or leverage technology?
158. What are the costs of building the information systems needed?
159. How will the IT systems need to scale?
160. How will the systems evolve? What new functionality will be added and when?
161. What are the technical risks?
162. How can IT be used to improve margins over time?
163. How can IT be used to monitor the business and/or reduce risk?
164. How hard will it be to duplicate the IT systems of this business?
165. What off-the-shelf applications can be used in running this business?
166. What technology can be outsourced? And How?
167. What technology should be outsourced?
168. What needs to be developed?
169. What is the optimal release schedule for product rollouts, from a technical standpoint?
170. What is the contingent release schedule for product rollouts, from a technical standpoint?
171. What is a reasonable schedule for developing the needed IT systems?


International Sourcing


172. Are there aspects of the ongoing operations, which could or should be, performed offshore?
173. Where are the best suppliers and subcontractors in the world?
174. How does currency rates impact costs?
175. Over time, how does the sub-contracting and outsourcing strategy change?
176. Are there international resources that can be used to accelerate domestic sales?
177. What talents are required four each aspect of the business?
178. What level of communication is required between different parts of the business?
179. What can be done to increase communications, reduce risk, minimize costs and accelerate revenue?
180. Are there aspects of the business set-up, which could or should be, performed offshore?