The New Venture Rules, Part XXIV: Get Big Cheap David Cowan touches on something I haven't articulated very well, so thanks to him for making the points below:
....the winning recipe today for aspiring entrepreneurs is GET BIG CHEAP. Don’t waste expensive development on untested ideas, and don’t let a fat marketing budget mask a weak value proposition. If instead you tinker your way to scalable organic growth, you’ll have a valuable business on your hands. Don’t worry about how long it takes—just make sure your burn rate is low enough to accommodate several cycles of iteration.
As one entrepreneur put it to me tonight when I forwarded the quote to him, "That doesn't sound like a venture guy." No kidding. Matter of fact, I'll wager that most venture guys will find the above terrifying, and, as nutty as might sound, will argue instead for the Big Burn model, where you raise money, build an expensive team, and then spend heavily as you sprint at the wall going after a specific opportunity.
Get Big Cheap
Two weeks ago I presented at Babson College, home of the nation's top ranked Blank Center for Entrepreneurship. (It's a beautiful campus, especially during the New England autumn.) Students asked for my slides, which I forgot to share, but the New York Times story on Wednesday on how cheaply one can launch a web startup reminded me to post a related segment of my talk here. (Be gentle--this was edited for a student audience far from Silicon Valley.)
...Conventional VC wisdom shied away from consumer ventures because consumers are unpredictable, branding is so expensive, and it takes a prohibitively long time to build a competitive distribution channel. So what changed? What’s now so attractive about consumer technology that makes 2006 such a better time to launch new services? Well, there are 7 new factors today that didn’t exist in the 90’s.
(I think this following one ended up in the wrong post, but whatever)
Confabb: Find, Track and Review Conferences
Confabb is a new service launching today that offers a centralized place to find information about all kinds of conferences. The site offers everything from speaker and event reviews to photos of the events after the fact through integration with Flickr. It’s an impressive full service site that could become the go-to spot for at least tech conference attendees and possibly a wider audience.
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