Steve Woda's Blog

From Messes To Successes

One of my favorite VC bloggers is Fred Wilson, and he wrote another great post this past week.  "From Messes to Successes" is an interesting article about his experiences with "problem" portfolio companies.  As you would hope would be the case with any good venture capitalist, he and his team have helped turn many of these "problems" into fabulous outcomes.

Here is an excerpt from his article...

When I look back at my 20+ year history of venture investing, it's certainly true that the biggest successes have been big messes at some point in their life. My most successful venture investment at Euclid, Multex, almost went bankrupt before the Internet came along and provided a cheap way to get it's service to its customers. Geocities, which was our most successful investment at Flatiron, was a total mess in mid/late 1997, about a year after we first invested. And our most successful investment to date at Union Square Ventures, TACODA, was a mess multiple times including when the first build of its software totally failed on them. Delicious also had plenty of messy moments in its brief period in our portfolio.

The core point of Fred's article is that startups are often messy due to the hyper-focus on the product and the market.  He goes on to argue that this may be what ultimately makes them companies great companies once they finally get their act together on process and operations.

I agree.  Building a great product is a pre-requisite for success.  When you get the product right, you can build a company around it.  Without a great product, you will end up throwing a lot of money at something that won't ultimately succeed.

Start with the product.  Make it great.  Build the team the processes and operations around that great product.  That is how you build a great, successful business.

You can read more of Fred's article here >> A VC: From Messes To Successes

Technorati Tags: Fred Wilson,A VC,Venture Capital,Union Square Ventures,Messes to Successes

Daily Roundup for 2008-04-17

• Targeting, Ad Network Spending Increase - eMarketer
  More than nine out of 10 US advertising agencies and advertisers buying online media plan to work with ad networks in 2008, according to Collective Media's "Ad Network Study 2008."  Nearly three-quarters of respondents said that they planned to spend more with ad networks in 2008 than they did in 2007.


• ISPs meddled with their customers' Web traffic by Robert McMillan, IDG News Service
  In a paper, set to be delivered Wednesday, the researchers document some troubling practices. In July and August they tested data sent to about 50,000 computers and discovered that a small number of ISPs were injecting ads into Web pages on their networks. They also found that some Web browsing and ad-blocking software was actually making Web surfing more dangerous by introducing security vulnerabilities into pages.

Daily Roundup for 2008-04-16

• Does Your Company Need a Chief Blogger? - Advertising Age
  It's a question marketers are still grappling with years after the first waves of corporate blogging flooded the web. But for better or worse, it seems corporate blogging -- and the title of chief blogger -- is beginning to hit its stride. Companies such as Coca-Cola, Marriott and Kodak all have recently recruited chief bloggers, with or without the actual title, to tell their stories and engage consumers.


• Brands Partner With Consumers Online - eMarketer
  These days, online consumers and companies are collaborating on a range of activities, including R&D, marketing and after-sales support.  Here are a few examples of how brands and consumers are working together online.

Daily Roundup for 2008-04-08

• Just What We Needed, Google on Speed - Google Everflux
  Is it just me or has Google gone into overdrive? As a professional full-time online marketer I have to keep my mind firmly placed on what Google is doing. As much as I try not to because Google has probably driven more people around the bend than Chrysler and Mercedes-Benz put together. Like any professional marketer, I monitor my numerous keywords on a daily basis - especially my major targeted keyword phrases that bring in the most sales and subscribers. For years now, I have had top rankings in Google for my chosen phrases; they move up and down, but mostly they don't leave the first page.


• Beam it up: Tiny projectors to magnify cell-phone cinema - Technology Review
  Recognizing that it is not much fun to watch movies on a tiny cell phone, a number of companies are racing to develop gadgets that project what's playing on the small screen onto walls, table cloths and other handy surfaces. ''Pico projectors'' that are small enough to carry around in a shirt pocket are expected on the market later this year. Eventually, the technology will be tiny enough to be built into phones and portable media players, the companies say.

Daily Roundup for 2008-03-25

• Region's Venture Capital Rank Slips - washingtonpost.com
  Regions of the West Coast and Midwest moved ahead of Washington as top destinations for venture capital in recent years, as the local venture economy grew more slowly than the national average, a Washington Post analysis shows. In 2001, the year the technology bubble popped, Washington ranked sixth among top destinations for venture capital, after Silicon Valley, New England, the New York metro area, Texas and the Southeast. Last year, it was ranked 10th, overtaken by the Northwest, San Diego, the Midwest and Los Angeles/Orange County.


• Hammering out Wikipedia's financial future, argument by argument - Technology Review
  Scroll the list of the 10 most popular Web sites in the U.S., and you'll encounter the Internet's richest corporate players -- names like Yahoo, Amazon.com, News Corp., Microsoft and Google. Except for No. 7: Wikipedia. And there lies a delicate situation. With 2 million articles in English alone, the Internet encyclopedia ''anyone can edit'' stormed the Web's top ranks through the work of unpaid volunteers and the assistance of donors. But that gives Wikipedia far less financial clout than its Web peers, and doing almost anything to improve that situation invites scrutiny from the same community that proudly generates the content.

Daily Roundup for 2008-03-21

• Report ranks Washington and Baltimore hotbed for investors - Washington Business Journal:
  The Washington and Baltimore region was the nation's fifth fastest-growing area for venture capital funding in the last decade, according to a report released Tuesday. In 2007, 180 Washington and Baltimore companies received nearly $1.3 billion in venture capital backing, the MoneyTree Report by PricewaterhouseCoopers, Thomson Financial and the National Venture Capital Association said. That number is up 130 percent from $558.24 million put into 105 companies in 1997.  The report lists Timonium, Md.-based Grotech Capital Group and Chevy Chase-based New Enterprise Associates as the most active investors in the region. The top industries for investments around the region were software, life sciences and telecommunications.


• Affluent Hobnob on Social Networks - eMarketer
  The rate of affluent US Internet user participation in online social networks increased dramatically to 60% in January 2008, from 27% in January 2007, according to The Luxury Institute's latest WealthSurvey "The Wealthy and Web 2.0."  "While some in the luxury industry are still debating e-commerce, search and banner ads, the majority of their customers have leaped into the online dialogue," said Milton Pedraza, CEO of the Luxury Institute. "Luxury needs to catch up quickly."

Daily Roundup for 2008-03-19

• Woman to record industry: Stop spying
  A woman who claims the recording industry's anti-music piracy campaign threatens and intimidates innocent people has filed a new complaint accusing record companies of racketeering, fraud and illegal spying.


• Startup RatePoint bets that people want user reviews refereed - Technology Review
  One of the great things about the Internet is the way people post reviews on just about anything you are considering trying, whether it is a movie, a new restaurant or the local florist.  This also introduces one of the worst things about the Internet: trying to figure out which reviews to trust. Was that effusive praise written surreptitiously by the merchant? Was that anonymous online slam posted by a devious competitor?  The dilemma might be unavoidable in this age of abundant user-generated content, when we have to be smarter about separating signals from noise. But a startup called RatePoint Inc. begs to differ. It wants to play referee, giving consumers more clarity into a business' reputation and protecting the business from unwarranted blights on its credibility.

Daily Roundup for 2008-03-08

• Jeremy Siegel on Politicians, Prices and a Potential 'Buying Opportunity of the Decade' - Knowledge@Wharton
  The U.S. Presidential race has reached a critical juncture. The Republicans have a confirmed nominee in John McCain; as for the Democrats, Hillary Clinton has bounced back, while Barack Obama retains a marginal lead in terms of delegates. How the presidential race evolves will be shaped in part by the increasingly worrisome state of the U.S. economy. Consumer prices are rising, oil has crossed $103 a barrel and gold is nudging $1,000 an ounce -- suggesting that the economy could be entering a phase of 1970s-style stagflation. Fed chairman Ben Bernanke, however, told Congress last week that he doesn't anticipate stagflation, and he continues to indicate his willingness to keep cutting interest rates. What lies ahead for the U.S. and world economies? Knowledge@Wharton discussed these questions and more with finance professor Jeremy Siegel, author of The Future for Investors.


• Ecommerce Blogging: Who, What And When: Well-written blogs create credibility, interest
  Last month I talked about blogging platforms and the value blogging can bring to ecommerce sites. When a website makes the decision to begin a blog and decides upon a blogging platform, it will then have to decide who will blog and how often. Time allotted to blogging is also a relative issue, as is subject matter. So why bother at all?  Relative to static ecommerce sites, search engines consider blogs more real and trusted because blogs tend to have fresh content and there is a less financial, more informational link between a blog and its readers. An ecommerce site should take advantage of this tendency by adding a blog to augment the overall site.

Daily Roundup for 2008-03-02

• The Psychology Of Buying - Behavioral Insider
  The recently launched 7 Billion People is an intriguing application to e-commerce of the real-world psychology behind buying behaviors. As CEO Mark Nagaitis tells us, his new Web analytics system tries to discern in a site's audience different "buying personalities" that marketers can talk with in very different ways.


• InternetNews Realtime IT News – Americans' e-Commerce Conundrum
  A new study from the Pew Internet Project casts light on the love-hate relationship many Americans have with e-commerce. In response to the survey, 78 percent of U.S. Internet users said that online shopping is convenient, and 68 percent said it saves time. Yet, 75 percent said they don't like giving out personal information like a credit card number over the Internet.  The security risks, real or perceived, are hampering the growth of the Internet economy, said John Horrigan, associate director of the Pew Internet Project and author of the report.

Daily Roundup for 2008-03-01

• Google Muscles Further Into Business Software - Forbes.com
  Google is launching Web-based collaboration software that aims to make it easy for groups to share and edit materials such as documents, photos, video and spreadsheets on a single site. Easy enough, Google hopes, to make selling software applications to enterprises a bit harder for the likes of IBM and Microsoft.


• Use of Google for Data Triggers Fears
  It's called "Google hacking" - a slick data-mining technique used by the Internet's cops and crooks alike to unearth sensitive material mistakenly posted to public Web sites.  And it's just gotten easier, thanks to a program that automates what has typically been painstaking manual labor. The program's authors say they hope it will "screw a large Internet search engine and make the Web a safer place."