The Startup Velocity Question: What Hinders Acceleration in VC Funded Companies?

I have been running 1Mby1M since 2010. I find myself saying to entrepreneurs ad nauseam that VCs want to invest in startups that can go from zero to $100 million in revenue in 5 to 7 years.

Startups that do not have what it takes to achieve velocity should not be venture funded.

Experienced VCs, over time, have developed heuristics to gauge what constitutes a high growth venture investment thesis. 

For Music Industry Entrepreneurs – Some Thoughts, Some Questions

I have been observing the online music industry becoming more and more dysfunctional by the day. Pandora, one of the real juggernauts of the space, is up for sale. While wildly popular, the business doesn’t make much money. Unclear, if it ever will.

On the other side of the spectrum, I am close to a few extremely talented musicians who have a hard time finding a business model with which to survive.

Long ago, record labels used to take musicians under their wings, fund recordings, sell albums, make and pay royalties. With the advent of the Internet, that model has gone to hell. Today, record labels do not have a business model to survive, really. The unit economics are dreadful. And the musicians are in a sorry position.
>>>

Featured Videos

Corporate Innovation Management: A Methodology Discussion

Last summer, I was invited to spend half a day with ~40 Fortune 500 Chief Innovation Officers at Xerox PARC, and discuss our experience with corporate innovation methodology through the 1M/1M Incubator In A Box program.

A few months later, Jim Euchner, the CIO of Goodyear, interviewed me for the Research-Technology Management journal. It’s a comprehensive discussion that those of you thinking about corporate innovation may find interesting. For the month of May, the interview is accessible free of charge at the journal’s website.

Please read: Business Acceleration at Scale: An Interview with Sramana Mitra

Some Advice for Laid-Off Engineers

The year 2009 began for many on an anxious note, on the heels of the 2008 financial crisis. Layoffs were everywhere. Foreclosures stalked them from town to town. By the fall, unemployment in America hit 30 million, over 10% of the population. But life goes on. Bills come in, mortgages come due. Looking for a job in this environment is no doubt a daunting, if not impossible, task. Against this backdrop, I profiled several entrepreneurs who managed to turn adversity into opportunity during the dotcom bust.

Kansas farm girl Michelle Munson is one such entrepreneur. Munson bucked her family’s multi-generational agricultural tradition – raising cattle and growing wheat, corn, and soybeans – to study computer science. After a brief stint at IBM, she went to work for two technology startups in a row. Both went under, and Munson was laid off for no fault of her own.
>>>

Build Me This Travel Planning App, Please!

Summer travel is about to begin. I am deep in the throes of planning our Sicily trip in May. In doing so, however, I miss not having access to an app that could make life dramatically easier and cut hours from my workflow.

Let me describe what my travel planning workflow looks like.

Step 1: We decide on the general area and the dates.

Step 2: We assess how much time we need to budget to do justice to each place we visit.

Step 3: We book the long haul flights.
>>>

Are Apple’s Best Days Over?

The second quarter of the year does not appear to be very bright for several tech giants. After a disappointing performance reported by Alphabet and Microsoft last week, Apple (Nasdaq: AAPL) does not seem to be faring any better. During the quarter, Apple announced its first ever revenue drop since 2003.

>>>

Tech Layoffs for 2016 Projected to be Deep – What Happens to 260,000 Highly Skilled Professionals in their 40s and 50s?

Following the news on Intel’s layoffs, I read some depressing projections for the rest of the technology industry. Dawn Kawamoto reports in Information Week that 260,000 tech workers will lose their jobs in 2016.

Below are the numbers Dawn has gathered from one Wall Street Analyst’s predictions:

VMware
Estimated percentage of jobs to be cut this year: 10% to 15%
Estimated number of cut employees: 1,700 to 2,500

Symantec
Estimated percentage of jobs to be cut this year: 15%
Estimated number of cut employees: 2,800
>>>

Build Me This Travelogue App, Please!

As you know, I love to write.

And among other things, I love to write travelogues.

These days, the procedure of writing a travelogue has changed dramatically. We no longer write just text accounts. We post pictures from our smart phones to Facebook and write commentary alongside those images. These posts to our Facebook timelines are distributed to friends, family, and followers organically.  They comment, they engage, and we respond with further details, often with humor, sometimes with new photos.

On my last trip to Eastern Europe, I experimented with the medium, and had a wonderful time sharing my travel experiences with a large number of readers. However, one of my friends had to go offline during that period, and missed the whole account. She asked to read my travelogue, but I had no way of sharing it with her. The entire body of work had become buried in my timeline, with no way of accessing three weeks of travel-specific posts.
>>>

Intel’s Layoffs: What Will Happen to the Older Workers?

Intel is about to layoff 12,000 people. This is a company with an enormous amount of intellectual horsepower within its folds. Many with very serious intellectual merit will be out.

The semiconductor industry has shrunk, and there aren’t many employers who can absorb that many highly qualified people.

Last summer, Intel had a layoff, although significantly smaller. Intel has a lot of employees in Oregon, and the cuts impacted that state dramatically. Mike Rogoway (@rogoway) at the Oregon Live did some investigative journalism that highlighted the fact that older employees were let go more easily:

Proportionately, employees in their 50s were three times more likely to lose their jobs than workers in their 30s, according to a document obtained by The Oregonian/OregonLive that tallies every Intel employee in the United States. The company was nearly five times more likely to lay off workers in their 60s than those in their 30s.

“Looking at the impact, in this case only, it clearly has disproportionately affected older workers,” said Portland employment attorney Matthew C. Ellis. But he said that’s not necessarily illegal, nor is it unusual. >>>

Women Entrepreneurs – The Myth, The Minefield, The Movement

On March 31st, I gave a talk at Hacker Dojo in Mountain View for the Women Who Code group.  In it, I addressed many of the myths about being a female entrepreneur that are currently circulating in the industry. For example:

• There’s a bias against women in Silicon Valley
• You CAN and SHOULD try to DO IT ALL
• VC rejection equals sexism
• VCs hit on women

And many others.

Here’s a recording of the session. I do believe those of you who are navigating these issues would find this useful.

>>>

From $100k to $1 Million: How to Minimize Equity Dilution by Using Convertible Notes

I have always advised companies in the 1M/1M eco-system to avoid raising equity financing too soon. In fact, as a thumb rule, we advise entrepreneurs to get to enough validation such that they can get to at least a $2M pre-money valuation.

Now, if you’ve managed to get to $100k in revenue with a consistent set of customers, it is likely that you can get to the $2M minimum valuation threshold. If not, and if you must raise money, you should look at doing so on convertible notes.

In fact, during one of our recent roundtables, we had as our guest Venky Balasubramanian, co-founder of Plivo. Venky and his partner have achieved the amazing feat of growing a relatively fast growth business to well over $10 million in revenue with just $2M in angel financing.
>>>