Tim Marman's Loosely Coupled

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• The Innovation Bubble: Copycats and “me too” startups

  When I talked earlier about why it might be better to start a tech company outside of Silicon Valley , perhaps the biggest point was avoiding the echo chamber. The fact that Yammer, a Twitter clone for the enterprise, had won the TechCrunch 50 conference, reinforces this point. Therese Poletti had a great column in Marketwatch that discussed this a little. Product features and improvements are important to keep technology evolving, but some of these seemed like incremental extensions to existing products and ideas, and not really "new, new things," to quote the popular Michael Lewis book of the same title. She goes on to question whether these are sustainable businesses by themselves. So the variety of startups I saw makes me wonder: are many of these companies long-term horizon plays that are not yet obvious winners? Or are many just flash-in-the-pan startups, looking for a quick exit via an acquisition by a larger company, since the initial public offering market is pretty much... Posted Sep 23 2008, 08:44 AM by Tim with | with no comments Filed under: Innovation, Business, Entrepreneurship, Startup, Venture Capital

• Simultaneous Discovery and its impact on stealth mode

  We’ve talked a lot about the anti-stealth movement here and on the nextNY list, and the topic has resurfaced again recently thanks to Brad Burnham’s post about the advantages of being open . I noticed that, at least anecdotally, there was a correlation between how open entrepreneurs were with us and their ultimate success. Simply put the entrepreneurs who are aggressively open in describing their plans seem to do better than the ones who are cagey. There is absolutely no data underneath this observation. It is just my sense after meeting hundreds of entrepreneurs over 15 years as a VC. If it is true, it could be for lots of reasons. The more experienced an entrepreneur, the more likely they are to understand that ideas are rarely unique, but the ability to assemble a team and execute against that idea is rare. Perhaps they are just more confident, and it is confidence that is correlated with success. But recently, I have started to think that there might be something more going... Posted Jun 08 2008, 09:49 PM by Tim with | with no comments Filed under: Intellectual Property, Rants, Patent, Innovation, Business, Entrepreneurship, Startup, Social Behavior, NextNY, Notches

• Innovation, Disruption and The Economics of Free

  Hank Williams managed to stir up quite the controversy with his recent post lamenting the rise of free and blaming the VCs . His assertion is that the venture capitalists have made free, ad-supported businesses the norm and effectively "ruined it for everyone else" (my words). I believe it should be possible to start a small business and to have a small number of profitable customers, and to earn a living. From there, it should be possible to work hard, and to grow your business into something substantial. Until recently, this was the American way, and it applied to technology as much as to any other business. But no more. In today’s “free” world, in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it. This is because in the digital world, advertising, the only real revenue stream, cannot support a small digital business. If businesses were based on the idea that people paid for services then small... Posted Apr 08 2008, 10:41 PM by Tim with | with 4 comment(s) Filed under: Rants, Innovation, Business, Entrepreneurship, Startup, Venture Capital, NextNY, Notches

• Getting the first penny

  Josh Kopelman says the first penny is the hardest . The truth is, scaling from $5 to $50 million is not the toughest part of a new venture - it’s getting your users to pay you anything at all . The biggest gap in any venture is that between a service that is free and one that costs a penny. (emphasis in original) Darren has noticed similar trends with MyPhotoAlbum . Jeff says "people will pay for these services but they have to have some persistent utility in order to cross that threshold, but the persistent utility is what is challenging." Converting free users into paying users is only challenging if you don’t ask them to pay. Premium feature sets is one way to do this, PBWiki being a good example, while increasing consumption thresholds being another. DabbleDB gives you more users for each pricing tier, other companies give you the ability to create more files, etc. Basically, the latter is what I prefer because it gives new users the opportunity to appreciate all the features while... Posted Apr 05 2007, 06:45 AM by Tim with | with no comments Filed under: Innovation, Business, Entrepreneurship, Startup