A.Sarva.Co

Met a startup recently that was founded in 2000. It is at 1mm in
revenue this year finally. It only has a couple million invested,
which means the founders went long stretches of years getting paid
zero salary.

This guy must surely be nuts, I thought.

Then again:

Now finally they are about to double revenue year over year and they
are generating cash. The competitors that once existed have all
vanished with the fad for that technology. The company does some
really handy useful stuff that most sites need to implement. The
company could be worth 30mm in a couple of years and the founders own
nearly all of it.

12 years later but $10mm for the founder is still $10mm.

It is a tale for the “neve give up” school of founders.

Victory over The New Yorker, September 26, 2011

amol — Tue, 21 Feb 2012 23:41:35 +0000

The style issue. Daphne Guinness (batty, rich), bulletproof fabric,
the excellent Andy Borowitz “alarm bells”, boring rural pharmacist,
awesome JP Gaultier piece I read online a while back, and a
fascinating Thomas Struth profile. Oh and a rave review for De
Kooning’s show at MoMA, which I missed. And that one article was the
only time-sensitive thing in there.

Gadget startups in the age of app startups

amol — Tue, 21 Feb 2012 22:55:23 +0000

We launched Peek on September 12, 2008, and among our problems (nevermind the Lehman collapse and ensuing financial and consumer market meltdown) was we were using the old-school gadget marketing model. It’s what we used when we launched Virgin Mobile. A lot of the same folks ran the marketing, in fact.

In startup land, I would call this the The Flip Go-To-Market (as in the Flip Video camera, who sold their company to Cisco for $700mm), and it is popular today with startups like Livescribe’s digital pen, Aliph’s Jawbone, and Roku. TiVo did it this way. So did Slingbox. For many of these it worked great and it did for Peek as long as we had the war chest to fund it – you need to raise $20-40mm to go from “cool product” to “decent sales flow”.

The Flip Go-To-Market is:

Big national retail chains with their marketing spend requirements and placement fees
Inventory to fill these with suppliers’ factories fired up producing a flow
Marketing programs through retailers and select media that get the word out
Price cuts and promos to juice numbers and keep retailer attention
Continuous product refresh cycle every 6 months of “now with X!”
Marketing people for twitter accounts and PR stunts and mass mails and Las Vegas suites at CES, etc.

This is way, way, way less than ‘real’ big electronics companies do and it costs less. There is no Superbowl spot or whatever. It’s a marketing budget of like $10-15 million with a product R&D budget similar to whatever the launch budget was — maybe as low as $2mm. A mere $10mm/year. Compare this to the $100 million in pure measurable ad-buying media spending that an Apple does to launch a big new thing (look it up or watch TV sometime if you think all they do is have a quick lecture at Moscone before madness ensues).

Don’t be gullible, don’t believe that you just need to use Marketing Tactic X to radically change the equation, whether X is viral videos, social media, a spot on QVC, late night infomercial, a hip hop star partnership, or some other magic bullet. Everyone else is using these and they are factored into the $ equation above.

There is a great thing about this model: if you have a cool product it moves units – you can sell a few hundred K units this way, or if you spend a bit more, 1mm. Big time! $100 gadget x 1mm units = $100mm in revenues!! Can you smell the IPO? (It only cost you $40mm in marketing…but with the scale you get the virtuous cycle of scale going and the $30/unit you pocket starts to pay for the overhead.)

Notice also that your happy nerdy engineering team is churning out an ever-evolving product in this scenario too — Peek the email gadget becomes Peek + web browser, then Peek Android then Samsung Peek and LG Peek etc etc. (Use your imagination.)

The catch however (in case you are dusting off that old business plan for an exercise gadget) is you need to start by raising $10mm then you need to raise $30mm more in the next round.

There is another way, however, and I think there are some guys doing it: Fitbit health accessory, Sifteo game cubes, Zeo sleep manager. More or on them later.

Victory over The New Yorker, Nov 28, 2011

amol — Tue, 21 Feb 2012 22:52:41 +0000

What a great issue. Peter Thiel (depressed genius), JR (empathic genius), Howard Cosell (voluble), Lasn/Adbusters (creative revolutionaries), Diego Rivera (), and some dumb American/Italian “princess”. A tour de force.

RIP Michael Dummett

amol — Mon, 20 Feb 2012 19:22:15 +0000

Much discussed in grad school.

De Tocqueville, still right

amol — Mon, 20 Feb 2012 17:04:39 +0000

The election of the president was and is corrupt. Luckily, he hasn’t
got much stroke. (Note to Colbert Liberalism: it wasn’t better before
Super PACs.)

Khosla and pretty much every trend

amol — Mon, 20 Feb 2012 03:43:52 +0000

http://techcrunch.com/2012/02/19/unhyped-internet-and-mobile/?grcc=33333Z98