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Yesterday I spoke with lean startup guru Eric Ries who is hosting the Startup Lessons Learned conference this Friday in San Francisco and at live simulcasts around the world. Ries says he considers entrepreneur turned educator turned public servant Steve Blank to be his mentor in the startup world, and Blank will be among Ries' lineup of speakers at this week's conference. Blank will give a talk he's titling, "Why Accountants Don't Run Startups," (or Customer Development 2.0 on the conference site ) which details the major differences between startups and large companies - a speech whose slides Blank posted to his blog via SlideShare late last week. Sponsor According to Blank, the line he draws between smaller startups and larger companies is based around the business model. Startups, he says, exist in the state where they are searching for a business model, and large companies are the result of finding and executing that business model. The reason he calls out accountants in the title of his talk is that as startups transition into larger companies, their less conventional methodologies become more traditional, and that's when accountants are needed. Early on, startups, in his opinion, should rely on such metrics as customer acquisition cost, viral coefficient, customer lifetime value, and monthly burn rate. These types of measurements become de-emphasized in larger companies which focus on balance sheets, cash flow statements and income statements, Blank says. Parallel ways in which startups transition into larger companies include customer development giving way to product management, and agile development becoming engineering. Early-stage companies, searching for a business model and for customer traction, will test hypotheses, discover their minimum feature sets, and pivot their focus if things don't work out, he says. Product management takes over once a viable model is found. One of the major stepping stones toward becoming a successful larger company, Blank says, is discovering the winning model or process and focusing on making it work over and over. Entrepreneurs begin their startups with a hatred for processes, but learn to love and implement processes as the company grows into a profitable business. Passionate focus transitions to focus on the company's mission, and ultimately to the execution of that mission. Blank wraps up his presentation by drawing the same lines between two types of education, business school and entrepreneurship school. Business school, he says, is far better suited for teaching students to run larger companies, while startups need founders with better entrepreneurial training. These ideas merely scratch the surface at what Blank is likely to dive into during his 45 minutes presentation Friday afternoon, so be sure to check out the event if you're in San Francisco, or find a live simulcast to attend in your area. Photo by Flickr user dux_carvajal . Discuss
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Steve Blank On How Startups Evolve Into Large Companies
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As a recent article in The Economist observed, we are at the point of an "industrial revolution of data," with vast amounts of digital information being created, stored and analyzed. The rise of "big data" has led in turn to an increased demand for tools to both analyze and visualize the information. This bodes well for startups tackling the field. One new service is Flowing Media , the new company of Fernanda Viégas and Martin Wattenberg, a consultancy focused on data visualization services. Sponsor Prior to founding Flowing Media, Viégas and Wattenberg worked for IBM's Visual Communications Lab . Their Many Eyes project was one of the first to put visualization tools in the hands of the public, with the goal of democratizing visualization and the accompanying social analysis. According to Viégas and Wattenberg, visualization is a powerful analytical tool for experts and non-experts. "It's an excellent way to attract non-geeks to complex data and can spark conversation." They note that a good visualization can easily go viral on the Web, touching millions of people. As "big data" becomes more accessible, visualization services like Flowing Media are sure to flourish. After all, as Viégas and Wattenberg note, "Today many facets of life are made of nothing but data, from flirting on Facebook to photos on Flickr." Image credits: Fernanda Viégas and Martin Wattenberg, top: Wired Magazine - "A visualization of thousands of Wikipedia edits that were made by a single software bot. Each color corresponds to a different page." and bottom: Flickr Flow , the colors in photos uploaded to Flickr. Discuss
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Visualize Big Data with Flowing Media
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Taking advantage of the increasing importance of social media management for businesses, Spredfast , a finalist at this year's Microsoft BizSpark Accelerator at SXSW, has received $1.6 million in funding from Austin Ventures. Featured here on ReadWriteWeb in January, Spredfast is the first enterprise-class social media management system. Sponsor Spredfast supports companies at both the enterprise and SMB levels, allowing businesses to manage their social media campaigns through a single dashboard. Spredfast incorporates data from multiple platforms, including Facebook, Twitter, LinkedIn, YouTube, Flickr and most blogging platforms (such as WordPress, Blogger and MoveableType). As the information from these platforms is in one location, and as the service integrates both Omniture and Google Analytics, Spredfast facilitates social media automation and then ties social media analytics with Web analytics to secure "click to conversion" metrics. The pricing for the services range from free to $100 per initiative per month. Since its public launch in January, Spredfast has attracted Oracle, AOL, HP and IBM to its customer base. "We've been working to establish Spredfast as the 'Omniture for social media', a valuable tool for anyone trying to effectively manage and measure a social media initiative," said Kenneth Cho, Spredfast's CEO. "Our relationship with Austin Ventures, specifically with AV partner Mike Dodd previously of Omniture, is great validation of the huge gap Spredfast is filling in the social media market and the reception so many customers are having toward the product." Discuss
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Social Media Management System Spredfast Secures Series A Funding
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The gaming industry continues to see phenomenal growth - from console systems to social games. The 12 million subscribers of Blizzard's World of Warcraft - once the giant of gaming - now seems small compared to the 80 million Farmville players. Farmville's maker, Zynga was recently estimated to be worth $5 billion - a valuation that appears to bode well for investors and for startups. But are games good buys? Can gaming startups attract the investment they need? Sponsor Gaming industry consultant Nicholas Lovell recently wrote a post on the blog Gamasutra where he suggested "Four Reasons Why VCs Won't Fund Game Companies." Lovell's arguments are as follows 1. VCs don't invest in projects Lovell contends that game developers are good at creating (and even at pitching) projects, but that VCs don't necessarily care what makes a good project - in other words, what makes a good game. "Investors care about businesses; developers show them projects." 2. Investors want to see a running business, not an idea 3. VCs want sustainable businesses Lowell writes, "Traditional games developers are really difficult for any investor to fund. They look like quite late-stage businesses: they may have hundreds of staff, millions in turnover and a proven track record. But fundamentally, they are always just one deal away from bankruptcy. They look like startups from a risk perspective but are like late stage investments from a reward perspective." 4. History sucks The history of the gaming industry is full of failed businesses, and as such VCs find the investment there to be risky. Arguably, investors' opinions might be changing, particularly given the rapidly increasing popularity of social games. While traditional console games and MMORPGs require significant investment and substantial development time before a game is "live," social games are, arguably, "lighter." With the growth in virtual goods and virtual currency, even "free" social games, as Farmville and the like have demonstrated, can become vastly popular and very profitable. Discuss
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Do VCs Like Games? Gaming Startups and Investors
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Most of the initial buzz surrounding Apple's announcement on Thursday of its new operating system, iPhone OS 4, centered on the support for multitasking . While this feature has been long anticipated by users and developers alike, another important but less discussed aspect of the update involves Apple's Game Center - a social gaming network to be launched for iPhone and iPod Touch later this summer. Similar to the networks already prevalent in console gaming, Apple's Game Center will allow friend invitations and multiplayer game-play and will include matchmaking and high-score tracking. Sponsor The Game Center may be Apple's attempt to compete with Facebook's dominance over the hugely popular and incredibly lucrative area of social gaming . A report released this week suggested that the gaming company Zynga , maker of six of the seven most popular social games, is worth over $5 billion. Unlike Facebook, Apple does not currently have a social network upon which to automatically connect players and friends, although implementation of the Game Center may well bring this about. Details about the Game Center were not explicit in Thursday's announcement, although the beta release of the operating system will include a developer preview of Game Center and contain a set of APIs so that mobile game developers can build apps that take advantage of the social gaming network capabilities. Echoing the popularity of gaming on the iPhone, initial analytics since the iPad release point to the continued domination of the App Store by gaming and entertainment applications. The updates to the iPhone OS could provide an opportunity for mobile and social game developers and for entrepreneurs in the gaming industry. Discuss
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Apple's Game Center: More Opportunities for Social Games Developers
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