Growth5 Blog

Saturday, February 28, 2009

If You're Considering a Startup, Here are Five Books You Should Read lists the five books every entrepreneur starting a business should read.

1. Will It Fly? How to Know if Your New Business Idea Has Wings... Before You Take the Leap, by Thomas K. McKnight

2. The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, by Michael E. Gerber

3. Guerrilla Marketing: Easy and Inexpensive Strategies for Making Big Profits From Your Small Businesses, by Jay Conrad Levinson

4. The Business Planning Guide, by David H. Bangs Jr.

5. Start, Run & Grow a Successful Small Business, by Toolkit Media Group editors

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Is Your Brand-Building Working?

Entrepreneur Magazine covers four key metrics that can help you determine if your brand-building is working.

#1 is Leads Generated: "...few businesses keep track of how many leads are generated or where the leads come from. By getting really fanatical about this metric, you can determine the best ways to spend your precious marketing dollars."

Check out the article for the other four.

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Friday, February 27, 2009

Google's US Search Market Share Stabilizing

Silicon Valley Insider recently reported on Google's US search market share stabilizing at about 63%. Over the last eight years, Google has gone from 0% of search to over 60% and appeared to be headed to 80-90%. However, over the last six months Google has settled in at the low 60% mark, while Yahoo has held steady at about 20%.

This is real good news for Yahoo shareholders and their hopes of a deal with Microsoft.

Search share trends over the past 25 months, per Comscore:

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Fastest to 150 million? Facebook is first.

Facebook reached 150 million users in five years. How does that compare with other technologies that achieved 150 million users or units sold?

iPod: 7 years
cell phone: 14 years
television: 38 years
telephone: 89 years

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Thursday, February 26, 2009

Preparing for the Worst

JP Morgan is profitable. They cut their dividend by 87% anyway. The dividend has not been cut since 1990. The drop to 5 cents a share will save JP Morgan more than $5 billion this year, a cushion for what may lie ahead.

CEO Jamie Dimon: "Please don’t read this that we’re panicking. You have to react to extraordinary times and extraordinary events to protect the company."

It appears JP Morgan's conservative approach will continue to pay off for them.

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American Express Will Pay You $300 to GO AWAY!

Proactive risk management. American Express is offering some cardholders a $300 incentive to pay off their balance by April 30th and then cancel their accounts.

"The move comes as credit rating firms have warned that rising credit-card delinquencies could push the industry's charge-off rate into the double-digits by the end of the year from December's record level of 7.7% amid higher unemployment and a bleak economic outlook."

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Wednesday, February 25, 2009

Can Cable & Satellite Save Newspapers?

There has been chatter recently that certain content on the web - like tv shows for example - should only be accessible online by cable or satellite subscribers.

Mark Cuban thinks that newspapers should be contacting the cable and satellite providers and striking a deal to provide their newspapers exclusively online to those same subscribers. The idea being that content aggregation is a far superior distribution system than the current newspaper plan: one-offs at the newsstands and one subscription at a time.

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Tuesday, February 24, 2009

How to Raise Your First Round of Financing

In the March issue of Entrepreneur, Asheesh Advani offers three tips for raising cash with a second round in mind.

1. Use convertible debt, not stock
2. Set a fair price or an appropriate discount
3. Communicate regularly

Asheesh Advani is president of Virgin Money USA, author of Investors in Your Backyard and founder of CircleLending, which pioneered the business of managing person-to-person loans and mortgages and was acquired by the Virgin Group.

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Monday, February 23, 2009

$1.5 Million in Angel Investment, 14 Geeks, and One Rescued Puppy. How Video Game Platforms Are Not Just For Fun and Games Any More

We know the video game industry is big business (about $13 Billion). We also know that "in-game" advertising is becoming popular (expected to be up to $1 Billion in 2010) We've also probably heard of video games being used for learning, training and simulation. So, it shouldn't be of too much surprise to find out that a video game platform is being used to facilitate the logistics in real life rescue operations. They even saved a puppy and 15,000 other stranded pets during Hurricane Gustav.

The software is called "Depiction" and it's Cool.

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Sunday, February 22, 2009

Links: Sunday, February 22, 2009

Venture Capital

1. YouNoodle is an online platform for startups, early-stage ventures and the world's top entrepreneurship clubs and competitions. They follow 27,000 startups and provide a score for each based on traction, activity and buzz.

Are traction, activity and buzz enough to predict the success of a startup? We shall see.

Startup Predictor
is "the first in a series of decision-making tools YouNoodle plans to introduce for the startup industry. The YouNoodle development team studied thousands of current and past startups, using both publicly available and proprietary data, to determine patterns of predictive factors for early-stage companies' success."

This tool attempts to predict what a startup will be worth in three years. Sight unseen we could all probably predict what most of them will be worth in three years, but that wouldn't be much fun would it?

2. World of Good raises $1.1 million for socially conscious shopping. The company promotes small artisans in developing countries that are certified as meeting environmental and ethical standards.


3. An iPhone app called WhatTheFont allows you to upload an image displaying a font then uses a database to return various possible matches. For the non-iPhoners out there, you can use the MyFonts site for the same purpose. Early reviews are promising.

4. Fast Company ranks the Top 10 Most Innovative Companies in Web 2.0. The top 3: Google, Facebook, Digg....#10 Kayak.


5. So, You Want to Be an Entrepreneur. An excellent article from the WSJ that asks ten questions to see if you have what it takes. If I had to pick just two of them to ask a potential entrepreneur, they would be:

#5. Are you comfortable making decisions on the fly with no playbook? and
#9. Are you a self-starter?

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Saturday, February 21, 2009

Marc Andreessen on Charlie Rose

Marc Andreessen was on Charlie Rose this week. An excellent interview. Marc co-founded Netscape, the social network platform Ning and is an Angel Investor in numerous companies including Twitter and LinkedIn.

Here are some highlights:

1:00 Marc serves on the Board of Facebook. He talks about Facebook's valuation, their 175 million active users, "half of which use it everyday, a lot of those use it 50 times a day."

4:00 The big vision of Facebook is to get from 175 million users to half of the current world's population... 3 billion users.

9:30 Innovation is alive and well.

12:20 "the iPhone is the first true cell phone that is actually a full computer... the iPhone when it landed, was like beamed in from the future."

18:38 Andreessen Horowitz. Marc's first fund. Will focus on investments in the $200k - $1.0 million range... "we're seeing a whole generation of startups that don't need that much money to get started."

27:00 Newspapers. NY Times deathwatch. "Stop the presses tomorrow."

35:00 Charlie gave Marc the following list of people: Marc Andreessen, Bill Gates, Steve Jobs, Sergey Brin, Larry Page and Andy Grove then asked Marc who of that list has had the most important contribution to the world. Who would you pick? Marc chose Andy Grove.

39:45 "Magic Businesses."

43:30 Online gaming.

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Friday, February 20, 2009

Entrepreneur Hall of Fame: Ted Turner

I just finished reading Ted Turner's book, Call Me Ted.

Here are a few takeaways:

1. Follow your instincts and act on them quickly. If Ted felt a deal was worth doing, he didn't take months talking himself out of it, he went after it immediately.

His purchases of the Atlanta Braves and Hanna Barbera (which would become the Cartoon Network) started with verbal agreements put in place within hours/days of him finding out the businesses were for sale.

2. Don't get hung up over price, negotiate favorable terms. Ted felt making deals quickly at a fair price was more important than months of negotiations and wasted time.

When Ted committed to buy the Braves in 1976, he couldn't afford the $10 million agreed upon price, so he negotiated a payment schedule of $1 million a year, plus interest, over ten years. [The Braves sold for $450 million in 2007]

3. Make deals that support your core business. Ted started with billboards, then bought a tv station (which later became TBS) because it was his biggest billboard advertiser client, which led to purchasing the Atlanta Braves because they were his biggest tv advertiser, etc... etc... etc...

If you are an entrepreneur, you should read this book.

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Thursday, February 19, 2009

Smaller Goals, Bigger Results

Fast Company posted an excellent article recently about how effective it can be to set slightly smaller goals that are more achievable than failing completely at larger goals.

It is so true that it's the dread itself that is worse than what is dreaded. Taking smaller chunks of the overall goal a piece at a time can provide the catalyst to overcome the dread and tackle the dreaded.

"Adversity calls for change, and change doesn't arrive via a miracle: It arrives via a kick start."

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Google is Chipping Away at Privacy, Again.

Google maps can now track people using the mobile phone's GPS signal. This is scary stuff, folks. We've been scanning what people have to say about this new feature and it's not good. Google should be careful. Trust is everything.

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What About Entrepreneurs? examines how the stimulus package affects entrepreneurs (if at all):

Entrepreneurs Not Feeling Stimulated

If most Americans work for small businesses, why are there little to no provisions for these businesses to help save jobs.

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Neither a Borrower Nor a Bailer-Outer Be

Do you have someone in your life that asks you to borrow money? There's nothing wrong with a small loan here and there. Sometimes life happens and we should help each other out, it could be us next time that needs a little help.

I'm talking about the person that keeps coming back, and each time seems to need to borrow a little more. We feel for them, but we wonder, what is it about their system/their plan that keeps bringing them to the point of needing more? We're pretty sure that whatever the system is, it doesn't work for them. We even go as far to offer suggestions to help fix the system, but we are told they have it figured out. We are friends, we chuckle about it, then consider changing our phone number. Eventually we stop repeating the insanity and just say no.

Which is why I'm glad I am not friends with the auto industry. They really do need help, I feel for them, but I couldn't do it.

For the record, if they were to ask, I would tell them unequivocally, "No, I will not give you $130 billion dollars, because a) how are you possibly going to repay me with the way you've perfected your system of consistently losing money and all; and b) you just know it will be $250 billion more next time and then you'll owe me $380 billion (awkward); and c) it doesn't matter anyway because I only have 8 cents right now with the market so firmly entrenched in the toilet."

Thankfully, our govt. still has more than 8 cents (because we continue to pay taxes), and could give the auto industry what it has requested. But should it?

-The turnaround plans submitted by automakers add up to massive job cuts. Sure, the layoffs could help the industry move towards profitability but would have a negative impact on the overall macro-economic picture. What have we gained?

-If the bailout for the auto industry is intended to save jobs and really is more of a jobs program, then it should be set up and implemented as such. Throwing money at businesses that have largely created their own problems will not magically make them profitable, in fact, history has shown the opposite.

-So the automakers get more efficient with these turnaround plans - demand for automobiles is way down as people are holding off on their next purchase. Cars may get made more efficiently but there is no one to buy them. What happens then?

The govt. will continue to bailout the auto industry under the "we have to, what else are we going to do, they're our friends" plan. Automakers will continue to lose billions. The govt. will change their phone number. The auto industry will show up at their House. Eventually the govt. will have to say no and then we'll be where we are right now, just short half a trillion dollars as we sit and watch the auto industry unwind itself via the mechanisms (bankruptcy) that are already in place today.

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Wednesday, February 18, 2009

I've Got 999 Ideas and I Can't Pick One!

Mark Cuban recently came up with an idea to boost the economy. He is taking business plan submissions and will fund ideas he thinks have merit. Seth Godin's Alternative MBA Program came up with 999 ideas for the taking.

Here is a random sample:

18. Hedge fund that makes bridge loans to homeowners facing foreclosure.
236. Digital family whiteboard on fridge (like an iTablet for the family)
456. Online Executive Betting System - Online trading system that allows you to trade CEOs like securities to make money
555. An application that you have your friends fill out that will compare against your answers and give you a compatibility score. In addition, tips about their personality.
975. A service that digitizes all your photos.

Check out the full list here.

If any of these ideas appeal to you, put a 1-pager together, shoot me an email and maybe we can wrap a business or two around a couple of these ideas. I bet if we don't, someone will.

Sunday, February 15, 2009

Is Your Mom on Facebook?

Congratulations! Your Parents Just Joined Facebook. Your Life is Officially Over.

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Thursday, February 12, 2009

The Three "S's": Status. Status. And status.

Hasn't it always been about status?

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Wednesday, February 11, 2009

Nitpicking what's in the stimulus package is like laboring over which specific turbo boost system to purchase for a car that doesn't work.

Old but applicable joke: "What do you get when you cross a Godfather with a deconstructionist? Someone who makes you an offer you can’t understand."

Why is everyone so focused on a stimulus bill that has little chance of making a noticeable difference when the financial system it would sit on top of is broken? It's like worrying about which specific turbo boost system to purchase for a car that doesn't work.

How do we get the car working so the turbo system will be useful? A good place to start would be to focus on what broke it in the first place. The fall of housing prices brought the financial system to its knees by exposing massively over-leveraged investment vehicles to capital calls they couldn't support. You would think the plan would include a measure to address foreclosures and the subsequent further drop in housing prices which make the toxic assets on the bank balance sheets nuclear.

Start with housing, fix the banking system (the plan may include some nationalization - so what), then stimulus - not the other way around.

Different takes on Geithner's plan (or lack thereof as it were)

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Tuesday, February 10, 2009

Apple is Doing What it Can to Remain Competitive

Apple is guarding the Multi-Touch patent with lawyers at the ready. Or in the case of Google, asking (threatening) them not to use the technology in Google's Android phone

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Monday, February 9, 2009

News Aggregator OneSpot Raises More Money

OneSpot has received $4.2M. OneStop creates news aggregation widgets that publications can customize and embed on their sites. They claim to have a better way of finding content on the web and leveraging it more efficiently for their client's sites.

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