Posted: February 26th, 2010 | Author: Julio Hernandez-Miyares | Filed under: New York City Startup, Startup |
For two hours on Wednesday evening February 24th, I and a group of other interested and hopefully entrepreneurial folks were treated to a discourse on Angel Investing – the when and how to ask for money from an Angel by David Rose, a dean of the art in New York City .
For those that have an interest in the presentation, here is a link to the audio.
The event was hosted by New York University’s Stern School of Business and the packed house seemed to be filled with mostly young and hungry NYU business students. The invite was not limited to just students but open to all that could reserve a spot which is how I got in.
I did take a front row seat with my polished Apple , spitting distance from Mr Rose and plopped myself down for what ended up being an enchanted two hour presentation.
The crux of the presentation was tailored around the protocol of enlisting angel funding for a startup. I won’t redact the entire two hours into this post , what I will concentrate will be on what I got out of it as singularly important.
- Have your elevator pitch
As the saying goes, you should be able to describe what problem your business attempts to solve in the short period of time that you may be in an elevator with someone, Ok, let’s assume you are in a New York City high-rise but notwithstanding, you have 30 seconds or at most if you are lucky 1 minute to provide the thrust of what your business strives to accomplish and be.
That is much harder then it seems and takes considerable thought and work to get it right and then practice to be able to deliverable at any time planned and most importantly unplanned. You never know when you will be presented an opportunity to deliver the pitch. For example , at the tail end of the 2 hour presentation, 3 people were selected at random to deliver their startup pitch to David Rose. The ground rule was you got two minutes and nothing more to present. Being concise but thorough enough to enlighten someone you have just met with the pretext of your business so that they come away with a general understanding and more importantly a desire to learn more is key if you want to successfully navigate the avenues of angel funding Remember, though quite naturally one is the most important person in their own universe or mind, the full universe is full of countless others who feel the same and thus the competition for attention is intense. Get your message tight and have it fit within that veritable 30 second window. imagine you were given 30 second spot during the Super Bowl.
- Craft a Business Plan
Even though David Rose admitted the likelihood of an angel spending time combing through a business plan was low, the strong expectation is the entrepreneur would expend the time and energy tailoring a business plan with a time horizon of 3 to 4 years. Anything out further then 4 years is dismissed as pure fantasy.
There is a recognition that even a 3 to 4 year horizon will be liable to be off and require constant recalibration. Nevertheless the act of preparing the plan gives evidence to a necessary discipline that is important for the budding business itself as well as an artifact that demonstrates to those you want money from that you have applied a degree of rigor to how your business purports to operate.
- Personal investment is key
It’s your business! If you don’t put some of your own funds on the line, how would you expect someone else to take a chance?
That seems very self evident but was hammered home at length. The absolute amount of personal investment is not the key factor as that will depend on multiple factors. Are you actively investing your own capital? How about Friends and Family who are the people who know you best? Even better, is there already a revenue stream from customers who are voting affirmatively using your services or products. If the answer is no to all above, fat chance you will have a willing angel investor.
These represent some of the things I took away from the two hours. It is a major distillation of what was a broad based educational presentation of how to interact with a potential angel investor if that is the path that makes sense for your startup.
Now that I have gotten myself on a magical listserv, I was also invited to an event this coming Monday March 1st 2010 to review the finalists of NYU’s Stern Business Startup Showcase. Starting with over 170 entires, the group has been whittled down to 40 semi-finalists in a content to garner from a pool of over $175,000 in capital for the winning ideas. I suspect I will be privy to a slew of more social networking or aggregation sites which seem to be in abundance as startup ideas but I hold out hope that doesn’t end up being the case.
Posted: February 26th, 2010 | Author: Julio Hernandez-Miyares | Filed under: Cloud Computing |
At least in the technical realm, the noise around cloud computing has become a veritable roar with all of the usual hype associated with the promise of alleviating some of the more difficult aspects of operationalizing the assorted services that constitute the web as we know it. In many respects the hype is legitimate and is making technologists’ potential to concentrate on the core feature set and leave the operations to someone else that much greater.
It the context of this post I will differentiate between Cloud Applications like Flickr or Delicious and countless others that provide product functionality directly to a consumer requiring precious little if any technical acumen and Cloud computing services like Amazon Web Services that provide a set of fundamental building blocks to build products.
Before I move on, a Cloud application I have recently started using that leverages Cloud services namely Amazon’s is Backupify. As the name implies, it backups various well known applications such as Flick, Delicious, wordpress blogs etc and the backups are persisted via Amazon’s Web Services. So here is an Cloud application that uses Cloud services to flesh out it’s features. The power of this model of crafting products is enormous. The time to market is considerably reduced as the purveyor of services can quickly spin up a set of functionality without much regard to establishing a data center/rack space and all that is involved in operationalizing something of this sort. Also, the vendor of the service is able to manage costs and attendant risk during the hectic startup period. They generally only have to pay for as much service as they consume which is governed by the adoption rate of new customers. This makes the operational costs almost entirely variable instead of fixed which provides the necessary risk mitigation especially for new startup like businesses. If the adoption rate is low and the service does not win out in the marketplace, there is no need to sell equipment at fire side sale prices to wind down an unsuccessful business. Conversely, growth can be managed in a more balanced manor by only tapping into the services needed. Also, for those particular instances where one has to deal with spikes in usage , the need to have an operational footprint large enough to support the anticipated spike ends up revolving around tapping into extra services from the Cloud to support the spike and when the spike is over, the horsepower is made available to whomever else out in the cloud when need the capacity.
This makes history of the scenario where one would need to manage fixed operational infrastructure sufficient to deal with the highest volume of usage but where that infrastructure is often left under-utilized save for the few instance of spikes.
Posted: February 6th, 2010 | Author: julio.luis.miyares | Filed under: Technology, Technology Outsourcing |
If we outsource our Software Development , we can save considerable labor costs. For each USA based employee we can have 4 or 5 based on current ratios of India development resources. True, if the disparity between where the resources are currently located and where they will be outsourced to is large, you will save some personnel costs but is that the sole determinant whether it is a good idea or not?
Dispersing technology development/support (or operations) throughout the world has benefits besides cost and based on labor rate differentials. If you have a large enough inventory of sites to support that operate 24/7, having a team of System Administrators that overlap various timezones should improve the responsiveness when things inevitably go wrong. Also allows for system maintenance during the slow hours in whatever market the particular site has it’s lull. Also, you can smooth out the demand and supply imbalances in actual engineering resources that make acquiring engineering resources problematic regardless of what the pay scale is in certain markets.
On the other hand, if you are working in a domain that is subject to large amounts of uncertainty and market pressures in leap frogging features, what does a lower labor rate coupled with the latency inherent in time differences and maintaining context get you except 2nd , 3rd or further down in timely meeting the market need?
I have worked in situations where design is in the Eastern Time Zone and Web development on India time. A change in design would easily take 48 hour turnaround just to get the correct understanding of what the feature represented and how it fit into the rest of the product/design flow before anything could possibly be engineered. Given that Frontend Web development is relatively low technology this minimum latency is dysfunctional and has an attendant cost in frustration on the part of the involved product team including executive management as well as missed opportunities in the marketplace.
The aforementioned should not be cast as a criticism of engineering in India as those engineering teams are thrust into a position where success is not achievable.
