It was December 2008, when I first wrote about trendwatching.com’s Global Consumer Trends of the next year report. trendwatching.com is an independent and opinionated trend firm located in Amsterdam, scanning the globe for the most promising consumer trends, insights and related hands-on business ideas. Reinier Evers; a trend watcher, a presenter and and an entrepreneur founded trendwatching.com in 2002 in Amsterdam. trendwatching.com is an innovative trend firm. What makes trendwaching.com unique is its source of information. Traditional trend reports rely on public surveys and direct sales datas. But trendwatching.com’s source of information is its network. The 2012 version of the popular report has been released.

Let’s look at 12 predicted crucial trends for 2012 from this report:

1. Red Carpet
2. DIY Health
3. Dealer-Chic
4. Eco-Cycology
5. Cash-Less
6. Bottom of The Urban Pyramid
7. Idle Sourcing
8. Flawsome
9. Screen Culture
10. Recommerce
11. Emerging Maturialism
12. Point & Know

Having an idea for a killer website doesn’t necessarily mean you can build it yourself. When it comes to building a website, there are a lot of factors to take into consideration. You have a great idea, however do you have the right configuration to execute and make this dream a reality? Developing a web business is a hard job, therefore you need additional talents or talented people to achieve success.

Talent marketplace Vitamin Talent prepared this handy flowchart to help you decide whether it’s time to build a great website or not.

Many people who want to start their own businesses and many people who want to invest in others’ ideas search answer of this question: “Which is more important the idea or the entrepreneur?” .

In academic journals, this is referred to as the horse (idea) and jockey (entrepreneur) debate. The horse and jockey analogy reflects two different financing philosophies: Either you believe the idea is the key and bet on the horse, or you believe management is the key and bet on the jockey. “Another way to phrase it is to say that you either bet on an A-team with a B-idea or on a B-team with an A-idea.

People have different thoughts on this topic. Generally, thoughts on this topic may be  grouped into 3.

1. The Idea: Some think that a good-idea will turn into a successful business in any manner whatsoever. They think business world has an evolutionary side which only good ideas can survive in time. Their motto is “Having the right idea is what counts.” .
2. The Entrepreneur: Many venture capitalists operate on the assumption that even if an idea isn’t perfect, it could be made so by the right management. So they think entrepreneur is more important than the idea.
3. Both The Idea&Entrepreneur: Some people believe that a successful business starts with a good idea. But firstly, an idea must be generated  and turned into a successful business by an entrepreneur. A good idea is a requirement but it’s not sufficient to succeed, it needs a good entrepreneur too.

I also think both the idea and the entrepreneur are important at the same time. A good idea is a start point. But don’t forget, most startups fail. A startup can begin with a revolutionary idea but execute dismally. Another startup can begin with a mediocre idea but execute spectacularly. The startup which executes dismally will fail and the one which executes spectacularly may succeed. But a startup which begins with a revolutionary idea and execute spectacularly will succeed. You may have the best idea but if you cannot reach your customers or you cannot pay your bills, you will fail. On the other hand, you may have the best management team but without a unique idea, growing your business and attracting investors will be very though job.

When you have a great idea, the questions to ask yourself is

1. Now that I have this great idea, do I have the right configuration to execute and make this dream a reality?”

2. Can I convince the marketplace that I can make this happen?

Consequently, I think the entrepreneur is 55% and the idea is %45 important to achieve success in business. What do you think about it? Would you bet on the Jockey or the Horse? Please comment…

People have many alternatives to sign in around the web. Users have existing online IDs and they don’t want any more accounts to sign-in. Internet developers need to determine which providers to let their users how to login.

The Infographic below from Gigya shows what online people are using the most to sign in around the web. Here are some statistics from the research.

• Across All Sites: 46% of people prefer FaceBook, 17% Google and 14% Twitter…
• Entertainment Sites: 52% percent prefer FaceBook to sign-in entertainment sites, 15% Twitter and 14% MySpace…
• News Sites: Twitter is preferred 45% to sign-in News Sites, 25% FaceBook and 16% Google…
• B2B Sites: 37% FaceBook, 19%Google and 18% Yahoo…

These statistics show us FaceBook is above all other alternatives to sign in online. I think this Infographic will be very helpful for developers to decide which online IDs are most important for their websites.
Which online ID do you use the most?

As an entrepreneur, I frequently see entrepreneurs failing. I wonder why it is so common for entrepreneurs to fail and how the successful entrepreneurs succeed. There must be a way to crack the formula of startup success and reduce the failure rate of entrepreneurs. The Startup Genome Project has an answer to this question.

A group of international entrepreneurs (Bjoern Herrmann, Max Marmer, Fadi Bishara, Aleksandra Markova) came together to crack the “innovation code” of the successful startups like the Human Genome Project’s attemps to crack the human genetic code. They released the first Startup Genome Report with in-depth analysis on what makes internet startups successful based on data from 650+ Internet startups. The list below shows 14 indicators of success from the report. You can download the full report for more details.

1. Founders that learn are more successful: Startups that have helpful mentors, track metrics effectively, and learn from startup thought leaders raise 7x more money and have 3.5x better user growth.
2. Startups that pivot once or twice times raise 2.5x more money, have 3.6x better user growth, and are 52% less likely to scale prematurely than startups that pivot more than 2 times or not at all.
3. Many investors invest 2-3x more capital than necessary in startups that haven’t reached problem solution fit yet. They also over-invest in solo founders and founding teams without technical cofounders despite indicators that show that these teams have a much lower probability of success.
4. Investors who provide hands-on help have little or no effect on the company’s operational performance. But the right mentors significantly influence a company’s performance and ability to raise money. (However, this does not mean that investors don’t have a significant effect on valuations and M&A)
5. Solo founders take 3.6x longer to reach scale stage compared to a founding team of 2 and they are 2.3x less likely to pivot.
6. Business-heavy founding teams are 6.2x more likely to successfully scale with sales driven startups than with product centric startups.
7. Technical-heavy founding teams are 3.3x more likely to successfully scale with product-centric startups with no network effects than with product-centric startups that have network effects.
8. Balanced teams with one technical founder and one business founder raise 30% more money, have 2.9x more user growth and are 19% less likely to scale prematurely than technical or business-heavy founding teams.
9. Most successful founders are driven by impact rather than experience or money.
10. Founders overestimate the value of IP before product market fit by 255%.
11. Startups need 2-3 times longer to validate their market than most founders expect. This underestimation creates the pressure to scale prematurely.
12. Startups that haven’t raised money over-estimate their market size by 100x and often misinterpret their market as new.
13. Premature scaling is the most common reason for startups to perform worse.They tend to lose the battle early on by getting ahead of themselves.
14. B2C vs. B2B is not a meaningful segmentation of Internet startups anymorebecause the Internet has changed the rules of business. We found 4 different major groups of startups that all have very different behavior regarding customer acquisition, time, product, market and team.

I hope this report will help all entrepreneurs like me to succeed and thanks for the contributors.

Paul Buchheit is the mastermind behind Google’s Gmail and AdSense, and founder of FriendFeed (now part of Facebook). As one of the earliest Google employees. Buchheit first uttered those three words “Don’t be evil” during a meeting convened to discuss how Google should communicate its corporate values… Then “Don’t be evil” took on a life of its own, spreading rapidly through the Googleplex, and ultimately it was included in the company’s 2004 initial public offering prospectus.

As a successful developer and an entreprenur, here are 5 startups tips from Paul Buchheit:

1. Launch a scaled-back version
   It’s always possible to do a scaled-back version of what you have in mind without the need of a lot of money.
2. Notice sluggish competitors
   If your competitors are actively making their products worse, it is a really good indicator of an opportunity. When Paul Buchheit considered building Gmail, he saw that Yahoo! decreased their [email storage capacity] from 6 megabytes to 4 megabytes and Gmail started with 1 gigabytes.
3. You don’t need virality if your product is good
   “I think the best kind of virality,” he said, “is a product that people like so much that they just want to tell people about it.”
4. Follow your passion
   Instead of setting goals, he said, “I have a different approach. I look to see what things I enjoy doing and just try to figure out how to spend my time doing things that I enjoy.”
5. Sometimes you have to go off on your own
   It’s very good thing to work in a big Company like Google; but sometimes you have to go off on your own to release what you want. Big companies can limit you, because what you’re releasing can harm their brand over time.

* This post is a rewrite of an older Mashable post written by Andrew Warner.

Andrew Warner is an Internet entrepreneur and the founder ofMixergy. He interviews successful people to learn how they did it.

I can’t write valuable posts for a long time because of our ongoing projects and my full time job (In fact, there are more than  10 draft posts which i should check and update before I post if i could find enough time and a free brain).  But i try to share valuable resources, especially experiences of successful Internet entrepreneurs with you and this is one of them.

At The Future of Web Apps London, Kevin Rose shares the secrets to Digg and Wefollow‘s explosive user growth. He covers ten unique strategies that turn passive users into passionate advocates and what he did to increase his users to 1,000,000 and beyond.  You can both watch his presentation video or view his presentation slides.

The first ever Gov 2.0 Summit was held in Washington,DC; in September 2009. The summit brought together leaders from the private, public and government sector to find better ways of dispensing information.

Eric Ries from VC firm Kleiner Perkins Caufield & Byers was one of the speakers at Gov 2.0 Summit. In the video below, Eric Ries is sharing his wide experience about creating “Lean Startups” by “Doing More with Less” as both a former entrepreneur and a VC advisor.

Eric Ries became a Venture Advisor at Kleiner Perkins Caufield & Byers, after co-founding and serving as Chief Technology Officer of IMVU. He is the co-author of several books including The Black Art of Java Game Programming (Waite Group Press, 1996). While an undergraduate at Yale Unviersity, he co-founded Catalyst Recruiting. Although Catalyst folded with the dot-com crash, Ries continued his entrepreneurial career as a Senior Software Engineer at There.com, leading efforts in agile software development and user-generated content. In 2007, BusinessWeek named Ries one of the Best Young Entrepreneurs of Tech. He serves on the advisory board of a number of technology startups including pbWiki, Bunchball, FooMojo, Causes and KaChing.

Aaron Patzer’s personal finance manager Mint is one of the best examples for building a successful company from nothing. Aaron Patzer started Mint.com when he was 25. Mint launched in September 2007 at TechCrunch40 and in September 2009, Mint is acquired by Intuit for $170m. Mint.com has reached over 1.5 million users and helped them of people pay debt, manage job loss in the downturn. Aaron has packed a lot of experience in a very short time and shared his experiences and advices on several platforms.

Aaron Patzer isn’t only a successful Internet entrepreneur, but he also likes to help others about Internet business development. In the embedded video below, he  tells the story of Mint and gives incredibly useful advices for Internet entrepreneurs at a startup competition event called Juice Pitcher on the Microsoft campus.

There’s no doubt that YouTube is the biggest player in online video industry. YouTube outperformed its competitors and has become a winner in video sharing. YouTube is one of  the most succesful web stories of all time, since 2006 and still growing very fast.

When Google acquired Youtube for $ 1.65 B, Google was criticized for paying huge amount of money for a website without a business model. Everybody except Google was thinking that YouTube was overvalued. Video sharing sites have the biggest costs in Internet World. They need really fast servers and huge storage space and the bandwith costs are the highest. Because of the high costs, ROI (return of investment) of online video businesses are very slow. It’s hard to monetize broadband video and the only ways to monetize this type of business are showing ads and subscription.

According to the YouTube Blog, YouTube’ s 1 minute is worth 20 hours. In mid-2007, 6 hours of video were uploaded to YouTube every minute and in January ’09 it grew to 15 hours per minute. Now,  20 hours of video are uploaded to YouTube every minute and we’ll see 24 hours – a day’s worth of video uploaded to YouTube, very soon.

YouTube dominates the statistics of online video industry, but doesn’t make Google any money. YouTube streams more than 5 billions videos in a month but less than 5 percent of those videos have ads.  YouTube serves one-third of  all online videos. Industry experts predicts US Online Video Ad Spending as $ 750 M in 2009 and rising to $ 5.8 B in 2013.  Undoubtedly, YouTube will get a big part of this pie if it’ll survive. YouTube’s operational costs are rising and bandwith costs are estimated about $ 470 M for this year alone. Day by day, it’s getting harder and more expensive for Google to support YouTube.

Hulu, a smaller and newer competitor of YouTube made a head-to-head US revenue (about $90 M) with YouTube. Hulu is focusing on exclusively on professional content and held by NBC Universal, News Corp and Disney which are also very important video producers for television. Hulu’s advantage is its professional content without copyright problems. But because of some copyright restricitons, Hulu is a U.S. only service. YouTube proves that there’s a big market for user-generated content but Hulu shows us that advertisers want to spend money for professional content.

* YouTube had more than 77 million unique visitors in April when Hulu had about 7 million unique visitors.

Industry experts estimate  an average value of $15 CPM for video sites and $40 CPM for focused video sites like Hulu and Heavy.

Other video sites will never be able to grow as much as YouTube, but their revenue can surpass YouTube’s in the future. YouTube (and Google) must find a way to monetize its content effectively and reduce the costs. I think the only way to do is to serve more professional content as quickly as possible and find an innovative way to monetize user-generated content. Maybe, sharing the revenue gained from user-generated content with the users who created the  content can increase the quality and the chance of the user-generated content to get ads.

It’s true that YouTube has mind blowing satistics and  the third most popular website in the world. YouTube’s one minute is worth 20 hours; but we really wonder how much is YouTube’s one minute worth in US $?

Web 2.0 started as a revolution that uses the web to link people together. Web 2.0 means communicating, sharing, discussing and trading online in very useful ways never possible before. Web 2.0 simplifies collaboration and information exchange. We get used to Web 2.0 services as a part of our daily lives and these services are being more popular day by day.

Web 2.0 makes headlines, but how is it possible to make money by starting a Web 2.0 business? We are sure that there are very successful Web 2.0 companies. Google makes money based on  “free” search,  Facebook and other social networks  grow so quickly and their content is created by their users.

This concise list is prepared to explain what’s different about Web 2.0 and  to help you about how to create a successful Web 2.0 business.

1. A Simple Business Idea: Every succesful business requires a business idea.  The main problem abot business ideas is that people think a complex idea means more success. Most succesful Web businesses focus on simple problems and solve them perfectly. There were search giants before Google but Google improved search results, localized its services with a very-simple interface and for free. Don’t forget, complexity is the enemy of Web 2.0 . Think simple!

2. Create and Release as Early as Possible: The development velocity is important when you start a Web 2.0 business. Investors want to see working prototypes before they invest in your projects and don’t forget the competitors; some of them are experts about getting others valuable ideas and transform into businesses.

3. Use The Network Effect: Web 2.0 World is people-centric and there are countless free ways of collaboration with people who may become your users, investors or team-mates. Social networks and social bookmarking sites likes Digg are the best places to find volunteers for testing your products or advertising your business for free. Listen to your customers and let their feedback shape your product.Try to develop a community around your web business and hire a community manager as soon as possible. Motivated fans will be the best and the cheapest marketing staff of your company. The network effect is the main reason why leading Internet companies got so big, so  fast.

4. Use Web 2.0 Tools To Cut Costs & Save Time:The simple rule to calculate how much money you need for a startup is; ”If you plan to develop in a year, it’s going to take two; if you think it’s going to take $100K, it’s going to take $200K”. So you must find a way to cut your costs and finish your project in due time. Web 2.0 tools help you to complete your tasks in a fast and mostly for free (or at a small charge) way. For example FreshBooks offers a simple invoicing and time tracking services that help you manage your business and lets you . Google Voice gives you anumber for all your phones, voicemail and sms. Especially in the startup phase, online services save you time and money, be available 24/7 and make you look professional.

When developing your products; don’t re-create what you can source from elsewhere. Another website’s API or Google App Engine may reduce your development time. Try to source it from elsewhere before you build something up. If you’re lucky it can be for free but sometimes it’s worth buying a ready solution; your time is priceless.

5. Monetize Every Chance: Advertising can often seem overly commercial especially in the startup stage but a sponsorship or small advertising sections are good for your business to make some money. Every pageview of your web business has potential as an earning point. You can also find innovative ways.

6. Track Your Users & Rankings: Success of your web 2.0 business depends on your business’ statistics. More users mean more money. You must track how man users visit your site, how much time they spend on your site, the most popular and the least popular parts of your site, how much registered users you have and etc… There are plenty of web 2.0 services to track your user analytics and  I think Google Analytics or a similar service is adequate for this purpose. You must also track and evaluate the demographics of your users to understand their needs and level of interests. User registration and polls are good options.
Tracking you site’s ratings is another important thing. Google’s PageRank, Alexa’s Traffic Rank and other rankings show how popular your site is and enables benchmarking of your site’s performance to your competitors’. You must know who’s talking about your company and in what way,too.

7. Don’t Forget Marketing: If developing a good web service is 50% of your business; the other 50% is marketing. Most of the creative & innovative solutions become trash because they can’t become brands. New users mean new markets; having a well-planned market strategy can save your business’ life. Instead of diving into a crowded market like a red ocean full of sharks, look for emerging areas on the web and try to find niche markets.  You should read something about Blue Ocean Strategy to learn niche marketing better. Marketing and brand positioning are two important points that you can need a professional’s help.

8. Read About Successful & Unsuccessful Internet Companies: Experience means money and time. A web entrepreneur must read the success stories of Amazon, Google, Youtube, Yahoo, Digg, Facebook, Myspace, LinkedIn,  PlentyofFish and the others, once. But an internet entrepreneur must read the stories of unsuccessful Internet companies that entered the deadpool, twice.

9. Have a Revenue Model: You can have 10 million pageviews, your users can spend several hours in a day on your site but it’s possible that you earn nothing. Every business needs a revenue model. You can sell physical goods, just run ads or sell your online services. It’s your business and  you will make a decision.  Don’t forget without a revenue model, starting a web business is a business suicide.

10. Continually Improve Your Business and Develop Improvement Metrics: Continuous improvement is the key factor to stay alive in Web 2.0 World; without continuous improvement, Web 2.0 itself can’t stay alive.  Experience is important and failure breeds success. You must learn from your mistakes and not repeat them.
You should define your targets and the KPIs (Key Performance Indicators) to reach your targets. For example, ROI rate is very important if you have investors. Define your metrics and check them often and improve your strategies to improve your business.

This post is a brief of personal experience and inspired by Dion Hinchcliffe’s “50 Essential Strategies For Creating A Successful Web 2.0 Product” article.

]]> http://siteboat.com/creating-a-successful-web-20-business/feed/ 1 http://siteboat.com/google-ventures-is-ready-to-fund-your-startup/ http://siteboat.com/google-ventures-is-ready-to-fund-your-startup/#comments Tue, 31 Mar 2009 19:06:18 +0000 Erdem OZKAN http://siteboat.com/?p=1944

Google finally launched its venture capital fund. Google Ventures welcomes startups from a broad range of industries; including consumer Internet, software, hardware, clean-tech, bio-tech and health care.

The FAQ of Google Ventures tells all the vision and targets of the …

(This post is co-authored with Web2INC Magazine)

The most stressful phase of a business is its start-up phase. If starting a business was easy, everyone would do it! You need 5 things to create a successful business: Idea, Courage, Time, Money, People.

Idea

There are billions of creative ideas in our brains, but ideas mean nothing if you don’t follow up by taking real action. Taking an idea into real action isn’t enough; your business model must cover what customers want. If you’re going to do what everyone is doing, you can’t be successful; you must solve a problem and create additional value for your customers.

Courage

A start-up without any risk is a dream. Forget about failure and  if you think you have a great idea, step out of your comfort area and go for it. Failures breed success!

Time & Money

There is a simple rule to calculate how much time and money you need for s startup: ” If you plan to develop in a year, it’s going to take two; if you think it’s going to take $100K, it’s going to take $200K”. So be patient and spend your money carefully and don’t run out of money. Also, growing too fast sometimes means unnecessary stress of a loan.

People

To succeed, the person you hire must do his job well and be success – oriented. In the start-up phase, the best way to motivate your employees and them make them more efficient is giving them your company’s shares.

You need more people who will help you develop your business for no money. These are friends, candidates for testing your product or service, a friends’ friends at advantageous positions for you to make PR and free marketing. This is called business networking.

To read more about this topic, you should read Paul Graham’s (partner at Y-Combinator) “How to Start a Start-Up” essay on his website. This essay is a must-read resource for entrepreneurs before starting a start-up.

Also, Inc.’s “Start-Up Secrets” slide is worth looking at.

After the dot-com (Web 1.0) bust, financing a web site wasn’t easy. But when we met Web 2.0, the Internet usage started to grow rapidly and investors started to become interested in investing web projects, again. Theorically, a business model with a monetizing income model is a must of a project for being invested in. But some web projects have no business model but something more important than a business model: Popularity.

Twitter is one of the most popular – top 500 – websites in the world, has a Google PageRank of 9 and no income model! Twitter is a privately funded startup with offices in the SoMA neighborhood of San Francisco, CA. Started as a side project in March of 2006, Twitter has grown into a real-time short messaging – microblogging service that works over multiple networks and devices. In the world of microblogging, people use the web or their cell phones to blast short updates on their activities to their virtual followers. An update is limited by 140 characters.

Twitter has drawn much attention in the tech world and has been funded two times, Series A: $5M, Series B: $15M and one of the investors in Series B was Bezos Expeditions – the company that manages Jeff Bezos’ personal venture capital investments. What a Paradox! A company with no income model but $20M fund. As Twitter becomes more popular, more gossips about Twitter’s expected income model, come out.

The last gossip was the most discussed one: “Companies using Twitter for commercial purposes may soon start getting charged for that activity, according to an interview British trade magazine Marketing (part of BrandRepublic) held with co-founder Biz Stone.” As you see the news headlines in the image at the left, this news has drawn very much attention in the tech-media. But a reply from Twitter came immediately. Twitter’s co-founder Biz Stone has written a blog post  related to the rumors with the title “Nothing To Report Just Yet“. He announced that Twitter will remain free to to use by everyone-individuals, companies, celebrities, etc. He’s telling that they’re thinking about offering new value added services to earn money and not imposing fees on existing services.

I think, a business plan is a must to start an internet business but sometimes a unique – niche idea eith no income model is worth investing and Jeff Bezos must have seen the future of Twitter.

As i mentioned in an old post before, Angelsoft is a New York based company which has become an online ecosystem where investors and entrepreneurs meet to build new companies. Due to its name, Angelsoft was about Angel Investors.After they released version 3.0 , their platform became easier but more powerful. With version 3.4 release, Angelsoft is welcoming VCs into the Angelsoft Network.They’ve launched new power features that can help the venture capitalists streamline the process easier. As it happened in all releases, the interfaces are ipmroved and lots of bugs fixed.

2008 Stats

Angelsoft is an alive and transparent platform and has lots of transactions, so the stats from Angelsoft are reliable enough to represent the industry. I think the most important stat is “invested submissions rate” . As you see, very small number of companies  who apply get funded. This shows how hard being an entrepreneur is. Getting an investment doesn’t mean that you will be successful. The success rate of a startup is very low, too. Half of the startups fail within two years and then the others in the next three years. Average four year – survival rate of a startup is under 40% . There are 442 angel groups and VCs and 14,900 investors in the Angelsoft Ecosystem and Angelsoft processes over 2,100 funding applications a month. Since May 2008, 37,000 + deals made, about 2,000 events occured, 150,000 documents attached.

Doubling Investor Community Activity

One of the most important need of the entrepreneurs is promoting their plans to the investor community. Angelsoft listened to them and took steps to help them out which resulted in a doubling of the number of views that the Investors receive. The feedback form both investors and entrepreneurs have been positive as well which means a win-win situation. Investors now receive an email bi-weekly with the 5 closest and 5 highest rated deals.

Industry Valuations

As the graph at the above shows, the average amount of funds being sought differs between 25% – 35% of the pre-money valuation estimated by entrepreneurs for their companies. The graph also shows us that the valuation is decreasing but the rate of the funds sought is increasing. This means,

• The prices are getting down in the early stage investment industry,
• Entrepreneurs are aready to share more of their companies with the investors.

Conclusion

These new features are a major step forward in improving the funding process for entrepreneurs and investing process for investors. These days, you can see angel investors and VCs coinvesting on deals more often. Both the VCs and angels need each other and this relationship will be more important in the future. It’s a smart action to bring VCs on board and Angelsoft platfrom has become a better place for entrepreneurs and angel investors to be able to meet more people.

* All the data and the images used in this article are the property of Angelsoft.