Startup Addict Musings

The Amazon Startup Challenge is down to seven finalists clawing for the $100,000 grand prize. As most of you know, I’m a huge fan of Amazon Web Services and startups that leverage the low cost - high scalability services. The seven finalists chosen by Amazon have truly interesting business models.

Encoding.com has transformed video encoding from a traditional software model to a software as a service (SaaS) platform. Encoding.com combines elastic computing resources with cutting edge video encoding software.

Startup Addict Musings:

I use to do a ton of encoding in my film and television days and used out of the box software like Sorenson and Cleaner for encoding. Having a SaaS is a boon for producers and editors who can load content from anywhere in the world with an Internet connection, completely software and platform agnostic. There will be a clear need for this business model…and you gotta love the tier 1 domain name, probably worth 250K just for the domain name.

Knewton supercharges any education content by teaching the exact concepts students need, in the medium and pacing best for each. Knewton’s self-optimizing “Darwinian” engine grows increasingly effective as each new student joins the network – so the learning plan of the 50 millionth student is powered by the combined data of all the others.

Startup Addict Musings:

A niche focused startup that offers 9 hours of free instruction and free GMAT test just to try it out. It’s the Moores law of education

MedCommons provides cloud-based Health 2.0 application services for patients and doctors, and enables third parties to customize and extend the MedCommons Platform for their own needs.

Startup Addict Musings:

The customization and application extension of this platfrom will really shine. Medcommons will be able to deliver at a far superior price point then competitors as well.

Sonian is a cloud compute email productivity service. Each day, 86 billion emails and IMs are created and most of this information needs to be saved and indexed for compliance and personal productivity. Sonian solves this problem with next generation software running on the Amazon Web Services cloud. Sonian archives electronic communications, files and unstructured content to unlock the actionable intelligence stored in this “dark data.”

Startup Addict Musings:

Seems like a pure data play to me and will have fierce competition. Focusing on enterprise or legacy systems may be the model.

Pixily is an interactive document management service that organizes paper and electronic materials online so people can instantly find and share information whenever and wherever they need it. For consumers, Pixily serves as a digital organization assistant that reduces paper clutter and helps manage personal information more efficiently. Businesses rely on Pixily as an affordable on-demand document management service to streamline daily operations and be more productive.

Startup Addict Musings:

A great concept to bring on-demand document management to the web, but getting businesses to send along sensitive documents and data will be a stumbling block for this model.

Yieldex delivers accurate forecasting of overlapping online advertising inventory and optimal campaign allocation for online publishers. Our tools help publishers get more revenue from their premium inventory through in-depth proposal analysis, scenario planning, and Yieldex’s proprietary yield index.

Startup Addict Musings:

Advertising metrics is always a profitable arena, but the proof is in the pudding. If Yieldex can really accomplish accurate forecasting, squeezing more revenue for the publisher and managing ad inventory it should be a winner. The company may face some turbulence with the consolidation of advertising networks and the general economic haze.

Zephyr enables enterprises to manage their test departments more efficiently, boost productivity, reduce costs and provide IT leaders with real-time visibility into all aspects of their software quality cycle.

Startup Addict Musings:

Web 2.0 outsourcing at it’s best…difficult to comment until I try the software, but a solid approach to a real world problem.

Financials on a few of the companies mentioned in this article

Tags: Startups //

I just finished reading Content Rich “Writing your Way to Wealth on the Web”. The author and fellow entrepreneur Jon Wuebben tackles an enormous amount of material pertaining to SEO copywriting. He demonstrates the topics and techniques in an easy to understand language. The book is adequate for the novice or experienced copywriter but shines in the optmization (chapter 5) and the small business (chapter 12) categories.

Content Rich digs into the anatomy of copy writing by identifying solid SEO techniques for spiders like Google, MSN, Yahoo while paying attention to aesthetics for the human readers. I have personally been obessed with SEO techniques at the expense of good call-to-action and conversion techniques. Content Rich has a nice balanced diet of both. It’s one thing for a search engine spider to find you but entirely another to convert a web surfer into a customer.

I would consider myself middle of the road in terms of SEO copy writing techniques and thought the book to be worth its’ salt and a good addition to my bookshelf for reference in the future.

Tags: SEO //

Buying a second business is an appropriate topic in these tumultuous economic times. The savvy entrepreneur should view the economic downturn as an opportunity to go shopping for future prosperity.

Key components necessary when evaluating a second business play is the following:

* Key Personnel
* Key Customer relationships
* Competitive edge with suppliers / vendors
* Valuation of business ( purchase price in multiples of revenue)

One hot spot to pay attention to is whether the business is cash healthy, asset healthy or both. For example, the second biggest reason businesses fail (management being #1) is cash problems. If a company is cash strapped you shouldn’t run from the opportunity but sift for gold. A business in need of a cash infusion will leave it desperate to make a deal forcing existing management to give up an equity stake or a sale.

Below is an embedded interview from BizWise.tv (cisco sponsored site) with tips on buying a second business

If you haven’t had a chance to scour the resources of bizwise.tv it’s well worth your time in content.

Tags: Business Deals //

The top ten traffic generation tips is one of the more popular requests from readers (actually traffic generation in general, I just chose to make it a top ten). I find this list can be about 10% subjective but will work for 90% of the blogging crowd who wish to drive more traffic. These are the top ten that have worked for me and I hope you can comment and add to this list so I can repost for the top 25 traffic generation tips…

1. Use Ping functionality. I use wordpress, so there is a simple built-in ping function for automaticly notifying sites like Google or Technorati that new content is ready to crawl. I know most of the other blogging software on the market has this function so investigate regardless of your blogging platform.

2. Quality content is king. YAWN! —-I know you have heard this a million times before, but seriously write content that means something at the end of the day. How tos, case studies, short lessons etc… You will be surprised at how little people actually write about content you’re passionate about.

3. Community. Be part of the community, you don’t have to be a hard core blogger or a prolific website owner, just some geninue comments on blogs, websites and social networks will be enough. Not only will you get inbound links to elevate your page rank, but you will make people aware of your brand. This includes leaving signatures on newsgroups, comments, forums and social groups.

4. BlogCatalog and Mybloglog. Most people will tell you Mybloglog is the way to go, but personally BlogCatalog has been a strong performer for me. Everyone is down to earth and generally cares about networking. There is a reason 73% of blogcatalog loves Startup Addict, it’s because we all support a growing community of blogs and websites that are relevant to our niche…after all that is the point.

5. Directories and linkback sources. There are so many to name here I don’t know where to start. Take a week you dedicate to the Internet and devote your time to finding nothing but directories that will give you valuable link backs and love. Consider all the heavy hitters like ezarticles, blogcarnival, squidoo, topix and many others. Just remember that web 2.0 and social media has added a whole other directory of link back sources (Facebook, Myspace). It’s better to be part of a long term del.ici.ous bookmark then an ephemeral StumbleUpon.

6. Press Releases. There are several.
Mashables has a great collection to save you on research all the paid and free services available. A good PR piece is essential for any brand to survive on the Internet. I’m offering the link to Mashables because they used #2 in this list (quality content is king).

7. Organic SEO. Do it yourself or hire it out. But the bottom line is I have far outperformed my PPC (pay per click) results by going organic. Technically this could be #8….learn a little CSS and some SEO copy writing and let the traffic roll in.

8. Yahoo Answers and Wikis. These particaluar sites are prime search engine fodder. Keywords rise fast to the top of Google in these Q&A verticals, be sure to find your niche topic and comment until you are blue in the face. Just make sure your comments or answers are actually useful and the Search Engines will reward you for it.

9. Network. Link exchanges, reaching out to fellow bloggers and website owners in your niche is worth its’ salt. Much of my relationships in the web world have come from real world contacts….don’t be afraid to leave your keyboard behind for an hour or two to reach out and make contact.

10. Use your talent for FREE! If you want to make a buck, sometimes you have to give it away first. For example….if you’re a web designer, give away a free CSS design with a linkback to you. If you are a business writer, compile an ebook and distribute for free with a link back. This causes brand awareness, linkbacks and credibility in your niche.

Tags: Uncategorized //

The real economy might be in the doldrums, but the virtual economy is never better. Virtual products being bought and sold is nothing new to most of you, especially with the success of Second Life from Linden. Lets put into prospective how virtual products are actually becoming critical mass, Habbo Hotel sold more virtual furniture than Ikea did in real life!…over $60 million bucks! That is the claim off a statistic from Viximo site. The reality is Habbo was clearing over $77 million bucks in 2006 in products that do not exist anywhere except servers susceptible to crashes and viruses.

Remember when Disney plunked down $700M for Club Penguin in 2007. At the Habbo numbers that would be 10x earnings. Not a bad investment in a high growth sector where the business models align. That will probably become more potent like 5x by 2010 (only $350 million was cash purchase anyway). But I digress, let’s get back to why you care about this.

How the heck can an everyday Startup Addict or entrepreneur jump in on this?

Viximo is the answer and will help you monetize your brand in this arena. Rather than sound like a parrot here is the quote from Viximo in their words:

Viximo is the only digital goods platform that connects content creators, brands and publishers across the Internet. Viximo enables content creators like you to create compelling digital goods and upload them for distribution across Viximo’s network of online and mobile communities. It basically works like this: You upload and track your good in Viximo’s Creator Community. People buy and send your items to their friends via Facebook apps, social networks, gaming sites and more. And you rake in the royalties! Yep, you get 20% of every sale of your items. Maybe not enough to buy an island but it might just support your coffee addiction.

Question is can they really do it?

The company claims to offer the following:

* Capture imagination and build loyalty with viral digital goods.
* Work with you to create a cross-platform campaign with multiple points of distribution online, including Facebook and the iPhone®.
* Leverage our world-class creator community, hand-selected to compete in this marketplace.
* Provide in-depth data and analytics to measure your success.

The fourth bullet point should probably be the first….giving solid metrics in a new or unknown space for brands is worth its weight in Gold and everyone will start to drink the Kool aid if done properly. More importanly, if the 20% royalties start to add up….that’s all the metrics you need!

Tags: startup trends //

Do hedge funds control the market?

Selling continues as the market starts to feel more like 1929 than 1987 with the wide spread panic instilled across the global markets. Although the loss of confidence in the financial markets is a component of the sell-off the real culprit may be the financial titans known as hedge funds. Trillions of dollars tied up in hedge funds are the 800lb gorilla that is probably driving this market sell-off. Interest rate cuts and federal liquidity injection has little effect when Hedge funds are covering their losses from margin calls as well as shorting the market on the way down. Usually blood baths (or bull runs) such as these are of institutional origins from the big money.

Tags: financial //

First there was the housing crisis, which was not unlike the dot com blow-out. Over indulgence eventually will take its toll. Then we experienced the credit crisis and now we are all in a full blown financial crisis. Will the stock market ever stop dropping? Will the Federal government ever give us back the $700 Billion with interest or appreciation, if so when? So that’s where we are today…but lets back up to the credit crisis phase…why did that happen?

The big institutions like Bear Stearns and Lehman brothers (and others) starting buying up all the risky loans made during the housing boom and packaged everything up into mortgage backed securities. These were sold on the open market with high return (and high risk). In order to hedge the risk and make the securities more palatable to the buyers an insurance policy was sold along with it called a credit-default swap. There was only one catch, it was called a “swap” and not an “insurance policy” for one for important reason…regulation. A swap is not regulated and insurance is. Insurance is not only regulated but requires ample and provable capital reserve in place to cover the default, no matter how great or how many. So this loop hole was exploited with a finacial instrument called swaps and unfortunately had inadequate reserves to cover defaults in large numbers.

Again, you still ask the question how did this happen? People who are smarter than the rest of us…crazy formulas and algorithms from the brightest minds in the world came up with formulas to predict a certain amount of defaults and balance risk and reward. The one catastrophic flaw was you can NEVER model human behavior. As a result here we all are, wallowing in a bowl of our own financial piss. Capitalism that attempted to be to capitalistic. I remember asking myself about 7 years ago when I jumped head first in real estate development and eventually into brokerage “how real estate prices continue to escalate at these prices when salaries are not keeping pace?, something is eventually gonna give.” While I was fortunate to be part of the biggest real estate run in history I am now witnessing the monumental blow-out.

I do have strong faith is this country, I’m an entrepreneur, I’m a proud citizen and as always I think we small business owners and innovators will be the phoenix from the ashes of a conglomerate corporate America that got too fat and too greedy. Rome fell in 800 plus years, I hope America can make it more than 250 years. Serious changes need to take place in this country in terms of credit, spending, debt and energy independence.

I’m not trying to come off as a know it all or a Monday morning Quarterback, hindsight has 20/20 vision or any other platitude you can think of. However, I am trying to insert my voice of short-term reason to a long-term problem.

Tags: Real Estate, Splattered Thoughts //

Capital markets become socialist… I try to salvage the good in every situation, rose colored glasses, the glass is half full, all mantras that stem from the entrepreneur within. I especially call upon my optimism when I watch the demise of the capital markets of the United States. As the evolution of the former financial markets unfold, I stand in awe as the federal government begins to control bellwethers of the United States private sector.

The silver lining in my opinion will fall squarely on the small caps or aka the “startup”. Just like it did in the late 90s and early 2000 when the dot.com blow-out took hold, it was the mighty small cap that led the pack. The over extended, non-nimble, greedy large-caps have committed one of the seven deadly sins…gluttony. It’s as Warren Buffet said “be fearful when people are greedy”, but…“be greedy when people are fearful”. I think the startups that will evolve from the phoenix of the ashes will far outweigh the demise…..and yes I realize that may be hard to see at this point. Whatever small faith I still place in our government, I believe when the time is right the socialist will revert back to the capitalist.

Worth a Read:
America’s a new socialist economy
The New Deal
Investment Rescue

Tags: Splattered Thoughts //

ShareThis To Acquire fellow Widget Maker madKast for and undisclosed amount. Reports are sparse at this point, but madKast has amassed $300,000 from angels verse a $15 Million infusion ShareThis has garnered.

If you haven’t noticed ShareThis has been at the base of every post on StartupAddict Musings for the last 6 months or so. It truly is a great service and with the madKast team and IM and email share functionality the synergy is definitely there. Chalk two up for the startup good guys….a cool startup acquiring a cool startup.

Tags: Startups //

I always enjoy reading Lawrence Yun’s columns from Realtor magazine. He is the chief economist for NAR (National Association Realtors) and has an above average record in advice and market predictions. His latest column is about hedging inflation by simply owning a home. It’s no mystery unless you have been asleep for the last three years that the housing situation in this country is in peril.

Yun makes an interesting comment stating previously built homes (three year old commodity materials) and market pricing for commodities will eventually force home pricing upward. This concept hits close to home for myself being in the real estate development and construction trade. The producer price index for construction is up 39% in the last five years with virtually no end in site. Steel, concrete, and energy (especially oil derived products) continue to soar. Once the glut of housing inventory clears and the financial markets stabilize pricing has no place to go but up. A home five years ago was roughly $130 a square foot for standard specification construction and now hovers around $170 a square foot for the same house (in New England anyway). Why the difference? It’s simply the cost of construction (the bundled commodities that go into the construction of a home).

Currently new construction pricing is at a premium to existing home pricing because of material prices. As we move forward this will only inevitably take the existing home sale price upward. So, the next time you’re thinking about buying long on steel, gold or copper you might just want to look at the four walls that surround you.

Let me know your thoughts on the correlation.

Tags: Real Estate //