Startup Addict Musings

The advertising network arena is ramping up at heart pounding speed and will inevitably end in big valuation buyouts and massive consolidation by the four horseman of the Internet and smaller mid-sized players. VentureBeat reported moments ago Adbrite raised another $23 million in third round (series C) funding from Sequoia Capital. If your not familiar with Sequoia, they are the creme da la creme of the VC world and the rap sheet to back it. If Sequoia is investing in a company (heard of Youtube?) people take notice.

According to sources gathered at VentureBeat

It is the third largest ad network, behind Google and Advertising.com, with over one billion page views a day across a network of 50,000 publishers. He says that AdBrite will use the funds to accelerate growth and expand the network’s targeting capabilities, including behavioral targeting.

Adbrite was an obvious acquisition target and now with Sequoia jumping in the game and stamp of approval, it is more a matter of when, not if.

Tags: advertising networks by Startup Addict

Verizon opens the infamous network. This may just be an effort to combat Google’s android project. As you remember Android is the official name everyone suspected would be the G-phone (which Google vehemently despised the name). Android is a linux phone that will run open apps on an open network and is part of the open handset alliance. I know I’ll stop there momentarily because “open” is becoming a very relative term to anything connected to the Internet. You can’t fault Google for being ambitious…they were an ambitious startup and certainly and ambitious conglomerate with billions and billions of dollars…..but I digress, back to Verizon.

I do find amusement in the alleged open standards and how quickly companies assume portability will be ubiquitous and instantly possible for everything with an IP address. I remember in 2001 in many VC meetings in Boston and New York spouting off faster than they could keep up about the universal and ubiquitous power of MPEG-4 and how the standards were indisputable in video distribution (create once and distribute many) from setup boxes to wireless devices. In reality, not only could companies not afford the MPEG royalties but Apple butchered what “open” really meant in the MPEG-4 standard through locked protected .mp4 itune files and video-conferencing in mpeg4 (H.264 format). My long winded point is Verizon Wireless is only as wide open as it is closed (which is means being limited by the CDMA network it’s on). Any Device and or manufacturer is welcome to run on Verizon Wireless as long as it is CDMA….but what about GSM, BREW, EVDO, WIMAX, 3G etc…(full list here).

The open efforts of traditional companies are getting better….but I think Verzion’s move was the obvious and imminent pressure being applied by Google regarding their mobile motives. Notice Verzion is not in the open handset alliance but in their own “open” network…..I don’t blame Verizon with the name brand recognition and large amount of subscribers to hold out.

Tags: Open Wireless (maybe) by Startup Addict

An awesome spreadsheet by TechCrunch based on an inquiry to Comscore regarding data for social networks from October 2006 to October 2007 and percentage change.

TechCrunch also has a nice founding timeline and funding amount per company. Enjoy!

Tags: Social Networking by Startup Addict

World of Warcraft is going mobile (yeah….will it work…I know). Vello is a well funded Israeli startup I reported early this year… it was founded in 2005. It took a second round (series B) of financing of 7.5 million this fall from Benchmark Partners and Blue-run partners. Supposedly World of Warcraft has been ported to 3G networks per Vollee.

According to the recent Under the Radar competition the following was stated:

The Vollee presentation at Under The Radar left our judges panel speechless, they were that impressed. Vollee’s technology is truly disruptive - it opens the door to an infinite range of mobile development opportunities - far beyond the world of gaming. The management team, led by CEO Martin Dunsby, is strong enough to take Vollee there.

Very exciting to see these startups pushing the envelope of bleeding edge wireless technology. Vollee is brilliant by porting MMO games that have built in audiences…cha-ching!.

Tags: mobile gaming by Startup Addict

Million dollar bill…WOW…stupidity apparently knows no bounds. I first came across this story in the early AM on Yahoo’s front page but then later found a more obscure but interesting piece over at Dave and Thomas about what a real million dollar bill should look like (now that is sweet). Hat tip to the boys for coming up with that one.

( it was ever since Desperado for me).

A gentleman from Georgia presented a million dollar bill to a teller and cursed her out once it was not cashed (shocker!). He was later arrested and also pin-pointed as buying camels with a stolen check earlier that day. At the end of the day he truly is entrepreneurial for thinking of something outside the box and innovative. Unfortunately, it qualifies as moronic as well.

Tags: Splattered Thoughts by Startup Addict

Business valuations are typically done through a multiple of a company’s EBITDA (earnings before interest, taxes, depreciation and amortization). The multiple is based on an industry average and recent merger and acquisition data. Typically technology multiples could be in the 10-15x EBITDA range. However, this approach should be used only as an average with a number of other formulas for determining a true metric for a startup’s value. The inherent problem with using only EBITDA for business valuation is the neglect to a startup’s balance sheet. Fair market value of assets may not be accurately portrayed on the balance sheet. A piece of equipment or property purchase three years ago may have a 40% premium to present day book value on the balance sheet. EBITDA certainly would not account for this. Intangible assets, management practices and goodwill is another factor EBITDA ignores.

For example the recent nose-bleed valuation of Facebook at $15 billion is certainly using much more than EBITDA to come up with that valuation. Facebook’s current gross revenue (lets say this closely resembles EBITDA) is speculated to be around $150 million. This would generate a multiple of 100x. The staggering figure is placing a lot of weight on intangible assets and goodwill like 40 million registered users, tremendous upside in advertising revenue, limitless possibilities in new paid services and a recognized brand name in social networking. These “possibilities” are where hype and valuations become gray.

Other factors to help you determine your business’s worth would be discounted cash flow analysis and running a full set of financial ratios on the audited financial statements.

Tags: Startups by Startup Addict

This is a hysterical spoof of the Facebook News Network. Laugh out loud funny. I scored this at collegehumor.com via Oliver Thylmann’s blog. We definitely live in a facebook world.

Tags: Splattered Thoughts by Startup Addict

“It’s not what you look at that matters, it’s what you see” - Henry David Thoreau

We all strive to be better entrepreneurs and these 8 strategies should help:

1. Don’t be afraid to take risks that are associated with the proper rewards, weigh the pros and cons before you spend a dime.
2. Learn to balance work and play (difficult but essential) or it will catch up with you.
3. Take a weekly, monthly and yearly pulse of your goals and ensure that you are staying true to what is important to you.
4. Learn to acknowledge your little successes, or you may never reach the finish line. Worse you may forget why you started in the first place.
5. Having a dedicated vision is what makes you great, but be open to new ideas or you may sink with the ship
6. Honor your commitments and rewards to people who have shared or helped you through the risky portion of a venture.

Tags: Startups by Startup Addict

The Zune is beating the ipod at least on Amazon.com according to Valleywag

This is obviously a bit misleading because the statistic on Amazon as a digital media player of choice is only a snapshot in time. One only needs to look at overall market share of the portable digital music player to see ipod has a crushing lead. After researching the new Zune, I finally broke down and scored the new ipod.

I just recently upgraded my first generation ipod (yes gray scale screen and looks like a white brick) with the newly hyped 16GB ipod touch. I have to tell you, I’m absolutely blown-away with Apple as a company continually living up to the hype. There are only a handful of companies in this world that can achieve the hype and Apple does it time and time again. I did grumble a bit when I first got the ipod touch and was forced to upgrade to Leopard before playing nice.

Tags: Splattered Thoughts by Startup Addict

We all know getting attention to stakeholders (money, customers, talent, media exposure) in a newly formed startup is always a challenge. One of the most creative pitches I have read or heard about in recent months was from Mark Kern, president and chief executive of online videogame maker Red 5 Studios Inc (WSJ article here).

He sent a russian doll style pitch to prospect talent. They opened one box after another, and than another. Eventually the prospective talent got to an ipod shuffle that played the evoking voice of Mark Kern telling them why they should work with Red 5 and why all the great achievements upon until that point has lead them to Red 5. NOW that is a great pitch, that is something that stimulates the daily numbing emotions of our lives. I know from my brief but eclectic history of startups, that it is what sells the grand prize. Good for Mark’s usage and a lesson to all of us.

Tags: Startups, Uncategorized by Startup Addict