A very nice backgrounder on the Redbeacon team that won TechCrunch50 this past year.
Most impressive item for me (besides the talent, prudence, discipline, and perseverance of the founding team, which is evident): having the willpower to defer VC funding until they can do it on terms that are reasonable for the founders (a lot of startups use this strategy now but to be able to do it after drawing interest from 19 VC firms in the wake of the TC50 win is commendable). Also, their realizing that getting premature VC funding can actually mess up a company by skewing its goals toward premature expansion.
These guys have a business model that will live or die by whether it can scale well, and that challenge still lies before them. But what they have done so far is really the perfect picture of a highly disciplined lean startup that is done right.
I must say, I am growing weary of the "fail" theme. It is just not in the spirit of an entrepreneur to be focused on failure and I wish those who write about them would stop beating this theme to death. Founders have better things to focus on, as do those reading about their ventures.
As this is part 2 of a 4-part series Dickerson is doing for Slate on the character of risk in America, I can understand his particular focus on "failure".
Differs from the normal startup stories you so often hear about - they don't have funding, they don't have much in the way of private cash, they're not ridiculously young, and it's taking them a while to get traction. They're basically going it totally alone on a wing and a prayer. Kudos to them.
How risky is it to be an entrepreneur?
10-30% chance of sucesss. On the surface this might seem like bad odds but we are talking about businesses that have the potential over a life time to be worth over 10million dollars.
And so the expected value of starting one is 0.1 * 10million = 1million.
These figures are arbitary but it's more to illustrate the point that they aren't that insane to start one.
The thing about entrepreneurship is that if you fail you can always try again. Try 12 times and that puts your probability of success to 70%. Assuming the trials are independent, but they are not most entrepreneurs will succeed in 4 tries.
Yes some people will fail no matter what cause it's a probability. But it doesn't negate the fact the more you do it the higher the probability you will win.
There's certainly a networking and pedigree advantage to be had:
"Social marketing is just starting to bubble up and everybody wants in. But only ex-Googlers needed to apply to invest in MyLikes, a social marketing ad network which just raised a $630,000 seed round. The company, which was founded by two ex-Googlers—former Google Apps product lead Bindu Reddy and former AdSense tech lead Arvind Sundararajan—took money only from 11 other ex-Googlers."
Most impressive item for me (besides the talent, prudence, discipline, and perseverance of the founding team, which is evident): having the willpower to defer VC funding until they can do it on terms that are reasonable for the founders (a lot of startups use this strategy now but to be able to do it after drawing interest from 19 VC firms in the wake of the TC50 win is commendable). Also, their realizing that getting premature VC funding can actually mess up a company by skewing its goals toward premature expansion.
These guys have a business model that will live or die by whether it can scale well, and that challenge still lies before them. But what they have done so far is really the perfect picture of a highly disciplined lean startup that is done right.
I must say, I am growing weary of the "fail" theme. It is just not in the spirit of an entrepreneur to be focused on failure and I wish those who write about them would stop beating this theme to death. Founders have better things to focus on, as do those reading about their ventures.