First off, congrats to the guys who made the list. It's hard work being an entrepreneur, and I'm glad that you guys are getting some good press.
But, I do have a problem with how it seems that these businesses are being selected. It seems that the level of funding that these people raised is used as a hallmark of how good the entrepreneur is. Isn't the mark of a good entrepreneur how much they can do with how little?
I can understand why a video company like Video Egg might need a high capitalization. Bandwidth charges for video streaming are high. But, I'd still balk at taking $27 million in funding.
Etsy--31 million in funding. Granted, the company has 1 million users and 75,000 sellers. But really, 31 million dollars! What does an e-commerce site need 31 million for?
I've actually begun to see taking large sums of VC money as a competitive disadvantage. If these companies take $20-30 million in funding, the VC's are going to push for a 10x return. That means that their investors are wanting a $200-300 million exit. And, even at those rates, I'd imagine that the founders shares are quite diluted by that point.
Yeah, it's like BW is blinded by the numbers--that money's not a personal gift to the founders (from "holed up alone in a room for 100 hours a week" to "Funding: $17.5 million"). Regardless, it's a validation of their efforts.
True success will be determined years from now based on the outcome of these investments.
I don't think BW cares about the amount raised. They didn't ask me until after we were already confident that I was going to be selected. It was like, "Oh, we forgot to ask -- how much money did you raise?"
thanks, though my cofounder arash deserves equal mention here. (we sent them a pic of the two of us but apparently after the deadline, so it should be corrected soon)
F Me. $15 mil for adding tinsel to your MySpace? And "RockYou is lining up a new round of funding to stay sharp.".
Etsy: $31.6 mil for a swapmeet just for handmade crafts.
When people take that much buck for so little bang it doesn't seem like they are interested in ROI or making it big so much as having a jobs program for them and their buddies.
Auctomatic sold for what probably amounts to a few months' burn rate for these suckers and still made their founders millionaires. How are these guys with 20 or 30 mil invested going to find a buyer that makes them a profit?
By the strict definition of entrepreneur (assuming the risk), that title goes to the VCs. When the venture tanks it's not going to be the founder who's out $30 mil.
Not a lot of technical wow in that list. Drupal probably leads by a good margin.
I won't argue against RockYou. That's just silly. But Handmade crafts are a huge segment of the market, especially with women as soon as they graduate college and start nesting. There's a much bigger upside to Etsy.
> especially with women as soon as they graduate college and start nesting
Nesting? What are they, ducks? As a feminist I'd like to say that's some pretty idiotic stereotyping. Female college graduates overwhelmingly enter the workforce, not nests.
'Nesting' is a common term for the set of behaviors that makes a home more compatible with a family than a single person. Are you unfamiliar with it?
Is it really idiotic to suggest that women are more likely to do handmade crafts than men? I know many women who knit as adults, or make small crafts as kids.
However, there's an easy way to settle this. If etsy is going to underserve the vast market for men who knit adorable mittens and hats for their kids, you can certainly be successful with a startup that targets that market. Or we could just bet that the online craft market with a higher fraction of male sellers will be more successful than the one dominated by women.
Or we could concede that -- whether due to biology or the patriarchy -- gender correlates with some behaviors. That shouldn't be hard to admit.
Yeah, I totally thought you were talking about ducks!
> Is it really idiotic to suggest that women are more likely to do handmade crafts than men?
Now you're trying to change the subject.
Your actual idiotic suggestion which I refuted quite specifically is that as soon as women graduate college they start "nesting". In fact women college graduates are pushing back starting families by record amounts.
I know a lot of female professionals and I can't think of any without kids that spend any appreciable amount of time on handmade crafts.
Unless you're addressing an autistic audience, it is acceptable to say "Women do X" when you really mean "Women do X more frequently than non-women, although of course some women do not do X at all, some have never heard of X, some hate X, etc." For example, I am rarely corrected if I say "Five-year-olds are taller than four-year-olds," even though it's trivial to demonstrate that this isn't true. If your argument is that the statement in question is not literally true, you are correct. But if you use that to conclude that the tendency described does not exist, you're stretching things.
The statement was not "Women are nesting more than they used to," but "Women tend to nest." Whether they start nesting immediately or a bit later than they used to distracts from the point that they do it more than men regardless of timing.
>I know a lot of female professionals and I can't think of any without kids that spend any appreciable amount of time on handmade crafts.
I know female professionals who don't, female professionals who do, full-time parents who don't, and full-time parents who do. Perhaps, given your admittedly limited circle of acquaintances and your previous admission of bias, you should leave this discussion to people who have more data and less of an axe to grind. That is, you should do so if you want to know the facts -- if you want to defend your prejudices, proceed.
>But you actually thought I was talking about ducks. So we're square.
That's a very strange thing to say. You acted shocked that someone would suggest that women tended to 'nest', and then brought up ducks. I have no way of knowing your intended tone. It would be very rude to assume that you were being sarcastic if you were actually a non-native speaker who was legitimately confused about the idiom. Perhaps, whether you are a native speaker or not, it is considered acceptable to make fun of people for using words when the meaning is apparent but another definition could be used where you are from. So one could say "The music was haunting," and someone in your social circle could respond "Ghosts are a silly superstition!" I bet it's a blast.
Did you have a response to the content of the comment, though?
Well, instead of taking offense when none is implied, try to understand what I said.
Of course females in their 20's enter the workforce. They also buy houses. They also decorate those houses, with candles (huge industry), paint (massive), knickknacks (ever heard of pottery barn?) and - wait for it - handmade goods.
Why handmade goods? Because having a family - nesting (it's a very common term, google it) - usually forces one to re-evaluate their world views. A woman with a house full of pottery barn items starts looking for something more authentic, and she usually goes for something handmade. This is why farmer's markets and such are a growth industry.
Of course it's a stereotype, but it's also a very profitable one.
> Because having a family - nesting (it's a very common term, google it)
Female college graduates are pushing back the age when they start families to historical highs, which puts lie to your claim that they start nesting right out of college.
Yes! Nests = ducks! I have never heard it applied to humans before! One might have thought I was comparing your incorrect and oversimplified description of female college graduates to instinctual waterfowl lifecycle behavior!
It's pretty funny you completely missed the sarcasm, focused on that, and then completely missed the point. And then start in with red herrings. Apparently your upmodders like fish.
You're obviously new here, so let me give you some unsolicited advice.
1. The crowd here is very business savvy. If you aren't, that's cool, but understand that many of the terms we use here that you might not be overly familiar with. Here's the first result in google for the keyword "nesting": http://www.parentingweekly.com/pregnancy/pregnancy_informati...
2. Trends and stereotypes are important factors in marketing. Pretty much everyone on this site understands that there are exceptions to every trend and stereotype. They also understand that if you want to make money, you need to understand a trend and focus on it. If you want to focus on social aspects, go into government.
3. "which puts lie to your claim that they start nesting right out of college."
I didn't actually say that, and you can see from my follow up that it's a two step process: First you graduate and get a job, then you settle down and have a family. It's not important that this may take up to 10 years, it's important that the pattern is common enough that it can be banked upon to produce results.
> but understand that many of the terms we use here that you might not be overly familiar with
I was making fun of you. Why do you insist on being enduringly stupid?
> I didn't actually say that
"especially with women as soon as they graduate college and start nesting". There's such a big time gap there it's like saying "as soon as they graduate sixth grade and start college", which, as far as I know, only applies to one person here.
> Etsy: $31.6 mil for a swapmeet just for handmade crafts.
I'm assuming that your italics were meant to indicate that you think this is a silly idea. But what you probably have to consider is the size of the handmade craft market in the US. Then consider the entire world-wide market. It's probably very large. And Breyer @ Accel is no fool.
You have to judge the idea, not appeal to authority. Investors make mistakes most of the time!
> But what you probably have to consider is the size of the handmade craft market in the US. Then consider the entire world-wide market. It's probably very large.
That's every business plan ever. "Look how huge this market is! If we could just get one percent, why..."
It's like Ali G's pitch. "Zen" (Venn) diagram of "People who like ice cream" intersected with "People who has hands". Voila, the Ice Cream Glove.
—Buy $5 million worth of hardware and hosting over the next two years.
—Support more currencies and languages other than the U.S. Dollar and English.
—Fix the checkout system (there is none now, every buyer has to pay every seller on an individual basis. There is no Etsy payment system that works across all sellers).
—Fix search.
—Provide a cushion in case of a recession.
—Offer customer service
—Provide competitive wages and take care of his employees.
Quite a lot of big ticket items in that list. Add to that any significant amount of consumer marketing and the number doesn't seem that bad.
I'm not sure of the checkout system, but I assume right now that the payments are left for the sellers and buyers to deal with and Etsy would instead like to establish their own system that makes it dead easy to buy and sell with Etsy as the middle man in the transaction.
Search is hard. They have search already, but they want it make it better and more relevant to the user's taste and buying history I imagine.
Customer Service => manpower => salaries => money => funding.
Competitive wages: I'm sure Etsy pays it's employees well, but I doubt it's at market value (although it's probably damn close). But they want to take care of their existing employees and hire new ones and pay them all well, which I think is admirable.
The funding isn't absurd. Etsy can and probably will be huge. I've seen nothing from their execution and growth so far that indicates that they're a mirage or about to tank.
For a company with a revenue model, growth, and a large market to raise a 30 million series B isn't exactly earth shattering.
But, I do have a problem with how it seems that these businesses are being selected. It seems that the level of funding that these people raised is used as a hallmark of how good the entrepreneur is. Isn't the mark of a good entrepreneur how much they can do with how little?
I can understand why a video company like Video Egg might need a high capitalization. Bandwidth charges for video streaming are high. But, I'd still balk at taking $27 million in funding.
Etsy--31 million in funding. Granted, the company has 1 million users and 75,000 sellers. But really, 31 million dollars! What does an e-commerce site need 31 million for?
I've actually begun to see taking large sums of VC money as a competitive disadvantage. If these companies take $20-30 million in funding, the VC's are going to push for a 10x return. That means that their investors are wanting a $200-300 million exit. And, even at those rates, I'd imagine that the founders shares are quite diluted by that point.
And, I'd guess that the chances of getting a $200-300 exit are a lot slimmer than getting a $5-6 million exit. For details Google "Digg acquisition": http://www.google.com/search?hl=en&safe=active&clien...