Win Seed Capital for your Music Tech Startup

By: indiemusictech.com

Got a music tech startup or idea that needs capital for a prototype or continued development? Or would you like additional exposure to Angels, VCs and large corporations like Yahoo and Coke?

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Web Startup 101: Get a Business Plan

By Sheila Shayon

Dave Lavinsky, co-founder of Growthink and president of Growthink Publishing, is a serial entrepreneur, with several successful ventures to his credit such as Emerge Juice and Nutrition Systems - a wellness products developer and distributor; Shoutmouth - a niche music-focused social networking site; Z Reporter LLC - owner of more than 3,000 niche-focused information websites; and TopPayingKeywords - a Search Engine Marketing & Optimization research data firm.

Growthink, a company he founded with Jay Turo, CEO, specializes in strategy consulting, investment banking and market research services. Headquartered in Los Angeles, with offices in Seattle, San Francisco and New York, Growthink has caught the attention of mainstream media including CNN.com, Businessweek.com, CNN Money, and made Top 50 and Top 100 Lists in Annual ‘Inc. 5000′ Business Surveys.

Calling themselves “idealistic capitalists,” they believe that the best ideas, products and services delivered to the market the best possible way make the most money. Their clients include entrepreneurs, startups, small businesses, venture capital and private equity firms, middle market organizations and Fortune 500 companies. In the last decade, Growthink has completed more than 2,000 engagements with such clients as: Deutsche Bank, Hooters, Paramount Parks, Porsche Design and The Salvation Army.

What gives your company a strategic edge in today’s marketplace?
Our team is comprised of entrepreneurs - we’ve all started and grown businesses, we are experienced, calculated risk-takers, who’ve had failures and successes. We’ve all had hands-on learning - strategic and tactical, and understand the why, what and how of creating and growing a business.

What are the main qualities you look for in a working relationship with a client?
First, we bet on the jockey, not on the horse. It’s not always about a track record - just look at Google, Apple, You Tube. The entrepreneurs behind those businesses didn’t have success stories - yet, but they had vision, passion and strong levels of commitment.

Second, we look at the market size and check there’s enough revenue potential for this idea, and that there’s a real need for the product or service.

What’s the biggest learning experience you’ve had in the last year?
We worked with an organization from soup to nuts - growing it to 100 people in 18 months. Everything was going well until the funding vaporized. You can never have too much money. With enough capital you will never fail - but you need multiple forms and sources of it. If your competition has 3X the capital you do - can you compete?

And the biggest success?
Growing a small company from a handful of employees to several thousand internationally. There was real ‘market pain,’ customers asking for a solution. We jumped in and learned the business first-hand from the inside. We were not distracted from our focus, kept to a specific vision, followed the business plan - but checked it every month to see if the goals were being met and if modifications were needed.

Has the pace/timeframe for raising capital changed significantly in the last few years?
Yes. The traditional VC timeline has elongated - it takes longer to raise money today than it did in 2000, or even five years ago. But, in the first half of 2009, there were 140,000 angel investor-funded deals of emerging companies. Raising capital is simple, but requires creativity and multiple sources - debt, equity, banks and often credit cards.

Growthink’s most used service is business plan consulting. Why is this the case?
A business plan documents your vision on paper; it’s the strategy of your business. But is it also the best marketing strategy? Does it have the right human resources perspective? Does it include the right people and functions to hire for operations? Who are your customers? Your competitors?

99 percent of a business plan must be answered on page one - how are you uniquely qualified? What is your advantage? And because business plans are marketing documents, you must have the bells and whistles - the graphics - and not be bland.

Is there a greater need than ever when starting a business to clearly know your competition?
Yes. There’s more competition than ever before as it’s so easy to start a business today. You have to find a competitive niche - is there a market need here, a customer need, can I solve it better than anybody else? You must do your research.

Any predictions of who or what to watch for in 2010?
I think we’ll see multiple vertical successes, in the social, non-profit arena, with tech companies - and with surprise entrepreneurs like Kevin Plank and Under Armour, which is now a $700 million company that took on Nike, Reebok and Adidas.

What defines an entrepreneurial ’skill set’?

1. Creativity
2. Leadership
3. Passion

An unswerving commitment to make it happen - and we’re going to do it!

Small Business Collaborators Compete With Google

By Dave Fidlin

In a move reminiscent of David taking on Goliath, a group of nearly 40 small software-as-a-service companies have linked arms with one another to remain competitive against the likes of Google.

Since its inception in March at the SXSW Conference in Austin, Texas, Small Business Web has been growing. Co-founder Pamela O’Hara says five companies were on board at that time. As word — and networking — has grown, more small online software vendors have agreed to be part of the loose organization. “It’s a very informal movement,” says Mikkel Asger Svane, CEO and founder of Zendesk, a San Francisco-based help-desk software company, that affiliated its name with SBW this summer. “It’s just like-minded companies that have similar interfaces.”

O’Hara says she got the idea of integrating products from other companies several years ago. Her company, BatchBlue Software, is based in Barrington, R.I., and produces user-friendly software for small businesses with a limited staff and budget. She is the company’s president.

As BatchBlue was getting off the ground, O’Hara was looking to partner with another company that would enable BatchBlue clients to email lists of contacts they organized with BatchBlue software. That effort stalled after several attempts, until the company teamed up with Atlanta-based MailChimp, an email marketing company. The two companies began integrating their products by using MailChimp’s application programming interface.

“(SBW) started as the very seed of an idea, and snowballed very quickly,” O’Hara says. “We’re open to growing with other similar companies that have the same philosophy and are open with their products.”

Daryl Bernstein, CEO and co-founder of Santa Barbara-based RightSignature, says his company has benefited greatly since becoming part of SBW midway through the summer. RightSignature offers software that gives users an opportunity to sign documents online.

“It’s been a great vision,” Bernstein says. “There’s a nice cluster of tools available to us, and everything’s integrated. Each one of us can all focus on doing our one thing really, really well.”

Bernstein says RightSignature has integrated several other company software products into its business model. For example, RightSignature customers also have the opportunity to purchase software from FreshBooks, an Ontario-based company that produces invoicing software.

Zendesk, founded three years ago, also has linked with FreshBooks for similar reasons to RightSignature. Additionally, Svane says the company has benefited greatly by integrating with MailChimp for marketing efforts. Most companies in the SBW integrate with at least five other companies.

“This has demonstrated how traditional software is being changed completely,” Svane says. “With open architecture, it’s business turned upside down.”

At BatchBlue, O’Hara says business has increased since the SBW has started to take off. She says at least half of the new business in recent months can be attributed to the partnerships. The heads of the other software-as-a-service companies participating in the open forum echo her sentiments.

“We’re adding to our customer base by doing this,” O’Hara says. “(Other companies) are getting exposure to our audience. We’re getting exposure to their audience. We’re doing very little paid advertising, so that gives us the opportunity to invest our money into business development.”

O’Hara says there are endless possibilities for the SBW in the future. “It’s a very exciting time for all of us,” she says. “It’s been nice seeing it click with so many other businesses.”

O’Hara says she envisions participation continuing its upward momentum and might eventually have a more formal dialogue session with all of the companies within the SBW.

“If we can talk as a group, we all will win from this,” she says.

Customer Service Tips for Early Stage Startups

By: readwriteweb.com

Few companies put as much effort into customer service as they do into member acquisition. However, in order to retain members, community-driven startups need to be conscious of the entire customer experience.

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Startup School: Stone, Williams on how they co-founded Twitter

By: DigitalBeat.com

(I’m live-blogging from Startup School, a daylong program from startup incubator YCombinator held at Berkeley today.)
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Twitter’s Success Up in the Air

By Alan Smodic

Twitter’s growth is unquestionable.

In 2008 alone, the service grew a massive 752 percent to a total of 4.43 million unique visitors. And by the end of this year, eMarketer believes Twitter’s user pool will reach 18 million – and on to 26 million in 2010.

The numbers could be even greater, but eMarketer senior analyst Paul Verna says the team is reluctant to include short-term users. “There are indications that large numbers of users are abandoning Twitter after a short period of experimentation, and another sizable contingent seems to use the service only sporadically,” he said in a statement. “With these trends in place, we felt it was prudent to take a conservative outlook on Twitter’s user growth over the next 18 months.”

Regardless, the number is large. And it’s certainly not easy to build that type of audience. And it’s even harder to predict how the service might utilize that audience – you know, how exactly will Twitter turn itself into a viable business. Now that’s something that is always in question.

So what are its options?

Possible scenarios brought forth by the masses include: Twitter leveraging its real-time Web action to create the dominant real-time search client, complete with locally focused advertising (and beating Facebook/FriendFeed and Google to the punch; Twitter developing a spam-free version for its users (at a cost); and the already confirmed business accounts.)

The mystique behind Twitter, though, is the assumption that it will accomplish profitably. Even though no concrete plans exist as to how it will do so.

As evidenced by VC Expert’s Private Equity Data Center’s (PEDC) analysis of Twitter’s five financing rounds, which date back to July 2007, Twitter’s new estimated worth now rests at it being perceived as a $1 billion business.

Mashable’s Ben Parr points out in the numbers that, as a $1 billion business, “Twitter has yet to make a single cent in profit.”

Those figures don’t add up to Jared O’Toole, of Under30CEO. “I feel like companies like Twitter are valued way too high way too early,” he says. “Twitter and Facebook are some of the first examples ever of a company working like this. I don’t know the numbers, but I guarantee you Apple, Intel, Microsoft, Ford and Google were not valued in the billions or anywhere near it before they made a dime.”

The difference between those companies and Twitter, though, is that they had a product to sell up front. “It’s easy to say ‘I sell computers’ or ‘I sell Web design’ – pretty straightforward,” O’Toole says. “Then these companies go and try to find their audience. “Twitter has their audience, yet no product to sell.”

So, and as comments throughout the blogosphere suggest, it’ll be up to Twitter to actually capitalize on the audience its built. The potential and investment dollars are in place, but now it must compete with the “big boys” of the search world – Microsoft/Yahoo!, Google and Facebook/FriendFeed.

Though Facebook possesses even more of a user base, it currently doesn’t have the real-time action that Twitter does. And its recent acquisition of FriendFeed cements the fact that integrating the core functions into users’ feeds is a major step toward real-time search.

Google Wave, also, is slowly beginning to carve a niche of its own to further its main company’s advertising reach. But as other companies try to attain the audience, Twitter has the one leg up, focusing on using its already built-in audience.

Even with the head start, will Twitter be the first (or even the best) at connecting advertisers and consumers in the real-time world? “I really don’t know what the future holds, but to me it just doesn’t feel good,” O’Toole says. “Doing things as backwards as something like Twitter has just doesn’t seem to add up in the long run.”

Time will certainly tell with Twitter and this battle.

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