Dec 30 2011
If you were looking for a year end Top 10 list, sorry to have disappointed you. On the whole, 2011 was a year that many people would like to forget especially the Indian equity markets. On the upside, many technology startups such as Dropbox, Evernote and Twitter received even more funding. I would say 99% percent of the people were unhappy with 2011 and 1% were ecstatic about 2011.
A trend that I have noticed more and more during 2011 was in the area of seed funding for a startup. I’m not an angel investor but I get about 1-2 unsolicited pitches a week. During 2011, most were structured like this:
Idea Guy – I have a great idea and I need 1 million dollars to hire the entire team to do the work
Me – What do you mean by entire team?
Idea Guy – product team, engineering team, UI/UX team and marketing team
Me – So what is your role?
Idea Guy – I have the idea
Me – Do you have anything so far to show for it
Idea Guy – Of course not, hence I need the million dollars
Me – Do you have a website?
Idea Guy – No, I couldn’t get the domain name, I couldn’t figure out which hosting company, but I have a PowerPoint slide deck…
At this point, I usually just mentally shut down and hope my cafe latte is still hot enough to enjoy while being tortured into viewing the slide deck. I could spend hours talking about how bad most of these slide decks are but honestly that is not the most concerning thing. The most concerning thing is the “Idea guy” wants a million dollars and then everything will happen, that is not how it works. You need to bring some talent to the table.
I can understand if you don’t have the technical skills to acquire a domain name, start a blog or get a basic website running but you might have friends that can. The early days of a startup are about conserving capital and trying to persuade people whether it’s to buy your product or get things done cheaply. This “idea guy” wanted to hire PaperPlane one of the best UI/UX companies in India to design the site, sure why not it ain’t his money.
Recently there was an article about Dropbox founder Drew Houston who had to hack the Apple operating system to understand how the desktop icon images worked. This was something that even other engineering teams at Apple couldn’t figure out. I’m assuming the VC firms are backing Drew as much as Dropbox, as they know what is possible with him.
Bottom line, if you can’t figure out how to get a blog started (or know someone that can) how in the hell are you going to run a company. I can envision that million dollars being spent very quickly, which is not what people want to see when they are investing in an idea, person or company.