VentureBeat - Latest Comments in What to look for in an Internet investment

Re: What to look for in an Internet investment

MartinFortKnox — Sat, 16 Feb 2008 19:47:26 -0000

This column was very informative. Kudos to the writer. At the end of the day it breaks down to whether or not you have the patience. Patience is a virtue. There is no denying that. Patience is what I believe the 5 percent of the people who succeed in networking have that the rest don't (yeah that number is true 95 percent of you fail, but it doesn't have to be that way). It takes time grow anything. Nothing happens overnight. You have to realize that its gonna take months and maybe years of CONSISTENTLY putting time into your business. Consistent is the focus here. People spend an hour or two one day then don't visit their business again for several weeks. This is an ineffective strategy to become successful.
Yeah, I know it's hard especially when your not making any money and time is limited but if it were easy everyone would be internet millionaires.

The truth is you can do it. All you need to do is understand how to focus your energy like all the top performers in any industry in the world. Through repetition, patience will be something you can turn on and off like a light switch. But what kind of repetition you ask?

“If you listen to your fears, you will die never knowing what a great person you might have been.”
-Robert H. Schuller-

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Thank You

Re: What to look for in an Internet investment

thegoogleguy — Fri, 09 Mar 2007 19:59:38 -0000

Love this stuff check outt

Teenwag

Re: What to look for in an Internet investment

ajay — Thu, 22 Feb 2007 16:54:18 -0000

You got everything but the kitchen sink. Add WOMEN/girls, cause if women won't digg it.. that click through digg isn't going to come through...

Where do men/boys go? - whereever there are women/girls.. !

ajay

Re: What to look for in an Internet investment

Mike McGrath — Thu, 15 Feb 2007 13:49:29 -0000

Nisan, Thank you for the insight. My businesse fulfills the vast majority of these requirments, but operates in a micro-niche. Q: In your opinion how niche is too niche, and how owuld you determin this?

Re: What to look for in an Internet investment

PaulK — Sun, 11 Feb 2007 17:00:11 -0000

I think you need to add a couple other points:
1. If just a duplicate of an existing service/site, how will this make a difference? When you have free sites, you cannot gain market share by undercutting on price! Adding some cool feature is often not enough as the big name ones can add these quickly and easily too (unless so unique you can get a patent, but then the question is whether users want it).

2. How will it make money? You kind of left that out! Some rely on ads only - so the question is whether you can get enough ads using some technique to add value (ie. targeting, keyword matching, profile matching, etc); will the kind of users match the advertisers who will actually place ads? If you rely on free accounts with fees to add features, how many will pay and for how long? The risk in many of these is that few will use the fee services, or will only use for a couple months and cancel.

Re: What to look for in an Internet investment

Chris Lake — Wed, 07 Feb 2007 14:29:10 -0000

Nice post Nisan. Points 1 and 2 are inextricably linked - niche works really well online, makes for amazing search engine fodder.

Last night I wrote a business / feature development plan for a startup (which is about to build out a new web app). Every one of your points is represented in it. Which makes me feel even more positive about 2007... : )

Re: What to look for in an Internet investment

Heath — Wed, 07 Feb 2007 14:22:36 -0000

I have one that I believe meets 11, combining the article and Mike Brown's list. I'm a one man show and I'm wearing all the hats. It will be great to get found!

-heath

Re: What to look for in an Internet investment

davemc500hats — Wed, 07 Feb 2007 11:57:20 -0000

great summary & observations :)

as with your other articles on Startup-Review.com, definitely worth the read.

- dave

Re: What to look for in an Internet investment

Tom Steen — Wed, 07 Feb 2007 11:48:52 -0000

Gabbay: I'm contacting you from the Midwest (Iowa) where we are still undergoing a very long term transition away from the agriculture/food chain and manufacturing sectors as primary drivers of enterprise growth. As a result, we are probably not as rich in the human capital needed to consistently succeed in growing internet enterprises. Is is possible, in a general way, to characterize the kinds of people/intellectual capital needed by upstart internet enterprises.

Re: What to look for in an Internet investment

Nisan Gabbay — Tue, 06 Feb 2007 21:57:51 -0000

Hi Heath,

If you can demonstrate even 3 of the 7 listed above in the real world, the investors will come find you! Unfortunately, a compelling business plan isn't enough these days. My advice is to build the service and prove that you meet some of the points above. Don't waste your time looking for investors.

Re: What to look for in an Internet investment

Nisan Gabbay — Tue, 06 Feb 2007 21:54:18 -0000

Hi Heath,

Re: What to look for in an Internet investment

Heath — Tue, 06 Feb 2007 16:53:03 -0000

How do you find an investor when you meet all these?

Re: What to look for in an Internet investment

Naked King — Tue, 06 Feb 2007 16:52:52 -0000

Blogs are becoming self reinforcing distortion reality fields, dunked in a tank of kool-aid. Do you notice that most 'top' bloggers are being commented on by other bloggers and startups who are trying to be notice and written about by other top bloggers.

In other words, is anyone reading these things besides other blog writers and parasitic attention starved one man startups.

LOL.

I fit in a third category... guy looking for some time to kill on the net. Randomly hit these blogs, same one never more than once/twice a quarter.

Re: What to look for in an Internet investment

Nisan Gabbay — Tue, 06 Feb 2007 12:59:06 -0000

Thanks everyone for the kind words - I'm glad that people have found the article useful. I'd like to point out that we have a nice conversation going about this post at Startup Review (www.startup-review.com). Some great feedback from Startup Review readers.

Thanks,
Nisan

Re: What to look for in an Internet investment

Michelle — Tue, 06 Feb 2007 12:44:12 -0000

Probably one of the best articles I've read yet here. You have yourself a new subscriber.

Re: What to look for in an Internet investment

Courtney Benson — Tue, 06 Feb 2007 09:42:39 -0000

The most succinct article on the subject to date. Thought that Mike Browns comments were right on the money. Iâ€™ll be checking out â€œStartup Reviewâ€ more frequently from now on.

Re: What to look for in an Internet investment

jon — Tue, 06 Feb 2007 09:08:58 -0000

I rarely comment on articles but this one deserves all the praise. Concise and to the point, and I happen to agree 100% with it. Plus, some of the specifics that Mikeâ€™s comment mentions are very relevant to my business. In particular: â€˜Improve an existing user behavior rather than require a new user behaviorâ€™ and â€˜previously unknown ability to personalizeâ€™. Others, such as â€˜Clear use caseâ€™ are an outright mental puzzle and personal daily challenge.

Re: What to look for in an Internet investment

Patrick Lor — Mon, 05 Feb 2007 23:07:18 -0000

Nisan, Nice work! As a former shareholder/exec of iStockphoto, I'm getting a lot of inquiries regarding investments and advice. It's absolutely essential that a startup generates enough excitement and passion to get free WOM advertising and evangelism. Businesses that require millions in launch advertising budgets are so dot.com . . .

Re: What to look for in an Internet investment

Nisan Gabbay — Mon, 05 Feb 2007 20:47:35 -0000

Hi Mike,

Nice to hear from you and thanks for taking the time to add to the list. I tried to keep the list broad and parallel, while some of your criteria are a little bit more specific. I do like and agree with most of them. I think the one that stands out to me the most is your first point around instant gratification.

I would re-state this as receiving a high degree of personal value from the service without their needing to be network effects in place before value is received. There were some good posts on this particular topic floating around the Web 2.0 blogs awhile back.

The other point that I like a lot is new and proprietary access to data.

Re: What to look for in an Internet investment

Mike Brown — Mon, 05 Feb 2007 20:04:16 -0000

Hey Nisan- Nice post. I'd add a couple more thoughts, as I went through a similar exercise myself recently when thinking about what's *hot* and what's not-so-hot in consumer applications. I would add:
-Instant (or near instant) gratification - this means I don't have to download something and get a ton of friends on the thing before I actually get some goodness from the product/service.
-Clear use case. Duh! Some sites are impossibly hard to understand when you show up for the first time. If I can figure out what to do there in about 10 seconds, forget it. You've lost me.
- Improve an existing user behavior rather than require a new user bahavior.
- Non-linear economies of scale. Obvious example is communication products but it could apply to cost reduction as well as user adoption.
- Previously unknown ability to personalize. Personalizing shopping, media, medical recommendations, restaurants, etc. The beauty of the web is in finding new ways to get ME exactly what I want.
- New or proprietary access to data presented in simple ways. It's cool when companies take previously unknown, inaccessible or complex data and make it usable for consumers to make decisions. Zillow, Farecast, and lots of others do this.
- Assume people are really lazy and mostly selfish. Businesses predicated on people doing stuff just because it helps others are a bit naive (this doesn't mean people don't want to participate in collective projects, ala Wikipedia).
- Help me get the stuff I want cheaper or make better decisions about stuff I will buy.
- Help me get access to my media in new places I couldn't get it before, e.g., my music or movies or shows on the go (iPod, TiVo, SlingBox)
- If it's mobile, does it work on all handsets or just some? Do I need to integrate with the carrier or does the service just work out of the box?

There's more, but those are a few I thought I would add.

-Mike

Re: What to look for in an Internet investment

Sundar Krishnamurthy — Mon, 05 Feb 2007 17:23:40 -0000

I am an avid reader of your startup reviews, great summary!

Another crucial ingredient I believe is the ability to sustain the community's loyalty to your offering ("stickiness", if I may use a Web 1.0 word). For instance, EBay is able to do it with the revenue potential. LinkedIn seems to do it by strengthening the member's network with every new link, which makes leaving that much harder.

Lack of this element may explain the reports on users shifting from one social network site to another. There is nothing tangible, monetary or otherwise, to keep users coming back once the novelty wears off.