Archive of thenextweb.com
Written on 30th December 2008
11 COMMENTS 
Ernst-Jan Pfauth, editor in chief
If you’re an iPhone app developer, you’re basically working for that one big hit. Like the developer of the iFart app, he told VentureBeat ow much profit he makes on a daily basis. A whopping $10,000!
Dutch iPhone developer Vincent Verweij got pretty fed up with this. He burns a lot of money while developing his apps, without seeing much revenue coming back. “To survive in the App Store, you’re only hope is short hits, I don’t want my business to depend on that,” Verweij told Emerce.
He also complains about the low prices for apps – max 3 euros -, the short life-cycle, overabundance, and the cocky attitude of Apple. Verweij developed an app called Camera Pro, which added 15 new features to the camera. That app was a little too good for Apple, so the company rejected the app (for now). Verweij lost around €10,000 because of this disappointment.
So what’s Verweij gonna do now? Hold on to yourself: he’s going to focus on Windows Mobile and Symbian again, since these platforms have more possibilities. I bet he’s also working on Android apps, but he probably didn’t want to tell the reporter.
By the way, Gerard van Enk tipped the readers of Emerce about a research by Mobile Orchard: people are willing to pay more than 99 cents for business and GTD apps
Written on 24th November 2008
1 COMMENT
Peter Robinett, Web Programmer and Founder of Lunch 2.0.nl
Slush Helsinki has gotten off to a great start, with the heavy snow yesterday doing little to dampen people’s spirits. We started off with presentations from some of the heroes of the Finnish startup scene: Risto Siilasmaa of F-Secure, Monty Widenius of MySQL, and Ilkka Paananen of Digital Chocolate. After insightful and introductions, Matt Marshall of VentureBeat moderated a panel with all the entrepreneurs.
A common thread in the three entrepeneurs’ comments were the difficulty raising funding. While all three were successful raising money, it was getting money at the right time with the right conditions that was tricky. Paananen says his company, after successfully bootstrapping for several years, was forced to chose between selling the company, raising venture capital, or merging with another company. They chose the latter because Digital Chocolate complemented their business and already had Sequoia and Kleiner Perkins as investors. Likewise MySQL turned down a $15M investment only to take a $10M investment a year or two later. The difference? The former would have seen the founders loosing a controlling stake, while the latter let Widenius and his fellow co-founders keep their involvement. This commitment served them well and enabled them to profit hansomely this year with the billion dollar sale of MySQL to Sun. Since it was been challenging, at best, for them to raise money from Finnish investors, both Widenius and Siilasmaa are now devoting time and money to Finnish startups. Predictably this announcement sent local startups scrabbling to corner both men after the panel.
One question European startups often struggle with is whether to move to Silicon Valley. Widenius said MySQL only moved there because their CEO wanted to be there. Despite drawing laughs from the crowd, this view seems to be widespread. All the panelists are happy with the ability to develop great products from Finland but emphasized the minuscule size of the Finnish market and the importance of having a management and sales presence in the US. Risto Siilasmaa, despite starting F-Secure in Silicon Valley, would have actually preferred to have been in Boston or another city on the US East Coast, due to the time difference if nothing else.
To follow Slush as it happens, you can watch the live video feeds from the business and development tracks. The #slush Jaiku channel and #slush Twitter search results are also a great way to take the pulse of the Slush attendees. If you have any questions for me, I’m @pr1001 on Twitter and on Jaiku.
Written on 13th October 2008
3 COMMENTS
Ayelet Noff, Next Web WebTipr Israel
During these times we are all somewhat paranoid about what the future will bring and whether we are entering a startup depression. In his newsletter dated September 27th, Jason Calacanis writes:
“It’s my belief that the economic downturn will be much worse than it is today, and that 50-80% of the venture-backed startups currently operating will shut down or go on life-support (i.e. 3-4 folks working on them) within the next 18 months.”
Jason gives startups a few pointers on how to survive the upcoming days and advises them to get focused, get leaner, and ultimately get profitable.
R.I.P Good Times
Om Malik had written last week that Sequoia held a meeting of all the entrepreneuers/CEOs of its portfolio companies and advised them to tighten their fiscal belts. Attendees were greeted with an image of a Grave Stone, with the following message: “R.I.P.: Good Times“.
According to The Marker, Other VCs such as Benchmark and Carmel Ventures in Israel have not only asked their portfolio companies to make budget cuts but have also taken their own advice and fired a few employees of their own.
So you may ask, is all this paranoia justified?
Some people in the industry think differently and much more optimistically about to the situation. Fred Wilson, of Union Square Ventures, an early stage venture capital fund in New York City, writes:
“But I do think Jason’s missing one important point in his email. It’s not the venture backed startups that are going to struggle the most…All startups are going to have to batten down the hatches, get leaner, and work to get profitable, but the venture backed startups are going to get more time to get through this process than those that are not venture backed. Here’s why.
Venture capital firms are largely flush with capital from sources that are mostly rock solid. If you look back at the last market downturn, most venture capital firms did not lose their funding sources (we did at Flatiron but that’s a different story). If you are an entrepreneur that is backed by a well established venture capital firm, or ideally a syndicate of well established venture capital firms, then you have investors who have the capacity to support your business for at least 3-5 years (for most companies).
Venture capital firms will get more conservative and they will urge their portfolio companies to do everything Jason suggests (and more), but they will also be there with additional capital infusions when and if the companies are making good progress toward a growing profitable business.”
Lack of IPO’s
According to VentureBeat, Mark Heesen, president of the National Venture Capital Association, believes there is an economic crisis in the lack of IPOs. but he doesn’t agree that so many start-ups are going to close. He believes there are still many angels who will continue to finance innovation among the seed-stage companies.
Mike Kwatinetz, founder and partner at Azure Capital Partners who invested in Bill Me Later during the post-bubble period and sold it recently to Ebay for $945 million, believes that this is exactly the time when investors should look for and target good business opportunities that they could profit from when the market revives.
He raises five good points:
- Since there’s less competition between the VCs, deals are priced more reasonably.
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Entrepreneurs have a better understanding of how much funds they really need in order to build their business and will stop asking for $40 million.
- The entrepreneurs who will stay in the game are those that really have a passion about building their company and not those adventurous entrepreneurs who come to Silicon Valley to make a few easy millions.
- There’s less competition between companies and there are less startups doing the same thing.
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One can hire a more skilled staff. Since the last bubble it’s been quite hard to find good people. Now this will change.
Flush out the doomed start-ups
So what do I think? In all honesty, nobody really knows what will happen as the startup world has never had to deal with such economic uncertainty in the past. However, it is my belief that the current situation will only do us good and allow those startups that have a unique offering to survive while flushing out those startups that were doomed to failure from the beginning. As Calacanis writes, companies now need to get better, more efficient, deliver more value, and use more cost-effective means to develop and promote their offerings. But this is not a bad thing. It just means that those entrepreneurs who really believe in their ideas need to find new ways to adapt to the current situation.
As Fred writes:
“I don’t think we are in a “depression” in startup land. We are in a down cycle driven by a bad global economy. I think the web and information technology is one of the few bright spots in an overall gloomy economic outlook. So if you are working on a web technology company, be happy that you aren’t working for a bank, a brokerage firm, an automobile company, or in many other industries. The tools and services that are made in the web technology business are only going to increase in demand over the next five years. But we are going to have to service that growing demand with leaner and more focused businesses and it’s time to start thinking more about profitability and how you are going to get there.”
Survival of the fittest
About a year and a half ago I wrote about the fact that we have too many startups offering us too many of the same things and that it may be time for Darwin’s survival of the fittest to take its place in the dotcom world. I mean, how many social networks do we really need?
As Stowe Boyd, writes:
“How many social bookmarking apps do we need? Is there really a place for seventeen social aggregators, or eleven blog comment plug-ins? Attention to hard numbers and real growth rates might lead hopeful entrepreneurs and investors to get smart fast and drop experiments that aren’t working, and to go back and dream something up that is really innovative instead of just-another-fill-in-the-blank application.”
Get funded one way or another
It’s time to get innovative people. It’s time to make changes. And if you’ve got a good, unique concept, I don’t think you need to be worried. You will get funded one way or another by VCs who still have plenty of dow or an angel who rather keep his money away from the Stock Market these days. Those companies that need to be worried are the ones that offer too much of the same and too little of the extraordinary. Sure, most startups will need to cut their budgets, but what doesn’t kill us, makes us stronger and the extraordinary will thrive. So stop getting depressed. Stop panicking. Depression and panic will lead us no where. Get inspired. This is your time to shine.
Written on 16th February 2008
5 COMMENTS
Ernst-Jan Pfauth, editor in chief
After spending two days in the city of love and buying Valentine’s presents, the wildest ideas about love pop into your mind. At least in my experience they do… so here’s one! On my way to Paris I read an article in my favorite newspaper that said it started a dating service. Nothing special, since every newspaper in the Netherlands has its own dating service. They were just a little later.
Starting a dating service as a newspaper makes sense if you think about it. You choose a newspaper because you feel most comfortable with its political signature, tone of voice, cultural supplement and of course its brand experience. The newspaper I read for example is aimed at a young cosmopolitan audience, discusses broad themes instead of just the hottest news and highlights interesting and semi-intellectual stuff to do. If I were looking for a girlfriend, I would definitely want a girl who has the same ideas about what’s important in life and the world. So the perfect girl for me would probably read the same newspaper.
That’s where the dating service comes in. I could just browse through profiles of girls, without worrying whether she open for semi-intellectual stuff of not. Makes perfect sense to me. I mean, somebody who reads The New York Times would never date anyone who started the day with The New York Post. It goes for magazines too, a FHM man doesn’t want a high-brow New Yorker reader to spend his life with. Right?
If you think of it that way, blogs could easily start dating services as well. They discuss a specific hobby, passion, business or sports team etcetera and differentiate from each other by using a different tone of voice and design. If you’re an eligible bachelor in London, it mustn’t be that hard to meet an attractive tech-minded girl (correct me if I’m wrong guys), yet when you live in Liverpool you might need some help finding one. Wouldn’t it be great if a TechCrunch UK dating service came to the rescue?
Moreover, blogs have a big advantage compared to newspapers since they allow interaction between readers. You can judge on beforehand whether you like his or hers opinion on certain matters. Want some diversity? Check out an article that discusses an important topic and see if he or she has as totally different view on things.
One doubt about dating on blogs, I’m not sure about the man/woman ratio though as male readers are probably still a majority. Anyway, let me try to give you an idea what I’m talking about, here are some stereotype readers. Feel free to drop your experiences in the comments.
- TechCrunch Chick: she’s pretty straight-forward, would love to live in the Valley and is always looking for opportunities to come up with THE perfect business idea. And as no other, she knows money makes the world go round.
- VentureBeat Gentleman: killer-guy, working his ass off and likes to cut through the chase. One you thing must know ladies, he checks the business news every 15 minutes.
- Valleywag Queen: he/ she gossips the day round and has an radar for rumors. Great to drunk with, since he/she is a great story teller and knows how to crash a party. Don’t let your guard down though.
- Mashable Man: Girls, you sure gonna love his elegant and charismatic appearance. Yet after a while, you might feel a bit neglected since he’s always busy with meeting friends and keeping social contacts intact.
- ReadWriteWebWoman: Highly intelligent lady who likes to get to the bottom of things. Although her punctual and structured approach to life might start to get on you nerves.
- Loogic Guapa: For all of you who are looking for that Spanish temper, the Loogic guapa is your chick. If only all her friends wouldn’t speak Spanish all the time.
The Next Web Blog is closely associated with The Next Web Conference which is held annually in Amsterdam, The Netherlands. At this event speakers from all over the world come together to talk about, and show off, the future of the Web. (More info 
