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A Fundraising Survival Guide

paulgraham.com

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Re: A Fundraising Survival Guide

#41

Post by skmurphy »

netcan wrote: post #38
skmurphy wrote: post #36

Earlier quoted context omitted.

eBay was far from the first on-line auction site. In particular OnSale was founded a year earlier was running on-line auctions in May of 1995 six months before eBay was founded.

First mover doesn't necessarily mean absolutely first. "Early mover" is probably a better term. Either way, it tends to apply to the first (or one of the first) to cross a certain hurdle.

eBay was not in the first 10. First/Early mover is a very mixed bag with most of the example of "first/early" turning out to be "one that we remember now." Some other counter-examples: Palm (something like 47th PDA, well after the Newton for example), iPhone, MP3 player (iPod), Google, Microsoft (e.g. Excel, IE, Word, Powerpoint,...). See also NSF study http://www.nsf.gov/statistics/nsf04305/pdf/tab11a.pdf (hat tip to http://particletree.com/notebook/first-mover-advantage/ )

Re: A Fundraising Survival Guide

#42

Post by netcan »

I think PG has said this before. There is incompatability between: A. VCs are 'funds' (IE they need to invest a big amounts) B. Partners only invest 1-2 times per year C. Startups are (or can be) cheap

One of them has to give. Seems like its C.

Re: A Fundraising Survival Guide

#43

Post by davidw »

skmurphy wrote: post #41
netcan wrote: post #38

Earlier quoted context omitted.

First mover doesn't necessarily mean absolutely first. "Early mover" is probably a better term. Either way, it tends to apply to the first (or one of the first) to cross a certain hurdle.

eBay was not in the first 10. First/Early mover is a very mixed bag with most of the example of "first/early" turning out to be "one that we remember now." Some other counter-examples: Palm (something like 47th PDA, well after the Newton for example), iPhone, MP3 player (iPod), Google, Microsoft (e.g. Excel, IE, Word, Powerpoint,...). See also NSF study http://www.nsf.gov/statistics/nsf04305/pdf/tab11a.pdf (hat tip t…

Search, and thus Google, obviously has different economics than something like eBay: it's very easy to switch to a new search engine, and there aren't really demand-side economies of scale like there are with auctions.

eBay may not have been the first auction site, but it was the first to hit a critical size, beyond which the advantage was all theirs.

Re: A Fundraising Survival Guide

#44

Post by skmurphy »

davidw wrote: post #43
skmurphy wrote: post #41

Earlier quoted context omitted.

eBay was not in the first 10. First/Early mover is a very mixed bag with most of the example of "first/early" turning out to be "one that we remember now." Some other counter-examples: Palm (something like 47th PDA, well after the Newton for example), iPhone, MP3 player (iPod), Google, Microsoft (e.g. Excel, IE, Word, Powerpoint,...). See also NSF study http://www.nsf.gov/statistics/nsf04305/pdf/tab11a.pdf (hat tip t…

Search, and thus Google, obviously has different economics than something like eBay: it's very easy to switch to a new search engine, and there aren't really demand-side economies of scale like there are with auctions. eBay may not have been the first auction site, but it was the first to hit a critical size, beyond which the advantage was all theirs.

Google makes money from selling ads. Advertisers want to place ads on the largest search engine sites (or one that can deliver a target audience at an effective price). It may be easy for a user to switch (although letting users know that you exist can be hard/expensive), it's less clear that advertisers will switch to a search engine with few users. Google's customers are the advertisers.

Re: A Fundraising Survival Guide

#45

Post by cperciva »

pg wrote: post #33
gojomo wrote: post #17

The very last sentence of the last footnote caught my eye: Oddly enough, the best VCs tend to be the least VC-like. I suspect that rather than being odd this is nearly tautological for any profession -- "the best X tend to be the least X-like". Professional stereotypes are set by the multitudes in the middle, not the highest-performing outliers. Further, atypical behavior can be both a cause and effect of excellence.…

I've been thinking about that. It's not true of all fields. It's true of painters, but not mathematicians. Maybe it depends on whether a field has a lot of fakers. Painting and VC both do. Math has few to none (I can't judge well enough to say for sure).

It's true of painters, but not mathematicians.

I'm not sure about that. The words "homeless drug addict" don't exactly bring "mathematician" to mind, but thats' exactly what Erdos was, and he certainly qualified as one of the best mathematicians of the 20th century.

EDIT: Oops, it wasn't methamphetamine; it was dl-amphetamine and methylphenidate. Somehow my brain squished those two together.

Re: A Fundraising Survival Guide

#46

Post by rms »

cperciva wrote: post #45
pg wrote: post #33

Earlier quoted context omitted.

I've been thinking about that. It's not true of all fields. It's true of painters, but not mathematicians. Maybe it depends on whether a field has a lot of fakers. Painting and VC both do. Math has few to none (I can't judge well enough to say for sure).

It's true of painters, but not mathematicians. I'm not sure about that. The words "homeless drug addict" don't exactly bring "mathematician" to mind, but thats' exactly what Erdos was, and he certainly qualified as one of the best mathematicians of the 20th century. EDIT: Oops, it wasn't methamphetamine; it was dl-amphetamine and methylphenidate. Somehow my brain squished those two together.

It was methylphenidate. There is a world of difference between methylphenidate and methamphetamine.

Re: A Fundraising Survival Guide

#48

Post by gscott »

vaksel wrote: post #19

there is probably a startup idea here. Everyone probably emails all VCs at the same time, so why not speed up the process? Can have Entrepreneurs sign up, upload their business plan/youtube presentation. Then VCs will be able to login using a special verified VC account(that way Entrepreneurs will know that only VCs will see their presentations). And then be able to see the uploaded presentations and contact entrepre…

There are a ton of those out there, http://www.gobignetwork.com/ is one another is http://www.fundingpost.com/.

There are too many people out there trying to do the "start up" thing trying to get attention from too few people.

To put the number of "start ups" out there in perspective, 900 signed up for the Techcrunch 50 conference (http://www.techcrunch50.com/2008/blog/) and in order to sign up you cannot be launched yet and you must be able to launch on the conference date. So that means that 900 start ups signed up, each ready to start on a single day.

Re: A Fundraising Survival Guide

#49

Post by cperciva »

rms wrote: post #46
cperciva wrote: post #45

Earlier quoted context omitted.

It's true of painters, but not mathematicians. I'm not sure about that. The words "homeless drug addict" don't exactly bring "mathematician" to mind, but thats' exactly what Erdos was, and he certainly qualified as one of the best mathematicians of the 20th century. EDIT: Oops, it wasn't methamphetamine; it was dl-amphetamine and methylphenidate. Somehow my brain squished those two together.

It was methylphenidate. There is a world of difference between methylphenidate and methamphetamine.

Oops, I mentally squished methylphenidate and dl-amphatamine together (Erdos took both) into methamphetamine. You're right, Erdos didn't take methamphetamine.

Re: A Fundraising Survival Guide

#50

Post by netcan »

skmurphy wrote: post #41
netcan wrote: post #38

Earlier quoted context omitted.

First mover doesn't necessarily mean absolutely first. "Early mover" is probably a better term. Either way, it tends to apply to the first (or one of the first) to cross a certain hurdle.

eBay was not in the first 10. First/Early mover is a very mixed bag with most of the example of "first/early" turning out to be "one that we remember now." Some other counter-examples: Palm (something like 47th PDA, well after the Newton for example), iPhone, MP3 player (iPod), Google, Microsoft (e.g. Excel, IE, Word, Powerpoint,...). See also NSF study http://www.nsf.gov/statistics/nsf04305/pdf/tab11a.pdf (hat tip t…

First/Early mover, is (I think) a more useful concept from the market perceptive then the technology perspective.

eBay was the winner that emerged from the first tussle and as said above it was the first to hit a certain size. You might not want to call it a first mover but that is a semantic discussion. From the perspective of the market, it was.

The iphone certainly is a late entrant any way you slice the market. Late mover doesn't necessarily mean loser though.

Palm was a late entrant. I think what you get in that case is that the market had a few false starts. In that case, moving early would have been a mistake as the market didn't take off.

You could argue that the ipod was a first mover from a marketing perspective. The idea is that the product (in the minds of users) is so different that it is essentially a different market. grey area

But some areas definitely favour early movers. Interestingly, I don't think viaweb was one of them. You have a very large choice of online shop building software these days. There is not too much advantage in choosing the same software as everyone else. But I guess that wouldn't have been obvious at that point. Things could have rolled out differently though 'Web malls' could have happened. In that case, being in early would have been a big deal.

Cheers for the link. Is there analysis that goes with it?

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