Archive for July, 2008

The Google Killer That Wasn’t.

Thursday, July 31st, 2008

It’s only been a few days since the new search engine Cuil launched, and already it’s been tarred, feathered, and ridden out of town on a rail. It’s hard to believe that just that Monday the press was calling the site a potential “Google Killer” – and that things turned so quickly. While it’s not necessarily surprising that Cuil hasn’t been totally embraced with open arms—Google’s a verb, which says all you need to know about how deeply ingrained it’s become in popular culture— it strikes us that there was one huge flaw in Cuil’s business plan (and PR): they never gave a convincing argument regarding why they’re any better than Google or any other search engine.

Think about it: Cuil’s hook is that it searches three times as many web pages as Google. The problem is that the search results don’t actually support that. We tried a bunch of Cuil searches, and aside from the way the results are organized, could detect no real difference from Google. That’s a problem. Beyond that, why should anyone care whether their spiders crawl more pages and return more results than other search engines? Frankly, Google already serves up 20 pages of crap along with the two relevant pages of search results that they dig up for most searches—so why does anyone need 80 pages of garbage to sift through?

The bottom line is that nothing about Cuil is exciting enough, or different enough to warrant using it instead of Google. But what do you think? While it’s way too early to call this a failure (to be fair, they’ve been up and running for less than a week), what’s your take on what went wrong?

(pssst…if you want to weigh on what it would take to lure you away from Google, check out this week’s survey question.)

Cuil

Tags: business plan, google
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VC Firms That Fund.

Thursday, July 31st, 2008

Looking to score VC funding? Then you’re going to want to check this out. Entrepreneur Mag has put together a list of the top 100 venture capital firms for early and later stage funding.

In case you’re wondering what “top” means (best-looking staff? highest salaries?), the rankings are actually based on the number of first-time deals each firm made with start-ups last year using data compiled by Reuters. The rankings are split into early stage and later stage, with the former being companies that have been in operation under 24 months. Take a look at the top ten VC firms for those fledgling companies below:

Top100VCFirms

Tags: entrepreneur, start-up, venture capital
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What Can I Do To Boost My Chances Of Getting A Start-Up Loan?

Thursday, July 31st, 2008

Here’s a familiar scenario: you’ve spent hours working on your business plan. It’s a piece of art. You take it to your local banker thinking that securing the $25K loan you need for your start-up is a slam dunk…

…And you end walking away 20 minutes later with nothing. What went wrong?

There are a few universal truths about bankers that every entrepreneur should know if they’re going to seek a loan for their start-up. The most important rule is that bankers are risk averse. It may sound like common sense, but given the current state of the economy and the credit crunch (which bankers are partially responsible for), bankers are less likely than ever to fund something they perceive is risky. Planning on opening up a burger joint next to a McDonald’s? A banker doesn’t want to fund that. No matter how sweet your triple Kahuna burger is, the chances are too high that you’ll go out of business and default on your loan. That thought alone is enough to give most bankers the hives. They’re looking for solid business with great cash flow and good contracts.

But what if your business doesn’t fit the bill? What if you are the guy opening up a burger shack next to McDonald’s? What then?

Pique a banker’s interest in your business by finding ways to reduce the risk of a loan. One way to do this is to note that you’ve got some percentage of the start-up capital you need in equity. Also mention that you’re interested in a loan through the Small Business Administration.

This hits the sweet spot for a risk averse banker in two ways. You brought up equity—and banks like equity. In fact, most require it. And two, you mentioned the Small Business Administration (SBA). Now, while most banks don’t particularly like handing out SBA loans because it means dealing with cash-strapped entrepreneurs and non-collateralized risk, they do it as a nod to the idea that small business is good for the economy. And most banks have a SBA department that can help secure government underwriting to back loans made to riskier applicants. Mentioning that you have equity and that you’re interested in a SBA loan also shows your banker that you get it—something that’s critical to them. If you’ve accomplished that, you have a far better shot at getting the loan you need.

Tags: bank lending, q&a, sba, start-up
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Google Will Fund Your Baby.

Thursday, July 31st, 2008

Well, maybe. Details are still fuzzy, but word got out this morning that Google is in the planning stages of developing a corporate venture capital arm. While it’s unclear what types of start-ups they plan to throw [some of] their billions at with this new venture, investing is nothing new for Google. They’ve backed start-ups in the past such as Current Communications, a company that shoots broadband through power lines, and wireless Internet part-maker Meraki.

Stay tuned- this isn’t the end of this story.

GoogleMoney

Tags: google, start-up, venture capital
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Can Anyone Really Compete With The iPod?

Wednesday, July 30th, 2008

As far as portable music devices go, the iPod is pretty close to perfect. It’s easy to use, even easier to transport, and it’s so damn pretty. All that, combined with Apple’s marketing magic, have resulted in the iPod becoming the only game in town when it comes to digital music devices.

That’s no stopping Dell, however, from taking [another] stab at swiping some of the iPod’s market share. That’s right, news broke today that the PC-maker is planning on launching a digital music player. This is a second effort for Dell. As you may remember, they crashed and burned with their last attempt to inch in on the iPod. Hard.

This time they say they’re coming back with a revamped business plan: instead of coming out the iPod with a newer/sleeker/prettier toy, they plan to offer software in the device that will allow users to download and organize music, movies, and other content from a variety of places online—not just one source. That stands in direct opposition to Apple’s model, where online music and videos are only sold through iTunes. Word is that the Dell device is also going to be sold on the cheap—for less than $100 a pop. Despite that, Dell is quick to point out that it’s not about selling an MP3 player that’s just cheaper than an iPod—they’re trying to create a product that integrates their software with a flexible product. It’s a strategy, people.

While it’s a new approach for Dell, is this new attack plan really enough to coax the white ear buds out of consumers’ ears? Frankly it strikes us that nothing short of a device that plays music and works like a jet pack could convince us to swap our Nano for something else. Although…we possibly could be convinced to defect if someone made a cute device with excellent battery life (and why, by the way, hasn’t someone done that yet?)

What about you?

iPod

Tags: apple, business plan
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More Money: Web 2.0 Still Feels The Love.

Wednesday, July 30th, 2008

-Like.com, a “visual search engine,” secured $32 million in third round funding today, reports VentureBeat. How it works is that the contents of images and photos on the net are used to search and retrieve similar items. For instance, say you find a dress you like, but want to find something similar. Type in details (such “buckle” or a color) and the search engine will find other, similar items. Apparently, investors think Like.com is one to something. Along with this round of funding, VCs gave the start-up a $100 million valuation.

-Video site Howcast announced today that they raised $2 million in first round funding. The site, founded by ex-Google employees, provides a slew of how-to videos on topics ranging from how to repel ticks naturally, to how to call in “sick,” to how to walk in high heels. It’s basically a smorgasbord of fun and quasi-useful clips. In other words, we love it.

-V.I. Labs, the maker of anti-piracy software (arr!), landed $4 million in second round funding this week. They plan to use the investment to market their new product, CodeArmor Intelligence, a tool that’s embedded in software that reports back to developers when it’s being use improperly. Will this mean that we have to get rid of our bootleg version of Microsoft Office?

-Predictive Biosciences nailed a $22 million second round of financing last week. The start-up works in the field of cancer detection. Right now they’re specifically focused on researching bladder cancer, but say they plan to expand to breast, prostate, ovarian, and colorectal cancers as well. They say they’ll use their funding to initiate further human studies.

-Chemclin, a medical diagnostics company (which apparently are popular this week), captured $16.5 million in Series B funding. The company is based in Beijing, China.

-WideOrbit, a software start-up that oversees advertising sales for thousands of cable networks, radio stations, and TV stations, announced that they’ve secured $9.5 in fourth round funding. CNET, which reported the story, says that while advertising is expected to slow during the coming months as a result of the economic turmoil, this round of funding is a sign that some VCs don’t believe that speculation.

-Also suggesting that the ad business isn’t screwed just yet, AdMob, a mobile advertising start-up, secured $15.8 million in third round funding from Sequoia Capital and Accel Partners this week, reports the LA Times. It may be because they just raised funding, but AdMob CEO Omar Hamoui says that he expects mobile advertising to continue to grow. And while other companies are making cuts as a result of the economy, he says they’re proceeding business as usual: “We will need to continue to be careful and conservative about how invest, but we have always been that way.”

-Trusteer, a customer protection software business, landed $6 million in funding this week. Their software protects online banking, healthcare, and other applications that users fill out from fraud and hackers—even if the user’s computer is already infected with malware. We like the sound of that.

-Sutus, a Canadian start-up, raised $4.5 million in funding this week. The company makes an all-in-one device that combines the various pieces of equipment a business needs to communicate—including phone, data networks, and internet.

like5652

Image via TechCrunch

Tags: funding, more money, venture capital
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We’re One Of The Cool Kids Now.

Wednesday, July 30th, 2008

Or we’re trying, that is. Today we launched our brand spankin’ new Twitter feed. Tweet us here and we’ll follow you back.

Tags: technology, twitter
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Questions We Didn’t Know You Wanted Answered.

Wednesday, July 30th, 2008

BizBehindBars

Er, slow news week, CNN?

Tags: entrepreneur, start-up
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Today In Contradictions.

Wednesday, July 30th, 2008

Even though the price of oil has dropped—and dropped substantially—has anyone else noticed that gas is still hovering around $4 gallon in most places? Nevermind that when oil shot up to $140 per barrel, prices at the pump seemed to rocket right along it with it. So what’s up?

We’ve got some bad news: if it seems like gas prices go up more quickly than they go down, it’s because they do. Slate’s Explainer has the economic analysis behind the phenomenon known as “asymmetric price adjustment” (although we just like to call it “screwing consumers over”), but the bottom line is that if you’re a consumer or small business owner waiting for relief from dropping oil prices, don’t hold your breath. It takes about eight weeks for a dip in the price of oil to translate into savings for consumers at the gas station.

ManAtPump

Tags: consumers, economy
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Breaking: CEOs Lie!

Wednesday, July 30th, 2008

It’s become the de facto rule these days that you can’t trust anything coming out of a CEO’s mouth (or from their PR person/Spin Doctor). Just this week alone there’s been a brouhaha about whether Apple CEO Steve Jobs truthfully answered questions about his personal health. Jobs, who once battled pancreatic cancer, appeared earlier this summer looking gaunt and sickly at a developer’s conference—yet his mouthpiece told the press that he only had a “common bug.” We all know now that Jobs had a little more than a sore throat—but then, most people were dubious to begin with.

That’s because it’s not exceptional for CEOs to lie or tell half-truths. It’s a given. Take Citi CEO Vikram Pandit, who took the helm of the beleaguered bank back in January. As Portfolio notes, he told investors on his first earnings call the following:

“The first priority of risk has been to make sure that our legacy portfolio of assets in the sub-prime and mortgage areas are separated and managed to be optimized, and we have done that. We have also made sure they are well-capitalized.”

Those comments would have been fine if they weren’t completely untrue. Just a mere three months later, the company wrote down a total of $12.1 billion in losses, and three months after that, they wrote down an additional $7 billion. Pandit and Jobs aren’t alone, though. The award for the biggest whopper of the year goes to the former CEO of the now defunct investment bank Bear Sterns. Just days before the bank collapsed, Alan Schwartz proclaimed on CNBC that, “Bear Stearns’ balance sheet, liquidity, and capital remain strong.”

Riiiiiight.

How did things ever get to this point? It’s baffling, considering that CEOs have a responsibility to their shareholders and investors, the people who effectively write their paycheck every month. Yet fibbing seems to have become so ingrained in corporate culture, perhaps going to back to Enron, that it seems questionable whether anyone could put a stop to it even if they wanted to.

What do you think?

BearSterns