What am I Missy

1303

What am I Missy? Episode 5

Microsoft and Yahoo's never-ending deal; Duh... It's the debt crisis; Drew reveals his secret sauce

Innovation series by Meliza Solan Surdi
December 7, 2008 | Comments (6)
Short URL: http://vator.tv/n/5c6

Let's take another glance at a couple of VatorNews articles and our top Lessons Learned story we covered last week.

Will the deal between Microsoft and Yahoo ever die? It's been reported that Microsoft is thinking about buying Yahoo's search business for some $20 billion dollars. The report has been widely dismissed, as the price tag is well over Yahoo's entire business. Sanford Bernstein's analyst Jeff Lindsay says that Yahoo's search business is worth more like $2 billion dollars. 

See: Yahoo search biz, worth more like $2 billion

Yes of course, we all know about our current debt crisis. If you asked anyone what is ailing the economy, they will tell you that everyone has been over-leveraged. Several people have been taking on too much debt. This means, debt will most likely not be the financing vehicle of choice when it comes to startups.

One of Skype's early investors Howard Hartenbaum said, "Bridge financings are dead and startups will have to rely on an equity round for capital." Unfortunately, those equity rounds will come at a steep price. Whoever said times are easy?

See: Bridge (to nowhere) financing is dead

One of America's top surviving entrepreneurs shared the secret of his success. Drew Curtis, CEO of Fark.com said," In order to survive, if you're an ad-supported startup, tap into a subscription model.

Back in 2002, Drew did this. It saved him back then and it's proving to be life support today. 

Then again, with advertising dollars evaporating, ask him six months from now and he'll likely tell you subscription sales account for half his revenue. Let's be thankful for different revenue streams.

See: Fark CEO Curtis on surviving the downturn

 



 

 

 





 


Related companies, investors and entrepreneurs

Plogo_farkcom-satirical-news-site_farklogo2
Fark.com
Startup/Business
Description: Fark is a satirical news forwarding site.  The Fark community identifiesodd, funny and entertaining news stories from across the Web...
4188
Drew Curtis
founder,
Fark.com
Bio: With his website Fark.com, Drew Curtis has built a global community based around news and, due to ad revenue, Fark.com has become one of ...
Bio: Howard Hartenbaum joined August Capital in 2008. 

Prior to joining, he served as a General Partner at Draper Richards LP where he was th...

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Comments

Gary Silver
Gary Silver, on December 7, 2008

On Nov 19, Ballmer said acquisition talks with Yahoo were "done". On Dec 4, Icahn said there are “no understandings” with Microsoft about a possible search business deal. So what is the source of these rumors?


Comment_gbg
David Rios, on December 8, 2008

It is amazing the number's that are being thrown around with any kind of sell these day's. Greed is what has put the U.S. in the finacial crisis it finds itself in today. In regards to debt we all need to learn how to live with in our means. If you can not pay for it with cash, then wait until you can or do with out. DLR in Denver


Todd Tate
Todd Tate, on December 8, 2008

Great breezy report! Fark is lucky IMHO with subscriptions as humor is involved, not (too) many are successful at subscriptions. A good laugh is always worth paying for and we all know The Onion is successful(ly hilarious ). As far as Bridge loans, I say skip the loan, stay bootstrapped and build value so you can hold your own in that conversation about x$ for y(equity). If you have value and smarts you can still control that conversation with VC. Having an investment team behind you is key though so don't let your CEO ego mess up money being deposited into your bank account. Compromise can happen.


Nick Ballantyne
Nick Ballantyne, on December 8, 2008

Smooth, you get more fluid with every show. The economy is affecting all aspects of American Life.People need to start spending again.I'm still waiting for you to jump up on the desk and start singing....


Comment_gbg
Pierre Coupet, on December 10, 2008

The REAL solution is for entrepreneurs to REALLY start thinking-out-of-the-box when it comes to a monetization strategy instead of the standard "got an idea, go to an investor, burn some cash, go back for more cash, burn more cash, get plenty of eyeballs, and hope that, eventually, over God knows how much time, revenue can be generated from product sales or advertising." ....................

How about burning the midnight oil trying to figure out the "killer value" of your offering and who your first "paying customers" are going to be......... Before you even launch your business, why don't you contact these "future [[paying]] customers" and ASK them if your product or service is.... (1) something they have an [[urgent need]] for because it would solve an existing problem or issue for them NOW (assuming your product or service REALLY worked the way you say it would); ..... (2) ask them to GIVE YOU -- instead of you giving them -- specific examples of how your product or service would make life much better for them and how it would positively affect their bottom line .....[[good reverse psychology]] ....after all, if they really understood the value of what you are offering, then who would be in a better position to have this sort of information...certainly NOT you, an outsider who doesn't know a darned thing about the inner workings of their company and the day-to-day issues they have to deal with,..... (3) is it something they would pay for, and at which price point [[besides FREE]] your product or service would be attractive enough to get them to at least try it upon release, ......(4) ASK them what kind of guarantee do [[[ they want ]]] and then you can figure out what kind of guarantee that you are willing to provide to these paying customers who are willing to try your products just in case you messed up;.....(5) are they willing to make an "informal-no guarantees" purchase commitment to you before you roll out the product...that's your way of distinguishing from those who are just blowing smoke up yours and those who are genuine................................

Once you have this information, then you will get a chance to find out YOUR REAL VALUE PROPOSITION as well as know how much money you will REALLY need to get your business off the ground; and whether you can build it slowly and profitably in an [[organic]] fashion or whether you will REALLY need an investor to help you get it off the ground OR whether you should even go ahead with the idea........... .....
.....
I know it's tedious, may take a long time, can be very discouraging because you're bound to get a lot of negative feedback from people who may not clearly understand what the hell it is you are offering as well as from those who could care less about what you have to offer;........a lot of well-meaning, as well as mean-spirited, people may try to pierce some holes into your armor in order to point out some weaknesses in your arguments or value proposition;.........and some people will just outright ignore you because they are just not interested in helping you do your homework either because they don't have the time or they figure you can contact them once you've got everything figured out, have a product, and then they'll give you time and let you know whether they are interested or not.............
........Just to have known or come across all these individuals is a GOLDEN OPPORTUNITY -- a gift - that will help make you a much better business person-entrepreneur and which will help guarantee your success........Whether they are The Good, The Bad, and The Ugly, in some strange fashion, you will owe your success to ALL of them......
......The point being, target paying customers FIRST before you even launch. This is standard research which can be accomplished OVER THE WEB at absolutely no or very little cost to you the entrepreneur, outside of your own sweat. Although, if you got a 9-5 job, that means you will have to "lose some or plenty of sleep" burning that midnight oil.


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