Startup Blog

If you boil down to the essence, there are really only two business models.

My friend Todd Defren from Shift Communications is part of a project to help make links in a Twitter background clickable as announced on Mashable.  A worthy goal! 

[Correction: When first published this post said the pricing was $20/month.  I was wrong.  The cost is $20 for a "lifetime" at the time ClickableNow launched.  I still don't think this changes their business problem.]

ANOTHER UPDATE: Clickable now has made some changes and is now FREE!

I have not talked to Todd about this project.  But from my current understanding I think the business model is flawed.  If you pay $20 you can make the links clickable on your profile for anyone who has installed the Firefox addon from ClickableNow.  Here is the big problem.  The business model relies on a large number of users installing an add-on, and there is no incentive to install the add on.

Why would I pay $20 to reach a tiny number of people that have installed the add-on?  I won't.  I also won't install the add on to be able to click on the tiny number of users that have added the clickable links.  Chicken and the egg.

Here are some suggestions for ClickableNow to drive more adoption:

1. Partner with an existing Firefox add-on with a big user base and add the ClickableNow functionality to it to get an instant large base of users who can click on the links.
2. Price the monthly fee for adding the clickable links to your Twitter page based on the number of people that have installed the add on.  Today it would be $0.10 a month or something.  As more people install it, the price goes up for everyone to a max of $20.
3. Same as above, except let the early users lock in the low price.  The first 10,000 installers pay $1 a month.  Then $2 for the next 10,000, up to a max price of $20.
4. Price the links on a CPC (cost per click) basis, so as a marketer I only pay for the clicks I get, and this will scale with the number of users.
5. Give away a simple version of the clickable links for free (maybe one link with no tracking stats) and then charge for more advanced version (multiple links and/or tracking stats).

What other ideas do you have to make the ClickableNow business model work?

I recently responded to a discussion on an email group about the business value (or lack of value)from using Twitter.  I thought others would find my answer interesting.  Most of the people thought Twitter was a complete waste of time.  I disagree.

Cisco is buying WebEx. I don't get it. Sure, a lot of Cisco customers could purchase the WebEx product (a lot of them probably do already, WebEx claims 65% marketshare), and I am sure Cisco will be able to grow WebEx sales at a good rate. But Cisco will also have to absorb WebEx's employees, and is inheriting technology that is not that good and is about a decade old. There are a lot of other much smaller companies that have better and newer technology. If Cisco is looking to really get leverage from their customer relationships and distribution, why don't they buy a small startup with newer/better technology than WebEx, and then use the Cisco brand and channel to really supercharge the sales? Why would they bother to pay $3 billion for WebEx (with $380 million in revenue), when they could pay $25 or $50 million for a startup with better technology? The only reason I can think of is that Cisco needs the $380m in revenue and $50m in profit from WebEx to meet its growth goals.

Is Web 2.0 Another Bubble? The new 'cool' topic to discuss seems to be is if the current excitement and innovation around "Web 2.0" is a bubble or not. In fact, there was a WSJ article interviewing Todd Dagress (Boston VC) and David Hornik (Bay Area VC) My favorite quote from the article... "By the way, the combined cash flow of Spot Runner, LinkedIn and Facebook is less than that of one Costco store. " - Todd Dagres, Spark Capital Yeah but, Todd, isn't is about growth and margins? Would you prefer to buy a Costco store rather than your recent investment in http://www.nextnewnetworks.com/? I don't think so. (BTW, I LOVE Costco. I would buy every product in my house from them if possible. But that does not mean I want to invest or work there.) As someone who lived through the 1999-2000 bubble - and was in San Francisco, aka 'ground zero' for the bubble - I really do not think we are even close to a bubble right now. A lot of the craziness we saw in '99 is NOT happening today, such as:

• There are no huge launch parties spending VC/investor money on booze - I went to a bunch of really expensive "launch parties" for all kinds of dot-com startups in 1999, which were basically booze and appetizer fests paid for with VC money (the VCs went and thought it was a great time)
• No one is spending millions on stupid advertisements - No one is buying SuperBowl ads like Pets.com (let's ignore GoDaddy.com) and no one is spending millions on 'partnerships' with AOL, Excite/@Home, etc. People are paying per click with Google instead, whichi has no long term committment and is infinitely scaleable
• There are no huge Series B VC rounds - One of my old startups (gazoontite.com) raised $26m in a Series B From Hummer Winblad and Oak Investment Partners, with very little revenue and no profit. While there is a lot of angel and serties A activity, the investments seem to max out at $4-6m, which is far less that the frothy investments and crazy valuations of the real bubble in 1999.

What is happening today is a huge amount of innovation using a new generation of development tools and social paradigms around the web. We are seeing a lot of entrepreneurs try new things and create value through building things not possible or not conceived a while ago. But, this is not a bubble. This is actually a good thing. And yes, many of them fail. Startups always do. but some succeed. And that is how the world changes. Sure, maybe valuations are a bit high and maybe a hot sector is attracting more attention than it should, but that is not a bubble. A bubble is pure craziness that will lead to a horrible burst / crash. We're not there. At least not yet.

Let me go on record saying that the biggest threat to Microsoft today is Google SpreadSheets and Documents. Not search, not Gmail... but spreadsheets and documents. And, if you read this article from innovation Creators about Google taking $200m from Microsoft & Lotus there is already a financial impact. I could not agree more. Google Documents and Spreadsheets has all the characterisitics of a disruptive technology.

• Much lower cost - free v.s $100's of dollars
• Less functionality in the traditional sense... BUT more functionality in ways that are important for a small but growing and important market segment - the collaboration and web-centric features will be the future of how we use documents and communicate

I am currently using Google Spreadsheets and Docs for a bunch of things, including tracking gifts and thank you notes for my wedding with my fiance. While Google spreadsheets does not do everything Excel does (pivot tables, charts), it does "enough" (to be dangerous), and the collaboration functionality is very cool and more importantly... quite USEFUL.