Friday, April 29, 2011

Nothing Matters But Traction

Nothing matters but traction. It makes everything easy, but it is the hardest to accomplish.

Too many entrepreneurs focus on working around a lack of traction when they would be better off using that energy to get traction.

A common occurrence is that an entrepreneur comes to me asking for money.
"I need money for marketing so I can get traction."
Alas, that's exactly backwards. If you have traction, then raise money to increase your marketing.

My advice to those entrepreneurs is clear and consistent: "No one will invest in a startup without traction unless the entrepreneur has already been wildly successful. For first time entrepreneurs, that means no one will invest in your startup without traction. Period."

Despite this, some entrepreneurs will persist. They'll want to show off their product, or try to prove why their company will dominate once it launches.

Fine, I reply, if it's that good, just launch it, and you'll get the traction you need.

There is no short cut. Get traction before you try to raise money.

The art lies in figuring out the cheapest way to generate compelling evidence of traction. I'll leave that for a future post!

Tuesday, April 26, 2011

Will Mobile Kill The Web? (Hell No)

Square honcho and legendary angel investor Keith Rabois said some provocative things about mobile versus web at the VentureBeat Mobile Summit:
Keith Rabois, a startup veteran who’s now president and chief operating officer at Square, didn’t mince words today when he talked about the potential of mobile startups. He said “the website as you know it” is “dead, dying, will be dying,” and that the future lies in reinventing Web experiences on the mobile phone.
Obviously Keith is somewhat biased, but I think he is on to something. The importance of the mobile experience is growing fast. Just this morning, I was thinking about my own portfolio of investments and realizing that I needed to find a mobile marketing guru to help some of my companies.

But while mobile is certainly growing in importance, the Web certainly isn't dying--at least for most applications.

No matter how powerful mobile phones get, their small size provides two major limitations:

1) They are terrible for displaying large amounts of data
2) They are even worse for allowing the input of data

As a result, mobile apps are great for many consumer applications (games, finding restaurants) where those limitations don't apply, but don't pose any realistic threat to those applications that bump into those limitations.

For example, spreadsheets have little to fear from mobile apps. No one in their right mind is going to put together their financials using an iPhone app.

In contrast, entering sales call notes into a CRM application should absolutely by done via a mobile app, since a) you can enter the details as soon as you get back to your car, and b) most salespeople enter terse, cryptic notes like "Called mr, lvm" (called male prospect, left voicemail) even when they are using a full-blown computer, so speed of data input isn't a major concern.

Even much-hyped mobile applications like shopping are unlikely to play a major role, except as a means of looking up and/or purchasing products when you're shopping at a bricks and mortar store.

Mobile apps feed on impulsiveness; anything that requires consideration will default back to the computer.

The wildcard in all this are future user interfaces. Mobile phones are already powerful enough to handle nearly any application--today's phones are more powerful than your laptop of 5 years ago. But the form factor doesn't lend itself to larger displays or high-speed keyboard input.

Give the hardware boffins some time, however, and those restrictions may eventually go away. When phones can project HD screens on your retinas, and you can enter input via a virtual keyboard based solely on your finger movements, there will no longer be any need for full-fledged computers. Ironically enough, however, at that point, the mobile interface will bear more resemblance to today's Web interface than to today's limited mobile interfaces!

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