startups

Cyprus : startup visa proposal

CNA shares some interesting news:

A proposal promoting startups visa, aiming to attract entrepreneurs from non-EU countries will be submitted to the next meeting of the Council of Ministers for approval, Cyprus President Nicos Anastasiades has said.

Addressing a graduation ceremony of IDEA, a starup programme co-founded by Bank of Cyprus and CIIM, the President also announced that a proposal from the legal framework for university spinoffs, liking academic research with entrepreneurship will be tabled within the next three months.

“We believe that the Cypriot startup visa will be one of the most competitive and will bring multiple benefits in the medium-term both as regards new jobs as well as promoting innovation and research and the boosting the competitiveness of our economy,” the President said.

Of course, knowing how long things take in this country (especially if the government is involved) and how twisted they get by the implementation time, one shouldn’t hold one’s breath. But there’s hope, if nothing else…

RethinkDB: why we failed

Startups are born and gone every single day. Much more often so in technology sector. Most of these just disappear into the ether. RethinkDB at least leaves the useful trace of analysis of what happened and why they failed.

When we announced that RethinkDB is shutting down, I promised to write a post-mortem. I took some time to process the experience, and I can now write about it clearly.

In the HN discussion thread people proposed many reasons for why RethinkDB failed, from inexplicable perversity of human nature and clever machinations of MongoDB’s marketing people, to failure to build an experienced go-to-market team, to lack of numeric type support beyond 64-bit float. I aggregated the comments into a list of proposed failure reasons here.

Some of these reasons have a ring of truth to them, but they’re symptoms rather than causes. For example, saying that we failed to monetize is tautological. It doesn’t illuminate the reasons for why we failed.

In hindsight, two things went wrong – we picked a terrible market and optimized the product for the wrong metrics of goodness. Each mistake likely cut RethinkDB’s valuation by one to two orders of magnitude. So if we got either of these right, RethinkDB would have been the size of MongoDB, and if we got both of them right, we eventually could have been the size of Red Hat[1].

Thank you, guys. There are valuable lessons in there. And three points, of course:

If you remember anything about this post, remember these:

Pick a large market but build for specific users.

Learn to recognize the talents you’re missing, then work like hell to get them on your team.

Read The Economist religiously. It will make you better faster.

The Three Machines

It’s amazing how well-timed this article is for the things that go on around me right now. But even if you are not spending most of your days, nights, and weekends building a company at this moment, have a go at it anyway. Here’s a bit to get you started:

My current hypothesis is that if you are a CEO, focus your organization on the three machines. Product, Customer, and Company. Then, have a direct report own one of them. If you have a sub-scale leadership team (e.g. you are three founders and four other employees), as CEO you can own one, but not more than one. As you get bigger (probably greater than 20 employees), hopefully now you have enough leadership to have one person own each, but recognize that if someone is being ineffective as a leader of one of the machines, you will have to replace them in that role (either by firing them or re-assigning them).

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Startup Metrics

The $4 billion venture capital firm Andreessen Horowitz is sharing some of the startup metrics that they use (part 1, part 2). Here they are just for the overview, follow through to the blog posts for details:

Bookings vs. Revenue
Recurring Revenue vs. Total Revenue
Gross Profit
Total Contract Value vs. Annual Contract Value
Life Time Value
Gross Merchandise Value vs. Revenue
Unearned or Deferred Revenue and Billings
Customer Acquisition Cost (Blended vs. Paid, Organic vs. Inorganic)
Active Users
Month-on-Month Growth
Churn
Burn Rate
Downloads
Cumulative Charts vs. Growth Metics
Order of Operations
Total Addressable Market
Annual Recurring Revenue
Average Revenue Per User
Gross Margins
Sell-Through Rate and Inventory Turns
Network Effects
Virality
Economies of Scale
Net Promoter Score
Cohort Analysis
Registered Users
Sources of Traffic
Customer Concentration Risk

There are also some tips and tricks on charts and data presentation, like truncating the Y-axis. Here is an example:

Overall, quite a bit of useful information for analysis of different startups. No wonder their portfolio is so impressive!

P.S.: Love the creative approach to the domain name as well … a16z.com (16 letters between A and Z in the company name Andreessen Horowitz, minus a space).