Embracing the Incrementality Mentality

We’ve all heard that line about the 10 year “overnight” successes. A friend* recently told me a key metric of his company was growing 4% week-over-week. Actually, he related with some dismay that it was only growing at 4%, and he was looking to build another product to make their company more attractive for raising the next round of funding. I was shocked. The base number that this 4% growth is accumulating on top of is in the billions, without much marketing or distribution yet. They found a problem many…

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The $3B+ Exit Tumblr Could Have Had

It’s all over the news, Yahoo! is in talks to acquire Tumblr. The popular blogging platform, which was founded in New York in 2007, has just a few months of cash left and hasn’t successfully monetized their platform fast enough to cover costs. To date investors have put $125M into the company, most recently infusing it with $85M more in September 2011 at a valuation of over $800M. According to Forbes Tumblr is targeting $100M revenue in 2013 but, according to sources I spoke to who are familiar with the…

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Past Performance is No Guarantee of Future Results

Past performance does not guarantee future results for startups, venture capitalists, accelerator programs, the media, individual founders, or any other part of the startup ecosystem. On the mission to see into the future, there is a tendency to over value the information and lessons of the past. With 20/20 hindsight it seems obvious that things would turn out the way they have. Cell phones? Computers? “If I had been alive back in the 1950s I so would have called that,” you say. Television? Telephone? Automobiles? “Obviously I would have been…

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New 500 Startups Batch Announced. Who Has the Most Momentum?

500 Startups announced the non-stealth participants in their current batch today in a TechCrunch article, and while they’ve kindly put them in alphabetical order… you probably know by now that’s not how I roll. I’ve been tracking many of these companies for awhile now and will certainly start tracking those I missed. It will be interesting to see how this rank and momentum scores at the beginning of the program compare to the end of the program. Are you a future investor, employee or customer for these companies? Get on…

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New York Startup Index: 500+ Companies Ranked by Momentum

This is the Startup Index series, an ongoing effort to measure the momentum of startup companies using external signals. It is calculated based on weighted factors such as web traffic, social media share of voice, inbound links, etc. I usually add some music, to make cruising a spreadsheet a little more fun. Enjoy! The Startup Index is inspired by the Seattle 2.0 Index, which Marcelo Calbucci produced each month to create a leaderboard for local startups and it is now the basis for the Geekwire 200 in Seattle. But why…

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Revenue vs. Value

I get a lot of feedback asking why the monthly startup momentum index doesn’t include revenue as a signal. There are two reasons, and the first is that most startups don’t want to provide that data to outsiders. The second is a bit counterintuitive, but stick with me and I’ll explain: revenue doesn’t actually matter for finding hot early stage startups. Startups aren’t supposed to be revenue machines right away; at first they’re designed as business model experiments. While revenue is a useful signal to founders, indicating they are creating…

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Startup Index: Y Combinator Companies Have More Than 2x the Momentum of 500 Startups, 3x Techstars

How to Read the Startup Momentum Index Momentum measures a quantity of motion, measured as a product of its mass and velocity. In case we want to measure the momentum of a startup (the “body”) where mass is the company’s share of web traffic (as measured by Alexa rank) and velocity is the growth trajectory of several different signals (social, inbound links, page rank, etc). It is weighted toward sustained growth, versus small spurts of growth from press coverage or a burst of paid traffic or Twitter/Facebook followers. Larger companies…

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Thoughts On YC Interview Prep

Companies currently interviewing for Y Combinator have taken the Internet’s advice to reach out to alumni to practice before they present, but unfortunately we don’t scale very well. I’ve prepped with a dozen teams so far and will probably talk to a dozen more before the weekend ends, but that will hardly scratch the surface. I am asking them all the same questions, so I thought I’d sum it up here for people I won’t have time to chat with. My phone number is 425-698-7497. Call me for a 10…

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Art Is Hard

My old startup died. I have been working on my new startup. It’s kind of named after this band I love, but not entirely. New name, and we’ve got a long way to go. Art Is Hard Cut it out – your self-inflicted pain is getting too routine the crowds are catching on – to the self-inflicted song Well, here we go again – the art of acting weak Fall in love to fail – to boost your CD sales And that CD sells – yeah, what a hit You’ve…

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Double Tap

Last night I logged into Referly for the first time in a few weeks. I’ve been trying not to do that, because there are still so many things I want to fix and when I see them I just… and I was so in love with it and it’s just… and knowing that we aren’t continuing in this direction it just… hurts. It hurts. I logged into the admin panel. I don’t know what I expected to see. If you’ve ever wondering what would happen if you stopped working on…

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