1. Venture Capitalist finance only 6 out of every 1,000 business plans
2. One in 10 of these companies go public
3. Startups require five years to go public
4. 60 percent of high tech that receive VC funding go bankrupt.
5. VC generally own 60 percent of the equity in software startup by the time they go public.
6. Criteria to measure a startup: a. a strong management team b. an attractive market c. a compelling new product, service, or hybrid solution. d. Strong evident of customer interest e. a plan to over the credibility gap f. a business model showing early growth and profit potential g. flexibility in strategy and product offerings h. potential for a large payoff to investors
7. In the mid 1990 there were 5 million windows developers, 700,000 users of C++, 400,000 of Java, and 3 million VB developers. NuMega introduced SoftICE and BoundsChecker. A. NuMega needed to learn how to sell directly to corporate managers of IT departments rather than individual programmers. B. The board decided to sell the company to Compuware, a billion dollar company. C. “Within a year the culture had dramatically changed from a very strong corporate bootstrapping mentality, where technical excellence was key to one where liquidity was the main goal.” D. Its possible to analyze a market very deliberately and then select a segment to play. E. There is no pushing a company once the founders want to move on.
8. CDS financial planning tool made it possible for each company to put in information about each of their products as well as specific business rules and local tax regulations. Changing business rules required changing code at different levels of components. A. CDS was not a products company; it had complex hybrid solution and a business that was hard to scale up profitability.
9. Concentric Vision created software for enriching multimedia content. Target customers were marketing and training programs. Concentric thought it had solved a problem of editing multimedia content easily without programmer or outside design shops. The company believe Flash would become the multimedia choice for the web replacing HTML and Java. Once Flash was created it required programmers to return to code level to edit the multimedia; concentric software provided the non programming edit capability for Flash layers and objects. “At $2,000 a day and taking weeks to edit/update some flash files, we thought businesses would need us more and more in the future.” A. Concentric did not start out with a clear product vision and concept. B. The product price was $50,000 C. The software required Microsoft SQL Server or Oracle to store the multimedia files. D. It didn’t have enough sales in the pipeline to cover costs. E. The target market turned out to be weak for the expensive product f. The product required training to use it. G. Customer became unwilling to pay the product price. Those who bought the software moved slowly making sure the system would pay off in a strong ROI.. H. The ebusiness market sectors was struggling and strategic partners failed to measure up. “If the market for multimedia content management tools had turned out to be large, it might have done reasonably well.”
10. rainwater provided wireless infrastructure, content management, and interenet search. The software could create snippets of content from Website for use on small screens and PDAs. : a. there is no guarantee that a startup, even with an unique technology, money, and broadbased support of illuminaries will succeed. b. Control costs, grow employee head count to meet real demand, and avoid excessive wasteful spending. C. PDA screen resolution was good enough and improving. D. 2002, 70% of firstRain revenues came from software licenses.
11. NetNumina specialized in e-Business particularly in the financial services sector. A. The company focused on services and build e-business systems for blue-chip customers : Citigroup, Wellington Management. B. In 2000, NetNumina received $10 million in VC and the company expanded head count and leased expensive office space in Cambridge. C. The company had expertise in developing middleware and enterprise architecture; products like Web Logic, Sun Microsystem, BEA systems, Microsoft, and IBM. D. NetNumina built a web-based currency trading system e. Client list include Merrill Lynch, Prudential, Morgan Stanley Dean Witter, Liberty Mutual, Credit Suisse First Boston, Citigroup, Pfizer, Biogen, and Philips Medical. E. Big drains were rent and employee wages f. By 2002, NetNumina had complete 175 projects. F. 70% of revenues came from service revenues. G. Talented software services company should always remain profitable if it manages head count and expenses carefully.
12. Oneworld idea was to provide development services to software product companies, do the project management, provide low-cost software programming, and manage the lifecycle of the component. “I argued that selling designing and development services to software products companies was equivalent to focusing on “a niche that wasn’t”. The fact that Oneworld had large revenue as well as nearly $17 million in venture funding made me seem wrong.” Companies like Microsoft, Netscape, and Business Objects rarely if ever outsourced their core activity.
13. H5 technologies developed a unique technology of characterizing and matching unstructured information and provided unique automated document analysis system. The h5 attracted big names: John Brown, Mitchell Marcus, Daniel Hills, and Paul Zeiger. “H5 technology captured the aboutness of the document and produced category matches.” “H5 system classified documents according to fine distinctions, or the sort typically only human beings have been able to make…” The system is measure for accuracy of the validality of its search results with academic minds. The analogy is a bar code for finding relevant information and H5 wanted to charge for the decoding of the information bar code. “I worried that a broad horizontal strategy might consume too many resources and not land any customers that absolutely needed this technology.” A. the company decide to focus vertically on government agencies (records and litigation). The search filter setup was labor intensive to build the knowledge representation hierarchies. The government study found that H5 performed better than competing technologies and as well as average accuracies achieved by humans. H5 needed to find paying customer before building technology. “A better approach would have been to conserve cash, build enough of the core engine and knowledge base to create prototypes, close at least one deal with a major customer, and then finish the product.”