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As an Apple evangelist, you were probably more responsible than most for
making Apple a household name. So you're used to this sort of thing. What advice
do you have for someone who wants to build an unknown web company into a recognized
brand?
I think the start is always, do you provide something useful? And you're right
about bringing up the Apple example, because quite frankly, at the time, the
so-called TechCrunch crowd was saying, "what's the big deal, Xerox PARC
did this ten years ago. It's been done. Frankly I could write a user interface
like this in half an hour." But, they didn't! It's a strange world. So
I guess one piece of advice to the entrepreneur is just ignore these people
and just go for it.
Truemors and Alltop are still fairly new, how successful are they?
They are making money but not in the sense that most people would mean. They're
making money because we don't pay ourselves, it's an extremely low cost kind
of thing. Neither of them are proven as businesses yet. On the other hand, let's
say our burn rate for each one is $3,000 a month. At $3,000 a month, you can
go a long time to prove that it will work or won't work, whereas if you did
a typical startup and you're burning a quarter million a month, guess what?
You're going to come to the end of that pretty quickly.
It's a very different world. And that's kind of where we are.
So as a venture capitalist, what do you look for when someone comes to you
with an idea for a dotcom company and they have their hand out for $5 million?
Honestly the answer these days is, $5 million is insane to try to raise for
a dotcom company. We know what can be done with an extreme of $12,000, or at
least a quarter million, you should be able to do something and show us more
than just a back of an envelope. It's a very different world.
Do you ever go back to a dotcommer with a business plan that's been presented
to you and say, "Hey, you don't need that much money, I started my own
dotcom with 12,000 bucks"?
All the time. Now, no one can say that you're talking out of your butt. Because
I've done it.
Everybody's seen the Internet go through phases, in the early days it was
all small companies, brand new things, dotcoms starting up in dorm rooms, then
it got larger and the companies got huge. Is the ability to create a web company
with less money with existing tools changing the nature of the Web again, swinging
the pendulum back in favor of smaller entrepreneurs?
It's got to. One of the things I've learned is that you really have no idea
which company will fail or succeed when you're starting, you really don't. Retroactively
you can say yes, I knew that this one would be successful. But the truth is,
you didn't know, because you also made 19 other bets that failed. So if you
really knew that one would succeed, then why'd you bet on the other 19, did
you know those would be successful too? So the key here is now instead of 20
bets, there can be 200 bets or 2000 bets because they're so much cheaper to
bet.
It seems like minimally-funded dotcoms like this represents a whole new
category of dotcoms, or maybe even the foundation of a new dotcom boom, true?
I hope so. For $50 grand, if you can try something, absolutely. Yes.
Do you think there are a lot of people out there that are actually making
money, if not huge amounts, at least small amounts of money, with small time
back pocket funded ventures?
Absolutely. And blogs, too. I know there's a lot of fashion blogs that I think
people would be amazed at how much money they make.
What's next for you? Is Truemors and Alltop just the first two of a series
of many similar Web companies?
The truth is, I don't know. But I will tell you that, at these kinds of prices,
it's easy to try more stuff.
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