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- Winner's Curse: Why Losing A B-School Biz Plan Competition Is Better Than Winning
- Totsy Offers Deep Discounts For Moms, Partners With Genealogy App FamilyBuilder
- This week on TechCrunch: very bad things, irritable Germans, retro fall-outs and shopping til you drop
| CrunchBoard Jobs: uvLayer, MOO, Kakai and More! | Top |
| If you're on the hunt for a new job, check out our CrunchBoard . We've added nearly 50 new jobs from leading internet businesses in the last two weeks, including three jobs here at TechCrunch. Here's a quick sample: Conferences & Events Producer TechCrunch – Palo Alto, CA Software Engineer uvLayer – San Francisco, CA Network Engineer Six Apart – San Francisco, CA Senior Online Product Manager MOO – London Build Release Engineer Kakai, Inc. – Santa Clara, CA Also, don’t forget that we’re looking for a Conferences & Events Producer , Account Executive and CrunchBase interns here at TechCrunch! For job hunters in Europe, check out our Europe CrunchBoard. Click here to see all the jobs on CrunchBoard. Crunch Network : CrunchGear drool over the sexiest new gadgets and hardware. | |
| Winner's Curse: Why Losing A B-School Biz Plan Competition Is Better Than Winning | Top |
| One of the best things about being an academic is being able to mold young minds and guide them to success. When one of my students , Andrew Leblanc told me he was entering the Duke Startup Challenge Elevator Pitch Competition , I told him to come and see me and do a practice run. After all, I had judged several of these contests at Duke and other universities. I thought I knew what worked. After the eleventh iteration, Andrew got it right. He wasn't trying to pack his presentation with unnecessary details. He had slowed down his pitch, added a personal touch and was now exuding confidence. Andrew even researched the background of the judges and tailored his message to their interests. So after two hours of intense preparation, I had little doubt that Andrew would win. Andrew lost. I was surprised. But what I told him afterward is that it really doesn’t matter. Contrary to what the organizers of these competitions will tell you, university business plan contests don't produce winning companies. Yes, a number of companies have emerged from business plan bake-offs that have been moderate or small successes. But not a single home-run has emerged from this now-omnipresent practice. This is not to say that the contests are bad. Instead, they educate students in entrepreneurship and motivate them to come up with interesting ideas. But for all of you out there who think a biz plan victory is a ticket to the big time, think again. And for all the engineering students who think any outcome but victory is a waste of time, you also need to think again. Even though he lost, Andrew met a potential partner and also got to speak with Bill Maris of Google Ventures, a priceless encounter. (Bill promised to introduce Andrew to the Google Power Meter team. Don’t forget, Bill!). In fact, let me throw out a radical thought. I submit that losing in a business plan contest is actually more beneficial than winning. There is a growing body of research that children who are praised too early and too easily end up under-performing peers who are not praised but are told, in constructive terms, they can do better. This is one of the core tenets of Po Bronson’s new book on parenting, " Nurture Shock ." Extending this to the realm of entrepreneurship might be a leap (and it could be great fodder for a future PhD dissertation). But to me the outcomes don’t lie. Business plan competitions don’t breed winning businesses. Rather than winning a beauty contest, building a business is a marathon that requires steady and constant effort , surmounting regular difficulties , and living through emotional peaks and valleys. The very roots of the current business plan craze go back to one of the periods that represents a low-point in sane business practices. The business plan competitions first started in the dotcom days. At that time, there was a frantic rush to start new companies. Entrepreneurs would create professional-looking, buzzword-laden business plans. Venture capitalists would then trip over each other to fund these plans, usually with way too much money. The prevailing theory was that a good business idea and enough money were enough to create the next hot IPO. B-schools readily jumped on the bandwagon and soon an arms race ensued to see which school could offer a bigger prize to winners. With the bursting of the dotcom bubble, the tech world was reminded that even a great idea funded by venture capital didn’t necessarily produce business success. In hindsight everyone saw that it took more than a good idea. It took a thorough understanding of the market, excellent management, and the ability to navigate rough waters to build a thriving enterprise. Some of the biggest dotcom winners came from me-too ideas that were executed better than the originals. Nor was this anomalous. Ask any seasoned entrepreneur in any industry, and he or she will likely tell you that his or her first business plan was probably the best work of fiction they ever created. A glimpse back through the big winners of the Dotcom Era also underscores the lack of impact business plan competitions actually had. Amazon, Google, Ebay, Yahoo—none of them won a business plan contest. In fact, not a single home run from that era won a business plan contest. And one of the biggest successes of its time, Akamai Technologies, actually lost the M.I.T. $100K contest . After the great Internet Bubble burst, venture capitalists and entrepreneurs quickly adapted to the new reality and went back to basics. But no one told the b-schools. From Silicon Valley to Research Triangle Park to New Delhi and Shanghai, new contests are still sprouting. Only now, the prizes have gotten bigger and the competitions more serious. Yet real successes remains non-existent. (If I’m wrong in five years on this, then call me out). But failure is no surprise for these b-school business launches Without a solid understanding of market needs and real-world validation of their ideas, few young entrepreneurs can achieve their business-plan projections. The hottest startup methodologies of today, built around ideas fostered by Y-Combinator and TechStars emphasize giving startups almost no money and encouraging them to get a product to market as quickly as possible in order to get real world validation. This is almost the exact opposite of the current business school competition ecosystem, where market validation is non-existent. So realistically, few of the business school plan entrants can even understand whether their business plans even make sense. Business plan judges, for their part, are equally in the dark most times. Andrew’s plan involved utilities and power management, a topic I know virtually nothing about. B-school contest judges are usually generalists who have only superficial insights into the internal dynamics of the industries at which these plans are aimed. It would seem, then, that the insights of long-time experts in those industries would likely be far more valuable to a prospective entrepreneur. Again, I am not at all saying that business school plans are inherently bad. To the contrary, Andrew learned an enormous amount about starting a business, the importance of understanding markets, utility and power management technologies, and team building. His plan to build software that would allow residents of college dorms to track their power usage through a visual interface and more easily understand the direct impact of their behaviors on electricity consumption was not a bad idea. In fact, it was a good enough idea that many others are currently attempting similar types of systems for various social settings and environments. My colleague, Lesa Mitchell at the Kauffman Foundation believes that these contests foster collaboration between business school students and engineers or scientists. This, she says, teaches valuable lessons about launching businesses to both potential inventors and would-be CEOs alike. Finally, let’s not confuse failure to execute or unrealistic plan expectations with bad ideas. Young CEOs going into industries they barely know armed with b-school plan competition money are like lambs to the slaughter. But the core idea behind their plan may be quite innovative and powerful. My takeaway from all this? If you want to be a successful entrepreneur, don’t win a business plan competition. If you do win, your first act might be to hire a CEO with industry experience. And win or lose, the most valuable lessons you’ll learn will come more from playing the game than from coming up with the best plan. Editor's note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. Follow him on Twitter at @vwadhwa . Crunch Network : MobileCrunch Mobile Gadgets and Applications, Delivered Daily. | |
| Totsy Offers Deep Discounts For Moms, Partners With Genealogy App FamilyBuilder | Top |
| While consumers around the U.S. are sniffing out Black Friday deals today, sample sale sites have emerged to provide members with serious discounts year round. Online sample sales sites such as Gilt Groupe, HauteLook, Ideeli, RueLaLa and others, have been picking up serious traction in the past year. We’ve seen a plethora of sites pop up for women’s and men’s clothing and accessories, travel deals and even children’s clothes. Totsy, an invitation only sales site that features children’s brands, baby gear and products, recently launched to appeal to parents looking for a bargain. Totsy, which marks down products by 40 to 70 percent, features a variety of toys, baby products (strollers, educational toys, cribs and more), children’s clothing and bedding. Similar to other sample sale sites, shopping events are designer-specific and held over a 72 hour period. The site is also partnering with Facebook app and genealogy site FamilyBuilder to build more buzz for the sale site. FamilyBuilder’s popular Facebook app, Family Tree, has 6.3 monthly active users. The site, which has over 17 million users, also runs applications on Bebo, MySpace, Hi5 and Orkut. The partnership will allow Totsy to send invitations via Facebook and email to Familybuilder's database of users. Even during a recession, sample sales are managing to draw in revenue. With the tremendous opportunity in the children’s and baby good market, Totsy could take off. Gilt also offers deals on children’s goods, but Totsy is primarily focused in this sector of the market. Crunch Network : CrunchBase the free database of technology companies, people, and investors | |
| This week on TechCrunch: very bad things, irritable Germans, retro fall-outs and shopping til you drop | Top |
| If you’re anything like me – and let’s for all of our sakes pray that you’re not – then your first thought as you stagger back to your desk today, bloated and giddy after Thanksgiving , will likely be “what can I do to kill time until the end of the week?” Actual work is out of the question, obviously. If you’re a PC person then there’s always Minesweeper, while Mac users can make a start on editing their Thanksgiving videos in iMovie. Linux fan? I suppose once you’ve finished your daily six hours of masturbation, you can just fill up the rest of the time pompously explaining to the rest of us precisely why what we’re doing is wrong. You know, the usual. But, regardless of our OS allegiance, there’s one activity we can all enjoy together – and that’s taking a look back at the last seven days of TechCrunch. So let’s get started, shall we? (And Linux users, please wash your hands before clicking. We all know where they’ve been…) Something really, really bad of the week… By far the most interesting story of the week was one that was almost entirely ignored by other media outlets for the first 24 hours . On Tuesday, Michael reported that ‘Something really, really bad went down at high flying startup Canopy Financial’. That something, according to multiple sources, was the discovery that Canopy was ‘absolutely making up their financial statements, even forging audited statements with fake KMPG letterhead. And somehow the investment bank and all the investors never figured it out.’ The story developed throughout the day, leading to a second post in which Arrington likened the response from the company’s lead financial advisors to the – shocked, shocked! – police chief in Casablanca. The action continued in the comments: alongside several comments from former Canopy employees, one anonymous reader pointed out that Dave McClure, one of Canopy’s investors, had removed the company from the list of ‘achievements’ on his website. In response, McClure commented that ‘needless to say, after getting a letter from the general counsel of the company that their financials are under review, I no longer feel that way about the company’. He also referred to CEO Vikram Kashyap as a ‘former friend’, adding “Vik: if you're reading this I hope you come to your senses and handle the situation responsibly.” Yeah, bit late for that. European disharmony of the week… In other controversial news, it seems that the Germans are getting irritable, which is most unlike them. Reporting from the relatively safe – but strategically important – stronghold of Belgium, Robin Wauters tells us that ’several federal and regional government officials in Germany are trying to put a ban on Google Analytics’, on the basis that collecting user data without explicit permission breaches the country’s strict data protection laws. Google Germany's Per Meyerdierks, however, says there’s nothing to worry about: the company is well within its rights to process user data in the United States because it respects the Safe Harbour treaty between the EU and the USA. And given that I can’t think of a single instance of Germany breaking a treaty, we can all sleep safely in our beds tonight. Undeterred, the next day Robin had another group of Germans in his sights – this time a manufacturer of laptops marketed under the trademark ‘Smartbook’. The company – Smartbook AG – has been threatening legal action against publications that use the word ’smartbook’ to refer to a generic portable device, leading to the deletion of various blog posts and news stories. Of course, as any intellectual properly lawyer will tell you, trademark owners have a duty to take this kind of action to ensure that their trademark retains its legal protection, and doesn’t become a generic word. But like the plucky Belgian he is, Robin laughs in the face of such lawyers, titling his post ‘ Smartbook Says Bloggers Can't Use The Word Smartbook Anymore. Smartbook. ‘, which, while not actually infringing on the trademark, is funny enough to be my headline of the week. Einfach klasse, Robin. Gut gemacht. Hill of Beenz of the week… Sticking with Europe and a guest post on TechCrunch EU from an anonymous ‘London-based VC’ sparked a whole lot of controversy. Not for the author’s suggestion that European start-ups needed to work harder if they were going to compete with Silicon Valley, but rather because of the fight that broke out in the comments between former Beenz CEO Philip Letts and – apparently – other former board members of the legendary dot com disaster. Here it is in full… Philip Letts: Having been one of the few Brits to have built a number of successful tech/Web startups and lead 2 large US Web businesses I hear what you are saying. The Silicon Valley ecosystem is unique and cannot be replicated – I should know I ran one of their pinups! The UK and Europe need to find a way to take the keys to Silicon Valley success and embed it into Euro startups while optimizing Euro differences – more global minded, diverse and distributed. I hope so anyway as I chose to develop my latest venture, blur Group, in London not the Valley. And there were good reasons why. We run at US pace but with Euro players – its a nice combination done right. Let's see if the VC's can keep up! Rob: Dude, You were fired from beenz. Silicon valley didn't want you Back. Phil(ip Letts): Actually you were the one fired. I was headhunted to go run Tradaq – the billion dollar Silicon Valley pinup after taking Beenz thru its glory days. U got the wrong guy/facts Dude! Steve: Lets put a line under this once and for all. Philip did an amazing job bulding Beenz into a formidable machine with a market value in the hundreds of millions. After he left there were tons of sour grapes one complaint stands out in light of this article was that he worked the team too hard making them go on working off-sites, always pushing them to better results etc. Well he went off to his Silicon Valley trophy and you europeans got to do what you wanted at Beenz. Nice easy 9-6 hours. No more of those lifestyle interrupting off-sites. You changed the strategy – fired half the team . Bravo. End result you all ended up getting fired or the board let your contracts run out and the company ended up being sold. Well done Dude. Its been nine years – get a life. Of course an argument between the board of Beenz is about as relevant today as a debate between the founders of Boo over who made the decision to fly Concorde, but it does provide another useful tip for European founders: working longer hours is not going to help you much if you spend your whole day arguing on the Internet like pathetic little children. Past imperfect, of the week… Speaking of debates from the past, Thanksgiving week has apparently spurred Americans to look back at alternative histories that could have been. Kicking off the orgy of hypothetical-revisionism, the team behind Google Wave decided to demonstrate the service’s questionable usefulness by suggesting how the Founding Fathers might have used it to draft the Declaration of Independence. The result is hardly the pinnacle of satire, but given how shockingly unfunny the Onion has been these past couple of weeks, it’s not a terrible way to pass the time. Slightly more interesting, but even less funny, were Arrington’s musings on what the world of technology might have looked like had Steve Jobs not returned to Apple in 1997. His verdict? ‘We'd likely still be in mobile phone hell. Chances are we still wouldn't have a decent browsing experience on the phone, and we certainly wouldn't be enjoying third party apps like Pandora or Skype on whatever clunker the carriers handed us…Think back to the phone you had in 2006, and then tell me you don't love Apple for the iPhone alone.’ (On the subject of the iPhone, the latest stats show a staggering 75% of smart-phone web traffic now comes from Apple and Android handsets. Apple is still well in the lead but, if this leaked video from Swype is anything to go by, that might start to change pretty soon.) What you two talkin’ about? Shoppin’! of the week… Today is, of course, black Friday, and what better time for Google to up the obnoxiousness level of its in-results advertising in an attempt to grab a few more holiday clicks for its customers? As MG reported, the ads can basically be summed up thus: ‘Bigger, bigger, click me, bigger. Or, in Google's own words, ‘Text is often useful, but sometimes videos and pictures are a more effective way to receive information."’ Certainly the ads are more noticable – so much so that MG reckons Google ‘has finally cracked the code for getting my mother to click on their ads non-stop.’ In other holiday shopping news “ mystery buyer ” has paid $1.5 million for the Russia.com domain name, previously owned by the consulting firm that also owns Algeria.com, Scotland.com, Nepal.com and Ukraine.com. The ideal stocking stuffer! And finally, of the week… And finally, if you still have time before the weekend starts, Michael has been busy with his Flipcam this week, conducting interviews with Skype CEO Josh Silverman and Twitter’s Dick Costol o. The Costolo one is particularly enjoyable to watch, if only for the revelation that Mike has been mispronouncing his friend’s name for the past five years. Have a good weekend! And don’t work too hard on your generic smartbook. Crunch Network : CrunchBoard because it’s time for you to find a new Job2.0 | |
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