Archive for the ‘Web 2.0’ Category

How big companies can innovate

Monday, April 3rd, 2006

After seeing all sorts of grand ideas, I came out thinking after ETech 2006; small startups and going-to-be-next-big ideas executing on the forefront of technology. Mostly missing were large companies (except, Microsoft, Yahoo and Google) who are going to buy these startups in 2-3 years for at least 5X/10X their current valuations.
Big corporations always miss the opportunity initially but then they spend millions of dollars on acquisitions. Most of these young companies are backed by venture capital and are funded to the north of just $1m on an average. A recent report cites that median price of these acquisitions are somewhere between $50m. That’s whopping.
How can the big companies execute on the new ideas? Simple — play by the same book as VCs play. How?
1. Pick at least one fresh idea every month and invest a total of half-a-million dollars for the next 12 months on each one, nurturing the idea to a private beta. You can even code name these project as Project Jan06, Project Feb06, etc. 🙂
2. I’m 100% sure; at least one of them would either be bankrolled into a full product or rolled into a feature in the existing product line.
3. Analyze after 12 months and start at #1 again
Here is the worksheet:
12 ideas, $0.5m each = $6m + $1m for an oversight team and a board consisting of a few people = $7m/year.
Median price of an acquisition = Cost of a missed opportunity = $50m (2005 avg.)
One single idea bankrolled into a successful product = Guaranteed funding for the next 50 new product ideas.

RSS is a Data Model not an API

Wednesday, September 7th, 2005

Just saw Nivi’s post on RSS is an API. Agreed RSS gives you access to a web site