Although largely unnoticed by the blogosphere, Techcrunch has killed CrunchForums. The initial idea according to Michael was

“[to provide] a good place to pitch your new startup or product if it hasn’t been featured yet on TechCrunch (or even if it has), share tips with the community, spread rumors, or endlessly debate the definition (or existence) of Web 2.0.”

Unfortunately, two mistakes were made:

• Pitching of startups was unregulated
• The chosen forum software did not allow for community policing

In conjunction with pulling down the old forum system, TechCrunch has offered a new and more regulated approach to pitching of startups: “elevator pitches.” While the new offering is more entertaining, lost in the change was rich collection of advice, tips and suggestions that could have been a rousing success if better facilitated. SPAM killed it.

Update 1: I was contacted by the CEO of WrapMail who gave me a demo of his product. WrapMail’s choice of wording may be poor but it is not false advertising. I offered to write a post summarizing the service and will link to it once it’s ready to ship.

I ran into two falsely advertised products today. While I was initially excited about both, now that I understand that I cannot use the services in the manner they claimed they have lost me as a potential customer.

I wonder how many potential customers were also lost by this messaging stupidity? No customer wants to feel like they were lied to and/or had their time wasted. Unfortunately that’s exactly how people are feeling right now.

Here are the culprits:

ScanLife

Today’s TechCrunch review has a demo with an iPhone. Awesome!

Then go to the website - iPhone is not supported. Yes, maybe it will be come July 11, but nowhere is that disclaimer made.

Wrapmail

I saw the CEO’s elevator pitch and loved the concept – especially because it indicates in the press release that Wrapmail can be used with web-based email like Gmail and Yahoo.

Upon going to the website I was immediately met with this disclaimer…

Fail.

There are two major challenges faced by all first time startup entrepreneurs:

1)    Investor Validation
2)    Product Distribution

These are difficult challenges to overcome — particularly if you’re an east coast entrepreneur…

I’m working with a few friends on a partial solution to this problem. If you are either a successful startup founder or someone intimately involved in startup funding (i.e. a VC/Angel) — and under 32 years of age please shoot me an email if you’d be interested in learning more.

I found a link to a new report from CIBC Word Markets that really made me pause to think. In the June 2008 issue of StrategEcon, Chief Economist, Jeff Rubin raised CIBC’s target for West Texas Intermediate by $20 per barrel to an average price of $150 in 2009 and by $50 per barrel to an average price of $200 per barrel by 2010.

According to Rubin,

“Under prevailing refinery margins that should translate into a near-$7 per gallon pump price within two years, a 70% increase from today’s already record levels.”

Furthermore, Rubin says,

“Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America’s highways in history. By 2012, there should be some 10 million fewer vehicles on American roadways than there are today…”

“By 2012, there should be some 10 million fewer vehicles on American roadways than there are today—a decline that dwarfs all previous adjustments including those during the two OPEC oil crises. Many of those in the exit lane will be low income Americans from households earning less than $25,000 per year. Incredibly, over 10 million of those American households own more than one car. Soon they won’t own any.”

This last statistic might be more shocking to me than $7/gallon gas. For most, cars are indispensable assets — unlike say Starbucks addictions, cable television or clothes shopping.

What happens when people can no longer afford to get to work?

Google seems to be on a tear. The 100 pound gorilla in the technology space. Unstoppable.

But…

Storage space is increasingly a commodity as evidenced by Google’s Gmail.

What happens when a user can download the entire Internet?

Searches could then be conducted instantaneously. Advertisements would be unnecessary.

Thoughts?

I started this blog back in 2006 with the intention of educating young people on technology and finance as well as to highlight the trends and experiences I was witnessing personally as an entrepreneur. Over the last two years, I’ve realized that I’m more interested in focusing on the environment of early-stage companies.

To clarify, an early-stage company may or may not be a startup. Likewise, startups do not only need refer to technology-focused companies. Even the definition of early stage is disputed. What;’s considered early stage in Boston is likely very different from what’s considered early stage in the Valley.

So what’s so interesting about early stage companies?

First, early-stage companies are often — but not always — run and managed by entrepreneurs who tend to be thought leaders and risk takers. An entrepreneur can be of any age, gender, race or creed…there is no Ivy League, SAT or IQ prerequisite.

Next, many early-stage companies have been ‘enabled’ by a number of exciting macro trends. The internet and globalization have enabled entrepreneurs and investors world-wide to collaborate and share knowledge. Also the barriers to entry for starting companies have never been lower. Overall the idea of work is shifting away from 9 to 5 jobs to focus more on entrepreneurial and project-based work. To me this indicates that globally we’ll see the rate of innovation, and hence number of early-stage companies, increase

Specifically among early stage internet businesses, some of the biggest opportunities are not purely utilitarian, or technological: Companies like Etsy and eBay are really sociological breakthroughs, platforms capable of empowering others to do things such as socialize, learn and even make a living. I still believe the web will drive innovation for years to come, partially because more advanced innovations will require the communication and collaboration the web can provide.

Aside from the ideas and innovations behind an early stage company, I also love the process that enables an early stage company to move from idea to sustainable business. For example, the financing of an early stage company typically involves a third-party investor who must be convinced of an idea’s potential and be willing to assume the risk of failure and loosing money in exchange for the dubious possibility of a long-term payoff. However, even with an idea and capital at hand – an early stage company still faces daunting challenges: distribution, market risk and competition. The likelihood of failure is high.

What’s not to love?

Last February I suggested a possible hybrid-model for venture capital firms: locating pre-VC backed technology plays, buying them on the cheap, then augmenting the companies with a pre-assembled all-star team of managers.

Looks like Austin Ventures was listening:

Today, Austin Ventures announced its second $50 million investment to back a seasoned entrepreneur to head this very model. Austin Ventures entered into a partnership with Sherman Atkinson to form ATCOR Holdings, Inc. The new company will focus on acquiring and operating businesses in high-growth sectors of online advertising, marketing and digital media. AV has committed $50 Million of equity capital to support management’s strategy to build a leading new media franchise through both organic growth and acquisition. Mr. Atkinson will serve as Chief Executive Officer of ATCOR.

This is the second $50M new entity that Austin Ventures has created in the last few months. The idea for both companies appears to be using a series of acquisitions to create a network of proprietary technology assets bolstered by top minds and consultants. Rather than taking a piece-meal approach, the rollup strategy would offer a sort of ‘one-stop solution’ with the potential to provide a prospective client everything from workshops, to software to human customer service.

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The early life-cycle of a startup is all about validation. Especially for first-time founders, the struggle is often to figure out what’s missing or what can be done to convince an investor to take a chance and invest. Whether looking for funding, or convincing a prospect to become a customer, startups must provide outsiders with ‘reasons to believe’. Unfortunately there are only a handful of ways this can be achieved.

In this case I have made an attempt to highlight a hierarchy of validation points for startups during the fundraising process based on my own personal experience. It’s my belief that this is roughly the rank order by which people (particularly investors) will evaluate the worth and/or potential of an early stage company.

Note that as you move up the pyramid, the degree of validation increases. Also note that the product itself is not really ever the focus. I think in today’s world, a quality product is really second to eyeballs, revenues and relationships. A weak product can always be made better – Twitter is proving this right now as it actually has contracted out to redesign its entire product.

Are these validation points the only things that matter to an investor? No. However, they should serve as a good reality-check for the milestones a startup should focus on in order to get that investor(s) to emphatically say “yes.”

Update: Good post on getting validation on the localglo.be blog. Hopefully this becomes a meme because it’s a critical discussion for first time entrepreneurs

Last weekend I had my ten year high school reunion. Over the weekend I heard an amazing story about a well known faculty member. I want to share the story because to me it is the absolute definition of leadership.

[Note: I have purposely decided against publishing this professor’s name for privacy reasons]

I attended a boarding school in Connecticut. While I was there — and for years before and after my own graduation – one professor stood out among the rest. Over his tenure of 49 years, he served as an inspiration in the classroom, on the playing field and in life as an adventurer.

An economics professor by trade, this teacher is cited several times in the famous book, Barbarians at the Gate. The great financier Henry Kravis has repeatedly attributed his massive success in business to the teachings of this professor.

As a lacrosse coach, his leadership resulted in the school being considered a premier national team, winning championships and producing numerous collegiate division one players. An avid promoter of elite physical fitness, he also taught an advanced off-season training class that would be considered nothing short of torture to most.

An adventurer, this professor was one of the leaders of the world’s record-breaking 1982 British-American expedition to Mt. Muztagh Ata in Western China.

More importantly his entire tenure – even into his 70’s — was spent living in the dormitories. He continued staying engaged 24/7 with students well past an age where faculty commonly move off-campus, or look to retirement. Remaining in the dorms is unheard of.

So from what I hear, suddenly, after 49 years of service this professor walked in and handed over his resignation. Acknowledging that the school had been his life, and even despite pleas that he remain for a 50^th year, this professor stated with absolute conviction that HE is so inspired by Barack Obama that he is joining Obama’s campaign as a full-time volunteer.

I thought that was incredible and needed to be shared. It certainly touched me.