Discovering Business Models

The problem with discovering business models is that what works for some does not work for all. Back in 1998 and 1999 the stock answer provided by just about any competitive local exchange carrier executive essentially was that the firm in question would get "one percent of a $250 billion market."

These days people ask how Facebook, messaging, collaboration, video or other portals will make any money. The most popular answer is some variant of the old CLEC standby. U.S. advertising currently is about a $153 billion a year business. Portal X will get one percent of that.

Look, it clearly works for four companies: Google, AOL, Yahoo! and MSN. The "four horsemen" get about 60 percent of all Internet advertising. It isn't going to work for most application, communications or portal providers, just as it never worked for most CLECs.

The biggest two "CLECs"--the former AT&T and WorldCom/MCI--threw in the towel in defeat. And those two had more than 40 percent of all "CLEC" revenues between them.

So people assume that fast-growing and useful sites such as Facebook will find some way to make money besides traditional advertising. And there is precedent for such discovery.

Google was equally clueless about its business model, but managed to discover one.
So just because a company has no idea how it will make money, doesn't mean it will not discover a means.

On the other hand, that doesn't mean it ALWAYS will find the answer. And though I'd have to say I am fairly confident Facebook will discover a model, as Google did, that doesn't mean thousands of other sites will be so lucky. Thousands of sites obviously cannot use the Internet advertising model, even if it is fast growing, because most fo the rewards will go a relative handful of companies.

More Enterprise Moves for Google

Google now is any tier one communications service provider's biggest fear, stated or unstated, and it mostly is stated. So Google's acquisition of Postini won't help clam any such fears. Google gains instant access to Postini’s client base of more than 35,000 businesses including many large businesses.

Postini will help Google further refine its "software as a service" architecture for critical business applications, moving Google further into the business services and software space.

Postini has offered managed email security services to corporate customers since 1999.

Jangl to Voice Enable Facebook

Jangl is getting ready to announce Phonebook for Facebook, which puts calling and voicemail right in a user profile and inbox on Facebook. The new feature will allow Facebook members who both have the application to call each other, visually manage voice mail messages in the Facebook inbox and show a current online presence. Voice is becoming an application available within a user's current context.

Lights Out for SunRocket?

SunRocket appears to be refusing to accept new customers. Try calling the call center to sign up. Vonage apparently has offered to buy SunRocket for no cash, simply to provide continuity of service. No word on any response from SunRocket. A couple more bidders, said to be undercapitalized themselves, also are poking around. Not a happy day, at all.

25 Startup Commandments: Great Stuff!

1. Your idea isn't new. Pick an idea; at least 50 other people have thought of it. Get over your stunning brilliance and realize that execution matters more.

2. Stealth startups suck. You're not working on the Manhattan Project, Einstein. Get something out as quickly as possible and promote the hell out of it.

3. If you don't have scaling problems, you're not growing fast enough.

4. If you're successful, people will try to take advantage of you. Hope that you're in that position, and hope that you're smart enough to not fall for it.

5. People will tell you they know more than you do. If that's really the case, you shouldn't be doing your startup.

6. Your competition will inflate their numbers. Take any startup traffic number and slash it in half. At least.

7. Perfection is the enemy of good enough. Leonardo could paint the Mona Lisa only once. You, Bob Ross, can push a bug release every 5 minutes because you were at least smart enough to do a web app.

8. The size of your startup is not a reflection of your manhood. More employees does not make you more of a man (or woman as the case may be).

9. You don't need business development people. If you're successful, companies will come to you. The deals will still be distractions and not worth doing, but at least you're not spending any effort trying to get them.

10. You have to be wrong in the head to start a company. But we have all the fun.

11. Starting a company will teach you what it's like to be a manic depressive. They, at least, can take medication.

12. Your startup isn't succeeding? You have two options: go home with your tail between your legs or do something about it. What's it going to be?

13. If you don't pay attention to your competition, they will turn out to be geniuses and will crush you. If you do pay attention to them, they will turn out to be idiots and you will have wasted your time. Which would you prefer?

14. Startups are not a democracy. Want a democracy? Go run for class president, Bueller.

15. You're doing a web app, right? This isn't the 1980s. Your crummy, half-assed web app will still be more successful than your competitor's most polished software application.

+10 More Startup Commandments

1. You will have at least one catastrophe every three months.

2. Outsource effectively, or be effectively outsourced.

3. Do you thrive on stress and ambiguity? You'd better.

4. The best way to get outside funding is to be successful already. Stupid but true. But you, cheapskate, don't need money, right?

5. People will think your idea sucks. They're even probably right. The only way to prove them wrong is to succeed.

6. A startup will require your complete attention and devotion. Thought your first love in High School was clingy? You can't take out a restraining order on your startup.

7. Being an entrepreneur requires a healthy amount of ignorance. Note I did not say stupidity.

8. Your software sucks. So what. Everyone else's does also, and re-architecting is the kiss of death for a startup. Startups are no place for architecture astronauts.

9. You do have a public API, right?

10. Abject Terror. Overwhelming Joy. Monstrous Greed. Embrace and harness these emotions you must.

Provided by Mark Fletcher, http://www.startupping.com/

Business IM Use at 26 Percent

AOL’s third survey of instant messaging use shows IM in the workplace has grown. About 26 percent of surveyed businesspeople say they use IM at work.

At-work IM users now send IMs to communicate with colleagues (58 percent), to get answers and make business decisions (49 percent) and even to interact with clients or customers (28 percent). Twelve percent have used IM at work to avoid a difficult in-person conversation, AOL says.

Business and at-work users say they use IM because it “enables me to keep up with family and friends (47 percent). IM also “helps me to stay in touch with people I normally wouldn't be in regular contact with (43 percent).

About 38 percent say IM “helps me to get more done each business day.” About a quarter say IM is useful because it “enables me to check in on my children, providing peace of mind.”

For working moms and dads, IM’s impact is higher than the national average. In fact, 83 percent say that their day-to-day business lives have benefited from instant messaging, AOL says.

Some 11 percent say IM enhances productivity enough that they “leave the office earlier.”

Among those who use instant messaging for business purposes, 13 percent say they have their IM screen name printed on their business card, while six percent say they write it on the business cards they exchange. About 26 percent of polled New Yorkers have their IM screen names printed on their business cards.

Open Network for 700 MHz?

It isn't clear whether the proposal will survive the inevitable challenges from established carriers who won't like the idea, but Federal Communications Commission Chairman Kevin Martin is said to be ready to propose an unusually "open" license for valuable 700 MHz spectrum being vacated by TV stations as they go digital.

Under Martin's proposal, mobile services in these airwaves would have to use of any compliant device and any application, with no restrictions, so long as the application is legal and doesn't harm the network.

As a platform for innovation, the new network would rival the Internet itself, moving far beyond "unlocked" phones and resembling nothing so much as a mobile version of the Internet, where any device can access any service.

Google would love it. So would most developers. So would Apple. A network of that sort basically obviates the walled garden approach the mobile industry has taken, and resembles the way any PC can access anybody or any application able to get onto the Internet.