Gust

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10 Rules of Thumb for Startup Investment Valuation

Gust

This time I’ll use a hypothetical health-care web site company named NewCo as an example to illustrate the points. Since NewCo has developed 10 online tools and a fabulous web site over the past year, how much would it cost another company to create similar quality tools and web interfaces with a conventional software team?

Valuation 187
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Stealth Mode Entrepreneurs Only Increase the Risk

Gust

In addition, a website needs several weeks of presence for indexing by search engines, search engine optimization, blog activity, and link building. With most others, like web services, incubation time must be short, and secrecy can be the kiss of death. These things can’t be done while in stealth mode.

Stealth 131
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Start With a Strong Team. (Or Not at All)

Gust

In reality, a startup is a temporary organization designed to search for a repeatable and scalable business model. We now know that this ‘build it and they will come” is a prayer rather than a business strategy.

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The Cost Equation for a Startup is Better Than Ever

Gust

Do basic Search Engine Optimization (SEO) and Marketing (SEM), like cohort analysis , yourself. Try Web-Ex, free teleconferencing, and Skype instead of international travel for client meetings. Skip the IT consultants and build an entry website yourself to save $50K. Sales and marketing costs.

Cost 139
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Assume Your Market is People Like You, Then Fail

Gust

Everyone must have a web site that is complete, inviting, and easy to use. Use social media, search engine optimization, blogging, and mobile media. As you move to new support new languages, don’t just translate, but “transcreate” (express the same meaning and nuances). Use technology to reach your prospects.

Marketing 136
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3 Good Reasons to Recheck Your Profitability Projections

Gust

A decent web search will turn up several different sources of standard industry ratios for less than $100 per industry, broken into NAICS codes. Projecting excess profits, at rates way beyond the normal, are bad for at least three reasons: Kills credibility regarding industry knowledge and realistic projections.

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Market Opportunity From Customer Hostility, Exhibit 802.11: Airline WiFi

Gust

It might make sense for weekend partiers heading from LA to Vegas on El Cheapo Web-Only Special fares, but doesn’t WiFi come free along with the peanuts since I paid substantially more for a Business Select fare? Nevertheless, Southwest charges $5 for in-flight Internet access, which starts to feel like nickel-and-diming.

Customer 143