December 3, 2007 – 2:44 pm
Fred Wilson over at Union Square Ventures has a really interesting post on why early stage venture investments fail.
The need to transform and the method that Dick described are two things I have been experiencing first hand with the company I currently work for. The first site we rolled out (I came in end of alpha) started us off. Now we’re looking down different alleys to see where it best fits and developing efficiently/appropriately to match it.
What I find striking is that 2/3 of companies reinvent themselves early stage. That’s kind of… well, nuts. Wonder what else that can be applied to.
| My friend Dick Costolo, co-founder of FeedBurner, describes a startup as the process of going down lots of dark alleys only to find that they are dead ends. Dick describes the art of a successful deal as figuring out they are dead ends quickly and trying another and another until you find the one paved with gold. |
| I like that analogy a lot. Of the 26 companies that I consider realized or effectively realized in my personal track record, 17 of them made complete transformations or partial transformations of their businesses between the time we invested and the time we sold. That means there a 2/3 chance you’ll have to significantly reinvent your business between the time you take a venture capital investment and when you exit your business. |
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