In Search of the Perfect Investment

Startups -the ongoing series
Starting your own business makes huge sense. You get the control. You get the rewards. You get the satisfaction — of giving people a job, of making customers happy, of making your shareholders rich.

It’s easy to start a business — easier than getting a job today. It’s easy for a thousand reasons — from the cheapness and power of computing, the ubiquity of the Internet as a sales and distribution mechanism and because Amazon will provide whatever computing and database power you need by the minute. No expensive upfront investment needed.

Why am I writing this when you’ve heard it all before?

In the last several weeks I’ve been inundated with wonderful new companies seeking finance. They all have great, finished technology, a super business opportunity and they all know where they’re going. But, they’ve all run out of money. If they don’t get any in the next 15 minutes, they’ll go broke and lose their founders’ considerable investment (typically their entire life savings). The urgency is palpable.

I invest in startup companies, as do many of my friends. But it’s a different world from what it was six and seven years ago. We’re more careful. In the old days we were entranced by technology — how it would change the world. These days, no more. We’ve seen too many technology startup companies go bust. These days we focus on two criteria:

1. Management. Can it transition from technology (making the product) to marketing (selling the product). Often not. I see too many companies strong on technology executives and weak on marketing executives (often no marketing executives).

2. Finance. For every $1 a startup spends on technology, it needs $10 on marketing. Call this Harry’s Rule of Technology Marketing. It’s worked since the early 1980s.

Too often, I get to see the company when the product is done, but when there is no money left for marketing, no marketing plan and no marketing executives. Too often we have a financial crisis. This puts everyone in a trickbag. No matter how exciting the company, its technology or its prospects, there’s no way anyone can fund (or wants to find) big money in an emergency. Worse, the constant nagging thought is that they’re not asking for sufficient money. I see the figure $500,000 often. “That’s all we need to get us over this hump.”

But it’s not. That’s not enough to fund a decent marketing program. There’s creating web buzz. There’s partners to secure. There are Google clicks. There’s even advertising. No one knows these days what actually works — until you’ve tried them all. And that can be very expensive, and time-consuming.

Hence I (and my friends) tend to baulk when we see a paltry $500,000 for marketing and selling.

Please think marketing before you approach us for money.

How I got on the Internet in Spain: I did three ways:

1. The hotel’s WiFi. Mostly pretty good. And pretty reliable. Mostly free. Mostly.

2.Xcom Global. This is the package you get for $15 a day, unlimited usage.

3. Verzon. This is the package you get for $25 a 100 megabit transfer.

Here’s the deal. You rent the thing for the U.S. for $50 a month, as I do. It works all over the U.S. for 3G and 4G/lTE (where it’s available). When you go overseas, you tell Verizon, they turn it on and charge you $25 for each 100 megs. If you don’t use it, you don’t pay.

Both devices worked equally well — on trains, in cars, in hotels, in restaurants, in remote mountain parts of Andalucia. I used both extensively. I wrote and uploaded my column from Spain using these devices.

My preference is the Verizon unit — but only if you already are paying $50 a month for local access. By the way, if you get a Verizon one, make sure it has global skills. The older ones don’t. Frankly, I prefer using my Verizon MiFi when I go into people’s offices for meetings. Getting on their “guest” network is just to much of a hassle.

Hoisted on my own petard, again.
First I loved the Canon G10 — see right hand column. Then I loved the Canon S100 which was smaller, but had a bigger senor chip. Then I loved the Canon G1X which had a huge chip, but was clunky and had serious problems focusing. It was slow and didn’t work for closeups (under 20 inches). Now Canon has the G15, which is a much updated G10, with a much bigger chip. and the reviews are great.

 

It “only” costs $499. But it may now be the perfect, larger point and shoot camera. Read more about it at dpreview. Click here.

How many cameras can one person own? I think it’s time to get rid of some on eBay.

Favorite advertising cartoon.3M is using this cartoon to advertise its Privacy Screens — those things that fit on your laptop or smartphone:

Harry Newton who wonders why half the world thinks I dislike Joe Kernan because of this political opinions. Sorry guys, I’m not politicizing this. I dislike Mr. Kernan because he talks crap. He doesn’t research what he talks about. He won’t let the people he’s interviewing finish their answers. He’s the worst interviewer on business TV. Not everything in life is Romney is wonderful. Obama is the devil incarnate.

Do not buy RIMM just because it lost less than Wall Street thought it would. The company remains a disaster. I am not short RIMM. I covered that profitable short weeks ago. If it goes up much more, maybe I’ll short it again.