Comments on: Web 2.0 startups in the UK and startup questions to consider http://www.oneafrikan.com/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/ This is the evolution of One Afrikan. Thu, 15 Jul 2010 09:10:32 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: David Cruickshank http://www.oneafrikan.com/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/comment-page-1/#comment-1143 David Cruickshank Fri, 23 Jun 2006 11:15:27 +0000 http://www.oneafrikan.com/archives/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/#comment-1143 Interestingly, Google successfully raised capital without any plans to make money from advertising. The founders originally had no interest in advertising as they thought it would 'devalue' their search service and they later reluctantly went for text based ads as they were the least obtrusive option. I'm fairly sure that in the UK, with there original proposition, they would have struggled to get the initial capital from traditional UK Angel networks and VCs - but there are always ways and means and great entrepreneurs always find a way. But that is the challenge faced by advertising-based revenue models. In order to be of significant value - you have to have the eyeballs. In order to get the eyeballs you often need money. And to get money from UK investors, you need a revenue model from the start. Interestingly, Google successfully raised capital without any plans to make money from advertising. The founders originally had no interest in advertising as they thought it would ‘devalue’ their search service and they later reluctantly went for text based ads as they were the least obtrusive option. I’m fairly sure that in the UK, with there original proposition, they would have struggled to get the initial capital from traditional UK Angel networks and VCs – but there are always ways and means and great entrepreneurs always find a way.

But that is the challenge faced by advertising-based revenue models. In order to be of significant value – you have to have the eyeballs. In order to get the eyeballs you often need money. And to get money from UK investors, you need a revenue model from the start.

]]> By: Roger http://www.oneafrikan.com/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/comment-page-1/#comment-1142 Roger Fri, 23 Jun 2006 09:55:31 +0000 http://www.oneafrikan.com/archives/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/#comment-1142 Hi again, I hear what you guys are saying about the need for a revenue model upfront and that that could be a problem. It is possible to create a Google because they were built on a solid foundation of revenue generation, however it may be more difficult to build niche products like Writely, del.icio.us, etc as they are only valuable as part of a whole and therefore their revenue model is buy me. Companies like 37 Signals have a montra of keep it simple and do what people need not what they wish they had. I like it. Its leads to good solid all empowering software down the road while solving the most important issues today. I don't know I am of two minds on this, but I think we are stretching when we say a google can't be incubated out of the UK. Hi again,

I hear what you guys are saying about the need for a revenue model upfront and that that could be a problem.

It is possible to create a Google because they were built on a solid foundation of revenue generation, however it may be more difficult to build niche products like Writely, del.icio.us, etc as they are only valuable as part of a whole and therefore their revenue model is buy me.

Companies like 37 Signals have a montra of keep it simple and do what people need not what they wish they had. I like it. Its leads to good solid all empowering software down the road while solving the most important issues today.

I don’t know I am of two minds on this, but I think we are stretching when we say a google can’t be incubated out of the UK.

]]> By: Gareth Knight http://www.oneafrikan.com/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/comment-page-1/#comment-1141 Gareth Knight Thu, 22 Jun 2006 16:00:47 +0000 http://www.oneafrikan.com/archives/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/#comment-1141 Hey David Yea, and that's the problem for me - the UK won't produce anything near to Google if the attitude towards innovation doesn't change. At the same time, I'm a strong believer in solid revenue models more because I'm interested in creating a sustainable business that will outlive myself than anything else - without that real revenue, you don't really have a business - you may have a new technology stack, and you may have rounded corners, but you're not really a business, you're just a cool site - which I fear many of the US startups you're / we're referring to above are... Anyways, wil be interesting to see how things play out over the next 18 months... Hey David

Yea, and that’s the problem for me – the UK won’t produce anything near to Google if the attitude towards innovation doesn’t change. At the same time, I’m a strong believer in solid revenue models more because I’m interested in creating a sustainable business that will outlive myself than anything else – without that real revenue, you don’t really have a business – you may have a new technology stack, and you may have rounded corners, but you’re not really a business, you’re just a cool site – which I fear many of the US startups you’re / we’re referring to above are…

Anyways, wil be interesting to see how things play out over the next 18 months…

]]> By: David Cruickshank http://www.oneafrikan.com/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/comment-page-1/#comment-1140 David Cruickshank Thu, 22 Jun 2006 15:08:02 +0000 http://www.oneafrikan.com/archives/2006/06/22/web-20-startups-in-the-uk-and-startup-questions-to-consider/#comment-1140 These headings are pretty much the major section headings of a business plan. So yes, if you're looking for investment - definitely a good idea to write a business plan, I agree. Pain, solution, market, competition, team, projections... Standard stuff but definitely necessary when looking to get investors turned on. I've been talking to a lot of investors recently and it's clear that startup web businesses without solid revenue models will fail to attract investment in the UK. In the US, many 'Web 2.0' businesses have raised in excess of $5m while in private beta - and that's just not going to happen here - unless the VC you pitch to has a US arm. The upshot - the UK will not fall nearly so hard when the next bubble bursts, but we won't produce the next Google over here either! These headings are pretty much the major section headings of a business plan. So yes, if you’re looking for investment – definitely a good idea to write a business plan, I agree.

Pain, solution, market, competition, team, projections…

Standard stuff but definitely necessary when looking to get investors turned on.

I’ve been talking to a lot of investors recently and it’s clear that startup web businesses without solid revenue models will fail to attract investment in the UK. In the US, many ‘Web 2.0′ businesses have raised in excess of $5m while in private beta – and that’s just not going to happen here – unless the VC you pitch to has a US arm.

The upshot – the UK will not fall nearly so hard when the next bubble bursts, but we won’t produce the next Google over here either!

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