Products and Companies…Two Different Things

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  • on November 19th, 2010

There is a lot of discussion in the VC blogosphere about whether we are in an early stage boom or headed for ‘storm clouds’ with everyone hopping in the angel pool. To me it is all about valuations as an angel and for the most part, prices have moved out of my comfort zone. I am happy so many startups are getting funded, but know that more companies will fail now just on the law of large numbers.

I believe in the next few years we will continue to see record amount of start-ups get funded but also more of a new thing, companies that have a product, a little bit of traction but little ability to fully attack their market. The second phase of running a business, even a web business, is marketing and selling. Furthermore, the startups that have raised money and have bodied up will face organizational challenges they never planned for in the fun early days.

One of the most profound start-up lines I have read in a while comes from Dennis Crowley of Foursquare who said:

‘Building a product is easy. But building the company that builds the product is hard‘

Stocktwits is in the middle of this ourselves and I promise to post our experiences over the next few months.

It is not the same amount of fun when you can’t go fast with product releases and hiring. I am glad to have some old age and a rolodex to call on mentors, my board and advisors to continue to move fast. In the coming weeks I will share some of our experiences of growing revenue fast and on the people front going from 2-20 plus people.

I am in new territory myself and making mistakes so I believe you will find them interesting.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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