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The Almighty Buck Businesses The Internet

Using Blogs To Dispense Venture Capital 121

Posted by timothy from the two-birds-with-one-buzzword dept.
prostoalex writes "The New York Times describes how Tim Draper, a founder of Draper Fisher Juvetson venture capital firm, is trying out a new approach to finding the next entrepreneurial superstars. In his Web log (which NYTimes mysteriously never links to, but it's on AlwaysOn-Network), Draper asks the readers to leave the comments with their billion-dollar ideas. The winners of this pitch were selected recently, and just reading the comments with innovative ideas is quite interesting."
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Using Blogs To Dispense Venture Capital More

Using Blogs To Dispense Venture Capital

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  • Presentation, Presentation, Presentation... (Score:3, Funny)

    by TWX ( 665546 ) on Monday July 05, 2004 @09:00PM (#9617257)
    So, if I can theoretically pitch an idea so it sounds absolutely awesome but in reality is totally full of crap, then I too can get venture capital money to use to create a company and pay myself a massive salary? Cool!
    • Why not, it worked during the Dot Bomb.

    • Well, that's how it used to work. (Score:4, Interesting)

      by stoneymonster ( 668767 ) * on Monday July 05, 2004 @09:04PM (#9617281) Homepage
      I personally witnessed $300 million of VC money come to naught. And our product worked. Even a good idea which is completely implemented is no guarantee of success. If giving money out based on slideware alone is alive and well, then the bubble never really burst. -C
    • "So, if I can theoretically pitch an idea so it sounds absolutely awesome but in reality is totally full of crap"

      It's not going to be easy to pitch a load of crap to this many people and make it easy for all of them to think it's incredible. They will look into the ideas to check if they are feasible and to make sure that they are possible. They are not going to hand you lots of money unless they think your idea is a good one and they feel that you can make them money.

      • Re:Presentation, Presentation, Presentation... (Score:4, Interesting)

        by MrAndrews ( 456547 ) * <mcmNO@SPAM1889.ca> on Monday July 05, 2004 @09:35PM (#9617466) Homepage
        I have an article I wrote a whole back dealing with this concept of the "idea men" not being able to execute their own innovations properly. The one thing that a lot of former dotcom execs told me was that they wish they'd sold out soon before they got the big company with all the programmers and Coke machines, because the biggest lesson they learned was that they didn't know how to run a business as well as they knew how to come up with great starter ideas.

        I think this blog approach - despite the fact that it's horribly risky for people with good concepts - is closer to the ideal. Find the talent out there, get them to give their baby a kickstart, and then (likely) buy it away from them to make it really successful. People need to see where they fit into the bigger picture, and not try and be in every shot.

        I should update that article sometime... hmm...


        • "... have an article I wrote a whole back dealing with this concept of the "idea men" not being able to execute their own innovations properly. The one thing that a lot of former dotcom execs told me was that they wish they'd sold out soon before they got the big company with all the programmers and Coke machines, because the biggest lesson they learned was that they didn't know how to run a business as well as they knew how to come up with great starter ideas. ..."

          This is precisely why a lot of the suc
        • That's true. "Idea man" is not able to make something working out of his idea. The problem is not only in 'business abilities'.

          Few years ago I started a project out of nothing. We made several kinds of electronic devices. We could sell enough of them to be able not to die of starvation, but not enough to continue development. Eventualy our enterprise (two people company) decayed back to nothing.

          The problem is : the most useful and profitable are the most crazy ideas. They are also the most risky AND they
          • The problem is : the most useful and profitable are the most crazy ideas.
            The problem is that given the premise that some good ideas initially appear crazy, people reach the conclusion that crazy ideas are good.
            after several years of useless attempts I stopped remembering new ideas.
            It's much easier to remember old ones. It's very hard to remember future ones.
    • ive got this great idea for collecting email addresses to help people market products using the internet.

      Send me an email and ill tell you all about it.
    • That is exactly how the Silicon Valley bubble burst. A close friend of mine still makes his living in the Washington DC area jumping from failing start-up to failing start-up, where he gets paid to manage computers for technologically handicapped entrepreneurs wasting some venture capitalist's money.
    • So, if I can theoretically pitch an idea so it sounds absolutely awesome but in reality is totally full of crap, then I too can get venture capital money to use to create a company and pay myself a massive salary? Cool!

      You could do that before. It was called the 1990s. The only difference here, it seems, is that you now do it on a blog.

  • What is its etymology?

  • Hehe... (Score:3, Interesting)

    by robson ( 60067 ) on Monday July 05, 2004 @09:02PM (#9617266)
    When skimming the headline, I first thought it read, "Using Blogs to Dispose of Venture Captial"...

    Doesn't sound like much of a challenge, but hey, it's a slow news day :)

  • This seems like an interesting idea... (Score:4, Insightful)

    by Zugot ( 17501 ) * <[bryan] [at] [osesm.com]> on Monday July 05, 2004 @09:02PM (#9617268)
    But I don't know if I would want to submit my idea out in the public before I had a chance to gather some financing to protect it. I also don't want my competitors to get an early leg up on my business before I have a chance to become competitive.

    All in all, this is interesting idea. I'm glad to see people using technology in all forms of business. This one idea may help four more just like it come to fruition. This can only be good for folks searching for venture capital.

  • And I'm sure this slashdotting will produce a lot of useful ideas and insightful comments.

    Before you mod that actually rather insightful comment down, realize I am offending the script kiddy side of /. and so if you have the urge to use that moderation cannon... maybe your lifestyle leads you to take my comment personally...

  • Agh I Hate eTechnology (Score:4, Funny)

    by t_allardyce ( 48447 ) on Monday July 05, 2004 @09:03PM (#9617275) Journal
    I dont want to troll, but I personally would just remove any idea that called itself a technology made up of two words StuckTogether(tm) people just need to be slapped and told no.
    • BitTorrent. That one has no chance.

    • Hate-o-Matic. (Score:2, Funny)

      by eddy ( 18759 )

      Yeah, everyone knows the correct pattern is $(sillything)-o-matic. For instance, I'd buy a Sludge-o-Matic(TM), but I'd never buy a SludgeMatic(TM) -- cause -- well, that just sounds completely stupid.

  • Oh, the irony... (Score:5, Funny)

    by Anonymous Coward on Monday July 05, 2004 @09:03PM (#9617277)

    http://www.alwayson-network.com/...

    Heh, heh, heh.

  • Here's one (Score:1, Interesting)

    by c0ldfusi0n ( 736058 )
    Someone should give him a few suggestions to keep his site reasonably reachable when mentionned on Slashdot -- maybe he'll make you CEO of something!
  • not anymore

  • always-on.com (Score:4, Funny)

    by artemis67 ( 93453 ) on Monday July 05, 2004 @09:05PM (#9617290)
    No, it isn't.

    Thanks, /.

  • Intellectual Property Theft (Score:5, Insightful)

    by Sean80 ( 567340 ) on Monday July 05, 2004 @09:07PM (#9617302)
    The first thing that came to my mind when I read this was: "What about IP theft?" I, like many people who think they've had their "big idea," am not too keen on putting it out on the web, where I have no patents or copyright to protect the idea, and where anybody and everybody can come along and put my idea into practice without paying me a dime.


    Maybe this is just the paranoia of one inventory, but I wonder how many people would be comfortable doing this sort of thing, and whether this would select any particular sub-population of entrepreneurs by its very nature.

    • don't forget, this also counts as a 'public disclosure' which in a lot of countries actually revokes the right for you to patent it

    • Re:Intellectual Property Theft (Score:5, Interesting)

      by Anonymous Coward on Monday July 05, 2004 @09:20PM (#9617389)
      This is a classic scam pulled by venture capitalists. They have been known to take great ideas from presentations by companies that are courting their financing and give the ideas to companies already in the stable. I personally wouldn't trust this blog idea further than I could drop kick it.
      • Hmmm,

        So all I need to do is invent a way of drop kicking a blog.

        I'll get back to you.
      • In defense of Tim Draper, I have presented a proposal to DFJ (Draper Fisher Jurvetson) without a non-disclosure statement or any other form of IP protection. He merely gave us his word of honor. Maybe I was stupid, but our idea was technical enough that he could not have reproduced our work without a few years of his own work. I was under the impression that discussing ideas without a form of IP protection is standard operating procedure at DFJ. They basically use their reputation as backing.

        Of course,

    • moron (Score:1, Interesting)

      by QuantumG ( 50515 )
      I don't mean to flame, but it's people like you ("My idea is worth money!") that are the fundimental problem with copyright and patents. It's a freakin' idea. It's not worth a damn thing. What's more, it's not your idea, it come from the public environment in which you live.
    • I considered this issue as well. Then I realized that anyone who attempted to implement my ideas would be missing many of the key ingredients necessary to make it work. i.e. I can give a presentation to venture capitalists that they might like, but the details that make the idea work technology wise are still stuck in my head. Anyone who attempts to steal the idea will either be winging it and come up with a useless implementation, or will already understand what I'm trying to do and have the concept alread
      • There's a fine line to walk when trying this, though: if your technology is indeed too complex to easily replicate, it will require effort to the nth degree to break through your closely-held knowledge monopoly. How much effort someone is willing to dump into breaking that barrier depends on how insanely useful the idea is. To keep people with money from dumping lots of cash into stealing your idea, you need to keep your presentations as vague as possible, so that there are more question marks involved fo
        • No, I think you misunderstand. I'm not saying that the idea is so *complex* that it defies the ability to present it, rather that the details of implementation are left out of a business proposal. For example, I could propose the idea "Selling books online". Depending on how it's pitched from a business perspective, it could sound great to an investor. Yet the investor lacks the detailed knowledge to actually create Amazon.com. If he attempted to steal my idea before an implementation existed, he'd end up w

    • In the US (Score:3, Informative)

      by autopr0n ( 534291 )
      You have two years after public disclosure before you have to patent your idea.

    • Re:Intellectual Property Theft (Score:5, Insightful)

      by prostoalex ( 308614 ) on Monday July 05, 2004 @09:35PM (#9617467) Homepage Journal
      Most of the successful businesses are not ideas, they are execution. Look at successful Internet companies right now: online marketplace [ebay.com], online bookseller [amazon.com] that's not selling electronics and a lot more, large-scale information archival and retrieval system [google.com]. Every once in a while you have Edison-like geniuses coming up with brilliant ideas that turn the world around and occasionally make their inventors rich, but more often than not, it's the execution, not the idea that matters.

      And don't forget that Draper is not the only one, as NYT article states, he's one of the few people that would invest in half-baked startups, but nevertheless in the venture world he's still one of many. And there's $70 billion dollars out there [itfacts.biz] ready to be invested into the next venture. VCs got a bit tough lately with dot bomb and everything, but the money is still out there, and there are fewer ideas, than there are brains.

    • Keeping your idea(s) secret will never ever bring you success. :)

    • The first thing that came to my mind when I read this was: "What about IP theft?"

      That is a very 'the glass is half empty' mindset. You wont get very far in business if you are always thinking about how people are gonna rip you off.

      If you destined to become a multi-millionaire entrepreneur you wouldnt be thinking about how is going to steal your ideas, you would be thinking about which ideas you can steal ;o)

    • "What about IP theft?"

      The simple answer is that ideas are a dime a dozen. Really. The power of an "idea" isn't the concept, it's the execution. And there's a long, long road from idea to finished product; that's why the overwhelming majority of "ideas" never make it.

      Think of it this way: you have an idea. Now how will you make it happen? Can you raise the capital? If you can't, then what value is that idea to you? And remember that if it's really profitable, there are probably already 1,000 people who h

  • The winner had an inovative idea about server bandwidth. Too bad they had no time to implement this new discovery!

  • hrmm (Score:1)

    by 2057 ( 600541 )
    doesnt feel like a safe place to post, with anyone able to read...I'd rather keep my bread-winning ideas in my dreams
  • There goes the %99.999 uptime guarantee!
  • What's to prevent someone from mining this goldmine ;-) [halfbakery.com] and submitting stuff from it to Mr. Draper?

    Wait.. let me patent it first!!11!one!

  • Yeah, right (Score:4, Funny)

    by melted ( 227442 ) on Monday July 05, 2004 @09:18PM (#9617371) Homepage
    OK, folks. I'm a millionaire and I've put together this blog where you can help me to become a billionaire for free.

    Nice thinking, dude. Try again. :0)
  • It's not surprising that venture capitalists are following blogs. Despite the vast amount of kibble out there only of interest to the blogger's friends ("I took my Snookypums to the vet today..."), the best of them are frequently scooping major media on important stories.

    For example, it was a blog that first broke the story [blogspot.com] that MoveOn.org was Astroturfing on behalf of Michael Moore's Farenheit 911 [moveonpac.org]. Likewise, I read about it first on a metablog, National Review Online's The Corner [nationalreview.com]. I haven't seen any o

    • I don't think what moveon is doing is astroturfing, exactly. Astroturfing generaly involves paying people to write fake letters to the editor. These guys are simply giving people a list of newspapers near them, and a few talking points.
    • I'd say its because blogs allow anyone to be an investigative journalist. What your metablog is doing is helping us to collect widely seperated but somewhat related data & put it together. This is exciting for sociologists and various other peoples because once you begin collecting information and viewpoints that normally would not be considered important or significant on their own, you can build a detailed picture of what is really being thought/said/done in politics, business and just about anything
  • 3... 2... 1...

    not exactly the "always on" network now, is it?

    OMG CREATIVITY ISN'T DEAD (just sleeping, darling)
  • Get livejournal to charge people a nickel for
    posting a whiny comment on it every time they do.

    It'll force people to cheer up and also get a lot of money in the meantime.
  • Here is the follow-up email I received from Draper Fisher Jurvetson:

    Hi Frank,

    Thanks for your time today. If you would like to provide us with further information about your idea we would be happy to review it in more detail.

    I will be traveling however, until the 19 July.

    If you would like to touch base with me that week then that would be great!

    Best regards,
    Tristen.

    My Microsoft-approved biz plan for a provider of customized lifelong learning and career services is here [jobczar.us].

    Feel free to send a resu

  • I always loved the website

    http://www.halfbakery.com/ [halfbakery.com]

    been there, done that...

    At the moment, I'd like to start a chain of bio-diesel and vege oil filler stations for diesel transport.

    I'm still waiting for a decent teleport. And I'd like, in my town, someone who will do takeaway food after 9pm, the kind of food that won't clog your arteries.

  • My Great Idea... (Score:5, Funny)

    by bfg9000 ( 726447 ) on Monday July 05, 2004 @10:18PM (#9617672) Homepage Journal
    ... a website where nerds can get together and read about stuff that matters to them, and people can comment and then others can moderate those--- nah... that'd never work. Who'd actually pay for that? Duh.

    Therefore, my new great idea is the Sex Helmet.

  • 'Just do It' (Score:3, Interesting)

    by Greg@RageNet ( 39860 ) on Monday July 05, 2004 @10:19PM (#9617680) Homepage
    With the state of things and what CPU cycles, open source software, and co-location costs these days, who needs venture capital if you are starting an online business. If you are sharp and have decent sysadmin and coding skills you can do it yourself.. Find yourself a partner that's got complementary sales and marketing skills and you're set. I've done this with my own startup KnowTraffic [knowtraffic.com] and am doing rather nicely without selling my virtual soul to the the VC's.

    -- Greg

    • So, where can I find a partner with sales and marketing skills?
      • Strangely enough my 'partner' came from a customer support request from one of my trial users. He loved the idea and wished he'd thought of it first. I asked if he had sales/marketing background and it turned out he was an expert in the area.

        Some other avenues to try are your 'social network' (i.e. friends and friends of friends), a posting on craig's list; or just start up business and sink a few bucks into google adwords and put a little blurb on your website that you are looking for someone with those s
    • You know, its funny, I have a lot of great ideas myself and want to take them further, but also don't want to sell my soul to a VC person.

      However, unlike yourself, I study marketing/advertising, and would be able to take care of that end of it. What I have a big problem with is knowing where to look to find someone who could handle ALL of the technical side of things (including manufacturing).

      I would prefer to not have to pay them a salary and instead have them come on as a partner and split profits, but I

    • The service and sales pitch are good, but I guarantee you're losing a lot of potential conversions.

      Your site design looks like just walked out of 1997, as does your HTML (with the exception of the CSS code).

      In order to make a conversion, you have to overcome a few important obstacles. One of them is trust. One of the most important trust factors on the web is a professional-looking design.

      Design matters! Check out this before [useit.com] and after [designbyfire.com] comparison. Which site would you be more likely to give your m

  • Why not announce about this stuff BEFORE they decide on it? Did anybody on /., hear about it before?
  • SO I'm sure it's worth millions, but wouldn't it be cool if you were able to have a website that was robust enough to survive if it was mentioned in a slashdot article... an article with only 80 comments, no less.

    So I would like, get some bandwidth, and like, get some servers that didn't suck, and maybe like hire this dude to write an app that didn't suck. So like, if you do that, then there's like this weird chance that when you get bombed with traffic people will still get a page back...

    I dunno though

  • Potentially Dangerous (Score:3, Interesting)

    by jnguy ( 683993 ) on Monday July 05, 2004 @10:36PM (#9617751) Homepage
    Why can't I just browse through all those ideas, and act quicker than these people. Head to the patent office, use my own capital, etc. Publicly viewable ideas are dangerous.
    • Any good idea worth investing in has a few things to deter such activity... this is called a "high barrier to entry",

      What that means is that the idea requires one or more of the following:

      - Large amounts of capital investment

      - Key staff in the prospective industry, requiring high salaries

      - Prolonged Research and Development

      - High raw resource costs

      Any of these and especially any combination of these will keep the average businessman from being able to establish a credible business around the idea, hen

  • Garage.com already does this (Score:3, Interesting)

    by Animats ( 122034 ) on Monday July 05, 2004 @10:51PM (#9617848) Homepage
    Garage.com [garage.com] has been doing this for years. They have some modest successes. [garage.com]. Guy Kawasaki ran Garage.com for a while, after he quit Apple.

  • Great place to steal ideas, get ideas for free (Score:3, Interesting)

    by shodson ( 179450 ) on Monday July 05, 2004 @11:17PM (#9618015) Homepage
    Hey, what kind of schmuck would post their idea to the public like this? The same schmuck that will give away 99% of his company for Draper to have them fund it for $1M.

    On the other hand, DFJ have funded some pretty gutsy ventures in the past, so I gotta give them props for trying something different.

  • Stealing ideas. How unethical. Quick let /. him! (Score:3, Funny)

    by syousef ( 465911 ) on Monday July 05, 2004 @11:38PM (#9618152) Journal
    Oh wait a second we already have...
  • Garage liked Steve Jurvetson (the J) well enough to invite him to a panel at thier 'Start' conference.

    I visualize these venture guys at an expensive diner , opening with a lame joke, 'The Idea is Out There'

  • This isn't a new approach. It's called ratings.

    Ratings are pretty straightforward: excellent, good, fair and poor. Some people's scale includes a fifth indicator. Four is good because it's quadratic.

    This is the part where the story begins to make sense: "But even Mr. Draper appreciates that he is skating close to the outer boundaries of common sense by erecting a virtual billboard on the Internet and inviting the world to compete for 10 minutes of his time." That's what ratings is all about: competition

  • So, this is an advertisement for whatever this vidtel dot com thing is? I'd love to know how it's working - probably cheap as heck, considering all they do is give out a little cash and a few cameras, and sites like us bury them in vidtel sales leads...

  • NDA (Score:1)

    by blooba ( 792259 )
    The one thing that, for me, stands out on the DFJ website is the statement that they do not sign NDA's. And their excuse for not signing NDA's is weak: that it would create a deluge of legal documents. Oh too bad. You have millions and millions of dollars, yet you cannot afford a small legal staff to proofread the NDA's.

    At least they could provide their own NDA, or offer an industry standard NDA which both parties can sign. Or they could post some guidelines for NDA's, such as number of pages, number

    • No VCs sign NDAs. They read way too many b-plans and signing NDAs would limit their ability to fund new projects. If they had to go back to legal every time they wanted to fund a new business and make sure the idea didn't conflict with any other business they may have an NDA in place with they would never be able to fund anybody.

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