Will it blend?

willitblend logoWhat do a golf ball, tiki torch, rake and crystal have in common? They have all been through the blender on WillItBlend.com!

The company, Blendtec, is less known for its heavy duty home and industrial blenders, as it is known for its hilarious videos, where the CEO Tom Dickson in a lab coat, tries to run anything and everything through a blender.

In a stroke of marketing genius, director George Wright (covered on WSJ), saw the potential in an initial spot which demonstrated the power of the blenders chewing through a 2×2. This has led to a publicity minefield, and the creation of a series of videos that capture the blenders doing their thing on a whole lot of common household items.

The site willitblend.com carries the videos in two categories, “Do not try this at home” and “Try this at home”. A shot of the flaming tiki torch (do not try, of course) shows the blender blades digesting the entire torch, stem and all!

While a lot of companies have “viral marketing” as part of their business plan, rarely does one actually accomplish it with as much ease and aplomb as Blendtec has managed to.

While the company has been around since 1975, the brand was reborn last November, when the company started its very successful online campaign. The initial videos proved to be a great hit on Youtube and Revver, and the story was picked up on Digg.

Today, the company is not just reaping the benefit of higher sales of its product, but companies are actually lining up to be featured in the Willitblend videos. For $5000 a piece, you can send your product to the Blendtec and team, and get the important question answered - “Will it blend?”.

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A start-up called Google

I know we profile startups, and Google is not a startup anymore, but I got all excited when I heard that Google had recently released the beta version of Google Analytics, an application that allows web owners and marketers to view the revenue and conversion trends on their websites.

I have to admit that I am a bit of a Google Analytics addict, and I wondered, what there was to improve upon on an almost perfect, and not to mention free, product (brought in through their acquisition of Urchin) that was already chewing up market share from all the other Web Analytics operators in large chunks. But sure enough, they had managed to work in an even more spiffy and useful graphical user interface. But more on that later.

So what was Google like, as a start-up? To find out I went to Google’s first web page archived in the shadowy recesses of Wayback Machine.

This is what the Google.com Home Page looked like on Nov 11, 2021

Behind that demure front page, was, of course the little search engine that could, and then some!


Since then Google has consistently spawned out innovative applications, “Googlets” if you will, each of which could be a company in its own right - Google Adwords, Google Images, Google Maps - the list is endless.

Google Analytics is one more of those “thank you for figuring out just what I needed” applications that, in terms of versatility and usefulness, is a generation beyond other apps in its class.

Their recent additions included:

1. A cleaner, more graphical interface that got the big thumbs up from me

2. Simpler way to compare data (like how your website did this month vs. last month)

3. A customizable dashboard that gives you an “at a glance” website report.

Besides that, they fixed a couple of bugs from the last system such as when you change the date range, the display does not go back to the default dashboard, but stays with the data and graphs that you are currently viewing.

Alas, I don’t think we shall be seeing any new companies get funded in the Web Analytics arena, in the near future - unless they can think up a really cool feature that Google has not gotten to - yet.

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The New Venture Capitalist: Not your Dad’s VC

The paradigm is shifting in VC land. In his blog post Deal flow is dead, Bill Burnham draws the funny and highly apt parallel with VCs being akin to bears fishing in a salmon run. In the old days, there were few VCs and many entrepreneurs looking for cash, and finding deals was like standing in the middle of a salmon run, and swatting a few of the best picks, at will.

Deal flow is becoming passe. Not that deals don’t still flow. Some do. But there are a whole lot more bears fishing in the stream. Pickings are getting slim - or so you would hear if you talked to VCs.

Now change phase to the entrepreneurs. They are still complaining that it is hard to fund a company. So where is the big disconnect?

Talking to VCs at small funds reveals a deal acceptance ratio of about 1:50. The ratio goes up to about 100 for mid to large funds and about 150 at the top tier. While these numbers are not exactly small, the quality of deals does not seem to be up to the expectation of most investors.

The mid tier funds face a double whammy. They not only see fewer business plans for each company that they fund, they are not privy to the best deals, which tend to go to the top tier funds.

In time, we will see a cycle where the smaller or lesser known funds will see fewer of the good deals, and have a harder time returning a decent ROI to their investors. This will make it even more difficult to raise their next fund, and might ultimately result in an even larger chasm separating the smaller funds, and the monolithic ones at the top.

So is there anything that VCs can do to reverse this trend?

1. Start a hatchery: The best way to spur innovation is to seed it at a formative stage. Recently, Mark Stevens at Sequoia Capital, gave a generous $22M gift to the University of Southern California, to establish the Stevens Institute for Innovation. Creating the right enviroment is a great head start towards ensuring that more and better ideas will get to the marketplace, to create the next wave of successful companies.

2. Find new rivers and streams: Many VCs of small funds are doing this already. They realize that it is no longer possible to sit still and wait for the deals to come to them. Several have found non traditional ways of finding new deals before they come to the market and bidding between funds makes them unattractive investments. Some firms such as Venture Farm in Irvine, CA are finding companies while they are still in the idea stage, and carrying them into the next stage in their life cycle where they will become investable companies.

3. Grow a stronger run: Mentorship is absolutely critical in carrying a company from its idea stage, into one that is ready for success. The Tech Coast Angels has set up mentorship programs with Universities, to help spur not only the commercialization of technology into viable companies, but also to support budding entrepreneurs so that they are able to take their companies to the next level. In order to generate future successes, VC firms might find it worth their while to take on and mentor would-be entrepreneurs (in the same way attorneys are expected to spend a certain amount of their time doing pro-bono cases), so that for every deal that they invest in today, there are 5 more that will form viable companies for them to invest in tomorrow.

4. Support the environment: Surprisingly, many entrepreneurs whose companies were passed up for investment by the top VC firms said that the partners at these firms were very good at keeping in touch with them. Smart VCs know that entrepreneurs are very resillient; The same person who presented a half baked idea today, will be back in a year’s time with a better idea and a better plan. Continuing to support the ecosystem is not just a good idea, it makes great business sense.

Perhaps we should heed the wisdom of the American Indians: Whenever you take from nature, put something back in its place.

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Angel Investors: A different breed of animal

I often get asked by entrepreneurs what it is like pitching a business idea to a group of Angel investors . I also hear of frustration in general, about not quite knowing what is expected in a VC or Angel pitch. Earlier, I wrote about the art of delivering the perfect fast pitch.

So are Angels similar to VCs? The short answer: Yes; The long answer: Not quite!

Sure Angels and regular VCs are looking for the same things: A good team, decent ROI in a reasonable time frame, etc. etc. But that is where the comparison ends.

Angels are a breed apart. I have gone through the whole gamut of raising funds for my company, started 3 companies (ok, we won’t talk about the road kill of 5 or so that never saw the light of day), invested in and mentored several companies in an incubator, and now am fortunate enough to be part of the Tech Coast Angels - the largest network of Angel investors in the world. Sitting in many startup presentations has given me some perspective on the pitch process - much of which is very different from what I believed when I was the person under the hot lights.

1. Angels play in a different sandbox: When I was in startup mode, I always thought that Angels, since they invested their own money, would be very risk averse. Not true. Most Angles have a some money stashed away for groceries and gas, and after that have managed to carve out a little play money that their spouses have agreed to look the other way, on. Within that sandbox, the investor is going to do whatever the heck they please. They are not answerable to anyone. If they lose money on a deal, they shrug and move on. It is worth remembering that VCs do invest other people’s money, so they have to be more conservative.

So if you have an oddball idea that everyone has told you will never get funded, try talking to an angel. You never know….

2. Angels are Vegas players, with one extra gene: Most Angels probably know in their bones that if they were just out to invest money, there are a whole lot of higher return, lower risk investments that they could be in. I would probably put all my money in overseas real estate right now. But Angels are not just investors, they have an extra nurturing gene. Most of them delight in helping and coaching a start-up, and seeing it succeed.

For that reason alone, Angel money is one of the best deals for a start-up company. Many VCs will not even invest unless they know that there is some Angel money that has gone into a deal. When you think about it, how often do you find a smart and experienced consultant (the angel, of course!), who is actually going to pay you for all the value that they bring in?

3. Are Angels are just a bunch of rich people who just got lucky? Not!. I was once asked this question, and after some time of hanging around with Angels, I can only say that they did not just get lucky. Many of them started companies themselves, and after a lot of work, managed to have one or more good exits. Many are professionals who have spent many years in the business arena, doing what they do best, and who have decided, for various reasons, to be involved with startups. I suspect many not only enjoy the investment aspect, but also look forward to the camaraderie of other angels - and they think that that is a lot more fun than being hunched over etrade all day!

4. There is strength in numbers: With Angels, you are typically pitching to a large group (on average from 10 to 100 people). No matter how specialized your niche, you are very likely to find one or more Angels who understand your domain really well. And Angels do make up their own minds regarding all their investments. So by and large, companies will find at least a handful of Angels (mostly more) who are at least interested enough to spend some time looking at the deal further, if not investing in it right away.

5. Angels make great girl/ boy scout leaders: There are instances in which a deal did not get the exact amount of investment that the company was looking for. Sometimes the deal is oversubscribed (a good thing!). In those cases, Angels tend to share the round so as to let in all those who are interested, and reduce the amount invested per angel. Sometimes, the round is not enough. In those cases, Angels are remarkably good at marshalling the troops within, or finding outsiders who happen to be sitting on a pile of cash, to co-invest. If the round is a large one, oftentimes, Angels will bring along VCs they know, into the deal.


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