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Posts Tagged ‘Profitability’

Free wiki hosting company Wikia to let you create your own question and answer sites

Wikia, a site which allows anyone to create their own free wiki page, has announced a new service, Answers from Wikia, that will enable anyone to create their own question and answer sites as well.

Wikia previously relaunched its Wikianswers service early last year, which directly competed with the likes of  Yahoo Answers, wikiAnswers (a competing service with a very similar name), and Answerbag. With Wikianswers, Wikia allowed users to ask general questions, and receive answers from the community. The new Answers from Wikia service will allow dedicated users who are experts on specific topics to build up their own niche Q&A communities.

Wikia will promote questions asked within these small Q&A communities throughout its existing communities — hopefully generating interest from its more dedicated users. Wikia also doesn’t require users to register to participate in its answer sites, so these niche Q&A sites will be more open than typical answer sites on the web.

After relaunching WikiAnswers in February 2009, the site has gone on to generate over 600,000 questions, with over 150,000 answered. Wikia also recently launched some niche do-it-yourself sites created by individuals, including EverythingAuto, and ClubPenguin.

Wikia was founded by Wikipedia’s Jimmy Wales and Angela Beesley. The San Francisco, Calif.-based company raised $14 million in funding throughout 2006 by Bessemer Venture Capital, First Round Funding, and Amazon, among others. In September 2009, Wikia announced that it achieved profitability a year earlier than expected.

Tags: WikiAnswers, wikis

Companies: Wikia

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EC Roundup: F is for founder… and focus… and forgetting about competitive analysis

Here’s the latest from VentureBeat’s Entrepreneur Corner:

Ask the attorney: What the heck is Class F stock? – You know what Class A stock is, but what is Class F stock and what benefits does it have for founders? Attorney Scott Edward Walker fills in the details – and explains why it might be good for you, but could scare away investors.

Just getting started? Focus on this to get to the next level – While you might be focused on your revenue and profitability growth cycle, the real secret to success lies in your people and strategy, says Pamela Springer,CEO of Manta, in this primer for new entrepreneurs.

Death by competitive analysis – Competitive analysis tables are a standard of any presentation to potential investors – but serial entrepreneur Steve Blank says they’re also often responsible for screwing up more start-ups before they have a chance to get going.

In favor of software patents – With Apple and HTC battling it out these days, software patents aren’t real popular to a lot of entrepreneurs. But Alain Ranaud, founder of FairSoftware, says they’re legitimate tools, though they’re definitely in need of some fixes.

Entrepreneurism: The age gap – Running a start-up in your 20s can put you at a disadvantage, since so many people assume younger entrepreneurs don’t have the experience to know what you’re doing. A who’s who of young entrepreneurs discusses the issue in this podcast from Stanford University’s Thought Leader Lecture series.

Tags: entrepreneur corner

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Just getting started? Focus on this to get to the next level

(Editor’s note: Pamela Springer is CEO of Manta, which provides information on small companies. She submitted this story to VentureBeat.)

As strange as it might sound, the key to success in startups is not always knowing where you are in your revenue and profitability growth cycle. Instead, it’s much more important to keep track of people, strategy and capital – and in that order.

Understanding the strengths of your team – and your leaders in particular – allows you to build the details of your strategy that you can proactively manage.   Aligning your strategy with your team’s strengths increases your chances of staying focused on sustainability.

On-the-job training is expensive, so check resumes and gauge how prospects for key roles have performed in previous jobs. If you have strong generalists, recognize you might need to evolve them into specialists. And keep an eye on balance: Having too many people on the team who have never experienced the start-up life (and the duties and responsibilities that go with it) can be dangerous.  Ideally, you’ve got committed, passionate and experienced leaders who can help navigate the inevitable bumps.

Having said this: Skills aren’t everything. The team needs to work well together. Many people are hired on skills, but fired due to their traits.

It’s very easy for a business to stray from its core mission. A clear focus on your company’s strategic goals is the key to staying on course  - or knowing when it’s time to modify things. Focus initially on “adoption” or revenue – confirming you have a product or service the market wants to buy.  Use the first few sales to gather feedback on missing features and what your customers like. Your next batch of customers will typically be more profitable (since you’ve made improvements and streamlined processes based on initial feedback).

As you start to establish a foothold in the marketplace, you’ll need to determine if your product has the capability to scale and bring a critical mass of customers and revenue to your company (depending, of course, on the market size and opportunity).  If not, think of adjacent markets to leverage or where you can re-package your existing product. (Note, though, that it is foolhardy to expand into a new segment before your initial product is well established.

It goes without saying that it’s important to have appropriate financial resources.  Bootstrapping an early stage company is typically the best option, as it allows you to validate the market and get initial feedback from customers. Once you’ve got a better sense of the market (and have secured a few customers), then it’s safe to begin thinking about outside investment.

Assuming you can find a willing venture capitalist or angel investor, deciding whether to accept a cash infusion ultimately depends on how fast you want to grow your company – and what you have planned for your exit strategy. Keep in mind that it’s best to secure capital when you don’t need it, as trying to raise or find money when you do need it is tough.

Understanding where you are in the maturity curve of each of these three categories will help you position your business better for the future. Cash is obviously important – but if you don’t have the right team and strategy, you’ll never see the capital.

Tags: employees, how-to, strategy

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Glam Media On A Roll: Raises $50 Million In Private Equity At $750 Million Valuation

Glam Media, a vertical advertising network, has raised its fifth round of venture capital – $50 million from aeris CAPITAL, a Switzerland and Silicon Valley based private equity fund. The company is not disclosing the valuation of the round, but it is rumored to be around $750 million.

Glam’s last major funding was a $85 million combined debt and equity round in early 2008, two years ago, that valued the company at around $500 million.

$10 million – $15 million of this new round will be used to purchase stock from existing employees/founders as well as early venture investors. The rest of the round will be used for investment in the business and strategic acquisitions.

Profitable and Rolling

Glam is also announcing EBITDA profitability on North American operations and break-even results globally for Q4 2009. 2009 revenue was likely around $55 million, up from $40 million in 2008.

The company attracts nearly 160 million unique monthly worldwide visitors to the sites it controls and represents, putting it at no. 14 on Comscore’s top 100 worldwide Internet properties. Those visitors racked up over 2.5 billion page views and 2.5 billion minutes spent on the site. The network includes over 1,400 publishers and other content sites.

Glam attracts around 72 million montly U.S. visitors to its site, more than double competitor iVillage’s 33 million. The company, which is headquartered in Silicon Valley and New York City, is clearly gearing up for an IPO in the next 12 – 18 months.

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Groupon Gets A Hefty $30 Million From Accel For Local Offers Service

Chicago based Groupon, which was formerly known as ThePoint, has raised a hefty Series B financing – $30 million – from new investor Accel Partners and existing investor New Enterprise Associates. Accel’s Kevin Efrusy joins Groupon’s board of directors.

The company is going gangbusters. They offer users deep discounts on local deals – spas, sky diving lessons, hotels, restaurants, golf, whtaever. Discounts range from 40%-90% of the normal price. If enough people buy into the offer, everyone gets the deal. If there aren’t enough people, no one gets the deal. Groupon collects payment and passes it on, minus their fee, to the business.

Example – 1,600 people in one day bought skydiving lessons in Chicago, says the company, getting a 44% discount on the $229 price. And the company making the offer normally sells just 6,000 lessons per year. They sacrificed some profit, but gos lots of new customers.

What makes the service so compelling is that people have an incentive to get their friends involved to make sure the minimum is hit. And Groupon makes it easy to spread the word about offers via Facebook and Twitter. Their user acquisition costs? zero.

Groupon generally takes 30% – 50% of the total price paid for the service, and they are on track, they say, to do $100 million in gross merchandise sales in 2010. They reached profitability in June 2009, just six months after launching the service.

Chicago launched first but the site now covers 26 cities and is adding a new one every week. They have 126 employees, more than half of which are sales staff finding new deals for users. The company has now raised about $35 million in aggregate, including an early angel round.

Think they deserve a Crunchie for best application or best new product in 2009? Vote for them here.

Crunch Network: CrunchGear drool over the sexiest new gadgets and hardware.

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Already Profitable Redfin Raises Another $10 Million

Seattle based Redfin, an online real estate startup, has raised another $10 million in a venture capital round led by Greylock Partners. Existing investors Madrona Venture Group, Draper Fisher Jurvetson, Vulcan Capital and The HIllman Company all participated in the round, and Greylock’s James Slavet joins the Redfin board of directors.

This was a safety round, as Redfin announced profitability over the summer and have now exceeded a $20 million in revenue run rate (it was just $15 million last summer). They’ve roughly quadrupled in size since 2008, even in a down real estate market.

I used Redfin as a buyer over the summer when I was looking for a house. Here’s how it works, and why it’s so attractive compared to normal real estate broker deals: As a buyer you spend a lot of time on the Redfin site, looking at available houses and a rich set of data on previous sales, comps in the neighborhood, other homes listed in the same price range, etc. (or you can use their iPhone app, which the company says is the highest rated real estate app).

If you want to view a home you schedule online. They set it up for you and meet you at the house.

In all, it isn’t much different than the standard buying a house procedure. Except at the end they refund 50% of their commission to you. On a $500,000 house, you get a check for $7,500 at closing.

Sellers who use Redfin pay a flat a $5,000 – $7,000 fee, depending on services ordered. And if you’re also using Redfin to buy a home while you are selling, that fee drops by $1,000.

As you can imagine, real estate professionals aren’t thrilled. Nor do they love CEO Glenn Kelman, who said In an interview with 60 Minutes: “Real Estate is by far the most screwed up industry in America.”

But customers clearly love the service, and they have closed more than $2 billion in home sales since launching in February 2006. The total U.S. home real estate market is around $1 trillion, so they have some room to grow.

Redfin is currently available in Boston, Chicago, Seattle, Washington DC, Baltimore, New York’s Long Island and Westchester County as well as most of California, including the San Francisco Bay Area, Southern California and Sacramento.

Crunch Network: CrunchBoard because it’s time for you to find a new Job2.0

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IT search company Splunk reaches profitability

Splunk, which provides IT managers with a search engine to find problems in their company networks, just released its latest numbers on customer and revenue growth. The big message: Splunk is now profitable, and has been for two consecutive quarters.

Splunk’s downloadable application allows users to search (in real-time) the logs of all the hardware and software in their networks. So Splunk should help IT teams find and solve problems much more quickly. The San Francisco company makes money by charging for services around its free software.

In its most recent quarter (July to September), the company released Splunk 4, which now has been downloaded 40,000 times. Chief executive Godfrey Sullivan also just completed his first full year with the company. Sullivan, who was chief executive of Hyperion Systems when it sold to Oracle for $3.3 billion, was appointed CEO in 2008 to help get Splunk’s business into shape. Looks like he managed to do that.

Also in Q3, Splunk says it added 153 customers, bringing the total to more than 1,300. New customers include NATO, Credit Suisse, and the United States Department of State and Department of Energy.

Splunk has raised $40 million in venture funding from Ignition Partners, August Capital, JK&B Capital, and Sevin Rosen Funds. Competitors include LogLogic and Sensage.

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TheFind launches “buying engine,” product search from 500,000 stores

TheFind, a Mountain View, Calif-based startup that applies machine learning and semantic search to shopping, says comparison buying sites only skim the surface of all the millions of products out there on the web.

So it’s launching a “buying engine” today that crawls half a million stores for products and coupons. The site shows reviews alongside products and highlights coupons. It attaches store information in a pop-up that shows the sellers trust and security ratings. There is also a “green” search for environmentally conscious products.

“The truth of why none of the other comparison shopping sites have ultimately become successful brands is because they don’t offer everyone,” said Ron Levi, the vice president of product for TheFind. “When you’re only showing 10 or 15 stores out of hundreds, it’s just not comprehensive.”

TheFind is backed by at least $26.5 million in three rounds of funding from Redpoint Ventures, Lightspeed Venture Partners and Bain Capital Ventures. Levi said the site has 13.5 million unique visitors a month and hit cash flow profitability in December of last year.

The company is one of many comparison shopping sites we covered way back in 2007. But its competitors like Shopping.com (owned by eBay), Shopzilla (owned by Scripps) and Pricegrabber (bought by Experian) aren’t independent. The company earns revenue from affiliate fees so when a user actually buys a product, TheFind earns a small portion of that. It also earns income from clicks when users are driven to other comparison shopping sites.

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