Jeff the Great Crowns Instagram a Winner

So much to blog about these days but it took a $1 billion acquisition of a no-revenue company to get me writing this evening. Yes, I am talking about Instagram and the sale to Facebook. One billion dollars. Wow...and congrats to them! The most amazing thing to me is that they are just a 10 person company with a product used by around 30 million people. That, my friends, is a lean startup!

So here is something to think about. Facebook paid approximately $33 for every Instagram user. That got me thinking, will this number be cited in the valuation of other web/mobile companies as they raise funding or negotiate a buyout? This means if your web/mobile app has 1 million users, you could reasonably argue that your company is worth $33 million......or more if you have revenue!

That is a little far fetched but it is a great way to remind yourself how much more work you have ahead of you. Say you have 25,000 users. That is wonderful, but you have a long way to go if you want to be purchased for millions of dollars! Twenty five thousand makes you worth about $825,000 based on Facebook/Instagram math. One hundred thousand users puts you at $3.3 million. Personally, I don't want to sell my current company for less than $100 million so I better get more than 3 million users running my software. Yikes, I have a lot of work to do!

Of course, I am over-simplifying things. Revenue changes the picture drastically. I also believe that each new Instagram user was worth more than the last (a network affect, so to speak). Not to mention all the other tangible and intangibles.

I'll leave you with this final thought. Maybe $1 billion was a bargain for Facebook? They are approaching an IPO that is rumored to value the company at around $100 billion. With around 900 million users, that is $111 per user. Makes $33 per user look like chump change, doesn't it?

Jeff the Great's Top Technology Companies in Portland

The Portland Business Journal on March 9th, 2012 published a list of the Top 25 Technology Companies in the Portland area. They ranked using number of global employees but also listed the number of Portland area employees. Effectively, this is a list of the largest tech companies with a presence in Portland.

Wow, did they miss the boat. Of course the likes of Xerox and Intel made the list (#1 and #3 respectively), but the omissions and selections get more and more odd as you read down. For example, at #25 they list Infinity Internet with 27 worldwide employees, 26 in the Portland area. You mean to tell me that the 25th largest tech company in Portland only has 27 employees?

So I did some research and quickly discovered that the Portland Business Journal blatantly ignored local companies that were obvious choices for the list. They even ignored multiple companies that they wrote about in the very same March 9th issue (Fisrv, Monsoon, Axium, Symantec)!

So out of respect for the great companies that were omitted for the list, here are some that should have been mentioned. The figures in parenthesis are my estimations of local employees based on data collected from LinkedIn plus a sprinkling of my personal knowledge.

• Act-On Software (over 60)
• Avnera (about 60)
• Axium (about 80)
• CD Baby (over 200)
• Clearedge Power (more than 100)
• Digimarc (over 100)
• EasyStreet (at least 30)
• Elemental (about 60)
• Fiserv (as many as 300)
• Galois (about 35)
• iovation (over 75)
• Janrain (110)
• Jive Software (200+)
• Monsoon (about 84)
• Netflix (about 200)
• Pixelworks (about 32)
• Puppet Labs (about 40)
• Rumblefish (about 30)
• Urban Airship (about 60)
• Shopigniter (about 30)
• SolarWorld (hundreds)
• Symantec (100, even after layoffs)
• Synopsys (about 300)
• Thetus (about 50)
• ViaWest (at least 25)

This isn't even an expansive list, there are more but I had to stop researching! Even the big guys have a presence here. Microsoft has about 150 in the Portland area, and Apple has at least 175 (both retail AND engineering). Finally, I didn't even list companies with fewer than 20 employees which I stumbled upon in my research. There are easily a few dozen tech companies with 10-20 local employees.

So, Portland Business Journal, I find it hard to believe you when you say "every attempt is made to ensure the thoroughness and accuracy of the list." It is especially frustrating when the only avenue to communicate errors and omissions is to send "corrections and additions on company letterhead to..." followed by your mailing address. Company letterhead, really? Why can't I just email you a list?

-Jeff the Great

Jeff the Great Boycotts The Oregonian (or, why the newspaper industry is dying)

Reading through the archives of this blog, you'll see that there are a few popular topics I like to write about. One of them is the downfall of the newspaper industry. I recently had an online conversation with the new Business section editor at The Oregonian which only strengthens my grim outlook for a dying industry.

As some of you know, I have been working hard to build my own startup company. Nearly 2 years now and we are finally getting some real traction. Big news is on the horizon. During this time, I have become aware of many other Portland startups. Unfortunately, it seems as if these companies don't get much attention from The Oregonian newspaper.

A recent example is when my company teamed up with another Portland startup, GadgetTrak, to produce an innovative project called "stolen camera finder." It was interesting enough for the New York Times, Economist magazine, Popular Photography magazine, TechCrunch, Gizmodo and others. We sent information to the Oregonian's tech business writer and I even spoke with him on the phone about the project during a call for a different story. Nothing, no story. Apparently the Oregonian is too good for a story that the New York Times and TechCrunch like.

However, the Oregonian did have space in their paper for a July story about an eccentric millionaire that has sunk nearly $1 million into the development of a shaving razor that sells for $100,000 each (yes, you read that correctly, one hundred thousand dollars). Then, in late August, the Oregonian did a follow up story with "news" that the company has now produced an $18,000 model of their high-end razor. According to the August 25th article, not a single unit had been sold at either price point.

In the meantime, real Portland startups are building world-changing products, earning revenues, hiring employees and otherwise succeeding. When was the last time you read about that?

So when the second razor article hit the Oregonian's web site, I took issue with both the author (who I respect greatly) and his boss, the Business Editor. Here is our Twitter exchange, archived thanks to a cool company called Storify (which isn't from Portland):

What is your take, Portland? Was I wrong to question the Oregonian's coverage of this gimmick razor business or do they in fact do enough coverage of Portland startups?

Update, 9/24/11: The Oregonian today published a story about Geoloqi, one of the companies I mentioned in the comments below because I felt they didn't get the attention they deserved. Here is the story.

Jeff the Great Says to Keep Your Eye on the Ball

Early stage startup founders have a problem. Early stage startup founders in Portland really have a problem. Too often, we look at venture funding as the goal, rather than a means to the end. Once you start focusing on raising money, you have failed.

I am currently in the process of raising financial backing for my early stage startup and sometimes I find myself taking my eye off the ball. Funding is not the goal. Building a wildly successful company that makes everyone involved rich is the goal. Every time I fail to focus on that, I am not taking a step forward.

The idea of investment dollars is to accelerate your company. Not to pay yourself more or to get a fancy office. Sure, those things *might* come with the territory, but they are not the goal. When you take an investment, that's when the work really begins.You now have more work and more responsibility. You just have some cash in the bank to help you through it all. If you take an investment and don't feel more pressure to succeed, I think something is wrong with you.

While high-fives may have gone around the Portland companies that have recently been funded, like ShopIgniter, PHP Fog and Urban Airship, I can guarantee you that the celebrations didnt' last long. They now have to work their asses off, and they know it. While I don't know the founders of these companies, I can confidently say that they were given that venture capital money because the investors knew they were focused on building wildly successful companies. They did not focus on getting funded. They saw funding as a means to the end.

As I network around the Portland startup community, I see too many of us that are focused on getting funding and not building wildly successful companies. I think part of the problem is that we read about all these funding events on TechCrunch and we fail to see all the hard work that has gone into those companies and we are not exposed to the greater vision they have. We don't see the pressure that those founders feel after the funding happens. We think its all ice cream sundays and stuffed animals. We want that TechCrunch recognition. We want ice cream and stuffed animals. It sounds so great, right?

All those companies on TechCrunch...funding wasn't the goal. Building a wildly successful company is the goal. They didn't accomplish anything by raising venture capital. Now that they have capital, they have to go accomplish something. Funding isn't the goal.

So next time we talk at a Portland area event, don't tell me about your fundraising efforts. Tell me about your product. About your customers. About your vision. Don't tell me how much you need. Don't say that if you just had X dollars, you would be set.

Make sure I do the same thing. If I start talking to you about my fundraising efforts, remind me that I need to focus on my product, customers and our vision. Don't let me take my eye off the ball. After all, I am writing this blog post as a reminder to myself.

Sure, we need money to realize our vision. Let's just not focus on that. Once we are focused on funding, we have failed. Our chances of building a wildly successful company are next to nothing once we take our eyes off the ball. Focusing on funding means your eye is off the ball.

Funding is not the goal. Building a wildly successful company is the goal.

Jeff the Great Creates Oregon Tumblr Directory

So I've been checking out a web site called Tumblr. Its basically between Twitter and a blog. Unlike Twitter, you can write more than a text message and can include pictures, video, etc. Unlike blogging, most people use it for short writing or simply to share a photo they like.

I signed up for ThePortlander.com as a way to get our news out to more Portlanders and Oregonians where they are, as opposed to waiting for them to come to us. If you are curious, we are at htt://theportlander.tumblr.com.

One thing I don't like about Tumblr is that they have not made it easy to find people to follow and interact with. Specifically, I can't tell where most people call home. So, I decided to create a Portland/Oregon Tumblr directory. If you are on Tumblr, please let me know using the below form. Once you do so, you'll see who else from Portland/Oregon is on Tumblr. When I get enough responses, I'll publish a full and active list somewhere.

Thanks!