And a Startup Crashes

Startups crop up every single week.  Some live long enough to raise capital.  And then there are the ones that succeed and go on to better things.  But there are also those, once in a while that seem like they soaring, until the wind gets pulled from under their wings; and they crash, hard.

Below are two wonderful examples of companies, which are astronomically large with meteoric growth that has catapulted them into hundreds and thousands of cities with thousands of employees, mind you most of part of the sharing business model and not part of the corporate core, but nonetheless a very impressive number.

Uber, for example, was found in 2009, has had $1.5 billion in investment, has spread like wild fire in over 50 countries and 300 cities, if Wikipedia is accurate.  Yet, the startup is not yet profitable. Currently, their revenue is $415 million and their operating costs is $470 million, this is based on speculation, but nonetheless not good.  Source: Wikipedia, Business Insider

Airbnb, for another, was found in 2008, has had almost $800 million in investment, and due to its business model was able to expand to 34,000 cities and in 190 countries.  Airbnb’s revenue is expected to hit $900 million for year 2015 with an operating lost of $150 million and expecting to grow revenue to $10 billion by 2020.  Also the company says they do not plan to be profitable until that same year. Source: Wikipedia, Skift, Fortune

If either of these companies were to go bust, the disaster would be enormous.  People who had originally depended on these companies for extra cash may have over time become fully dependent on their respective revenue model.

But this post isn’t about these two companies, it’s about a much smaller one which recently crashed and left 400 employees out of work and thousands of great clients with no service.  Zirtual, like most startups started as the dream of Maren Kate which ran out of investment money after being found in 2011.  To get a true feel for the story and the details I suggest you read her posts on Medium: Zirtual: What Happened and What’s Next

Read more about Maren Kate on LinkedIn

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Why Twitter Should Go Non-Profit

Twitter has been going through some tumultuous times lately.  With its latest CEO Dick Costolo jumping out of the nest, its inability to grow the platform and really monetize it for growth, Twitter I think has reached a dead end.  Unlike Facebook which has unlimited growth potential, it limits third party app integration, controls the user experience and really isn’t constrained to the 140 character limit that Twitter imposed on itself.  Twitter’s character limit is essentially putting a choke hold on its growth potential.
Having said that, Twitter is critical, as essential as the Internet has become.  When ever some major news or gossip erupts in the world of politics, business, financials, celebrity, etc. Twitter is the place everyone looks to.  The more lively Twitter gets, the more important the issue becomes.  What happens on Facebook often stays on Facebook, it’s a social platform for cousins, close friends, siblings, essentially family.  But what happens on Twitter often spills onto mainstream and usually gets taken more seriously, although I’m not saying that Twitter doesn’t have its share of attention seeking personalities.
Although people wouldn’t miss Twitter right away if it were to disappear, it would certainly leave a big gaping hole for the day when someone needs to spread news fast.  Twitter, unlike other online businesses is one of the few tools that has grown organically.  Being able to reply to a tweet, to retweet or hashtag a tweet; all functionality added after the Twitterverse enacted their use. You can’t force Twitter to go where its user base doesn’t want it to go, it’s social engineering at its purest form.
This is why I think Twitter should drop its business model and go non-profit.  I don’t know where the funds to pay for its operating expenses would come from. Perhaps 
Reporters Sans Frontières, newspapers and media like Bloomberg.
Anyway, that’s my thought.
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Book Review: Marissa Mayer And The Fight To Save Yahoo

Marissa Mayer and the Fight to Save Yahoo
by Nicholas Carlson

I’ll be honest, I’m a huge fan of Marissa Mayer, mostly because I think that she’s a bit like me, someone who pushes hard to get ahead in her career.  The difference being that she was lucky to be part of a startup (Google) that became huge.  Me, not so much. So I couldn’t wait to read this book.

I love to learn and be exposed to new opportunities so for me reading this book was a treat.  I’ve never read a biography on people or businesses, so I wasn’t sure what to expect. But having read this book I have to say that the only disappointing bit of it is that there’s no ending.  For those of you who follow Marissa’s career and Yahoo’s on-goings know that the fight isn’t over. And the reason the ending was so disappointing is because the book is so well written.  It’s like reading a day time drama. You really want to get to the part where Marissa succeeds, or doesn’t.  But that’s still a story in development.

This is what I really liked about this book, from a career perspective, I learned about M&A (mergers and acquisitions), well numerous failed attempts anyway.  I learned about shareholder hostilities. I learned some rules on stock ownership.  I learned a lot about what it’s like to be an MNC (multi-national corporation) and the adventures of dealing with shareholders and corporate deals.

The biggest lesson that I learned is that CEOs are humans as well.  It was quite easy to point out the areas where Marissa screwed up, and where she could have done a better job. But then at some point in the book there’s a realization that she has 12,500 people reporting to her. And not everyone that reports to her is a star, especially when she’s running at 100 mph herself.  She put on some big shoes and stepped into one huge pile of poo.

The Yahoo portal is a lot bigger than I ever realized.  I knew about a few of the sections, like videos, email, search, news, but some of the others on women’s fashion, etc.; it’s daunting.  All I can say is that Marissa is brave and a champ for putting up with such a challenge.  Knowing that the battle is really between her and the shareholders I can understand why this book wasn’t written without her or Yahoo’s PR consent.  But as a fan of hers I really wish there was more transparency.

The book provides a very good history of Yahoo, Marissa Mayer and some of the key people involved.  It’s really worth a read.