Redeye VC

- What's the one thing that needs to happen for this project to succeed? If there is one key thing, that's good. If there are five or six key things, then you have a domino rally business, and that's bad: http://redeye.firstround.com/2006/09/domino_rally_bu.html

- What's the engine of growth? The best businesses basically start with the engine of growth and then work backwards to find a product. If the product doesn't have a built-in mechanism of virality, then you should be asking yourself how easy it will be to get leads, since that's the most important determinant of CAC. Again start by finding a great source of valuable leads, and then build the product to match.

- What are the assumptions, risks, and unknowns? Specifically in the areas of user engagement, growth, design, technology, and monetization. If this list is less than, say, three pages, then you're probably not engaging with the idea at a deep enough level yet to be capable of successfully executing.

- Is this a good idea for you? In the above section I'm assuming there isn't any significant founding team risk because you're doing a startup that's well-suited to your skillset; if not, it's not a good idea for you. Remember, everyone is capable of running a successful business, even if it's only a hotdog stand; the trick is finding an idea that's just at the edge of your current skillset.

- What are the key metrics I need to hit for a seed round, series A, series B, etc? And similarly, what are the key…

Maybe there's never a "good" time to put up a pay wall, but it seems pretty dumb or naive to try to do it now, while so many people are still eliminating recurring expenses and generally trying to save money. If money is tight, switching to a free alternative when one of the sites you hit online puts up a pay wall seems like a no-brainer.

Reminds me of "the penny gap" (see http://redeye.firstround.com/2007/03/the_first_penny.html). This is especially true with discretionary items and items that have many competitors and substitutes, especially free ones. That's the situation with newspapers. Sure, some might say each newspaper and writer is unique, which is true, but...

...maybe people aren't looking for "the best" newspaper or writer or web app, maybe they're looking for "the best free" newspaper, writer, or web app. NOTE: "Free" in this case means "ad supported," or at least "no subscription required."

VCs usually list job openings at their portfolio companies, so for NYC, check out the Union Square Ventures jobs page (http://www.unionsquareventures.com/jobboard.html).

Silicon Alley Insider also has a jobs page with some startups listed (http://jobs.alleyinsider.com/).

And you can use "Reg D" to find out about startups which have just gotten funding that may not be listed anywhere else (http://redeye.firstround.com/2008/06/the-death-of-st.html).

The nextNY (http://groups.google.com/group/nextNYdigital) and NYC Tech Boosters (http://groups.google.com/group/nyc-tech-boosters) boards also list jobs from time to time.

Also, even though it's not a jobs board, you should subscribe to Jay Sulzberger's mailing list (http://lxny.org/correspondence.html) to find out about tech events in NY.

I'm optimistically looking for ways not to feel guilty about this. I've always believed that better technology creates new jobs and a wealthier society, but it's pretty clear now that businesses are doing very well by automating away mid-skill jobs. Just contrast the stock market with the job market: companies are becoming more profitable but hiring/paying less.

Tech entrepreneurs are trained to think about optimizing/automating. For example, here's an old blog post by Kopelman: http://redeye.firstround.com/2006/04/shrink_a_market.html Summary: there's a lot of opportunity for you if you find a way to shrink a market.

Without doing too much handwringing, I think it's our responsibility as engineers/technologists to at least try to be aware of what we destroy with what we create.

I think trying to create a product that is superior + obviously necessary should be the goal for most startups... Getting on TC is then just a resulting symptom.

That said, top-tier blogs are a good way for many in the startup scene to really jumpstart their project, but getting a writeup there is certainly not a requirement to success, and there's plenty of echochambering that goes on in them too, so I can see why many choose an alternate route all together.

Perhaps you'll find this post relevant to your question: http://redeye.firstround.com/2008/01/after-the-techc.html

For us, getting on TechCrunch//GigaOm//etc was a strong benefit. Those blogs have a big reach. It got us a lot of other coverage, investor interest, and established some level of credibility out of the gate.

I think Joe missed one of the crucial considerations in valuation... How many doors you close with a high valuation.

If you close $3m on a $10m post-money valuation, you're signing up to build a $100m company (see http://www.angelblog.net/VC_Mandatory_Moonshot_The_Unwritten_Terms.html ). If things aren't going great (i.e. growth has plateaued), you MIGHT be able to sell for $50m.

This is especially true if you take money from a BIG venture fund (who has $500m under management and needs to see BIG exits to move the needle).

Looking at the chart here ( http://redeye.firstround.com/2007/07/the-unintention.html ), the vast majority of exits are under $100m... Which means that committing yourself to be north of that means a long road and a lot of risk.