My first whiff of Silicon Valley entrepreneurialism came five years ago when I left Miami to intern at Netscape. Working in the company of so many ambitious people was literally a kid’s dream come true.
But as Netvibes gets $15 million dollars richer, it’s all starting to get a little too dreamy now, a little too chimerical.
Netvibes is a customizable portal that aggregates e-mail, stock prices and other slices of your life. It’s a solid portal, but it’s still just a portal. Many developers could piece it together on a dime. Many already have. While I must assume the company is planning a capital-intensive expansion, I can’t imagine what on God’s earth would justify an additional fifteen million dollars, unless we’re about to see Netvibes appliances, or medicine, or medicinal appliances. Admittedly, my strongest frame of reference is my own venture-backed project, which I personally consider very ambitious. In nearly two years, we’ve raised $100,000.
It’s a problem of skewed perspectives. When we hit one million downloads of Firefox, that wasn’t “normal.” That was outrageous, intoxicating. Today it’s difficult to find anyone who even notices when the counter rolls another million. The 200 millionth download was celebrated with digital balloons. What’s 300 million, a :-)? It’s a frightening attitude—we can’t afford to be blasé about a single person, let alone a million—but at least if it brings us down, people just change browsers.
The stakes are higher in the Valley, where many venture capital firms refuse to invest anything smaller than the “normal” $3 million series A. So can we really make do with only two? That company raised “4,” that one “9,” that one “16.” Zeroes are extinct in Silicon Valley, trampled in our breathless pursuit of the next great enterprise. It’s all a damned game out here, losers go home with a :-(, it’s just play money anyway, you can always start another company.
Except that if you have fifteen million dollars, someone else doesn’t. Most founders know that investments carry fiduciary responsibility; Netvibes, for instance, now owes its investors a sizable return. What about social responsibility? Will that IPO be your legacy after you RIP? Before raising large—and yes, these are large, so fix your normal if you disagree—amounts of money, founders may wish to consider life after liquidity.
I think about it often, particularly when people ask pointedly if I want to make a lot of money. The answer is yes, but not for myself. I want to suck the money out of this ludicrous system and give it to the people and organizations for whom a million dollars is still a million dollars, zeroes and all.
August 14th, 2006 at 5:19 am
Intrestingly Netvibes has been the only site that I have used as a homepage since…basically…1994. The other being about:blank. Other homepages have I have tried and removed after a couple of days. They must be doing something right. Of course, the moment they do something wrong…
August 14th, 2006 at 7:34 am
My normal is still in the $20 range (and no, thats not 20 million, thats 20 dollars), so $15,000,000 (lets write it out) is definitely a lot of money. $20 is a significant investment to me… and it usually goes towards an investment in a dining establishment. ;)
~jw
August 14th, 2006 at 7:53 am
Thank you for expressing my own thoughts so eloquently! I would be scared to take this kind of money …
August 14th, 2006 at 8:06 am
Money on that scale is impressive. My wife is starting a publishing company right now, and she’s projecting that she’ll need about $50,000 over the first year or two. Depending on sales, obviously.
It’s hard to see where “15″ would even be put to use in her operation. Well, okay, staffing. But still. Her traditional, physical-goods-oriented business could run for the next 10 years on that sort of money.
August 14th, 2006 at 9:05 am
Great way to put in words what others only think of :)
August 14th, 2006 at 10:41 am
i agree it’s a bit of a head-scratcher, particularly given the customizable portal concept is far from proven. perhaps netvibes thinks that if it does actually take hold, only a small number of companies will play in it (assuming yahoo, AOL, microsoft, etc.) don’t decide to move in.
August 14th, 2006 at 11:21 am
Wow, Blake, quite a dream there. I wish you the best of luck, and will be excited to hear more about your new project!
August 16th, 2006 at 5:34 am
Nice stuff, man. Just make sure you do what you say.
August 16th, 2006 at 8:24 am
This is a great question Blake, and you know - because we have talked about it - that I am always for raising the right amount of money from the right people at the right time.
In the case of Netvibes though, it basically meant raising a substantial round that gives the company a lot of runway to scale their infrastructure - dealing with their fast growing user base and traffic, develop new features, establish a US presence, etc. This does not come cheap, and when you can afford doing it, you want to have a balance sheet that allows you to do it.
Note that I am an advisor to the company (as I just disclosed on my blog).
August 16th, 2006 at 11:06 pm
My initial reaction was complete agreement with blake here… how could you justify 15MM of viability of a company with zero competitive advantage (and IMO a weak brand name) competing directly against Google, Yahoo, MS among others.
Then I remembered my own recent blog musings about how beatable Google.com is (note the distinction between Google.com and Google search)… maybe NetVibes is on to something. Look forward to watching 15MM worth of execution play out.
August 22nd, 2006 at 5:29 am
Blake, I agree that 15MM is a lot for a company with no proven business model. I too am for raising just a bit more than you actually need. Maxthon raised less than 5MM and we were revenue positive 2 years ago…and we really though a lot and for a long time about accepting an investment at all. Most software development is relatively cheap now-a-days and Ajax can be brewed in your own kitchen ;)
August 22nd, 2006 at 8:29 pm
Am I dreaming? Pinch me.
Death toll rises due to FireFox
http://qainsight.net/2006/08/23/Death+Toll+Rises+Due+To+FireFox.aspx
September 26th, 2006 at 6:32 pm
Straight up - you rock!