Five Tips For Internet Startup Investors
“They don’t get it,” Alan Fitzpatrick CEO of mailVU told me over a recent lunch. Alan’s successful Charlotte, North Carolina Internet startup mailVU isn’t getting the investor traction it deserves. Reaction with influential early adopters isn’t a problem. mailVU’s brilliant Web 2.0 viral marketing strategy – give away their B2C tool and focus on selling B2B via content marketing to develop ever increasing awareness – is loved by evangelical early adopters. “We will reach a million users next year,” Alan shared for my Hope, Heroes and Startups profile (coming soon).
It’s so damn complex. If you ever think you have the solution to this, you’re wrong and you’re dangerous.
H. R. McMaster, author of Dereliction of Duty
The web is damn complex too. How can we function in what Hollywood writer William Goldman famously defined as a “nobody knows nothing” world? Caveat sated here are Five Internet Startup Investor Tips to keep in mind before writing big checks:
Tips #1: Certainty Is Not Your Friend So Don’t Seek It
The web functions more like beehives or ant colonies than static business models. Organic things change frequently and in response to billions of stimuli you will never know and can’t discover. Feedback loops are more important than business rules and inflexibility is death. Invest in humble organizations living by Tip #2.
Tip #2: Failures Matter So Fail Early And Often
When you find a team who extols failure, stays together, learns and fails again such as Carrboro, North Carolina's New Media Campaigns invest in them. The only winning strategy in a lively organic environment is Darwin-based survival via natural selection on speed. Buy a failing team who is learning over the winning inflexible team.
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