Today’s roundtable overlapped with the Italy – Slovakia World Cup soccer game, which from what I can tell was quite exciting, albeit very disappointing for the reigning champions! Michael Jastram started off by presenting ProR , an open-source platform to manage the RFQ process for automotive parts manufacturers and suppliers. Michael has an European Union grant for the next 18 months to build this platform, and intends to offer integration services and premium functionality on top of it to monetize it. His presentation was clear and concise, and he has good connections into the automotive industry, through which he expects to be able to scope out the functionality of the system relatively easily. Sponsor There are about 6 major manufacturers and 600 smaller parts manufacturers who feed into these companies. We discussed average deal sizes for the integration projects, which Michael estimates between €10,000-50,000. This would be a very reasonable way to monetize the platform and build a several million dollars a year business over the next three years. I found Michael’s strategy robust and well thought through. He used me as a sounding board to verify his assumptions. Michael came to the session with a good deal of homework done, which made it a smooth discussion with a very clear execution roadmap. I gave him several pointers to open source case studies, including SugarCRM , CollabNet , SpringSource , and DimDim , which, of course, is our host for the 1M/1M roundtables. Norton Scientific Then Bryan Webb pitched Norton Scientific , which is a protein aggregation monitoring system that helps with drug discovery. Bryan’s target market is the 3,500 chemistry labs worldwide, adding up to a TAM of about $250 million. The product is 12 weeks from being ready, and will be sold through distributors at $8,000 per unit. Bryan seems to have identified a well-defined niche, and has designed a product that costs $1,000 to build. Distributors will be paying $6,000 per unit, making $5,000 profit per unit. There are some short-term cash flow issues with this business, but clearly, there is a business here that can get to break-even relatively quickly. With some seed capital, the business will scale just fine. I plan to invite Bryan to be featured on my Incubation Radar series, and introduce him to some angel investors. Relationships Matter Now Next, Denise Barreto started off by introducing Relationships Matter Now, a Web portal for wellness programs that want to offer relationship advice to employees of corporations. I’m afraid I did not find the value proposition convincing, and advised her to go talk to at least 50 corporate HR managers in charge of wellness programs to validate her idea before she quits her day job. Giant Media Up last was David Segura with Giant Media , discussing his viral video marketing company which did $90,000 last month in services revenue. David is exploring ways to manage his cash-flow challenges so that he can invest some money in building a widget or two that transforms Giant Media to more of a technology company, as opposed to a pure services company. I tend to really like services businesses that achieve deep customer intimacy and build products based on that knowledge and experience. I am curious to see what kind of widgets David comes up with over the next few months, and again, as this business develops, we will feature the company in my Incubation Radar and expose it to seed investors. While I am not sure about Denise’s venture, the others three businesses – ProR, Norton Scientific, and Giant Media – I am reasonably sure have the potential to reach the $1 million mark with good execution and intelligent maneuvering. I started doing my free Online Strategy Roundtables for entrepreneurs in the fall of 2008. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million ( 1M/1M ). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. In addition, we are offering entrepreneurs access to investors and customers through our recently launched our 1M/1M Incubation Radar series . You can pitch to be featured on my blog following these instructions . The recording of this roundtable can be found here . Recordings of previous roundtables are all available here . You can register for the next roundtable here . Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies, writes a business blog, Sramana Mitra on Strategy , and runs the 1M/1M initiative. She has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her Entrepreneur Journeys book series, Entrepreneur Journeys , Bootstrapping: Weapon Of Mass Reconstruction , Positioning: How To Test, Validate, and Bring Your Idea To Market and her latest volume Innovation: Need Of The Hour , as well as Vision India 2020 , are all available from Amazon. Photo by Svilen Milev Discuss

Click here to read more

Whether or not you believe that venture capital is broken , the necessity of funding startups still exists. One alternative to traditional funding models is “crowdfunding” – crowdsourcing the fundraising process. Like crowdsourcing, crowdfunding is based on the idea of the ” wisdom of crowds .” And crowdfunding contends that “the crowd” can be a better source for financial support than traditional funding avenues. As these traditional avenues are often criticized for being based on “who you know” as much as “what you do,” crowdfunding promises fundraising that is more transparent, more collaborative, more accessible, and more global. Sponsor This Innovation Series is brought to you by Lexus . Disrupting the Relationship Between Investor and Entrepreneur But as it is a different funding model, crowdfunding means a different sort of relationship between the investor and the entrepreneur. With many (but not all) crowdfunding sites, startups retain full ownership of their projects. Investors receive credit on the website, and sometimes a thank-you gift (a commemorative t-shirt, a free subscription or software copy, and the like). But there are no stock certificates, no seat on the Board of Directors, no equity. While crowdfunding does provide entrepreneurs with needed funding, startups who raise money this way might miss out on some of other things that investors bring to the table, including business advice and connections. But arguably this is a vicious circle: In order to get that investor backing and to take advantage of investors’ connections, you often need pretty strong connections in the first place. According to John Rooney, CEO for the startup Jakaya , which is seeking funding for its collaboration tool via IndieGoGo , finding investors can be very challenging for those outside the tech world’s “inner circles.” Crowdfunding, with Due Diligence GrowVC is one crowdfunding site that aims to foster both the startup and the investor community. GrowVC is run on a subscription-based model, where subscribers make the decisions about what gets funded. Unlike some of the other crowdfunding services, GrowVC does due diligence on the companies that are listed there. And this diligence is often pointed to as a flaw of the crowdfunding process. While a startup might be able to raise money using crowdfunding sites, these services do not necessite that these companies have a business plan or a viable product. This is among the criticisms lobbed at what is perhaps crowdfunding’s most well known success story, the Diaspora Project . Although Diaspora was able to raise well over its initial $10,000 goal – it’s actually raised more than $200,000 – this is still no guarantee that Diaspora can build a viable alternative to Facebook. And while Diaspora certainly capitalized on the anti-Facebook sentiment, arguably its project would have not received such a positive response had it not been for the press coverage they’ve received. Several other alternatives to Facebook, for example – many of which actually have a product – also appear on crowdfunding sites, but have received neither the press nor the money that Diaspora has. “Fund us if you believe in us,” says Jakaya’s John Rooney. And while “believing in a startup” is a prerequisite before any investor writes a check, crowdfunding does offer a chance for startups to expand that investor base outside the traditional investment circles. And as there can’t possibly be as many VC managers as there are good ideas, that’s not necessarily a bad thing. Discuss

Click here to read more

The top story this week was about tools, like software developer kits and sensors, that let you hook things up to the Internet. We also continued our exploration of the significant Internet trends of 2010: Tattoos are now a part of the Internet of Things ; iPhone 4 is going to change augmented reality ; and Marshall Kirkpatrick talks about the myths, realities and future of the real-time Web . Read on for more. Sponsor Stories of the Week 6 Geeky Devices Connecting the Internet to Your Things iPhone Letdown? 8 Things Apple Didn’t Announce Updated Applications Disappearing from Android Market How iPhone 4 Could Change Augmented Reality Apple’s Biggest News: An Open Standard for Video Calls More coverage and analysis from ReadWriteWeb Real-Time Web How to Manage Your News Consumption in the Real-Time Web Era [Updated] Google’s New Secure Search Might Force Schools to Block Google Myths, Realities & the Future of the Real-Time Web More Real-Time Web coverage . Don’t miss the next wave of opportunity on the Web supported by real-time technology! Get ReadWriteWeb’s report, The Real-Time Web and its Future . Augmented Reality Military Grade Augmented Reality Could Redefine Modern Warfare How iPhone 4 Could Change Augmented Reality More Augmented Reality coverage Augmented Reality for Marketers and Developers: Our Newest Research Report We’re pleased to announce ReadWriteWeb’s latest premium report, Augmented Reality for Marketers and Developers: Analysis of the Leaders, the Challenges and the Future . This report will help you develop a sophisticated understanding of Augmented Reality (AR), the mobile and Web technology that places data on top of a user’s view of the physical world. The research included will help you decrease your AR development time to market by learning from the first wave of early adopters. AR offers a new marketing and product paradigm for a high impact, high value customer experience. More than 1,000 AR campaigns were kicked-off last year and we expect to see many more in 2010. In this report, we profile key AR development companies, their campaigns as well as development lessons learned. For more information or to buy the report, visit here . Mobile Web Updated Applications Disappearing from Android Market Sick of Useless Badges and Mayorships? Topguest Makes Check-ins Meaningful Mobile Apps to Hit $32 Billion in Five Years More Mobile Web coverage Internet of Things Internet of Tattoos 6 Geeky Devices Connecting the Internet to Your Things More Internet of Things coverage Check Out The ReadWriteWeb iPhone App We recently launched the official ReadWriteWeb iPhone app . As well as enabling you to read ReadWriteWeb while on the go or lying on the couch, we’ve made it easy to share ReadWriteWeb posts directly from your iPhone, on Twitter and Facebook. You can also follow the RWW team on Twitter, directly from the app. We invite you to download it now from iTunes . ReadWriteStart Our channel ReadWriteStart , sponsored by Microsoft BizSpark , is dedicated to profiling startups and entrepreneurs. A College Student and a CEO: A Profile of 21 Year Old Entrepreneur Jay Rodrigues Tips for Making a Screencast for Your Startup New Media Ventures Launches a National Network of Progressive Angel Investors ReadWriteCloud Our channel ReadWriteCloud , sponsored by VMware and Intel, is dedicated to Virtualization and Cloud Computing. Has IBM Just Launched A Cloud Currency? The Battle for Cloud-Based Education Services Heats Up as Kentucky Deploys Microsoft’s Live@edu Web Apps Are One Thing But What About Security on the Smart Grid? ReadWriteEnterprise Our channel ReadWriteEnterprise is devoted to ‘enterprise 2.0′ and using social software inside organizations. Microsoft Rolls Out Office Web Apps iPhone 4 Gets Improved Exchange, VPN and Enterprise Support Enjoy your weekend everyone. Subscribe to Weekly Wrap-up You can subscribe to the Weekly Wrap-up by RSS or by email below. RWW Weekly Wrap-up Email Subscription form: Discuss

Click here to read more

I am very pleased with the conversations I had with the four entrepreneurs who presented at today’s Online Strategy Roundtable . All are going after problems and then looking for solutions, as opposed to presenting solutions that are looking for problems. While not every business solves a problem per se, all do cater to a need of some sort. Once you identify the potential customer who truly needs your product or service in the narrowest of terms, then you can zero in on the best way to reach them. Only after you sharply define your market segment can you develop a successful go to market strategy. Sponsor Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy . She has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her Entrepreneur Journeys book series, Entrepreneur Journeys , Bootstrapping: Weapon Of Mass Reconstruction , Positioning: How To Test, Validate, and Bring Your Idea To Market and her latest volume Innovation: Need Of The Hour , as well as Vision India 2020 , are all available from Amazon. Mitra is also a columnist for Forbes and runs the 1M/1M initiative. Matt Sidhom started off by introducing MyTestAnswers.com , which offers video solutions to questions on standardized tests. While coaching in Maine, he realized the students didn’t have easy access to test prep services beyond buying a book. His aim is to give everyone, including those living outside of metropolitan areas, access to affordable standardized test prep. Each video can be viewed on an iPod, iPhone or browser, and is self-contained. Through combining audio and graphics, his videos explain which answer is correct and why, rather than just providing an answer key like the prep books. Launched in 2009, he currently offers 1,700-plus SAT prep videos and 800-plus LSAT prep videos. Which leads to the first problem: The market segment preparing for the SATs is completely different from the segment preparing for the LSATs and I’m afraid too much time has been wasted trying to reach both. Matt says he has more free customers for the SAT prep, so I recommend he builds that up as his primary business and puts the LSAT business on hold for now. I also don’t think his pricing model that offers each video for $0.99 is right. His 8% conversion rate from freemium to paying customer is not bad at all (the average is 2-4%). I suggest he does some sort of focus group with existing free and paying customers to find the most appealing pricing model. I also recommend Matt reads up on Archipelago Learning and understand their strategy. Archipelago could also be a possible channel for him to go to market through. Next, Juan Perez presented Nature’s Beauty, a line of creams, shampoos and soaps made with natural extracts (such as cream of avocado oil and garlic shampoo) that he would like to introduce to the U.S. market starting in San Diego. These products are produced in Mexico and he claims the benefits are well known to women in Mexico. Juan says his target segment is Hispanic women, ages 20-60, in middle- to upper-income levels, which definitely needs to be narrowed down. This is much too broad. He planned to introduce the product as giveaways at local swap meets, until we came to realize that those attending such events are by and large not middle and upper income level women. You cannot test your product with the wrong market segment. Your experiment will come back with tons of false negatives or false positives. Juan needs to validate who his target market segment is, and then go where they can be found to test the products. I recommend he read the story of TheFind , an excellent example of a business zeroing in on its customers precisely. Aaron Moskowitz was up next to present Capchure , a startup that wants to bring the lead generation model and all its monetization potential to the blogosphere. Capchure adds a hover-over form that readers can opt into as they touch highlighted keywords on a blog page. Through his research, he has learned that bloggers are open to this depending on the price, and advertisers are willing to experiment with it. It certainly sounds like a better alternative to CPM, which doesn’t monetize well at all, and is something that the big ad networks should be interested in. He has identified the video game segment as the one with the most potential for his service, and also bloggers in the technology space. My suggestion is for Aaron to consider working with the big advertising networks already in those verticals (Federated, Adify, IDG in Tech), and get them to buy into his service while he remains the tech provider who runs the service. The alternative is for him to become an ad network himself, but that requires core competency in reaching advertisers which I did not get the sense that he has. Aaron asked me if I would use his service for my blog. The answer: It depends on which advertisers you bring to the table. I suspect Richard, Om and Arrington would all say the same thing. Up last was Ram Kumar, who discussed techcello’s cellosaas , a shrink-wrapped SaaS framework on which you can develop, host and maintain your cloud-ready application from anywhere. Built on standard technologies, developers can start coding the first day with this system, saving on custom development time and maintenance. He went into too much detail explaining the licensing and pricing strategy and had to be reeled in, but overall I like his ideas. He was concerned about going against the verticalization trend, but I’m completely comfortable with his strategy of focusing on the horizontal layer. Since he plans to do online promotions rather than employ a direct sales team, I pointed out that they have a great opportunity to use an open-source framework as a means to acquire customers. He should offer a free version along with the paid version as outlined in this story about Dimdim . I also suggest he explores partnering with outsourced product development companies like Persistent Systems . I think he’ll find the enterprise IT companies harder to reach without systems integrator intermediaries. I started doing my free Online Strategy Roundtables for entrepreneurs in the fall of 2008. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million ( 1M/1M ). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. In addition, we are offering entrepreneurs access to investors and customers through our substantial channels. Last week we launched our 1M/1M Incubation Radar series , and you can also read about several other 1M/1M entrepreneurs on my recent Forbes column, These Companies Are Built To Enjoy . Recordings of previous roundtables are all available here . You can register for the next roundtable here . Photo by ilco . Discuss

Click here to read more

Today quite a variety of entrepreneurs presented their business ideas at my Online Strategy Roundtables . Several times I brought up how precious our time is and we need to treat it as such. So many people become enamored with technology and the building of the product before they ever think to validate that this is a business service or product that a customer wants to pay for. I’ve seen too many entrepreneurs wasting precious years of their lives, and I sincerely try to discourage anyone from wasting his or her time on an idea that does not have legs based on concrete customer feedback. One of the entrepreneurs said he thinks of me as the Simon Cowell for entrepreneurs after listening to some recordings of previous roundtables. I think my advice is only valuable if I’m being honest and direct. Plus, I don’t want to waste my precious time either! Sponsor Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies and writes a business blog, Sramana Mitra on Strategy . She has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her Entrepreneur Journeys book series, Entrepreneur Journeys , Bootstrapping: Weapon Of Mass Reconstruction , Positioning: How To Test, Validate, and Bring Your Idea To Market and her latest volume Innovation: Need Of The Hour , as well as Vision India 2020 , are all available from Amazon. Mitra is also a columnist for Forbes and runs the 1M/1M initiative. Dawson Fercho started off by introducing Temetic Research , an software services company that offers advanced tools based on digital sociology that can offer a deeper understanding of social media buzz (beyond just words) than social listening and monitoring products currently do. Launched in January, they already have half a dozen communications firms who deal in brand awareness and management on board as clients. They offer a base analysis report as a service, and they hope those who like the report will become clients of either the software products or of their ongoing service. Dawson asked if he should position his business as being similar to social monitoring to help potential clients fit them into a category. He tells me there are several metrics that his technology is able to track because of the algorithmic sophistication that others cannot, so my advice is to lead with those metrics to differentiate. He needs to ask customers if they are interested in measuring X, Y, and Z to validate that these metrics are indeed of interest to them. Dawson said all of their money is going into development, and my advice is to ramp up the base analysis service to help fund their development and continue to bootstrap. I also suggested he explore partnering with SaaS PR businesses like Vocus PR who I think will find this technology intriguing. I asked him to check out my case study on Vocus PR . Next, Griffin Boyce presented PsycView , a software to help eliminate the distance between doctors and patients. Griffin discussed how this software can help doctors manage patients over great distances, and also how patients can use it to get treatment from rural and frontier areas. Griffin is trying to do too many things at once with his business and is going in too many directions. He spoke about having an iPhone application to serve people living in frontier areas, but the iPhone is not widely used in such places. He said he thinks addicts are a strong segment to target, but I don’t think people in the depths of addiction will be checking their phones for solutions. I think there could be something interesting in Griffin’s pool of ideas, but he needs to do a lot more focused work to figure out what it is. I told him it’s like an uncut diamond that still needs to be shaped and pared down to get to the gem. He needs to focus his software on doing one thing really well – zero in on one idea, a specific disease or whatever. Spraying and praying does not work. I suggest using the Clarify Your Story framework to focus. Gustavo Hernando was up next to present daFoodie , a website that allows diners in Orlando to share photos of their plate of food at a restaurant to help others decide where to eat. He sees the sharing of such photos as a growing trend and does not plan to include ratings or reviews. I’m very concerned that there is no reasonable way to make money doing this. I question how many people base their dining decision on photos alone rather than reviews. Perhaps he could partner with some other review sites, but what will keep them from doing this themselves? I hate to discourage any entrepreneur, but Gustavo may be better off using his considerable skills elsewhere. It is very expensive to go to market in this area; OpenTable has spent a ton of money. I hope Gustavo will find an opportunity that will monetize better for him. Then we had Rudy Santamaria who has designed a line of kids clothing called Look Mommy! Clothing . These clothes convey positive images depicting what a child would like to be when he or she grows up. He has sold 750 of these shirts by hand in the past six months, validating that this is something parents are interested in buying for their child. If he would like this business to scale, the next step is to figure out how to sell these shirts without Rudy being physically involved in the process. Since baseball player and rock star shirts are his best selling, I suggest he start exploring what the best channels are for each category and remain very focused on each niche. Personally, I’m aware of a high level effort to interest young girls in science, so I suggested he do a Look Mommy, I’m A Scientist design for girls and target the organizations that are leading this movement. Up last was Matt Walters for Sports Spray , a line of water resistant spray products to help amateur and professional athletes excel. His product line includes a stick spray (to enhance grip), slip spray (for under padding and blisters), no sweat spray (antiperspirant for hands or feet), more sweat spray (enhances workout and weight loss), and shoe spray (to keep from slipping). He is ready to go to market but is wondering if he should lead with a product whose competition retailers would already be familiar with or should he introduce the slip spray product, which is totally unique. I suggest he start with the new, more differentiated product, the slip spray, and manufacture that first. He should focus all the branding around this new product and getting it reviewed by bloggers and social media influencers interested in sports. We discussed very targeted advertising to coaches since he believes it is a cost-effective and reasonably priced channel. I suggested he validates that the demand for this product exists by selling online before chasing retailers to get broader distribution. I started doing my free Online Strategy Roundtables for entrepreneurs in the fall of 2008. These roundtables are the cornerstone programming of a global initiative that I have started called One Million by One Million ( 1M/1M ). Its mission is to help a million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. In 1M/1M, I teach the EJ Methodology which is based on my Entrepreneur Journeys research, and emphasize bootstrapping, idea validation, and crisp positioning as some of the core principles of building strong fundamentals in early stage ventures. In addition, we are offering entrepreneurs access to investors and customers through our substantial channels. Our newly launched 1M/1M Incubation Radar series this week profiles La Grande Dame , and you can also read about several other 1M/1M entrepreneurs on my Forbes column, These Companies Are Built To Enjoy . You can find the recording of this roundtable session here . Recordings of previous roundtables are all available here . You can register for the next roundtable here . Discuss

Click here to read more