Steve Wadsworth: There are two reasons why some of the other apps may not get the same level of traction. One is user interest. Games are universal. You get much more user engagement there. Secondly, I think a number of app publishers are leaving money on the table because of the model they’ve chosen. Let us look at the magazine business. Historically, their offline model has been advertising and subscriptions. They’ve moved online and to mobile with the same model. While subscriptions is a form of freemium model for monetization, it’s a highly limited model because you’re asking the user to make a very large decision. >>>
Earlier this year, Facebook acquired WhatsApp for a whopping $22 billion sparking interest in the mobile messaging industry. Soon after the acquisition, South Korean mobile messaging leader Line filed papers to list on the Tokyo Exchange and the NYSE earlier this fall. The company claimed that they would much rather follow the IPO route than be sold to a bigger player. But in a surprising move, Line went back on their earlier plans and announced that they would abandon their IPO.
A number of accelerators offer a good chunk of seed funding these days.
YCombinator, the best known of the lot, invests $120k in fewer than 100 startups, twice a year. For those ~100 slots, they get over 3000 applications. Companies are required to move to Silicon Valley for three months and YC takes 7% equity.
TechStars also offers about $120k in seed funding and takes 7-10% equity, and has offices in multiple cities.
Numerous accelerators offer $15-25k in funding around the world. That is the average at the lower end of the scale.
We just launched out Bootstrapping With A Paycheck book, the 11th volume in the Entrepreneur Journeys series. Here’s yet another instance of a very successful company being built in this mode.
Sramana Mitra: Let’s start at the beginning of your story. Where are you from? Where were you born and raised, and in what kind of circumstances?
Steve Liu: I was born in the United States. I was born in DC and lived in Virginia my whole life. My parents were immigrants but not your typical immigrants. My father came to UVA for his undergraduate studies. I grew up pretty typical with Asian parents. I’m sure you know what I’m talking about.
Sramana Mitra: Tell me more about how exactly that move played out.
Grant Kohler: We started to get some outside requests from clients who wanted to use our system to provide things other than just strokes. Two of the other service lines were based around trauma patients coming into the ER and patients that were possibly coded as septic patients. >>>
Steve Wadsworth: What our analytics is able to do is watch the user behavior in the app, and based on that behavior assess very quickly which bucket a user falls into. We then use predictive analytics to classify users. We also have engagement tools in that same solution that will provide the publisher the opportunity to further engage any given segment and drive them to monetization either through advertising or in-app purchase. That’s where this ends up going. It’s sophisticated but the freemium model requires that as each user is going to behave slightly differently. You need a sophisticated modeling and analytics capability to understand the behavior of your users, put them >>>
Bootstrapping your startup while holding onto a full-time job is plenty viable. We have numerous examples of very successful companies that were built in this mode.
Here are five entrepreneurs whose stories will give you lots of inspiration:
1. Girish Navani, CEO of eClinicalWorks: Girish has since built one of the leaders in cloud-based healthcare IT solutions including practice management, EMR, etc. The company forecasts over $300 million in revenue in 2014. Read my February 2010 Entrepreneur Journeys interview with him here. Also, a recent follow-up interview is here.
According to a Juniper Research report on the online music streaming industry, the online music market is projected to grow from $12.3 billion this year to $13.9 billion in 2019. The analyst believes that while the market is seeing intensifying competition from bigger brand players like Apple and Google, it is not necessarily seeing a significant growth in revenues. It means that online streaming players like Pandora (NYSE:P) will have to up the volume in terms of offerings to keep attracting a bigger customer base.