There has been a lot of bad news lately with all of the startup layoffs and the “economic crisis”. TechCrunch has gone as far as creating a layoff tracker. Robert Scoble is obviously tired of the bad news and wishes that someone could write some positive coverage of the current situation. I have already stated that I think it is time to adapt. However, I wanted to highlight the funding that has been finalized this week because it has not received nearly as much press.
- Wix announces $3.5 million in venture funding
- V.i. Labs snags $4 million in a third round of funding
- Eventful has a new partnership with Ticketmaster and gets another $10 million in funding
- Ignighter snaps up $1.2 million in angel funding
- FatTail lands $3.5 million in first round funding
- Booyah scores $4.5 million from Kleiner Perkins
Not surprisingly, most of this news is coming from VentureBeat as one of the few sites covering funding news. They also have a good article on how clean tech funding is plentiful. There were also a few acquisitions the past few days.
- Automattic continued its buying spree, grabbing PollDaddy
- Technorati moved more towards advertising by buying AdEngage
Lastly, there were some other excellent posts on the current startup situation. The SmoothSpan blog wonders why startups are running at a level where they can layoff 1/3.
It would seem to me that the goal for any startup should be creating an organization that wouldn’t survive if 1/3 of the people had to go. After all, startups should be lean and mean. They should be focused on being nimble and doing less with more.
This is consistent with many people’s view of a startup. Aren’t startups supposed to be running really lean? Well, SmoothSpan had the same idea:
Startups need to have laser like focus to succeed. They need to find leveraged ways of doing things. It’s useful to outsource anything outside the startup’s distinctive area of competence.
One example of a lean running organization is SocialMedian. Jason Goldberg has a very good post on what they are doing to avoid burning too much money too quickly. Jason has previously talked about how SocialMedian is being run, one of the core tenets being “force your startup to be resource constrained”.
From February to June our team consisted of myself … + 5 software developers in Pune, India. The only other significant costs we incurred was my monthly travel to Pune and some t-shirts for our early alpha users. We don’t have an office in NYC. I work from my kitchen table. We didn’t raise any VC money. Instead we raised small amounts of money from angel investors and a strategic partner. We raised a little bit at a time vs. one big raise.
One of the most surprising parts of this is that Jason does not have an office in the city, he works from his kitchen. Given that his developers are in India, this works well. He has also hired interns to help with the customer service. He easily could have hired an expensive community manager, but kept costs small by using interns. Even though the organization is small, they are growing rapidly. With the new Facebook integration and some other new features, they saw a dramatic change in their traffic:
Last week we doubled our page views vs. the week prior. We have added more registered users in the past week than in the previous 4 weeks combined. The engagement levels on socialmedian are off the chart and only increasing — regular repeate usage is the norm, and the level of comments, clips, and discussions is increases every week over week.
So, as you can see, all is not “doom and gloom” in the startup world. If you look around, some companies are still getting funding. Others may be cutting, but maybe they really needed to. Hopefully, we can get more balanced coverage from some other sites as well. Obviously, everything is not rosy, but sometimes you do need to highlight the good things.