Antonio Rodriguez in Mass High TechMHT Startup Advisor: From Outsourcing to Acquisition Finance
November 30, 2010
Mass High Tech
by Galen Moore
MHT Startup Adviser will close out the month of November with a few leftovers from the Thanksgiving holiday week to chew on. No turkeys here. No stuffing. Plenty of gravy. Plenty of sauce.
Furqan Nazeeri recaps his Founder Institute talk with John Prendergast, in which the two serial entrepreneurs explain why you should outsource everything.
“Many of you have heard of PlentyOfFish. It’s a dating website that is free for users and makes money from advertising. PlentyOfFish has 11 million registered users, is the #1 dating site in the UK and Canada and the #2 in the U.S. by audience share. But did you know that founder Markus Frind has just 3 employees for his $10MM+ revenue business? He basically outsources everything.”
But Matrix VC Antonio Rodriguez tells us about one thing you can’t outsource – and why that’s a problem for lean startups looking for seed funding.
“Today if you are working on any semi-interesting service you are also likely to want to support iPhone OS 3.x/4 out of the gate, Android 2.X, and likely also the iPad….So what was a 1 man effort in 2005 is now a 2-3 man job at minimum. And every entrepreneur who I meet who tells me they can outsource this is fooling themselves in much the same way that the MBAs who claim they can outsource technology do.”
Finally, Fred Wilson’s MBA Mondays series has wrapped up its deep dive into employee equity issues and is onto the next thing: acquisition finance.
“Google has $34bn in cash. Apple has $50bn in cash and short term investments. Microsoft has $44bn in cash and short term investments. eBay and Amazon each have more than $5bn. The numbers add up to a lot of buying power out there.
But just because they have the cash doesn’t mean they will use it. There are a number of factors that acquirers consider before pulling the trigger on an acquisition.”