I’m compiling data on the average number of SaaS or other subscription based websites both businesses and consumers subscribe to. This includes anything from Salesforce.com on the business/enterprise end down to Wall Street Journal on the consumer side, and everything in between.
What type of web based applications are you willing to pay for? What is the value add or motivating factor that would make you pay for a web application?
Last week I did an interview with Startup Lucky to promote iLogon. For those of you who don’t know who StartupLucky is, I highly recommend checking them out, especially if you are a startup founder / entrepreneur! They do web video interviews with startups, entrepreneurs, investors, and internet personalities. @aronado (Aronado Placencia for you non Twitter folks) started the site and also does the interviews. If you spend any time on Twitter, you probably know who he is. Aronado (yes, that’s his real name — I asked!) is a high energy guy and a lot of fun to talk to. I’m a big fan of his after following him on Twitter for about 6 months.
Anyway, I’m pretty happy with how the interview went and wanted to share it with my network. I’ve emailed the link to a number of people, and posting it here as well. Check it out and let me know what you think.
http://startuplucky.com/2009/04/28/ilogoncom-a-startup-that-manages-your-online-subscriptions/
Finally!! After several delays and a lot of stress, we launched the beta release. We certainly have a lot more work to do, but we now have steady traffic on the site and users. My goal is to drive traffic to the site, which will lead to beta accounts, which will then translate to paying production users. The plan is in place, and things are looking good. We still need to sign up a bunch more partners, but that is also going well. We should easily hit our goal of 20 partners minimum for the production release. The goal for the end of the year is 50 partners, and this also looks very achievable.
Steps to sign up for iLogon Beta:
1) Go to www.ilogon.com and click “Product Finder”
2) Select the iLogon Account product and add to cart
3) Select any additional services you want to add to your account
4) Complete the checkout process (in the future this will automatically redirect you to the main page where your services are located)
5) When you return to iLogon, enter your username/password, and you will be presented with the main page which shows the services you have access to
That’s all there is to it. Please email us any feedback or questions you have to beta@ilogon.com. We still have some work to do, but we’re excited about getting the beta release out there, and hearing what you think about iLogon.
While working on the business model for iLogon, I noticed an interesting trend developing on the web. Is Web 2.0 a repeat of the dot com crash? Once again we started seeing ridiculous valuations on companies that generate little or no revenue. The difference this time? Users are King. If you have a lot of users, and more specifically, a lot of key information about the users, you may have been sitting on a gold mine. Look at the valuations for Facebook, Linkedin, and MySpace. While constantly watching the VC activity throughout ‘08 (preparing for my own funding campaign) I saw one “cool” or “sexy” Web 2.0 application after another get funded. The problem I saw was, cool and sexy is not a business model. Where was the revenue going to come from? Even Facebook, with their 120M users can’t sustain themselves on advertising alone. When you read between the lines, you realize pretty quickly that the plan is to go get a bunch of users and figure out how to monetize them later.
So this brings me to my earlier point. When I saw this developing over the last few years, it made me even more confident that the iLogon model was rock solid. While ‘08 was not necessarily the best time to get funded if you didn’t have the next “me too” social network or freemium web app, it was a great time to bootstrap iLogon. And a funny thing happened on the way to the iLogon beta launch. The economy tanked, the stock market took a crap, and VCs closed their wallets. This lead to increased pressure to generate revenue for startups AND established companies, which in turn forced these companies to scrap the free model in many cases. Google and Jott Networks are 2 examples that stand out for me, but there are many more coming.
http://www.techcrunch.com/2009/01/23/google-puts-the-squeeze-on-free-apps/
http://www.techcrunch.com/2009/01/13/no-more-free-jott-for-you/
So, how exactly does this help iLogon? For those not familiar with the iLogon solution, it’s a web application for aggregating and managing online subscriptions, more specifically, fee based subscriptions. We’re signing up partners who offered fee based services at a steady pace, and are in the process of becoming a Google reseller. The iLogon app let’s users build a “package” of subscriptions sites, and provides single sign-on, consolidated billing, reviews and recommendations, and perhaps the best feature – gives the user a discount on the subscription fees. The more sites out there that are fee based, the better for iLogon, especially if the industry continues to move in that direction.
The bottom line? The web appears to be trending towards fee based content and services over free, and iLogon is positioned well to take advantage of this trend. We launch our beta release by the end of January, and will be in full production by the end of Q1. Perfect timing?
http://www.ilogon.com/default.aspx
I recently sent an email to everyone who has contributed to or inquired about the status of iLogon since we started last summer. I thought I would post a copy of that email here to record our current status and get access to anyone who is interested. Many people have helped iLogon out in one way or another, and for that I am forever grateful! 2009 is shaping up to be a great year for iLogon, and I have very aggressive goals that I am confident we can achieve.
Below is an update on our status and plans for the year. For those who are interested, please read on and provide any feedback you may have. I’m always looking for advice, thoughts and ideas on the business. If you only had minimal interaction with iLogon or don’t even remember who we are (could that possibly be true?? 
I offer thanks for any help you have provided, and won’t take any more of your time.
- We are launching our Beta Release later this month. By the end of Q1 we will start signing up production users and generating revenue.
- We have about 10 partners with signed contracts, and more coming in every week. We are well on our way to the goal of 100 by the end of ’09.
- We are finalizing a deal now with Merchants Information Solutions (Identity Theft Protection/Credit Monitoring) to include their basic monitoring service for free when users sign up for iLogon. This is a great deal for us and our customers and will contribute to our viral marketing campaign.
- We are closing a deal now to bring in a Chief Strategy Officer who will help us land some “big name” accounts we have targeted. I’ll provide more detail here later.
- Some of the key accounts we have signed up or are in progress of signing up include: ESPN, Rotowire, TrainingPeaks, Dimdim, Photobucket, Merchants Information Solutions, Wine Library, Box.net, Britannica, Zagat, Motley Fool, Wall Street Journal, and many others.
- Our Marketing Campaign has started, but will pick up in full force once we launch. This includes viral, word of mouth, traditional marketing, social media, and every available channel for getting the message out and acquiring users. We’re growing our presence on social media platforms, building relationships with bloggers and press, collecting beta users, and getting the word out, all in anticipation of the launch.
- Funding continues to be a challenge, but we have some good prospects, and continue to work hard on extending our runway. Between our early stage status and the state of the economy, it has been difficult to raise money. However, we have secured enough seed funding to bootstrap our way to launch. Hitting these key milestones gets us closer to revenue and funding, both of which will enable us to grow faster and hit our goals.
I’ve been thinking and writing a lot lately on the economy and how it is affecting startups. This is always on my mind. I’ve been pretty positive and bullish on how I think things will turn out. Last week, I attended the Arizona Entrepreneurship Conference, and was blown away by one presentation in particular. First off, the entire conference was great, but the best part by far was Gary Vaynerchuk. He is my new hero!!!
Here’s a link to a video of the presentation.
http://www.vimeo.com/groups/azec/videos/2293651
I haven’t watched it yet, so I don’t know how good the quality is, but I’m sure you’ll get the point. He is full of passion, humor, insight, knowledge, and just tells it like it is. It is rare that I am this affected by a speaker.
So this brings me to my point, though I may ramble and wander a bit in this post. There is never a good or bad time to launch a startup. The odds always suck, they are never in your favor. This was a point Gary made several times. If you have a great idea and great people, you have a good chance to be successful. If you don’t, you don’t!! It’s obvious and common sense, but you just don’t hear enough people say this.
As a Startup founder, I get a lot of advice and feedback. This is a good thing, and I welcome it all. However, if one more person tells me that I need traction to get funding, or that 80% or more of all startups fail, I’m gonna snap!! I think people must confuse humility and willingness to listen to all feedback as naivety or inexperience. I’m not sure, but I’m getting close to my boiling point. Look, I COMPLETELY understand the risks of a startup. 80-90% fail, of the companies who submit a business plan to an investor, only 1 in a 100 (or less) even get their plan read by a partner. The economy sucks now. It is hard to get funded before you have customers and revenue. YES, I get it. I knew this before I started. I knew this before I left my job of 8 years. I knew this before the economy went to shit. Maybe only 1 in 10 succeed. Maybe only 1 in 1,000 get funded w/o revenue and a fully launched product. But, the thing that is going to make me successful is that I fully believe I am that one! How can you succeed if you don’t believe that and work your ass off to make it happen?
So please, give me advice. Tell me what you don’t like about the business model. Be direct, I can take it. But don’t start quoting statistics and telling me how risky this is. If I hadn’t fully processed that information and done my risk analysis/contingency planning before starting my business, I’m an idiot and it won’t do any good anyway.
I just read a comment on a story in Techcrunch that got me thinking about the current financial and business downturn we are in. (ok, it’s probably more of a disaster, but I’m trying to be positive).
Anyway, Web 2.0 Bubble commented as follows:
Layoff is a corporate version of “On Diet”. If you eat too much, you blow up. There are many unsustainable “me-too” 2.0 startups. Supply >> Demand. The marketplace cannot hold that many duplicates.
Here’s the full post with all comments:
http://www.techcrunch.com/2008/10/17/keeping-count-the-techcrunch-layoff-tracker/
Anyway, I’m not sure of Web 2.0 Bubble’s complete intent here, but allow me to give my take on this. I like this analogy. It makes perfect sense to me! I exercise regularly, eat right, take vitamins, etc. Therefore I am very healthy, don’t get sick often, and have few if any swings in my physical well being. We always hear that there is no such thing as a diet. You have to live a healthy lifestyle ALL the time. You can’t eat like a pig and starve yourself later. Not only is it unhealthy, but it creates a viscous circle of gain weight, lose weight, gain more back.
Hmm, do you see my analogy taking shape now? I think the current economy, the housing boom and bust, and the dot com bubble bursting are all based on this unhealthy lifestyle. You cannot overeat and practice unhealthy habbits without an eventual crash. It could be a heart attack or bankruptcy.
Companies that didn’t overspend, overhire, AND have a solid business plan should survive. They’ve been living a healthy lifestyle. Those that havent?? Well you can find many of them in the Techcrunch layoff tracker…
As a follow up to my last post, I want to revisit the topic of launching a startup in this economy. Despite all the doom and gloom, there is some good news. See the following:
http://permanentrecord.firstround.com/2008/10/next-we-drink-c.html
http://500hats.typepad.com/500blogs/2008/10/fear-is-the-min.html#comments
This doesn’t mean happy times are here again, but it does point to some positives we can take from this mess. Let’s not forget survival of the fittest. Perhaps thinning the startup herd is not such a bad thing. I think iLogon is a great idea that will be widly successful. But then again, doesn’t EVERY entreprenuer think the same of their startup? If the weaker startups can’t survive these times, that should help build a stronger market for the stronger early stage companies.
Despite the stock market, business credit, and gas prices, consumers are still spending money on the web (as Dave points out in his post). Consumers are still spending money everywhere for that matter. I still have to wait in line at most stores in the mall, it still takes over 5 hours to play a round of golf because they overbooked, and there is no shortage of consumers on the web.
I think it will be harder to get money, especially credit, but otherwise this could actually prove to be a good time to start up. I am bootstrapping my business venture now, and expect to do so until the end of the year. (while still trying to raise money, just expecting it won’t happen until January)
Again, if I am not right about the future potential of iLogon, then I’ll fail and learn some valuable lessons. Though I don’t see that happening…
So after about 20 years of working for software, internet, and techonology companies, I decided to go out on my own and launch my startup. It just so happens that I chose the worst financial and economic situation of my lifetime to do it. Our government has proven it has no clue how to fix this, after they were a major contributor to this mess. Wall street is in a death spiral, and the real estate market is horrendous.
Does this mean the market is equally bad for us startups? Are there investors out there willing to take a chance? Here are a few links with differering opinions:
http://www.techcrunch.com/2008/10/10/an-ignoble-but-much-needed-end-to-web-20/
http://www.techcrunch.com/2008/10/10/sequoia-capitals-56-slide-powerpoint-presentation-of-doom/
http://www.techcrunch.com/2008/10/09/benchmark-capital-advises-startups-to-conserve-capital/
http://tinycrunch.com/2008/10/10/why-i-dont-buy-into-the-web-20-death-tinycrunch/
I’m still not sure what exactly all this doom and gloom means for startups. On one hand, credit is scarce, and people with money are starting to panic. However, an early stage startup is now no more risky than the traditional investment options.
I have a great business idea, and the right people to make it happen. Regardless of what happens in the economy and financial infrastructure, I’m pushing ahead with my startup. I’ll keep you posted on the results…
I just read Jason Nazr’s Blog Post “10 Lessons Startups Can Learn From Superheroes” and loved it! (http://www.jasonnazar.com/2008/09/23/10-lessons-startups-can-learn-from-superheros/).
Jason suggests replacing Superheroes with your organization name, and you have the foundation for a great set of core values for your organization. Here’s my firt pass at this, but I will continue to build on it. I think this is a great framework for building a successful startup.
Never Give Up
Like Batman, you have to keep pressing on to the very last breath. Challenges are overcome by wholeheartedly committing to unrelenting persistence.
Always Get the Job Done
There are no excuses if you don’t save the girl from the burning house. There are just results, not reasons, you either save the day or you don’t. Gray area is for Kafka not comic heros.
We Are the Best at What We Do
Flash is the fastest and we all know it. . If you’re the back end developer, you are the best developer in the world, and everyone on your team knows it. Let great talent excel in areas where their superpowers are most needed.
We Are Crystal Clear of our Purpose
Captain Marvel may be a cheeseball, but he knows what he stands for. Startups die when they are not clear on their mission.
We Are NOT Flawless
Superheros have flaws, every member of your team will also. The goal is not perfection, it’s the pursuit of perfection.
We Do Not Seek Glory…But We Get it Anyway
Don’t do it because you want the attention.
If you do it right, you’ll get it anyway.
We Help Others
Superheroes help people by solving problems. Startups should be obsessed NOT with themselves, but with how they are going to help other people and solve their issues.
We Can Do it By Ourselves But Are More Powerful in Teams
You always have to have each other’s back. Its you vs. the world and brining together your own team of superheroes, and the mutual respect, loyalty, and camaraderie of that team is vital.
Our True Strength Comes From Our Character
No matter how super you think you are, you’re strength comes from your character not your talent. Be courageous, be respectful, be honorable, be selfless.
We Accomplish Huge Feats
The same effort it takes to start a lemonade stand or college club, is the same raw effort it takes to change the world. Your goal is not to build a product or get traffic… Your goal is to accomplish the most amazing feat imaginable. Make the Product, Save the World.
