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With the announcement that The Social Network has won best picture in the golden globes, there is even more buzz than ever about people who feel like anyone can start a multi-billion dollar business. With reports of Facebook stock trading around a $70 Billion dollar valuation and Groupon preparing an IPO at $15 Billion – these entrepreneurs seem like absolute geniuses. The reality of the situation is however, much different than the media has portrayed.

1. Dumb luck meets opportunity

While I think Mark Zuckerberg is a bright guy (although he comes off very arrogant at times), Facebook would only be a shadow of what it is today without the help of Sean Parker of Napster fame. Sean is one of the driving forces behind subtle things such as changing from TheFacebook to just Facebook; to much larger things like the billion dollar contact list he carries which ultimately got Facebook the funding it needed to continue its upward ramp.

2. We are in a bubble

Being an entrepreneur myself I can sometimes be turned into a cynic instead of just seeing the blind optimism that often infects those built of our breed. I have been guilty of that far too often myself, and while I certainly think that entrepreneurs should be championed, we also need to occasionally step back and see what is going on in the marketplace and understand that bubbles happen and try to counter the inevitable “losses” that will eventually happen.

The kind of valuations that companies are getting right now are absurd, and stories of things such as Groupon attempting to acquire Hipster.com for a sub $10 million range BEFORE IT EVEN LAUNCHES are insanity. While this is fantastic news for companies who bring real value and innovation to the table, by offering them a chance to get the funding they need to keep going it creates a problem for the marketplace as a whole.

High valuations and easy liquidity for companies also means that a lot of stupid and redundant ideas are getting funded. This may not seem bad on the surface, and creates temporary jobs. However, those jobs are not needed and create an artificially good economy when there isn’t enough value to support it. As the cycle of bubbles starts to come down from emotional decisions to decisions based on metrics and returns these companies will get axed, liquidity will dry up and we will be in a tougher place than we started once again.

Those of you who know me also know that I spend a lot of my “down time” working on http://mybiggive.com, it is something I am passionate about and feel is very important for the industry. I have had the pleasure to work with some very talented individuals from programming and design backgrounds that have pulled something together worth writing home about. This is still a “small project” in the sense of it’s financial impact for causes but I am confident that if we keep iterating we can come up with something that really nails it. That being said I wanted to share you a few things I have learned along the way of getting this version out to the public.

#1 Getting a team of people to work together is difficult

I am sure you remember working with teams when you were in school (or currently experience this pain) that was supposed to get you “ready for the real world”. The biggest flaw I always felt in the school based team system is that no ever pulled their weight and one person ended up doing all the work because they were the person motivated to get a good grade. Ultimately the entire team benefits unfairly from the work done by a singular person.

Luckily lean startups are a different story, but that doesn’t mean they are all rainbows and lollipops. For this project most of my time has been spent with two developers and at least one designer (although the design capacity seems to be continually passed from one person to the next.) Throughout this experience the only people who have been working on this project have either been invested in the idea (as in they like what it is trying to do), just want to help me out, or some combination thereof. Communicating the needs and roles of each person has been a unique challenge even for a team this small because it has been my job as a project manager to understand the disciplines of expertise for each party and how to guide them towards my “big vision”. With any luck this big vision also aligns with my business development deals I have been working my tail off on securing, but more to come on that at a later date…

#2 The little things make a huge difference

The last version of MyBigGive was a decent milestone for us, but we really got the design wrong. The last website, while elegant was designed for a more content/corporate site and may end up being recycled into other projects I have at a later date, but it certainly wasn’t meeting the needs we had as a charitable shopping service. As we went through the process we realized that one of the major components missing was simplicity and the level of friction for sharing the service with friends.

The back-end was rebuilt from the ground up with this ideology in mind, that in order to win we had to convince users to share us and quickly understand WHY we existed. It sounds easy enough, but keeping the feature list and product flow simple is actually more difficult than created a feature rich experience when your team has talent (good problem to have). Some of the small things that are subtle but are having a major impact on our sharing metrics include the dynamic Tweet and FB Share buttons on our “Thank You” page that is shown after a customer shops for a cause. By dynamically slipping into the charity name for a preloaded Tweet or FB Post (via a Facebook Application) we are now able to create a shared experience that still feels relatively organic in the stream instead of a cut and dry advertisement. This means more for our users and makes the entire process more meaningful for our “super users”.

#3 Something good is not equal to something great

A smart friend of mine recently said “never settle – iteration is a way of life”. I don’t think I could have said it better myself, and this has always been my motto to life. NEVER SETTLE. I would like to think that I don’t settle with my projects, friends, significant others, purchases etc. If you want to create something great you have to be continually innovating and that is exactly what we plan on doing; we have hugely ambitious goals that will only come one step at a time by staying on the grind.

So that being said, I would really love any feedback you have on our redesign. You can check it out here: http://mybiggive.com. Comment below or @ reply me on Twitter!

Namesake, one of the more promising start-ups from California driven by a very bright and talented team. The founders Brian Norgard (co-founder of Ad.ly, Newroo) and Dan Gould. I had the delight of connecting with Brian Norgard recently and was able to talk with him about what the project nicknamed as the “LinkedIn killer” by some of its avid fans (which is an incredibly short list due to its uber exclusive beta testing period to date).

What I love

• The user interface is absolutely gorgeous
• It is simplistic, which means it is easier to convey its value proposition
• Builds around your existing social ties (Twitter, Facebook, LinkedIn, Youtube)
• Real time opportunity routing
• Endorsement graph

What I don’t (aka feature wish list)

• Some kind of quality score and search-able list for routed opportunities as the community grows
• An infinite scroll type feature to see more than just the last 3 things someone posted

I can’t help but wonder how the activity feed is going to be handled as this site grows. According to Brian Norgard, as of today there are only 168 people on Namesake due to its hyper exclusive on-boarding. But, that being said, if any team has the talent and the brains to solve that problem it is going to be these guys. It is already plain to see with this small group of users though how valuable the friend-to-friend referral and endorsements are going to be.

However, with LinkedIn now reaching 80 million users signed up, how do you think Namesake is going to be able to make a case for those with other profiles to put in the effort of developing yet another social graph within Namesake ecosystem without being perceived as actively job seeking? I would still fill out Namesake even if I wasn’t looking for a job because I think it represents your level of authority within certain fields but employers may not share the sentiment. What are your thoughts? Let me know below or with an @ reply on Twitter!

One of the wonderful things about technology is that it makes it connects people across the globe with a seamless and constant connection. Here is a quick run down of the things that I absolutely have to use in order to get my job done when I am mobile.

The Device

A lot of people will argue about what hardware is the best to use when running a business on the go, and while I am sure my choice will polarize people just like every other post about iconic cell phones in the technology community, I simply cannot go through my day without this device:

iPhone 4

$199-299 w/2 year AT&T Contract

Hate or love Apple, you have to admit that they know how to create a reliable product with a slick and smooth user interface. I had the iPhone 3G before this device and while I liked it, it was just too slow and was missing a few key features that make the iPhone 4 a kick ass device for running a business on the go. The 4th iPhone is VERY fast, runs applications in the background, feels solid in the hand, has great battery life (for a smart phone), and has a gorgeous high resolution screen.

If you are lucky enough to live in one of AT&T’s more reliable coverage areas, this phone does the higher speed version of their 3G connection that in my experience.. has actually been exceptional (Pacific Northwest). This phone has a lot to do with my next recommendations, if you happen to prefer an Android based smartphone (for the software.. or to use Verizon) then you would have to find the equivalent application on that platform.

Messaging

The built in SMS app on the iPhone has great threading for each contact, and the new threading for e-mail conversation into a more usable (and search able) story line. For messaging across your instant messaging accounts and social media though here are my 3rd party recommendations:

Meebo

FREE

This is easily my most used app on my iPhone when I need to be available for my developers, editors, designers and more to get in touch with me. It connects the messengers across all of my accounts including Live!, AOL, GMail and Facebook. If you like to use Meebo.com in your browser (pro-tip for those of you who want to IM on a machine that can’t download new messengers.. like a friends or a work machine), then you are you going to love the Meebo App. This app is not only costs absolutely nothing but it syncs with the Meebo servers if you leave it logged in on your home machine.

Skype

App: Free Service ~$60/year

With the last update, iOS 4 and AT&T lifting some restrictions, Skype has become infinitely more useful when on the move. If the App is running in the background you can accept audio calls over 3G without the need for WiFi or even being directly in the App. It only uses your data, instead of your minutes and gives you a cost effective way to talk to anyone in the US or Canada without paying an arm and a leg. You can buy a Skype out number and unlimited talk to US and Canada for roughly $60/year which absolutely kicks ass.

Facebook & Twitter

Free

The two most popular social media services have their own free application available for the iPhone. While the Facebook App is a great way to control updates to your Fan Page, I don’t recommend trying to use the messenger.. go get Meebo instead for more reliable delivery and notification.

In regards to Twitter, I had been using Tweetie before it was acquired and is now the free and official Twitter application which does a pretty good job. However with the new launch of Seesmic Destktop 2 I am considering moving my day-to-day usage over to the free Seesmic app in order to sync which notifications I have already read on my mobile for when I am back on my laptop or desktop.

Productivity

Google Apps

Free to $50 per account/year

Do you remember when e-mail and productivity used to be expensive? Not with Google Apps, now you can use the same collaborative tools you love about GMail in your business for a branded e-mail, Google Docs, Instant Messaging and a boat load of other useful features. Google Apps runs the backbone of my business, my life and my way of making money. From calendaring, being able to share documents with developers to track progress, to the seamless integration of Google Apps into my iPhone, Mac Mail, Outlook or whatever platform I need, Google Apps JUST WORKS.

I hope these tools help you get your business running a little smoother while on the go. Do you have any suggestions of things you use and love that I haven’t listed? I’d love to hear what makes your business work while on the go!

Think you need a business plan to have a successful website/web service? The statistics would actually indicate otherwise, as the most successful websites were from people who were able to ship a product out of the door for an audience to start using and then iterate upon.

“Winners Ship”

This is what I keep hearing like a broken record from people who know what it takes to make it work online. Are you worried about having all the features your clients might ever want? You are going about it completely wrong, what you should be doing is focusing on key features that work – and work really well. Beyond adding clutter and delaying your launch, feature bloat can actually detract from whatever primary pain point your service is supposed to alleviate.

Pick the top 3 or so features that are core to your service working and make sure that the value of each feature is incredibly clear so that a user has no doubts at all as to WHY your service exists in the first place. If a customer can’t quickly identify the value in your service then all is lost anyway.

Link > Plan

So if you axe the business plan and try to not over think your new service, how are you supposed to go out and try to acquire funding for your start-up? Y Combinator jokingly says that they value a company by “adding 500k in value for each engineer and subtracting 250k for each MBA” because investors today want to see progress on an idea, not just a bunch of words around how good an idea might be. So what do investors care about these days instead of just a business plan? A link to a (mostly) working product that has a little bit of traction in the marketplace. The cost barrier to entry for a new web service has been lowered to much that investors need to see this level of success before investing because they have the luxury of being more picky.

As entrepreneurs, we can often relate our business passions to that of our lives with a significant other. We put so much effort into things we like to try and see them succeed and grow into something truly amazing. Today I was listening to my iTunes when @MichaelBuble’s song came on ” Just Haven’t Met You Yet” and I couldn’t help but draw the similarities between an entrepreneurs quest to build something amazing and the human desire to find someone you love to spend your life with.

“I promise you kid, I give so much more than I get”

Starting a business isn’t easy at all – in fact I can say without a doubt that starting not one, but two businesses so far it has been the most challenging thing in my life. Every time you decide to put yourself on the line financially, emotionally, and mentally you run a huge risk of being hurt, battered and depending on the level of risk you might even feel broken by the end. But what entrepreneurs see is amazing OPPORTUNITY that makes the risk all worth it. If you aren’t this person out of your circle of friends, chances are that you know at least one or two who seem not only willing, but EAGER to do this kind of thing.

But what is incredibly important about entrepreneurs like us is that we are willing to take that risk. No risk, no reward.. this saying has always been true and always will be. I know that I wake up every morning and ask myself “Why am I doing this? Why am I putting all my chips on the table to try and do this?”. But every day I keep working at it because I know deep down I am far from satisfied with the status quo – I want to build something truly amazing.

When talking with other entrepreneurs, far too many say something along the lines of “we are too small to compete with the big guys”. The general mentality is that the competition is just so large and so strong that there is no logical way for them to fall 2nd place to a hungry and innovative start-up. As evidenced by the banking crisis and others, being “too big to fail” is certainly far from the truth as the banking system in the United States is on welfare as far as I am concerned.

Think Google just got lucky? When they originally launched there were at least 5 established search engines available on across the web who had saturated market share, and the appearance of being unstoppable. Remember Altavista? The reason that Google is dominating the market right now wasn’t because of some mysterious series of windfalls, but rather BECAUSE they were small.

How can being small be an advantage?

Being a small and “hungry” company gives you the advantage of compounding innovation. Think about how long it takes these giant companies to roll out any meaningful changes, shifts in policy or new products. By being a small company you are able to test your product in a more meaningful way, produce useful changes at a speed that very few companies have the opportunity to do. This pace of innovation over time can show a drastic difference between the quality of a product (especially in software) over even 6 months time.

So as Steve Jobs says “stay hungry, stay foolish” but most importantly use your unique ability to compound innovation against the big guys and stop thinking that being small is a downfall. The process of building something is what should be getting you excited to get up in the morning, and what will ultimately lead you to the success you are after.

As entrepreneurs we are often blinded by the enthusiasm behind our ideas, our passions and our drive to make it all come together. This thought process is made even less logical when you have tasted success in the past, but now must face the reality of a shifting market, a down economy and a business that is bleeding cash. I recently had a prospective client come to me who was in dire straights; her business had once been pretty profitable but is now dumping money left and right. This prospective client came to me because she had no web presence at all and her retail store has been losing money for over a year.

Her biggest question was “How do we capture users through the internet to grow my business?”. The sad answer to this was that in her particular category the margins were low (in dollars, but but high in percentage) and depended on high volume to make sense financially. As I looked through Google search volume in her appropriate keyword set it became apparent that the reason her retail store was dying off wasn’t just do to this area, but in fact the entire market has shifted away from her category. The only real way she would have had a chance right now is if she had been a first mover to shift towards the web and become an authority for her sector. Unfortunately now though, her sector is saturated, dying and EXTREMELY competitive; the numbers just simply don’t make sense anymore.

Her passion is admirable, and her work ethic is on par with what is needed to run a profitable business; however fire and hunger are simply not enough to make an unworthy market sector work. So as entrepreneurs, what have you done to create a separation from your idea to make the most logical and reasonable decisions about staying in business or not? The best entrepreneurs are the ones who have failed the most, but also known when to cut their loses and move on to a new idea.

Yesterday I talked about the number of “moving parts” that a business may have can be a huge turn off to investors. So what exactly does it mean to have a lot of moving parts in your business? Well to put it simply, moving parts can be related to a chain; this is because each “part” of your business that is required in order to create revenue or work, then each chance you have for less than expected results to occur. When this happens, much like a chain the weakest link can be your undoing and ultimately lead to business failure.

Business is a lot like logical reasoning, the most simplistic answer is usually the right one so do your best to create simplistic value that everyone can understand. For example, instead of trying to be “The new Digg + Yahoo – Flickr with Facebook Intergration” just try to do one simple thing, but do it EXTREMELY well. Examples of this streamlined business example could be things such as Groupon. This start-up company does one thing (creates group initiated coupons), but does it so well that is essentially printing money for its investors that is has snatched up a staggering 1.35 BILLION dollar valuation only months after launch. It is now on a war path to acquire other businesses and disrupt the entire coupon market.

Keep in mind that Twitter recently received a 1 Billion dollar valuation after being in business since 2006, and while the idea behind Twitter is simple, the revenue model is still being defined. Given that, a key to success for a simple business is a model where only a few functions take place, but they make sense financially for everyone involved. If you were to list all the features of your tech related start-up, how long would that feature list be? 10? 20? 50? History has shown us that business with less than 10, and closer to 5 are the ones who have the highest chances to succeed.