PRODUCT now typically means a website or service, run on low-/no-cost open source software, hosted in the cloud on low-cost servers, developed in a few months (or a WEEKEND!) by a small team of 1-5 developers, who continuously test & iterate in real-time with online customersMARKETING now typically means using a variety of online distribution channels via paid & organic search (SEM/SEO) on Google, PLATFORMS viral/social amplification on new media platforms & social networks like Facebook, Twitter & YouTube, and the quickly-growing mobile platforms of Apple iPhone & Google Android. With the exception of search, most of these distribution channels didn't exist 5 years ago, yet they now easily reach over 100M-500M+ users, with very low cost and measurable marketing campaigns such that even a small team can reach billions of people globally.REVENUE can now be collected easily via a variety of online payment, transactional e-commerce, digital goods, subscription billing, lead generation,CPM/CPC/CPA advertising. Many people buy things online now, and many companies are even bought for usage & users ahead of revenue.
It was designed for the stair-step world, and we are now in the curve-y world.Our entire industry was designed for raise capital, spend capital, raise more capital, spend more capital.What does it mean for us?
In fact, over the last year, we have seen the industry change – change from below (with the formation of new funds) and change from within (self correction).We have seen a new class of investor come out – you can call it the super-angel or the micro-vc…it means the same thing.What are the characteristics? Less than $50m, average investment around $500k to $1m, very frugal, test and learn, Also – will have to cut companies off sooner than before…horrible, but the right thing to do.