Washington Business Report - Feb. 23, 2014
Lots to learn in Whats App sale: tech experts
"WhatsApp is a great example of how companies get bought and not sold. Google wanted to buy it, too. But they sold to Facebook because that's where they wanted to be," says Jonathan Aberman, Managing Director of Amplifier Ventures.
This week, Facebook announced it is buying the popular messaging app WhatsApp for $16 billion, one of the most successful venture capital investment deals of all time -- and a mind-blowing success story in terms of a tiny startup with few employees.
WhatsApp climbed its way to the point where it essentially got to choose who its buyer was, Aberman says.
"We are in the middle of a big food fight between Google and Facebook and Apple and Amazon about who is going to control the internet -- who is going to control who we ultimately follow. Ultimately, there is an economic model around this, but at the moment, [the goal] is just getting users," Aberman told Washington Business Report.
WhatsApp Inc. was founded in 2009 by former Yahoo! employees Brian Action and Jan Koum and employs 55 people. The app allows users to text, send images, video, and audio media messages as well as their location using integrated mapping features.
"Really great entrepreneurs work in a cave, in a small team. They don't go out and beat their chests and promote themselves. They promote their company when it's time," says Glen Hellman, a D.C.-based business coach and angel investor.
"A lot of the people who make a lot of noise fail because they make a lot of noise instead of doing," Hellman says, giving WhatsApp's stealth style credit for the windfall. "They didn't seek money, money sought them."
For startups, there is a fine balance to be struck when it comes to the timing of touting a company's goals. Startups want to create a positive buzz, but premature attention can land good intentions flat on their faces.
Getting attention in the tech world is a skill which sees generational differences, Aberman says.
"Millennials and Gen Ys have grown up in the world of digital, and to promote oneself avidly is as natural a behavior [for them] as it would be for baby boomers to sit down and watch television. It's just the way that they're wired," he says, noting tech entrepreneurship is driven by the younger demographic.
Business plans are bull, says author
There are major pitfalls that business owners experience that inevitably lead to failure, and companies that fail, lack one or more of four necessary factors says author Ebong Eka.
Start Me Up! provides strategies to avoid those pitfalls and gives you the powerful ideas you need to build your thriving business.
Far too many small businesses fail in their first year, and many such failures are absolutely preventable according to Eka, whose new book Start Me Up aims to teach entrepreneurs how to thrive in new ventures.
First off, business plans are often a waste of time, he says, calling them "bull***t." They give an entrepreneur a false sense of security by leading them to believe that if they simply stick to the business plan, that they cannot fail. In reality, plans must be more agile, and ready to be altered in adversity, says Eka, a CPA who has spent 12 years building a small-business consulting and technology toolkit is also a tax and small business expert.
Besides, banks and venture capitalists don't even care about business plans, he told Washington Business Report.
The best and most successful companies know the importance of the elements of success, Eka says.
Structure. "Fall in love with the problem you want to solve," he says. Many people make the mistake of using an idea as their driving force to start a business, but an idea alone won't make money, it is the skillful execution of that idea.
Strategy. Don't compete with WalMart while getting your idea or service to market, instead focus on providing value to a targeted market. "People spend money for two reasons: to get a desired result and because they want a problem solved. So if you focus on that aspect of it, you can provide them with so much value, that they are not worried about the price."
Systems. Don't delegate, leverage accountability. "Delegation is basically telling people what you want them to do and when they don't do it, you yell at them. Leveraging is having people who are part of the process and have them buy in. Do that through interns, working with local universities and colleges to find people who want to learn as much as you want to have things done. And then spend your time on more productive things like making money."
Sales. "The term 'selling' most people dislike and they find it distasteful. But the reality is, we are selling everything. We are selling when we meet people to date, we're selling when we go to our interviews, we sell ourselves to meet friends," Eka says.
Create an opportunity to provide people with content and information. Becoming an expert but also using social media to grow your brand and leveraging your brand by giving them information they can use, he says, adding that a clear message to a targeted audience is more effective than a bullhorn.
Art execs promise Corcoran will be in good hands
The Corcoran Gallery in downtown DC is considered one of the top ten art collections in the country, but challenges have dogged the institution for years now, and a solution is finally in sight.
It faced controversy, debt, and is in desperate need of about $100 million in upgrades and repairs.
To save the collection, the college and the historic building, the museum announced this week that The National Gallery of Art and George Washington University will take over the Corcoran Gallery of Art and Corcoran College of Art + Design.
The university will operate the College, and take over the Corcoran building. The National Gallery of Art will offer exhibitions of modern and contemporary art under the new name: Corcoran Contemporary, National Gallery of Art.
"We know that it will be very well taken care of from a collections management point of view, conservation, exhibition, digitizing the collection and putting it out there for the public to have more familiarity with it," says Peggy Loar, Director & President, Corcoran Gallery & College of Art & Design.
Earl Powell, Director of the National Gallery of Art, vows the collection will not be dismembered.
"Of course not! We'll display it with distinction and honor and I think it will be used very effectively and very beautifully," he told Washington Business Report, as part of an extended, exclusive interview.
"I think this is a great plan for preserving the collection, giving it to an excellent institution's care, while at the same time we can raise the level of the arts education that's been an intimate part of this great institution," says Steven Knapp, George Washington University's President.