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I have just read a guest post on Techcruch by the CEO of Redfin on how to deal with a downturn. You can read the whole post here. I loved his 9th point, however, I am a little worried it may have resonated maybe a little bit too much…

9. Be a Roman

What disgusted the ancient Romans about barbarians was their lack of discipline. Oxford Professor Peter Heather writes, “As far as a Roman was concerned, you could easily tell a barbarian by how he reacted to fortune. Give him one little stroke of luck, and he would think he had conquered the world. But, equally, the slightest setback would find him in deepest despair…” This is why, 2,000 miles from home, several hundred Romans could slaughter several thousand barbarians.

Startups are founded by barbarians. But to survive the ups and downs, you have to make yourself into a Roman. The most talented entrepreneur I know nearly self-destructs on the 18-month birthday of each of his ventures. By that point a startup isn’t brand-new anymore, and it isn’t Google either. The closer you get to becoming a real company, the less glamorous reality seems: you’re grimy from clawing for money and breathing hard now from exertion, which would be fine if you could convince yourself you’re not the only one struggling. Everyone struggles. Keep fighting.

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I have just read Jon Fine’s column in Business Week – he interviewed Michael Wolff, who wrote the new Rupert Murdoch bio The Man Who Owns The News Here is an exerpt:

Michael Wolff: MySpace. They [meaning News Corp] know they have a huge problem. They’re quaking in their boots about MySpace. It always was a little rustling when I was there, there was this rustling—

Jon Fine: What do you identify as the problem?

MW: Facebook.

JF: OK. But Facebook is still smaller in America, and—

MW: Absolutely. But you know the rhythms of the Internet business, which I think are still, at this point, immutable. Something else comes along – a better technology, a better flavor of the month – and you, the former, are downgraded. Possibly to the point of being downgraded out of existence.

You can read the whole article here.

I have been an avid follower of MySpace v Facebook over the last 3 years. The two businesses initially had markedly different strategies. MySpace traded on being the cool place to hang out, driven by its band pages. Facebook has always been focused on being a “social utility”, replicating real world relationships online and providing new and innovative ways of communicating with friends on many different levels.

About a year ago, MySpace finally did something about the usability of its site – it redesigned its profile pages and introduced a range of Facebook like features.

The problem MySpace has, is that it does not really know what it is. There are now lots of places to find and share music and videos which work better than MySpace (LastFM, YouTube etc) and it is not as good at connecting people as Facebook. With no USP and some highly focused and ambitious competitors you can understand why News Corp might be losing sleep about MySpace.

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Against my better judgement, last week I signed up to The Midas Touch Dragon’s Den Style pitching event at the Business Startup conference at Olympia today.

The five strong panel had some heavy weight business people on it including Jonathan Jay, Chelsea Baker, Brad Rosser, Rachel Elnaugh and Howard Graham. As it was set up in the middle of the conference, it drew quite a crowd, with 50-60 seated and a crowd of onlookers 3 to 4 back around the side.

To add to my nerves, the first two presenters were torn to shreds with the usual Dragon like comments such as “I didn’t understand any of that; I’ve no idea what you were talking about”.

I was up third. I gingerly took the stand, and, thank goodness, my nerves evaporated. All that G2i eleavator pitch training obviously paid off! I fielded a few tough questions, but generally received a good response. Even so, I can not say it has persuaded me to apply for the real thing.

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I have just been catching up on Fred Wilson‘s blog and was interested to see his post on Joe The Plumber’s Landing Page. The post basically says that Google should improve its Google Local service to provider better landing pages for small businesses (skinning, own URL, call to action etc). Several Union Square Ventures‘ portfolio companies are in the business of helping advertisers target local businesses – so I can see why he would like Google to help solve their landing page problem as this would bring more of them in to the market for being sold online advertising.

Google Local is already a very powerful resource – I can see that if Google does improve its service, this could put traditional directories such as Yellow Pages and Thompson Local under even more pressure. These companies have been slow to innovate, it may now be too late to grab their slice of the online pie.

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A big thank you to Ed at nestoria for organising the pub meet up with Brad Inman last week, it was a great evening. Brad organises Real Estate Connect, the annual get together for real estate technology folk. It was exciting to meet Brad, the man behind Inman News, and hear his view on how technology is shaping the property market around the world.

We have been saving up our Airmiles and hope to get over to New York for the next conference in January 2009 as the first step to introducing the U.S. to estatecreate.com. Big Apple here we come….

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I just read Nic Brisbourne’s blog – he has posted some great advice from Rob Majteles. You can see it here.

Having read the advice I had a look at Rob’s website. He has a great Roosevelt quote under “Words to Live By”:

“It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better.
The credit belongs to the man who is actually in the arena;
whose face is marred by the dust and sweat and blood;
who strives valiantly; who errs and comes short again and again;
who knows the great enthusiasms, the great devotions and spends himself in a worthy course;
who at the best, knows in the end the triumph of high achievement, and who, at worst,
if he fails, at least fails while daring greatly;
so that his place shall never be with those cold and timid souls who know neither victory or defeat.”

Powerful stuff. Just what is needed in these tough times!

There has been a lot of debate in the blogosphere over the past week about the crunch and its potential effect on startups. A Sequoia presentation has been circulating which is a must read for anyone involved in a startup – you can read it here. The presentation paints a pretty bleak and, in my opinion, realistic picture of the next couple of years and tells startups to focus on preserving capital and getting to profitability.

We have been debating our business model and the merits of having both a free and premium product (dubbed by Fred Wilson as a freemium strategy). The thinking behind a freemium strategy is that the best way for a startup to build a decent size paying customer base is to launch a free version and get viral growth and then convert your top customers to pay for the service by offering premium features.

The counter argument to the freemium strategy that has emerged with the credit crunch and looming recesssion is that start ups need to focus on getting to profitability, so they should not be giving away free product, but focusing on getting paid customers.

I have been personally wrestling with this debate and even left a comment on Fred Wilson’s blog questioning whether Freemium was a suitable strategy for these lean times, particularly the points made on slide 46 of the Sequoia presentation (importance of established revenue model, understanding of market uptake, customers’ ability to pay, profitablity, cash) . He came back to me saying he thought that Freemium is a great way, maybe the best way, to achieve all the suggestions on slide 46.

I guess what he means by this is that you will not get better marketing for your product than initially giving it away (or a version of it). You will get lots and lots of customers using your product that would not have otherwise done so. If your product is any good, they will tell their friends, some of whom will also try your product. The key is then implementing the Freemium strategy so that you can optimise the number of paying customers. If you have a great product and lots of people take it up, even a small percentage of that base would make up a large paying customer base which would have cost a lot of marketing money to acquire.

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Back in 1998 I read a lot about First Tuesday, and I finally got there last night 10 years later.

They are still using colour lanyards: Green = entrepreneurs Yellow = Service Providers Red = Investors, however, they were trialing a new web 2.0 mobile networking device provided by xoio.com. The idea sounds like a good one – you can look up who is at an event, connect with them and then arrange to meet them at a meeting point. In reality, the tech was not quite there yet, perhaps more web 3 than web 2.

First Tuesday attracts an interesting mix of people – the original First Tuesday founder Julie Meyer was there as was the founder of Multimap, Sean Phelan. Sean had some great advice on how to build a web business in a downturn, revealing that Multimap focused on its business to business channel in 2001/2002 when web advertising virtually disappeared as a revenue stream. This enabled Multimap to build a client base with little competition from other suppliers and then come out of the downturn in a strong position and build its consumer advertising model.

All in all a great evening and not bad value at £20 with a couple of glasses of wine thrown in.

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Last week I went to a new meetup called social innovation camp. I came away excited and inspired. I have always liked Google’s .org initiative and have been wanting to get involved in social innovation for a while. Last week’s session provided the inspiration to get me going. I talked to Adrian the next morning, he loved the idea and as a result estatecreate.org has been born. I will post again in a few weeks time once we have crystalised our thinking on how we plan to try and make a difference.

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I just watched Day 4 of Seedcamp on video. You can watch it here: http://vimeo.com/1761085. There is a great quote on valuing startups:

“I asked Arsene Wenger the same question the other day. How do you value a player? Why is one player worth £16.5m and another player worth £35m? …..and he basically says “I just know”.”

Brilliant.