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We caught up with Guy Kawasaki, managing director of Garage Technology Ventures, ex-Apple evangelist and most recently, co-founder of Truemors.com, to talk about venture capital, startups and his latest project, Alltop.com.

Guy Kawasaki is a managing director of Garage Technology Ventures, a seed-stage and early-stage venture capital firm, and co-founder of Truemors.com. Previously, he was an Apple Fellow at Apple Computer, Inc.

Guy is the author of eight books including The Art of the Start, Rules for Revolutionaries, How to Drive Your Competition Crazy, Selling the Dream, and The Macintosh Way. Read Guy's blog at: http://blog.guykawasaki.com.

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In the Art of the Start, you say that the motive for entrepreneurs to start a business (or indeed for anyone to start anything) should be to make meaning and change the world. How does Truemors make meaning?

I started Truemors for two reasons: first, I want to further democratise information.

That is, to move information dissemination along the path that has gone from scribes to Guttenberg to offset printing to desktop publishing to websites to blogs. With Truemors, people who want to “tell the world” something don’t even need to run a website or blog. That’s the meaning part.

The second reason was to, honestly, make money by selling advertising. We’ll see how we’ll do in both regards, but I’d be happy with achieving either goal.

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How is Truemors doing now, and what advice would you give to entrepreneurs who want to launch their own site? 

We’re getting about 10,000-12,000 visitors a day and traffic has been steadily increasing. However, this level of traffic isn’t a business, but we’ve only spent about $30,000 on it so far. Whether it succeeds or fails, the lesson is that in this age of open source, plugins and templates, one can certainly start a company faster and cheaper than ever before.

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When E-consultancy last interviewed you, you said that Web 2.0 businesses that monetise with AdWords aren’t going to make it. Has your view since changed and do you think that ad-driven web models are sustainable in the long term?

Good question. We’re about to find out if we go into a recession. I’m on the other side of this equation now in terms of selling ads of any kind for my blog and Truemors, so I hope AdWords and the like are sustainable. All I can say right now is, “We shall see.”

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Companies such as Google, Yahoo and Facebook weren’t necessarily predicted to be outright successes. Does this make it harder for venture capitalists to know the “right” investments to pick, or predict what the next killer app is going to be? 

You simply take your best shot, and then you retroactively declare how smart you were. Then you blame the failures on your partners.

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What sort of companies will we see attracting VC investment in 2008?

Tools and analytics to help people figure out what’s going on with the previous wave of Web 2.0 sites and services will probably attract a lot of attention.

Clean-tech will be hot until oil is under $50/barrel. :) 

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What effect will the economic downturn have on the level of VC investment in 2008?

You can’t build a case that it will help increase or sustain the level of VC investment. Like any other investor, VCs are prone to mood swings and herd-like behaviour.

Whichever direction it goes, most of the VCs will go together. Entrepreneurs shouldn’t care about the macro picture that a government statistician came up with.

Only one deal is important for them: getting their company funded. That’s all that matters.

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What’s your take on the recent valuation of Slide at $550m?

My hat’s off to Max Levchin. He saw the light on MySpace and Facebook and seized the day.

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What tips would you give to entrepreneurs for valuing a start-up generally?

These days, each full-time engineer is worth $1 million in pre-money valuation. Each MBA is worth a negative $500,000.

You can argue about these valuations a little either way, but this is a good rule of thumb.

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You recently said that at least at the early stage, start-ups should spend less on marketing and PR and instead invest in engineering. At what point during the lifecycle do you think start-ups need to increase their investment in marketing?

Generally, the later the better. I’ve seen startup after startup waste their marketing dollars on products that were late or buggy.

Marketing wasn’t the issue — the product simply didn’t work and yet the company had “scaled” for enormous, albeit “conservative,” growth.

I’ve never seen a great product die because it didn’t have enough marketing. On the other hand, I’ve seen many companies die because marketing and IT was spent ahead of product delivery.

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What’s your latest project?

Alltop - ”all the top” info. It’s a collection of feeds from the best sites and blogs for popular topics like celebrity gossip, gaming, Macintosh, politics, etc.

We were inspired by popurls and wanted to provide “single-page aggregation” to help people stay on top of their favourite topics.

It’s for the 99.9% of the world who don’t use home-page customisation sites, feed readers, or even collections of bookmarks. We think we can help people read their favorite sites more efficiently and discover new sources of information.

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Aliya Zaidi

Published 8 February, 2008 by Aliya Zaidi

Aliya Zaidi is Research Manager at Econsultancy. Follow her on Twitter or connect via LinkedIn or Google+.

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Comments (2)

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Anthony Kuhn

Nice interview with Guy, and I've linked to this piece in my blog for the Innovators-Network so my readers can read the piece for themselves in its entirety. I wonder if Harvard MBAs really think their self-worth is less than that of an MIT wunderkind? Kinda got a chuckle out of that answer. Thanks for the interview and best wishes for continued success.

Anthony Kuhn

over 8 years ago

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rajendran mariagnanam

Very pragmatic approach indeed. Thanks for the practical cues

over 8 years ago

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