This week, I've had several meetings with venture funds, incubators, corporate accelerators and other significant players in the startup ecosystem. One theme seems to come up over and again, especially from geographies outside Silicon Valley is the lack of a reliable pipeline of deals. On July 1, 2006, commenting on the Indian startup scenario, I had written a blog post called "Too Much Money, Too Few Deals." Today, the Indian scenario has improved greatly, but still the issue of a lack of a mature deal flow remains. The same applies to Malaysia, where our partner, the MAD Incubator, is in search of 10 good deals to put through the 1M/1M program. And it also applies to many different parts of the United States where startup activity is still a relatively small portion of economic development.
In many of these cases, the funds or the accelerators want to put in $100,000 to $500,000 in select ventures but are having a hard time finding mature entrepreneurs to support.
To those in our ecosystem who are facing this problem around the globe, I have the following suggestion: instead of giving $100,000 to one startup, give $1,000 each to 100 startups, and put a larger number of entrepreneurs in your community through 1M/1M. Announce one or two $100,000 prizes that only those entrepreneurs who have gone through and completed at least 60 hours of 1M/1M curriculum would be eligible for.
I am pretty sure that the pipeline in your community will be of a significantly higher quality within six months.
During this week's roundtable, we had three startups presenting.
First, Vikrant Mathur from Menlo Park, Calif. discussed iFood.tv, a video recipe network where chefs, cook-book authors, etc. share their videos, and over three million culinary arts enthusiasts consume them. An ad-supported network, the company has achieved over $1 million in revenue and is profitable. It is currently evaluating options and strategies for growth and the possibility of additional financing. Today's discussion was largely about those options. I like the company a lot, and being an enthusiast of the culinary arts myself, I look forward to using the site.
In fact, on a small side note, I want to draw your attention to a series that is currently running on my blog called "The Next European Renaissance," in which I have discussed culinary arts as an area where I'd like to see more innovation that is enabled by technology. The series is a follow-up to my earlier series, "Silicon Valley: The Next Decade," where I discussed the Valley's next renaissance. While I was in Europe recently, I had a chance to think more deeply about the role Europe ought to be playing in that and other Renaissance movements around the world.
Next, Kevin Fullerton, from Graham, Tex., pitched PartingOut, an online exchange for after-market auto parts that are beyond the top 10 to 20 that most parts dealers sell. Kevin is a 1M/1M premium member, and he has a deep understanding and domain knowledge of the "salvage" business, as it is called. Kevin has come up with a rather subtle idea for tapping into the parts that are beyond the top 10 to 20, where most of the market is focused. I look forward to working further with Kevin on building this business.
Then Dr. Adarsh Patil from Bangalore, India, presented Heathcare e-Market, again, an online exchange for the medical tourism industry where patients and providers around the globe would transact to find the best solutions for the medical tourism needs. The business model Adarsh is proposing is a per lead compensation structure, which seems perfectly reasonable. However, the business is at a pure concept stage, and most of the details are yet to be fleshed out. I like the idea, but to go from idea to financing, there is a long road for Adarsh to travel still.
You can select the business you like best of those discussed today through a poll on the 1M/1M Facebook page.