Is Seattle’s startup community hamstrung by a lack of investment dollars or a lack of high-quality entrepreneurial ideas? That was the debate which erupted on GeekWire this past week as readers reacted to guest posts written by Marcelo Calbucci and Jonathan Shapiro.
Calbucci prodded Seattle venture capitalists to bankroll 100 seed-stage startups in 24 months, which led Shapiro to counter that Seattle’s entrepreneurial community should focus on generating 100 investment-worthy companies instead. At the end of the day, it seemed a bit like a chicken-and-egg debate. But, nonetheless, there were some fascinating insights about the Seattle tech community and what it will take for this region to stay in the mix as a true innovation hub.
It was hard to pick favorites among the more than 50 comments submitted on both columns, but here’s a look at a few which resonated with us along with some other top comments of the week. At GeekWire, we love this sort of debate and we appreciate everyone who offered their two cents on this issue and others.
Seattle startup guru Janis Machala wrote:
Remember, everyone, that the WA roots are Scandinavian and that means most long-timers don’t beat their chest too much or over inflate what their company/idea/technology might be capable of. There’s an understated element to our culture in WA and that is one reason people think there’s less here than there is. I suspect there’s more bootstrapping per capita and more angel funding per capita and more customer funding per capita here than the Valley where VCs do rule and are much higher per capita. We do NOT have the VCs per capita as CA does.
Venture capitalist Bill Bryant also weighed in, arguing that there aren’t enough deals to follow Calbucci’s advice of supporting 100 seed-stage companies. He wrote:
As an entrepreneur turned venture capitalist & angel, I agree with the sentiment expressed here. Investors can only invest in what is presented to them. If there were only 13 seed stage deals done in Seattle in 5 quarters, that’s a rough approximation of the “quality” projects that were spun up during this timeframe. Are there occasional deals that should have been done? Are there deals that investors missed? Just didn’t get? Absolutely, no question.
But these are exceptions. Over the past ~ 4 yrs, I can think of two deals that in hindsight absolutely should have been done here in Seattle, were not, went down to the Valley, found investors, and became successes (Twilio and Docverse). I met them both and frankly didn’t make the right call. The founders were excellent, the idea was “good enough” and I should have pulled the trigger (as should others). There may have been 1 or 2 others that I’m forgetting.
But its not 10. Or 25. Or 50. Or 87.
Stories and full discussion: “A challenge to Seattle VCs: Back 100 seed-stage startups in 24 months”
GeekWire readers also responded to the Netflix price hike, with nearly 1,500 people voting in our online poll. Forty percent of those voters said they were ready to drop the popular online movie rental service. Reader Tommy Unger wondered if those angry Netflix customers actually would follow through and cancel.
NFLX is definitely taking a gamble here. These poll numbers indicate a net average subscription per customer per month of about $6.36 (vs the current $10+ per month). Even with some adjustments (taking out undecided, accounting to the fact that this is probably a self selected negative group, and the fact that many people still get DVDs by mail) I’d estimate $8.80 per month per customer. I think the biggest variable is how many people will actually cancel. I think Netflix made an educated guess–they do have the knowledge of the Netflix prize after all :-)–and they think this number will be very low. I wouldn’t be surprised if they anticipate (and achieve) a sub 10% cancellation rate. Only time will tell.
Full story and discussion: “Poll: Time to dump Netflix?”
Our story on Apple’s meteoric rise in the past year, eclipsing Microsoft by more than $100 billion in market value led one reader to do a simple calculation comparing investments in the two companies.
If you invested $10,000 into Apple in 2001, after a 2,836% appreciation you would have $283,600.
Microsoft is down 24.92% over the last 10 years. It has paid an annual dividend yield of 2.39%, so you’d've received 23.90% of your investment back in dividends. That’s a net loss of (1.02%). If you had invested $10,000 into Microsoft in 2001, you would have ended up with $9,898.
In conclusion, Apple has won by $273,702.
Full story and discussion: “Apple hits record high, now valued at $110 billion more than Microsoft”
The big story of the week was PopCap’s sale to Zynga for as much as $1.3 billion, a blockbuster by any standard. Readers thought the deal made a lot of sense. One wrote:
This news is a win-win for both companies involved. PopCap gets the financial backing of the world’s largest entertainment company and Zynga gets to keep building its platform on its own terms. I am excited to see what both PopCap/EA and Zynga produce in the years to come!
Full story and discussion: Report: PopCap turned down $1B buyout offer from Zynga