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On Startups, Be Wary of What You Read

Just because a company gets featured in a major publication, doesn’t mean it has made it.

It could mean one of two things: (1) that the company is profitable or (2) the company is turning heads with a revolutionary product but still has a lot of work to do.

The startup world is mostly a mirage, with many young businesses touting their user base and showing off successful case studies.

More investors should learn how these new technologies actually work before writing the big checks.

There’s always three good questions to ask in a VC evaluation: (1) Does the product make people money, (2) save people money, (3) and does it provide a good customer experience.

Checking two out of the three is a guideline for smart investing.

We all want to prove our idea and product is a game changer and we do that by getting national features and raising more money. Just be aware of the hoopla.

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Daily Deals or Spam?

Have you ever purchased from one of those daily deal websites, Groupon or Living Social?

Discount sites used to be the talk of of the Internet, the new commerce, half price off on everything.  But New York Times reports that only 20% of Groupon email subscribers actually bought a deal.

The growth of daily deals exploded and turned the scarcity of hot online coupons into spam; turning off the consumer as a result.

The few people I know that actually check and act on Groupon and Living Social deals are tech nerds looking to leverage their Internet addiction by buying a discounted activity that offers a fun weekend or dinner outside the computer.  The REAL market for daily deals are the everyday working semi-connected people with Smartphones that don’t use Foursquare or the Groupon or Living Social app and often look for something to do with their disposable income.

Until Groupon or Living Social can send me an email offering a discount on Arsenal tickets at the Emirates in conjunction with cheap tickets to London I have no interest.  My daily deals interests are very specific.