3/2/08 Recap: Opportunity Costs, "Free" Business Models, Angel Outlook for 2008 -- and More

This past week saw several interesting blog entries, articles, and reports from the world of entrepreneurship, management, and venture capital.

• John Tierney of the NY Times wrote an excellent article on opportunity costs and decision making [1], regarding research on the risks associated with keeping too many options on the table. An interesting observation from Professor Dan Ariely of MIT: “Closing a door on an option is experienced as a loss, and people are willing to pay a price to avoid the emotion of loss.”


• Chris Anderson wrote a fascinating article, The Rise of the “Free” Business Model [2]. “Once a marketing gimmick, free has emerged as a full-fledged economy,” he writes, citing the success of Radiohead and Google as prime recent examples. Read the article here [2].


• Thanks to Jeff Cornwall [3] for pointing us to the Angel Capital Association’s outlook for 2008. Despite recent news about the slowdown in the U.S. economy, nearly half of angel groups expect deal flow to improve in both quantity and quality in 2008. However, angel groups’ expectations for positive exits in 2008 were not as optimistic. More information about the Angel Capital Assocation’s report can be found here [4] and here [5].


• Fred Wilson of Union Square Ventures [6] wrote about the importance of conviction and discipline [7] -- specifically, the importance of careful, deliberate planning in order to achieve conviction in one’s strategy, plus the necessary discipline to adhere to that strategy.


• He also provided great advice on choosing board members [8], including avoiding “big names” and making sure you get people who have enough time to commit to the job – it’s not a “retirement perk,” he says.


• imagine it! is a new documentary about Stanford students building companies solely from Post-It notes (available for download here [9], once you fill out the form). As Anthony Ha of VentureBeat wrote: “Watching the students at work is a great illustration of an important point: even if you’re facing substantial constraints, you can still produce something valuable.” (You can listen to him interview the executive producer of the film, Richard Tavener, here [10]).


• Is there such a thing as a “born” entrepreneur [11]? Scott Shane examines whether a person’s genetic makeup could affect their inclination to start a business.


• Michael McDerment of ThinkVitamin recently posted a great article with advice on How To Name Your Company [12]. Evan Carmichael of YoungEntrepreneur.com also provided a few business naming tips [13] of his own.


• Mashable [14] introduced us to Fundability [15] – a website that matches startups seeking seed capital with investors. While many websites also serve this general purpose, Fundability claims to match startups with investors’ preferences with an algorithm. Entrepreneurs looking to find investors can use the service for a $50 fee (though there is a 30-day free trial).


• Last week, Mashable also polled its readers, asking “What Would You Want to Invest in Online? [16]” Mobile applications, social networking, and online advertising topped the list.


• Inc published The Nuts and Bolts of Entrepreneurship [17]. A key insight from the article:
  “Real entrepreneurs grab an idea and start moving—and adapt their vision of the business as they go.”


• And finally – courtesy of VentureCyclist [18] – we got a laugh from VCWear.com’s venture capitalist parody t-shirts [19].