Business Opportunities Weblog

November 3, 2005 by Dane Carlson | 1 Comment

Startup Journal:

But some entrepreneurs believe the balance of power in Silicon Valley is shifting for at least a subset of Internet-focused start-ups. “There is magic in independence,” says Chris MacAskill, co-founder of online-photo site Smugmug Inc., which has no venture funding — and, according to Mr. MacAskill, doesn’t want any.

Start-ups also are becoming easier to build without venture cash because entrepreneurs can now outsource programming chores to cheap, offshore engineers. Brad Silverberg, a partner with Seattle-area venture-capital firm Ignition Partners, says his son recently introduced him to a classmate from the University of Southern California who had built a sophisticated Web-storage company, called Box.net Inc. “It’s two kids, and [some] development was outsourced to some Russian guys they met on the Internet,” says Mr. Silverberg.

Some entrepreneurs can now get their start-ups off the ground for less than one-10th of what it used to cost. Former Excite Inc. President Joe Kraus, for example, has publicly talked about how he started his new Web-media company, JotSpot Inc., for about $100,000 two years ago. That’s far less than the $3 million it cost to launch Excite in the 1990s. “The cost of getting out to market [today] is so low,” and “that spells a different time for venture capitalists,” he says.

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