Playing the GYMEAN Game

The presence of a revenue model doesn’t ensure profitability; if the charges, usage or number of users has been overestimated, or the cost structure scales up faster than revenue growth, new ventures burn up their startup capital faster than expected, needing infusions to keep up the pace of growth. Bootstrapping or angel investors can only take it so far; the burn rate forces tough choices.

In some ways, venture capital is easier to obtain these days. The excesses of the dot bomb era have vanished; many of the success stories of Net 1.0 have provided proof that sound concepts and business models do work. A new generation of venture investors, including some of the dot-com millionaires, are more willing to experiment with innovation.

On the other side, the lower cost structures of community based web services mean that the risk levels are far lower. In comparison with the multi-million dollar fundraising that was the norm earlier, today’s ventures start with much smaller requirements. Reddit, for instance, raised only $100,000 prior to acquisition. Unlike earlier days where an IPO was the most common exit route, today’s ventures have a different option – the GYMANE game. Getting acquired by Google, Yahoo, Microsoft, Ebay, AOL or News Corp.; or any other large technology company.

In a way, it’s like playing Monopoly in real life. Land on a prime idea, invest to boost the value of your venture, pass GO with venture capitalists, and bulk up users; you then have people paying you handsomely. On the other hand, following another’s lead, paying out more than you invest, or missing GO; you can try to catch up, but if you run out of time…

Sure, financial risk is lower. What really counts is knowing how to play the game. First mover, fast mover, managing internet time 24/7, because some part of the community never sleeps.

And you think Bush outlawed online gambling?