Editor's note: Adeo Ressi is founding member at TheFunded and The Founder Institute. Follow him on Twitter @adeoressi.
Q: What does the Instagram acquisition mean for startups?
A: A LOT.
At the close of 2011, there was a lot of uncertainty for startups. Stock market fluctuations, underwhelming talent acquisitions ("acqui-hires"), and structural investment problems threatened the prospects for startups.
But what a difference a few weeks can make. The passage of crowdfunding legislation in the US coupled with the $1 billion acquisition offer of Instagram, signals the beginning of a full startup boom. In preparation for the good times, venture capitalists have started to raise new fund money at their pre-crash highs.
Two and a half years ago, Mint.com was acquired for $170 million, and everyone thought that was an amazing deal following the great recession. Now, a fledgling company with a small team gets acquired for $1 billion.
My best guess is that it is about to get crazy. And, only fools sit on the sidelines. Many strong and older entrepreneurs that I know are wealthy today because they made intelligent decisions during the dot-com bubble of the late '90s. Success was not easy then, and it will not be easy now, either. But, the likelihood of a great outcome is much higher in a boom.
There are a lot of newly minted entrepreneurs that pursue their dream company in a half-hearted way. You may tinker with your idea while toiling at a day job. You may refuse to put in the work required to recruit the best talent. You might be afraid of launching an imperfect product. Or, you may put a mediocre effort into fundraising.
However, if you want to take advantage of a boom cycle and reap the rewards, you need to slide all of your chips on to the table. You need to go all in. And, you need to play smart. Every move that you take and every bet that you make needs to have the best odds of success.
You can't enter the game too late, either. If what I predict happens, very soon you will start to read about more and more crazy deals. When "crazy" becomes the new normal, the opportunity will have already passed you by.
So, let me get really specific. As an entrepreneur, you have a decision to make. Ask yourself, "is this my boom?" If your answer is "yes," then you have a lot of work to do.
Look around you. If everyone that you deal with is not top-notch, from cofounders to vendors, fire them immediately and bring on the best. Now. Right now. Seriously. Now. To really win during a boom, you need to play at the top level, and the winners in every boom always have the best talent. Always.
Is it your time? Is this your boom?
[image via flickr/V1LL14N]
Instagram is a free photo sharing application that allows users to take photos, apply a filter, and share it on the service or a variety of other social networking services, including Facebook, Twitter, Foursquare, Tumblr, Flickr, and Posterous. The application is compatible with any iPhone, iPad or iPod Touch running iOS 3.1.2 or above or any Android device running Android 2.2 or above. In an homage to both the Kodak Instamatic and Polaroid cameras, Instagram confines photos into a square...
Facebook is the world's largest social network, with over 500 million users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students. It was a huge hit: in 2 weeks, half of the schools in the Boston area began demanding a Facebook network. Zuckerberg immediately recruited his friends Dustin Moskovitz and Chris Hughes to help build Facebook, and within four months, Facebook added 30 more college networks. The original idea for the term...
Adeo Ressi is the founder of VC-rating site TheFunded and the startup incubator Founder Institute.
The Founder Institute is a global network of startups and mentors that helps entrepreneurs launch meaningful and enduring technology companies. Through a four month pre-seed incubator program, you can launch your dream company with expert training, feedback, and support from experienced startup CEOs, while not being required to quit your day job. Their unique Bonus Pool also shares equity upside with all participants, creating local, teamwork-based ecosystems where great startups can flourish. Since 2009 the Founder Institute has helped...
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