What is a venture and how it works
Since the creation of the Internet agency ALTWeb in 2004, I have always looked with great interest at various technologies and services for the automation of Internet marketing. I have always strived to create convenient automation tools that would save time and increase efficiency.
At that time, all clients were interested only in SEO, as it was the easiest and fastest way to get a lot of clients. Then the market for automation services of various SEO processes was almost empty. For search promotion there were only services of automatic registration in catalogs and linkators. Later, in 2006, the era of reference exchanges came, and in 2008 - promotion automation services.
It was then, at the end of 2008, that we began the development of our first product, MegaIndex . The first version of the product was launched 3 months after the start of development and included a limited runet index and a database of site positions for a million queries in search engines. After half a year, the functionality of automated website promotion appeared, which is now the main commercial product in MegaIndex.
Since 2009, the number of tools and services in MegaIndex began to grow exponentially, and the user base has increased rapidly. By 2012, MegaIndex essentially consisted of 12 different services and tools.
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In October 2012, it seemed to me that we were ready to open a venture capital investment fund to help projects not only with money, but also with technology. At that time, ALTWeb Capital was created. The only direction that I was interested in was the development of advertising SaaS solutions. I must say that many applications come to the fund. During the year I conducted an analysis of more than 2000 projects, but about 90% of them did not fit the subject area, while the rest left something to be desired.
Having worked a year with short-term applications, it became clear to me that it was faster to build teams ourselves and make projects taking into account our knowledge and expertise. But this is quite a venture fund. First, we build all the projects within the company, respectively, all 100% of the property and project management are concentrated in one hand. Secondly, all decisions are tracked down instantly. Thirdly, projects are implemented on a single technological model, which saves a lot of resources.
At the moment, I realized that we have created a completely new concept of business development, which can be described as a venture factory .
Now ALTWeb Capital has launched or is preparing to launch more than 30 projects .
1. The capitalization of the project in the case of the implementation of the planned scenario should be at least 100 times the amount of investment before reaching the self-sufficiency
2. The market should have growth prospects of 100% per year for 3 years
3. From the idea to the launch of the project, the plan should be no more than 2 months (in reality, twice as long)
4. At the time of launch of the project, the market should be small (usually not more than $ 10M)
5. A new project should have significant synergy with other existing ones (customer base, technology, PR, solution of our needs)
6. The project should reach a payback one month after launch.
Another important factor in the rapid scaling is the cloud staff. In 2010, I fired the last programmer from the office. From this point on, all development was done with the help of freelancers. Since 2013, we have successfully implemented the practice of remote project management, which in fact has generated a whole ecosystem of cloud development.
It may seem to many that in such conditions the implementation of any project may come to a standstill. However, ours is completely different. The secret is in structuring the entire development, which is divided into independent phases.
Take a simple example: you need to create a system for collecting and analyzing data. No need to try to do everything at once.
First you need to make an API for collecting data and presenting it in a prepared format, for example JSON. And only then create an independent project for their processing.
Separating tasks into small blocks will help to significantly reduce the number of errors, and hence the time for debugging.
When we already had about 20 projects, and the number of physical servers exceeded 30 units, the new systematization of efficiency was a single systematization of all solutions. A single virtualization cluster has appeared, on which all projects operate. A unified management system (CMS) for the construction of all projects has appeared, which solves all the necessary analytical and user tasks.
In conclusion, I want to add that we are working in the segment of projects with relatively low risk. To date, we have already launched 16 projects, 12 of which have passed the break-even point. And another 15 are preparing to launch. In general, I would like to note that there are no risky startups, there is the creation of a business without the necessary competencies and resources.
Nikolay Khivrin, CEO of ALTWeb Group
At that time, all clients were interested only in SEO, as it was the easiest and fastest way to get a lot of clients. Then the market for automation services of various SEO processes was almost empty. For search promotion there were only services of automatic registration in catalogs and linkators. Later, in 2006, the era of reference exchanges came, and in 2008 - promotion automation services.
It was then, at the end of 2008, that we began the development of our first product, MegaIndex . The first version of the product was launched 3 months after the start of development and included a limited runet index and a database of site positions for a million queries in search engines. After half a year, the functionality of automated website promotion appeared, which is now the main commercial product in MegaIndex.
Since 2009, the number of tools and services in MegaIndex began to grow exponentially, and the user base has increased rapidly. By 2012, MegaIndex essentially consisted of 12 different services and tools.
')
In October 2012, it seemed to me that we were ready to open a venture capital investment fund to help projects not only with money, but also with technology. At that time, ALTWeb Capital was created. The only direction that I was interested in was the development of advertising SaaS solutions. I must say that many applications come to the fund. During the year I conducted an analysis of more than 2000 projects, but about 90% of them did not fit the subject area, while the rest left something to be desired.
Having worked a year with short-term applications, it became clear to me that it was faster to build teams ourselves and make projects taking into account our knowledge and expertise. But this is quite a venture fund. First, we build all the projects within the company, respectively, all 100% of the property and project management are concentrated in one hand. Secondly, all decisions are tracked down instantly. Thirdly, projects are implemented on a single technological model, which saves a lot of resources.
At the moment, I realized that we have created a completely new concept of business development, which can be described as a venture factory .
Now ALTWeb Capital has launched or is preparing to launch more than 30 projects .
By what criteria did I choose the directions for each new project?
1. The capitalization of the project in the case of the implementation of the planned scenario should be at least 100 times the amount of investment before reaching the self-sufficiency
2. The market should have growth prospects of 100% per year for 3 years
3. From the idea to the launch of the project, the plan should be no more than 2 months (in reality, twice as long)
4. At the time of launch of the project, the market should be small (usually not more than $ 10M)
5. A new project should have significant synergy with other existing ones (customer base, technology, PR, solution of our needs)
6. The project should reach a payback one month after launch.
Another important factor in the rapid scaling is the cloud staff. In 2010, I fired the last programmer from the office. From this point on, all development was done with the help of freelancers. Since 2013, we have successfully implemented the practice of remote project management, which in fact has generated a whole ecosystem of cloud development.
It may seem to many that in such conditions the implementation of any project may come to a standstill. However, ours is completely different. The secret is in structuring the entire development, which is divided into independent phases.
Take a simple example: you need to create a system for collecting and analyzing data. No need to try to do everything at once.
First you need to make an API for collecting data and presenting it in a prepared format, for example JSON. And only then create an independent project for their processing.
Separating tasks into small blocks will help to significantly reduce the number of errors, and hence the time for debugging.
When we already had about 20 projects, and the number of physical servers exceeded 30 units, the new systematization of efficiency was a single systematization of all solutions. A single virtualization cluster has appeared, on which all projects operate. A unified management system (CMS) for the construction of all projects has appeared, which solves all the necessary analytical and user tasks.
In conclusion, I want to add that we are working in the segment of projects with relatively low risk. To date, we have already launched 16 projects, 12 of which have passed the break-even point. And another 15 are preparing to launch. In general, I would like to note that there are no risky startups, there is the creation of a business without the necessary competencies and resources.
Nikolay Khivrin, CEO of ALTWeb Group
Source: https://habr.com/ru/post/219709/
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