LetsBuyIt Blog

We had previously mentioned that the internet start-ups are particularly prone to financial difficulties because of their long Return-on-Investment (ROI) structures as well as the Capital Investments being primarily a luxurious side-effect of other successful endeavours. However when the going gets though these investments tend to be quickly cut, reduced or “restructured”.

The news about the decrease of advertising revenues is our daily bread already but now the first internet-initiatives are looking at reducing staff, like Wikia announcing to lay-off 10% of their staff! These news are hard to accept when they relate to you but this is the real deal when trying to survive among this shark-pool of economies. But how do you tell your staff that their days are counted? Check out how Jerry Yang, fonder of Yahoo, did it in his lowercase style here.

It is very difficult to avoid news about the financial crisis nowadays and it gets “frustrating” to read the whole banking and finance sector is collapsing. However when it starts hitting home at the foundation of the internet entrepreneur scene, as mentioned by Om Malik, all the start-ups need to listen up.

As Handelsblatt pointed out, the funding of most projects is in jeopardy because the investors and business angels are losing money elsewhere and need to concentrate on reducing the damage. Qitera had to find this out the hard way now after having already shifted to the Silicon Valley to be closer to the investor, stated Handelsblatt.com. That implies that either they stop funding new projects and/or the investor needs to focus on the projects in the portfolio and start cutting costs. The difference to the many industry sectors is that internet start-ups always take significant time to gain a critical mass and break-even because the margins are usually in the cent-area and not hard dollars.

Therefore the financing is very important in the initial start-up phase so get what you can now because the tech-bubble is not actually a bubble but sonner or later as exposed to the harsh financial conditions as everybody else. Be ready because reducing staff in an already small team, really hurts!

Almost everybody has watched some YouTube Videos and several videos tend to pop-up again from left, right and center. The list of the 10 most viewed YouTube Videos of all times (as of September 2008) therefore is particularly interesting. As Richard MacManus pointed it out in his article on ReadWriteWeb, the fact that hardly any of these successful videos is User Generated Content (UGC) but rather professionally produced videos gives a clear sign for the future of online content.

Does that mean that content production companies like Blinkenlichten, the German startup that produces professional, journalistic video content, is the way for the future instead of UGC?

Our favourite video: