On the surface, though, it's not clear to me what the big play is and what itch you're scratching. It's a MUCH more creative way to publish photography, which is cool. I don't know the photosharing space very well (though I have a pro account on Flickr and love it).

There are plenty of stars in the photosharing space (Flickr, Smugmug), but it's a pretty mature space. So the big question is: Is the innovation you're bringing compelling enough to shake up the space? If you reached out to 100 photo nuts right now, how many would sign up and how many would be there in a month?

My gut says that it'd be a hard slog for fundraising– I don't think VCs are looking to the photosharing space to spit out a $100m biz (though remember the Google example). You'll get the “It's a feature, not a business” response until you prove otherwise.

If you can afford to do it, my advice would be to keep at it 'till you have a healthy user growth curve, solid retention, and a proven zero-cost distribution plan (SEO? VIral?). Early monetization would be good too (“ad supported” seems like a non-starter).

I would also experiment with marketing– if you haven't already, branch out to people you don't know (find a photography forum), post your value prop and a link and measure the number of people who come and the percentage that sign up to see if anyone wants what you've built. This allows you to experiment with messaging, which is critical, and get a reality check on the demand.

And for God's sake, don't trust your friends/colleague's feedback.
(read this: http://www.theonion.com/content/node/39174 )

On the surface, though, it's not clear to me what the big play is and what itch you're scratching. It's a MUCH more creative way to publish photography, which is cool. I don't know the photosharing space very well (though I have a pro account on Flickr and love it).

There are plenty of stars in the photosharing space (Flickr, Smugmug), but it's a pretty mature space. So the big question is: Is the innovation you're bringing compelling enough to shake up the space? If you reached out to 100 photo nuts right now, how many would sign up and how many would be there in a month?

My gut says that it'd be a hard slog for fundraising– I don't think VCs are looking to the photosharing space to spit out a $100m biz (though remember the Google example). You'll get the “It's a feature, not a business” response until you prove otherwise.

If you can afford to do it, my advice would be to keep at it 'till you have a healthy user growth curve, solid retention, and a proven zero-cost distribution plan (SEO? VIral?). Early monetization would be good too (“ad supported” seems like a non-starter).

I would also experiment with marketing– if you haven't already, branch out to people you don't know (find a photography forum), post your value prop and a link and measure the number of people who come and the percentage that sign up to see if anyone wants what you've built. This allows you to experiment with messaging, which is critical, and get a reality check on the demand.

And for God's sake, don't trust your friends/colleague's feedback.
(read this: http://www.theonion.com/content/node/39174 )

For context, I was the person who asked the second question. The reason I asked was because my two co-founders and I have worked in our spare time on this project for a while now. I've heard from many people that the funding process takes a long time, and I feel that that time would be better spent actually just working on the product instead. So far, the only money we've spent was to pay for a single dedicated server and our relatively small AWS bill. The rest is just our time. My guess is that after funding we would be able to move faster, but do we really need to do that? I don't know, maybe you could offer some advice?

You mentioned some hot VC trends now. Our application is in the photo-sharing space which you said was on its way out, but we are also working on a facebook app and considering building an iPhone app if our viewer doesn't work so well in Safari on the iPhone.

The product we are creating is a web-based photo collage maker called ScrapWalls. You can upload your photos, and drag them around a giant canvas. Once you publish your ScrapWall, you can share it via a URL of your choosing. The web-based ScrapWalls viewer allows walls with thousands of photos to initially load just as fast as a single image. You can then zoom in and pan around using controls similar to Google Maps. Zooming in all the way will give you the full resolution image.

The site is live, and you can try it out if you'd like. We'd love to hear feedback from you as well as other people who like photos and photo collages.
http://www.scrapwalls.com

I touched on it a little last night– I think a lot of people nowadays shoot for the “sell for $15m to Google and get out” target, which is a shame. Big ambitions often need big dollars (though I do think that for most web software, you can run the experiment for much less than most VCs want to invest and court VC only AFTER you've proven things out a bit).

Regarding the lifestyle stuff– Righto! My preso last night was purposefully ordered to talk about the “what do you WANT?” discussion before talking about the “what are you going to build?”. I think most people (myself include) chase ideas that they love without considering what their goals are… Which is kinda bad. A lot of people who set out to build high-growth businesses are not the type who would enjoy growing/running them.

“Given that taking huge piles of VC money both has the dangers you describe and and firmly closes the door on most early acquisition opportunities, why are people still going after big VC?”

Just as there are people who only eat at nice restaurants or only ski when the conditions are perfect, there are entrepreneurs who are only looking at big market opportunities (where selling for $10M isn't on their radar). For instance, for someone who sold their last company for $100M+ then they might have their sights set on the next one going public and being worth $1B. When you think bigger like that, you tend to only think about bigger investment checks — like, why waste your time raising ONLY $1M and 50k at a time?! Look at McCaw and Clearwire — I'm not sure they even bothered with traditional VC instead going for ibank money right off the bat.

Plus VCs can often bring a lot more to the table than money, if you need certain experience, contacts, etc.

“Can you talk about how to decide whether a business/idea should fall into the “lifestyle” category or the “get funding a go big” category?”

It feels to me that the person/founder(s) should decide this for themselves, not the business. As in, do you *want* a lifestyle business (which are certainly the majority), or do you only want to swing a bit more for the fences. The majority of people in this world decide to have a business that earns them a comfortable living, which is fine. Then there are the nutcases (yours truly) that are only looking at big market opportunities and way different risk/reward ratios. Doesn't mean one can't lead to the other, but I think you need to decide what you want first THEN whether your idea fits.