My answer:

Most importantly, make sure your business idea actually solves a problem. If it doesn’t solve problems, no one is going to care about it no matter how good you think your idea is.

2nd. Good ideas are a dime a dozen. Execution is everything. Find good partners. Build a good team. Stay focused.
At the end of the day, your success is all tied to the whole team, not your idea.

A business model like the following has been busted (especially if you want to raise VC funding):

• have a great idea
• build a nice demo, alpha version of your idea
• raise a ton of money
• get millions of users (after a couple of years)
• throw advertising around to attempt to make tons of money

However, there are tons of  business models out there.  Here are some of them:

• Freeminum – give away most of your service for free.   Charge for a few premium features.  Example: Craigslist(charge only for job posting), TaoBao(no listing/transaction fee, sellers can pay for additional services/promotion), iPhone apps, Flickr
  
• The “Woot” model with Guerrilla marketing- one kind of product  per day, limited supply.  Bag of craps. example: Woot
• “Pay what you think it’s worth” – let customers decide how much your service is worth.  Not many people/companies have been brave enough to embrace this business model.  It’s quite popular in open source software offering(you can call it “donation” as well).  Modrails currently offers Phusion Passenger Enterprise via this way.
• Open source software model: give software away for free. Charge for certification, support and service subscription
• “Pay as you go” utility model – charge customers by their usages.  They don’t need to pay when they don’t actually use your service.  Example:  Amazon Web Service
• Monthly Subscription – you charge a monthly fee for different level of services or supports.  Example: SalesForce, NetFlix
• Middle Man/Broker – You act as a middle man to facilitate a transaction between a supplier and a demand.  You take a percentage cut of a completed transaction.  Example: Google AdSenses, affiliate marketing in general
• Money printing machine – this is a dream for everyone.  eg: Google Adwords where advertisers pay for clicks/impressions/actions
• Learn from gaming industry where gamers have been willing to spend money – 29 business models for games

Other resources:

• In a battered economy, free goods and services online are more attractive than ever. So how can the suppliers make a business model out of nothing?  Wall Street Journal talks about the Economics of Giving It Away
• is the free ride for web startups is over?

Whatever business model you come up, you really need to provide values to users and work on stuff that matters.

The majority of the discussion is on surviving the downturn(recession).

General thoughts:

• Be scrappy
• do more with less
• Save money, cut cost
• be data-driven
• the bar for VC series A is very high
• VCs will still bet on very viral products.  But you need to keep the burn rate down

Good points by Andrew Chen:

• Vcs tell you what’s hot, but they already invest tons of money into this space.
• Don’t build your business around corporate partnership – you can’t predict
• Execution always beats ideas.  Great team + mediocre ideas > mediocre team + great ideas
• No need to worry about cutting edges
• 6-9 months bootstrapping(then raise angel, then raise VC if you can or you need it)

It was a great discussion.

mo

1. What is pitching? In Silicon Valley, it’s very common for entrepreneurs to pitch their ideas to VC for funding.  But pitching actually has a much broad meaning.  The goal of pitching is really on how you can get enough attraction from telling your story to generate new relationship or to get some one’s buy-in .  It is actually such an important and common task that we deal with every day on about everything.
2. Pitching is not just a business activity. It happens at work, at home, at movie theatre, among colleagues, between wife and husband, among friends, online and offline…  When you and your friend were discussing if they would all go to the movie you want, it’s your pitch. You want to persuade your husband or wife to buy a Graco car seat versus a Chicoo brand, it’s a pitch. You have an innovative idea on how to improve one project and you need to get your boss’ buy-in, it’s a pitch. You run into a person at a bar, who could be your potential client, and you want him/her have more interests in your offering, it’s a pitch…  You can practice your pitching skills whenever
3. The secret of a successful pitch is so simple, yet so few people know how to make it work. There are three basic elements of a good pitch, and the goal is to make these three elements clear and short! Below is a great presentation from the session:
   • what is the problem you are trying to solve
   • why it matters /why it is a problem
   • how you are going to solve the problem and why it’s different
   Stanford E Week 2009 Pitching&Presenting Workshop

   View more presentations from agilestorm.
4. A very practical way of practicing pitching that I found useful is: have a live elevator pitch for yourself (who you are & what you do). Practice this often (daily or weekly); write it down in a piece of paper; keep it in your pocket; revise it while you are in a car or waiting for lunch…

Have a great pitch next time!