What Makes Start-ups Burn Through Cash?

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The Next Big Thing: Niche Media for Rich Kids. With the news that Thrillist co-founder Ben Lerer plans to launch a London outpost of his popular newsletter for all things dude, Valleywag calls a boom in the market for "guilt-free niche media targeted at well-heeled hedonistic young people." After all, Lerer isn't alone in capitalizing on the fact that the well-to-do are well-insulated from the recession. Racked, the shopping blog, added a national edition this week. (Valleywag's explanation for a shopping boom: unemployment rates among those making less than $12,000 are 30.8 percent, whereas unemployment among the $138,000+ set is 3.2 percent). But why are the Rackeds, Thrillists, and Daily Candys of the world thriving when luxury advertisers are cutting back in other forms of media? Lerer, whose company is on track to make more than $10 million in 2010, tells the blog that newsletters are cheaper to run, and better targeted. Check out Lerer and his co-founder Adam Rich who made nos. 4 and 5 on our annual 30 under 30 list last year.

The No. 1 cause of start-ups burning through cash. It's not handing out salaries too early. Nor is it investing too much in technology. It's the "premature scaling of sales and marketing," writes serial tech entrepreneur Steve Blank, and here's how you can fix it before it's too late.

The World's Weirdest Patents. The American patent system may not be the best at fostering innovation, but theHuffington Post has a collected some hilarious would-be products it's helped protect. There's the motorized ice cream cone which facilitates "sculpting and carving of channels with one's tongue." The doll urn, for when you want to store the remains of a loved one or pet inside the body of a doll. Not to mention a neck-massager powered by your shoe, a pair of pants that convert into a hammock, and more. Order yours today!

Farewell to the inventor of the Frisbee. Sad news for anyone who's ever spent a lazy afternoon playing a game of Frisbee. Fred Morrison, the man credited with inventing the flying disc, passed away this week at the age of 90. Morrison's invention, originally called a "Pluto Platter," was born from his days on the Santa Monica beach when he and his girlfriend would toss a cake pan back and forth. The idea to market his flying disc came when a stranger offered to buy his cake-pan disc for a quarter. As Morrison explains, "At the time cake pans cost about a nickel. A business was born!" After his service in World War II as a bomber pilot, Morrison hawked his unusual invention at county fairs and department stores. However, it wasn't until he licensed his toy to the Wham-O Corporation in 1957, (which gave the toy its Frisbee name), that the flying disc became a household name. Sales have since reached the hundreds of millions. As Kevin Givens, executive director of the World Flying Disc Federation explains, "It is impossible to fathom the impact Fred Morrison has had on the world through the invention of such a simple object known as the Frisbee."

Congressional gridlock hits jobs bill. A rare bipartisan jobs proposal was released yesterday that would provide an array of tax breaks to growing companies, but it quickly became mired in controversy, reports the New York Times. The bill, which was introduced by Democrat Max Baucus and Republican Charles Grassley, would provide a $1000 tax credit to any company that keeps a new employee on the payroll for more than 52 weeks and it would wave payroll taxes for companies that hire someone who has been laid off for more than 60 days. It sounds good--and President Obama has been pushing for a compromise for weeks--but the bill was immediately attacked by some Democrats for having too many corporate tax breaks and by some Republicans for excessive spending.

Google's latest social acquisition Social search start-up Aardvark has confirmed rumors that it has been acquired by Google. According to the Wall Street Journal, the service provides customized answers to users' questions by asking the people in their online networks via an e-mail or IM message. It only asks friends or friends of friends who are online and most likely to be able to answer that question. For instance, "Where can I get the best bagel in New York?" might be sent only to people who live or have lived in New York. While it's not clear exactly what Google has planned for Aardvark, FastCompany speculates that the new service, acquired just two days after Google unveiled Buzz, could challenge Facebook by being more useful to users and guidebooks like Yelp by creating customized opinions.

5 quirky small business sponsorships for the Vancouver Olympics. While most Olympic teams go the way of multi-million dollar corporate sponsorships, there are plenty of small businesses that have locked down official deals for Vancouver's games. CNN Money has a slideshow of 5 smaller companies with oddball sponsorships, such as the Kodiak Technology Group--the official sponsor of the U.S. Curling team with its Hurry Hard Condoms--and Vulcan Global Manufacturing Solutions, a Milwaukee-based metal-parts manufacturer that's the official supplier of lead weights for the U.S. Luge team.

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Last updated: Feb 12, 2010




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