According to Ek, the notion of overnight success is "very misleading and actually rather harmful to any hope for long term and sustainable growth in this industry." Despite this fact, he calls out the music industry for doing just that and expecting to see business models proven "within months of inception."  That's just not how it works, he says, reminding us how iTunes was not initially the powerhouse it is today. In its first year, the company missed its revenue targets by 30% and most label executives doubted its staying power at the time.

While Ek realizes that comparing iTunes to Spotify is wrong given the very different business models for each company, it does prove the overall point: success in this industry takes time.

Spotify, which is currently hugely popular in Europe, has yet to launch in the U.S. due to contract negotiations over licensing agreements. However, as popular as the service is, it still has a long way to go in terms of both product and monetization. Ek acknowledges that one thing which needs to be addressed is how difficult it is for Spotify users to actually buy the music they're listening to. Yet despite the fact that nearly 80% of the company's users are unaware that they can purchase the tunes they're hearing, Spotify is still one of the biggest affiliates to music downloads.

Another challenge facing the company is how to earn a profit considering the large costs of licensing the music it plays... especially when reliant on an ad-supported model. (Spotify offers multiple service levels, one being ad-supported. It also offers subscriptions.) Earlier this year, another streaming service, Last.fm, had to do away with its ad-supported model for the same reason.

The Music Industry Needs to Change

If it was up to Spotify, the music industry would be embracing the future instead of constantly fighting against it. Ek says that in order for the industry to find success, it needs to realize that the new business model is "a mix between ad-supported music, downloads, subscriptions, merchandising and ticketing where the user comes first and where the key to monetization comes from portability and packaging access rights." If willing to adapt, the music industry could then have the potential to become a $40-50 billion industry and one that could grow stronger than it ever was.

Until that time, it looks like Spotify has a long road ahead of it, but it's good to know that it is up for the challenge. "We aren't interested in just trying to hype the company and then flipping it," Ek says. "We are in this for the long haul."

Learnvest is another service targeting women. The site offers checklists, budget tools and action items for women to tackle their debt and increase their credit ratings. Through a point system and a number of survey-style questions, the site determines a path for improving your financial future. The only problem is that a collection of points is less interesting than the things you can buy with it - for both women and men. In the future the company plans on integrating affiliate and ad-based monetization. If they can find a way to equate tangible items (vacations, mortgages etc) to points, the service is more likely to catch on.

Never ones to be outdone, we at ReadWriteWeb have labored intensely and discussed among ourselves to produce this app wishlist. We can't offer funding, but it would make us picky little Internet geeks terribly happy if someone developed any of the six apps listed below. You know, while we're waiting for the flying cars and food replicators.

2. Full-Length Movies on Mobiles
It's a matter of time, we're sure, before you look next to you on a subway and see a guy watching V for Vendetta on his iPhone. Movies are getting quicker to stream and more mobile, and mobile video display is a quickly-aligning Rubik's cube. A combination of the right coding technology, the right player, and the right partnership with a giant such as Hulu or Netflix could allow some lucky startup to charge the pants off of mobile users per movie. Plus, it'd be a great trick to keep the kids quiet in restaurants or church or wherever, and who, parents and non-parents alike, can't get behind an idea like that?

3. Multiplayer Augmented Reality Social Gaming
A few months ago, we found out what Crash Corp was up to, and that bee has been in our bonnet ever since. Augmented reality mobile gaming is definitely the frontier of its space. It's a gamble getting gamers away from their hotly-defended consoles, their PCs laden with expensive video cards, and all the games and ways of game playing they know. That would be, shall we say, a game changer. Ha ha. But we feel the coolest, most hardcore application of AR gaming can be achieved through multiplayer, socially enhanced, RPG-type games as opposed to the kind of casual games that isolate rather than connect users and don't tend to induce hours of Mountain-Dew fueled play. Something like foursquare is the embryonic, interface-free, back-end concept for what mobile gaming will become. We predict that in five years, all gamer geeks will have farmer's tans. Also, the addition of semi-virtual currency in marketing promotions that are location- and proximity-based make AR mobile a brand's most fantastic dream.

4. Real-Time Social Streams as Gesture-Responsive, Dimensional Displays
It's 2009. We don't have any flying cars. We don't have a moon colony. We've waited this long, and we want SOMETHING, damn it. Give us our Minority Report-esque gesture-controlled holographic displays, or at least a BumpTop-like 3D app that can handle concepts such as relative size and weight of discussions, apps, and other users. With existing apps such as Seesmic Desktop and its ilk becoming real-time and constantly present, we see our entire social graph's firehose glutting the data stream with absolutely too much information until it truly becomes the time-waster the mainstream claimed it was all along. We now need an app that can imaginatively and radically simplify statuses and microblogging and how we receive and parse them, and we're talking TED-level imagination. Why anyone that brilliant would want to work on social media projects is anyone's guess, but hey, it's our wishlist.

5. Shopping App for Thrift Stores
We can't believe some hipster hasn't picked up on this already, but someone ought to develop a web and mobile app specifically for thrift stores, kind of like TheThriftShopper, but much more than a directory. We want to see locations, reviews, sales and specials, pics of good finds, and a social community for organizing ugly sweater parties! With the revolving door that is any second-hand shop's inventory, it's probably not reasonable to ask for an Internet of Things-type cataloging program -- yet. But it would be simple and fun enough to use certain APIs to create this kind of mashup.

6. Personal Inventory and Shopping App
We've seen several trade-and-barter apps lately, such as NeighborGoods and OurShelf, that allow users to catalog items they already own and request those they need. And there are a few good shopping applications, such as Alice, out there, both in terms of inventory control as well as social shopping. But coming back to the Internet of Things, what we want is more inclusive and integrated than anything we've seen yet. We would like someone to develop a way to manage multiple home shopping lists, including groceries, book/DVD wishlists, etc., that sync with retailer inventories and send mobile alerts. It would also require a mobile app that allows shopping to be completed and automatically updates web-based lists accordingly. Eventually, this is the kind of tech that could be used to create truly smart shopping carts, as well.

As incredible as it may seem, there are corners of the Internet upon which the RWW team has not stumbled. If you know of any good apps that fit these categories, be sure to let us know in the comments!

Also, if you've got a wishlist of your own, feel free to share below.

Starting a new tech company is a labor of love. Particularly in the beginning, when funds are low, expectations are high, and the product is still a twinkle in the developer's eye, stressful situations under external pressures can lead to pull-the-plug moments.

When we interviewed Pandora founder Tim Westergren last week, he shared his personal brush with startup death: In 2007, it seemed that the music-streaming site would have to declare bankruptcy and close shop. Pandora's success is one reason to stick with your own startup. Here are six more.

[...]

Thirty-Seven Cents and a Heart Full of Hope Adrenaline

"I was $0.37 away from closing it up. Literally, that was all I had left in the bank account. There wasn't enough to pay next month's legal bills."

However, a dramatic turn of events saved him and his startup at the last minute. "In mid-November, Grocio won top prize in a local business model competition sponsored by the City of Tulsa and a local bank. That put $30K in the bank (non-equity, non-debt). Then the state of Oklahoma awarded us $100K matching funds (again, non-equity, non-debt). Money became less an issue and allowed us to focus on execution."

Although the economy began changing the equation once again last fall, Buckley encourages other startups, "I'm going to have the startup bug all my life, I think. NEVER give up if you really believe!"

Read the full post...

After years of work and more than $20 million dollars invested, the company is finally looking at the light of the end of the tunnel: Turning a profit. In this exclusive interview with founder Tim Westergren after a town hall meetup in Richmond, Virginia, we discuss the company's close call with bankruptcy in 2007, their ad-based revenue model, their roadmap for adding new features and an open API, and their incorporation into a variety of hardware devices.

Now, however, the "unwitting nonprofit" is closer than ever to growing revenues larger than their expenses, news the investors will surely be ecstatic to hear.

In addition to recording this one-on-one talk with Westergren, we also captured about 20 uncut minutes of his talk to Richmond fans and users. Watch for the fuller story of Pandora's trials, triumphs, and evolution, including an extended discussion of the utterly unscalable but nevertheless fascinating Music Genome Project.

Speaking directly to this concern (or phenomenon, depending on your perspective), two students at the New York University Stern School of Business and a former MySpace IT director have started FledgeWing, a new social network that aims to connect aspiring student entrepreneurs with one another as well as with mentors, investors, and industry professionals.

Students present brief descriptions of their projects along with goals and objectives; the UI acts as a light project management, task-tracking app. Others may leave comments or request to join the project.

The case studies are presented as business challenges within the tech/social media world and range from the creation of a retail outlet for Microsoft to the development of a business model for Twitter. Students are encouraged to submit their case studies as comments, attaching any necessary documents to validate or clarify their POV.

The site also has been categorized by areas of interest; and different forums, students, mentors, and companies appear in each category.

Co-founder Lewis Drummond said his team is "bringing together the brightest and most creative minds during a time when then entire structure of business is changing.

"The site has a large database of mentors, companies, and jobs... FledgeWing also regularly hosts all-expenses paid networking events... along with business plan competitions with cash prizes. Entrepreneurial clubs can participate in and host forums, while a feedback-style rating system and comprehensive intellectual property agreement ensure quality control and legal protection for both users and club moderators. Additionally, clubs can create events and have a place for users to collaborate together on specific projects."

In addition to bridging the gap between professional and student entrepreneurialism, the site also intends to encourage more cooperation and collaboration between student entrepreneurs and supporting organizations at different universities.

We find the heavy emphasis on business (as opposed to straight tech) an interesting and valuable approach to the aforementioned structural changes going on in our industries. As we noted in a previous article on IT and journalism student collaboration, bringing different disciplines together with an emphasis on pragmatic creation and measurable action is sure to yield mutually beneficial results for all involved. In this case, from perusing the student projects and comments, we notice a trend toward bootstrappable startups - a welcome mindset in the current economy.

Fledgewing also represents a trend we've noticed toward project-driven social-professional networks that focus on active collaboration and partnership. IBM has recently launched two such sites, one for developers and one for business partners.

What do you think: Is this breed of social-political online groups a valuable networking tool that can lead to successful projects in reality? And is interdisciplinary collaboration the best route to better, more viable startups? Let us know your thoughts in the comments.

Specific areas of interest for IBM investment include analytics, clean tech, cloud computing, smart grids, electronic health care, and green data centers. The company's expansion into Vietnam is a response to what they see as accelerated IT growth in that area.

"The country's IT sector is growing over 20 percent annually, fueled by massive Internet expansion and a younger population that's driving consumer demand for infrastructure improvements."

The first IBM Innovation Center in Vietnam is the sixth such site to open since 2007 and the forty-third in the past decade. The center will be based in Ho Chi Minh City and will focus on the development and marketing of new tech across banking, telecom, energy, and government industries. Here, local developers and others will find training and access to open standards-based tech.

The company will also be collaborating with local VCs to support the development of emerging technology products. Similar partnerships now account for nearly a third of IBM's revenue and have doubled since 2008, when IBM partnered with around 8,500 companies.

IBM is also turning its attention and earmarking funds to develop relationships with the University of Technology in Ho Chi Minh City and the College of Technology in Hanoi. Their goal is to create a curriculum in cloud computing at the former institution and service sciences at the latter. Computing labs and new departments will be created as a result.

IBM is also debuting the first local-language version of developerWorks, its online resource and social network for developers.

As for IBM's strategy of investment in growth sectors outside the U.S. and Western Europe, Freeman wrote, "The strategy is paying off.

"For example, in Brazil, more than half of the country's estimated 2,000 independent software vendors (ISVs) have become IBM partners. In China, IBM continues to recruit partners at record rates, with more than 11,000 registered so far this year. In India, IBM has over 2,500 business partners across 200 cities, ranging from small resellers to global systems integrators and ISVs - business partners now drive 35 percent of revenue for IBM in India."

Certainly, this smacks of global domination; after all, is not IBM the Starbucks of IT? The company's unrelenting expansion in areas that can least refuse its injections of tech and capital has been making headlines for years. It likely wouldn't hurt IBM to create dependent tech ecosystems in these areas, and we cannot overlook the fact that IT labor is cheaper in many of these parts of the world.

Some have also begun to question IBM's role in South Africa, an area that Freeman specifically mentioned as a growth area ripe for strong investments. The company has a rough history there; a U.S. federal court recently ruled that IBM can be held responsible for enabling apartheid by providing regime leaders with IT infrastructure used to disenfranchise and harm black citizens.

When IBM declared its lack of responsibility for how clients would use its products, the judge countered, "That level of willful blindness in the face of crimes in violation of the law of nations cannot defeat an otherwise clear showing of knowledge that the assistance IBM provided would directly and substantially support apartheid."

IBM is not UNICEF. Historically, like almost any multinational corporation, they have followed profit amorally, whether the revenue streams led to their helping oppress or enlighten the citizens of any geographical area. These partnerships in developing areas are highly profitable for the company. And let us not imagine that their desire to invest in green tech or healthcare-related tech comes from any kind of altruism: These are hot, bankable areas right now.

Still, sometimes capitalism does work for the best for all parties involved. Let's hope that Vietnamese techies benefit as much from IBM's expansion into their country as the company itself doubtless will.

"Sponsors are paying thousands of dollars for space that we're giving to Showoffs for free," wrote event producer Francisco Dao. "If you're a startup who wants exposure, there's no reason not to throw your hat in the ring."

Showoff startups will be selected by a panel of five judges, including Tubefilter co-founder Brady Brim-DeForest, investor Neil Patel, PR 2.0 publisher Brian Solis, Mixergy founder Andrew Warner, and venture capitalist Mark Suster.

Interested startups can apply on the Twiistup website.

Much like Remarkable Wit, a venture technology firm we recently covered, SproutBox focuses on product development and essential business services, investing talent in startup companies in exchange for equity.

At the BIGOmaha conference this morning, founders Trotzke and Wisler sat down to talk about the SproutBox approach and what they think will make a good startup project.

Starting today and until August 8, SproutBox will accept applications from entrepreneurs. Interested entrepreneurs and start-ups can apply online at SproutBox.com.

As a means of proving the model, SproutBox has already completed work on two projects. The team developed DecideAlready, a web-based decision-making tool, and CheddarGetter, an easy-to-use online subscription management and billing tool which is currently accepting requests to join its private beta.

Marcus explains a little bit about the differences between venture technology and venture capital models and how his firm adopts good ideas and "A team" executives-in-training to create living, breathing tech startups without blowing through ungodly amounts of cash. He also talks about the need for a solid revenue model for even the best of tech ideas.

Remarkable Wit is a little bit TechStars, a little bit Idealab, and a little bit outside any box.

The firm's flagship project, an expertise marketplace called Moontoast, launched this spring at South by Southwest.

Its two newest sites are focused on pets and celebrities.

GiantRedCarpet.com curates tweets from silver screen luminaries such as Ben Stiller, George Clooney, our own Wil Wheaton (he'll always belong to the geeks), and, obviously, the ubiquitous Ashton Kutcher. So you can follow him without, you know, following him. It also gathers updates from "gadfly" Perez Hilton, several athletes, director Kevin Smith, and a surprisingly diverse collection of musicians from Ashlee Simpson to Yoko Ono. I guess what they say is true: Everybody really is doing it.

ThePetFeed.com is simply freakin' strange. We've heard before about people who set up Twitter accounts for their animal companions. This site is their mothership, an aggregation of the passing thoughts of cats, dogs, birds, rodents, and one lonely capybara (go ahead, click the link, you know you have no idea what a capybara is).

After a long and thoughtful pause, all we can say is good on you, SawHorse.

But what is it about this niche vertical site that has in such a short period of time grown to become one of the leading financial news sites on the Web? According to Muhammad Saleem, Tip'd's community director, there is no secret ingredient to success. Instead, it's about maintaining focus on community and continuously delivering tools to help them sort through the noise that has become an unfortunate side effect of today's information age.

So what can we learn from this young start up? Plenty it seems, and where better to start than by looking at the new features the company is rolling out today.

Focus on making it easier for your community

Tip'd's biggest news today is the launch of SocialTickers; pages that track any given stock ticker across the Web. They feature the latest stories, bookmarks, tweets and links to data resources in order to provide additional information about every stock listed on the NYSE or NASDAQ.

While this fits in perfectly with an audience that is interested in financial markets, the bigger lesson here is to recognize what information your community wants and then provide it in an easy to digest manner. Tip'd, uses the SaneBull stock widget to implement part of this feature for its users, but by looking through sites such as Widgetbox you may just come across the perfect way to add more value to your community.

Information comes in all shapes, sizes and formats

Tip'd, which recognizes that financial news doesn't just come in article format, has today given its community a simple way to share relevant videos. It's also made it easier to access video only content from the site by providing a video feed.

Information doesn't always come in the form of text. The use of podcasts and video as content delivery systems is growing at an astronomical rate and if you're not making use of these mediums, remember that your competitor could be. Most online videos and podcasts now offer simple codes that allow them to be embedded on your site. Are you making use of them?

Bring your friends

The new Tip'd Inviter Tool allows any Tip'd user to invite their contacts form a Web-based e-mail address book or social networking platform such as Twitter or Facebook. Making it easier for its community, the tool tells you in advance which friends are already registered and which have already been invited.

Do you make it easy for your community members to bring their friends to your site? And if not, why not? Given the greatest recommendations are those given to us by friends, the best thing you can do for your start up is to give your evangelizers a simple way to bring their friends to your party.

Facebook matters and so does sharing

Facebook, with its 150 million+ user base is home to many fan pages including Tip'd. But how easy do you make it for your community to show off its latest stories on Facebook? Tip'd with its recently launched Facebook application provides its community with an easy one click option to share the latest crowdsourced financial news.

The importance of acknowledgement

Although some social news sites prefer not to list top users, Tip'd likes to acknowledge the contribution of its members. Not only does it offer a top users list, it now offers a top domains list to highlight which domains are consistently supplying the site with great content, as well as an ambassadors list that highlights users that have recruited the most members to its community using the Inviter tool.

While creating top lists is certainly a way to say thank you to your community, keep in mind that it isn't for everyone. Two years ago Kevin Rose pointed to the potential pitfalls: "Some of our top users - the people that have spent hundreds if not thousands of hours finding and digging the best stuff - are being blamed by some outlets as leading efforts to manipulate Digg."

Surviving the econaclypse

As observed by Walter Mossberg several months ago, the companies that succeed in this miserable economic condition that the All Things Digital team have dubbed the econaclypse, are those which focus on innovation. "The companies that can hold together and continue to work on their innovation, whether it's business model innovation, but especially if it's product innovation, those are the companies that come out of these things strongest."

Will Tip'd survive the econaclypse? Who knows? But certainly, it won't be through lack of trying.

Disclosure: Tip'd co-founder Muhammad Saleem is a co-host along with article author Lidija Davis on The Drill Down; a podcast about the Digg community.

BrightKite started as a "nights and weekends" project that they submitted to TechStars, a small funding initiative similar to Y Combinator. TechStars provided mentorship, a bit of seed capital and generally got them off the ground - in return for some equity. BrightKite did a working prototype, then raised an angel round of $1M last year.

I then asked the two companies about how their product plan will be affected, if at all, by the economy downturn. I noted that Zoho has a wide variety of products in their Web Office suite, so for example do they plan to fold some of those into bigger products due to the economy? Zoho replied that they make money from their business applications, rather than their collaboration apps. So they have made it a priority to integrate their collaboration apps into the business apps over the coming year(s). They will also continue to add new apps, however those will be money-making business apps.

I put the same question to BrightKite: has their product plan changed due to the economy? BrightKite replied that it hasn't changed significantly, they were always planning to ramp up the marketing and do more partnerships this year. They also plan to introduce revenue drivers - e.g. location-based advertising and analytics for businesses. Generally the economy hasn't changed their revenue-generating plans too much, although it's perhaps brought it forward by a month or so.

In terms of success factors, Zoho mentioned that "constant innovation" has allowed them to keep ahead of the pack. In the online word processing space, there were around 17 competing apps when they launched Zoho Writer - but continually improving their product helped them keep ahead. Zoho has about 250 staff, so that has helped. On the other side of the staffing coin, BrightKite is a small 10-person team. They believe that being open and iterating on user problems is key for their success.

There are many more tips in the podcast, which we invite you to listen to below. Also let us know your own thoughts on not just surviving, but thriving, in this current economic environment.

Download MP3

Cat pic: fofurasfelinas

Another Web-based time tracking app? Why would we focus on that? There are a number of features that make Freckle worth a look, but the primary reason for considering Freckle is that the team behind it is rethinking the time tracking problem. And it could be that approach which differentiates the product in a crowded market.

Part of that user happiness will come from the intuitive design and thoughtful AJAX implementation throughout the app. The thoughtful - and colorful - aesthetic should come as no surprise, given that it was put together by interface designer Amy Hoy and javascript consultant Thomas Fuchs - the same folks who brought us Twistori.

The most striking part of the app is the user interface. Unlike the Web-based time tracking app I use on a regular basis, Freckle allows users to enter all of your time and categorize it without a lot of switching between typing and clicking. You can enter all of the data from the keyboard. And that saves time. Time that could be spent on other projects.

Many other time tracking systems rely on a rigid set of client and category lists that - while often editable - require dropping the task at hand to add new clients, projects, and categories. With Freckle, adding these elements all happens on the fly. Adding a new category, for example, is as simple as adding a new tag. What's more, you're not constrained to a single category for a task. You can can categorize tasks for both client's requirements as well as your own internal tracking needs.

Yes, Freckle is simple and thoughtful - with some insightful reporting functionality to boot. But unfortunately, Freckle's ultra-simple design lacks one feature which - for me - makes my current time tracking app invaluable: a stopwatch. With Freckle, I'm still required to figure out how much time I've spent on any given activity. And for someone like me, who jumps from task to task and client to client, the lack of a stopwatch is a deal breaker.

And that's unfortunate. I want to use the app. Partially because of the application, but mostly because of the team's vision for Freckle:

"We're in this to build a sustainable business: to make truly great software, to help people add a little joy back to their daily business, and to make a living doing it.

We're not building a tasty startup snack for Google to devour, digest, and defecate."

It's always nice to see a team with a vision - especially when that vision is accompanied by an application with a revenue model. Freckle offers several levels of paid service starting at $24 US per month for five users. Each level carries a 30-day free trial. Freckle also offers a "one user, one project" setup for free.

If you're more focused than I and capable of judging "how long you've spent on X," then Freckle could very well be the answer to your time tracking needs. It's certainly much more fun and functional than a dreary spreadsheet.

To try the app and read more about the team's vision, visit Freckle.

Wild Apricot is a young technology company out of Toronto, Canada. We provide Software-as-as-Service for associations, clubs, and non-profit organizations. This is our story of an investment round that fell through due to economic conditions.

Originally financed by our founders, the company wanted to grow faster and in December 2007 decided to seek additional financing from outside investors. Things progressed quickly, and by February 2008 we shook hands on a deal with a new investor: a very entrepreneurial investment company out of UK. Closing was planned for April 2008.

Of course, things never go as planned (and this is one of the lessons many startups learn the painful way). First, due diligence protracted much longer than expected. This was partially due to the fact that our Canadian-based company has a subsidiary office in Moscow, Russia, where the bulk of software development work takes place. The investor was keen to ensure that the intellectual property was properly protected, and it required changes to the legal setup of the Russian subsidiary, new employment contracts for all employees, and a bunch of other changes.

Then the MBAs and lawyers got their hands on the deal, and it quickly deteriorated from a relatively simple original term sheet to a thick stack of very complicated contracts.

This was to be the first Canadian deal for the investment company, and the deal stalled for a while as the investor's lawyers struggled to reconcile the terms sheet with their standard templates and the wording of UK contractual law with the Canadian legal system and its way of doing things. (That's another lesson for start-ups: making a deal outside of your home base frequently takes much more time and energy.)

The shareholder agreement, articles of association, board by-laws, and all the other fun documents multiplied in versions like rabbits.

Everybody got exhausted, and the deal almost derailed a few times and was only saved thanks to the open dialog between our company and the majority shareholder of the investment company.

Dmitry Buterin, the Chief Apricot (aka President of Wild Apricot), got the final documents on the morning of October 9th, 2008. He was visiting the Moscow office at the time and went to work having the documents signed and faxed between Moscow and Toronto.

Alas, it was not to be. At 4:00 pm, he got a call from the investor. "We are not going to close the deal after all. Our shareholders are panicking and withdrawing their money. We cannot do any new deals now." The financial crisis finally hit home.

After seven months of due diligence, many thousands of dollars spent on accountants and lawyers, and countless hours invested by the management team, Wild Apricot had to write it all off.

It was even more disappointing because our company was delivering on its promises. Back in January 2008, we provided a detailed financial projection, and at the last check-in with the investor team we were proud to show the September and year-to-date numbers were right on the projections.

As the saying goes, in every crisis there is opportunity. So, the Wild Apricot team went searching hard for those opportunities.

The story is still being written because the crisis is still unfolding, but here is what we have achieved so far:

1. We asked nicely, and the investor agreed to reimburse part of Wild Apricot's legal expenses, even though there was no legal obligation on the investor's part.
2. We contacted local media right away to capitalize on all of the hoopla about the crisis and ended up on Canada's CBC television.
3. The founders put together another round of their own money, and while they had to scale back some growth ambitions, we feel comfortable about riding out the current storm and bridging this and the next investment round. (we knew that any deal had a risk of falling through, so we had backup financing arranged in advance, and it came in very handy.)

Wal-Mart has been reporting record growth as of late and McDonalds is stealing market share from Starbucks. So we think Wild Apricot might do even better in these tough times. Non-profits are hurting and have to trim their budgets (just search Google News).

To tell you more about our software: the basic premise is that for a simple, flat monthly fee of $25 to $200, Wild Apricot replaces up to seven separate pieces of software: the content management system for your website, a members database, a secure private website for members and the board, an event registration system, online payments processing, software to send bulk emails and newsletters, and online community facilities, such as blogs and discussion forums. Technical support and updates are free.

For a small association or club, this set-up saves thousands of dollars in software, countless hours of volunteer time usually wasted on copying and pasting and reconciling the data between a dozen Excel files, and paying through the nose for IT services.

Wild Apricot delivers a custom-built website project that would cost the equivalent of $20,000 or more (not to mention hefty ongoing maintenance and support fees).

October 2008 has been our best month in terms of absolute financial growth (meaning our monthly revenue has increased by the biggest amount ever). Percentage-wise, our revenue grew by 11.3% in a single month! And November so far is shaping up to be an even better month for us.

We we are very confident in our ability to keep growing by staying agile on our feet!

And here is the silver lining:

The US dollar is shooting up against most other currencies. Wild Apricot software is priced in US dollars, while its expenditures are largely in Canadian dollars and Russian rubles. This adds a healthy boost to its bottom line.

What are your war stories? How are you navigating these waters, and what new opportunities are opening up for other technology startups?

If you're curious to know more about this 'gritty startup', please click through to Wild Apricot's website and support a RWW sponsor!