Bootstrapper.com - Confessions of Serial Entrepreneurs

Hello there gang!

Been a while since I last posted to this blog, but I’ll try to be more regular in the future.  I wanted to take this time to officially announce the launch of my next startup: http://www.PriceDrip.com.  Please check it out, register for free, tell your friends, but most importantly.. GIVE ME FEEDBACK!  You can leave me comments here or get in touch with me directly (you know how).

PriceDrip is actually a revolutionary new way to shop. It’s an auction site for brand new items, but instead of watching the price go up constantly, you watch it fall-er, drip!  You do have to pay to bid though and this is partially to ensure serious buyers use the site and not just casual browsers.  Give it a whirl, win an auction today.

Now for all you entrepreneurs out there, a few important points.  First, I got this entire thing up and running in about 4 months, but  had to work EVERY day at it.  I did 98% of the progamming myself and hired a few contractors along the way.  I’m now in the marketing stage, which means setting up my banners, ads, etc ad testing it.  Once I know what works, I crank up the marketing dollars and zoom zoom zoom!

So please, provide any feedback that you may have below.  I don’t care if it’s good or bad or if you love the idea or hate the idea.  Just be honest!

Hey everyone,

We were featured today in the NY Daily News!!!

http://www.nydailynews.com/money/2009/02/23/2009-02-23_blogging_for_bucks_how_pros_get_paid_for.html

PS. Congrats to Bryce who also is featured and is an awesome girl!

I was recently asked why I started Shiny Door.  My response:

I was in a tough spot.  The startup I had been with did not make it.  I looked around for a position but I could not find a good fit.  I really wanted a job that I would love and that would make a difference in the world.  Through networking, the idea of teach a social networking class came about.  As I thought more about it and talked to others about it, I realized I could turn that idea into a business plan.

I love people.  I love figuring out web applications.  I understand the struggles of small/medium businesses and nonprofits.  I have found value from networking in general and online social networking in particular.  The pieces all seemed to fit together.

I love to talk social media but I recognize my specialty is relationship building.  I teach folks the importance of integrating online and offline networking.

I never could have launched Shiny Door without my network.  My network not only helped me find my initial clients but also helped me with my website, my logo, my curriculum, my business model, etc.  Thanks to my network (and a lot of hard work), I was able to launch Shiny Door within three weeks of inception and become profitable within eight weeks of inception.

As the only person developing Shiny Door, I very much needed (and do still need) feedback from my friends and colleagues.  My network provides the guidance and support that all startups require.

I have more receipts from coffee shops than any other place.  I don’t even drink coffee! The sustainability of Shiny Door is reliant upon me having a strong network.  To have a strong network, I must meet with online colleagues offline and interact with as many contacts as possible online.  I believe in quality over quantity.  Colleagues who know me and trust me are more likely to recommend me and/or provide guidance to me.

Shiny Door is the best social networking success story I could possible tell folks.  Because its my story.  What’s your story?

I am often asked what VC’s typically look for when performing analysis/due diligence on a business plan. Below is a plain and simple outline on what they look for:

1. Cover Page

1. Table of Contents

1. Executive Summary
   1. Company Intro
   2. Concept and Mission
   3. Mission Statement
   4. Strategy
   5. Company’s Products and Services
   6. Market Analysis and Trends
   7. Competitive Analysis
   8. Value Add of the Company
   9. Financing Amount, Purpose and Time Span
   10. Milestones
   11. Management Profile
   12. Financial Summary
   13. Exit Strategy

1. Company History and Current Status
   1. How Company Started
   2. Founders and Personnel

1. Revenue Model
   1. Nature of the Business
   2. Profit Margins of Industry

1. Technology, Products and Services
   1. Description of the technology (include diagrams)
   2. Value Add
   3. Competitive Advantages
   4. Proprietary Nature
   5. Current State of Development

1. Market Analysis
   1. The Overall Industry
   2. Market Segments Targeted and Rationale
   3. Customer Profiles (needs met/unmet, buying patterns)
   4. Describe how the company’s products will meet the needs of intended markets
   5. Describe all industry forces (suppliers, buyers, threat of substitutes)
   6. Barriers to Entry
2. Competitive Analysis

1. 1. Competitor Profiles (History, Segments Served, Market Share)
   2. Provide Solutions to Breech Entry Barriers
   3. Competitive Advantages (IP, etc)
   4. Anticipated reaction from competitors upon market entry

1. Sales and Marketing

Sales

1. 1. Material, Labor, Overhead Costs
   2. Methods of Promotion and Distribution
   3. Revenue Model
   4. Customer Selling Approach

Marketing

1. 1. Identify customer purchasing decisions and trends
   2. Identify current needs served and unmet by competition
   3. Identify company’s positioning (quality vs. price, innovator vs. adaptor, follower vs. leader, private sector vs. government)

1. Management Profile
   1. Background Information
   2. Capabilities
   3. Management Gaps
   4. Organizational Chart

1. Financial Strategy

Financial Operations

1. 1. List of all loans and terms
   2. Operating Budget
   3. Milestones
   4. Pro-forma income, cash flow and balance sheet

Financing

1. 1. Breakeven Analysis
   2. Amount Needed, Time Period, Total Amount Required
   3. Capitalization Table showing the amount raised and the percentage of ownership
   4. Exit Strategy

I recently saw a video on YouTube featuring David Rose, the very successful serial entrepreneur and financier. A summarization of his presentation (with some of my own comments included) follows…

Outside of what is on your previously prepared slide deck, there are 10 crucial traits an entrepreneur must convey to a group of Angels if they expect to be funded. They are qualities which one cannot fake and are the foundation for true success as an entrepreneur.

The single most important asset an Angel invests in is the entrepreneur. It is not business models, markets, financials or anything of the sort. They are investing in you. That’s it. Thus, the entire purpose of a pitch is to convince investors that you are the entrepreneur for whom they are going to risk and invest their money in, and as a result, then make a lot of money in return.

As stated previously, an entrepreneur has very little time to grab their audience’s attention….. actually only seconds- just those initial 10 seconds.  Therefore, make sure your pitch starts off like a rocket and then immediately transitions into conveying the top 10 traits which investors look for during your pitch. These include:

1)     Integrity: This is the most important attribute in a prospective entrepreneur. An investor would much rather invest in, and take a chance with, someone where there is no question regarding alternative motives or who they’re looking out for in the long term.

2)     Passion: Entrepreneurs by definition are individuals who are leaving something and starting something else. Something completely new. Creating a new venture and putting their lifeblood into it. If you’re not passionate about your venture… then why should anyone else be?

3)     Experience: You have to be able to say “Hey, I’ve done this before.”… this means starting an enterprise and creating value and also taking it/seeing it through beginning to end. This is why Angels love to fund serial entrepreneurs- because even if they didn’t do it right the first time, they’ve learned the hard lessons that will stand the test of time (which they won’t repeat). Plain and simple- they want experience in creating an organization.

4)     Knowledge: If you’re telling an investor you’re going to be the great developer of a new trend- you better understand the macro and micro-level implications of your new product/service and encompass an immense amount of domain expertise the given vertical. You must know your market, who the players are and why your product/service brings new and significant value.

5)     Skills: These include technical knowledge, marketing, sales, management, etc. Not everyone has such a large and diverse set of competencies and experiences. In fact, very few have a solid acumen in all of these crucial skill areas to run a company. Therefore, as the entrepreneur, you must be a leader (See #6).

6)     Leadership: An entrepreneur must convince investors that they’ve recruited and developed a team that encompasses all the necessary skill sets to run an organization efficiently and effectively, or, convince the investors that they can do so personally. They must present themselves as having the necessary charisma, management style and ability to get others to follow their lead, as well as inspire and motivate them.

7)     Commitment: An investor wants to be assured that you’re going to be there to the end with your venture. Convey that you’ll fight to the death and do anything possible before losing even one dollar of your investors money. Fiscal responsibility is imperative as bad things are bound to happen.

8)     Vision: You have to be able to see where the venture is going. There is not one investor in the world who wants another “me too” product. Instead they seek entrepreneurs who know they can change the world.

9)     Realism: Investors want someone who is grounded and realizes that a good idea doesn’t always ascend to a market changing idea. As stated previously, bad things do occasionally take place, thus it’s imperative to be rational and have such projections in place.

10) Coachable: Investors need to know that you have the ability to listen and accept constructive criticism.

So one of the people that applied to the BootStrapper Venture Summit told me a story about how he raised capital … so i’ll repost it for everyone …

It is imporrtant to recognize that I always defined an angel as looking for investor-partners, not just investors. In addition to a good business idea is the acceptance as who I am as co-founder, including the appreciation of how much we could produce by bootstrapping. I found my first angel investor by placing breakfast invitations under the hotel doors of all the attendees to a later-stage investor event. Two people came to my speciality coffee room, one became my first investor and the other sponsored another angel forum. I went to this angel forum which is where I met my 2nd angel investor.

Everyone along the way has been thanked, and thanked, and thanked as many times as possible. This requires no extra money other than time.

Next form of bootstrapping is going to as many events as possible and flying in-and-out in the most inconvenient times possible, but never staying the extra day since you can easily spend an extra $500 to $750 on the extra day. Going to events includes participating as a panelist, pitching or just working the audience.

Another form of bootstrapping is to comment and respond to as many professional fund raising news stories and blogs as possible.

A final form of bootstrapping is to maintain an ongoing list of potential investors and to update them everytime a major milestone is achieved. This is a subset of the information provided to existing investors, whom by the way will usually invest more than once if they are treated as a partner- not just an investor.

Each of these requires persistence and professionalism. There are numerous tricks-of-the-trade that can be learned, but have to be embraced and accepted as part of the ongoing process to be successful at raising capital and growing a company.

Brian Javeline
President & CEO
www.MyOnlineToolbox.com
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954-786-0883 x6252

You’ve been sitting around with a few friends, talking, laughing and it hits you!  The next big thing!  Your next (or maybe first) company!  You share it with your friends and they help you work out the details and you just KNOW this thing will be awesome.

A few weeks go by and you’ve invested some serious time and effort (and maybe even money) into this effort.  You have the basics of a business plan, a rough sketch of a marketing plan and you’ve even told your family.  Everyone’s in your corner, rooting for you.

A few more weeks pass and you hit the wall… You realize that you didn’t do as much market research as you thought.  Maybe there’s another company that’s already doing what you’re doing.  Maybe the costs to start will be too high for you to handle.  What do you do?!

You can’t just “stop” because you’ve already told your friends and family about it and to stop now would mean losing face.  It would mean that forever more, you’re labeled as that dreamer that never gets things done but talks about those things all the time.

Relax.  We’ve all been there and we’ve all given up on a few ideas.  But at this point, you need to stop and think.  Take a break from starting this company of yours and assess if it’s really worth continuing.  The simplest thing to do at this point is to make a list of your alternatives.  What’s the alternative use of your time?  What’s the alternative use of your money?

Next, take those alternatives and create a little table to assess the pro’s and cons.  List EVERY pro (even the dumb ones) and EVERY con (ESPECIALLY the dumb ones) just to keep the analysis accurate.  After you’ve compiled your list of alternatives and the pros and cons of either staying on course or pursuing an alternative, STOP.  DO NOT DECIDE ANYTHING.

Give it a week to simmer, then look at your list and cross out the pros that are overlapping.  For example if you have three options:

1. Continuing to work on the business
2. Getting a job
3. Going back to school

If all three have a pro of “gives me a productive way to spend my day”, then cross that pro out!  Same with the cons.

Now that you have your FINAL list, spend some time thinking it over.  Which of those pros and cons do you really care about and which are just there for the sake of being there.

Remember, there’s no shame in throwing in the towel if it’s for good reason.  And quitting early may be better than quitting late.  I’d love to get your stories on when/how you quit ideas, so please leave comments.

One of the most important things for a successful startup or any company for that matter is a sound HR policy. Most young companies neglect HR and just hire friends or because a resume reads well. It is very important to build a cohesive team that works together. A bunch of brilliant people that hate each other is recipe for disaster. This should be common sense but rarely is down correctly.

Before you hire, please make sure you know the goals of the person, define a mission for the organization, a mission and milestones for the position and attempt to build a culture for the company. If your company doesn’t have a soul, why would anyone stay?

So I was going back and forth today with Jeff Pulver founder of Vonage and he was talking about everything he was working on and he made the comment that sometimes he felt he was busy on a million things and othertimes that he was doing nothing. I think that’s a trait worth exploring. I’ve seen it in all serial entrepreneurs, especially myself whenever we are trying to do too much. I’ve learned over the last few months that the most important thing for a crazy entrepreneur to have is focus. Spread to thin and we feel useless. But focused on a key task and we tend to work as fast as 20 people. Just something to think about next time everyone out there decides to start 12 things at once. Focus on one. Execute. As a result of this thinking, I really don’t want to get drawn into any more ventures, besides for lack of time, it causes a huge mental strain, even more so when I invest money in projects or companies. I don’t know how some people do it. If I go back into the investing side at all - my investment thesis will be simple, small investments in friends companies. $5-25k investments in people i believe in and forget about it. Small, simple and supporting friends that know what they are doing. This way i don’t have to be neurotic. Alas, i’m on the entrepreneur side so that won’t be for a while. Don’t be left thinking you’re a crazy person like me spread too thin. Luckily, i’m involved with a great startup right now i’m itching to tell you all about but am forbidden by my partner for fear of execution, hehe. my little joke.

Killthedot.com (long killed) was an attempt by us to let users type a word into their browser and hit enter so they don’t have to deal with typing .com’s. Now this technology was later built into the browser but we thought it was cool back then. We promoted it and then hoped to make money from toolbar installs and contexual advertising and the like. We never heavily promoted it, I can’t remember why.

So right now I throw 2 types of events. Happy Hours & BootStorming Sessions. Both are free or super cheap ($10) and we have a great turn out. But recently

If you’re an entrepreneur, one of the hardest things to do is stay motivated.  I wanted to get feedback from all of you as to how you stay motivated.  Start posting comments and let’s get this discussion started..

This post is dedicated to Joe Z

So I’m in the middle of partnering with a great entreprenuer and while poking around on him, I found the name of one of his companies, Occam’s razor LLC. Being the inquisitive mind that I am, I decided to look it up and found and found out the Occam’s Razor is a principle attributed to the 14th Century that states that one should not make more assumptions more than the bare minimum needed. What that means is - Simplicity is King. If you have 2 options, create complexity and delay or simplify and go to market - simplify. Why? People don’t really like choice, they like user experience.

An old story is the one where people are given the choice of 14 jams to try. Something like 11% of them bought the jam. Then, the test was done with only 4 options and something like 25% of them bought the a jam. Now, my numbers above are not the actual results of the test but the key is that the simpler the product, the easier to use. Remember the original version of facebook? It was a simple stupid one page directory listing, you had an option of 1 photo and no real functionality except for groups that themselves had no real functionality. Now facebook is a beast but it started as a flat stupid simple site. This happens to be why I have so much respect for facebook, they’ve rolled out their product in such an intelligent fashion that now it is ubiquitous  but they do it in small little steps.

I’ve started to try to keep the simplicity first rule myself, I never knew the origin until recently or even heard of Occam’s Razor but I wholeheartedly agree with it. With that said - always plan deep ahead so you have an idea of the issues that could develop but when it comes to execution - go simple. Get to market, relax. Get feedback, collect cash. Repeat.

I just wanted to give everyone a quick update on takesalltypes. A couple months back, we applies for the facebook fund for TAT, thinking it makes total sense given their goals. Well, we just heard back and we’ve made the next stage of their process. Woohoo!!! Thanks facebook, let’s see where this goes? Meanwhile, donations appreciated :) 
Richie