Bootstrapper.com - Confessions of Serial Entrepreneurs

This June’s Early Stage East, the premier venture conference for promising young startups and the investment community promises to deliver compelling content and opportunities. Companies representing the hottest sectors right now - cleantech, financial tech, and emerging media will present their value propositions to an audience investors - venture capitalists, angels and individuals who represent over $4b in capital.

Our featured guests and panelists will broaden our perspectives on the key topics of media and branding, two critical aspects to a company’s growth and ultimately, bottom line. Daymond John, founder of Fubu, co-star of the Shark Tank, and author, will be our keynote speaker. The other esteemed guests include: Jeff Pulver, founder of the 140 Conference and early stage investor, Josh Kopelman, Managing Partner of First Round Capital and recipient of the 2010 Venture Impact Award.  The original NYC fashion entrepreneur, Yuli Ziv will also be on hand to share tried and true viral marketing tactics.

Of course, this conference is not all work and no play!  The conference is being hosted at the historic Hotel Dupont during the famous annual Jazzfest.  After all, what better environment is there for connecting with your peers, broadening your horizons and listening to the companies of tomorrow?

Register now for special early bird rates, including accommodations.

It’s not embedding for some reason, but check out this hilarious video of HP’s “epic fail” attempt to include facial tracking software.

In terms of business lessons, it should be easy let you draw your own Aesop from this one…

Hat Tip to BusinessPundit

According to Danah Boyd, MySpace has become a digital ghetto, following the online equivalent of white flight to Facebook.  She doesn’t attribute this to any kind of active racism, but rather that offline racial and class divides are extending themselves onto the internet.  The “Stuff White People Like” blog has smartly parodied this phenomenon.

Although the internet was initially a color-blind and unwalled neighborhood, the hidden hand of racism had no problem moving into the digital age.  Kozmo.com, a casualty of the first internet bubble, ran a cool on-demand delivery service that redlined zip codes with a predominantly African-American population.  Google’s unsuccessful attempt at an online social network, Orkut, devolved into a haven for various hate groups in other countries.

The takeaway? Don’t invest in services that promise to make the world less divided.  It’s easiest to gain market share if you focus on dominating a tiny niche.  Competing services that try to be all things to all people will, if they survive, diverge and inheriting a different segment of the audience.

In our daily routine, we hear from numerous companies looking for ways to improve their pitch and overall web strategy.

I found this comment on the NextNY discussion group, and felt that it was insightful advice. In an interview Guy Kawasaki; the founder of Garage Ventures, was asked:

Q: So with all the advice you’ve given on pitching VCs, have you seen an improvement in the quality of pitches to Garage Technology Ventures?

A: Honestly, they’re not that much better. They are still too long, still using meaningless buzz words like “revolutionary,” and still don’t have credible business models. If only they would adhere to the
10/20/30 rule of Powerpoint: Ten slides, twenty minutes, 30 point font.

So the moral of the story is

Keep your powerpoint presentation simple.

• Make it readable form 20 ft away,  or better yet don’t include much text at all.
• Remove the words “revolutionary,” “World Changing” and “This is going to be huge” from your vocabulary FOREVER!
• Stop mentioning that if you can achieve just 1% market share of an industry, you will be able to create a 100 million dollar company.
• Be different / Be interesting / Provide Value

If you want to learn more about effective pitching please see Guy Kawasaki’s blog post on the 10/20/30 rule

Just before we go, we leave you with a short piece on how to turn a compelling speech into utter PowerPoint  boringness:

http://tinyurl.com/5dd59t

So you’re a successful entrepreneur and making money. Now what? You’re bored and hate your business. Sure, you can sell it or you can live off of it. But that doesn’t solve the problem that you’re bored and need something to do. Don’t get me wrong, this is a great problem to have but it’s tough to solve.

How do you move from Cash to Cool?

How do you move from a cash flowing solid business to something that will excite you?

My advice is to start by thinking about what you enjoy doing. Then try thinking of a problem with the scenario and how you can solve it.

Yea, like that’s easy …

Lately, there are 3 situations I can think of where this falls into play.

1) Me. I was running AdSolutia and making money but it wasn’t fulfilling because I wasn’t creating value. It was just an affiliate network, nothing wrong with that but it didn’t add value to society. So I started my non profit, TakesAllTypes.org which is incredibly fulfilling though doesn’t make any money. It’s still probably the best thing i’ve ever done.

2) Mr X. Mr X. is a buddy who we will call Duane. Duane runs a very successful tech company but is bored. He is currently looking for something new to leverage his existing network and client base and do something fun. He hasn’t found it yet but I introduced him to someone who may have that solution.

3) Mr Y. Mr. Y is someone who we will call Ben. Ben owns a successful dating site but spent 8 months dilly dallying because he started to loathe the business. Since then, he started a cool facebook app company and is passionate about that. The facebook app company he finds fun while he tries to sell his first business. Hopefully he’ll be able to sell it to focus on his passion - however even if sold, the new company still isn’t profitable so another challenge lay ahead.

The truth is - it’s hard to to find something that you love that also pays the bills, especially in the online advertising space. A lot of the online ad space makes money but creates no value (Affiliate Network, Ad Networks etc…), essentially you act as a broker of intangible objects. It’s a tough life. The few of us that can achieve both passion and generate cash are the lucky ones.

Since the time I entered the digital media world, I have rarely looked at it from a media planners’ perspective. As a matter of fact, most of the available research is overwhelmingly skewed towards the sell side – the side that is so heavily fragmented that its really a nightmare being a media planner in today’s online world. Exception being search – the ease-of-use and simplicity that the medium brings, particularly Google, to online media planners

Let us look at what’s on offer in Europe for a media planner exploring content categories to target and run a campaign. I began looking at the comscore numbers by category to figure out how to allocate my budget.

The UK automotive category is quite well-spread among the internet population – reaching 45% of UK internet audience. However – within the space, my only chance of reaching any meaningful scale is via the leader of the pack, Trader Media Group. However, even if I buy the slots on all of their welcome pages, my campaign will reach only 17% of UK auto category population. Behind the leader is the trade group – Automobile Association Ltd. – with a reach of 12%, but with engagement levels so low that it would be futile buying the site. Within the top 10 are the car majors – who have audiences that are either incredibly loyal or are soon to be one. Is there any point for me to run a competitive campaign on these sites? – is this possible? – OK – let’s move on. I’m already beginning to get frustrated. Same story in France – although the automotive category reaches 34% of internet population, the top site Caradisiac reaches only 30% of online automotive enthusiasts. In Germany, the story is slightly better – auto category reaches 32% of online population, but the combined reach of top two, Mobile.de and AutoScout24 is a massive 70% of online auto enthusiasts.

At this point, I became very intrigued, and wanted to research another hot sector from a buy-side perspective – Money and Finance. In the UK, this category reaches about 80% of internet audience. However, within the top 10, which is where the category is concentrated, my only chance of running a successful campaign is Moneysupermarket.com with a reach of only 25% of UK Money and Finance category; and Reed Business Information and BBC, which have a combined reach of 12%. Wow! – I thought – isn’t this a text boon scenario of ‘Fragmentation’. In France, this category reaches about 56% of online audience, but I have no chance of running into any sort of success here, because I couldn’t find a single, consumer web destination, with any reasonable reach. Disaster, isn’t it? In Germany, the Money and Finance category reaches about 50% of online audience, and the leader, Sparkassen-Finanzgruppe reaches about 30% of this category. I felt relieved.

But to be honest – the entire experience has been truly frustrating, and I begin to think – if I should follow my friend Pete, who makes his job so simple – buy buying only Google keywords – for both Brand and Performance campaigns. It’s so easy, and value for money – so measurable etc. Surely, this strategy has its limitations, but atleast Pete can enjoy quality time with his family and indulge in his favourite pastime – Golf.

So It’s 1:39AM and I wanted to give a shout out to Jay Weintraub. Jay was a former top exec at our favorite domain monger, oversee.net and recently left and decided to put together a conference about lead generation. Jay decided out of no where to do this conference and he’s really pulling it together. Sold out, sponsors sold out. It’s really amazing. It’s awesome to see people pulling stuff together like this. Kudos out to Jay. Also, if you’re reading this and in the lead gen/ affiliate space GO TO THE CONFERENCE and tell Jay hello for me. Leadscon.com

So i got into a discussion with someone about facebook and the social graph. First off, i think the social graph is bullshit. Yes, facebook is very sharp with how they built their platform and yes they collect data - but no, the social graph is not new. People like looking at other peoples shit and wala demographics do matter.

What facebook really is, is an entertainment portal. The original portals (yahoo, msn, goog) were focused around search/email and real content. Facebook is a portal for space cadetting - entertainment. Look at all the popular apps, they are mainly useless wastes of time.

This takes me to my next point, that people like layers. If you built a standalone site for most fcbk apps people wouldn’t go but because they can go in and out so easily. This is the same concept behind yahoo games, most of the games on their wont get traffic but as part of a portal they get millions of plays. The truth is people like being easily distracted and the easier you make it to distract the more people get addicted. Now, there’s one catch, you need a loyal audience to start.

The next great question, Google or Microsoft. Is the future of
computing about desktop computing with Internet fused into it or internet computing with desktop elements. In the early days, Internet speed was slow and computing was all about the computer, then it became
about networking, mainly corporate and educational, then the Internet came in full force and suddenly it was Internet only. Occasionally, you saw an application that allowed itself to be connected to the Internet but with the exception of outlook and email tools almost never used. The internet has seemingly became a GooglePlex being about to do
just about everything online - or offline as created mainly by
Microsoft….the question is what is the next step?

The next step, I think at least, is this, the two most popular tools
are instant messaging and email … the core of computing will be
around communication based on applications - sure you can access them wholly on the Internet however the key will always be on the system - the reason: internet always has and always will go down and people always will travel - therefore I propose the main system revolve around
a communication device that logs all email / messenger and file
transfer communication between people, accessible via simple search, you want to learn about a person, pull up their profiles from 5 different sites and your communication history and add in notepad and you have a little slice of history of all of your friends…

Social Networking will be tied into the tool but different than it is
today. There is some value visceral based networking such as myspace and there is value in more in depth platforms - the most important component however is a) ability to find friends b) ability to link
through their friends and c) search - all will be able to occur through the same tool …

When it comes to applications such as word processing and spreadsheets - the key will always be on the system, 1 person, 1 creation, however using this same communication center, users will be able to collaborate
on different projects, the applications based mainly on computers for stability purposes but fused into the Internet so it is dynamic - similar to how AIM works.

Users will be able to have one single system for creating and storing creations as well as communicating about them and distributing the final product. Of course as soon as this product is complete it will be
need to be modded, updated, changed and added on to - ala Open Source - right now there are all sorts of open source platforms for search, messaging, networking, browing etc…the future will combine them in a
way that saves time and money for all involved…my 2 cents, whats yours?

The hardest part about creating an Internet business is not the product, is not the features, it is the marketing. In order to get traffic you need to spend money and hope that it takes off by word of mouth. There is no gaurentee that this will occur therefore there is no gaurantee of an online company’s success. Marketing formula’s that worked 7 years ago no longer work since there are so many systems out there now. Only the truly unique will prosper.

On Monday morning, I put out a call to raise enough money to buy 500 pre-paid cell phones to send to the Huricane Katrina victim and volunteers in Houston. Immediately, I received a couple of emails from readers offering a resounding “count me in!” Off to a good start, or so I thought. Afterall, DEMOletter goes out to about 15,000 people each week.

As the week wore on, I got another — that’s one other — email offering to buy a phone. Yesterday, I received a fourth offer. Four. Of 15,000 readers.

Oh, lots of people have been by this blog to read the near-daily postings of my friend Pam. Her stories from Houston are heart wrenching and sometimes heart warming.

I have been stupified by the low response — oh, we’ll buy as many phones as we can with our slight contributions — until a friend reminded me how easy it is to assume that others are picking up the slack. “I read your plan and I thought it was a great idea,”she said. “I figured you’d get a great response and you wouldn’t need my contribution.” She then promised to pitch in to help get phones in the hands of folks who need them.

If, by chance, you thought someone else was offering to buy a phone — they’re only about $60 a piece if we get enough volume , please think again. Then drop me an email with the subject “Katrina Mobile Phone Project” and let me know that you’ll pitch in, too.

Thanks!

The latest installment from Pam Peterson, a social worker volunteering in Huston in support of the victims of Hurricane Katrina.

Friday September 16, 2005

Last night around 5:00, Bobbi got a call that her 92 year old father was “acting strangely.” He lives about 10 minutes from here. She rushed out and called about 2 hours later from the hospital. Her dad was on his way for a CAT scan, but it appeared he had a stroke. I had offered to take Bobbi and Vic out to dinner tonight. I told Bobbi I would make myself some dinner here, and take care of Cassie. Vic called 2 minutes later to say he was coming home, and he and I could get something to eat. I tried to encourage him to go to be with Bobbi, but he insisted we eat. Said he could not get her on cell as she’s not allowed to use it in the hospital. We headed to a Texas BBQ place.

Once back here, Vic tried again to reach her, and decided to go on to the hospital. Shortly after he left Bobbi called to confirm it was a stroke and her dad was in intensive care. I told her Vic was on the way… she sounded relieved. I vaguely heard them come in around midnight.

Again that feeling that life goes on, that there are everyday events that are reminders that so much happens in and around us that it’s often hard to keep up.
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I talked my way past the officer at the front gate. Once inside the gate, it was clear that things were very different. Lots of fencing was gone, and other roadways were restricted. All the tents were gone, as were the basketball nets. I made my way to the arena, and once inside was able to get a “volunteer” wrist band. That, combined with my hospital badge, again gave me as much freedom to move about as I needed. On my way to the arena I had decided that I wasn’t going to stay long, just long enough to find people and say goodbye.
________________________

I found Raydell immediately. Jean was off checking about housing. He was about to try to get some sleep. Down the row from him was Keisha, Gloria and Tyrone, but they were no where around. And Just beyond them I saw Lynn. She’s still not sure what she’s doing, but was thankful to have what she does.

I couldn’t find Naomi and Tamara, and Gilda had gone to the post office. Lethia was preparing to go to the post office, and I just caught her. She again talked about the children and how they are the future.

As I was walking through the area where people were eating, I saw Keisha. Tyrone came running up to me and threw his arms around my leg, big smile on his face. He said he had “lost his balloon.” When I had seen them earlier in the week, I had made a “balloon” for him out of the plastic gloves we were wearing. Today, he asked for another, as did the other two children sitting at the table. I got some gloves and made them all balloons. I said my goodbyes to Tyrone, his mom and grandmom, deciding this was the best time to leave.
________________________

There was an undercurrent of dis-ease today. Tempers are getting short, people are bored and they’re tired of waiting. It was the first day I felt tension in the building. It has amazed me how well contained so many peole have managed to be. There have been reports of drug selling and violence, but for the most part, these people have remained good spirited. I hope that doesn’t change….

So I get asked all the time to help people find financing. Am i qualified to do this? Yes, and no. I never raised money for my companies, i’m not an investment banker nor am i a VC. sure, i’ve invested in a few things along the way but am I a financier? No.

So am I qualified to answer this? maybe.

I do run a seed capital group and fairly well connected in nyc finance, and make many connections between both sides (have 4 deals in and around term sheet from the last 3 months) and i like to think i’m valued for my unbiased feedback and calling both ;sides on their bullshit right off the bat but i could be wrong .

So now that i’m done discrediting myself ..i’d like to answer my own question

Many entrepreneurs waste countless time trying to raise capital - mainly because they don’t understand what investors look for.

Investors look for 2 things: 1) Protection of their investment and 2) Exit

Protection of their investment means that they give money, they want a shot at getting it back…there are 3 primary types of companies that can get funded
a) demonstrable, protect-able IP with a clear usage
b) serious traction in usage, revenue or profits
c) proven management team (need a ceo, founder, coo or chairman that has had an exit before or a super sexy public story)

Usually professional investors want 2 of those 3 but sometimes they’ll take 1 of them (usually requires either traction or proven management, ip by itself can be elusive to fund without a story)

Them the investor looks towards an exit. Generally is there either a) a $20-50MM potential exit in the next 12 months if its a small investment

or more likely

b) a $1BN+ addressable market opportunity where realistic potential is to generate $100MM a year in revenue within 3-5 years.

or

c) You play in a market that does a lot of M&A and you could be bought for $100MM+ with a little traction in 3 years or so

The ipo option isn’t so realistic right now unless its a creative firm (read: hedge fund, pe fund or ibank) that will so some structured finance to get liquidity. Most VC’s aren’t creative financiers though.

If your startup doesn’t fit into those categories you probably aren’t fundable. Don’t want to bust your bubble but better work on getting traction than barking up an unfruitful tree.

This is the final installment of social worker Pam Peterson’s experience volunteering in Houtson with Hurricane Katrina victims. A special thanks to Pam for sharing these moments and putting a human face on this tragedy.

Saturday September 17, 2005

I slept like a baby last night, utterly worn out. Bobbi is back at the hospital this morning. I never had an opportunity to get back to finish my entry yesterday as things in the Samuels home got crazy. Bobbi spent the whole day at the hospital with her father. He is not doing well, and I know it is very hard for Bobbi. This is a very tightly-knit family and what effects one, effects all.

I ended up making dinner for seven adults and one 3 year old. Chicken breasts in a mushroom, white wine and cream sauce, couscous, sautéed zucchini and tomatoes with feta, and salad. Not bad for cooking in a strange kitchen on a gas stove which I’ve never cooked on. The family again celebrated Shabbat, a scaled down version from last week. And Vic said a prayer for his father in law.

Today has been a very quiet day here at the house. Bobbi spent the morning at the hospital, and Vic watched Nathaniel’s soccer game. Hard to believe that there are soccer games for 3 year olds. Bobbi’s dad is not well. He’s lost use of his left side completely, and sleeps most of the time. He seems to know who Bobbi is, but other than that is not very responsive. She is really struggling with how to proceed. althoug she has a signed directive that no extreme measures be taken, she also has heard him say that he is to be kept alive no moatter what. She knows it’s a nursing home or hospice. You can see the sadness in her eyes.

There was a diversion this afternoon as two other grandchildren, Meagan and Jeremy, were here for a couple of hours to swim. Vic and Bobbi are so good with their grandchildren, so patient. They are both very dedicated to children’s issues in general. It’s obvious they understand that kids are the most important part of the future.

That’s the same thing Lethia was saying the other day…the importance of the children, that they are the future. I’ve seen so many children these last days. Many laughing and playing, others crying. I wonder what scars they will carry from this trauma. Just before I left yesterday, I noticed some young white women taping up drawings made by the kids. All of them were of sun and clouds, trees, houses, children and grown ups. Many had written the word “care” on the paper somewhere. These were simple drawings, but quite poignant. There was also a collage sent from an elementary school in Boulder signed by the students with things written like “We love you,” and “You are safe now.” It was addressed to the children survivors.

Sunday September 18, 2005

It’s early Sunday morning and I’ve been awake for some time. It’s going home day, and I’m ready. I imagine today will bring a range of feelings. Sadness, relief, grief, joy. It’s hard to believe I’ve only been here 10 days. It feels like much longer than that. I can’t begin to know what it must be like for the survivors, who have been “housed” for over two weeks.

I read earlier that there is such a thing as “transfer trauma.” It’s a term used to describe what the elderly go through when they are moved. It is thought that this kind of trauma can shorten a life or even kill someone. I can believe that younger people forced to “transfer” also experience this kind of trauma. Whether it shortens life may not be true, but it certainly can impact health, both physical and psychological.

The trauma survivors have experienced will stay with them a long time. Bobbi wonders how people will fare six months from now, when the true impact of the experience is felt. She worries there will not be enough/any help for them. I believe many are already experiencing PTSD symptoms. If nothing else there is depression. The blank stares, the lethargy is evident. Even some of those I came to know showed signs of depression. Raydell certainly spent most of his days either sleeping or staring off into space. Earl admitted to nightmares. Many said they couldn’t really think to long about their escape without feeling enormous grief. Many said they knew they would never be able to go back, the memories were too hard.
______________________________

I’m on the plane, we’ve just left Houston. Saying good by to Bobbi was hard. We talked a little this morning about the choices that lie ahead for her. She believes her dad will never recover enough to have any kind of life. And, she does not wish for him to live a life that has no substance. She has to decide today whether to have the feeding tube inserted through his nose. She talked with her sons yesterday to get their input, and all agree that he will need hospice to care for these last days. She was tearful describing this. She was tearful saying good ye to me. I shed my tears as well…..

It will be a while before I will clearly know the impact of this experience for me. I can only say, I don’t regret a minute……

First, I want to thank you for your response to the Katrina (now also Rita) Mobile Phone Project.

Through your generosity, we will be able to get mobile phones into the hands of the most in-need victims of these huricanes and the volunteers who are assisting them. The phones will be place through Care for Elders/Sheltering Arms in Houston through program director Jan Edwards.

The first shipment of phones is on its way to Houston, thanks to the generosity of AIRMEDIA, which donated 60 pre-paid phones to the project.

You can still contribute to the project in one of two ways:

1. You can donate a mobile phone(s), with or without pre-paid service. We are collecting phones at the Guidewire Group office and plan to send a second shipment late next week.

2. You can donate money to purchase phones and/or pre-paid service plans. Checks can be made to “Big Bark Publishing,” noting “Katrina Phone Project” in the memo field. Donations can be sent to the Guidewire Group office.

The address at Guidewire Group is:

Chris Shipley

Katrina Phone Project

Guidewire Group LLC

600 Townsend Street, Suite 120e

San Francisco, CA 94103

To give you a sense of how much impact these phones will have on the lives of those affected by these storms, let me share with you a message I received from Jan this morning.

Cell phones were literally our lifelines at the Dome and other sites at “Reliant City.” The frail elders we were working with were not able to access phones like the other evacuees. It’s difficult to describe how many and insurmountable the barriers were in that setting for our folks. . . It was problematic for us trying to find and help them. We were on foot between all three far-flung sites in teams, and this is where the phones became invaluable. We used them to talk to each other, to locate elders who had been repeatedly relocated or had wandered, and to talk to our home base for resource information. They allowed us to call for nurses and doctors to come to the cot of an elder who needed immediate attention. We used them to set up arrangements for placement, or transportation to hospitals, or other appointments. We used them to talk to shelter staff to arrange for services and wheel-chairs and the like. We used them to try to locate family members who had become separated at the complex, and to reconnect them with family elsewhere. We were able to find out the status of family members for our elders who had no other means of reaching them to find out if they weres safe. Many had gone through the entire disaster without knowing if their nearest and dearest had even survived. I used them to connect a lone elder with family members in Alabama, and to arrange for him to get home to some friends safely. Our volunteers were most generous with their personal phones and their minutes, but there were times when they didn’t have them, or whatever, and having the four donated phones we did have made so much more possible for us to accomplish.

Now, we are challenged to provide service for those elders who remain in temporary shelter or permanent housing, scattered throughout the county. We plan to do case management on site for them in a variety of settings, but we will have, I believe, similar needs for communication among the workers and volunteers, and to connect to community services and other informational resources. As generous as this donation is, it may be that we can provide them directly to the seniors for their own ongoing use. They have been placed in different housing situations in a strange city and have many unmet needs to deal with in the long term, as well as safety concerns. There are situations and needs that are emerging as I type this and try to answer my phone, for which I am sure the donated phones will make helping possible.

On behalf of everyone we serve, and all of us at Care for Elders, we send our gratitude.

Sincerely,

Jan Edwards, LCSW