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.

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!

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 everyone, I wanted to tell you about an amazing conference happening next week, the Personal Democracy Forum. The PDF is a great conference run by Andrew Rasiej and is the Main Event for the cross section of politics and technology. It should be a great show with amazing speakers such as Arianna Huffington & Esther Dyson. With the election coming up, it should be a packed event and an eye opening experience. I recommend everyone attends it as I will be there. Check out the PDF!

Richie

So I’ve decided I want to get a small laptop to take on the go. Why do I need it? My macbook has my life on it and I’m paranoid I’m going to lose or destroy it. My track record with electronics sucks (in the last 9 years, I’ve had 8 computers and 33 cell phones - SERIOUSLY) so there is cause to be concerned. I was thinking of the Macbook Air with a solid state hard drive but it sets you back $4,000 and I would be paranoid about losing it. My current Macbook was $2300 so spending $4k for my carefree computer doesn’t sound like piece of mind. Does it?

So I remember someone (I think it was my friend Bennet over a couple of shots a few weeks back) mention a mini laptop that costs like $400 and has everything i need. What do I need? Internet/wifi/Word/Excel/PPT and an email program with imap so i can have my emails and 3 gigs of storage for backup business data. A USB port would be nice so i can copy photos to it if i take it on the go with my digital camera.

Sounds simple. Well it is but it isn’t. I also don’t want another windows machine and Mac’s only option is the Air. I’ve never used linux but I think I’m going to take a chance.

So I want to reveal to the world the ASUS Eee 900.

It has a 8.6 inch screen, is 10in x 6in, weighs under 2 pounds and has a 20 gig solid state drive - that means you can drop it on the floor and it will be A-OK.

Here’s a link to buy it at pricegrabber -

This is a shout out to Adobe Flex. I think it’s one of the coolest development frameworks I’ve ever seen. Stuff gets built fast and it moves fast and is far less buggy than anything i’ve ever seen. I love you adobe (yes, I will accept free stuff if you want to send it)

Richie

So one of my friends and partners just did this awesome just post, i think it’s classic and sings the songs of startups very nicely…Ridiculous opportunity for LAMP developer with early stage start-up. Help partners who have already built world-class companies (and sold them), to do it again. If you want a job that you can do mindlessly in between Guitar Hero gigs, don’t read any further. If you want to stretch your brain and get excited about your work every day, keep going. You will be lead developer, VP of Engineering and CTO all in one and all in your spare time.You can do the work from anywhere but you must be available to meet in NYC at least twice a month. No, we ain’t paying your airfare. We’re a start-up.No HTML, CSS or any graphic work or knowledge is required. You are hard-core back-end. Javascript, AJAX, optional.Job duties:Help complete writing (you think, we’ll write) technology specification (SDLC). Architect and help build complex, social advertising marketplace.VERY IMPORTANT:- Expert knowledge of PHP5- Expert knowledge of relational database design and deployment for dynamicsites using MySQL 5- Minimum of 3 years of Object Oriented design andprogramming experience- Knowledge of basic Linux systems administration skills- Entrepreneurial fervor and desire to knock heads together (to get things done)SOMEWHAT IMPORTANT:- Experience with (AJAX) / Javascript /- Familiarity working with the Symfony PHP framework- Experience with one or more or cachingengines, eg. APC, Zend, etc. WE DONT CARE:- You live with your momma- You sing while playing the drums in RockBand- You like cats- You only read non-fiction- You wear chinos and hush-puppiesLots of stock options and an uncompetitive salary.Sincerely,Nate BrochinBootstrapper.comnbrochin@lse.ac.ukPhone: +1 (973) 477-2576Web:    http://www.bootstrapper.com
 

I would like to introduce the world to Ponoko.com, one of the coolest things I’ve ever seen. They allow anyone to easily design physical products, have them custom made, even just one at a time and give people the ability to sell them through their marketplace. So, have an idea for a new kitchen sink? Make it with konoko. Seriously, this is amazing. They use some sort of fancy laser (death rays?) to make the goods. It is a revolution in manufacturing and I think could be a huge business.

I interviewed Derek Elley over the phone and I no longer remember exactly what he said so he emailed me the following: “Armed with nothing more than an idea, professional and hobbiest designers, makers, crafters, hackers and artists can turn their ideas into real products - and new revenue streams - using our web commerce and digital make-on-demand services. No upfront costs. No minimum orders. No inventory. Simply click to design, make, sell and deliver your creativity to the world, at your own speed. his means buyers can search for and buy the most original of things from around the world. And what’s even more amazing, you can download, mashup and click to make product plans into goods completely individualized to you.

Ponoko manages every detail for you to trade original user-generated digital and physical products. This service includes a personal web showroom for you to show, share or sell your stuff, a personal online factory for you to ‘click to make‘, hosting, secure payment processing, order management, on-demand production, fulfillment, customer service and online sharing tools.”

Wow.

For the last few months, I’ve been going back and forth about desktoptwo.com with the founder, Josh Rand. First of all, I love the platform, I think it’s the future of The internet. if you look back at my old posts, my very first blog post around 3 or 4 years ago was about desktop enabled internet or internet enabled desktop. Josh put it to action. Desktoptwo allows people to use their web based virtual computer complete with MSFT office. It has the power of bringing internet to millions of people that can’t afford a fancy computer or have to use one in the library. It also will enable millions of people to download porn without it being on their computer. Truly revolutionary, seriously and they have 200,000 users while still in beta without a single $1 of marketing…Josh is also trying to recruit me but that’s another story. I told him I have to pass as I don’t believe in amway and I already have plenty of toilet paper but I wished him goodluck with his new venture.

I just picked up a copy of Wired and found a story on Ponoko.com and let me tell  you, it’s amazing. Ponoko does on the spot manufacturing using some really fancy laser rutters. I don’t even understand what it is exactly but I know it’s amazing. Someone can send in a design and has as little as 1 copy made - without set up costs. It is truly revolutionary and can open up a whole range of micro-industry. It’s the exact opposite of Etsy - where you can get one of a kind handmade goods. Both are amazing. Go make stuff!

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.

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.