Wednesday, February 28, 2007

Paul Allen has some Competition

Paul once blogged that his core competency is his ability to type 55+ words per minute on his blackberry. He may have some competition in Bijan Sibet.

Fastest way to get to $50M?

Jeremy Liew raised a great question on the Lightspeed Ventures blog this morning: What's the fastest way build an online media business to $50M in revenue?

Jeremy points out three strategies towards building enough traffic to reach $50M:

1) The Bebo.com/MySpace.com approach -- broad reach, not a lot of targeting.
2) The Facebook.com/Terra .com approach -- demographic targeting.
3) The Endemic Advertising approach -- create a website about cars that car companies would naturally want to advertise on, an electronics site for consumer electronics companies to advertise on, etc.

Jeremy I agree with Jeremy's ultimate suggestion that #3 is the best way to go of the three scenarios listed, but I think that the best way to get quick cash flow for an online media company is the subscription model.

I know it may be a little Web 1.0 to bring up subscriptions, but I don't know of another way for a media company to get to cash flow positive faster than with a subscription model. Augment your subscription service with a call center, and your conversions go through the roof and you're immediately bringing in cash.

In the long term, its all about automating the process so the call center fades out and margins go up. There's no reason to pay someone a commission on what a website alone can do. But if you want quick cash, subs with call support is where it's at. It also gives entrepreneurs something to help pay the bills while they build traffic and tweak their UI in order to generate more paid sign-ups and pageviews.

I'm not talking about a WSJ subscription model where you basically get no value out of the site unless you pay. I'm talking about a Pogo.com/espn.com/Skype model that gives you good service for free and great service for a monthly rate.

What do you think? Is the 1.0 subscription model broken, or are 2.0 junkies looking past a simple answer that has been under their noses all along?

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Friday, February 23, 2007

Getting the Truth from Entrepreneurs

Going to a networking event with entrepreneurs is a blast. As you go around the room, every entrepreneur that you talk to makes it sound as if their company is on the edge of world domination. "We're about ready to close a huge deal with ..." "Our partnership with so-and-so is starting to really pay off ..."

Of course, 90% of it is total garbage. Most entrepreneurs do not have the physical capability to say anything negative about their comapany. It's like asking a snake to tap dance.

If you want to hear the truth about a male entrepreneurs company, ask his wife. She'll give you the truth.

If you've ever been an entrepreneur leading a bootstrapped pre-cashflow company, you know what I'm talking about. Your buddy asks, "How's business?" You say, "We're stoked about what's happening and we're accomplishing some great things right now." Your wife says, "Yeah. He really likes it and he's having alot of fun. I just hope we get paid soon."

Nine times out of ten she isn't saying it maliciously, she's just telling the absolute truth without any of the fluff. When I began my carreer, Anna unknowingly did this to me a few times. I have since coached her on the art of entrepreneur-speak.

If I were an angel investor, I'd be on the phone with the spouse of every entrepreneur I was looking into financing.

Just in case a few VCs and angels read this and catch on to my idea ... all of you spouses out there, repeat with me, "Business is going very well. I'm excited about this month's revenue!"

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Tuesday, February 20, 2007

My Under the Radar Picks for v100

I got my link to the v100 voting page today. I love the v100. Going down the list of nominees is incredible. With all of the talent on the list, vSpring could easily make a v200 list.

I'd like to give a shout out to a few less-visible entrepreneurs who will be getting my vote. These guys might not be as visible as some of the usual suspects who will likely end up on this year's list, but are certainly deserving of attention.

Side note: I was looking at last year's list as I did my voting and I was a surprised to see so many VCs and prominent angels on the list. Something tells me that Alan Hall (one of the best entrepreneurs/investors in the state) won't be leaving Mercado Ventures, GUV or his board seat at MarketStar to " ... lead a successful venture as CEO or CTO in the next 5-7 years in IT or Biotech industries". I wonder if some of the voters understand the selection criteria. Sometimes the list looks a little more like a "Who's Who" list than what the criteria calls for.

Anyways, back to the guys I wanted to plug ...

Brigham Tomco -- The guy is a machine. He's a JD/MBA student at BYU, one of the editors of the law review, raising a VC fund for Cougar Capital, and all this while single-handedly building a company and a product that is gaining nationwide distribution. Once he gets out of school and focuses on one project, he's going to be a force to reckoned with.

Nick Mecham -- This recently wealthy technophile is one of the primary reasons that MaxStream is such a success. You won't find find him at a lot of networking events, but I'll bet you will find him as a CTO at a successful technology venture in the next 5-7 years.

Mick Hagen -- If you haven't heard of Zinch -- in the word's of my main man Stuart Scott -- you betta aksk sombody. Sharp young team and a killer concept. Even if Zinch doesn't fly like it has the potential to, Mick is a solid guy who will have his hands in successful ventures for a long time.

There are quite a few more entrepreneurs that I'd like to mention, but I don't want to give away all of my votes. Thanks to vSpring for making this happen!

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David Cohen on the Boulder LivePitch

David Cohen posted more info on the Boulder LivePitch. (We've changed the name because of the new format.)
Attendees in the audience will receive $100 of play money that they will use to “invest” in their favorite company pitch. Both the audience favorite and the investor favorite will receive prizes from sponsors like HRO and CTEK for their efforts. The big picture is that this is a great networking opportunity for investors, service providers, and entrepreneurs.

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Saturday, February 17, 2007

Speedpitching is Coming to Colorado!

Had a great chat with Colorado mover-and-shaker David Cohen yesterday. David is part of the muscle behind TechStars and an active angel investor in companies like HyperSites and ClickCaster. I've been subscribed to David's blog since its inception and I'm a HUGE fan of the TechStars concept, which is why I'm glad that we'll be working with David to bring Speedpitching to Boulder in early March.

The event will be a variation on the Speedpitching luncheons we've held in Florida, Texas, California and Phoenix. It will be open to the public and anyone who has an business idea that wants to get feedback from a panel of real investors. There will also be some new crowd participation elements that will allow everyone in the room to "invest" in the ideas that they like the most.

As soon as we know who, what, when and where, we'll let you know. If you're an entrepreneur in or around or willing to drive to Boulder, register at FundingUniverse.com to receive email notification with event details.

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Friday, February 16, 2007

Knowing When to Quit

Will Price blogged a killer post that helps entrepreneurs and investors discover whether the source of their company's struggles is the market or the company. He points out a few ways that you can tell that your market is healthy:

Companies that are in healthy markets close enough business to:
    1. develop a clear value proposition
    2. build repeatable marketing, sales, and delivery models around common uses cases
    3. know their top 2-3 competitors cold and see them in every account
    4. are solicited for business
    5. have real, active partners engaged in common customer accounts
    6. have highly energetic cultures where the changes month to month are significant
    7. can explain what they do so that almost anyone can understand
    8. share a common mission that everyone in the company can articulate

When companies begin to fail, it's important for both the entrepreneur and the investor to determine whether or not the company can be saved. If failure is market based, no amount of money or resources or time can save it. Firing your VP Sales won't save it. It's best to just cut your losses and move on to another deal.

Perhaps this post will be most useful to those who are contemplating a startup and teetering on whether or not there is a market to sustain it. Be honest with yourself and let the numbers make the decision for you. No matter how passionate you are about your space, if there's no market, there's no customers. No customers, no company.

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Thursday, February 15, 2007

First-time Entrepreneurs Need to Bow Down

I spoke with a first-time entrepreneur that I really liked today. He was passionate about his idea, he had made some serious sacrifices for his cause and he worked like a fool.

I feel terrible for the guy because I don't know if he is ever going to successfully raise money. He's been offered the amount that he's looking for on several occasions by more than one investor. But the dude is so set on raising money on his terms that he won't accept any others. His greed is going to kill the deal.

In most cases I believe that the best thing that a first-time entrepreneur can do when raising capital is bow down to most, if not all, of the terms that their investor lays out for him/her.

(Their are obvious exceptions to this rule; the most obvious being when you have multiple investors banging down your door to give you money. Or, if the terms of the agreement will hamstring your company's ability to make money. Ninety-nine point nine percent of entrepreneurs aren't lucky enough to be in the first situation, and the second scenario is pretty easy to spot.)

Greg Warnock wrote a great article for Launch Magazine (page 10) about his first investor and how his relationship with him has benefited his career. One of the reasons (not mentioned in the article) Warnock enjoyed such a lasting and mutually beneficial relationship with Jurgen Manchot is because Warnock basically let him have his way in his first negotiation with him. Of course, anyone who has negotiated with Greg Warnock knows that he would probably advise entrepreneurs to bow down to his every whim, but I'm sure you get the point nonetheless.

Losing a bit of equity on your first deal is not the end of the world. Your company not reaching its potential because of a few shares is. Give up a little on the first deal and reap the rewards in the future. The next time you raise money you'll come to the negotiating table with the strength of a successful track record, a solid relationship with an angel and the respect of that angel's network.

Unrelated note: Fred Wilson gives investors a little advice on being good negotiators here.

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Wednesday, February 14, 2007

Valentines, Marriage and Business

In the spirit of Devin Thorpe's post, here are a couple of things that can help both a start-up and a marriage:
  • Clear expectations
    • Business application -- Rather than saying, "Dave, I need you to take care of theproblem with the rating system?" try, "Dave, I need you to take care of the error code on the top of the rating page because we've had four customers report that they cannot purchase their ratings. If you could have that finished by tomorrow evening, that would be great. Does that work for you?" Give details, context, deadline and make sure they're cool with it. If you're the one being given the vague assignment, take responsibility for getting the full story.
    • Marriage application -- Not, "Honey, I need to be to work early tomorrow. Can you help me get the kids ready?" Instead, "Can you help me get the kids fed by 7am so you can take me to work by 7:15? I have a meeting with the board at 7:45 that's really important." I don't know how many times I've agreed to do something for my wife, only to find her doing the job for me a short time liater with a "My husband is an idiot." look on her face. I've learned that it's important for me to know when she needs something done so she doesn't feel let down when I finish blogging/make a phone call/wait until halftime to do what she asked.
  • Make time to get outside of the day-to-day grind with your partners
    • Business application -- Execution is HUGE for a start-up, so it's not uncommon to develop the tendancy to lock yourself in the office, only emerging for meetings and sales calls. Take the time to go to lunch with as many employees as possible each month. Get to know them, their family, their interests, their goals, their talents and all of the other things about people that make them so interesting and lovable. We do our best to do this at FuningUniverse and the results have been significant. I don't know how many times I've heard one of our employees say that the primary reason that they work at FundingUniverse is the people.
    • Marriage application -- Go on at least one date per week -- especially if you have kids. It's easy to get caught up in the day-to-day grind of "Wake up, feed the kids, go to work, come home, feed the kids, read a story, put kids to bed, clean the house, go to bed. Repeat." If you don't take the time to spend one-on-one with your wife, it's easy to begin seeing her as just another cog in your life -- the lady that helps you pay the bills and change the diapers. Continued courtship helps you see her as she really is: the woman who stood so far out above the rest that you decided to give her your heart, mind and life. A little corny, but nothing short of true.
What have you learned from business that has positive application in your marriage?

I wish we all spent more time blogging about this stuff. Employees with broken marriages are much less productive than those involved in healthy marriages. People with marriage problem are often distracted, grumpy and mentally tired. Besides, I think most of the people reading this blog would agree that no matter what kind of rockstar you are at the office, nothing can make up for failure in the home, and nothing will have a more lasting affect on your happiness.

One more thing now that I'm off my moral high horse: If you have any killer ideas for a Valentines date for a pregnant woman who may very likely be a little queezy tonight, let me know. I have something planned, but I think I can improve. Send your ideas to jeffbjordan at gmail dot kom.

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Monday, February 12, 2007

Daily Inspiration

Every Monday, Wednesday and Friday I wake up at 6am to get schooled on the basketball court by a man who has multiple sclerosis and is almost 20 years my senior. No, I'm not kidding -- and I'm not just saying nice things about him because of his developing condition.

The guy is an animal. We're on the same church league basketball team and he's among the league leaders in points, assists and free-throw percentage. The dude drops threes like they were free throws and he pushes the ball up the floor like he was being chased by Warren Sapp.

Guys like him just get me fired up about life and help me to avoid making excuses when I'm tired or frustrated.

Who inspires you?

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Friday, February 09, 2007

FundingUniverse to Co-host $100k Business Plan Competition

The other day I alluded to this ...

We're hosting the mother of all Speedpitching events in conjunction with GOED, Grow Utah Ventures and Newspaper Corp. Here's an article in the Trib all about it.

Basically, you can enter the competition by clicking here or going to FundingUniverse.com and submitting an executive summary. Registration is free and you have until March 6th to enter.

FundingUniverse will choose five finalists to pitch five Utah angel investors (and the audience) during a special session of the Utah Economic Summit on March 22nd. The entrepreneur with the best pitch/most prepared company gets an equity investment of up to $100k.

Big shout out to GOED and Governor Huntsman for supporting angel investing here in Utah. The Gov, who is doing a great job overall, has shown a lot of love to the VC community since he began his tenure, but not as much for the angels. This is a great step in the right direction.

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Thursday, February 08, 2007

Jeff Barr, Amazon Web Services Evangelist, Speaking Tonight!

I know it's a little late, but I just got the following email from TagJungle CEO Phil Burns:

This is your friendly reminder for tonight’s Geek Dinner with Jeff Barr at Los Hermanos (in Lindon) at 6 pm!!

Jeff will be speaking to us briefly (about 5-10 minutes) to highlight the Amazon Web Services; the rest of the evening will be getting to know each other over dinner. Guests and spouses are welcome!

Thanks and hopefully we’ll see you tonight.

I won't be able to come because of a previous engagement that I can't get out of, but this should be a great event.

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YouTube Founders Cash Out

YouTube founders Chad Hurley, Steve Chen and Jawed Karim are very, very, very, very, very, very wealthy.

Paul Kedrosky posted SEC filings on his blog that show Chad and Steve pocketed about $340mm each, while "silent founder" Jawed walks away with a cool $64mm.

I can't get enough these guys. Every time I see video of them, I can just feel the "I can't believe how awesome my life is." bubbling underneath everything they say. Not that I blame them. Over the last year and a half Chad and Steve have been making about $621,500 per day. Not bad ...

Update: Here's a full list of the YouTube sale beneficiaries.

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Wednesday, February 07, 2007

Thousands of dollars for your startup?

If you're raising capital Utah, keep your eyes peeled for a big announcement involving FundingUniverse, the Governors Office for Economic Development, Grow Utah Ventures, and Newspaper Agency Corp.

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Monday, February 05, 2007

Say What?

Seth Levine recently posted on his irritation with people who do not speak in clear, direct terms.
It's a major pet peeve of mine and so prevalent I'm losing my ability to be nice about it. Perhaps it's a result of being a kinder, gentler society or maybe it's just because we've all sat through too many PowerPoint presentations or maybe we're all testing our political-speak skills, but whatever it is the result is the absolutely maddening trend of people not saying directly what they mean and forcing the rest of us to play 20 questions to tease it out of them.
Amen, Seth. Amen.


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Friday, February 02, 2007

Hot Utah-based Website: ConvinceMe.net

TechCrunch says --

"ConvinceMe.net is a new competitive arguing site [that allows] debaters carry out public debates, head-to-head arguments, and a "King of the Hill" free for all about any subject they like ... ConvinceMe lets members talk about anything and ranks them based on how many “convince” points they get from user voting for their argument."

Big shout out to Pleasant Grove's Brett Stubbs, the chief architect of ConvinceMe, for creating a super-sticky website that is seriously starting to eat into my productivity. (I've spent much more time thinking about and participating in the Superman v. Batman debate than I'd like to admit.)

It's no small thing to get an exclusive launch article from TechCrunch (Although, based on the comments in the article, there was a little misunderstanding between TC and Brett about the timing of the launch.) Having TechCrunch launch a website is the equivalent of a band landing a gig as the opening act for the Rolling Stones. Brett has garnered over 500 registered users in less than three days, and the number of debates is increasing rapidly.

One thing I'd like to see added to ConvinceMe is an email notification system that lets me know when someone has responded to my comment. That would instantly double the number of pageviews I contribute to the site.

Nice work Brett!

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