Moving On…

December 3rd, 2007

For the legion of fans out there other than my mother (Hi, Mom!) who have been wondering what’s going on with this blog, it’s been absorbed by the Borglike blog of the life of Scott Yates.

And if you think that link looks funny, well, it is. It really is s-c-o-dot-t-t.

Anyway, my conviction that Credit Card VC is still the way to go hasn’t changed — if anything it’s gotten stronger — it’s just that topic has been combined with all the other things I think are important.

So, join me over at the new hub/blog for Scott Yates. Thanks.

Serial Entrepreneurs

August 21st, 2007

Now in the midst of my second startup, people often say to me, “Wow, so you are one of those serial entrepreneurs.”

It’s true, I suppose. I didn’t exactly plan it this way, but here I am.

The whole notion is regarded with a great deal of reverence, the latest example of which is here. (Hat tip Brad Feld.)

I’m not disagreeing with any of the sentiments. Lord knows I learned lots of lessons in my first one, MyTrafficNews, that I’m applying to the Legislative Database, LgDb.com.

But allow me to throw one other thought into the mix:

Let’s just say that I wanted to get a big job at a big company. Part of the accepted wisdom is that I would never want to do that, that I could never work in such an environment. There’s probably a grain of truth in that, but lets say that I could set that to the side and get excited about the goals of a large corporation, and would enter that organization in a position that would be interesting. The pay would be great, I wouldn’t have to worry that I’m taking all the risk, and when I went on my paid vacation I could leave the job at the job, and not think about it constantly, the way I do now.

Let’s say that could happen. Here’s the problem: It would NEVER happen. Never.

Why? Because I would feel stifled the first time I had to fill out a form to get a box of paperclips, or whatever?

Well, maybe, but it wouldn’t matter, because I would never get that job. It just wouldn’t happen.

For all the talk from big business about how they need to be more entrepreneurial, bla bla bla, they really all like their gig exactly the way it is. Nobody working within any large corporation is going to hire someone who will come in and upset the apple cart.

“Entrepreneurial” is another word for “Disruptive.” Corporations will issue press releases embracing “market disruptions” but what they really mean is they want to keep doing the same thing in the same ways, and by issuing a press release the execs can feel that they have done what they need to do to react to changes in the markets.

I’m not just blowing smoke here. If you are a person who has a steady career, you should think carefully before becoming an entrepreneur. It’s great, no doubt about it, but you may never be able to go back even if you want to.

(One note about this blog, it’s been quiet for a bit. It will be seeing some big changes and a big announcement soon. Stay tuned!)

No Compunction about No Competition

June 27th, 2007

Quite often, it seems, people violate, or come too close to violating a non-compete clause after they sell a company. Here’s the latest example.

Davis previously sold a recruiting blog to Jobster, and worked with the company for a while. He eventualy left, but apparently had a non-compete in place.

I never really understand why this noncompete stuff ever comes up.

When I sold MyTrafficNews to Traffic.com, I worked hard for them, and enjoyed it. When the contract was over we parted as friends. I gladly signed the non-compete.

Now I’m running another startup, but in a totally different indsutry. As much as I loved the traffic business, I’m very happy to NOT be in it any more.

That’s why I don’t understand when this kind of thing comes up. I would think entrepreneurs, by nature, would want to move on to a different challenge, and apply what they learned in one area to a different industry or niche that needs the same kind of new thinking.

Rest of the story on LifeLock

June 17th, 2007

I linked to the story of the guy who stole his own father’s credit cards to start a business, something that violates the nature of Credit Card VC.

There was one bit of the story that bothered me, however, and it was that the story originally broke in the Phoenix New Times, parent company of a newspaper I once toiled at. In the years since I’ve left I’ve seen that the New Times company has gutted investigative reporting in Denver, and all over the country including at the Village Voice in New York City.

So the thing that didn’t quite make sense for me about the story was that the original investigative reporting came from the New Times.

Now, thanks to Mike Arrington, we know the rest of the story. The only way the New Times was able to do an “investigative” story was by pasting together an anonymous email, probably from the credit reporting agencies who might lose business if this company does well.

I’m not saying Maynard is a saint, but if that company takes away a bit of business from the big three credit agencies, I have no beef with that; and Maynard is gone.
My other takeaway? Thanks goodness for the Interweb, and especially guys like Arrington who are willing to pull back the curtain a bit on the way the media works.

Another rule of the Credit Card VC: Use your own cards!

June 15th, 2007

I shouldn’t have to say this, but apparently I do.

That guy somehow convinced some reputable VCs to put money into his anti-identity theft venture.

The rub: it turns out that the (accused) slimeball is himself an ID thief, and he did it to his own dad.

Happy Father’s Day!

“Despite”?

June 14th, 2007

University Hospital is the last I see in a series of this kind of announcement.

Despite moving to a new facility, the University of Colorado Hospital is expected to layoff up to 70 people by the end of the month due to a budget shortfall.

“Despite”???? How about “Because of”?

We’ve seen this several times in Denver just in the last few months. Certainly newspapers are laying off around the country, but the layoffs at the Denver Post and Rocky Mountain News come just after moving into a shiny new building shown here under construction (in a link that gives a clue about when Google took all those cool new street level pictures) or here for some more recent shots.

And just a few blocks away is the DAM expansion, a dramatic new building that millions of people are not going to. Hence, they had a round of layoffs also.

What does this have to do with your startup? Well, just when you are thinking that it’s time to get a fancy new office, maybe that’s the time to hunker down.

Another Credit Card VC adopter

June 4th, 2007

I know I’m linking to Guy twice in a row, but his latest post makes it clear that he fully groks the Credit Card VC ethos:

By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09

Because of Truemors, I’ve learned a lot about launching a company in these “Web 2.0” times. Here’s quick overview “by the numbers.”

  • 0. I wrote 0 business plans for it. The plan is simple: Get a site launched in a few months, see if people like it, and sell ads and sponsorships (or not).
  • 0. I pitched 0 venture capitalists to fund it. Life is simple when you can launch a company with a credit-card level debt.

Now, Guy will tell you that this is not the next Microsoft or Google, it’s a service that may grow on its own and maybe someday some bigger organization will want to add it to a portfolio because of the user base or whatever, and so it may have a nice exit someday.

But the best part, I think, for Guy is that when people send him business plans about how they really need to have $1 million Angel Round so that the team can develop a prototype, he can look them right in the eye and say, “Why? I launched a site for $12,107.09, and within two weeks it had 315,000 hits in Google. Why do you need 82.596 TIMES the money I spent to do what you want to do?”

They better have a darn good answer to that question.

PRrrrs like a kitty

May 30th, 2007

My real background — what I did for a living for a decade before I started my first company — was journalism. And then my first company was pretty tied to the news; it operated inside a TV station so I worked in that environment every day for five years.

So the whole notion of PR is second nature to me.

Anyone who’s read any of this blog could probably figure out where I stand on the notion of hiring a PR agency. But it didn’t really occur to be to write about it here until I saw this post in Guy Kawasaki’s blog:

Nobody knows if Charlemagne could read because an advisor always read aloud for him. It was considered humbling for the king to do anything himself. The same fears drive the most captivating, articulate entrepreneurs to hire publicists. Who wants to risk looking like a fool? As a result, hardly anyone in technology ever tries to talk to a journalist by herself—except Guy, of course.

The writer, Glenn Kelman, goes on to give 10 reasons that you should not hire a PR agency. I have plenty of friends in PR, and I even help in a small way with the PRJobsList here in Denver.

That said, I have to tell you that if my current company gets to $100M in sales, we still won’t hire an agency.

Why? The few shining examples in which agencies do a good job are outweighed by the 90 percent that do a job that could easily be done in-house, or the 5 percent that make things worse. This campaign that seems to be in favor of the Unabomber is the latest in a long line of examples.

So read that list, every one of his 10 points is exactly right. Nothing bummed me out as a reporter more than doing a story that was doing the bidding of a flak. Make a reporter’s day, and just give him or her a call. You’ll both love it.

This is the end, my friend

May 22nd, 2007

I don’t live or work in the valley, but it’s becoming more and more clear that things are koyaanisqatsi (life out of balance).

Michael Arrington, founder of TechCrunch, wrote about this with great clarity this morning.

Times are good, money is flowing, and Silicon Valley sucks.

I don’t know what it is, but the same thing happened in the late nineties before the bubble burst. Lots of startups got funded that made no sense but people got excited anyway. A unique, beautiful and well executed idea was not a story worth talking about until that first round of big, eye-popping capital. People become more anxious, and more likely to snap at someone in anger or jealousy. Rumor mongering spikes, and a crucial balance is lost. It’s no longer about beautiful products and genius developers. It’s about the money and the status, and hot PR chicks and marketing departments.

I wasn’t in the valley for the first one, but started MyTrafficNews by bootstrapping, and the whole dot-bomb thing actually helped us, made it possible for me to afford developers.

Now it’s a bit nutso, and I am actually out looking for investors, but I’m not doing it in the midst of the insanity. I love my current startup, love the people I work with, I even love the customers — the real live paying customers who depend on us for the tools they use every day.

I think that’s the only way to avoid not only crashing when the bubble pops, but to have fun along the way.

VC and the long tail

May 12th, 2007

I love the whole Long Tail concept, and I saw a story and a chart that made me wonder if the concept could be applied to VCs.

…what success there has been in the venture industry has been highly concentrated among fewer than 40 venture firms.

So, the big “hits” of the VC world do very well, but after that they have not been doing well at all. This is important to note in this blog, because there may be some people who think they could self-finance a startup, but you think you have as a backup plan of going to a small VC firm and getting an investment.

If your goal is just to get back what you put into the business, I guess that’s OK. If your goal is to make your company something that really does change the world, well, then you are in trouble.

If you’ve got a big expensive idea, position it so that you can get one of the biggest and best VCs in the country to buy in. Go big or go home.

If you’ve got a big idea that can be created for a lot less money and funded significantly by sales, that’s awesome. That’s why we’re here. But don’t have some small VC as your backup plan. Don’t move up to the curve part of the tail, that’s a recipe for heartbreak. You may need to move a little to the left on the curve, up to an Angel, but there are lots of good Angels out there.