Credit Card VC

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.

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.

Look, I love TechCrunch. It always seems to have the news I’m interested in first. I should have written posts about all the things that I saw TC do properly.

But this was too sweet to resist.

Here’s TechCrunch yesterday, wirting about how Google is going to be announcing a replacement for Power Point:

They acquired Writely, and (mostly) built their spreadsheet application. The smart money is saying this is a build, not a buy.

Then today I read on the unofficial Google blog that Google has bought a company for its Power Point replacement.

The main guy at TechCrunch, being a stand-up guy, immediately posted an update to his post, and even teased himself a bit in the process. Because he’s a class guy, he didn’t write, “From now on I won’t believe anything from the source who told me that Google will build this in house.”

But I bet he’s thinking that!

If you are building a company, and you are hoping that company has a healthy exit some day, the way to do that is to focus on what it is you are doing, and do it so well that some larger exit opportunity comes along.

It’s kind of Zen, but you really can’t focus on the exit, you have to focus first on the task at hand. Sure you have to be smart, be well positioned for an exit, etc., but most of getting well positioned for a good exit is the same stuff you have to do to run a smart and solid business in the first place.

There’s a flip side to all this, however. If you do have an exit; If your company does get bought by some larger company, the way the rules of this country work, and the way the rules of human nature work and even the way manners dictate is that after the exit, it’s no longer your thing. It belongs to the ones that wrote the check. You have to just let go.

Here’s an example of two otherwise fine young men screwing that up. If you don’t want to click, it’s the story of two guys quitting Google because — grab your Web 2.0 Kleenx — they weren’t getting enough attention from their bosses.

So…. Alex and I quit Google on Friday.

It’s no real secret that Google wasn’t supporting dodgeball the way we expected. The whole experience was incredibly frustrating for us - especially as we couldn’t convince them that dodgeball was worth engineering resources, leaving us to watch as other startups got to innovate in the mobile + social space. And while it was a tough decision (and really disappointing) to walk away from dodgeball, I’m actually looking forward to getting to work on other projects again.

Whhaaaaaaaaa!

Look, if these guys want to quit, I have no issue with that. Fine. It’s the whining about not getting enough attention that rankles me. If they wanted to complain privately, I’m sure they could and some other sources could make their case in probably a much more effective way, as in this post from A VC pointing out how Google really is just a big company now. He easily could have written that post without having to link to that whiny missive.

I speak from direct experience here, as my first company was bought by bigger guys. I suppose I could have complained about something or another (though probably not as it was a great transaction.) And now that I’m out looking for investors in my next thing a connection from California through New York actually made it back to Traffic.com in Pennsylvania. The key guy there had great things to say about the whole transaction. If I had complained publicly, would I have gotten that positive back-channel feedback? I don’t think so.

And worse, I’m now running a great business, one that won’t be as big as YouTube or DoubleClick, but still could be a great acquisition for Google or some other big name. Knowing the bad taste left in the collective mouth of Google about this Dodgeball thing, aren’t they going to be just thismuch more shy about all the deals that are less than $1.5 billion?
Look, if you didn’t get the support you needed from within the acquiring company, that says more about your inability to work within the structure of a big company. If you can’t succeed at that, don’t blame the big company for acting like a big company, blame yourself for not being better at playing by those rules. If you just don’t want to be good at it, that’s fine, but don’t burn those bridges… other people may still want to use them.

So, thanks for nothin’, Dodgeball.

Every once in a while I notice when someone writes something that makes me think they grok the ethos of Credit Card VC. I’m not saying they are foolish enough to actually use credit cards to finance a business, but they are simpatico with the notion.

This morning, in comment No. 7 to this post about an acquisition of a Sacramento company made me laugh so hard I almost spilled by grapefruit juice.

Shhhh…you’re not supposed to mention Sacramento. Don’t make us send our catering crew over there…..

1st rule of building a startup in Sacramento is you’re not supposed to mention Sacramento

2nd rule of building a startup in Sacramento, is you’re NOT supposed to mention Sacramento.

3rd rule of bootstrapping in Sacramento, is that if we are mentioned frequently on TC or elsewhere our talent and engineers get recruited to SV/SF, only to return when the bubble goes limp, taps out or bursts.

4th rule of bootstrapping in Sacramento is try and talk to local Angels and VCs before you have to drive to Menlo Park

5th rule of building a startup in Sacramento is it costs even less here.

6th Rule of building a startup in Sacramento is build something with a product and value, you can’t sell a burn rate, man.

7th Rule of Sacramento start ups is you can bootstrap as long as you have to.

8th Rule of Sacramento startups is, if this is your first start up here, you will probably be doing another…

Grats to the MaxPreps team, they’ve been at it awhile. Always good to see other local teams making good.

PS: There is no Sacramento Startup Club, and if there were we deny its existence.

Very nice. I don’t know what Allen Sligar’s company does, but I wish him luck.

On the other end of the spectrum, and I hesitate about doing this but just can’t resist, is YouniversityVentures .com. This is a VC outfit that only funds companies that are alums of the schools the founders attended. Heh.

Remember in college the guys who talked about high school a bit too much?

I haven’t been posting much lately — frankly I’ve gone a little soft on the concept. Should I really be telling people to load up on credit card debt just before Christmas? Seems like a way to drive financial ruin.

If you are thinking about it, just be sure to follow the rules in the Manifesto.

Also, be sure to follow the advice in this post from Mark Cuban about not losing focus.

Look, I’m a Catholic, and so I tend to feel guilty about a lot of stuff. I’m starting to feel a bit guilty about being the only one on the public square in favor of credit card debt. Every expert is against it, you can see columns like this one nearly every day somewhere.

Of course, the credit card companies also want you to use credit cards, which makes me the equivalent of Milton Friedman,  the economist who favors drug legalization. Credit cards are legal, but they are addictive and it can be difficult to break free of them.

That’s why I really only advocate using them if you have a specific plan for using them, and then getting out.