Buzz Kill

Credit Card VC has not exactly caught on as the buzz word of the moment, but that’s OK with me. It shouldn’t. You have to be nuts to start a company on credit cards and expect everything to be OK.

Still, I like “Credit Card VC” better than “Peer Production,” which doesn’t seem to say very much and yet seems to have some people trying to use it as though it’s the accepted way to describe… something… perhaps the “movement” behind Open Source software. It comes from an academic, if Wikipedia is to be believed. Figures.

I first learned of it from an alert reader who sent me a story about some of the political ramifications of “Peer Production.” If you have better things to do, and I know you do, don’t read the whole thing, and for sure don’t read the comments, which devolve into a miasma about the Future of Journalism.

And I’m not sure I buy into all of the political ramifications of lowering the cost of production. Maybe I’m missing something. I just think it’s the way the world is going in so many ways: Cheaper, more complicated, more interconnected, more information-driven.

So, you can either sit back and ruminate on that, or you can get to work and create some cheaper solutions that are more complicated on the back end and yet they makes things easier for people on the front end and — by the way — those solutions are more intereconnected and information-driven.

So, use whatever buzz words you want, but if you really want to change the world, you’ve got some work to do, and blogging about buzz words doesn’t count. Not even for me, so back to work I go.

This is what I’m talking about

Credit cards are bad, evil, a pain in the arse, etc.

But they will never do this to you.

Michael Arrington does an excellent job, as he always does, of being honest and open about the stuff that other people are  only honest about in private. Kudos to him for that post.

I’m a huge fan of Guy Kawasaki, and I wonder if he will be able to talk about this mess in his blog. More likely, as Arrington points out, he not want to foul the waters. I’m sure his lawyers are telling him to keep quiet, and there’s a reason that lawyers get paid what they do, so he’ll probably listen to them and keep quiet.

Clearly not all VCs are the same, but one way to avoid getting fired from your own company is to never use a VC in the first place. Any ethical VC will tell you the same thing.

Say yes to saying no

A VC is talking about the importance of saying no. Sure, of course. A VC eats “no” for breakfast and poops it all day long. That’s what VCs do.

The discussion from that post gets into the need for startups to say no to customer requests, which is different than a VC saying no to a pitch, but it’s the same answer. I’m not sure I agree with the idea that you should reflexively say no to customer requests. I mean, if you are trying to sell something then the customers are the experts on what it is they are buying. If they won’t buy it, then why wouldn’t you change to have it do what they want?

But those are not the “nos” that concern us here in the CreditCardVC community. We say no to VC before they can say no to us!

The most important no, however, is saying no to spending. We just had some good publicity over at LgDb.com, and with it came a raft of people wanting to sell us all kinds of doodads.
I’m trying to sell a new thing, too, so I’m sympathetic to the people trying to make a buck off someone who was just in the paper. My job, however, is to have more checks coming in, and fewer checks going out. Saying no is the only way to keep that balance.

Keep your eye on the ball

OK, Apple, nee Apple Computers, announced a phone that looks so awesome, I’m seriously bummed that I have to wait six months for it.

It’s clear that the gang at Apple has put all their effort into making the best phone possible. Some marketing will flow out of that, but it will be easy, basically telling people, “Hey, why not own the best phone possible?” Not too tough of a message.

Microsoft, on the other hand, is doing whatever it can to make you look at anything other than their products, going so far as to send you into outerspace. From there, I suppose, even Microsoft products look good.

And compared to the new iPhone, the Zune looks really silly.

OK, back to my sales calls.

Fellow believers

The core meme of this blog is a bit unusual, if only because it goes against the grain of so much of the conventional wisdom.

So when there’s an exception, it jumps out.

I just today came across this blog post from the amazing gang at 37Signals.com. I missed it first time around, but they included it in their year-end wrap-up. The entry is a critique of an article from a Money Magazine imprint called “Business 2.0” that shows how to build a “bullet-proof startup.” 37Signals correctly points out that following the advice would not make you bullet-proof, but instead is more akin to shooting a bullet right through the startup.
They don’t go quite as far as I do in this blog; they say there’s no reason to spend $20M to get to be a $20M company, and that makes all kinds of sense. They don’t say you should startup a company using your credit cards. You’d have to be nuts to advocate that.
I would like to say one thing here that the blog item did not say: Part of the reason it’s more possible than ever to build a new idea on the web for less money than ever before is Ruby on Rails, a web application framework that comes from … 37 Signals. These guys are so good that they didn’t even feel the need to pat themselves on the back for being a core part of why it is that the “Business 2.0” pabulum is so wrong, and so dated.

They didn’t pat themselves on the back, but I will. Good job 37 Signals!

External Validation

OK. If you are really thinking about CreditCardVC, if you are really thinking that you should take your idea and fund it yourself, there are a few things that you need to have.

Most of them are listed in the CreditCardVC Manifesto, but here’s another: External Validation.

This can take many forms. Some of them don’t count. For instance, if you tell an old college buddy about it, and he says it sounds like a great idea, and then changes the topic and talks about sports, it doesn’t count. If he wants to talk about it for a while, and says, “Good luck with that, man!” it still doesn’t count.

If he says, “Awesome, man, you’re going to be the next Bill Gates.” that is actually a sign that you need new old college buddies.

If he says, “Hey, I love that idea. Can I quit my job and come to work for you with no pay for the first six months?” that counts. Anything short of that does not count.

Also important is feedback in public from someone with nothing to gain or lose one way or another based on what they say. That is, getting a positive mention on the aforementioned college buddy’s MySpace page does not count.

I’ve been hesitant in this space to write too much about my current project because I fear that potential customers will see LgDb as undercapitalized and therefore somehow not trustworthy. But that probably doesn’t matter that much. Either LgDb will become the most-used site for state-level legislative information, or it won’t. Either LgDb will save them an hour or so of mind-numbing busy work every day, or it won’t. Either it will help an association make a meaningful web page, or it won’t. I think it will in all cases, which is why I shouldn’t worry so much about perceptions of perceptions.

But I want to say in this space that I’m pretty psyched about our first bit of external validation from a serious and respected blog: ColoradoStartups.com. David is usually pretty gentle with his subjects, but is willing to — correctly I’ve found — point out in his helpful way a seriously flawed business model or a glaring technical glitch or user-interface problem.

For LgDb, however, he had a positive, felicitous, and succinct summary. He even increased my base price by $45, which I see as a sign more of his perceived value in the product than a sign of his note-taking skills from a month-old conversation. 😉
In any case, it sure is better then telling me I’ll be the next Bill Gates, so I’m excited for the write-up, and thankful to David.

And I’m looking forward to getting through the holidays so that people will focus on business again and I’ll get some more of the best external validation of all: paying customers.

Mark does it again

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.

Free Your TV; Do not pay for cable!

Part of the Credit Card VC ethos, of course, is not spending money in the first place. That’s the thin thread I’m using to insert this meme into this blog.

One way to save a small pile of money every month and also save a bit of your sanity is to cut off your cable company. Now, I’m not talking about figuring out a way to get cable, and not pay for it, that would be wrong; the moral equivalent of downloading music without paying for it. Really, though, you shouldn’t have cable. If you have time to sit around and watch the Game Show Network, you are not spending the time you should be spending on your business.

This will not make you a Luddite. Indeed you can cut off cable, and the dish, and still be something of a video snob.

Here’s how:

  1. Buy an HDTV. The prices have come down enough, it’s time to do it.
  2. Get the rabbit ears antenna recommended for that TV. Do not go overboard and get one of those big ones from Radio Shack and kill yourself up on your roof.
  3. Put the rabbit ears as high as you can inside your house, if you can put it in an attic, that’s best.
  4. Go to AntennaWeb.org and figure out which direction to point your antenna.
  5. In checking that out, you’ll realize that you get a lot of stations, more than enough for the times when you do need to veg out.
  6. OK, here’s bit that allows you to be a video snob: The signal broadcast by your local stations is essentially uncompressed, meaning that you will get better picture quality from that little rabbit-ears antenna than you would from cable or a dish! That’s right, the stations send out the whole picture over the air, but the carriers take that signal and smash it down so it will fit in the pipe with all the other channels. So when you are watching that amazing snowcone catch that almost helped the Mets into the world series, you will be able to see every seam on the ball better than your brethren watching on cable.

OK, I know I haven’t been at this blog long, and I’ve already referred to Mark Cuban’s blog a couple of times, but now I’m going to do it again. He recently asked “How do you get people to see a movie without spending a fortune on advertising?” He got a zillion responses. I didn’t read them all, but in my mind it’s easy: Work harder to get more Little Miss Sunshines made.

So, he didn’t ask, but here’s my suggestion for how to get a lot more traction for his HDNet: Broadcast it over the air.

Here in Denver we have all the big networks broadcasting in HD, as they must under federal mandate. But we also have a bunch of smaller ones, Christian broadcasters, even shopping networks. If they can get a broadcast license, so could HDNet. It would be a great publicity play for the Maverick to do an end-around on the cable and dish providers. Combined with the fact that he could tout his ability to send true uncompressed HD images and the market penetration the HD sets have reached, well, this would be a huge win for him.

So, Mark, what do I want for this million-dollar idea? Only that you start in Denver as a test market.

Connections

Sometimes I see connections between items that aren’t commonly seen. Sometimes this makes me seem brilliant, and sometimes people look at me like I’m Jerry Fletcher.
For instance today I wrote one blog comment on Mark Cuban’s blog that made connections between three seemingly disparate posts.

But closer to the relevancy of this blog are two items posted right now on TechCrunch. One of them is also related to one of Cuban’s blog items, and it concerns a new company that is paying bloggers to write about a topic. This new one seems slightly less invidious because it actually requires bloggers to disclose the financial arrangement.

The interesting link to me is between that topic — trying to find new ways to generate essentially small amounts of cash — and the one that follows that about an outfit that makes very small investments in new companies, because that small investment is all that’s needed. This is all classic Long Tail stuff; i.e. making a few pennies here and there off a lot of people doing small things.
The bit about small investments should be familiar to readers of this blog, as we advocate investments so small that you could actually put them all on your credit card. It’s the way that software and the world are moving, the end of the “hit” manufactured by an expensive process.

I just want people to remember one thing: There is no easy money. Even if you can start a business on your credit cards, it’s not going to become a $20-million business without the idea AND boatloads of really hard hard hard work.

So, if you think you are smart, and maybe you are, just remember that there are boatloads of smart people out there. The only thing that will get you a big win is hard work. That said, I need to get back to work.

Thanks for reading.

Wobbly

OK, I hate to admit it, but I’m getting a bit wobbly. I’m all alone out there right now and the wolves are howling.

It would be so nice to cuddle up in the warm embrace of some VC, or even an angel. With a name like “angel” how could I go wrong?

I’m even deeper right now in the situation than I was when I wrote the manifesto. I’m scraping by, trying to pay more than just the minimums but looking at some much bigger bills in the next couple of months.

What’s going to keep me solid? Well, it changes from day to day. Yesterday it was finding a couple of sites that encouraged me, I’ll have more on those soon.
Today it is the fact that I got some great confirmation from a customer — a real live paying customer — in the form of a check and also some encouragement about how precisely we are solving a huge problem that she knows she’s going to have in January. Unfortunately not everyone is able to project forward to January, so I know the phone will be ringing then.

But for now, it’s quiet.

OK, time for me to get some marketing stuff done. You go back to work, too!

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