Carnival of Bootstrapping Entrepreneurs #8

Thursday, September 6, 2007 at 8:30pm by Site Administrator

Welcome to the eighth Carnival of Bootstrapping Entrepreneurs (CoBE #8). Critieria for inclusion: relevant to bootstrapping, entrepreneuring, startup/ small businesses. To be fair to everyone, entries are selected approximately in order of submission. Please support this carnival by linking back to this post.

This edition is a bit shorter than normal because a half a dozen or so bloggers sent the same entry – several of which I’d already accepted in earlier editions of this Carnival. So please keep track of your submissions – no dups – to increase your chances of getting in.

Editor’s Choice

  1. 21 Proven Tactics for Self and Employee Motivation by John Wesley.

Picks of the Week

Here are this week’s additional picks.

  1. Be A Good Manager By Letting People Learn And Grow by Warren Wong.

  2. You’re Worth More Than Your Job by Edith Yeung.
  3. 5 Ways to Think Strategically by Luke Houghton.
  4. Keys to Effective Holiday Marketing in 2007 by Frances Palaschuk.
  5. When is it Time for a Re-Design? by Vandelay Website Design.
  6. Avoid Getting Gypped by Fraudulent Web Designers by Michelle Cramer.
  7. 7 Ways to Expand Your Products and Services by Terry Dean.
  8. Talking Good English by Mark Miller.

That ends this edition of the Carnival of Bootstrapping Entrepreneurs. Any articles submitted on or after Aug 31st that meet the criteria but not appearing here will likely appear in the next edition.

Please use the submission form for future editions. Limit one entry per week per person. If you find you are not getting into this blog carnival, please read 11 tips for being included. I’ll particularly point out a few reoccurring problems:

  1. Submitting the same article twice. Always send something fresh. It’s not that hard to keep a spreadsheet of your carnival submissions.
  2. Submitting more than one article in the same week, sometimes in the same hour. If you can’t be bothered to pick your best, I can’t be bothered to either.
  3. Not making articles readable (high contrast pages, non-miniscule font sizes, short to medium paragraphs). Computer screens are not ideal reading platforms.
  4. Being off topic or simply not targeted at bootstrapping entrepreneurs, or entrepreneuring in general. The article might be great, but if you don’t target it at entrepreneurs, that reduces the chances of being accepted.
  5. Submitting someone else’s writing as yours.


Profiling 10 Successful Anime Entrepreneurs

Thursday, September 6, 2007 at 3:17pm by Site Administrator

When anime finally exploded onto the scene in the United States in the late 1990s along with Pikachu and friends, an entirely new pop subculture was formed. Everyone young and old welcomed the TV show and videos and embraced the funny little characters as a revolution in art, design and cinema, at least as we Americans knew it. Since then anime has managed to gain popularity, and even though new shows and stories aren’t as mainstream as Pokemon was, anime has solidly established itself in the American pop culture world, alongside Britney Spears, Finding Nemo, and Spiderman.

Anime entrepreneurs are continuing to make their mark in Japan, Korea, and rest of the Western world. According to Business Week magazine, they are only maximizing a fraction of their potential. Still regarded as a fresh take on traditional Western animation, anime, with the help of its designers, business managers and technology consultants, could one day compete with Hollywood. Critics argue that the bulk of the anime industry is still to disorganized to become a cinematic heavyweight, but we’ve compiled a list of 10 anime entrepreneurs who have overcome challenges like lack of funding or too-small audiences to rise to the top of their game and challenge even the biggest mainstream Hollywood companies.

  1. John Ledford Houston, TX, native John Ledford "is America’s leading licensor and distributor of Japanese animation," according to Forbes magazine. A college dropout, Ledford started his own video game distribution company in 1990. It became so wildly successful that just a few years later he began licensing and distributing anime films. Soon afterward, he founded ADV Films, the company under which he still operates today. Ledford, 38, has now branched into the cable television market developing shows for his diehard fans.
  2. Tatsunori Konno As President of Bandai Visual USA, Inc., Tatsunori Konno heads the American division the Japanese film company Bandai Visual Co., Ltd. By distancing himself, however far, from his parent company, Konno will surely end up being ultimately responsible for the growing successes of anime film in the United States. A distributor for the most "sophisticated" and hardcore anime fans, Konno strives to bring his customers the highest quality DVDs, designs, and experiences. Click here to read about an interview with Konno.
  3. Stu Levy After founding the popular manga novel and guidebook company Tokyopop in 1996, Stu Levy’s profile has reached international audiences. As a guest lecturer at colleges and conventions around the world Levy manages, creates, and publishes the entertainment produced at Tokyopop as well as collaborates with other companies in the anime industry.
  4. Matt Greenfield Matt Greenfield is another influential member of America’s anime business. He is a founding partner and current Vice President of John Ledford’s ADV Films. Helping to start ADV Films in 1992, Greenfield launched the company into the highest levels of American anime consumerism while managing to compete with traditional Hollywood. He also occasionally does voice overs for some films.
  5. Tateo Mataki As CEO for Dentsu, often regarded as one of the largest and most powerful advertising agencies in the entire world, Tateo Mataki is quite involved with the global successes of anime. Mataki began working for Dentsu in 1962, making his way up to different managerial and executive level offices until he reached the position of CEO in 2004. Among a list of other high profile clients in the sports and entertainment industries, Dentsu is also responsible for the advertising and promotion of anime worldwide.
  6. John Oppliger John Oppliger’s professional beginnings were far from the flash and fame of anime. Starting out, he briefly taught English at St. Petersburg College — he is now widely regarded as an expert of anime culture and trivia. As Web master for AnimeNation.com, Oppliger was made famous by his "Ask John" column, in which he answers fans’ questions about anything anime related.
  7. Satoshi Yamaguchi Yamaguchi’s Yumeta Co. adequately represents the quiet, humble nature behind the origins of anime. Despite its immense popularity, the Yumeta Co. has "no sign on the door. Inside the cramped, nearly windowless building, the company’s 30 or so jeans-clad staffers busily draw by hand" each design, according to "The Anime Biz," article published in Business Week. A direct contrast of Hollywood egoism, Yamaguchi’s anime business recalls a purist’s style, in which all the work centers around the perfection of the trade.
  8. Hayao Miyazaki As one of the leading directors in the Asian culture and perhaps the most prolific and successful director in the anime industry, Haya Miyazaki has come as close as he can get to achieving mainstream popularity. His film "Princess Mononoke," backed by the American company Miramax, became the highest-grossing film EVER in Japan, until two years later when another of his films, "Spirited Away," took over the title. Miyazaki is also co-founder of the prominent Studio Ghibli, which produces anime films.
  9. Mitsuhisa Ishikawa As President of the Production IG Studio, Ishikawa has developed numerous TV shows, films, and video games for anime fans all over the world. Ishikawa started Production IG in 1987 and since then has become known as "one of the forerunners of digital animation techniques," making him one of the leaders in bringing anime into the future.
  10. Osamu Tezuka Osamu Tezuka is warmly considered Japan’s Walt Disney. He revolutionized anime through his design techniques and is responsible for popularizing the unique artform. His most famous stories are Astro Boy and Kimba the White Lion. Tezuka died in 1989 but is still revered as "the God of Manga."

The ever-growing anime industry may not be the mainstream in the United States yet but it’s certainly hold its own. With ambitious, talented entrepreneurs like the leaders listed above spreading the word through their designs, advertising campaigns, Web sites, and profitable distribution companies, it’s only a matter of time before the quirky animated art is as much a part of our pop culture as it is Japan’s.

7 Tips for Bootstrapping a Business by Blogging

Wednesday, September 5, 2007 at 9:30pm by Site Administrator

If you do decide that your business website should have a blog, and that having a blog can bootstrap your business, you’ll likely want a few pointers on settng up and managing a blog. This is not a detailed guide, but rather a quick overview.

  1. Blog setup.
    Setup a blog on a subdirectory of the main site. That is, if your website is at http://www.example.com/, use http://www.example.com/blog/ or some such instead of http://blog.example.com/.

  2. Niche selection.
    This is the tough decision. Your blog’s topic niche should be related to your business, but be of interest to readers. First, decide who your customers are, whether they will be your blog readers, and whether they’ll convert into customers. If that’s not possible, the blog can be about a topic related to your business, even just peripherally.

    Either way, your blog builds authority over time, and that authority partly transfers to the main website. That’s where you are selling your products or services, and hopefully it will receive its fair share of web traffic from search engine queries. (I.e., people searching for a specific product or service tend to be ready to buy something.)

  3. Editorial calendar.
    Once you’ve selected a niche, it’s easier to come up with a plan for actual articles – an editorial calendar. A strict editorial calendar also indicates specific publication dates. For a blog, you can just come up with a loose schedule and a list of article ideas or actual titles. It’s important that you publish “key” content:

    • Resource lists and general linkbait articles.
    • Profiles and interviews of industry leaders.
    • Comparisons and reviews of products and services, though not of your direct competitors.
    • Tutorials of how to do something related to your blog’s niche.
    • Video screencasts of how use relevant software.
    • Ebooks.

    All of these types of content should be produced with the intent of establishing your blog as an authority on its selected niche.

  4. Regular schedule.
    Publish to the blog regularly. If you can publish quality articles five days a week, fine. If you can’t, fine. Just be consistent. Any less than three times per week is not a good idea, in my opinion. Neither is it expected that you publish more than 3-5 articles per day, unless there is an overwhelming reason to do so.

  5. Giveaways.
    Use your blog, which does not hard sell your products and services, to occasional give away what you’re selling. You can also hire a design firm to create plugins and website templates for blog platforms (such as WordPress – one of the most popular Open Source platforms). Give the plugins and themes away on your blog.

    Such freebies can generate an awful lot of buzz for you, especially if you do them on a regular basis. Your website’s link goes into the footer, as the sponsor. [Some search engines may discount the value of these links, but you will still get visitors from blogs that use your free themes, and some bloggers will write about and link to your site. So it's still a worthwhile move.]

  6. Build relationships.
    Relationship-building is very important online, but it must be sincere and diplomatic. It’s not easy, and you might slip, so do your best to rectify awkward situations. This applies if you comment at other blogs related to your niche, which you should consider doing.

  7. Promote and build links.
    All the activities above are for naught if you cannot succeed in building links to your site through good content, social media marketing and ongoing networking with other online professionals. For more reading material, check out Tropical SEO and Search Engine Journal.

This is the tip of the iceberg for building a successful “business” blog, though it should give you a general overview.

The Gay Entrepreneur’s Toolkit: 100 Networking Resources, Guides, and Links

Wednesday, September 5, 2007 at 2:20pm by Site Administrator

Resources for the LGBT community at large are plentiful, but it’s often difficult for gay entrepreneurs to find helpful business resources. There are, however, a number of networking groups, tools, and other resources available if you know where to look. These are 100 of the best.

Networking and Organizations

Get connected with other gay businesspeople through these events, organizations, and other networking resources.

  1. National Gay & Lesbian Chamber of Commerce: Get certified with this organization for better exposure, events, and networking opportunities.
  2. Gay and Lesbian Business Association of B.C.: Gay businesspeople in British Columbia can join this group for community resources, a red dress ball, and networking groups.
  3. Gay Business World: On Gay Business World, you can connect with others, find advice, learn about events, and even post a job listing.
  4. Gay Business Association: This gay business association boasts an extensive database, a monthly newsletter, and networking events.
  5. Out & Equal: The Out and Equal advocates support gays in all types of business.
  6. Gayellow Pages: Whether you’re looking for a vendor or would like to advertise your business, check out the Gayellow Pages.
  7. Golden Gate Business Association (GGBA): The GGBA was the first LGBT chamber of commerce, and for 30 years has supported LGBT businesses and those that support them. Check them out for a great directory, networking, resources, and expos.
  8. Gay Directory: Gay.com‘s directory is full of free listings for businesses and events. You should be there, too.
  9. GayFranchise: Are you looking for a business to start? This is a good resource to check out.
  10. GayCanada: Check out this directory for gay businesses, services, and resources in Canada.
  11. International Gay Entrepreneurs Association: Join this group to connect with gay entrepreneurs all over the world.
  12. Genius: This Netherlands association of gay professionals supports a network of gay businesses.
  13. The National Gay Franchise Expo: Whether you’re looking for a franchise to invest in or want to sell your own, this event in West Hollywood is a great place to be.
  14. Out Professionals: This network for gay and lesbian professionals offers events, news, and more.
  15. Greater San Diego Business Association: This Gay and Lesbian Chamber of Commerce in San Diego supports gay businesses through networking opportunities and social activities.
  16. Lesbian and Gay Veterinary Medical Association: LGBT vets can join this professional organization for support, information, and networking with other gay vets.
  17. Sydney Gay & Lesbian Business Association: Aussie LGBT entrepreneurs can join this organization for community connection and networking.
  18. US Gay/Lesbian Business Groups: Check out this list for a number of local gay chambers of commerce and business associations.
  19. LambdaBusiness: Connect with other gay and lesbian owned businesses through this directory.
  20. Out and Equal Workplace Summit: Find out how you can contribute to a diversified workplace at this gathering of gay business leaders and advocates.
  21. NetworkQ: This network is for gays and lesbians in business school and beyond.
  22. Queer Arts Resource: Gay artists should check out the Queer Arts Resource for help getting into an exhibition.
  23. Adventure Out Women: This website provides a networking portal for professional women, lesbian or otherwise.
  24. Lesbian Business: Find lesbian owned and operated businesses through this site.
  25. Gay Business Association: Gay entrepreneurs in the UK should join this trade association that represents gay and lesbian businesses.

Tools

Whether you’re networking, balancing the books, or just keeping track of it all, these tools are lifesavers for the gay entrepreneur.

  1. 8apps: 8apps features online applications that help users network more productively. Although not released for the general public, you can score an invite if you ask around.
  2. MindMeister: Get your mind mapping under control online and use this tool for collaboration and brainstorming.
  3. Box: Share and access files from anywhere using Box.
  4. Goplan: For online project management and collaboration, check out Goplan.
  5. FreshBooks: Use FreshBooks to make billing easier and more effective.
  6. Breeze: Stay in contact with your customers in style with Breeze.
  7. Remember The Milk: Keep tabs on the things you need to do with this easy-to-use online to do list.
  8. Open Closet: Send these "greeting cards with gay regards" to gay friends and professionals you want to keep in touch with.
  9. Spongecell: For the socially active gay entrepreneur, this calendar service is worth its weight in gold.
  10. Moo: Moo’s website says they love to print, and it shows. Check them out for colorful printing of note cards, business cards, sticker books and more.
  11. Jewelboxing: It’s all about presentation. With Jewelboxing’s professional grade DVD and CD packages, you’ll put your best foot forward.
  12. Biz-Plan: This business plan guide and template will help you with the framework and structure that goes into writing a successful business plan.
  13. Comodo: Use Comodo’s Secure Email Certificates to make sure you’re sending out secure, confidential emails.
  14. Zoho: The applications offered by Zoho make Microsoft Office programs pale in comparison.

Gay Business Districts

For the best in community resources and support, you can’t do much better than these gay business districts.

  1. Nashville’s Church Street: Church Street in Nashville is a hub for everything hip and gay in Nashville. This business district is home to a number of gay ventures, from retail and dining to office space.
  2. Seattle’s Capitol Hill: Capitol Hill, once known as Catholic Hill, is alive and kicking with gay culture. You’ll find a number of nightlife hotspots as well as support from organizations including the Lambert House and Seattle LGBT Community Center.
  3. Columbus’ Victorian Village: Victorian Village is very much a gay village, with many homes owned by same-sex couples. The re-development of this area is a result of gay gentrification.
  4. Providence’s Fox Point: Fox Point entrepreneurs love the way their gay businesses are embraced by both their gay peers and the community at large.
  5. Washington DC’s Dupont Circle: Many prospering gay businesses have made their home in Dupont Circle. The area is also home to D.C.’s first gay bookstore, Lambda Rising.
  6. Santa Clara’s Alameda: The Alameda is full of gay community resources, specifically the Billy DeFrank Lesbian, Gay, Bisexual and Transgender Community Center.
  7. San Diego’s Hillcrest: Hillcrest is a hub for gay commercial activity in San Diego, as well as home to the Lesbian, Gay, Bisexual and Transgender Community Center.
  8. Philadelphia’s Washington Square West: Washington Square West, known as "The Gayborhood" by locals, is home to a large concentration of gay bookstores, restaurants, and other businesses.
  9. San Francisco’s Castro: Castro is full of LGBT businesses and spaces, like Pink Triangle Park and the Castro Theatre.
  10. Tulsa’s Brady Heights: Brady Heights boasts a large gay business organization, TuRBO, as well as a new Equality Center that serves as an anchor for the district.
  11. Fort Lauderdale’s Wilton Manors: Wilton Manors has a majority gay city council, so you’re sure to have the support you need. You’ll also enjoy a pedestrian friendly community and neighboring businesses like "Gay Mart."
  12. Los Angeles’ West Hollywood: Although technically a city in its own right, this LA community boasts a gay-supporting coalition called the Community for Economic Survival (CES), a group that supports gays and other special groups. Like Wilton Manors, West Hollywood has a majority gay city council.
  13. Chicago’s Boystown: Boystown was the first officially recognized gay village in the U.S., a fact that is clearly supported by its booming gay businesses and community.

Help!

Whether you need financial support or local resources, these links are sure to guide you in the right direction.

  1. Prosper: Get funding from real people, not banks, using Prosper.
  2. Angel Investor Directory: Find angel investor networks in your state.
  3. GayJob: If you need to hire help, check out this job site for gay and gay-friendly employees.
  4. Gay Marketing 101: Get help spreading the word about your business with this gay marketing service.
  5. Small Business Administration: The Small Business Administration offers lots of resources to entrepreneurs, gay or otherwise.
  6. Count Me In: Lesbian entrepreneurs can use this resource to join programs and get small business financing.
  7. Gay Finance: For assistance with business finances as well as implications for civil partners, check out Gay Finance.
  8. State-Specific Entrepreneurial Resources: Find helpful resources in your state.

Articles & Advice

For expert advice on business matters that affect gay entrepreneurs, take a look at these resources.

  1. When Is It Time to Get Capital?: This article discusses the fine art of timing your funding.
  2. Can I Date My Client?: Find out if it’s wrong to love a client in this advice column.
  3. Keys to Successful Capital Acquisition: Get your hands on important financial resources with these tips.
  4. How to Select a Shopping Center Location: If you’re ready to move your business into the retail arena, be sure to check out this article.
  5. Seven Ways to Avoid Becoming the Boss from Hell: No one likes a scary boss, so why would you want to be one? Follow this advice to be the boss your employees respect.
  6. Like a Magnate: This story details the many pearls of wisdom gay entrepreneurs can use from Madonna’s successful career.
  7. Members’ choice: the most gay-friendly companies: When doing business with companies, check this list to see if they’re supportive of your lifestyle.
  8. Keep Your Business Afloat by Becoming a Sustainable Leader: Read this story for five practical steps towards building a business that will last.
  9. Lavender Road to Success: Should you relocate?: Take this quiz to find out if it might be a good idea to relocate to a more gay-friendly community.
  10. What Gay Entrepreneurs Contribute: This article details just how important you are to your community.
  11. Learn How to Manage Virtual Workers: Find out how to keep tabs on and support your employees from afar.
  12. What To Do When You Can’t Raise Money: This article details a number of methods you can use to stay afloat during slow business months.

Publications

From blogs to magazines, these publications will fill you in on the latest in gay entrepreneurship.

  1. Echelon Magazine: This online magazine for gay business professionals highlights economic development, education, and trends in the marketplace.
  2. GFN: GFN covers financial news that matters to the gay community. You’ll also find a helpful professional directory.
  3. Gay Market News: Stay up to date on the latest in market research and trends with Gay Market News.
  4. Queercents: This blog focuses on money for the GLBT community, a topic that entrepreneurs are sure to benefit from.
  5. Planet Out Money & Careers: Planet Out’s Money & Careers section offers advice for gay business owners and even features a $20,000 Entrepreneur of the Year contest.
  6. Gay Banker: Read the story of this gay man who is an investment banker in London.
  7. Coaching4Lesbians: This blog encourages readers to be successful lesbian business owners and professionals.
  8. Queer Chef: Chase blogs about life as a queer web designer.
  9. Kirk Snyder: Kirk is an authority on business and workplace issues as well as a regular contributor to well-respected gay publications.
  10. Miami Glen: On this blog, you’ll find Glen Mitchell’s musings on life as a gay photographer in Miami.
  11. Gay.com Business: This gay publication’s business section is full of helpful information and resources.

Success Stories

Find inspiration from these gay and lesbian entrepreneurs who have found success.

  1. Quickbrowse: Marc Fest solved a problem for himself, but may make a fortune for his mostly selfish action.
  2. Drew Banks: This businessman-turned-author has found success in both home networking and publishing.
  3. Lisa Thomas: Lisa is Co-Founder and former CEO of Clif Bar. She’s also an executive producer of award winning media works.
  4. RainbowVision: This gay retirement community has found great demand in Santa Fe.
  5. Nasty Pig: This clothing line was "born on the dancefloor of Sound Factory" and has grown into an icon of leather and fetish culture.
  6. Olivia: Olivia has conquered the gay and lesbian cruise market and is now finding success in resort and retirement communities for aging members of the LGBT community.
  7. Pride Factory: Pride Factory celebrates 10 years of business, 6,000 square feet, and status as a tourist attraction in South Florida.
  8. Udi Behr: Udi Behr’s "Love and Pride" collection has found success by producing attractive jewelry with meaning.
  9. Mike Dorsey: Mike Dorsey founded Roy G. Biv to bring color to the outdoor furniture market.
  10. Mariah Hanson: Dinah founder Mariah Hanson has thrown lesbian-centric parties for 18 years.
  11. Dixie Longate: Miss Dixie sells Tupperware in drag. She’s become the number one personal seller in the country.

Books

For more in-depth discussions on gay business and entrepreneurship, check out these books.

  1. In the Pink: The Making of Successful Gay and Lesbian-Owned Businesses: This book is full of real life tips, focusing on working with your partner, success stories, finances, and more.
  2. Selling Out: The Gay and Lesbian Movement Goes to Market: Read Selling Out for a great discussion on the consumerism of the gay community.
  3. Gay Media Guide: Use your marketing dollars more effectively by understanding the media market. You’ll find information on what’s available in the gay media marketplace.
  4. Untold Millions: Secret Truths About Marketing to Gay and Lesbian Consumers: Are you sure that your gay peers are interested in your business? Read this book to find out how you can make your product or service more attractive to the community.
  5. The Pink Pages: The Gay and Lesbian Business and Services Directory: Keep this book handy to support your fellow gay business owners.
  6. Business Inside Out: Capturing Millions of Brand Loyal Gay Consumers: Tap into the lucrative market of gay consumers with advice from Business Inside Out.

Case Study: 7 Principles of Bootstrapping an Online Media Empire

Tuesday, September 4, 2007 at 10:00pm by Site Administrator

Compared to traditional channels, the Internet provides opportunities for building online businesses that are within reach for many more entrepreneurs. Eager to try my hand, since I’ve had varying degrees of success with previous offline businesses, I’m in the midst of launching a bootstrapped online venture with several partners.

The model upon which this project is built, however, nearly guarantees some level of success, though it might come after year 1, or when we sell the business.

7 Principles of bootstrapping a partnered online business

Here are the seven principles of bootstrapping that this project is based on. Some project details are given afterwards. Note that these are not the only principles of bootstrapping, just the ones I based this project on.

  1. Minimal or no initial capital.
    Start with minimal resources and capital to carry the project through the first phase.

  2. Minimal operating costs.
    Use open source software and modify features as necessary. Use “bulk” resources that allow each sub-project to be easily operated in tandem. Recycle any revenues from previous phases.

  3. Minimal loss.
    An ideal bootstrapped operation results in minimal loss. In this case, I’ve guaranteed partners a refund of their $200-300 investment by no later than Dec 31st, 2008, if they are not happy with monthly returns. They keep any revenue share but give up their ownership to me.

  4. Return based on effort.
    Bloggers are used to the idea of greater returns for greater initial effort. This project’s success relies on early effort. However, once certain milestones are reached, the time investment decreases and the revenue increase.

  5. Leveraged partner efforts.
    Can’t run a business yourself? Bring in capable partners who get a large chunk of ownership in return for early efforts and a little bit of capital. In this project, each partner is at least a blogger. Some are designers, copywriters, SEOs. They’ll apply their skills to the official weblog for each sub-project. Each blog has the potential to generate web traffic and revenue supplemental to the rest of the sub-project.

  6. Leveraged resources and skills.
    What the Web offers to bootstrapping entrepreneurs that’s not available in traditional channels are free resources that can be customized. If you have the skills to use these resources, there’s a lot of opportunity for you. You just have to find it.

  7. Applied bootstrapping.
    An ideal bootstrapped operation will funnel the revenues from one phase into the next. Bootstrapped cash flow uses any suitable leverage.

Project details

The rest of this article goes into a bit of specifics about the project. They’re recorded here for posterity. This is a long-term bootstrapping project, and periodic updates for each phase will be provide on this blog.

  1. Top secret – sort of.
    Most of the details will be revealed in Jan 2008, after official launch. There will be 11-15 related sub-projects, all of which are based online. Each project will have an official weblog, which will hopefully generate enough early revenue to keep things going.

  2. Many partners.
    I could do this project all by myself but then it would most likely fail. I would much rather give passionate partners an equal net share of each sub-project in return for their early effort and no initial investment. The revenue model will hopefully motivate everyone to promote their sub-projects (1-3 per partner).

  3. Minimal partner investments.
    If early gross revenues are sufficient, there will be no cash investment required per partner. Else, each partner will put in $200-300 per sub-project that they are part of. That is, if I settle on 11 sub-projects, there will be a total pool of $2200 – $3300 dollars to hire some temporary staff. If things go very well in phase 1, partners will not have to open their own wallets.

  4. Minimal paid staff.
    Because this is an experiment in bootstrapping, paid staff have to be kept to a minimum, at least initially. At the start of the second phase, if revenues are sufficient, $2200 – $3300 will be pulled from gross revenues to hire staff. Otherwise, each sub-project’s partner will put in $200-300 towards the project pool, for hiring temporary staff.

    Success from phase 2 will determine whether staff can be kept on. If not, we go back to putting in our own time and effort, then try to hire again later – but only from available gross revenues.

  5. Self-promotion through blogging.
    A blog for bootstrapping a business project can be ideal for leverage. Each partner is a successful blogger in their own right, and hopefully each sub-project’s blog will generate enough revenue to create a bootstrapped cash flow for the entire project.

  6. Leveraged resources and skills.
    I am leveraging Open Source software and my own skills to bootstrap this project. This includes using free online collaboration applications where available. The only costs at the moment are for the project-related websites:

    1. Domain registration is about US$6.95/yr + $0.25 ICANN fee for each site. I registered all domains for two years.
    2. Hosting uses a special reseller acount for $52.97/mth. This provides 5 Terabytes pooled monthly bandwidth and 55 Gb pooled hard drive space. Using this site makes admin simple, but it requires a “main” domain, which also has to be registered ($6.95 + 0.25/yr).
    3. Design and graphics. Some of this work will be paid with a 10% net revenue share. Those sub-projects not launching immediately will have their design + graphics paid for in cash out of my own pocket.

    Thus, average monthly website costs are just over $60/mth out of my own pocket. When hosting needs go beyond my reseller account’s limits, the weblogs will be moved, and the cost paid from gross revenues.

  7. Overall project goals:
    To reveal this now gives away too much. From an entrepreneurial point of view, the project intends to show that bootstrapping can lead to successful revenues in an online venture, using a “synergy” of partnership, leverage of skills, and leveraging of Open Source software. The sub-projects will be aiding other people, but the details of this will be revealed in Jan 2008.

Expected returns

It’s impossible to determine what the exact return will be, but the nature of the project allows me to estimate long-term as well as minimums.

  • Minimum: $500/month gross revenue per sub-project, after a specific milestone point (to be revealed in the future). If operating costs are, say, $1000/mth across the entire project, that is divided 11 ways (11 partnerships). This is not much of a return for the partners nor myself, so there is hopefully motivation for a greater promotional effort.

  • My estimation: I’ve conservatively estimated that each sub-project could earn at least $3000/mth within two years, if partners do their share of promotional effort. While that will not be a huge return for each partner on a monthly basis, not only will they get their money back and some modest monthly income, they’ll benefit from any sale of the project.
  • Outside estimation: Two people I consider experts about such projects having been analyzing my plan. They feel there is a 50/50 chance of the project being hugely successful ($800K/mth) or a flop ($8K/mth). The latter means about $800/mth per sub-project. Their estimations are based on the success of similar projects.

I’m far more optimistic about the low end because I’m applying tried and true bootstrapping principles, leveraging effort and skills, and keeping costs minimal early on. What’s more, there’s a second layer of bootstrapping here. If my share of the project’s net monthly revenue reaches a certain level, I can afford to give up other paid work and devote more time. And because of the nature of the project, even a modest level of success means we’ll eventually get offers for at least $2-3M, if not as much as $10M. For some entrepreneurs, that’s nothing. But for a bootstrap-minded person like myself, it’s capital for the next project.

5 Common Problems a Bootstrapping Entrepreneur May Face

Saturday, September 1, 2007 at 11:00pm by Site Administrator

Entrepreneurs managing a startup should expect to encounter problems. Being prepared for them is what will help carry you through. Here are a few common problems that may crop up, and not just due to repeated business anti-patterns.

  1. Poorly defined partnership.

    Problem: Not making clear from the start the role of each partnership in a startup can result in an unequal workload between partners, or lead to someone slacking off, or some sort of unbalance.

    Solutions:

    1. Do not let things go on, because when you finally do tackle the problem, you’ll do it with contempt and/or excessive confrontation.
    2. Have weekly status meetings. These can serve as reminders to slackers that they’re not doing their share.
    3. Play dumb. Tell them seem distant and you’re worried about them. This approach is dangerous. If you’re not skilled at this method, it can seem disingenuous and be insulting.
    4. Be direct. Ask them why such and such task isn’t done, but expect confrontation or deflection.
    5. Buy them out, if you don’t see change coming.
  2. Flash success.

    Problem: One of the biggest problems about success is that it can sink you. Unexpected success results in accounts payable for supplies, etc., exceeding existing cash flow – at least until acounts payable come in. Now you have to decide whether to take investment money or not.

    Solutions:

    1. Collect on overdue bills.
    2. Offer a discount for immediate payment on new orders.
    3. Outsource some of the work, if applicable.
    4. Ask suppliers for credit, especially if you’ve been with them for a while.
    5. Pass on a big order. Just say you cannot accept it at this time.
    6. Refer the order to a competitor.
    7. Cut back on expenses.

    It may hurt your pride to follow #5 or #6, but sometimes it’s necessary.

  3. Requiring loans.

    Problem: If you do need an infusion of cash flow, where do you get it from? Bank, private loan, family, or Venture Capital?

    Solutions:

    1. Not every business can take or even get Venture Capital. And even if your business qualify, taking VC is equivalent to agreeing to eventually give up your business. But if it doesn’t bother you,

    2. A small business loan keeps ownership with you, though the requirements at times might seem as monumental as for getting VC.
    3. Unlike Santa Claus, private lenders do exist, but they expect a certain amount of ROI, in a certan amount of time.
    4. While taking money from friends and relatives is potentially harmful, it keeps ownership closer to the heart than other solutions.
    5. Get a 0% APR balance transfer credit card. But only provided you think that you can pay off the balance within the alloted time.

    Before you decide, consider all the ways you can finance your business startup.

  4. Hardware costs.
    Problem: While there are many options for free software, there is no equivalent for hardware, particularly computers. Computer costs are down, but if you have a staff that all need computers, those costs add up.

    Solutions:

    1. Offer flexible work schedules, with sharing of computers. If you set up each computer with network access and more than one user profile – or an Intranet-based framework running only web-based applications – anyone can use any computer that is available.

    2. Have remote teams, whereby employees use their own computers. In recompense, institute some additional profit sharing or private shares in the company.
    3. If you’re a software publisher, try extreme programming practices, where 2-3 teammates work together on a single computer. The practice is said to reduce errors and development time, provided teammates can get along, I suppose. (Hint: install a shower in the office – the cyclists among your staff will thank you for it.)
    4. Hire new employees only when absolutely necessary. Make sure that roles are clearly defined so that there is no duplication of effort – thus reducing the need for new employees and new hardware.
  5. Software support costs.

    Problem: Open Source software is often free, but sometimes support costs extra.

    Solutions:

    1. Choose your software carefully. Many Open Source applications have enthusiastic user communities where generous people will answer your questions free of charge. Hopefully, you pay it forward and offer help where you can – even if it’s at another such community.

    2. Learn on your own. If you have a bit of time, you might surprise yourself. I know many non-programmers who taught themselves the basics. These days, designers and bloggers might learn just enough to tweak Open Source code to their needs.
    3. Hire someone’s nephew/ niece on an affordable hourly basis, as necessary. If they know the software, they’ll likely be up to date on latest bugs, fixes, etc., simply because they’re young and have infinite energy to be learning such things.

Whatever legitimate solution keeps you from spending more than you have to is a bootstrapping way to do it. If you can, try creative solutions.

« Previous Page