Performance-based Pay Packages?

Monday, August 6, 2007 at 7:00pm by Site Administrator

Bwah ha ha ha ha ha ha ha. Disgraced ex-Home Depot CEO Robert Nardelli has been hired by Chrysler to bring it back to financial health. Oh ha ha ha. Is it April 1st already? Didn’t Nardelli basically damage Home Depot and take a huge severance package for his “good” work?

Here’s a tip, Chrysler: ditch Nardelli now. If you don’t, you can’t be too serious about gaining financial health. It’ll only cost you several million for his non-performance, but you can hire someone more capable that’d be willing to take a $1 salary, plus performance bonuses. And that’s real performance, not what Nardelli imagines in his head. Or are you that desperate to have someone that screwed Home Depot?

A note to new entrepreneurs… Being successful doesn’t mean you have to hoard your profits. Don’t be afraid to institute pay-for-performance compensation for your top employees. Here are a few simple reasons for doing so:

  1. Opportunity for select employees to increase pay based on results. Not everyone feels comfortable with this, but those who do are very likely to over-perform.
  2. You’re not stuck with a huge payroll and no profits to show for it.
  3. If you go public, you already show accountability. VCs might also favor such organizations.

Need more reasons than that? Maybe fewer companies would go under if this sort of pay scheme were more widely implemented. You just have to be sure to quantize the necessary performance. One boss of mine promise me a raise if I could save the company a million dollars. I created a CMS (Content Management System) for 20 worldwide divisions to be able to create and manage their own web pages. I also stayed late past work hours to teach each region’s PR or web person how to use the CMS. I then showed my boss how this saved a million. Did I get a raise? Of course not, because this boss had a do-nothing motto.

What do you think? Should more entrepreneurs offer performance-based payment packages? Agree? Disagree?

Startup Required Reading: Top 100 VC Bloggers

Tuesday, July 31, 2007 at 2:34pm by Site Administrator

Securing venture capital is often an integral part of the success or failure of any startup business, even for those who initially began as bootstrappers. While it’s no substitute for professional advice, the Internet can be a great place to research venture capital. These are 100 of the best resources.

Top Ten

While any top ten is based on personal opinion, there is no denying that these blogs have superior content.

  1. VentureBlog VentureBlog is a multi-author blog with contributors including Andrew Anker, EVP for Corporate Development with Six Apart, David Hornik of August Capital, Kevin Laws of PacRim Venture Partners, and Naval Ravikant of DotEdu Ventures. It discusses day to day issues that affect venture capitalists in Silicon Valley.
  2. Feld Thoughts Feld Thoughts is written by Brad Feld, managing director at Mobius Venture Capital. Feld writes about his own investments as well as technology, blogging, and entrepreneurship. Don’t miss his articles on term sheets, which are a great resource for entrepreneurs looking for funding.
  3. Beyond VC Beyond VC is written by Ed Sim, a partner with early stage technology VC firm Dawntreader Ventures. His blog covers venture capital and technology with particular emphasis on emerging software companies. Sim provides great advice for entrepreneurs on how they can better work with VCs to build successful companies.
  4. The J-Curve The J-Curve focuses on venture capitalism as it relates to technology.
  5. Southeast VC Jason Caplain gives his perspective on venture investing in the southeastern United States. Many of the articles focus on software, e-commerce, and digital media. This blog also provides a number of tips for entrepreneurs.
  6. Venture Chronicles Venture Chronices is Jeff Nolan’s blog. He provides links and original articles relating to the technology industry at large with an emphasis on software applications and infrastructure.
  7. VCball VC Ball is an early stage growth equity VC’s blog. He has a number of great in-depth articles for venture capitalists. Topics focus on choosing investments wisely, tax strategies, and marketing.
  8. Northwest VC Northwest VC is written by Steve Hall, a partner with Vulcan Capital. He discusses his thoughts on embedded networking and data intelligence as well as general issues relating to technology and venture investing.
  9. Infectious Greed Written by former hedge fund manager and now finance professor Paul Kedrosky, this blog covers a wide variety of issues from venture capital, stocks, and technology to gadgets and blogging.
  10. A VC Written by Fred Wilson of Union Square Ventures, this blog provides insight into the fields of emerging internet and media companies interspersed with Wilson’s thoughts on music and technology.

Foreign VCs

While venture capitalism has traditionally been dominated by American investors, non-US venture investment is growing, as is evidenced by these blogs.

  1. China Venture News China Venture News provides a stream of China-related business news directed at VCs.
  2. Venture Intelligence India Venture Intelligence India, written by Arun Natarajan, gives up-to-date information about the Indian tech industry as well as posts from businesses that are looking for VC funding.
  3. Fred Destin: A VC in Europe A VC in Europe gives the perspective of a European investor in the technology sector.
  4. Technofile Europe Technofile Europe provides information on European technology deals, entrepreneurship, and new technologies from a British perspective.
  5. Golb: Is This Israel? Is This Israel? is written by Ed Mlavsky, a major player in building the Israeli hi-tech market through venture investments. His blog focuses on these hi-tech issues as well as on investing in alternate sources of energy.
  6. VC in Jerusalem Jacob Ner-David writes about his experience as a VC investor in Israel.
  7. It’s All About Luck Danish investor Morten Lund gives his personal and somewhat informal take on his venture capital investments all over the world.
  8. Seriously Clueless Seriously Clueless is home to Indian-born Anand Sridharan who is now a principal in Singapore. He gives some valuable insight into the emerging venture capital markets in India and Southeast Asia.
  9. Venture Woods Venture Woods is a site that provides news and resources to the Indian venture community. Entrepreneurs, investors, and bankers can discuss issues that affect the market and professional community.
  10. The Post Money Value The Post Money Value is a Canadian VC’s thoughts on competition, investing and business planning.
  11. Sepulveda.net French entrepreneur and VC Rodrigo Sepúlveda Schulz blogs about marketing, gadgets, and the internet with a European viewpoint.
  12. Sortipreneur Turkish internet entrepreneur and investor Cem Sertoglu shares his experience and views on the tech investment industry in Turkey and abroad.
  13. Babbling VC Babbling VC is the blog of German based investor and entrepreneur Paul Jozefak. He provides insight on the European VC industry and technology related ventures.
  14. Shantanu Bhagwat Shantanu Bhagwat blogs about venture capitalism in the global market.
  15. From the Inside, Looking In Shin Fukushige, a venture capitalist living and working in Tokyo, writes about investing in IT software and hardware as well as general tech news.

Software Investors

Almost all VCs are interested in software investment, but these blogs are particularly focused on the topic.

  1. Software Only Jeff Clavier blogs about the web, social media, and of course, software.
  2. From Istanbul to Sand Hill Road This blog focuses on the high-tech industries of Silicon Valley from a Turkish perspective.
  3. Life With Alacrity Life With Alacrity focuses on the social software, security and internet tool sectors of investment with an emphasis on technology-based ratings systems.
  4. Mark Pincus Blog Mark Pincus shares his feelings on investing in the software and social networking fields.
  5. Burnham’s Beat Bill Burnham gives his thoughts on venture capitalism in software technology and the financial workings of it all.
  6. Our Man in Nirvana Our Man in Nirvana is where British born venture capitalist Robin Bordoli shares his thoughts and opinions on investing in the Silicon Valley.
  7. SF Venture SF Venture is home to Keith Benjamin. Keith provides his opinions on venture capital investments in the software and internet markets.
  8. Will Price Will Price discusses his opinions on technology and the VC industry. He also dishes out advice for startups.
  9. Cracking the Code Cracking the Code gives a California-based VC’s thoughts on the internet, enterprise software and technology issues.
  10. Go Big or Go Home Go Big or Go Home is the site of an Illinois investor who blogs about a wide variety of tech related issues.
  11. OC VC OC VC is home to Okapi Venture Capital’s Marc Averitt. He discusses investing in the life science and information technology industries as well as the industry in general in the Orange County Area.
  12. Ventureblogalist Ventureblogalist comes from Rob Finn, associate at Edison Venture Fund. It gives his perspective on IT technology, marketing, and entrepreneurship.

Internet Entrepreneurs

The dot.com boom may be over, but internet venture investments are still going strong. Read these blogs for insight on the world of internet entrepreneurs.

  1. Blogtrepreneur Adnan at Blogtrepreneur discusses entrepreneurial opportunities that abound online.
  2. VC Adventure VC Adventure gives Seth Levine’s perspective on the VC world and offers great advice for startup entrepreneurs. It focuses on blogging technologies, as Levine is an investor in Technorati, Feedburner and Newsgator.
  3. VCMike’s Blog is written by Mike Hirshland of Polaris Venture Partners in Boston. An initial investor in WordPress, Mike’s blog focuses primarily on internet and digital media investments.
  4. Redeye VC Redeye VC is written by Josh Kopelman, founder of Half.com. In it, Josh discusses experiences and advice in the VC field.
  5. Nothing to Say Nothing to Say is the blog of Chris Fralic at First Round Capital. A former employee of both Del.icio.us and eBay, Chris writes primarily about technology and internet startups.
  6. Tim Oren’s Due Diligence Due Diligence is about this Pacifica Fund employee’s experience living and working in Silicon Valley. It contains numerous posts on the Internet and blogging.
  7. The Perceptions and Reverie of a VC Investor and Entrepreneur This blog focuses on social networking and internet based investments.
  8. Jesse Rasch Jesse Rasch, founder of InQuent web hosting services, provides some great in-depth articles in his blog about startup investing and internet-based business.
  9. localglo.be Saul Klein, advisor to internet phone company Skype, gives his thoughts on launching internet businesses.
  10. McInBlog McInBlog is Ryan McIntyre’s blog on venture capitalism issues. McIntyre also writes musings on gadgets, technology, blogging and the Internet.
  11. The Equity Kicker The Equity Kicker is written by Nick Brisbane and covers a wide variety of issues related to venture capital. It focuses on social network and consumer internet markets.

VC Firms

These blogs are written by individual venture firms.

  1. Longworth Venture Partners Longworth Venture Partners, a Boston-based firm, blogs about emerging software, internet and media investments and issues.
  2. Alsop Louie Partners Alsop Louie Partners is written by business partners Stewart Alsop and Gilman Louie. It gives their perspective on marketing, technology, and helping business owners get started on pursuing their passions.
  3. Union Square Ventures Union Square Ventures is an early-stage venture investment group. Their blog focuses on IT and financial services, healthcare, and telecom.
  4. Above the Crowd Above the Crowd, written by Benchmark Capital’s Bill Gurley, provides great insight on high-technology business and strategy. While it’s no longer updated regularly, it can still provide a great resource for those interested in the field.
  5. The NVA Blog The NVA Blog is a technology focused blog by Newman Venture Advisors. It provides links to relevant articles as well as some original content. Much of it focuses on NVA-specific endeavors, but the blog also covers business strategy and venture capital news.
  6. Geekfishing Geekfishing is the home of the Ignition Partners blog. It deals almost exclusively with investing in the technology and telecom sectors.

VC News and Information

It’s difficult, if not impossible, to stay up to date on technology and emerging industries without reading the news. These blogs should help you stay on top of the latest happenings.

  1. VentureBeat VentureBeat is a great source for all news relevant to the VC world.
  2. Deal Flow Deal Flow is Business Week’s venture capital blog, produced by Sarah Lacy and Justin Hibbard. Written by professional journalists, this blog is carefully researched and can be a great way to keep informed about current issues and events.
  3. T.J.’s Weblog This blog provides a constant feed of news and information that is useful to the venture capitalist interested in internet-based technologies.
  4. Nothing Ventured, Nothing Gained Nothing Ventured, Nothing Gained is the blog of Jeremy Levine. It deals primarily with news affecting the venture capital world, especially in the technology sector.
  5. A Little Ludwig Goes a Long Way Written by Ignition Partners principal John Ludwig, this blog provides links to software topics and internet-based tools. It can be a great way to keep up with what’s hot and useful on the web.
  6. Deep Green Crystal Deep Green Crystal’s blog contains a number of technology guides on everything from blogging to VoIP and financial news.
  7. John Cook’s Venture Blog This blog is part of the Seattlepi.com website. It provides insightful commentary about venture investing and emerging technology.
  8. Venture Voice Venture Voice is a blog that offers a series of podcasts aimed at VCs and entrepreneurs.
  9. VentureBlogs VentureBlogs provides a stream of articles from American Venture Magazine.
  10. VC Ratings VC Ratings is a blog dedicated to providing profiles and ratings of venture capital investments and companies.

For Entrepreneurs

You can’t have venture capitalism without entrepreneurs. These blogs give advice on the give and take between entrepreneurs and venture capitalists.

  1. How to Change the World Guy Kawasaki gives practical advice for entrepreneurs who are just starting out or looking to expand.
  2. Nivi Blog This blog focuses on the world of technology investments. It also provides “venture hacks” to help entrepreneurs better understand how the industry can work to their advantage.
  3. VC Confidential VC Confidential, written by Matt McCall, seeks to encourage conversation between entrepreneurs and their investors in order to facilitate understanding of internal principles and processes.
  4. Allen’s Blog Written by an entrepreneur lawyer turned venture capitalist, this blog focuses on investments in the fields of technology and software. Allen has a great series of articles called The Ten Commandments of Entrepreneurs.
  5. Who Has Time for This? Who Has Time for This? is David Cowan’s blog and provides great articles on information security and entrepreneurship advice.
  6. Florida Venture Blog Florida Venture Blog gives straight talk for entrepreneurs interested in securing venture capital. This blog has articles focusing specifically on the southeast market.
  7. This is Going to be BIG This is a blog that seeks to help entrepreneurs find supporters. There are posts on a variety of topics from personal interests to web technology and investment.
  8. Now What? Now What? is a blog for those interested in expansion stage venture capitalism. Written by Scott Maxwell, it attempts to answer the question of what to do after you’ve taken the first steps in establishing a business and getting a few customers.
  9. The VC in Me The VC in Me is a blog that seeks to engage venture capitalists and entrepreneurs in conversation about current affairs, investing, and the media sector.
  10. Ask the VC Ask the VC is a great resource for entrepreneurs who want to get some advice on VC funding straight from the source.

Early-Stage Investors

Often, the best place to be is on the ground floor. These bloggers specialize in early stage investing and are willing to share their knowledge.

  1. EarlyStage VC Early Stage VC by Peter Rip of Crosslink Capital focuses on venture investments in the preliminary stages of business development.
  2. Seeing Both Sides Seeing Both Sides shares the perspective of an entrepreneur turned early-stage venture capitalist.
  3. Oxyfish Oxyfish gives Tom Sheild’s thoughts on early-stage venture capitalism and entrepreneurship in the tech industry.
  4. WayTooEarly WayTooEarly chronicles the process of working with venture companies in the very early stages of development.
  5. Permanent Record Permanent Record is the blog of First Round Capital partner Rob Hayes. Posts focus on early-stage venture capitalism and online business.
  6. Outright VC This blog focuses on early and mid-stage companies in the information technology, automation, power, wireless and RFID industries. Author Todd Jaquez-Fissori also gives advice to those who are looking for VC funding.
  7. Venture Capital Cafe Authored by Eze Vidra, Venture Capital Cafe provides news and articles about early-stage companies with a special focus on Israel-originated innovations.
  8. Texas Startup Blog Texas Startup focuses on topics surrounding entrepreneurship, startups, and venture capitalism in Texas.

VC and Beyond

These blogs offer a unique perspective on the VC industry, providing emphasis on investment and other interests that extend beyond most run-of-the-mill VC Blogs.

  1. Sense and Cents George Zachary discusses venture capitalism and its relationship to human nature, consumerism, and business identity.
  2. Venture Cyclist Written by venture capitalist and biking enthusiast Richard Dale, this blog has posts about both of Richard’s interests.
  3. Venture Explorer Venture Explorer follows venture capitalist Vineet Buch. Posts contain his thoughts on investments and the tech industry as well as his world travels and adventures.
  4. Sacred Cow Dung Christian Mayaud works to expose the myths surrounding venture capitalism, business strategy, and management philosophy with a distinct focus on technology and blogging.
  5. Punctuative! Punctuative! by Louisville-based investor Matt Winn, offers thoughts on the changing venture capital markets.
  6. Ego Ventures This blog by BaseCamp Investment co-founder Andrew Luter is filled with thoughts on business, technology and everything else.
  7. CleanTech Investing CleanTech Investing is written by Boston-based investor Rob Day. It focuses on issues surrounding investment in cleantech industries such as alternative energy, energy storage and efficiency, and water purification technologies.
  8. Ho John Lee Ho John Lee talks about tech investment from a distinctly market-based viewpoint.
  9. Venture Again Venture Again, by Justin Label, focuses on the cleantech investment sector of venture capitalism.
  10. BijanBlog BijanBlog is written by a Spark Capital partner. Aside from personal posts, the blog contains information about investing in emerging media, entertainment and technology sectors.

Female VCs

In a male dominated industry, these women provide a refreshingly feminine perspective.

  1. Class V Class V is written by an early-stage IT and green tech startup investor. Topics cover a wide range, from startups to world travel.
  2. Susan Wu Susan Wu discusses her experience as a VC, focusing on early stage consumer technology and infrastructure software.
  3. Adventurista Adventurista, written by Sarah Tavel, gives some insight on what being a female in the field of venture capitalism is all about.
  4. Christine.net Christine.net is published by Christine Herron, venture advisor at First Round Capital. She provides helpful articles for women who are looking to get into the field of venture capitalism as well as information on the nonprofit and technology sectors.
  5. Let the Sparks Fly Let the Sparks Fly is the blog of venture capital firm Brightspark. Brightspark focuses on helping entrepreneurs with infrastructure, enterprise, and communication software in the early stages of their growth and development.
  6. Israeli VC on Sand Hill Road Tali Aben was the first woman partner in an Israeli VC. Her blog focuses on software investing, but it also provides special insight for women on balancing careers and family obligations.
  7. Inside Chatter Internet entrepreneur and investment banker Donna Bogatin blogs about emerging web technologies.
  8. Venture Law Lines Lawyer and VC Suzanne Dingwall gives her thoughts on law, entrepreneurship, startups and investments.

This list only scratches the surface of the VC blogs out there, but it should provide you with ample reading material. With so much to choose from, there is bound to be something that can provide you with the insight and information you need to make the most of your startup.

20 Ways to Finance Your Business Startup

Tuesday, July 17, 2007 at 3:00pm by Site Administrator

Trying to finance a startup is always an excercise in masterful cash flow management and fund-seeking. Here are a number of traditional and non-traditional ways to get financing. Some are a bit more desperate than others. A couple generate capital but leave no time to use it. A few apply true bootstrapping principles by essentially building on very little capital and reinvesting all earnings until you have the amount you feel you need to start the business you’ve been dreaming about.

  1. Work overtime.
    Some employers have no weekly overtime limits, though the government does. While this method may earn you more money, it also pushes you into higher tax brackets without the time to enjoy it. Do this only if you don’t plan to start your business for several years or have no other choices.
  2. Ask for a bonus or raise.
    Overperform at work, then write up a list of “11 reasons I deserve a raise”, explaining to your boss what you’ve “done for him/her lately.” If it works, you still move into a higher tax bracket, but hopefully you haven’t added more work hours. You may have additional, stressful responsibilities, though.
  3. Get a 0% balance transfer loan.
    If you’re in the United States especially, you’ve no doubt received loads of offers for 0% balance transfer loans. If you have a good credit rating, you can sometimes receive a balance transfer check as a loan for the full amount, which you can do whatever you like with for X months. That is, it may not have to go towards credit cards or other debts. (Some issuers do have restrictions.)

    Depending on the offer, X might be 6, 12, 15, 18, or 24 months. If you do not pay the loan off in that time period, you start paying a relatively high interest rate. So if you think you can start a business in that time period and make it profitable, this is a funding option.

  4. Apply 0% balance transfer arbitrage.
    Zero percent balance transfer arbitrage is a variation of 0% balance transfer loans. The primary difference is that instead of using the balance transfer check to pay off debts, you use it to invest in something that is guaranteed to earn money before your loan is due.

    For example, if you’re offered an 18 month 0% APR balance transfer loan for $30,000, what you do is open an online savings account (OSA) and deposit the money for, say, 16 months at 4-5%. Before the loan comes due, you close the OSA, pay off the $30,000 loan, and put the interest towards financing your business.

    There are pfbloggers (personal finance bloggers) claiming to have received such loans totalling over $100,000 – all at 0%. While 5% isn’t a lot, at that loan amount, it adds up. This is a great way to leverage OPM (Other People’s Money), provided you are not tempted to buy something and can pay the loan back on time. Otherwise, it could bankrupt you.

  5. Consolidate debts.
    Obviously, you want to be responsible with your credit card debt. Overloading more debt isn’t the best way to start a new business. On the other hand, if there’s any way that you can consolidate your currrent debts for a lower monthly payment based on a better interest rate, do it. The amount you save each month from reduced interest rates could be used towards starting a business.

    If your credit rating is poor, you obviously have some work ahead of you, but you can rebuild your credit.

  6. Bootstrap and reinvest.
    Bootstrap a small business, possibly online, using minimal capital. Reinvest the profits to fund the next startup. Stairstep your profits to higher startup capital, until you have enough for your “real” idea.

  7. Sell shares.
    Once you prove yourself in some initial startup (while moving towards your real passion), bring your success to the attention of friends and family. Then offer them a block of private shares for, say, a $1000 investment each. Do you have ten or twenty friends or family members that might be interested? Would $10-20K get you started. Bootstrappers can often get started with less. Just make it clear to your private investors when they might expect a return and what their cut will be. If you don’t expect a return in five years, let them know that now. Formalize everything, or risk destroying relationships.

  8. Borrow from your registered retirement plans.
    Countries that have a registered retirement plan often allow you to borrow on your savings for specific uses. If you have a sizeable retirement contributed to by your current/ previous employer, you might consider borrowing. The drawback is that if you withdraw funds, you often have to pay income tax immediately on the amount. Depending on your tax bracket, it might not be worth it.

  9. Borrow from a life insurance policy.
    Borrowing from your life insurance policy isn’t a good idea, especially if you have dependents, but you can often take a loan out on it. And sometimes it’s worthwhile.

    To wit, Honest Ed Mirvish, a much-loved Toronto business man who passed away last weeky at 92, moved from the US to Toronto in the late 1940s. He cashed in his wife’s insurance policy for Cdn$247 and started the still-standing landmark Honest Ed’s department store. It had the most incredible bargains and helped many poor Canadian immigrants, amongst other citizens. Much later, as a multi-millionaire, he paid for two theatres to be refurbished in downtown Toronto for several shows. One was done at an extra cost of $5 million (if memory serves) to accomodate a real helicopter for Miss Saigon.

    Imagine had Mr. Mirvish not cashed in that insurance policy. Might he have been running some mom and pop shop instead? Probably not, but you never know.

  10. Refinance your mortage.
    Refinancing your mortgage is quite extreme and simply scary, unless you’re 100% certain of the success of your idea. Nevertheless entrepreneurs with vision, who were driven and disciplined have made it work. Just be sure of yourself, as doubt can kill success. You don’t want to be out on the street, literally, if something goes wrong. Though if that happens, you might be inspired by The Pursuit of Happiness.

  11. Get creative.
    Have some collectible items in the house, taking up space? That full-pattern china tea set grandma left you might be worth more than you think. Or maybe you have a few odds and ends of furniture that you can sell at the flea market. Or at Antiques Roadshow. If you’re really hands-on, you might pick up items at flea markets, fix them up and resell at a profit.

  12. Give it up.
    Or maybe you have some big-ticket items you can give up. Say, get rid of any extra vehicles, or replace the one you have with something more fuel-efficient. I don’t recommend giving up a vehicle entirely. Entrepreneurs have a tendency to need a car, unless they’re based entirely online. Or have come up with a new mode of transportation, such as the extreme stilts in the video below.

  13. Use eBay to generate some funds.
    Skip the flea markets. People are making huge profits on eBay, and honestly at that. The key is to find quality items and sell them at a profit with good descriptions and photos. One guy I met in 2003 sold $100 pens that cost him $16. That year – a bad one economically – he grossed $300,000 (although that was mostly expenses). Normally, he made $500K to a million per year, gross, on a variety of very select items.

    Even if you don’t attempt his scale, a few extra hours per week of effort on eBay might generate a few thousand dollars extra capital per month. To save time, you can often have items drop-shipped, though that will cost you.

  14. Get a business bank loan.
    While most bootstrappers do not use/want business bank loans, that does not mean it’s not an option. Of course, if you’re only in the idea stage, it had better be one unique idea that no one else but you can do. Otherwise, you need some proof of concept.

  15. Find venture capital.
    Venture capitalists are more likely to give out money for something at an idea stage than banks, but again, it had better be one solid idea. And if you’re really good with generating salable ideas, you might find yourself as an Entrepreneur in Residence.

  16. Invest in the stock market.
    For experienced investors, it is possible to raise business capital in the stock market. But if you day-trade or get into commodities, etc., you’d better have big brass ones and a healthy understanding of these financial dangerous games.

  17. Invest in government bonds.
    Government bonds are much safer than stock marketing investing, though the maximum return may be low, and take several years to mature.

  18. Consulting.
    Are you in a salaried career position now? Have you considered consulting? Not everyone who consults ends up earning more than as a salaried employee. However, you may have periods between contracts to work on your ideas, and monies earned are typically subject to different income tax rules. Talk to an accountant. And keep all your receipts.

  19. Partner up.
    A good partner is hard to find. Some people prefer to only work with friends, some never would. But two people have many more friends and relatives than one person. (See “Sell Shares”, above.) If the partnership shoe fits, wear it.

  20. Leveraging new media opportunities.
    The Internet has levelled the playing field somewhat, offering many opportunities to earn money. Take what you make, channel it into something else. For example, what I am hoping to do is use my freelance online writing earnings to invest in properties, which I’ll turn around and hopefully start a film production company. It’s a ten-year goal that I’m on my 17th year in, though I’m getting closer, now that I work online.


Innovate to Stay In Business

Tuesday, July 17, 2007 at 2:00pm by Site Administrator

Sounds like a fairly obvious directive, right? Unfortunately, not every company does it. Witness the demise of SunRocket [NY Times, free registration may be req'd], a reasonably successful player in the VoIP market.

VoIP, or Voice over Internet Protocol, is a group of related technologies that allow consumers to make phone calls over their Internet access – be it cable, high-speed dialup, satellite, power, Wi-Fi, or cellular.

SunRocket, like it’s very troubled direct competitor Vonage, are known as “pure VoIP” providers. They pretty much can only offer a few services, primarily because consumers use their regular home telephones and a special converter.

However, competitors such as Comcast, have a million VoIP customers to SunRocket’s 200,000. Why? Because Comcast is a cable company that can offer “triple play” services. Depending on the Triple Play provider, this may include TV, Internet and VoIP over the same “lines”.

Pure plays cannot offer much more than VoIP service, though a few made an attempt by offering home alarm services. So in terms of a service offering, while there is a market for Pure Plays, it’s probably much smaller than for Triple Plays. Pure VoIP providers simply cannot compete long-term, and were doomed to begin with.

Note, however, that with IPTV (Internet Protocol TV) offerings such as Joost and Babelgum, Triple Plays may very well lose their TV package customers. And with cell phone makers heading towards hybrid models that can work on both cellular networks and Wi-Fi networks (whether in your home or elsewhere), home phone providers may also start losing customers. So Triple Plays may become Single Plays – though probably not for several years.

Companies have to stay on top of these “convergence” trends in VoIP or other markets. Just preparing for the inevitable future is not enough. They’ll have to follow through and actually innovate if they want to stay in business long-term.

New Media Ways To Raise Capital

Monday, July 2, 2007 at 8:00pm by Site Administrator

You have an idea for a startup business but you don’t have the capital. That’s a pretty common scenario, having to bootstrap your way to success with very little funding. If you’re a local celebrity, you could pimp your wisdom out in the form of an auctioned business lunch. But what are the chances of that?

So what are your other options? What can you offer that may earn you a bit extra to put towards your entrepreneurial endeavors? If you’re still holding down a full-time job, here are a few tips that you could explore during a bit of free time.

  1. Blogging.
    Work from home, during the evening or weekends, writing about a topic you’re passionate about.

  2. Ebooks.
    Writing an ebook can give you authority. If done properly, of course. Give a few away, on a topic you know well, and you may find a market for selling your later books.

  3. Video tutorials.
    There is an enormous potential market for how-to videos on numerous topics. Video rounds out the offerings of an online information business, which of course includes ebooks.

  4. Microstock photography.
    If you have a skill for photography, you might have considered ways it could earn you some money. Before online stock photography houses, that was generally impossible for the average hobby photographer. With microstock photography websites, you could earn a few hundred to a few thousand dollars per month to put towards your entrepreneur fund.

  5. Voiceovers.
    It takes work to crack into, but if you have a versatile, clear voice, work well under deadlines, and have the minimal necessary equipment, Voice over work could be an option for a bit extra capital.

  6. Website flipping.
    If you have some skills in writing or giving a haggardly website a bit extra “bumpf”, you could pick up inexpensive websites, build them up with extra content and visuals, promote them, then sell them. It costs a bit of capital if you’re buying rather than building your own, but it can be mildly lucrative. Website flipping is different than buying a website for its monthly ad income because you are not holding the sites.

  7. Domain speculation.
    You might not become Kevin Ham and score $300M from domain speculation, but if you’re good at research and trendspotting, you could earn something extra without spending a lot. If you can’t come up with original domain names, you can sometimes find good ones at reasonable prices at Sitepoint Marketplace and Digital Point Forums Marketplace.

Getting involved in these activities of course makes you a digital entrepreneur – skills you can use when you do start up your business idea. The Internet makes relatively easy to succeed in this activities, compared with their offline counterparts, if any. If you’re successful in these smaller endeavors, you might one day find you have the capital to launch your business idea.

Getting Business While Bootstrapping

Tuesday, June 26, 2007 at 5:00pm by Site Administrator

Every business undergoes some and ebb and flow in revenue. It’s just that smaller businesses feel the ebb more. Everyday Entrepreneurs offers some advice on how to get business when bootstrapping. Here’s a summary of the points:

  1. Subscribe and post to mailing lists.
  2. Write articles.
  3. Speak at conferences.
  4. Write a blog.
  5. Call up the bigger fish. (Work with other businesses in your industry.)
  6. Call up existing clients.
  7. Get your website listed.
  8. Drop flyers in your office complex.
  9. Put up hoardings in possible. (The term is British and Indian in usage, and refers to a billboard-like sign but is allowed to be established outside an office building.)
  10. Do work gratis.

You will have to consider the flyers and hoardings cautiously, depending on your local bylaws. Some of the advice is more applicable to consulting businesses, as the original article points out, but it’s still all good advice. To this list, I’d like to add a few suggestions, geared to online promotion of your business.

  1. Distribute your articles wide.
    Write articles and submit them to reputable online article directories such as ezinearticles. Make these submissions significantly different than anything you have on your own website or weblog. The idea here is that other websites will republish the article, usually with links to your website(s) intact. That, at the very least, may draw some traffic to your site, and possibly some business inquiries.

  2. Enter blog carnivals.
    This is a great way to get some recognition for your best weblog articles. Just make sure you are not hard-selling your business in the articles you submit, as they’ll probably be rejected.

  3. Participate in forums.
    Choose online forums relevant to your industry/ business and participate. Offer commentary and advice in existing forum threads, and write articles in new discussion threads. If you offer intelligent/ relevant/ helpful discussion, that will draw eyes to your site. (Most forums allow your forum member name to be linked to a site of your choice, once you’ve posted a certain number of discussions.)

  4. Comment, comment, comment.
    Visit relevant websites and weblogs and participate in a manner similar to forums. If someone is knocking your industry, business or product, don’t get defensive. Be diplomatic.


Case Study: Bootstrapping an Online Information Business

Friday, June 15, 2007 at 11:00pm by Site Administrator

Ever been told you’re good at teaching people how to do something? Maybe you’re good at a piece of popular software and think you could produce a few tutorial videos captured from your computer screen. Or do you have some skill that can be captured in live video?

A CNN Money article in March indicates that how-to videos are hot, and my own observations suggest that this is true. Even when there’s a subscription price involved, there might just be a market for your videos. What’s more, the cost of startup might be very low, and you don’t necessarily need a lot of subscribers to make a comfortable living. It just becomes a matter of finding the right subscribers. (If you’re listed in a few video/ podcast directories, or have a blog that accompanies the videos, it becomes easier to find those subscribers.)

The CNN Money article focuses mostly on San Franciscan dance teacher Evan Margolin’s SalsaBootCamp. His monthly video subscription price increased from a US$9 to $37 and still pulls in enough members to garner him $20,000 per month. That’s roughly 540 subscribers. Even if you worked at some how to videos part-time and only garnered 100 subscribers at the same price point, that’s close to $4,000/month of extra revenue.

Now, even if you can’t dance or don’t have anything you can teach in live video, maybe there are information/ instructional screencast videos that you can produce – these days for a song.

Screencasting is relatively easy, and while you do have to learn a few storyboarding and scripting skills, if you have a clear voice, this just might be an opportunity for you.

A screencast, if you’re not familiar with it, is simply a video that has captured someone using a piece of software. This is done with screen capture software such as Camstudio (free) or Camtasia Studio (US$299). Every action you take and all the screen changes are captured in a screencast video. You can see examples of what I mean at Tubetorial, where I’ve covered a variety of software that’s useful to bloggers.

The part that I’d like to emphasize is that whether or not you plan to offer live video or screencasts, you can bootstrap an online information business. In the case of live video, keep your production costs down until you have enough of a trickle of revenue to afford more lights, better backgrounds, a director, etc. For screencasting, you can literally start for next to nothing – provided you have a computer and high-speed access to the Internet.

Here is a suggested approach, though I’ll point out that I’m not necessarily endorsing any of these options. Some additional links are provided in the clickable mindmap at the end of this article. (None are affiliate links, and if you know of better options, great.)

  1. Brainstorming.
    Write out some how-to video ideas.

  2. Equipment.
    Buy an inexpensive microphone or webcam with microphone. (If you’re offering live video, get a $300 camcorder. It’ll probably have rudimentary video editing software included.)

  3. Test run.
    Download and install the free Camstudio to test out your screencasting skills.

  4. Bootstrapping.
    When you’re relatively happy with your work and want fancier screencast production, download a free 21-day, fully-functioning trial of Camtasia Studio (and Snagit). If you time it right, you can produce a video, sell a few copies, and pay for a full version of Camtasia Studio with the proceeds.

  5. Domain name.
    Register a $0.99 .info domain name for one year at GoDaddy. Or a $0.99 .info or .org at estdomains.

  6. Site hosting.
    Get some cheap hosting. Site5 has a great deal right now where if you pay 24 months upfront, you can get 5 Terabytes of monthly bandwidth and 110 Gb of disk space for only $5. That’s enough for a small video site.

  7. Articles or blog.
    Write a few articles to draw the search engines in. (I’m overly simplifying this step.)

  8. Video teasers.
    Post sample videos on your site.

  9. Promote.
    Use a video sharing service like YouTube or SplashCast, etc., for short teaser videos. Such services are presently free. Some offer content contributors a way to earn some revenue, but if you want your own subscription model, think twice. Either way, make sure that a watermark of your logo is visible in sample videos, or that your website address is.

  10. Offer premium content.
    When traffic picks up, offer full-videos. You’ll have to decide whether you’ll offer them free and run ads, or to charge a flat price for access, or a monthly membership. It’ll depend on how much content you’re planning and your production schedule. To simplify payment collection, use PayPal, which is relatively simple to integrate into your site, even for subscriptions. If you allow credit card payments via PayPal, you will have to pay a fee on each transaction. If you start off with no credit card payments, then you will not pay any fees.

Most of the above process applies to live how-to videos. Visit the immensely popular, amusing Ask a Ninja site and you’ll see that even humorous how-tos can do well – even if they don’t really teach all that much.

The principal idea is that if your topic is salable and the timing of your site rollout is right, you can bootstrap your way to a reasonable income without a large initial cash outlay. When you have the funds, whether from advertising on your site or from sales/ subscriptions, you can reinvest some of it for higher quality production tools to improve later content.

Toolkit categories:
These are some of the software categories that are useful for an online information/ screencasting tutorial business:

  1. Calendaring and planning.
  2. Brainstorming.
  3. Communication.
  4. Conferencing and collaboration.
  5. Creating content.
  6. Publishing and distribution.
  7. Payment processing.

Most of these tools can also be used to maintain a site offering live how-to videos. A clickable mindmap of specific tools is shown below. Just click the page icon beside a tool’s name and you’ll go to it’s web page. While the list is by no means comprehensive, it should be a good start.

Over time, I’ll try to cover some of the other aspects of building and maintaining an online information business. Of course, what would a case study for a bootstrapped startup be if I didn’t offer a live example. I’ve got one in production, and I’ll introduce in the future, along with discussions on how it’s doing.

Online information business toolkit mindmap

http://aimpro.premiumservices.aol.com/ http://aimpro.premiumservices.aol.com/ http://youtube.com/ http://youtube.com/ http://skype.com/ http://skype.com/ http://inkscape.org/ http://inkscape.org/ http://www.corel.com/servlet/Satellite/us/en/Product/1155872554948 http://www.corel.com/servlet/Satellite/us/en/Product/1155872554948 http://get.live.com/messenger/overview http://get.live.com/messenger/overview http://office.microsoft.com/ http://office.microsoft.com/ http://mindapp.com http://mindapp.com http://messenger.yahoo.com http://messenger.yahoo.com http://messenger.yahoo.com/webmessengerpromo.php http://messenger.yahoo.com/webmessengerpromo.php http://trillian.cc/ http://trillian.cc/ http://bubbl.us/ http://bubbl.us/ http://www.mindjet.com http://www.mindjet.com http://www.camstudio.org/ http://www.camstudio.org/ http://office.microsoft.com/en-us/visio/FX100487861033.aspx http://office.microsoft.com/en-us/visio/FX100487861033.aspx http://pidgin.im/ http://pidgin.im/ http://www.corel.com/servlet/Satellite/us/en/Product/1150981051301 http://www.corel.com/servlet/Satellite/us/en/Product/1150981051301 http://www.gizmoproject.com/ http://www.gizmoproject.com/ http://freemind.sourceforge.net/ http://freemind.sourceforge.net/ http://techsmith.com/snagit.asp http://techsmith.com/snagit.asp http://www.adobe.com/products/photoshop/index.html http://www.adobe.com/products/photoshop/index.html https://www.paypal.com/ https://www.paypal.com/ http://www.adobe.com/products/illustrator/ http://www.adobe.com/products/illustrator/ http://docs.google.com/ http://docs.google.com/ http://smartdraw.com/ http://smartdraw.com/ http://www.mindmeister.com/ http://www.mindmeister.com/ http://www.adobe.com/products/fireworks/ http://www.adobe.com/products/fireworks/ http://writer.zoho.com http://writer.zoho.com http://www.sightspeed.com/ http://www.sightspeed.com/ http://techsmith.com/camtasia.asp http://techsmith.com/camtasia.asp http://www.debugmode.com/wink/ http://www.debugmode.com/wink/ http://conceptdraw.com/en/products/mindmap/main.php http://conceptdraw.com/en/products/mindmap/main.php http://www.openoffice.org/ http://www.openoffice.org/ http://office.microsoft.com/en-us/products/FX100487411033.aspx?pid=CL100571081033 http://office.microsoft.com/en-us/products/FX100487411033.aspx?pid=CL100571081033 http://gliffy.com/ http://gliffy.com/ http://www.google.com/calendar http://www.google.com/calendar http://wordpress.org/ http://wordpress.org/ http://mail.google.com/mail/ http://mail.google.com/mail/ http://www.splashcastmedia.com/ http://www.splashcastmedia.com/ http://snipshot.com/ http://snipshot.com/ http://wwwl.meebo.com/ http://wwwl.meebo.com/ http://www.mindomo.com/ http://www.mindomo.com/ http://www.vyew.com http://www.vyew.com http://webmessenger.msn.com/ http://webmessenger.msn.com/ http://wordpress.com/ http://wordpress.com/ http://www.google.com/talk/ http://www.google.com/talk/

Tips on Bootstrapping

Wednesday, June 13, 2007 at 11:00pm by Site Administrator

A little while back, Business Fund had a post, How to: bootstrap it (27 tips). The tips are split up into two sections: “where do I get the money” and “how do I get started”.

This is a great list of tips, well worth reading. There are a number of funding sources that I hadn’t thought of. Though if you decide to use credit cards to fund a startup – as many people do – just keep in mind how easy it is to go from bootstrapping to being in debt.

Of course, if you manage to get a 0% APR balance-transfer credit card, you might have anywhere from 6-18 months of interest-free credit. However, you do need a good credit rating to qualify. If you get accepted, just be sure you’re always on top of your current and predicted cashflow – which of course should be realistic.

5 Reasons To Get Out Of Debt Fast

Monday, June 11, 2007 at 11:00pm by Site Administrator

While proper bootstrapping practice typically does not put you into debt, regular entrepreneuring can. It’s exciting to think of all the opportunities our activities could lead us to, but being over-eager at the detriment of other aspects of life is not a prize. Sometimes, we just need to be reminded why not to hold debt. A few thoughts…

  1. Stay out of bankruptcy.
    Protect your home and other assets, which won’t have to be sold off at auction at a low return on the dollar, to pay off your debts.

  2. Better health.
    Debt does cause depression in some people. Getting out of debt usually results in less anxiety, more sanity.

  3. Save your marriage.
    A more peaceful family life. Is there a family you know that has never argued about the bills? Probably not. It’s normal. However, when it goes too far, relationships sour.

  4. Better quality of life.
    Spend less overall, have more money saved, and enjoy more out of life. Go on vacation more often or gift your self.

  5. Save for retirement.
    Experts have been saying that Social Security cannot be relied on after the Baby Boomers have all retired. Save now, by first paying off your debts. Then, whatever monthly amount you’ve been paying towards interest charges can now earn you interest with a safe online savings account. At least until you’re ready to reinvest it into your startup.

That said, Credit Card Lowdown has a list of who they feel are the 100 most influential personal finance bloggers. While many “pfblogs” are geared towards personal finance, when you’re an entrepreneuring, especially a bootstrapping one, you may find it hard to separate work and private life. So your finances for both facets are treated identically. In other words, go check the list out.

Comments (1) | Filed under: Cash Flow

5 Ways To Increase Your Wealth

Sunday, June 10, 2007 at 11:00pm by Site Administrator

Some people become entrepreneurs because they know that the potential for becoming wealthy exists – something they feel isn’t possible with a “regular” job. However, one thing I’ve learned the hard way, and also from studying other entrepreneurs is that wealth is both a process and a frame of mind. That is, you don’t necessarily have to be entrepreneurial to eventually find wealth. (Though it probably helps.)

That said, here are some thoughts about increasing wealth, whether or not you’re an entrepreneur.

  1. Earn more by:

    1. Getting a second job. It can be from home, online. This might be a safe way to start your career as an entrepreneur.
    2. Selling off items you own but don’t need. Your source of startup capital?
    3. Upgrading your skills/ education and getting a promotion. Do you know what you’re getting into? Are you prepared?
  2. Spend less.
    Double think all your medium- and big-ticket items. Be a bargain hunter. Frugality is a characteristic of successful entrepreneurs.

  3. Pay off your debts.
    If you continue to use credit afterwards, pay off your balances each month. This is part of slicing out unnecessary expenses. Credit is good if you use it wisely. After making in mistakes in this regard, I’ve learned to pay off my debts monthly.

  4. Save your money.
    In CDs (Certificates of Deposit), Treasury Bills, or interest-bearing accounts such as online savings accounts.

  5. Save for retirement.
    Protect some of your savings against income taxes in a registered retirement savings plan. You can have money deposited periodically and directly from your  bank account.
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