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Perfect Time for Bootstrappers

Posted on: October 9, 2008 I Written By

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Today I read a post from Techcrunch (been too long since I did that) that contained a letter from Bill Gurley of Benchmark Capital (VC Company). In this letter, Bill instructs his portfolio companies on what’s happening in the market and what a privately held company should be doing amidst this “US financial Crisis.” It’s a great read that was very informative about what’s going on.

Of course, at the end of the article I thought to myself that this is the perfect time for bootstrapper start up companies to thrive.

Bill suggested that these VC funded startups conserve capital and look for opportunities. Every VC funded startup can and should be looking at their burn rate and “months of cash.” As a bootstrapped startup, you’ve already lowered your burn rate to a barely survivable level of expense. You already know how to do more with less. Many of the VC funded companies won’t know how to scale down and scaling down will usually mean they’ll be offering less services. If you were able to compete on some level with these major VC backed startups, then the advantage just turned your way.

Let me give you an example. I’m currently working on a group of websites related to TV. The major TV related websites are ones like BuddyTV and TVGuide. I can’t even imagine the burn rates these websites have with all of the staff they use to develop their content. I don’t know the specifics of their financials, but I’d be very surprised if they were profitable.

Instead, my small network of TV websites is already profitable, because I’ve gone out and built it with almost no cash outlay. Do I have to cut any of the staff that I’m paying? No. Do I have to get a smaller office space? No, I work from home. etc etc etc. Sure, I might see a dip in my various revenue streams, but I’m certain that I could withstand the dip in revenues much easier than these other TV websites.

This may not be true for all bootstrappers, but I’ve been absolutely insane in how I’ve bootstrapped. I’ve tried to take out almost every financial risk except for my time spent. Does that mean that I might not have a $2 billion pay day like Youtube? Maybe not, but I’m doing something I really enjoy and making some pretty good money at the same time.

How big can I grow it? Time will tell, but for now I’ve found a nice niche and a lot of growth available. Especially now that my major competitors will be cutting back on their ability to cover everything. Some will be able to focus and do well. However, as a bootstrapped startup, I’ve already got my focus and I’m hammering away on that niche.

That’s Advantage bootstrapper in my book.

Free Phone Calls to Anywhere

Posted on: September 29, 2008 I Written By

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I’ve always been about free calls ever since about 2000 when I first saw the free phone call service which I used extensively as a poor college student who couldn’t pay long distance costs. It’s become less of an issue these days with cell phones, but there are a number of times that I’ve wanted to make a call on my computer and not have/use a cell phone. Techcrunch just posted about IconDial being a new free service.

The best part of IconDial is that you can call any number in the world for free. I’m hoping to try my friends cell phone in Italy which is usually really expensive to call from the US. Too bad he’s probably in bed right now.

The sad part is that I think Techcrunch is probably right. However, my guess is that a new VC will fund the next startup to see if they can do it again. So, we should have a perpetual supply of free phone call websites until the costs of the phone call are free. Someone’s going to do it sooner or later and if they don’t VCs will continue funding it until it does happen.

A Shirt and Website Mark from YouBeTheVC Would Appreciate

Posted on: February 20, 2008 I Written By

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Today I came across this new website. They sell VC shirts like this one:
VC Shirt - Nanotechnology

I saw it and thought about Mark from YouBeTheVC since his focus has been nanotech.

On the YouBeTheVC note, I’m happy to say that I made it into the Top 100 semifinal round. Now I just need to clean up my business plan.

Facebook Social Ad Experiment Gone Wrong

Posted on: February 7, 2008 I Written By

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I must admit that over the past couple days I’d read references to Redeye VC’s post about Microsoft and Yahoo employees leaving. I thought it was an interesting experiment, but like he said it wasn’t scientific at all. It definitely classified solely as the interesting test and nothing more.

Well, it turns out that the experiment turned out to be very useful, but not for its intended purpose. Instead, it teaches a cruel lesson about how various online endeavors in this connected web 2.0 world can go terribly wrong. Take a look at the unintended consequences of what happened.

We’ll have to all keep our eyes open for times when unintended consequences affect someone else on the web. It’s a feature of a connected world and there’s really no turning back in many cases. All we can do is be open and honest about what happened and then move forward.

2 More Entrepreneur Readings

Posted on: December 19, 2007 I Written By

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A couple more good VC readings that I’ve been enjoying of late. This is a pretty interesting blog and here’s a long list of article written by the amazing Paul Graham. I’m sure there are more so if you have any good suggestions, let me know.

Entrepreneurs Who Don’t Want Venture Capital

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A while back I ran across a blog called Credit Card VC. I thought they had an interesting concept on how you could create a business without having to go and get VC funding. I think a lot can be learned from this concept. I still think that the point is partially missed. This guy still needs some sort of funding to scale the business, but the point that for a relatively small amount of money you should be able to create a simplified version of your site and do a serious market test is a great concept. This is what I plan to do with my idea.