Welcome to Smuggle Me

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.

Time is running out and I’ve been polishing up my application for YouBeTheVC. I’m really nervous, because I really want to win this competition and I know there have been a lot of entrants. I guess in 4 days I’ll leave it in God’s hands that everything will work out for the best. I certainly will know I have done my part. Either way, it’s a very exciting time in my life. I just wish that I would have been able to put together a stronger team. I’m still working on it and I have a couple of possibilities, but it doesn’t look like they’ll work out before the submissions our due. We’ll see what they think.

I must admit that lately I’ve been without too much to say. I think it might be because I’ve been focused on starting my own business. I’ve been evaluating a ton of potential options and it’s been quite the challenge knowing which option will be best. There are a lot of unknowns and I’ve been doing my best to find out as much information as possible. I’ve been really glad that Mark Cuban has dug into some of his best posts from the past on his blog. It really gave me a lot of food for thought when considering the idea of starting my own business.

One thing that Mark has said multiple times is that one of his greatest advantages it that he is going to work harder and be more prepared than his competition. I think that’s what I’ve been trying to do now. I’ve been reading and researching and talking to people in order to find out as much information as possible so that I can make the best decisions possible.

Finding out information isn’t as easy as it sounds. People don’t just show you their cards when you’re playing poker. You have to try and find ways to have people show you their hands. Of course, this leads to a lot of ambiguity in your decision making, because you are making decisions with limited information. However, this is what makes business so interesting to me. There are a million factors that goes into anything and you have to learn to adapt quickly or die.

I’ve often said that I’d love to be a waiter at a restaurant some time, because it’s one job where your pay is commensurate with the quality of work you perform. I think starting your own business can be the same. If you are killer at business, then you’re going to be rewarded. I definitely have confidence in my abilities and believe that I have that killer business skill. I guess time will tell.

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.

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.

I’ve really grown interested in the various VC firms, startups and getting funding for a startup. It’s like entering a new world that speaks a different language or at least talks at a different level. However, I’ve really enjoyed what I’ve read and I hope that all goes well and I can start working on building my idea.

Anyway, VC blogs are some of the most interesting websites out there on this topic and today I came across 2 more on Techcrunch.

Fred Wilson of Union Square Ventures
and
Rick Segal a Toronto-based VC