Come for the Ride…

For the people who have been following this blog, we posted a video of Truemors a couple of months ago where Guy Kawasaki talked about how he started a web based business with $12k and a few weeks of time. Well, after this past weekend, Guy posted a truemor about the Atlanta Startup Project, Skribit and how we were able to start a web business with $0 financing.

Well $0 is of course a stretch, there were SOME costs… but what does $0 really mean? Well, here’s the dirty dirty truth based on my observations.

$50 in domain names - I don’t have the hard numbers but in registering our name and in registering a few more variations to protect the brand, we’re looking at least $50 in expenses.

$1,000 in legal, misc fees. I admit, I completely ignored this part of the project, on purpose. I can’t wrap my head around it.

$2,400 in food - we were fed; a lot… I can’t say they were all great or healthy food, but we were well fed. There was also a ton of beers and drinks and so forth. If we didn’t have this, people wouldn’t stay.

$5,000 in office space - I’m not sure of the actual costs but I’ll throw in $5,000 as an estimate for renting the entire floor of where we needed to be. In addition to the main room, the various groups worked out of several different, smaller conference rooms which was necessary or we’d probably end up with nothing.

$96,000 in laptops/equipment - If the 64 people who showed up came with just pen and paper, we probably wouldn’t have accomplished too much in the 54 hour period. If you estimated the avg. laptop cost to be $1,500, then there would be close to $100,000 in equipment alone.

$185,000 in free labor - We worked about 36 actual hours… So if our average comes out to be $80 in consulting fees x 64 people, then that’s how much work we’ve put in in that time.

Priceless - Things we got for free due to networking. Things we will get for free as a result of this weekend’s networking. We got a few freebies from this weekend. A few months of web hosting… a few connections into the blogger world, connections to VC’s in the event this project takes off. All great and amazing things if you’re a struggling startup.

Even MORE Priceless, internal networking - You know how hard it is to find people who don’t make excuses, have a variety of talents, hop over any and all obstacles and apply that determination to businesses? Close to impossible. I’m really glad I was able to experience it cause… without seeing it for myself, it would have been hard to believe.

So is free really free? No, not really. Even though I worked about a week’s worth of hours in 2.5 days, I guess the difference is that we all think this project may turnout to be greater than the $290,000 of Monopoly money (and effort) we invested.

All I’ve gotta say is… if it’s possible to get $300,000 to start a company, find a group of smart business “snipers” who come in, do what’s needed and hop out, I would be all over it. After all, in the web world speed and execution is way more valuable than the alternative.

Welp… it seems like I was able to buy my way into the Atlanta Startup Weekend for a mere $20.

$$$ > waitlist

Even though I am in desperate need of some sleep, this should be a lot of fun. Besides, Thanksgiving will be here in a couple of weeks which means I’ll have a few days to hibernate if I want to.

I’ll try to get some pics and do a couple of posts about the event if time allows.

That’s not true.

At least it’s not true almost all the time. Very few of your prospects literally can’t afford it. What they are really trying to say is, “it’s not worth it.” As in, it’s not worth reprioritizing my life, not worth the risk, not worth what I’ll have to give up to get this, not worth being in debt for.

The blog title and the quote above were pulled from Seth Godin’s blog. Although he was talking about selling a product or service, I’ve actually received a similar response recently while talking with my friend about starting a company.

For me, it’s always been “you can’t afford not to…” after all, life’s too short not to try. However, my friend’s response to my question on why he hasn’t started a venture when that’s all he reads and writes about, really baffled me; until I read the quote above.

Even though many entrepreneurs have the courage to just go-for-it and take it for granted, there are many others out there who just can’t seem to do the same. If you guys have any good advice on how to release the fear, I would love to hear about it so I can pass on the encouragement.

Edit: Releasing the fear is just the first roadblock of many to pass through when jumping into the world of entrepreneurship. However, everything else including money, technical skill, resources, etc. can all be resolved once a person set their mind to it. So the question is, what would make an entrepreneur climb over that first wall so s/he would learn that they can in fact think creatively and scale any wall?

As a desperate measure to gain some control in the matter of no communication, we decided to do a couple of things to resolve the issue of the missing designer.

1. We started shopping around for alternative shops that also provided image to code services and got a few recommendations from some friends and fellow entrepreneurs. Yes, we probably could have taken the time to do the work ourselves but given the time constraints, I felt it would have been money well spent to hire some professionals that could knock the project out of the park in a very short time. After all, the goal of this venture is to launch a business, it isn’t to make sure our team members can conquer certain technical skills just to say we can.

If you are designing a new site and desire xhtml code, below are some options for you we have found over the last couple of days. We did not end up using the companies but from the examples some showed us, they are great.

www.psdxhtml.com - very impressive portfolio, $89 per page, quick turnaround.
PSD2Html.com $153+ per page
xhtmlized.com $249+ per page

One important thing to note is that you (and these shops) can probably churn these things out pretty quickly if all you’re doing is one page. The value-add here is more for projects that have multiple pages with various differences in their layouts or maybe even complex layouts. Note: We did not get into details with these shops to know if they would charge more for complex layouts.

2. The second thing we did to resolve the issue was contacting Guru to see about getting what’s left of our escrow money back. The idea was to take the unspent budget and apply it to one of the shops above to finish the project or to get as close to it as possible.

Guru offered to mediate the issue and also contacted the designer to let him know of the refund request. If the professional did not respond with 5 business days, we would get the money back. Guess what? Within hours, the designer came back, responded to our inquiries and provided some sample pages for us to review.

Fancy that…

As it turns out, nothing bad had happened to the designer but he has been avoiding us due to lack of progress. Again, lack of progress was not what I was concerned about; lack of communication was. I had to explain that concept to the designer again but hopefully he’ll get it this time.

We’re still scouring the web and networking events looking for awesome entrepreneurs to join our startup. As we’re checking out various areas on the web and seeing what other people are writing and asking about, there seems to be a common theme among the newbies which is: how much equity or options should I give away to attract raw talent?

Well, I’m sure the answer differs for everyone, every industry and especially for people who think their ideas MAKE the business and everything else is secondary. However, my experience has taught me that it’s much better to share. Think about it… would you rather have a 40% stake in a King Monster sized Twix or would you rather have a complete piece of a fun size Twix? If you opted for 100% of the smaller piece, you are definitely not seeing the BIGGER picture.

So what is a fair split in equity? 33% across the board would be fair on paper for a three person company, but that seems a bit too simple and well… not fair in practice. I’m not sure if there is a magic formula for this question but I can tell you what we’re doing.

My original plan and the one we’re using for now is 40% (me) ideas / 30% developer / 30% marketing. This split is of course, pre-funding and pre-slicing the pie for other roles in the company. My thinking is, the business would not exist without the idea, at the same time, without programming and without marketing, the business would also not exist. So because I’m in need of all three key positions to sustain the project, I’m happy to give away large pieces of the pie (or Twix) for those that would work towards the shared vision.

However, ownership percentage aside, the above split is also how I envision the work to be split. Many, MANY startups focus on 98% programming and nothing else. I’ve been there, it doesn’t work. You can’t sit in a bubble and code all day and expect your product to meet some demand and suddenly gain interest if you never get any feedback or market it. We all should know by now: If you build it, they won’t come unless they have a reason to. Therefore, just as I believe my CTO should get 30% of the company for months of hard work, my VP of business development/marketing should also do about 30% of the overall work and get 30% of the equity.

In the end, hopefully all the hours will add up and something nice, possibly a monster Twix will await us on the flip side.

Speaking of marketing and networking… while Randall has been busy hammering away at the technical stuff, I’ve been out in the field talking to people and avoiding sitting in front of a computer. Though I must admit, after just a couple of weeks of these events, I’m a bit networked out…

Wednesday night was an AiMA meeting where I met some marketers and learned about Business Lead Gen. (Great stuff!)

Tonight was the Atlanta Deck Party which was also a pretty cool networking event. Surprisingly, the crowd was a lot older than I thought since I expected half to be GaTech students.

I did make Randall come out for this one cause I figured it’s probably more his crowd than mine. Also, I see a common theme between all my programmer friends which is: they don’t network enough. In any case, it’s great to see such a huge turnout for the Atlanta area… Maybe I don’t have to move to Silicon Valley for awhile after all!