Quote of the Week

Jul 10, 2009 in Entrepreneurship, Quotes, Startups

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"The idea that you cannot build an important tech company outside of Silicon Valley is 'a crock of shit'."

Fred Wilson

July Event Roundup

Jul 01, 2009 in Entrepreneurship

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I first did this type of post last month and some received positive feedback.  So here we go again.  Even though it is July lots going on.  And since we are celebrating freedom this month I thought it would be good to talk a bit about (mostly) free things.

Angel Investing For Entrepreneurs
Knox Massey of the Atlanta Technology Angels is putting on a short program to help Georgia based entrepreneurs understand the basics of angel investing—from an investors viewpoint.  These are taking place on July 8 and 23 from 12 - 2.  You can learn more here.  Free.

CapVenture
CapVenture is a unique ATDC education program that equips early stage (typically those seeking their first institutional round of financing) CEO's and executives for smarter and more productive capitalization of their business. Final applications are due July 15.  The program runs from run from August 25th to September 29th and concludes with an investor forum and a shot at getting involved with Venture Atlanta.  Not Free.

Atlanta CEO Council
The Atlanta CEO Council provides entrepreneurs, C-Level executives, investors, and selected services partners to participate in an exclusive networking environment.  Exclusive being a key word (one of the beenies ATDC companies receive is access). Their next shindig on at the Ritz on July 20 at 5:30.  Free.

Convince and Convert: How to Pull More Prospects Into and Through the Sales Funnel
Stacy Willams the president of Prominent Placement invited me to a Webinar July 21 from 2 - 3.  Stacy is a SEO guru and when she talks I listen.  Given that getting customers is a pretty darn important thing to be focusing on you should too.  Learn more here.  Free

Social Media Camp
Atlanta did not make the cut for the official Social Media Club Summer Tour.  But I want one.  Others seem to be doing their own.  We should too.  Not free.  It will take effort.  Who wants to play?

Quote of the Week

Jun 26, 2009 in Entrepreneurship, Quotes, Venture Capital

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"Build a company for the long term. Control your own destiny."

Justin Fishner-Wolfson

In his presentation Term Sheets 101 below.

The Liquidity Event Proceeds Calculator, developed as a joint project between the Atlanta Technology Development Center and Siavage Law Group, is a nice tool to figure out the affect a funding round might have on your particular situation.

Entrepreneurs Can Change The World

Jun 15, 2009 in Entrepreneurship

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A little Monday morning inspiration.

With a shout out to Jonathan Kay for sending this in my direction.

How to Pitch Angels

Jun 11, 2009 in Angels, Entrepreneurship

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Know Massey of the Atlanta Technology Angels pointed me to a great article in The New York Times about angel investors and how to pitch them.  Toward the end there is a simple summary.  It is from an entrepreneur named Ted Ray currently going down the angel path.

1. Have a product on the market.
2. Do not ask other people for money until you have spent your own.
3. Be concise in your investment materials.
4. Seek angels in your field.

Focus on achieving one and two before taking steps three and four.

For Tessa

Jun 03, 2009 in Entrepreneurship

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June Event Roundup

Jun 02, 2009 in Entrepreneurship

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Lots going on in the first half of June plus one.  Here's a roundup. Busy.

GRA/TAG Business Launch Competition Finals
On Wednesday June 3rd from 8:00am - 2:00pm the finals of the GRA/TAG Business Launch Competition are being held at IBM. The finalists are AccelerEyes, Band Metrics and TalentSoup.  These companies were selected from over 75 entrants.  They will presenting their business plans to an all-star panel of judges to close the deal for over $300,000 in cash and services. Register here.

Atlanta Social Media Tweetup
A special social media tweetup (a.k.a. happy hour) with special guest David Meerman Scott, bestselling author of The New Rules of Marketing and PR and World Wide Rave is taking place on Thursday June 4, from 6:00 - 8:30pm.

ProductCamp
A user driven unconference about product marketing and management ProductCamp Atlanta takes place on Saturday June 6 from 8:30am - 5:00pm at GTRI.  I am going to be participating on the Listening to Social Networks (an area of keen interest) session, and may do a bit on evolving product management from startup to enterprise.  ProductCamp is free to attend.  Please register.  I hear tell about 180 people have already done so.

CapitalLounge
The Next CapitalLounge is scheduled for June 10th from 6:00 - 9:00pm.  CapitalLounge is  a free, networking event for Southeast early stage, fast-growth entrepreneurs, venture capitalists and angel investors.  You can expect  anywhere from 250 to 300 entrepreneurs and investors sharing ideas, connections, a great food spread, and cash bar.  Southeast-based bootstrappers, ‘idea-napkin’ holders, and more established entrepreneurs seeking expansion capital or networking contacts are also invited to apply.

Calling All Entrepreneurs
The boys from Southern Capital Ventures will be in town for CapitalLounge and they are having open sessions with entrepreneurs from 7:00 - 10:00am on June 11.  So don't spend too much at the cash bar and get up early to meet with Jason Caplain and David Jones.  You can find the details on Jason's blog.

CapVenture
CapVenture is a unique ATDC education program that equips early stage (typically those seeking their first institutional round of financing) CEO's and executives for smarter and more productive capitalization of their business. Early applications are due June 16.  The program runs from run from August 25th to September 29th and concludes with an investor forum and a shot at getting involved with Venture Atlanta.  It costs $400.  You serious about raising money?  Worth it.

How To Pitch

Apr 14, 2009 in Entrepreneurship, Presentations, Venture Capital

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I bet a spend somewhere between 5 to 10% of my time listening to entrepreneurs give pitches, helping entrepreneurs create pitches, or providing suggestions for improvements to pitches.  More often then not I point entrepreneurs to online resources such as the ATDC presentation template or a presentation that I gave at CapVenure on "Communicating With Investors" that made its way onto the Peachseedz Library.   And of course Guy's infamous 10/20/30 Rule of Powerpoint is a mainstay as well.  But yesterday Paul Freet pointed to this fantastic presentation by Canaan Partners called the "Entrepreneur Pitch Workbook" that instantly became a favorite. 

The structure of the pitch section on slides 5 through 11 is a most excellent explanation of the key elements needed in any pitch. Very specifically follow slide 7.  By the time you are finished with the intro slide everyone in the room should know the basic idea and the value proposition of what your company is doing.  And at the end, the presentation has a nice summary slide of the structure before closing with a billboard slide with contact information.  If you are pitching you want such a billboard up on the screen during Q&A.

An entrepreneur that follows Guy's simpe rules coupled with the objectives based structure laid out by Canaan will be well prepared for a successful pitch.

Quote of the Week

Apr 03, 2009 in Entrepreneurship, Startups, Venture Capital

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"As soon as it's written, every business plan is wrong. Good entrepreneurs recognize this, and tend to build agile teams that can quickly respond to early market information in order to identify a real business model and minimize risk."

Josh Koppleman

In a great Yogi Berra wisdom for startups article.  There are really two main points to the article.  One, entrepreneurs need to "pivot" or change their initial strategy and vision.  Two, you need to know what inning the game you are playing is in so that you can act accordingly.

And don't forget, venture capitalists do not read business plans.

Calacanis' Customer Acquisition Cost Math

Mar 24, 2009 in Business, Entrepreneurship, Internet, Marketing, Startups

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You may have heard that Jason Calacanis, the CEO of Mahalo, publicly offered $250,000 for two years for one of the top twenty slots of suggested users that Twitter is now offering up as part of its service.  Jason's offer was a publicity stunt.  A game.  He intended to attract media coverage.  He is extremely skilled at getting attention.  The king of linkbait.  It is one of the things that makes him a good entrepreneur.  And once again it worked.

But with an interchange with TechCrunch he said he was serious about the offer.  And I believe he is.

Jason outlined his thought process for the $250k offer in his most recent list mailing (He stopped blogging in 2007.  Blogs are so last, last year, though he really did not stop.)  Jason did some math on his offer and this is what it looked like.

My plan was to post the Top Five most absolutely fascinating questions from Mahalo Answers to our @questions account every day. Everyone loves a timely or fascinating question and, in my estimation, I would get a one percent clickthrough rate on each question. If I was able to reach three million followers, and kept half of them (1.5m), that means every tweet would get 15,000 visits. Five a day means 75,000 daily visits, and over two million visits a month--or close to 50m visits of two or three years. Some percentage of those two million would participate in Mahalo by asking or answering questions, and if that number is also .5 to 1%, that means I would get about 250,000 new members for my service. Each of those 250,000 new members would cost me one dollar, and I'm certain over their lives we would monetize them for much more than that.

Jason estimated his customer acquisition cost of doing a deal to buy a Twitter suggested users slot to be a dollar.  Customer acquisition cost is simply the cost of securing a new customer, member, or user.  And while not every startup is well funded like Mahalo and has $250k to throw around on a whim, there is an important lesson here. 

Customer acquisition cost is a key driver of any Internet business.

Especially so for early stage and growth stage companies.  It deserves deep thought and consideration.  While I might not buy into Jason's math and question some of the assumptions made to reach the customer acquisition cost in this instance, he walked through the logic.  Every entrepreneur running an Internet business needs to be able to do the same.  You can start with a very simple model.  If you have no history make some reasonable well thought out assumptions. Have data points and facts to back your assumptions.  Using services like Facebook, Google, and Twitter as examples and a basis for assumptions is a bad idea.  Yes, Web services need to grow virally and via word of mouth (the two are not one and the same) to be successful.  But at some point it is going to take more then that.   Just assuming 20% quarter over quarter growth rates won't cut it.  Nobody is going to buy into that assumption unless you are actually achieving 20% quarter over quarter growth rates. And then they are going to want to know how you are going to sustain it.

Customer acquisition costs is one of the three most important drivers of a SaaS business model (churn and recurring revenue being the other two), if you are going to build a successful Internet business you need to know customer acquisition marketing cold or find somebody who does.  It is the only way that you can cost effectively grow your business. 

As for Jason's offer?  He raised it to $500,000.