Someone asked this question of Fred Wilson, and I am still looking for a solid answer myself. But I did do some digging.
I signed up for twitter, and did one post. I subsequently made my page private until I could figure the thing out. I installed the twitter plugin for this blog site, but haven’t used it. Then I called (novel, eh) ten friends and pointed them to twitter to get their thoughts. The makeup of those contacts was as follows:
A commercial banker who deals primarily in real estate development loans
A residential real estate agent who deals in middle market (750K to 2MM) properties
A credit card processing technology entrepreneur
A bond trader from a top-tier firm
A software engineer who specializes in mobile and video streaming applications
The CFO of a Midwestern retail operation
The CEO of a small movie production company
A bankruptcy attorney
An “angel” investor with three exits under their belt
A stay-at-home mother/former insurance industry executive
“I don’t want strangers to know what I am up to every minute of the day, so I’ll keep my profile private and befriend you, but only if you keep your profile private as well.”
“I have a Blackberry – I still can’t keep up with my email.”
“This is Blackberry on the web, right?”
“I have two IM clients already – I don’t need another.”
“I’m on a family plan, and my kid uses all the texting.”
Nothing really groundbreaking here, but it does give you something of a first impression from the stupid set. The only opinion I can offer so far is that twitter has something of a barrier to entry with the SMS integration, and dealing with SMSCs can be a real pain (so kudos to them). Also, it is probably going to grow like mad with the publicly available API. Will that be enough? Or will it add more noise to an already very noisy idea?
Still looking for answers…
I was hard pressed to call it a debacle, but I couldn’t think of a better word. Still, when I think about it I keep hearing Resolution Trust Corporation bells in my ears. Steve Berger says:
Let contractual arrangements remain in force, let good lenders prosper and bad ones suffer (similarly with borrowers) and let the taxpayers’ pockets go unpicked. Legislative interference with market processes is likely only to prolong and deepen the downturn.
I concur, but legislators only know how to legislate. Look at the bright side…if government steps in, institutions will have less need to raise rates.
Matthew Ingram doesn’t care that Guy Kawasaki found a cheap lawyer – Kawasaki’s Truemors is a complete “waste”.
It (Truemors) may not get bought for millions, but then again surprising things do happen. And no doubt the “waste” is getting PR now – maybe Kawasaki can turn it into a cat fight so people will flock to the site. But what about the intangibles being ignored?
Kawasaki makes a fine example of how easy it is to get something started, and how cheaply compared with just a few years ago (something Ingram also points out in conclusion). Also note that what is cheap to launch may also be cheap to modify. Cheap to enhance. And cheap to emulate. Which means…more logo makers creating logos. More lawyers writing docs. More developers hacking code.
Someone else may learn something from Guy Kawasaki’s
waste experiment, and wind up making the difference.
I wonder if these folks will actually read their own quotes and wonder how hypocritical they sound.
Do people really get more conservative as they age, or are they inclined to simply ignore history (including their own)? If the latter is the case, the web is going to change all that for the next generation. Blogs, MySpace pages, Google “Street View,” yada yada, are going to make it so.
Everyone will be telling you exactly how much of a hippie you really were.
Ryan Sholin talks straight up.
That kind of pointed acknowledgement of an issue is refreshing, and a rarity.
Ask The VC got a second opinion on the issue, and it looks like the total costs up to the first round closing tally to around ten grand. Closing may cost you up to ten grand more.
Guy Kawasaki got it done for less than $5K, but didn’t raise venture financing (yet).
Initial structuring is generally pretty “standard,” and I’ve seen it done competently for under $2,500. And that includes any quirks like exchanges of contributed IP for stock, founders vesting, and a base option plan – not from your uncle’s divorce lawyer either. That is the cash price, no deferral – but is well within the credit card advance range for most. You may need a bigger firm come first round – the investors may insist on it – but structure will get tweaked whether you use the same firm thoughout or use a smaller shop upfront and switch to the big guys later.
It looks like you may pay a premium for fee deferral, twice – once in equity and once in deferred fees for going with a top-tier firm from the start (those are the only ones that can really afford to defer fees). And note…using a white-shoed operation is no guarantee your investors aren’t going to ask you to use their lawyer anyway. The question you have to ask yourself is whether the premium is worthy of the contacts that might be had as a result, as well as the cash you’ll conserve at the start. Paul Kedrosky says some need it, some don’t.
I’d go for getting the base put together with someone you know and trust, while sucking up the cash expense. Then, use whatever firm your investors are comfortable with if and when the time comes.
A few parallels worth mentioning:
- The need for patience and persistence – Not everyone is going to buy into your idea the moment you deliver it. By the same token, neither is a trout. Be patient with people as well as finicky aquatica – adjust your presentation to achieve the intended objective. Quit too soon, and you might miss out on the opportunity of a lifetime.
- Betting on your winners – Throw your all into the stuff that’s working. Successful entrepreneurs get a boost from small successes, and by directing attention to the small wins they often turn them into big ones. Commodities traders are particularly good at this – they generally double up their bets on their winners (and yes, I consider traders entrepreneurs). For trout, go for your favorite flies and favorite holes first – the ones you have confidence in as a result of previous successes.
- Knowing when to cut your losses – You can turn a small business failure into a big one very easily. Just keep throwing good money after bad. You can turn stellar conditions into a “no fish” day as well – just stick to the same fly, or stand in the same hole. All day.
Birthing ground of Cheesman – beautiful!
I just couldn’t let Cheesman beat me, and I am glad to say it didn’t. We packed in for a full day trip, donning several full Nalgene bottles, leaving pickup vehicles at both ends, and exploring the whole river (with emphasis on the upper canyon). Didn’t get a lot of pics, as most of the time our gear was hundreds of feet away hiding under boulders, but we did score some cute little browns – very healthy, brightly colored fish. And I am not going to say I have it dialed in – I really don’t, and Mr. Todd Pepin warned against making such claims on this place as it can come back to haunt you.
I’ll send a big thanks to Todd for hauling me in there. I won’t thank him for the soreness I feel today – we really slogged down that canyon, covering many miles with packs in tow. I’ll also thank Zoka’s Restaurant and Bar in Pine Grove, CO for pouring a great Heff (lemon or orange – your choice) and cooking a great gourmet burger, after the fact. I won’t thank them for forcing that chocolate truffle with rasberry glaze on me – I need to cut some poundage if I am going to continue doing trips like this!
Flies of the day were tan and red San Juans, trailed by RS-2s and Pheasant Tails (both smallish 18-) – best production between us was on the latter. One was taken on a 16 Prince, followed by a reddish caddis emerger, but I’m not counting it. The fish took me downstream and wrapped himself around the rig as Todd screamed from behind…”Where the hell’s your net!!!???” (it was in the pack, along with the camera). By the time I scrambled down three granite boulders the size of semi-tractors for a landing (all the while thinking that any second I was going to slip and tumble in), he had spit out the Prince (which was now snagged on the top of his head) and the emerger was stuck to his belly. No harm done (with barbless), and he scrambled off just fine – but we’re calling this one a double-foul hook just to keep things honest.