Topic: entrepreneurship

When I was in the Boy Scouts I learned that my motto was to: “Be Prepared.” About 2 weeks ago, I particpated in a Funding Universe LivePitch event in Sandy. The positioning to aspiring entrepreneurs was: Come pitch your idea to a panel of local experts, to get feedback on presentation, or recruit /hire, or [...]

Yes, this is a blog post about Speaking Roses. Yes, they are back from the dead. After trying almost every conceivable business model and failing to the point of bankruptcy Speaking Roses has now emerged as a bizopp.

No, I’m not kidding.

You see, Speaking Roses has a Google problem. If you go to Google and type in “Speaking Roses” several unflattering but true blog posts by yours truly on Speaking Roses come up in positions two and three. So when you have people out performing due diligence on Speaking Roses’ bizopp and they go to Google to do a little homework I end up getting emails like this:

Subject line: Speaking Roses WOW! 

Chris,

I just wanted to drop a line to you, I recently almost sent these guys 15K to start, what I thought, would be a brilliant business in my area. Then I read your articles along with viewing a few financial websites, and needless to say I’m glad I didn’t make that move. But my question is, if they truly are doing this poorly how are they still here? I just wanted to get some further insight from you, thanks
Jason

To which I replied:

Jason:

First off congrats on doing your due diligence. Most people get overexcited about an “opportunity” and jump into things without doing proper homework.

To answer your question - Speaking Roses, the publicly traded company, filed for bankruptcy last year. Several of the former founders then acquired the IP out of the bankruptcy. They then re-launched the company in its present form as a bizopp. So the things you have read about Speaking Roses mostly applied to the company before it filed for bankruptcy. That said, several of the founders of the “old” Speaking Roses are also the ones running the “new” Speaking Roses.

My take: same people, same product, same problems. You made a wise decision.

Chris 

I’ve been in touch with Alan Ferrell about the “new” Speaking Roses. I have offered to help the “new” Speaking Roses with this problem but they have been very slow to respond to my correspondence.  If Rene and Alan can convince me that the “new” Speaking Roses isn’t “the same people, same product, same problems” then I am more than happy to change my tune on the business. Heck, I might even be willing to help them!

I sincerely mean that but right now the jury is still out.

Until that’s resolved, the following notification will be posted at the top of all my blog posts on Speaking Roses:

Important notice: In the Summer of 2007, Speaking Roses filed for bankruptcy. The company’s intellectual property was acquired out of that bankruptcy by several of the former founders of Speaking Roses. Those founders then restarted the company as a new entity and are now trying to market Speaking Roses as a bizopp distributorship. Therefore, the Company discussed in the post below was the “old” Speaking Roses not the newly founded Speaking Roses. However, the founders and investors of the “new” Company were also the founders and managers of the old publicly traded (now bankrupt) Speaking Roses.

If you came here looking for information on the new Speaking Roses bizopp please consider the following: I encourage you to look at ANY investment opportunity very closely. I encourage you to perform thorough due diligence. I encourage you to specifically look at the management team of the business you are seeking to invest in. Look at their track record, skill set, and ask for personal references. Demand the company produce financials. The last thing you want is to invest cash upfront only to have the company go bankrupt soon thereafter. I encourage you to do a detailed financial analysis of the “opportunity” with your accountant. You should also perform a detailed analysis of your local market. You should have an attorney review any and all paperwork given you by the company. Finally, get valid references and drill them on the “opportunity” and how its working for them. Be as specific as possible in all your questions and research.  

Chris Anderson, a writer at Wired Magazine and author of the influential The Long Tail: Why the Future of Business is Selling Less of More, makes some good points about the insanity of Facebook’s $15 billion valuation, the inadequacy of current approaches to social networking, and the implications of an over-reliance on advertising as a business model. His arguments are useful because entrepreneurs can use them to make concrete business or strategic decisions. He doesn’t use namby pamby qualifications to hedge his bets and predictions. I do have a huge doubt about Anderson’s conclusions though.

First, Anderson argues that social networking should be a feature, not a destination. I agree wholeheartedly. The ability to interact with friends, share content, and engage in self-expression should be standard features on most websites. The unique methods of encouraging creative online behaviors known as Web 2.0 will filter through the rest of the Internet and, soon, your grandfather’s favorite website will allow him to engage in “social networking.”

Second, Anderson cites stats regarding advertising revenues or costs from Myspace (NWS-A), Facebook, and Ning. He shows that monolithic social networks like Myspace and Facebook, which attempt to be all things to all people, are having immense struggles with selling advertising at worthwhile rates. He also implies that Ning’s niche vertical social networks built by customers command higher advertising rates. Some marketers happily pay the higher rates because the engagement level is greater on these niche vertical networks. Advertisers also prefer the more intelligent targeting of relevant audiences. Myspace, Facebook, Bebo (TWX), and other undifferentiated mass networks are actively trying to improve their targeting abilities so it will be interesting to watch this competition evolve.

Finally, Anderson asks a pointed question about Facebook’s implied $15 billion valuation when Microsoft (MSFT) bought a small percentage of the company a few months ago. If Facebook is struggling to target its advertising and improve its advertising revenues, does its gargantuan valuation make sense? I think Zuckerberg should take the money and run. I also think that Lee Lorenzen, a venture capitalist, and his prediction that Facebook is worth $100 billion is a case of shrewd exaggeration. What I think is most funny is the fact that all of Lorenzen’s fanboys, the self-branded “social app gurus” and developers of tiny Facebook apps are all eagerly drinking the spiked punch. There are few better examples of confirmation bias in action.

My main problem with Anderson’s analysis is his implied assumption that the currently high advertising rates the niche vertical social networks enjoy will stay relatively high. Based on his personal experience, he concludes that Ning’s advertising rates are greater than Facebook’s and Myspace by at least a factor of ten. I don’t think this will last. Web 2.0 methods are precisely that, methods. They can be products, but they are also methods or general, conceptual best practices. As such, the ability to create robust social networks for different verticals will diffuse to a critical mass of software engineers. As that process accelerates, social networks and features of social networking will become commonplace or commoditized. I’ve alluded to the commoditization of social networking applications, which is a related problem. When this process nears its peak, advertising rates for all social networks will have diminished drastically. Self-proclaimed “social app gurus” and “social network gurus” who have staked their futures on social networking will ultimately prove themselves as less than prudent.

In highly entrepreneurial hot spots like Silicon Valley, San Francisco where I grew up, Route 128, Washington DC, Seattle, Los Angeles where an impressive raft of social networking and new media startups has sprouted, and biotechnology-focused San Diego, critical mass of entrepreneurial activity organically attracts venture capital. In other words, a rich “ecosystem” - where entrepreneurs can assemble readily available capital, talent, and relationships - can only come about when entrepreneurs first satisfy the initial criterion of creating innovation and value to a significant degree. In emerging hot spots such as Colorado, Utah or “Silicon Slopes” where I currently reside, New Mexico, and Pittsburgh, the march towards critical mass is accelerating and their ecosystems are becoming more robust.

When critical mass is achieved, the eagerly welcomed venture capital that forms to service innovative startups becomes a hot topic of conversation. Networking groups begin to get together to talk about how to raise money from venture capitalists. “Consultants” come out of the woodwork claiming expertise in helping new companies attract venture capital. Venture capitalists are looked upon as “masters of the universe” and treated like rock stars. University business school programs institute curricula aimed at instilling students with an understanding for the process. MBA grads and finance majors from those same university business schools decide they want to become venture capitalists. Local business magazines hyperventilate upon the sexy subject. Entrepreneurs talk in awed tones about their peers who have successfully attracted funding. Angel groups form and hold workshops or seminars about the process of fundraising. Websites with glossaries of mysterious VC lingo spring up out of nowhere.

We have glamorized venture capital beyond reasonableness. We spend an inordinate amount of time, energy, and attention on the subject of venture capital and end up mythologizing it. Because we talk about it so much - in such reverent tones - entrepreneurs unfortunately fixate on it at the expense of other critical components to building great companies. Would-be entrepreneurs start to reason that they must get venture funding in order to “really do something.” It is a convenient excuse to do nothing. Because we talk about venture capital so much, some of us start to see raising capital as the ultimate measure of success. “If I could just raise one million dollars, things would be different.”

Can we talk less about venture capital and more about great ideas and business building? Sure there are some programs that mix in subjects like building a great management team, hiring best practices, networking and relationship building, but venture capital gets the overwhelming majority of attention. What we need more of are entrepreneurs with the ability to figure out if their pet idea is something worth pursuing. At the very least, we need workshops and seminars that help entrepreneurs figure out if their idea, frankly, sucks. We need to talk more about making sure that our ideas are unique and bring some sort of new value to the world. We need to talk about how to execute better than your best competitor. We need entrepreneurs that can focus on the essentials of building great companies.

What entrepreneurs ought to realize is that venture capital follows true innovation and execution. It goes where the action is. It does not precede the action. Entrepreneurs who are willing to put the work in to become savvy about the whole process will come to understand that raising venture capital is relatively easy when compared to out-thinking and outrunning your best competition. It is much easier than keeping customers ecstatic. Raising venture capital is immensely easier than finding and acquiring the scarcest resource of all, great talent. Raising venture capital is not the end game. We need to stop perpetuating the myth.

Last November, Doba worked with Connect Magazine and the Utah Technology Council to bring Guy Kawasaki to Utah. I posted at the time that because we charged attendees $10, we were able to make a donation to Kiva for $4,000. Shortly after the event in November, we loaned that money to 40 entrepreneurs all over the world. [...]

It was 3 years ago, almost to the day, that I heard about an entrepreneurial program called Junto Partners. I decided to throw my “hat in the ring” to be selected as 1 of 5 entrepreneurs that would receive a $50k investment to start a company. The program lasted 8 weeks; it was filled with Trump/Apprentice-like activities and the awesome experience of learning at the feet of venture capitalist and entrepreneur mastermind Greg Warnock.

Being selected as one of the Junto Partners really jump-started my entrepreneurial career. I ended up investing my $50k into FundingUniverse (which had started several months earlier) and was off and running. It opened doors and provided momentum and infrastructure to a young and energetic entrepreneur. I attribute a lot of any success that I’ve had to the Junto experience.

Though the experience was invaluable, I also felt like there were a few pieces of the Junto program that were “broken.” I didn’t like the deal structure/terms of the $50k.  Also, while I learned a ton from my partners (and they’ll be good friends for the rest of my life), the partnership arrangement didn’t foster the best decisions to build successful companies. I also felt that the mentor program needed some re-structuring.

Despite the challenges, I felt like the Junto Partners program was a fantastic program and needed to exist. Greg Warnock and Alan Hall (the masterminds behind Junto) are sincere in their desire to build entrepreneurship in the state and they love working with young and energetic entrepreneurs. As a result, I felt motivated to provide as much help and feedback to the re-structuring of the new Junto Partners program. Led by Joe Grover (one of my 5 Junto Partners), we met several times to figure out how to create the Junto Partners program with the “issues” being resolved.

That being said, I’d like to help announce the Junto Partners Program 2008. If you are an entrepreneur and are looking to take the needed step to be “plugged in,” you totally should apply to participate. Even if you aren’t accepted as 1 of the 5 entrepreneurs, the 8 weeks of learning (which is free) will be one of the best experiences you will go through as an entrepreneur and will change the way that you think about things. The deadline for the application is this week (April 30th), so don’t wait.

Thanks to Greg, Alan (and Joe) for their hard work to provide such an amazing program for young entrepreneurs. I’ll always be grateful for their mentoring, friendship, and foresight.

Over the past year, we’ve had many requests by entrepreneurs to come and attend our SpeedPitching events. While we’d love to have everyone there, part of the value for the entrepreneur/investor is to have an intimate environment where you can focus on relationships, etc. However, the good news is that we have just announced our upcoming LivePitch event — a pitching/networking event for all entrepreneurs.

Here’s how it works: we are inviting all entrepreneurial companies to apply to pitch. However, this isn’t necessarily a place to pitch for money. You can pitch for feedback, partners, help, fun, and/or for investment dollars. Yes, investors are invited — in fact, we’ll have a few of them on our “panel of experts.” But, the majority of the audience will be other entrepreneurs that are coming to have a good time and network.

Here’s the kicker: everyone in the audience will have $100 in “funny money” that they can use to “invest” in their favorite pitch. At the end of all the presentations, we’ll have 2 winners: one chosen by the panel of judges & another “chosen” by the audience’s investment dollars.

Each company will have several minutes to make a presentation, after which, they’ll answer questions posed by the panel of experts and/or the audience. It should provide a valuable learning experience for the presenters and allow some great exposure to the community. We previously hosted one LivePitch event in Boulder, CO and it turned out to be a huge success. Come and enjoy the opportunity to network with other entrepreneurs in the State.

Here are the details of the event:

When: Friday May 2, 2008
Venue: Miller Business Innovation Center
Building: Karen Gale Conference Center
Rooms: Wasatch and Cottonwood
Time: 9 am - 10:30 am
Cost: FREE! ($10 to apply to present)
Click here for more information or to register.

Also, for all of you Utah bloggers, please spread the word. We’ll announce our panelists (most likely angels & VCs) in the next few days.

One of our advisors, Kent Thomas (CFO Solutions), put together an interesting article called “10 Tips for Recession-Proofing your Business.” Kent provides a much-needed out-sourced financial services for the small & growing business. He has been fantastic to work with and I highly recommend him. Here are the details of his recent article:

1. Diversify Customers. Evaluate your customer base and identify concentrations of customers in the same industry and / or geographic region. Also look at how much business you do with each customer (make a list of your top 10 or 20 customers with total sales in the past 12 to 24 months and calculate the percentage of your total sales that comes from each. Losing any customer that individually represents a large percentage of your total sales (10% to 20% or more) could have a devastating impact on your business. Establish a strategy to expand your customer base and to watch the “concentration risks” carefully. Also, take this opportunity to review all of your customer’s credit worthiness and make sure that the credit limits that you have granted are still appropriate based on their current financial position. Act quickly to make the adjustments necessary to remove these potential risks from your business.

2. Cut costs. Have a look at your business and figure out where you could save, suggests Bill Lenhart, the national director of business restructuring at BDO Consulting in New York. If three employees are doing the job of one, you may need to make job cuts. Additionally, if you have two product lines and one is successful while the other one isn’t, consider selling off that division. “When times are tough, it’s best to focus on core markets and spend money in those areas, not in areas that haven’t been more profitable,” says Lenhart.

3. Ratchet down inventory. When a recession hits, the last thing you’ll want to do is get stuck with shelves of needless inventory. If spending $30,000 a year on boating gear, for example, isn’t necessary, make sure your purchase orders reflect that. For a better idea of what you’ll need as the year progresses, keep an eye on leading consumer indicators such as those offered by the National Retail Federation and the Conference Board. Also, establish inventory targets and make sure the sales and purchasing departments are talking.

4. Maintain prices. You may be tempted to slash prices to free up cash flow. That’s a mistake, says Bradley J. Sugars, a business coach in Las Vegas. Sure, you’ll sell products but you’ll also cut your profit margins and likely dilute your brand in the process. Plus, if customers decide to buy again from you in the future they may expect similar discounts.

5. Reserve discounts. “Don’t go into a discounting war,” says Sugars. Since you don’t want to dilute your brand’s value and you especially don’t want to start competing on price with discounters such as Wal-Mart Stores and Target, tread lightly when it comes to offering discounts. Be sure to reserve them only for current, repeat customers. “You’re trying to breed loyalty” without diminishing your brand’s value, says Sugars.

6. Focus on service. While expanding your business into markets abroad may be avenues for growth, many small-business owners should focus on their existing customers and clients for a boost in revenue. With this in mind, Sugars suggests focusing on service. “It is one of the best ways to add value without costing money,” he says.

7. Invest in employees. When the going gets tough, the employees you have will be your productivity all-stars, says Lenhart. Make boosting productivity within reason, of course a focal point. For those that rise to the top, be sure to reward them accordingly. “You don’t want to lose your most productive people at this time,” he says. Consider offering vacations or time off, which can be cheap incentives. Also, now is a good time to evaluate all of your employees and replace the mediocre and poor performers – especially if your competitors or other businesses in your area are downsizing.

8. Free up cash flow. While you’re attempting to cut costs and grow sales, “now is the time to call in favors,” says Howard Applebaum, chief lending officer of Sterling National Bank in New York. Be sure to free up your business’s cash flow by asking to have payments to suppliers extended. Also, if you have old debts, call them in. Having a good amount of cash on hand, especially in light of the credit crunch, will help you do everything from make payments to employees and vendors to spend on marketing campaigns that may grow future business.

9. Renegotiate contracts. If a contract, a lease or other obligation will soon be up for renewal, try to negotiate lower prices. At this point, you may be able to also make cuts, says Applebaum. If you don’t need 50,000 square feet of office space, consider paring down. “It is really a reality check that requires a tough look at your expenses,” he says.

10. Look to expand your business. If, on the other hand, you’re sitting pretty, Carmen Bianchi, director of San Diego State University’s Entrepreneurial Management Center, suggests giving the competition a gander. “Look for weaknesses and instability,” she says. If they’ve been having trouble, you may be in a good position to pick up their business at bargain-basement prices. Obviously, make sure you can afford it, says Bianchi, but their loss may be your gain.

Venture capital follows the public equity markets. So it is no coincidence that many VCs think that funding activity will slow down in the foreseeable future. KPMG, the large accounting firm, surveyed venture capitalists and found that 69% of respondents think that we are currently in a recession. A whopping 90% believe we will see a drop in initial public offerings. All in all, this will result in less money raised in venture capital partnerships and thus less money available for startups. Startup funds will find it exponentially harder to raise institutional money. It is often these first-time funds that are willing to take the most risks to deploy capital in a quick manner, the proverbial “quick trigger.” Second-tier ideas and management teams get funded in bull market environments, resulting in an increase in overall funding activity. In a bear market environment, the more venturesome first-time funds can’t raise enough money to take second-tier risks. This leads to a drop in overall funding activity.

Another report by the National Venture Capital Association found that only five venture-backed startups achieved an IPO in Q1 2008. We’ve never seen levels this low since the bottom of the bear market in Q2 2003. A public market with a healthy appetite for new issues is essential for the venture capital industry. It drives the lucrative exits that VCs are looking for and also, in a roundabout way, cycles money back into venture fund coffers for the next generation of startups. In a market wary of IPOs, the only remaining exit opportunity is acquisition by strategic buyers.

We know that VCs are frustratingly lemming-like in behavior. As with all investment activities and fields, it is much safer to follow the crowd or herd than to venture out, pardon the pun. But as with all investment activities and fields, it is much more profitable to invest with a contrarian framework.

Bull market vintage funds usually pay top dollar in terms of valuations. It is notoriously difficult to time the markets, but a good or lucky venture fund could exit handsomely on a few investments while valuations are still rising. However, most investments will have been made at the most expensive valuations. This is not usually a recipe for success.

Bear market vintage funds usually buy equity in startups at favorable valuations. It is still notoriously difficult to time the markets, but the depressed valuations paid by venture funds make it more likely their exits will be profitable. Investments made now while we are in a bear market will take several years to harvest. When portfolio companies are ripe, if history is any guide, the markets will have turned for the better and exit opportunities will abound.

What would I do if I wore the shiny shoes of a VC? As I said before, I would resolutely shun the second-tier ideas that are social networking apps built by self-styled “social networking gurus” or “social app gurus” because these toy ventures will never achieve noticeable success. If I had to play in the Web 2.0 playground, I would concentrate on “primary platforms” that will compete directly against existing social networks like Myspace (NWS-A) and Facebook in a unique way. I’m sure there are entrepreneurs frantically trying to figure out different ways to address the social networking space. I would not fund any social networking apps that would need to exist within Myspace, Facebook, OpenSocial (GOOG), or other platform ecosystems. In the big picture, the cost to build a primary platform versus a secondary web application, or even networks of secondary web applications, differs little. The reduced cost of building consumer Web 2.0 businesses means perhaps we should be allocating less capital to this space anyway.

Of course, not everything is Web 2.0 - let’s not be myopic here. Enterprise 2.0 looks promising as it actually has a potential revenue model around it. I’m crossing my fingers that the clean tech guys will launch something truly revolutionary and world-changing. The already significant attention given to that space by VCs will pale in comparison to the resultant capital flooding to clean tech if some genius scores a big hit.

What would I do if I wore the worn-out sneakers of an entrepreneur? I would try and do what Marc Andreessen did with Ning and raise more money than I need to weather the coming slowdown. Giving up a bit more equity in this environment makes sense in order to ensure that my startup makes it through alive. This is exactly what I’m trying to do with my new stealth mode startup. Now I’m no Andreessen and my deal is so new, but I’ll just have to keep pitching to see how far we get.

Prompted by the rumblings of activist hedge funds Harbinger Capital and Firebrand Partners last month, I wrote about the New York Times (NYT) and its evolving technology assets. I found the Times to be surprisingly forward-thinking in its investments in the online world. As a strategic investor, it has made some fairly impressive investments in innovative startups that could solve the riddle of monetizing online news and content. Its investments include bets on blog advertising networks, news aggregation websites, blogging platforms, video sharing sites, job search engines, mobile Web technology, and advertising management technology.

The question really is, will the newer investments and initiatives take hold in time to stem the bleeding? Traditional classifieds advertising, the lifeblood of old line newspaper operations, is quickly disappearing as cheaper online alternatives destroy that business. The Times just released its earnings report and it isn’t pretty. The latest quarter resulted in a $335,000 loss compared to a $23.9 million profit in the quarter a year earlier.

My sense is that Harbinger and Firebrand are getting the Times for a bargain if indeed they can insert their own directors onto the board and fix some strategic errors. The company has agreed to expand the board to 15 seats from 13 but this proposal will need to be approved by shareholders. I expect that disgruntled shareholders will consent.

Here are some notable points or ideas sparked from the earnings release:

• Overall revenue dropped but circulation revenue actually increased 25%. This was made possible by raising prices on newspapers like The Times and The Globe. This to me seems ridiculous. Physical, cellulose-based newspapers are no longer premium products. The short term boost in circulation revenue will quickly fade as customers flee to online news sources. Younger readers are already there and older readers will soon be there. The strategy should be to gently help older readers make the transition from paper to Web. In order to do this, the company should actually be lowering prices on newspapers to increase readership. Content should then be written and presented in such a way as to encourage usage of online properties the company controls.
• The About Group, the company’s Web division, showed healthy gains in revenue and income. Online efforts are working so continued investment in this space is imperative. I’d look seriously at buying news aggregation and crowdsourcing website Digg.com - a company that has been trying to sell itself. It’s one of the Web’s most popular websites and it has been for sale for quite some time. Perhaps the asking price has been lowered.
• Local search and local advertising is the next big thing on the Internet. Venture capitalists are looking for the next generation of startups that will displace first generation local services like CitySearch (IACI) with intelligent application of search engine technology, search engine marketing (SEM), search engine optimization (SEO), and geostamping technology. The best implementations are probably still being stewed over by entrepreneurs, but some existing acquisition candidates include Zillow.com, Local.com, LocalBizNOW, ZipLocal, and Smalltown.

As I have said before, “if creative destruction is going to happen, you might as well do it to yourself.”

This is something I’ve thought a lot about lately. Here’s a quick summary on why entrepreneurs should take vacations:

1. You work too much
2. New environments spark creativity
3. You are getting boring to be around
4. Its been a long time since you’ve been on a vacation
5. You need to get out of the house
6. You need to reconnect
7. Its helpful to remind yourself why you work so hard
8. You need fresh air
9. Talking to people in other places will help your business
10. Vacations are fun
11. Bonus: your employees want you to go away

I’ve been relearning the value of getting away lately. I’ve been on three vacations in the last year and I think I could use even more!

Salt Lake-based MediaFORGE, a company I thought had passed away, launches a cool new interactive ad widget. Check it out:

Its good to see these guys are still around and kicking! Have a nice weekend!

My friend, Lisa Ann Thomson, a local writer and author sent me this question:

Hello! I have a quick question (or maybe a very complicated question) for all the entrepreneurial types I know:

How do you divide equity and ownership amongst founders of a company?

More specifically, I have a friend (seriously, it’s a friend, it’s not me….) who is involved in the very beginning of a start up. There are three of them. One had the idea and development of the product. My friend is doing the business plan, initial sales contacts/meetings, and developing partnerships. I don’t know what the third person is doing.

Is there a formula or are there resources to which you can point me to guide in the division of ownership and equity? Your insight is appreciated.

I responded along the lines of money and time put into the business, who had the idea, who will be the CEO, and the issues regarding future dilution.  

What are your thoughts? Please sound off in the comments.

Thanks.

I’ve never been so busy at FundingUniverse.  Things are going better than they have ever gone before and I’m super excited about the future.  With the growth and opportunities, I’ve been over loaded with new projects and meetings which means that I’ve neglected to write as much as I’d like on the blog.  So here is a list of things that I would’ve liked to blog about, but didn’t:

1. FundingUniverse named #2 Startup to Watch on the UV50 list
2. Participating on the Advisory Board of the yet-to-be-publicly-announced Utah Pulse — the site for “all things business in Utah” — led and sponsored by Zion Bank’s CEO Scott Anderson
3. Recent FundingUniverse SpeedPitching event — 12 awesome companies, 30+ legit investors, 1 great location (Noah’s in Lindon)
4. Recent “hot companies” in Utah that I’ve seen or met with recently:  Lumiport, Open Floor Technologies, Sendside, Velosum, Mangia, SimpleStartup, and Neutron Interactive (there are probably more, but I can’t think of them all right now).
5. v|100 list was announced — though it can sometimes just seem like a popularity list, I’m honored to represent FundingUniverse because the recognition comes from the Utah Business Community
6. Lots of thoughts on various types of financing for businesses including, but not limited to:  unsecured lines of credit (680+ credit score & 2 years of business will go a long way), Dell business credit (an easy $25,000), Google credit line (an easier $125,000), Equipment leasing, etc.
7. The parting of Jeff:  total stud.  We’ll miss him.  In the end, will work out best for everyone.
8. Following up on Entrepreneurship & the Family… for those of you that are entrepreneurs and have a family, I’d love to get your feedback via a quick survey that I set up.  It’s a fun side project for me.
9. Read the book The Illusions of Entrepreneurship and loved it.  You can learn more about it here and here.
10. Being a judge at the BYU Business Plan Competition — a lot of fun.  Went to the final event today and the final 3 winners are:  1.  Klymit (previously Argon… raised $375k through one of our SpeedPitching Events), 2. SchoolTipline (founder is Justin Bergener… one of my Junto Partners), and 3. Greeting Call.  Congrats to each of them!
11. Hiring of our new VP of Sales Jason Emett.  Jason is a rock-star that I’ve known for over a year.  He used FundingUniverse for a separate company and was invited to pitch in front of the Utah Angels.  We’re stoked to have him on board.
12. Looking to hire the following positions in the near future:  COO, CMO, Affiliate Recruiter, Internet Marketing Specialist, Business Loan Specialist, Investor Account Manager, and a few more.

Anyway, I know that there are a bunch of other things that I should be blogging about, but that’ll suffice for now.

Lately I’ve been meeting with a lot of budding entrepreneurs to talk about ideas they have or businesses they have started. I really enjoy getting together and talking with like-minded people. Just today I met with a fellow Westminster grad who has built a great little outsource programming shop. On the side, he and his developers bang out ideas that he comes up with. The problem is that they come up with a good idea then another cool idea comes along and they move on. So they’ve built some cool stuff but they’ve never really taken their extracurricular activity anywhere. Why? Well, as he admitted to me, there’s no focus on one idea.

I can relate! I’ve been through it myself and I’ve seen it with countless other entrepreneurs. About a year ago I came up with a new process for myself for evaluating my own ideas and whether or not they are worth pursuing. I’ll give the first couple of steps because they are the most important.

First, I write the idea down on a document I have with a bunch of other running ideas. I write down why I like it and some potential URLs. Second, and this is the most important step, I shelve the idea for a month. That’s right, I put it away, let it ferment, and forget about it. I figure if I still like it a month from now then it may be worth taking to step three. Step three is to talk to 10 people I trust about the idea and get their opinion. I also contact potential customers to assess if they really have a need for my idea. If that goes well then you act on/think about team, money, product dev, etc, etc, etc…

Since implementing this process I took an idea (that wasn’t originally mine but I did come up with the business model) all the way to a funding offer. We didn’t take the money. Some people would say that was a mistake - it wasn’t for so many reasons. Many, many other ideas sit as words on a document and that’s probably all they will ever be.

That brings me to another point. The thing I see more often than anything else is a good idea hatched by the wrong team. Good ideas are a dime a dozen. So the real challenge is finding the right team to take the idea all the way to exit. I love the idea of finding the right team then wrapping a great idea around that team - an idea that FITS that team. Stop trying to make your team fit your idea. Most of the time it doesn’t work.   

OK, so let me embarrass myself and drop some of my ideas that have never made it past the 30 day test (meaning I dumped the idea for some good reason). I’d love to get your take…

- A “techmeme” type site that tracks finance/economy news and blogs. Revenue model = ads

- A area code or address proximity restaurant guide for mobile devices. Revenue model = ads

- A Google Q&A phone service. This would be like the 411 service in NYC. So a person or a small business would call a 800 number, enter their credit card number, then speak with a Google expert. I think a lot of people with SEO and adwords/adsense questions would call. Since Google’s support sucks this idea could have legs (until Google un-sucks their support). Revenue model = per minute charge to talk.

- A “hot or not” type site for ranking celebrities on the A,B,C and D list. Revenue model = ads. I own the domain FamousOnTheWeb.com and I thought it might be a good idea for the domain. Americans are obsessed with celebrity.

- Ultimate online guide to tech trade shows. Revenue model = ads and affiliate deals with conference promoters.

- I’d love to wrap an idea around another domain I own: AsSeenOnWeb.TV. Any ideas? 

Why do most of these ideas stink? Because they’re mostly content plays. In order for a content site to make any real money you need a lot of traffic. In order to build traffic you need a lot of money. I think you see where this is going. Legendary Silicon Valley investor Ron Conway recently said that of 200 ideas he has none of them are Internet content plays. The Google help line idea has a huge upfront investment and numerous other problems that disqualify it. The URL’s? Well I think you can build a business around a good URL (Business.com is a great example) but these URL’s aren’t that great.

At any rate…what are some of your ideas?

Last Thursday I spoke at the monthly luncheon for the Utah Valley Entrepreneur Forum (UVEF) down at the Novell campus in Provo. I gave my Adventures in Entrepreneurship presentation. I’m hoping they put my slides and the audio from it up so that I can link to it. I really enjoyed the event, and I met [...]

Google ads, those little bits of advertising text that litter the internet, have made some people a lot of money.  I run the ads on this site to offset the costs of hosting, but others have made a living off both placing ads, and buying the “little tiny classified ads” from G$$gle.

And, more and more frequently, there are people being tossed out of the Google fun house onto their backsides, banned from Google Adwords, without any recourse, due process, or even any warning.

Even Micro$oft isn’t that evil. 

Jason Calacanis wrote a blog post that created a firestorm on the Web. On the important stuff he’s right on. Here are my thoughts:

1. “Buy Macintosh computers, save money on an IT department.” Come on, Jason - Macs break down too. Plus, I’m way more productive on a PC - so are most other people.
2. “Buy a second monitor for everyone” Apparently research by the UofU proves he’s right!
3. “Buy everyone lunch four days a week and establish a no-meetings policy.” That could be expensive but I understand that he’s trying to keep people in the office. Also, a no-meeting policy would be awesome but is that really reality?
4. “Buy cheap tables and expensive chairs.” Great advice.
5. “Don’t buy a phone system.” If you’re a Web play like Mahalo - this probably works - if you have a sales team this won’t work.
6. “Rent out your extra space.” Right on.
7. “Outsource accounting and HR…” absolutely!
8. “Don’t buy everyone Microsoft Office” ahhhh - if you want people to be productive make sure they have an office suite. Google Docs is still just a toy.
9. “Use Google hosted email.” Yes!
10. “Buy your hardest working folks computers for home.” I’ve have found that most people already own a PC or laptop - maybe offer to pay their home ISP bill?
11. (I’ll come back to this one later.)
12. “Get an expensive, automatic espresso machine at the office.” That will work everywhere except Utah.
13. “Stock the fridge with sodas” Yes!
14. “Allow folks to work off hours.” Great idea especially for your programmers.
15. “Go to each of your vendors every 6-9 months and ask for 10-30% off.”  You may not get it but it never hurts to ask.
16. “Don’t waste money on recruiters.” probably true.
17. “Really think about if you need that $15,000 a month PR firm.” This is good advice - PR firms are either a black hole or worth their weight in gold.
18. “Outsource to middle America.” I live in middle America. How can I disagree with this?

Now back to #11. originally Jason Wrote:

“Fire people who are not workaholics. don’t love their work… come on folks, this is start up life, it’s not a game. don’t work at a startup if you’re not into it–go work at the post office or starbucks if you’re not into it you want balance in your life. For realz.”

Later, he changed this to:

“Fire people who are not workaholics. don’t love their work… come on folks, this is startup life, it’s not a game. don’t work at a startup if you’re not into it–go work at the post office or stabucks if you’re not into it you want balance in your life. For realz.”  

He was attacked for saying this by people who have never had any accountability to shareholders, investors, etc. He was attacked for saying this by a professional journalist (and bloggers) who has no idea what its like to run a start up. What Jason says sounds harsh (and it is) but its mostly true. I would have worded it this way:

“Fire people who are not absolutely 100% dedicated to the businesses success. Fire people who don’t take the business as serious as you do. Fire people who are there just for a paycheck. Fire people who don’t fit the culture or turn out not to be qualified for the job their in. This is a start up, it’s not a game.”

Yeah, I know its harsh but so is bankruptcy.

Here’s a random thought I had this morning as I was driving into work…

There are many companies that are in business, but in reality they are out of business. The perfect example of this was Speaking Roses. When I was at Speaking Roses the company was losing $500k per month. On top of the massive burn rate - the business lacked sales. I think in 2007 they barely beat the one million mark. Their investors refused to see the reality of their situation - they just kept on pumping money into the business. There was no growth, there was too much money going out the door and not enough coming in. Yet the board kept forcing the company down the suicide path because they thought the idea was too good to let die. It was hard to watch.  

As I travel around and visit with various companies its apparent there are many businesses in this same predicament. Like Speaking Roses, it is only a matter of time before reality sets in - millions are lost, lives are destroyed, employees are unemployed, and what was once of some value is now worthless.  

Question: at what point do you know its over before it really ends?

Update: it looks like the former founders are going to give Speaking Roses another go. Someone once said the definition of insanity is expecting a different result by doing the same thing over and over again. This is insanity.

I had a great time last night at the UEC mentor event. I was tapped to mentor the Savvy May team, which won the Westminster business plan competition last month.

It was also good to run into a couple of familiar faces. Rand Bateman was at the table next to me. His team has a cool idea. Steve Spencer of 12 Horses is mentoring a team and so is Damon Kirchmeier from UTFC.

I’m really excited about the UEC this year. I think Savvy May has a a real chance of winning. I lost the UEC two years in a row so maybe I can live vicariously through my team - kind of like a dad trying to re-live the glory days on the field through his son

I’ll post updates as things progress.

I’m a HUGE fan of Mike Rowe and his show on the Discovery Channel, Dirty Jobs. For those of you not familiar with this show, Mike starts each show with this narrative: “My name is Mike Rowe, and this is my job: I explore the country looking for people who aren’t afraid to get dirty—hard-working [...]

YoungEntrepreneur.com pulled together a list of the top 10 mistakes people make when starting a business. Some I agree with and some I don’t but overall its a good read. My comments are below in italics:

What are the common mistakes that new entrepreneurs make and how can you avoid making them yourself? Here is our top 10 list of mistakes people make when starting a business:

1) Not enough money.

The most common reason why new businesses shut down is that the owner runs out of money. Cash flow is critical to a startup business. You could be profitable and still have to close your doors because your customers are taking too long to pay you. Cash is king in a startup venture and you need to prepare for it.

One option is to make sure you have enough startup capital from your own investments or outsiders (bank loan, private investors, etc). A second option is to ease into the business so that you start doing it on a part-time basis until you know that it will make enough money to support you.

I would call this “not enough runway” rather than “not enough money”. Or you could call this “not enough sales”, which should be #1 on this list. Sales fixes all kinds of money problems.

2) Not thinking survival.

Starting a business is all about survival. How do you stay around one more day so that you can learn more about your market and close new customers?

At the beginning stages of a business this may mean doing work that might not be completely what you want to do but it helps pay the bills. You need to do whatever it takes to survive and get through until the business can fully support yourself.

I hate thinking in terms of “survival”. People in “survival mode” burn out quick. Think execution, cash management, and sales instead of “survival”.

3) Losing momentum.

Many new entrepreneurs have ambitions to start a business so they create a website, try to make a few sales, go all out for a few months and then stop completely. Building a business is all about momentum. If you had 24 hours to spend on a business they would be put to far better use by spending one hour a day than for 24 hours straight.

It takes time to develop a new company and for people to react to what you have to offer. Never lose the momentum and even if your business is only a part time initiative for you at the moment, make sure that every day you are making progress of some sort to move your company forward.

So true!

4) Doing it all alone.

Nobody is perfect or has the skills to do everything themselves. You need to understand what it is that you bring to the table and what you need to surround yourself with. If, for example, you are very strong at inventing but don’t want to sell then you need to find a salesperson to help you.

You won’t succeed by forcing yourself to do things that you truly don’t enjoy and will never be good at. Know where you stand and what value you can offer. By getting people around you who complement your skills, you will be able to achieve your goals and have a lot more fun along the way!

I would call this “thinking you can do it all alone”. New businesses should look to outsource non-critical functions (like book keeping) and focus on executing on the things that will bring revenue in the door (like sales).

5) Not hiring right away.

You should begin looking at who can be brought on board to help you from the first day of starting your company. There will be tasks in any business that you, as the owner, should not be focusing on if you hope to build any sort of sizable organization. Why are you doing admin work when you should be out closing customers, talking to the media, and landing new partnerships?

But I’m broke! How can I hire someone? Even if you have a $0 budget you can find people to work for you through high school and foreign student internship programs. Once you have a budget, you can bring people on board for as little as one hour a day (what I first did) and then increase their hours when you can afford it. You need to be spending your time working on the business and not in the business.

This is a huge debate in the world of startups. I fall on the “wait to hire” side.  Also, hiring non-skilled labor, as suggested above, can be a huge burden as you try to keep interns, etc from screwing up. Look to outsource first. Look for consultants willing to work with you for minimal hours per week. Look for people who will work for stock. Make sure they are all skilled. Focus on the most important activities.

6. Doing it just for the money.

If you don’t truly love your business then you won’t be successful. If you read the stories of famous entrepreneurs and how they built their organizations you will find that it all comes down to the root of loving what you are doing.

Money is definitely important, as most companies are for-profit enterprises, but it will often take a long time to come and if you don’t truly enjoy your work then you won’t be able to convince yourself to keep going. You can only do something that you don’t really love for so long before you give up.

The author states “If you don’t truly love your business then you won’t be successful.”, which I no longer believe. Money can be huge motivator. I firmly believe that Silicon Valley runs on the prospect of riches more than the desire to innovate. That said, its hard to get rich starting a new business. Go work in sales if you want to make real money without the stress of owning your own company.  

7. Getting to year 1, past year 2.

Many entrepreneurs have a hard time getting to the end of year one. Typically it’s because they started the business on a whim and got excited about an opportunity but didn’t do the proper research. These entrepreneurs usually run out of money and close down after a few months.

A second challenge is getting through year two. It usually takes three years of hard work to make a business. Year one is all about the excitement of getting started. You’re high on energy and ready to take on the world. In year two entrepreneurs often find themselves still not making much money and the startup excitement has faded. You’ll need to work your way through the downturn and know that the money is coming if you keep at it.

Agreed but this isn’t a “mistake” people make.

8. Don’t build around a customer.

The best way to make a lot of money quickly is to find a customer who has a problem and is willing to pay you to solve it - and then you go out and build the solution. Most entrepreneurs take the opposite mentality of “if I build it, then will come” only to realize that they’ve built it and nobody is coming. Instead of talking to customers as to why they’re not coming they decided to continue building and building. Soon they find out that they’ve invested years of work and nobody is interested in buying from them.

The companies with the highest failure rates are restaurants because they are usually built around an owner’s personal tastes. Meanwhile, the entrepreneurs with the lowest failure rates are lawyers and accountants because they are based around a service that we all need (whether we like it or not!) Talk to potential customers, see what they are interested in, identify who has money and what their pains are and then create your product / service around them.

AGREED! The first paragraph perfectly defines what I see in a lot of “tech” entrepreneurs in Utah. They think its cool so everybody else will…right? Wrong. In Utah we lack vision and basic market research skills (among other things).

9. Don’t seek mentors.

A great way to get a business going is to find out what other people have done to achieve success and implement those strategies into your own company. Find mentors who have knowledge of your industry and will give you time out of their day to help you.

You could set up a formal board of advisers and compensate people for their time but if you’re a startup you can play on the fact that most entrepreneurs are willing to help out a fellow business owner as a way to give back. If you show genuine appreciation and approach the right people, the advice you get will help make or break your company.

This is right on. Create a great board of advisers and find mentors who can help you. It will make all the difference in the world!

10. Don’t get involved in the community.

Tied in with not seeking mentors is not getting involved in the small business community. Countless opportunities are generated by connecting with other young entrepreneurs and finding out what they are up to and how you can help. You will get new business opportunities, partners, investment, media attention, ideas for productive tools to use, advice for your company, and many other resources that otherwise would take you years of trial and error to figure out (if you ever do at all).

I would call this “not networking” but what he says is so true.

A great community to be involved in, needless to say, is the Young Entrepreneur Forums, where there are over 32,500 entrepreneurs waiting to meet you and help you grow your business!

Evan Carmichael
YoungEntrepreneur.com Blog Manager

Evan, overall good advice. Thanks.

As part of the “Entrepreneurship & the Family” theme that I started a few months ago, I’d like to interview a few entrepreneurs about their experience of raising a family while being an entrepreneur.  In fact, it’d be great to ask a few questions to the spouse of the entrepreneur too.

If you are an entrepreneur with a family, the spouse of an entrepreneur, or if you know an entrepreneur with a family and would be interested/willing to chat… please contact me at “bblake at fundinguniverse.com”.

My brother Dave (the one that works at Omniture) let me know about the Omniture-Sponsored website www.SiliconSlopes.com. If you are an entrepreneur/business professional in Utah (or someone that spends time in Utah), I highly recommend checking out the site. Omniture has done a great job of compiling a ton of information about the Utah business community and creating in interactive community. Here are some of the things that you’ll find on the site:

• Deal flow reports
• Blogs
• HUGE list of Utah companies with stats on each one
• Events

Thanks to Phil Windley, I found out about the very-easy-to-use web app TripIt. TripIt is a new tool that will manage your travel plans and itinerary for you (i.e. flight schedule, hotel reservations, directions from airport to hotel, weather suggestions, etc.). The best part about the tool is that all you have to do is email your itinerary to plans@tripit.com and it will do the rest. In fact, you don’t even have to register the first time that you use it… just send the email and it will reply with a confirmation and allow you to register the next time that you visit the site.

As you can tell, I am very impressed. It made my travel arrangements last weekend very convenient because I didn’t have to the spend the time figuring out directions, maps, etc. TripIt also has a tool that allows me to share my itinerary with others (those traveling or others that need the information).

Highly recommended.

“It’s been a busy few weeks,” Matt Mullenweg said with a grin in response to the question about Automattic’s recent $29M funding round. Interestingly enough, this funding trails the initial investment of $1M that wasn’t fully expended.

Mullenweg talks with Brad Baldwin while visiting Park City, Utah (shhh…remember Matt you promised not to tell anyone about how great it is here) about their development team, projects, the open source community and revenue models at Automattic. Mullenweg shares some of the features and enhancements that will appear in WordPress 2.5 to be released in March 2008.

Download This: iPod

I was recently tapped to judge the Westminster College business plan competition. Last Friday, a group of judges descended on Westminster to hear the presentations of the top ten semi-finalists. The top three teams will have their plans refined and sent to the UEC state business plan competition.

It took six hours to get through all the presentations. As time went on I found myself asking less questions of the teams and just giving them strait up advice like “If I were you guys I’d focus on x aspect of your plan - that’s where the money is.” or “I think you ought to take so and so out to lunch - they would have great advice for you.” Someone made the comment (in jest) that I was being hard on the groups. I might have been but I also gave them some dang good advice and names of people who could really help them.

As I was driving home I was thinking back to my early start up days. I was in an Internet company and it was right in the thick of the Web 1.0 blow up. Back then, no one really knew the Internet space. It was too new to everyone. If you made it in Web 1.0 you were flat out lucky. There were a ton of auction sites but somehow eBay emerged from the pack. There were a ton of companies selling books online but somehow Amazon emerged. People got lucky.

I wish, back then, that we had legitimate advisers who’d been through it before - people who could have put their arm around my shoulder and said “I like you but you’re doing it wrong. Let me help you” or “Let me make an introduction to some people who know your space that can give you good advice.” That would have been invaluable.

Back to the business plan competition.

People overdo it. People complicate their business models. It’s embarrassing to watch a well planned out 10 minute presentation only to have your first question be “I don’t get it. In one or two sentences tell me what your company does and how it makes money?” Yes, that happened.

I am also bothered by the fact that some people seem to think an exit strategy is a bad thing. In almost all cases when I would ask what the exit strategy is they would talk about their high commitment to the business and that they weren’t in it for an exit. Say what? Now, I don’t have a problem with a lifestyle business but don’t tell me having an exit strategy means you’re not committed to the business. I think the opposite is true.

The best plan of the night (IMHO) came from a nine months pregnant former school teacher who invented a device for keeping track of marker caps. Sounds kind of plain, unexciting, non-sexy, right? It is, but fundamentally it has all the elements required for success. On top of that, one of the judges has great contacts at QVC, HSN and in the infomercial space. He flipped for the idea and wants to help them get their business off the ground. It was awesome to watch that unfold.   

The company is Savvy May Creations. I wish them all the success in the world. I think they deserve it.

I’m here (written yesterday) at the rock-star-packed University Venture Fund conference in Salt Lake City. I didn’t even know about the conference until late last night when a fellow entrepreneur forwarded to me the conference agenda. As soon as I found out about the list of panelists & speakers, I quickly rearranged my schedule to make sure that I could attend. Here is a list of (my favorite) people that are here speaking:

• Brad Feld
• Will Price
• Eliot Jacobsen
• Josh Coates
• Rick Alden

While I missed the first panel on “What VC’s look for and Industry Trends,” I was able to make it to the entrepreneurship panel “Starting Your Company – Going from an Idea to Your Business.”

Here are a few highlights:

• Almost every entrepreneur on the panel saw a simple need in the market and, after noticing the market potential, pressed on the gas to build the company and penetrate the market.
• Common theme:each entrepreneur is “unemployable.” They are truly afraid of getting a “real job.”
• Almost every panelist had started and sold smaller companies before starting the companies that they are currently running.
• Advice from panelists: build a company that you are completely passionate about, because your passion for the space will drive the success of the business.

Highlights from Brad Feld’s Keynote:

• The most important decision he makes as a VC: do I support the CEO or not? If I do, then I do whatever he asks to build the company. If not, I will find another CEO that I completely support and trust.
• The Foundry Group is very open and transparent. They will take emails from anyone… and he will respond to anyone (within reason). I can personally attest that this is true — Brad is one of the most responsive people that I know.
• 2 Rules for investing: 1) invest in his area of strength (software, internet, etc.) and NOT outside of it. 2) Must believe in/trust the founder.

Overall, it was a fantastic conference and was stoked to attend.

I just read over a press release announcing that nominations are now open for the 2008 v|Spring v|100 award. What is the V|100? According to Dennis Wood, v|Springs Director of Human Capital, the v|100 is:

“Each year, vSpring asks members of the Utah business community to nominate individuals who are most likely to lead a successful startup venture in the next five to seven years in the IT (information technology) or biotech industries in a chief executive or chief technical officer role. Those nominees who garner the most votes from their peers in this second step of the annual voting process are then elected into the v|100.”

As I thought about the criteria for the v|100 I really took a step back and asked myself who I thought fit the bill. Who do I know (or not know) that is the most likely to lead a tech or bioteh firm as CEO or CTO in the five to seven years? I immediately discarded any attorney, academic and the Larry Miller types (heck he’s already made it in the auto industry - I don’t see him starting up a tech business in the next five to seven years).  I then threw out the blogger types, the self promoters and the has beens. I also threw out most of the angels that came to mind. They may invest in promising startups but I doubt most of them will “lead a successful startup venture in the next five to seven years in the IT or biotech industries…”  I’m also really trying hard to think of females that I can nominate (not that they aren’t out there). I think woman like Cydni Tetro at NextPage and Kim Jones from Verite probably fit the bill. Who else?

At first, I quickly filled up the 20 available fields. Then I started to delete people as I thought over the criteria. I ended up nominating only 12 people but I think they are 12 people who really fit the criteria.

At any rate, here’s the link to nominate. Here’s the link to the 2007 winners. 

Let the criteria be your guide.

I headed to New York Sunday for a quick trip to the National Retail Federation 97th Annual Convention and Expo, a.k.a. Retail’s Big Show. I mainly went to cruise the show and get info and meet a lot of the exhibitors. I ended up with a bit of extra time on Tuesday, so I headed down to [...]

I was having a conversation with Steve Spencer the other day about ConnectBlogs. He was surprised to learn that I was one of the guys behind ConnectBlogs. I thought I’d tell the story here for your enjoyment/enlightenment.

The first business model for 10Speed Media involved us going out and doing what we called “renegade” video. They were short videos on local companies that were hardly edited and intentionally rough. Here are a couple of good examples:

Judd Bagley interviews Shawn Nelson and takes a tour of Lovesac (pre-bankruptcy blow up):

Here’s Winter @ Westminster:

Here’s Pears (”We’re a shoe store…we sell mostly shoe’s”):

The whole idea was to create a new Web 2.0 public relations play. Part of our challenge was getting distribution for the video. My idea was to partner with local news outlets and create channels on their Web sites for our video along with any other video the news agency wanted to distribute. Judd Bagley and I put our heads together to try and figure out who we could run a test with. Judd came up with the idea of contacting Colin Kelly at Connect Magazine to see if we could partner with them and test the idea. Colin was more than happy to get together.

In the late winter of 2006 we met at the Tucanos in Provo and hashed out the plan. Colin had already wanted to create some kind of blog network for Connect. We convinced him to just aggregate a bunch of local blogs to one site. We told him that we’d pay for the development if he let us put up 10Speed videos. It was a deal.

So I grabbed Blake Snow and he built the first iteration of the ConnectBlogs. Judd and I compiled the list of the first bloggers that would be aggregated to the site. It launched sometime in the spring 2006 (if I remember right). By that time, 10Speed had changed its business model to a video-based affiliate network and no longer need media partnerships. So Connect Magazine took ConnectBlogs and ran with it. At some point, Jordy got involved and now runs the thing.

So there you go. That’s a brief history of ConnectBlogs and how it got here. Now you know. To all the other people involved - if I’m missing any details or got something wrong please feel free to sound off in the comments.   

The stock market no longer moves based on sound fundamentals - it swings on the emotion of fund managers, media opinion, politics, and the average Joe’s paranoia. 

On that note, Apple’s stock sunk yesterday when Steve Jobs didn’t announce any new ground breaking products at MacWorld. Fundamentally the company couldn’t be doing any better.

Hillary Clinton sheds a tear and the Democrats in New Hampshire hand her the primary vote.

Mike Huckabee promotes his “Christianity” and Iowa voters hand him the primary vote.

A prankster says “I’m going to blow you up” over a radio and the president almost goes to war with Iran.

A candidate says “were on the verge of another terrorist attack” to get himself more votes.

WalMart announce a new store in Heber. Some citizens assemble and protest against the plan but ignore the Walgreens and Lowe’s that come to town with it.

A person gets insulted by something said at church and gives up their religion over it.

A lawyer gives a passionate closing argument and a jury sets a guilty man free.

A business partner gets insulted by an email and drops a promising startup.

A police officer gets mad because a person won’t sign a ticket so he ends up tazzing the dude over it.

A stock gets sold short so a CEO goes on a “Jihad” that almost destroys the company he initially set out to protect.

“Experts” judging a business plan competition pick the worst plan out of the bunch because they want to give the guy a chance.

A powerful teachers union uses the media to lie to the people of Utah causing them to vote down sound legislation.