BoS 2011 Lightning Talks: Corey Reid, Freshbooks; Karl Treier, Prospect Stream; Justin Goeres, JKI; Patrick Foley, Microsoft; Tyler Rooney, 4ormat.

Here are the lightning talk videos from five speakers at the Business of Software conference 2011, starting with the winning talk by Justin Goeres of JKI. Lightning Talks are terrifying and very hard to pull off – each speaker was allowed 15 slides with 30 seconds for each slide.

That’s 7 minutes and 30 seconds in total. Done.

 Justin Goeres, JKI - Getting to Nowhere. the story of Richard Feyman’s quest to travel to Tuva.

An epic tale of an extraordinary physicist, Richard Feynman, and some pointless goal-setting that leads to an inner truth. Might bring a tear to your eye – if you are human.


Karl Treier, Prospect Stream - 20 Tips on Starting a Business

20 tips, 15 slides. No mean feat.


Patrick Foley, Microsoft - Confessions of a Wannapreneur

Try as we might, we couldn’t get Patrick to resign live on stage. Next year…

Corey Reid, Freshbooks - Be Afraid, Be Very Afraid

Of recruiting…

Tyler Rooney, 4ormat - Things I Learned the Hard Way at Amazon.com
A smart techie in a cardigan telling tales of relentless scalabilty. Geek heaven.

#BoS2012 takes place over 2 and a half days 1st-3rd October, 2012, at the Intercontinental Hotel, Boston.

Confirmed speakers this year include Professor Noam Wasserman, Jason Cohen, Gail Goodman, Mikey Traft, Adii Pienaar, Joel Spolsky, Peldi, Paul Kenny, Bob Dorf, Dharmesh Shah and others who spend their lives at the sharp end of software businesses around the world. We hope you will be able to join us.

There is a $800 discount on the full ticket price till midnight 24th May. If you didn’t make it to last year’s event, you will also get access to all of the talks from BoS 2011 when you register for BoS 2012.

Early Bird Registration Deadline midnight PST Thursday 24th May.

We will organise the Lightning Talks later in the year. If you want to be considered, drop me a line – mark at businessofsoftware . org with your contact details, a possible topic and ideally a link to a video of you speaking somewhere else.

We believe in sharing, we don’t necessarily believe in paper

Nice to see some proof that sharing some of the BoS love brings more cool people to the physical event. Just got this note…

"Just ordered my ticket, and am really looking forward to it. I attended live stream from my living room couch last year. It was great, but felt like I was missing out on the networking and interaction. One question. It says the ticket should be printed. Will it be possible to show the ticket on my iPhone instead?

Thanks,
KR"

Look forward to seeing you there and, 'Yes', you can bring the paper ticket with you if you wish but as long as your phone has a screen that can display the registration details, that is good enough. See you in Boston!

Don't forget, registration for BoS 2012 is open now. We hope to see you in Boston October 1st-3rd 2012 and the first EARLY BIRD DISCOUNT tickets run out midnight, March 31st. Save $900 on full registration.

Confirmed speakers this year include Professor Noam Wasserman, Jason Cohen, Mikey Traft, Adii Pienaar, Joel Spolksy, Peldi, Paul Kenny, Bob Dorf, Dharmesh Shah and others who spend their lives at the sharp end of software businesses around the world. We hope to see you there.

We believe in sharing, we don’t necessarily believe in paper

Nice to see some proof that sharing some of the BoS love brings more cool people to the physical event. Just got this note...

"Just ordered my ticket, and am really looking forward to it. I attended live stream from my living room couch last year. It was great, but felt like I was missing out on the networking and interaction. One question. It says the ticket should be printed. Will it be possible to show the ticket on my iPhone instead?

Thanks,
KR"

Look forward to seeing you there and, 'Yes', you can bring the paper ticket with you if you wish but as long as your phone has a screen that can display the registration details, that is good enough. See you in Boston!

Don't forget, registration for BoS 2012 is open now. We hope to see you in Boston October 1st-3rd 2012 and the first EARLY BIRD DISCOUNT tickets run out midnight, March 31st. Save $900 on full registration.

Confirmed speakers this year include Professor Noam Wasserman, Jason Cohen, Mikey Traft, Adii Pienaar, Joel Spolksy, Peldi, Paul Kenny, Bob Dorf, Dharmesh Shah and others who spend their lives at the sharp end of software businesses around the world. We hope to see you there.

BoS 2011 Lightning Talks: Corey Reid, Freshbooks; Karl Treier, Prospect Stream; Justin Goeres, JKI; Patrick Foley, Microsoft; Tyler Rooney, 4ormat.

Below are the lightning talk videos from five speakers at the Business of Software conference 2011, starting with the winning talk by Justin Goeres of JKI. Lightning Talks are terrifying and very hard to pull off - each speaker was allowed 15 slides with 30 seconds for each slide.

That's 7 minutes and 30 seconds in total. Done. 

Don't forget, registration for BoS 2012 is open now. We hope to see you in Boston October 1st-3rd 2012 and the first EARLY BIRD DISCOUNT tickets run out on March 30th. Save $900 on full registration.

Confirmed speakers this year include Professor Noam Wasserman, Gail Goodman, Dan Lyons, Jason Cohen, Mikey Traft, Adii Pienaar, Joel Spolksy, Peldi, Paul Kenny, Bob Dorf, Dharmesh Shah and others who spend their lives at the sharp end of software businesses around the world.

 Justin Goeres, JKI - Getting to Nowhere. the story of Richard Feyman's quest to travel to Tuva.

An epic tale of an extraordinary physicist, Richard Feynman, and some pointless goal-setting that leads to an inner truth. Might bring a tear to your eye - if you are human.

 

Karl Treier, Prospect Stream - 20 Tips on Starting a Business

20 tips, 15 slides. No mean feat. 

Patrick Foley, Microsoft - Confessions of a Wannapreneur

Try as we might, we couldn't get Patrick to resign live on stage. Next year... 

Corey Reid, Freshbooks - Be Afraid, Be Very Afraid

Of recruiting... 

Tyler Rooney, 4ormat - Things I Learned the Hard Way at Amazon.com

A smart techie in a cardigan telling tales of relentless scalabilty. Geek heaven. 

 

Don't forget, registration for BoS 2012 is open now. We hope to see you in Boston October 1st-3rd 2012 and the first EARLY BIRD DISCOUNT tickets run out on March 30th. Save $900 on full registration.

Confirmed speakers this year include Professor Noam Wasserman, Gail Goodman, Dan Lyons, Jason Cohen, Mikey Traft, Adii Pienaar, Joel Spolksy, Peldi, Paul Kenny, Bob Dorf, Dharmesh Shah and others who spend their lives at the sharp end of software businesses around the world.

We will organise the Lightning Talks later in the year. If you want to be considered, drop me a line - mark at businessofsoftware . org with your contact details, a possible topic and ideally a link to a video of you speaking somewhere else.

Fall In Love With Your Business, Not Your Business Plan


That business plan, that business plan,

I do not like that business plan.

I do not like the writing part,

I do not even like to start.

I do not like them at a bar,

I do not like them from afar.

~Dharmesh (with h/t to Dr. Seuss, who I read every day to my son)

My feelings on business plans varies: from extreme dislike to just mild irritation.

I don't think business plans are completely useless, just mostly so. And sometimes, they're even dangerous.

Here's why…

1. Business plans are energy-depleting exercises. When I went to MIT Sloan for business school, I took what was (and is) one of the “definitive” classes for entrepreneurs “New Enterprises”. The class was oriented around coming up with ideas, forging a team of classmates around that idea (you had to actually sell them) and then having that team write a business plan during the course. All of this was intermingled with some presentations and some guest lectures. All around, I loved the class but hated the writing of the business plan. It was painful. I had a great team — and it was still painful. We had a real business (what later morphed into my current company, HubSpot) — but it was still painful. And, took a lot of time. I'd much rather have been talking to potential customers or building product prototypes — both of those activities, unlike writing business plans, are energizing.

2. You should be committed to your business, not your business plan. As a way to capture your current plan and thinking about the business, business plans are inefficient. Shortly after you're done writing it (or editing it), you will realize that the plan is a little out-dated and does not reflect your current reality. Startups change constantly, especially in the early days when you're trying to find product market fit. The market changes, you get more feedback from your customers, and your understanding of the opportunity changes. Even more simply, you might just change your mind. In the early days, your startup is likely changing so frequently that going through the effort of making sure your business plan keeps up with your latest thinking is frustrating and futile. You're much, much better off spending that time and energy talking to customers and making the product better. Business plans are often dangerous, because you become overly committed to what you've written down. The risk is that you revise the plan so much, have toiled so many nights getting it just right that you actually start becoming emotionally attached to the plan. It becomes your baby — not the business itself. This can be fatal. You want to stay pragmatic and willing to change. If you have a 100 page tome that you've poured your heart and soul into late into the night, you'll have this small piece of you that begins resisting the change to the plan. That's a Very Bad Thing.

3. Business plans are written in the waterfall method, and you need to be agile. Some entrepreneurs take the “classic” approach to a startup. Have idea. Write business plan. Rewrite business plan. Rewrite busines plan. Pitch plan to investors, team maters, etc. Keep pitching until you get money or fall into the dark abyss. If you raise money, go out and start “executing” on the plan. Later discover that some of the core elements of the plan were flat out wrong. Does those sequence of things sound familiar? If you're a developer, it will sound to you an awful lot like the “waterfall method” of software development. And, in that case, you just listen to your instincts to run screaming in the other direction. Agile is not just for software development, it's for startup development too.

4. Nobody will read your business plan. If you enjoy the act of writing a business plan and like having it, that's fine. Perhaps you like sleeping with it under your pillow because it gives you comfort. That's cool. As long as you don't have some delusional idea that anyone is going to actually read it, you're fine. It's when you expect potential investors, team members and other unsuspecting victims to read your masterful work of brilliance that you have a problem. Once you get through the first few iterations, it's likely that even you won't want to read the plan anymore. You'll become sick of it.

5. It's a work of fiction. The executive summary can be useful (but can be manifested in much better ways), but a lot of the marketing sizing, financial projections and long narratives around go-to-market strategy are usually complete works of fiction. Some plans have more reliable market data than others. Some include more realistic projections than others. But, they're all works of fiction. All that varies is the degree to which the business plan resembles the truth and the degree to which the entrepreneur believes the fiction.

blog onstartups

6. Write a blog, not a business plan. Although I advise against writing the classic business plan, I'm not against writing down your ideas and describing them in a way that is consumable by other humans. In fact, I'm a big fan of that. Just not in the form of a business plan. Instead of writing a business plan, which nobody will read, write a blog instead. Unlike a business plan, a few people will actually read your blog. The blog has the added value of being interactive. People can leave comments on your blog. They can poke at your ideas, tell you about these other 3 startups that sound like they're working on something similar. They can call you an idiot. All of that is useful. The earlier in the process you can get feedback from places other than the voices inside your head that talk to you at 1am in the morning after a long day of work, the better off you are. Unlike a business plan, a blog is useful forever. It pulls people into your business (through things like Google search). It helps people visiting your website to get a better understanding of what's going on in your head. It serves as both a vehicle for crystallizing your thinking and as a tool for marketing. In fact, it's one of the most important inbound marketing tools at your disposal. Every startup should have a blog.  

What do you think?  Have you tried writing a business plan? Do you know of a "friend" that tried to write one, because they thought they needed one for some reason?What's your take?

Looking for other startup fanatics?  Request access to the OnStartups LinkedIn Group.  130,000+ members and growing daily.

Oh, and by the way, you should follow me on twitter: @dharmesh.


FA092 – How to Get Automated Newsletter Income

This is as close to getting passive income as I’ve seen from someone actively running his own business. Oh, I’m not changing my position on earning passive income.

This is a case of Leveraged Income, but boy howdy, it sure is leveraged.

In this episode, you’ll meet Matt Paulson (one smart dude) who created a premium newsletter that he promotes on his financial news sites.

His audience signs up for the newsletter and he gets $10 to $15 per month. Software does all the rest. No writing “epic” content. Or “connecting” on social media. Just delivering a quality product to their inbox each day — automatically.

Hopefully, I got your interest piqued. This episode should get you thinking on how you’re going to create a premium newsletter for your audience and maybe even make it completely automated.

Using remarketing to sell more software

Earlier this week, Dave Collins asked for feedback on remarketing. I have already posted some remarks in the comments under his blog post, but then I thought, why not write about my experience with remarketing in a longer blog post. So here it is.

First, a quick reminder of what remarketing is:

Remarketing is a cookie-based advertising system that lets you show your ads to people who have already visited your website.
Your ads can appear on any site that the user visits after visiting yours.

For example: A user visits my Movie Collector product page (it doesn’t matter where he came from, an ad, organic result, a link on another website, etc…). Now after he visits my website, this user goes on to browse the internet, visiting other websites. And suddenly everywhere he goes, he sees Movie Collector ads. Leaderboards, towers, inline rectangles, even little text ads. My ads are following him around the web.

One important thing to understand: remarketing ads do not only appear on websites related to your product, like your regular display network ads. No, they appear everywhere, on any site. Remarketing lets you target specific users on any site, as opposed to all users on specific sites.

Remarketing for software

I started using Remarketing for our Collectorz.com software 2 years ago, when Adwords started offering it. Like most advertising and marketing tools, it didn’t work right out-of-the-box. It took a bit of tweaking and tuning to make it effective, but ultimately I found that remarketing can be a great fit for software vendors, especially if you use some kind of “try-before-you-buy” system.
Here’s some factors I played around with:

  • Message
  • Targeting, or: who to cookie?
  • Audience Membership Duration and Frequency Capping
  • Bidding type: CPC or CPA
  • Reducing the creepiness

Let’s discuss these one by one:

Message

This is the first thing I experimented with. Mainly, how obvious do I make it to users that they are being remarketed to and how hard do I push for the sale?

One could go as far as saying:

“Hey, remember Movie Collector?
Please come back and I’ll give you $10 off”

However, my feeling was that this would make it too clear to visitors that they saw the ad because they visited my website earlier. It would probably annoy too many of my visitors, so I didn’t even try that.

So my first try was a bit less creepy, but still pretty pushy. The message was

“Special offer: Save $10 on Comic Collector today. Coupon: XXX-XXX”

The idea behind this was: these people have already visited my website, so they already know what Comic Collector is and do not need further explaining. I could push for the sale now, with the added incentive of the $10 discount coupon. The banner also linked straight to our shop.

This did result in some sales, but not many. And I never saw the special remarketing coupon being used. So I concluded this sale-focused approach was too direct.
(a year later I tried this direct-to-shop approach again, with the same results, no one ever used the special coupon)

When looking at the results of the sales ad above, I noticed something interesting. The ad only resulted in a couple of normal conversions, but it generated many “View-through conversions” (Adwords terminology for “conversions that happened within 30 days after a user saw, but did not click, a display ad”). In this case, conversions being sign-ups for the trial version. It looked like the mere seeing of my ads was reminding visitors of my product and even triggering them to go back to my site and sign-up for the trial after all.

So in the end, I decided to use my regular Display Network ads for remarketing, linking them to my regular product landing page. Like so:

This resulted in higher CTRs and more conversions, both regular and view-through.
The remarketing ads are now just serving as a reminder of our existence, a way to stay top-of-mind and, excuse me for using the dreaded B-word, Branding.

Targeting, or: who to cookie?

This is probably the most important parameter to experiment with. Some tips:

Tip 1: Product-specific audience lists
Of course, you can just add the remarketing scripts to all pages of your website, creating one audience list, and then target that audience with your remarketing ads. But if you have multiple products, you should create separate audiences per product, so that you can show them targeted product-specific ads. I am separating my visitors into 5 product-specific audiences, plus I have one extra audience for users who visit the home/hub page of the Collectorz.com site only.

Tip 2: Cooky first-time visitors only
I started out targeting all visitors of the Collectorz.com site. However, after sending a broadcast email to my existing Music Collector customers, about a minor update, I noticed a huge jump in the impressions of my Music Collector remarketing ad group. This made me realize my site was also dropping the remarketing cookie for my existing customers. And I definitely didn’t want to spend precious advertising money on them, as they already purchased Music Collector!
So I added some PHP code to my site that includes the remarketing script only for first time visitors, on their first page view. This dramatically improved the conversion rate of my remarketing campaigns, simply by decreasing the size of the audiences (and thus the number of impressions).

Tip 3: Separate audiences for different “levels of interest”
Instead of adding all visitors to your audience lists, you may consider adding only those who visited a specific section of your website (e.g. your Features page), or performed a specific action (e.g. downloaded your trial edition). The more interest the visitor shows, the more likely he/she is to convert. So keeping your audience limited to visitors who have shown a certain level of interest will reduce the size of your audience lists, reduce costs, and improve conversion rates.

Alternatively, you can keep remarketing to everyone, but drop separate cookies depending on interest level. This way you can target them in separate campaigns with their own ads, bids and settings. I am generating great results by separating “visitors” and “trial users”, then using higher bids and longer audience memberships for trial users.

Tip 4: Target buyers for up-selling
Finally, you could take the interest targeting one step further and drop a separate audience cookie for buyers, e.g. on your “Thanks for your purchase” page. The resulting audience can then be used for cross-selling your other products, up-selling to add-ons or more expensive versions, etc…
Note that the your audience must contain at least 100 users before Adwords starts showing impressions to them, so it may take a while before your “customers” ad group gets impressions.

Audience Membership Duration and Frequency Capping

When you define your remarketing audiences, one of the settings is the “Membership Duration”. My first try for this setting was 60 days, because for us that is about the longest it takes for a first time visitor to actually convert to a customer.
In practice, this turned out to be way too long. Of course, the chance of conversion severely drops after the first few days, so I quickly changed the setting to 30 days. Then after I created the separate audiences for visitors and trial users, I decreased the membership of the visitor audience even further, to 7 days. The membership duration of the trial user audience is still set to 30 days.

The 2nd setting that I found to be important to tweak the results (mainly the costs), is the Frequency Capping. This setting is not defined at the audience level, but rather a regular setting of your Adwords campaigns.
The default value is “No cap on impressions” and that is definitely not what you want for your remarketing campaigns, if only to keep down the annoyance factor. This default setting will sometimes even show your ad multiple times on one page, especially on sites that do not have a lot of competing advertisers.
I currently have it set to “5 impressions per day per ad group”, which caused a huge decrease in impressions and costs.

Bidding type: CPC or CPA

This is a tricky one. I am a huge fan of the conversion optimizer, so most of my campaigns are set to CPA bidding. For remarketing campaigns CPA bidding can work fine too, but there are two things to watch out for:

View-through conversions
Google’s conversion optimizer only optimizes for conversions following an actual click on your ad. View-through conversions are not counted. (this is not specific to remarketing, it’s like this for all campaigns)
Now, as I said above, remarketing campaigns typically generate a lot of view-through conversions. I think that is because just seeing your ads reminds people of your site or your product. So when setting your CPA bid make sure to consider this. In general, you can set the CPA bid to a value higher than what you would normally pay for a conversion.

On the other hand, think about this: Are these view-through conversions actually being caused by your ad? I mean, all visitors get a remarketing cookie, so all of them will start seeing your ads on other sites. Many (most?) of them are likely to see your ad on some other site before they convert (unless they convert immediately on their first visit). Which may mean that many of your regular conversions could be attributed to your remarketing campaign as view-through conversions, even if the ad didn’t help at all. The impact of this effect of course depends on the type of conversions you track (downloads, sign-ups, sales), how fast your typical visitor converts, your frequency capping settings, etc…
But be aware of this effect while looking at your conversion data, and when deciding between CPC and CPA.

Conversion types and targeting
This may be an obvious one, but it still bit me. Let me explain:
Let’s say your conversion tracking is set up to count trial sign-ups as conversions. Then you create a remarketing campaign that only targets highly interested visitors, that is, those that signed up your trial edition. Now guess how many conversions that campaign will generate?
Of course, the right answer is: almost none.
This makes it hard to judge the effectiveness of the campaign and makes it impossible to use CPA bidding. Unless you also track your sales as conversions. But then you still have to be aware that the conversions you do get are probably all sales and thus way more valuable than your average conversion.

Reducing the creepiness factor

An often heard comment about remarketing is “It’s creepy!”. But is it?
I am sure when Adwords was launched, people found it creepy that after doing a Google search, suddenly ads appeared on the side that exactly matched what they were searching for. Now? Not so much.
A bit later, people were upset about targeted ads appearing in Gmail, matching the contents of their email. Outcries of “Google is reading my email!” were everywhere. Now? Who cares…
But yeah, I am sure some people will find remarketing creepy. But IMO it’s just the next step in better ad targeting. In general, I think people would prefer to see remarketing ads that are actually targeted at what they’re interested in, as opposed to random ads of uninteresting stuff. The better the targeting of ads, the less annoying they are.

Still, there’s some things you can do to reduce the creepiness factor of remarketing:

  • Cap your frequency: Don’t leave your frequency set to “no cap”, as users will indeed see your ad everywhere, on every site they visit, all day long. They will feel stalked. Instead set it to 5 per user per day, maybe even lower.
  • Limit your Audience Membership Duration: Don’t be too persistent. Reminding visitors of your existence is fine, but make sure to give up after a reasonable period of time. One week seems to work for me.
  • Have a less confronting message: Don’t make it too obvious from the ad that the user is being retargeted, e.g. by saying “thanks for visiting Collectorz.com, please come back!”. Instead, make it seem like the user just happens to see your ad
  • Only cookie interested visitors: Take a look at the bounce-rate of your website. Note how many visitors immediately leave your website within seconds. Then realize all these bouncing visitors have been given your remarketing cookie and will start seeing your remarketing ads. Do you really want that? Consider not dropping the cookie on your landing page, but one step further in your conversion process.

I hope the above will help you tweak your remarketing campaigns to make them more effective (and less creepy :-) ).

I’m starting a Mastermind Group – who’s up for it?

The hardest part of building a startup isn’t coding, marketing, building the web site, finding your market, defining your product, raising seed money, raising equity money, getting press attention, building a Twitter or Facebook or Google+ following, finding a URL, setting up a VPS, getting approved by Apple, finding a co-founder, making a YouTube video, writing marketing copy, building a blog, deploying to your server, scaling your servers, managing your cashflow, doing your business taxes, or getting Robert Scoble to notice you.

It’s dealing with the doubts, fears, objections echoing around in your own head, dragging you down. Alone.

Mastermind Groups is an idea that’s been kicking around for 85+ years. Find a number of like-minded people trying to succeed, provide each other with feedback, constructive criticism, different points of view, resources, accountability. Meet on a regular basis, what happens in the group stays in the group, mutual respect and support are the rule.

A quick google makes it clear more than a few people have tried to make money one way or another out of Mastermind Groups. Chris Pirillo, whom I respect, started “Gnomies” a couple of months ago and I wish him well. But that is not kind of Mastermind Group I want to build or join.

What I want to do is find up to 1o technical founders closing in on launching a new startup willing to meet once a week via Skype or probably Google+ Hangouts to brainstorm ideas, get and give feedback, and support each other. Lifehack.org did a good writeup on what Mastermind group is really about – I intend to follow it.

Who’s in? Email me at bob.walsh@47hats.com.

You’re reading I’m starting a Mastermind Group – who’s up for it? from: 47 Hats. If you like this post, there’s plenty more! Want more sales for your startup? Stop by and let’s chat, or consider a Microconsult with Bob Walsh.

JOBS bill passes – New era for startup funding starts now.

If you’ve founded a startup, or are thinking of founding a startup, your API to OPM (Other People’s Money) just got earthshakingly easier to use.

Sitting in President Obama’s inbox this afternoon is HR 3606 – the JOBS act – ready for his signature, SEC rulemaking, and going into production. Three startup constituencies are going to get some good stuff from Washington:

  • Angels and Angel Groups will be able to do much more business, easier, and actually solicit business much more directly and publicly,
  • The onramp for taking successful startups public just got much easier to navigate, meaning it won’t take a Facebook-sized business to make this an attractive way of raising capital again,
  • People like you and I (not “accredited investors”) will be able to buy stock through crowdsourced sites (called “funding portals”) in startups who with relatively little effort will be able to list with these portals. How much stock? Up to 10% of our annual incomes or $10K whichever is less. As for startups, those who go through portals, can crowdsource up to $2 million a year.

Three other parameters worth mentioning. While a startup could do all the legal stuff that needs to be done and sell stock direct, it’s going to be a lot easier, and a lot more credible, to go through a portal who can do all that for a hundred, a thousand, 10 thousand startups. And for all the non-tech would-be startup founders, no, you can’t use this kind of stock to pay for your Facebook clone – you can’t own crowdsourced stock in a company you work for. And speaking of those new funding portals, how much will they be making? Dunno. Stay tuned as the SEC makes the rules. At least they will be startups, insofar by at least one informed reading of the bill, existing stock brokers cannot become crowdsource brokers.

New Rules, new Game.

So how is this all going to play out after Obama signs the bill and the SEC spends six months writing out the nitty-gritty there will be devils in these details rules?

First off, go get on Motaavi’s mailing list, like now. There’s a great story by PandoDaily writer Erin Griffith about how Motaavi’s co-founder Melanie Plageman pulled a Ms. Smith Goes To Washington, buttonholing staffers, started building a database of startup by congressional district,  and learning how the DC game is played. Upshot? Great networking, and already Motaavi is gearing up to start posting startup profiles. There will be of course other players – SecondMarket, KickStarter, Gate Technologies have been mentioned – but Melanie now knows the right people, is tied into the DC tech caucus, and has a power suit to wear while walking the walk :) .

Second off, you need to get serious about a) what the hell your startup is going to do to be successful and b) just exactly why you want Other People’s Money. The single biggest hurdle to launching a startup is that it’s a killer to launch a company and hold down a day job. Crowdsourcing your big leap forward makes sense, and the 20 self-funded startups out there for every traditionally funded startup will be getting into the game. And that means it’s time to get read and adopt  both Steve Blank’s brand new Startup Owner’s Manual and Ash Maurya’s Running Lean, 2nd edition. Both these guys are channeling Alex Osterwalder’s Business Model Canvas that gives founders a way of figuring out how their startups succeed and investors a much better way of comparing startups to startups that b.s. business plans.

Re what you plan to do with the money you crowdsource, that’s definitely an app I’d like to see – and you will too unless you delight in using crappy old Excel accounting templates divorced from startup reality. Keep in mind those funding portals have an ongoing responsibility under the JOBS act to report to their investors where the money invested goes.

Third off, expect to see the rise of a brand new kind of Angel/VC. When the likes of you and I go buy $300 of NextBigStartup through a funding portal, we (or at least I!) will be doing it in the hopes of making some money, money we get when that startup gets bought and the new owners buy out the crowdsourced owners, or the company goes public, or when an “accredited investor” makes us a good offer. We won’t be able to sell our stock for a year (see Sec. 4A(e)(2) of the HR3606 if you’re interested). But if a Ron Conway, Brad Feld or Dave McClure want to take buy that $300 of stock for say $900, I for one won’t say no.

So what happens when non-rich people can buy startup stock instead of lotto tickets, successful startups can go IPO-Big, Angels can do real audition calls for startups not American Idol-like competitions and a whole lot more would be startup founders can get that critical first couple of million dollars? Stay tuned – but that damn Internet has gone and done it again – disrupted how things used to be.

 

 

You’re reading JOBS bill passes – New era for startup funding starts now. from: 47 Hats. If you like this post, there’s plenty more! Want more sales for your startup? Stop by and let’s chat, or consider a Microconsult with Bob Walsh.