At the beginning of this month, I read another book on personal finances, and decided that same day to put some of the advice to practical use. Some of the stuff might make you laugh (using envelopes to control my expenses), but before I get into that in one of my future posts, I’d like to say how much I feel the personal finances impact your business and especially your startup!
I see personal finances as a set of habits. Do you:
– Measure something or not
– Plan something or not
– Stick to your goals and decisions or not.
Going broke, or being without money is a habitual pattern, nothing more. Unfortunately I will also have to skip the importance of habits, will power, goal setting in life and personal finances for some other time, because that’s too broad of a topic.
Maybe you know someone who is really lazy, undisciplined with more than a few bad habits (smoking, alcohol, drugs) and still very successful under some definitions. Let’s say he has a great business, a lot of money, a great wife, great body, whatever. He is winning in a certain field. Here’s the problem with that, when it’s going great, people think it’s going to be great forever. When it’s going bad, people also think it’s going to be bad forever. But that’s not how it goes. Every recession, depression and war had an end. Ever economic boom, revolutionary product had either an end, or a major slow down. A lot of people are so successful in certain fields, but so remarkably unhappy in other parts of their life they go so far that they commit suicide. Remember Curt Cobain? You don’t have to go so far, I am sure you know Robin Williams. All the money and success in the world didn’t mean anything that day when he decided to commit suicide. Then again, if you ask 99% of the people what is their biggest problem, they’ll say, money (so it’s a personal finance problem, a set of habits). Money is not the problem. I’ll say that again, money is never the problem. The problem is you. To paraphrase George Carlin: “The money is fine. The people are fu**ed …”.
Those same people spend more than they earn. I am sure you heard this in the movie Fight Club, they: “Buy stuff they don’t need, to impress people they don’t like”. So what happens when someone starts a company? Well, in the beginning it’s just them (or perhaps one or two partners), and their habits and their personal finances have a major influence! Their ability to do budget planing. Skills to do personal finances. It’s the management that decides to buy a new chair, instead of investing in the product. It’s the management decision to buy a new car, instead of investing in research. It’s the management decision to go to a conference instead of doing real lead generation.
When a startup is failing it takes some guts to admit that it’s the management problem. In startups there are so few people that you have no one to point to, then yourself. But many people don’t. They point their fingers at the market, the problem they are solving, the money they don’t have, the people that surround them and so on. It even gets worse. You don’t only “transfer” your habits to your startup, but since you are personally spending more than you are making, you have to suck out the money out of your startup! In return, that more than cripples the startup that maybe had a chance if you didn’t have to buy cigarettes, travel, party, party, party. Who’s going to pay for all that? The fledgling business!
Amazing how so many people start “changing the world” and try to solve a huge problem in the world, and they don’t even know where their personal money is going! I know, I was certainly guilty of this. Right now, I am just mad at myself for being so stupid in the past. But just a little bit, because I know that it’s not important what happened to you, it’s important what you decide! You have to make a decision that from this day you will change your habits, which will have a strong impact on your personal finances, and ultimately on your startup! Yes dear reader, I admited my mistakes, I sucked it up, and now changing my habits.
Start small, start anywhere!
Skip one coffee per day. Skip one candy bar per week. Skip one dinner in a restaurant. Skip here, and a skip there.
Make one more phone call. Do one more interview. Make one more sale. Send one more newsletter. Little bit here, and a little bit there.
Repeat each month, and add just one more. Just one.
Make it a golden rule to spend less than you earn! No matter what! If you make this your habit, so will your startup. Ultimately, that means that you and your startup are making more each month, which means that all you now need is time to pass. If there’s one thing you can be certain of, is that time will pass. Ten years from now, you will still be here. There’s a good chance that 50 years from now, you will still be here! The medical / biomedical, technological, psychological advances will surely improve people lives, and increase longevity. So start now!
Don’t be that guy or gal who has to suck the money out of startup, and because of that, pay more taxes. What happens next is that they complain about high taxes, and how the government is the problem. Taking the money out of a business in order to buy junk? Not really. Hey, if you want to buy expensive toys, you better be ready to cough up some dough. I heard the new iPhone 6+ is out, with a nice smartwatch.
Don’t fail. Don’t spend, more than you make. We need more people like you. We need people who build startups, who fight, who create instead of consume. Will you be that person?
Last week was one of the best weeks in my life, hands down. Why? First of all, thanks to Stevica Kuharski I was invited to come to Vis for free for a week. I asked what’s the catch? He said I have to do what I love, help startups and act as a mentor. I had absolutely no problem with that, and after talking with my investor (who was also coming as a mentor) and my partner (Edi, the other WhoAPI co-founder) I was on my way.
However, I wouldn’t be on my way if the whole camp wasn’t funded by the U.S. embassy! Now if that wasn’t cool I don’t know what is… Also, most of the images and video used here are from U.S. embassy’s in Zagreb facebook page.
On startupcamp Vis there were 22 startups, and top 3 already got coverage. Just to show you the quality of ideas and startups there I decided to interview co-founders of my three favorite startups there. Some may think why focus on the losers? Well here’s where they are wrong. I see them as winners. They were winners because they showed up on Vis, they were winners because they made profound progress from first pitch on day 1 to last pitch on day 3. And in my eyes, they are winners because they show passion and commitment to do what it takes to succeed. Perhaps there are projects at later stage or with better ideas. This doesn’t matter because these people are ready for overnight success, they are willing to work overnight. They will finish their projects, and if necessary find better ideas.
I published their answers in alphabetic order – I love them equally and if I was an investor I would do some serious due diligence in order to give them seed funding. This post is for them, and I am hoping to help them once again!
Oh yea, it’s ON, Croatia’s got startups!
Goran: Stevica, you an Saša Cvetojević from Croatian angel network were the two conspirators in the master plan called Startup Camp Vis. Can you tell my readears how did you get to this idea, and what was the crucial turning point when you realized that this is actually going to happen?
This idea crossed my mind while we were in Barcelona. Four of us, Sasa, Damir Sabol and Marjan Zitnik were living for 6 days together, which looked like a camp. Then I’ve realized that having a camp for startups would be blast. Participating a panel organized by US Embassy, I’ve expressed this idea to audience. Sita from US Embassy asked few questions and approached me after the panel asking “Were you serious about that camp?”. I’ve sad that I was. “OK, we’d like to pay for it”, she concluded.
Goran: You played a key role in organising the event, to which I personally thank you. I really think we made a difference. Can you tell me what was the most rewarding thing you saw in Startup Camp Vis. Obviously we all had to bail out from our offices to make this happen.
The most rewarding thing was seeing students changing their pitches and presentations. They have made tremendous progress during just two days. I still feel warm around my heart thinking of it.
Goran: Do you think that camps like this can make a real difference in the croatian economy, and what needs to happen on larger scale for this camps to occur more often?
Yes, in the long run it could make a difference. Pitched projects now need to grow more and to mature. Only then they will be able to attract foreign investors. For sure we would need more serious young entrepreneurs to have camps more often, not just in Croatia, but in the whole region as well.
Goran: In your oppinion, what was the thing that was missing? More mentors, more time, better ideas, more keyotes, something else? Can this be provided in perhaps next camp?
We’ve missed one more day. For the next camp we’ll squeeze it in and provide students lectures about dilution of ownership, how to create their pitches and basics of investments.
Goran: What makes your startup so special and why do you think you were invited to come to
Seedcamp, and this week’s Startup Camp on Vis? What exactly does your startup do, and tell us a
little bit about your team (age, background, qualities, etc)?
What makes us special are basically two things- firstly the team whose energy is unstoppable, and secondly the idea behind it. These two made us pass to the competition part in Vis, work all day and night there (literally) and get much more than we’ve expected (and we expected A LOT).
Our idea is to connect organizers of all kinds of non-formal educational events and their prospect users (attendees) by their previously chosen criteria. The reality is they sometimes just can’t seem to find each other. We want to provide them an ultimate place to meet and make their search and life much easier.
Our team for now consists of us two, Matea (22) and Ilona (24), we’re specialized in Marketing, Business and Finance fields, however we are on the search for the development partner, equally enthusiastic in this as we are. We both come from entrepreneurial families and, therefore, have the insight of all processes needed for something to succeed. And that’s exactly what we have in mind with this project.
Goran: Whats the most valuable thing you got during the Startup Camp Vis? Do you think camps like
this should happen more often, and should perhaps the Croatian government fund such an event/
camp? In general, what can you say about the Startup Camp Vis?
The most important thing we’ve learned in Vis was that we ought to share, comment, ask, criticize and pitch our idea as much as possible. That’s different from the usual Croatian mindset, but you just can’t progress alone, in your room, holding jealously your idea to yourself. Startups need to be dynamic, flexible and fast. With that in mind, Startup Camp Vis was the best place to be this year.
Things like SCVis should most definitely happen more often, and it would be great if the Government would fund them, but somehow we think it will continue to depend on the enthusiastic and crazy people who do it out of the pure belief in young people and their ideas. They were the ones who made Camp flawlessly organized, filled with awesome energy and people.
It’s really a great thing in every sense of that word for them to do it and, without any cliché, make the world a bit better place.
Goran: Were you satisfied with my performance as a mentor, and have the other mentors deliver what
you expected of them? Did we lack some critical information to your startup, and what would that
You were a great mentor, to be honest, one of the toughest but with the constructive critics. It was great to listen to you because were/are a startup yourself. Therefore, you were the only one who gave us opinion with the startup perspective which was very valuable.
All the mentors gave us some great feedback that really helped us, not just for the future, but we literary implemented them right away. It was incredible how none of the teams said for Camp it was “Ok”, or “Good”, we were all thrilled. Time of our lives, really.
Goran: At what stage is your startup, and what are you currently looking for? Is it funding, development
guy, biz guy, mentor, or perhaps clients and partners?
We are merely at the beginning of our project, and the Camp was the best thing that could happen at this moment. Our next steps are to establish the first version of our web site, get the developer, collect some data and get our startup going. Obviously, since we are students with limited budget, it would be great to get funding, but to be honest, not as much for the money part as much as for the mentoring, feedback and partnering part.
Goran: What do you see as your advantage compared to Silicon valley startups, and what’s your next
step in achieving that? What’s your and your teams next step in general?
Well, we are geographically in Croatia which is so much cooler than Silicon Valley 🙂
There’s nowhere in the world so much (stupid) bureaucracy obstacles like here, but we like to see it as a challenge. Like we said, we have a great team to start, but we’ll have to expand it a bit more to optimize our resources, skills and technical knowledge.
As we said, we are just beginning the story we believe it’s going to be big. Our passion for non-formal education drives us to work long hours.
Like Peter Drucker said, “The best way to predict your future is to create it.” And that’s exactly what we’re doing.
You can see allmyconferences.com presentation here.
Just a quick update, I hear the girls have a new name and a logo to replace allmyconferences.com
Goran: What makes your startup so special and why do you think you were invited to come to Seedcamp, and this week’s Startup Camp on Vis? What exactly does your startup do, and tell us a little bit about your team (age, background, qualities, etc)?
-Why is my startup so special? Well most of all, I think that we as a team make our startup special, not because we are some kind of a geniuses, but because we are very passionate about doing what we do.. simply „We are in love“ with the problem that our startup solves , its really breaking the limits once it comes to social media tools, gives users the ability to create their own environment and gives developers a „hotspot“ for building their social apps. Those are probably the reasons why we where invited on SeedCamp and Startup Camp on Vis.
Team is sustained of my coworker Goran Blazevic and me(Marko Pavlović).
We are building social media marketplace called Anctu. It’s an open platform for developers to have a place where they can build and sell their social apps for users, mostly community managers, so they can choose between a long range of social apps/tools that suits them and their business, this way they will be able to create their own working environment for managing and tracking their social media and finally do it all from one place; Anctu!
There are ton of social media services out there which are mostly broken,useless or even good but their are dying since its hard for them to profit, I think a lot of people will agree with me on that. We are not only trying to unite existing ones, but to create new ones and have it working in a harmony with users on a single platform!
Team is expanding rapidly since recently we met some people that share the same vision as we do. Goran is 5 years experienced frontend developer and graphic designer which comes from Đakovo, Croatia. He is 27 years old and just getting his bachelor’s degree at Electrical Engeenireing, very calm and hard working guy, we have a lot in common (we both love Anctu and rakija, that’s for sure!).
I am 20 years old PHP developer(4 of years exp.). Coming from Vinkovci, where I graduated from high school of economics and trade. I don’t know how I ended up there since I love coding & tech overall, from my 10. I started seriously with one unsuccessful Andriod app and ended up 4 years in freelance waters with dozens of web projects behind me. Curentlly studying on faculty of electrical engineering at Osijek, but I feel „one big“ dropout coming up since Anctu needs me here alot, but anyway I plan to finish it later on. At the moment I’m living at Osijek and Goran is moving here also.
Goran: Whats the most valuable thing you got during the Startup Camp Vis? Do you think camps like this should happen more often, and should perhaps the Croatian government fund such an event/camp? In general, what can you say about the Startup Camp Vis?
Most valuable thing I got from Startup Camp Vis is those great people I met there, for god sakes, we became one happy family and that’s awesome! I really felt the bound with all of them there, both teams and mentors! So much positivity, great working atmosphere and crazy fun-times! Startup Camp Vis made me believe in myself even more then I did! What a great experience, it should happen much more often. Croatian government should definitely fund it, especially since this explosion of innovativity is happening on Croatian ground, right?
Startup Camp Vis is connecting people with great ideas and helps them to improve, that’s something great!
Goran: Were you satisfied with my performance as a mentor, and have the other mentors deliver what you expected of them? Did we lack some critical information to your startup, and what would that information be?
You where amazing Goran and same I hear from others! You supported me, advised me, felt my passion and energy about my startup and most of all, you where bloody honest, not only to me but to everyone; that’s exactly how every mentor should be, good job! Every of you mentors where great, some of you had harder time to understand what my startup is actually about, since its pretty deep into social media and development world, but on the end you all got it even better then I expected. This is one thing that almost made me cry: After doing the final pitch, one older mentor came to me and said „I am 70 years old, its really hard for me to understand some tech and social media stuff, but you made me get it all in only 5mins, amazing job, amazing pitch!“. This was my StartupCamp Vis reward, 50 years older person telling me this words. Felt.Stuning! All of you showed interest in my startup, both inside agenda and outside, that’s great!
Goran: At what stage is your startup, and what are you currently looking for? Is it funding, development guy, biz guy, mentor, or perhaps clients and partners?
We are at „wrapping up“, we expect our first live beta to be out in a month or so. We are looking for people that have any of those skills and are interested in Anctu, we are looking for people who will share the same vision as we do. Mostly we lack „biz guy“ which would do the sales and keep business connections, but we are also open for all interested clients and partners!
We are looking for funding, but we will turn to that much more seriously once we get the product out, all trough, it would not hurt us if it happens at this point also.
Goran: What do you see as your advantage compared to Silicon valley startups, and what’s your next step in achieving that? What’s your and your teams next step in general?
Silicon Valley atmosphere is much more competitive, here we live in a high-friendly atmosphere, that’s one of the advantages being in smaller communities. For Anctu its just another great location with bunch of good startups, we are not intimidated by it. Our next step is to release the product and get first costumers in.
Get you’r preinvite for Anctu live beta at: www.anctu.com
You can download Anctu presentation here.
Goran: What makes your startup so special and why do you think you were invited to come to this week’s Startup Camp on Vis? What exactly does your startup do, and tell us a little bit about your team (age, background, qualities, etc)?
What makes us special? That is a hard one. We consider our self different, hmm. That is about it. We believe that we have a good project. That our application has what it takes to become popular not just in Croatia, but with broader public. Squee is a beautiful app that basically allows the user to discover, share and buy an independently developed gadgets directly from your iPhone. Today the Silicon Valley is going through Hardware Renaissance, due to the cheap 3D prototyping and new technologies a lot of small teams make incredible gadgets, they make a prototype in the US, Europe and then they ship it to China, India for “mass” production. A lot of those teams get funded trough www.kickstarter.com. Squee is basically a social hub (mcommerce) for all the gadget creators and lovers.
Ivan, he is a creative guy, designer (likes to brag with the Squee UX), at the moment he is a proud user of CodeAcademy, earning his badges, learning how to program and having a time of his life, also
he is our blogger. Most of our gadget reviews are coming from him. He is a proven entrepreneur. Ivan has successfully founded and runs the best and most beautiful espresso&wine bar and coffee house
in the city, in his words Rubirosa (the name of the place, named after Porfirio Ariza Rubirosa) is the perfect connection of pleasure and taste. Ivan has initially came up with the idea and now he strongly
believes that he is more cool than Mr. Cool himself, Steve McQueen.
Kruno, where to start with Kruno, hmmm. Lets say he is a adventures type of guy at least. Every one of us knows a guy like him. Example, when the waves are so high, and no one else is on the sea he is the first one to come with the idea to untie his sailing boat, pushing us to come with him. We believe he was brain washed by watching Thomas Crown Affairs and Indiana Jones movies just too many times. Also, he is our rock star marketing guy and strategist. As well, he is constantly harassing indie manufacturers to work with us and he is fiercely explaining to them what we are all about. Not that we are counting but we are pretty sure that he achieved seven restraining orders issued against him so far, talking about persistence :)). Kruno is also a consultant with additional self entrepreneurial
experience trough his whole life.
We have two Ivans in our team, not to be confused; the first one isn’t so in love with himself to write twice about his life :). The second Ivan is insanely focused, doesn’t sleep during day nor night, we still believe that he is a robot, or has a twin brother that we aren’t familiar with :). He is the Christopher Columbo of our team, always knows where we are going and in which direction. He deals with everyday problems and issues. Also he is contacting web portals and blogs around the world to develop mutual endorsement and he is spreading the good word. When other people are watching reruns of Two and a Half Men he is working hard as a community manager pushing info and sourcing gadgets. Ivan is working for 3 years now as a strategy consultant with a high number of successfully
Marin, he is our in house developer. Marin is developing our code and he is crazy good at it. Hence, he developed several iOS apps and successfully launched them. Few of his apps have a fan base of over 10.000 users. He is passionate about what he is doing and we are having a blast with him. The most important thing is that we utterly understand each other, when talking about women and wine
Goran: What is the most valuable thing you got during the Startup Camp Vis? Do you think camps like this should happen more often, and should perhaps the Croatian government fund such an event/camp? In general, what can you say about the Startup Camp Vis?
The most valuable thing we got during the #scvis was the mentorship and all the networking with super creative and smart people. We definitely believe that camps like it should happen way more often. First thing on our mind when we came back in Zagreb was the feeling of emptiness, I cannot describe in words how much we wanted to wake up again in our apartment on Vis and start with the pitching, hustling and fast mentoring. We missed the entire crew, all the creative startup teams that became our friends and all the mentors. It is not expected from our government to fund such events, #scvis is something they cannot grasp or think off, and that is a shame.
Goran: Were you satisfied with my performance as a mentor, and have the other mentors deliver what you expected of them? Did we lack some critical information to your startup, and what would that information be?
Honestly, we will be forever grateful for all your help and all of your information and time you gave us. Your mentoring was incredibly helpful for us, thanks again for believing in our team and our project.
Goran: At what stage is your startup, and what are you currently looking for? Is it funding, development guy, biz guy, mentor, or perhaps clients and partners?
At the moment our startup is in seed stage. What do we mean by that? We are in a prototype phase and pushing hard to launch our app on the App store. We are looking for a in house developer and
Goran: What do you see as your advantage compared to Silicon Valley startups, and what’s your next step in achieving that? What’s your and your team’s next step in general?
Silicon Valley is full of large companies and great startups that are hunting for talented young people, so that is maybe the advantage compared to SV, here in Croatia you have a lot of talented people.
Hence, you can more easily gather a good team in the beginning. One big difference is the funding. Silicon Valley is fool of angel investors and VC-s, so startups in Silicon Valley can more easily get funded. Our next step is to push our application to MVP (minimum viable product) and launch it until the end of the year. Also, we are hoping to get funded.
You can download Squee presentation here.
Guy is currently on vacation. I tried sending him an interview request, and a responder replied. Plus I also saw on Google+ another person asking for the interview. So that wont work. I will try to get to the person that got the investment from Guy so I can reach him, but that means more research. Every step. Hustle! Research! Hustle! Work smart – work hard. Hustle!
What do you need to know about Guy Kawasaki?
He loves rottweilers. How do I know? Well, I’ve read 3 of his books (The art of the start, Enchantment: The Art of Changing Hearts, Minds, and Actions and What the Plus!: Google+ for the Rest of Us, watched several presentations, follow him on 4 major social networks and have his picture in my room (to remind me every morning not to be a bozo). So yes, Guy has a bloodhound/Rottweiler, I am sorry I can’t remember his name, and I am not sure Google will help you with this one.
Now you also know why Guy loves to talk about selling dog food online. Pets.com, epets.com, dogfoodonline.com and many others. There’s no need for me spending time about their patent pending, curve jumping, paradigm-shifting, service with revolutionary SEO strategies. But you should know that Guy survived online dog food, and the .com bust. He also likes to say you need to eat your own dog food. Let me explain what he means by that.
My startup delivers information about domain names. We still haven’t launched, the system isn’t ready. I am using the faulty prototype, and with it I have signed our first client. Our client isn’t actually using WhoAPI, I am using it, and the first client is the end user. The client isn’t technically aware of full possibilities of our project, but he is aware of the benefits and wants to use them. I have a rottweiler. I eat my own dog food and it’s not even cooked yet.
He loves ice hockey. I am not really sure where one can play ice hockey in San Francisco or Hawaii (where Guy is Born), but if you want Guy’s attention, ice hockey is the right path. I am not sure what’s his favorite team, but I am not here to speak about hockey either. I have two great hockey analogies for you. First one was used both by the late Steve Jobs, and Guy Kawasaki and of course the legendary hockey player Wayne Gretzky. He said:”I skate to where the puck is going to be, not where it has been.“. Wow, now that’s profound. Use this in your business, and especially in the technology. Never do what everyone else is doing, see the future, and see where the industry and the markets are going. Invent!
There were people that were cutting and delivering ice, then there were companies that were producing and shipping ice cubes, then there are people like Einstein who invented refrigeration (Szilard-Einstein refrigeration patent) and companies who built refrigerators, and you will have companies in biotech that will make food that doesn’t need freezing. That’s curve jumping, skating where the puck is going to be.
The other hockey analogy I learned from Guy Kawasaki is that of an ice resurfacer. In his presentation Guy uses the term “Zamboni” which is the most popular brand. What the ice resurfacer does it removes all the lines, and irregularities from the ice. It creates an intact ice, perfection. Similar to first snow, where no one set foot. This is the same as a new company. It’s not ruined by the logo your aunt made. It’s not ruined by nagging customers who want a discount, or by a lousy service you provide. Guy says that at that point (fresh ice, new company) is also difficult to set priorities. I don’t have to say how much I agree to this, because you have to agree to everything that Guy says (unless one thing, which I will leave for the end). He was the Macintosh evangelist, and part of the team around which the universe revolved, and one must respect that. Your focus must go towards the things you will be proud to share with your spouse. Why spouse? Well Guy celebrates women, and in all his books he is referring to “she”, rather than “he” when he wrote. This is his way of repaying them. You know what? This wouldn’t be a Guy Kawasaki post if I didn’t do the same.
Maybe that’s the reason Guy loves to fly Virgin? On a more serious note – this is what happened.
Backstage in Moscow. Richard Branson is speaking before me. He asks me if I ever fly Virgin; I admit that I never have. He asks me to try it. I say to him: “If Richard Branson asks me, I guess I have to.” He then gets on his knees and starts polishing my shoes with his jacket in order to convince me. Can it get any better than this?
So, there you have it. When was the last time you polished your prospective client shoes? Maybe today is a good day to start. Lot’s of people use some company’s products just because of the way their CEO/owner behaves. I am sure you can find examples in your lives. Be that CEO.
I have never flown with Virgin Atlantic because I can’t afford it, and I was never on a flight longer than 3 hours. But, I will one day. I’ve read Richard Branson’s autobiography “Losing my virginity” and it inspired me. I love inspiring people, and I love to inspire other people (or at least try). I also love successful high school/college dropouts, they are like that statistical spike that no one can explain. Flying Virgin Atlantic, increases your chances of bumping into Guy Kawasaki by 0.0000001% and it also gives you a common topic with your favorite VC. You won’t bump into Richard Branson, he flies with an air balloon, or water skies.
Guy loves his family. He has 4 children, and I cannot begin to explain the respect I have for successful business people (especially investors) that have children. This also means Guy turned down a job offer from Yahoo, that he says cost him 2 billion dollars. So, if Guy doesn’t invest in you, don’t take it to your heart. He has Meniere’s disease, and he can always say he didn’t hear you right. Hint, if you are are a startup that helps people with Meniere’s disease, go for it. Guy likes to joke about his condition, and that he got it from hearing lousy pitches. What’s a lousy pitch?
Enter the bozos. A bozo by Steve Jobs’s and Guy Kawasaki’s definition is a person who… for example, reads of the slides. When you give a presentation, DO NOT, I repeat, DO NOT, read of the slides. The slides are not there for you to be your crutch, you must know your shitake. (Shitake is a word Guy often uses) They are there to help people understand what the heck you are talking about. A picture is worth a thousand words, right? Use pictures, use videos! If you want to create inspiring presentation read Carmine Gallo’s book The presentation secrets of Steve Jobs. It helped me tremendously! When I gave my first presentation it was of bozosity (you see you can use this as an adjective) proportions. And then one day, I gave a presentation to about 50-70 college students. First thing I said I am not going to talk about my startup because it’s really technical and niche, and they wouldn’t understand any of what I said. I then proceeded with the 20 minute presentation about investors, inspiring companies like Apple, Zappos, and Simon Sinek. The first question from the audience after the presentation was: “What is it exactly that your company does?”. I am not telling you this to brag, but to give you an example that this stuff works! Don’t be a bozo, don’t read of the slides, remain eye contact, people want to be inspired. Guy Kawasaki also has a 10-20-30 rule. 10 slides, 20 minutes, 30pt font. Do just this, and you are better than 50% presenters. As you might have guessed, Guy doesn’t love bozos, in fact, he sets his Rottweiler on them.
Every man loves his car (no matter what they tell you). Guy drives a Porsche. One does not simply buy, drive, have a Porsche. It is a special connection. Guy often posts photos of his Porsche, of the replacement Porsche they send him, and when he goes to the track to drive a special Porsche. Tip, respect the Porsche.
One last thing. Whatever you do, if Guy Kawasaki says your startup sucks, don’t believe him. He said so himself. As a matter a fact, don’t believe anyone like him. He says, the most dangerous people for your startup are VC’s who say they won’t invest in you, and that your startup sucks.
Some VC funds even display their anti-portfolio, and there you can find companies like Apple, Google, etc. Thing is, hitting a jackpot with an investment is close to gambling. A barefoot guy on LSD, and a guy wearing flip-flops are responsible for the creation of Apple and Facebook. The asocial guy responsible for the creation of the biggest social network. Seriously, are you kidding me? Richard Branson was a dyslexic who didn’t get through high-school. How do you find the courage to invest in people like that? There are no analytic skills that can tell you where to invest for a big return. Go with your gut feeling. Why is going with your gut feeling the right thing to do? Well read Simon Sinek’s Start with Why: How Great Leaders Inspire Everyone to Take Action, and Malcolm Gladwell’s “Blink: The Power of Thinking Without Thinking“.
First of all, I should say that 50% out of nothing is still nothing. You shouldn’t be afraid of giving equity, however, you should be smart about how much you give and to whom. If an investor asks for 50% of equity he is probably inexperienced. Why?
1. If he has the majority of equity, you are actually not the owner of “your” company, ergo it’s not your company. If he is asking for 50% he is probably an angel investor, which means you “lose” a lot and you haven’t even started. In fact, you just had your first exit, and you can go on vacation. This will most likely kill the entrepreneur inside you and if the dark days come (and trust me, they will) you are probably more likely to raise hands, say that it’s not your project anyway, and leave.
2. If you are willing to give away 50% of something that’s so valuable and spectacular, why are you doing it? If it’s not that spectacular, why would I want to do it in the first place?
3. If the investor is experienced, he is probably testing you, your negotiating skills and your perception on value of the idea. But in this case, he will probably start with a much lower take in equity depending on the region, industry, market size, etc.
How much of equity should you give away to an angel investor? It depends on many factors, sadly your location is the first one that will influence this decision. In Silicon Valley, angel investors get below 10%, but in other parts of the world equity goes as high as 30%. You should also take into account if it’s „smart money“ or just money, that you are getting.
If your angel has a big contact list, or Rolodex, as they like to call it, perhaps it’s worth a consideration. Sometimes 30% equity means the success of your startup, and 6% means failing. This is something you will have to decide on the spot, since these decisions are really unique, custom and differ from case to case.
Giving away equity also depends on the amount of money you are getting. Also, this sets the current value of your company. But, company valuation isn’t something you should be concerned at this stage. Now your top priority is to launch early, launch often or as some say “fail fast”. Or as Guy Kawasaki would put it: „Don’t worry, be crapy“. So let’s take the 50% equity as an example and see how it would play out.
Angel investor: Your project looks interesting, and I am interested in taking a shot. I can give you $50.000 for return of 50% in equity.
You: Thank you very much, I am glad you like what we are doing. But, I am willing to give 10% at most. I want to leave room for first team developers, and VC fond.
Angel investor: Ok, even 10% sounds good, but than I am willing to give only $10.000.
The question now is, what are you going to do with only $10.000? Is this investor worth the bother? Are you going to answer his phone calls on Sunday when the project starts to go south? Is this investor going to scare away other bigger investors that want to be alone before the VC fond comes? What if you took 30000 for 15%? How much money do you need in order to get the startup moving and making first sales? How much money/time do you need until first sale? How much money/time do you need until break even?
I know I put up a lot questions, and not so much answers. However, asking the right questions will move you in a direction you want to go.
You have just read the 3rd question and answer of my book. Interested in reading more? Preorder my ebook, and support the good I am doing.
[EDIT 22nd, August, 2014] If you liked this blog post, perhaps you will like the ebook]