The Summer 2008 Olympics are now over. The national conventions for the Democrats and Republicans are happening. Democrats just wrapped up theirs and Barack Obama is the official candidate. The Republicans are up soon and John McCain just announced his VP, Sarah Palin. School has started for all kids across the country. Summer vacations are over. And life goes on.
Like many I watched the Olympics when I found the time in the evening and was fortunate enough to see some of the men and women’s gymnastics, swimming, track and field, and volleyball. I saw the US women’s beach volleyball team win. I saw the women’s gymnastics team win and saw Nastia Lukin win gold. I saw Michael Phelps win several of his gold medals for swimming. One weekend I even caught the Chinese synchronized swimming team. Wow, that was impressive! My husband stayed up later and saw the women’s and men’s volleyball teams as well as the men’s basketball team.
I actually think I was able to watch more of the events during this Olympics than any other Olympics in my life. I’m not sure why that is given that my life is so much busier than it used to be. It’s probably because my husband was watching it and it was a nice (often nerve wracking) way to end the day and see several of the events “live.”
What struck me was how hard all of these athletes have been preparing for the vast majority of their lives for this one shot at gold, fame, and potential sponsorship opportunities from big name brands/companies. All their preparation comes down to a single point in time to succeed or fail. The pressure and mental stress must be extreme, and yet they get up every day to prepare for that one moment in time.
Every individual who competes tries hard, practices hard, prepares hard and only 1 receives the gold medal. The same is true for entrepreneurs but fortunately there aren’t hundreds of little kids competing to win in one particular business (e.g., selling widget X). There may be several competitors in a space but it’s doubtful that the leaders of your competitors started practicing to compete to sell “widget X” when they were 10 or even 5 years old!
However, there seem to be many more factors way out of the control of the entrepreneur that determine their company’s success or failure (e.g., the economy, people issues, product issues, market timing, etc.). An athlete has much more control on whether they get up and practice every day with the major big unknown being a devastating injury. They are rarely blindsided by a last minute entry who ends up being a well-funded Superman/Superwoman athlete!
Building a successful business is extremely hard, costs money, and is time consuming, but after watching the Olympics, my guess is that preparing and then winning a gold medal is harder, requires more discipline, and is more time consuming but with more defined parameters. Even more so if you happen to be a Chinese Olympic team member who are often taken from their parents at a very young age.
People expect athletes to take years or even a decade to train to even make it to the Olympic games, but many expect entrepreneurs to make it big in just a few years and in the process they often burn themselves and others out. I’m guessing that fewer entrepreneurs earn ‘gold medals’ than individuals and teams do every four years in the summer Olympics.
Photo by: Unknown – could not find link to original creator
So continuing on the fortune cookie blogging escapade, I recently got a fortune (for some reason I eat at a lot of Chinese restaurants) that said “Look forward to great fortune and a new lease on life!” Of course I saved that one. I still have a few others on my home office desk that are a little more realistic, but who’s to say a great fortune and a new lease on life isn’t around the corner for me!
I can definitely say that a new lease on life is definitely in the process of happening just by the sheer fact I’m doing something different day-to-day than I have before. Whether it’s a good lease or a bad lease depends a lot on my landlords. 😉
The Austin American Statesman (the main newspaper for Austin) mentioned my new position today in their Up The Ladder are in the business section. They happened to use a picture of me that’s probably 7 or 8 years old which was when I weighed 10 to 12 lbs more than I do now. (Of all my New Year’s resolution goals, I have achieved the ‘lose 5 lbs’ goal and ‘take yoga classes’ goal but I’m still working on all of the rest – Sigh). For a more recent picture of me, you can check out the page where I show the articles I’ve co-written on the topic of success and entrepreneurship or even the About page.
If you were too lazy busy to click through the Up The Ladder link above, my new day job is running Operations for the Austin Technology Incubator (ATI). I am acting as the COO/CFO of this small organization (5 to 6 full time employees) that is part of the University of Texas at Austin (and yes subject to the positives of great HR benefits yet at the same time monumental bureaucracy). It’s a very unique initiative in the university because it supports 15 or so technology companies by helping them get to market, find funding, and build their professional support network.
The companies get access to student help, consulting support from the directors, flexible space allocation, senior advisors/talent, discounts from ‘incubator friends,’ etc. ATI is supported by rent and membership fees it collects from the companies as well as grants it receives from various government related entities that are interested in creating companies (thereby jobs) and furthering technology related initiatives in the Austin area related to Wireless, IT, Biotechnology, and Clean Energy.
My job duties are varied but include helping make sure operations run smoothly internally, the companies are supported, and we have enough money to continue providing a great service to Austin technology companies and the Austin community in general. I’m most excited about the potential to help entrepreneurs – it can be a lonely/tough job and having been there, done that, and doing it, I believe I can at least share my experience and contacts.
Now working for the University does not lead to great fortune, but I’m open to it offering a ‘new (and different) lease on life!’
Now that I took a day job, I’ve been wondering what I should post about. Should I post about my new job or other stuff? It also takes time to write meaningful posts and time is harder to come by now. My new job has a lot to do with helping entrepreneurs or I should say it will once I get past the administrative day-to-day stuff of getting up to speed.
So in the meantime until I figure it all out, I’ve thought about posting about the fortune cookies I get when I go to Chinese restaurants or other restaurants who for some reason hand out fortune cookies.
So, a couple of weeks ago I was having lunch with one of my business advisors at a Chinese restaurant in this place in Austin called Davenport village, and I got the following fortune:
“You can’t ride in all directions at one time.”
We both thought it was appropriate considering what was going on in my life. Of course, I then thought to myself ‘well all directions isn’t the same as two three directions’ and ‘there’s no point in going no direction.’ 🙂
So here I go (the multi-tasker that I am) attempting to go one direction with a few detours here and there along the way…
You’ve probably seen those Nationwide insurance commercials that go something like “Life comes at you fast. That’s why there’s Nationwide.” And they show people whose car gets hit by a garage door, a leaf blower or some other random, humorous, or shocking thing. Check out some of their video ads on their site.
Photo by Sandy Blanchard Well in every entrepreneurial journey things can happen fast and often there appears a fork in the road. I decided to pick one of the paths that will have quite an impact on my ability to spend time on Babble Soft. The opportunity presented itself when I wasn’t looking and I had to take a cold, hard look at it. The difference between success and failure can often come down to being open to opportunities that seem to randomly present themselves.
The decision on which path to take was not an easy one. It was not made without much thought, stress, doubt, questions, frustration, etc., but I believe it is the right decision for me, my family, and yes even for Babble Soft.
I worked part-time on Babble Soft for a while and started full time in late 2007. As some of you know, I went out to raise funds in early February 2008. By end of March and early April (because I’ve raised funds before and could see the writing on the wall) it became clear to me this was not going to happen right now for a variety of reasons including:
We are too early. In other words, we don’t yet have enough users or market traction to make investors comfortable enough to take the bet given they have started losing money on many of their Web 2.0 companies that they invested in at the concept or early beta stage. It’s become clearer to me that we are trying to “create a market” which is often quite painful and takes a long time. Therefore, I cannot yet prove that the market is HUGE for what we were trying to do. By the way, what you see on the site is just a fraction of what I envision as a site for new parents. It also did not help that we continue to struggle to find a good SEO rhythm due to a variety of reasons including the fact we are, as I mentioned, for all intents and purposes making a market.
I need a business partner. It’s tough going it alone without someone to bounce ideas off of on a daily basis. What I need is a strong technical co-founder and/or an expert consumer marketing partner. I remember meeting with another Austin entrepreneur, Chris Justice of Sparksight, a while back and he shared with me a sound bite from one of his mentors: “People fund teams, not individuals.” My husband helps me a lot, but he has a full time job and isn’t really into the business concept the same way I am.
The economy is in flux. Investors and consumers alike are concerned about the economy, high gas prices, home foreclosures, job losses, the presidential election, impending tax increases, etc. and their behavior and outlooks have changed. I won’t freak you out with links to all the articles about the demise of Web 2.0/social networks and people losing their money and their jobs but suffice it to say there are many. There’s also a lot of good stuff happening but uncertainty is definitely in the air.
Other personal stuff I can’t blog about yet but which is probably the biggest driving force for choosing this path right now.
So, not being one to continue banging bang her head against a brick wall, I took a J-O-B (another form of insurance that I don’t think Nationwide or any other insurance company offers) to support my entrepreneurial addiction!
I wasn’t looking, but the opportunity arose for an interesting, most likely fun, hopefully low stress job working with people I like. My boss (who has been a long time subscriber to my blog) is a very cool guy who I’m sure I’ll enjoy working with. He knows I will continue working on Babble Soft and is very supportive of my doing so. He also knows I’m a mom to two great kids and wife to a pretty good guy. 😉
I’m excited about the potential of this job combined with what’s going on in the rest of my life. Of course, I will have to become a guru in time management to make it all work.
The entrepreneurial lifestyle is not made up of beautifully paved, straight roads. There are often detours and roundabouts. Right now I’m crossing my fingers that this path I’ve chosen will lead to bigger and better things for me, my family, and my company. A friend of mine, who is a screen writer trying to make it big in Los Angeles, CA (probably similar odds to building a successful company), wrote an excellent post about his decision four years ago to do the same thing I’m doing now when he took a job. He reflects on how its been both a good and bad decision for his goal to become a recognized, well-paid screen writer.
I’ll continue to blog and will eventually tell you more about my new ‘day job’ so Sign up for free email updates so you can see a) how I make it work or b) a train wreck in action. If you see a train wreck about to happen, please leave comments and maybe if I read enough of them, I can find a way to build another track or jump off the train beforehand!
This is a philosophical post at best and a rambling, forky post at its not-so-best. Everyone’s life is filled with predictable stuff and non-predictable stuff. And it seems like the life of an entrepreneur has more unpredictability than most.
Entrepreneurs often have to create a path where none existed before so the chances of seeing beautiful and amazing things as well as the chance of staring at the face of a lioness with her jaws open wide in a snarl about to pounce on you are higher than say going to work at a “predictable” day job.
Of course predictable day jobs are also subject to stress, crazy bosses, insane co-workers, and layoffs, but it’s not your company that you might just have to see on the wayside as road kill OR on the plus side helping tons of people, purchased by a reputable company, or with a Wall Street ticker symbol. 😉 Either way you end up with some sort of vultures around you.
Sadly, yesterday afternoon there was a car-squashed dead squirrel in the road outside our house. Our neighbor across the street told me she saw a big vulture hanging out in one of the trees outside of her house. I told her about the dead squirrel and it immediately made sense to both of us why it was there. Needless to say, this morning the squirrel was no longer on the road. Anyway, I digress…
Everyone knows intrinsically that high risk can equal high rewards but we often forget it also can mean high loss and sometimes making odd, creative decisions.
So what’s an entrepreneur to do?
Well she doesn’t give up easily. She looks at her situation, looks ahead at the several uncharted roads ahead of her, gets manic stresses about it for a while, and then puts her foot down on one of the paths on the fork in the road ahead and starts walking. If she’s got control of her thoughts (which I don’t usually) she won’t look back and wonder “what if?” She’ll move forward and hope the path will eventually rejoin, and perhaps even speed up, the wider, bigger path to achieving her vision.
I have just encountered such a fork in my entrepreneurial road. [As an aside, why do they call it a fork when the utensil we eat with has 4 prongs (sometimes 3) but when we think of a fork in the road it usually is shown with 2?!] I’m hoping it will lead to bigger and better things for me, my family, and my company. Time and presence-of-mind (what’s that?!) will tell.
We have some exciting news today that I just had to share! We did a press release with UpSpring Baby about our partnership to offer free subscriptions to Babble Soft web and mobile applications for customers who purchase their milkscreen product in Babies “R” Us! UpSpring is a great company with awesome women/mom entrepreneurs at the helm. Please let new parents know how they can try two cool products for the price of one. It’s sort of like you buy one, you get the higher priced item for free. Don’t you love those kind of offers. 😀
If you are a blogger, know a blogger, or a journalist who might be interested in telling their readers about it especially since it’s so close to Mother’s Day, I would be truly grateful if you mentioned it to them. Or even a Stumble of this post, would be so appreciated.
The press release is below and is also on our site and on PRWeb. I think it’s kind of cool that a Consumer Packaged Goods company and a Tech company are offering solutions for new moms, together in Babies “R” Us!
Babble Soft and UpSpring Baby Offer Free Subscriptions to Baby Insights for Milkscreen Customers
Customers who purchase a Milkscreen 3-pack, available at Babies “R” Us, will get a free subscription to Babble Soft web and mobile applications.
AUSTIN, TX – May 7, 2008 – For a limited time only, customers who purchase the MilkscreenTM 3-pack at Babies “R” Us and other retailers for $4.99, will get a free 3 month subscription valued at $19.95 to Baby InsightsTM and Baby Say CheeseTM!
“We are thrilled about the opportunity to provide our customers with access to Babble Soft’s unique web and mobile applications!” said Lisa Williamson, founder and CEO of UpSpring Baby. “Our customers use milkscreen as a simple, two minute test to detect alcohol in breast milk. Every woman metabolizes alcohol differently so milkscreen allows Mom to relax and remove the guesswork and Babble Soft’s Baby Insight’s product helps new moms keep track of their breastfeeding and pumping schedule as well as how much pumped milk they feed their baby. We feel that giving our customers the chance to try out easy-to-use tools to help them manage their breastfeeding and pumping schedules is a huge plus for busy moms.”
“Our goal at Babble Soft is to help make the transition into parenthood easier by taking some of the worry away about whether baby is getting what he/she needs.” said Aruni Gunasegaram, founder and CEO of Babble Soft. “We are excited about partnering with UpSpring Baby to not only offer their customers an easy way to try our Baby Insights application to help them track pumping and breastfeeding, but also our Baby Say Cheese first year online baby album with milestones and family tree.”
Baby Insights helps caregivers gain insight into baby’s breast & bottle feeding, sleep periods, diaper changes, medicine doses, immunization records, as well as mom’s breastfeeding, pumping and medicine intake. Having important information stored in one location makes communication between parents, their nanny, babysitters, grandparents, or doctors seamless and reliable and gives new parents insight into their baby’s patterns to help with crucial baby care decisions.
Baby Say Cheese lets you create a wonderful online baby’s first year photo album with milestones such as ‘first crawl, first smile, first word’ and family tree that you can share with friends and family. You can even send fun, cute picture postcards of any of your baby’s milestones to anyone with an email address!
About UpSpring Baby
UpSpring, founded in 2005 and based in Austin, Texas, is a premiere parenting and child consumer brand that consists of popular labels such as Walking Wings® and MilkscreenTM. Founded by momprenuers, the company is dedicated to offering parents and children the most innovative and trustworthy health, wellness and safety products available in the baby care industry. The founders are inspired by how many unmet needs still exist in the childcare industry and how many great ideas other parents have to offer. UpSpring, has worked with designers, medical experts and testing laboratories, to ensure fresh and more natural product alternatives that are safer and supportive for every facet of babies’ early childhood. To learn more, please visit us at http://www.upspringbaby.com.
About Babble Soft
Babble Soft is based in Austin, Texas and creates products that help make the transition into parenthood easier. Whether you need breastfeeding support, are experiencing baby sleep issues, are expecting twins, or taking care of a premature (preemie) baby and would like to create your baby’s first year album, Babble Soft offers unique, easy-to-use Web and Mobile software solutions that improve communication between caregivers. Babble Soft makes a great baby shower gift that you can easily send via Email to any new parent anywhere in the world! To learn more and purchase Babble Soft applications, please visit http://www.babblesoft.com.
I was planning to write a post updating everyone on our search engine optimization experience today but the real world injected itself with a sick kid at home. High fever and rescheduling meetings doesn’t leave much time for writing long, heavy posts. Plus I had to sneak in a nap in the afternoon while our daughter napped since we didn’t get much sleep the night before. 🙂
So instead, while my husband takes care of the kids this evening, I thought I’d write a post on the example of an unanticipated, viral marketing story with a mom twist. So here it goes…
Once upon a time I met a friend on the Internet. I found her blog and commented away. After some time, we realized we had similar visions and she invited me do a guest post on her blog called Entrepreneurship: A Blessing or a Curse. We kept in touch, spoke on the phone a few times about ways to work together, became twitter pals, and finally met in person at SXSW here in Austin back in March and clicked even more.
While at SXSW she got further proof of what she already knew which was that the name of her blog, then called eMoms at Home, was not really reflective of the demographics of her readers and would-be readers so she had a mini-meltdown, picked herself up and came up with a cool new name called Sparkplugging! Since she was and still is an advocate of entrepreneurs and especially those who work from home, her cool, new name opens the door wide open to many of us who are moms or not but like to spark up ideas and play with them until something happens.
So after SXSW, she went home and saw a post about dads on twitter and decided to do one for moms. Within hours she got tons of replies and created a post called The Ultimate List of Moms on Twitter that started with 250 moms. I commented and subscribed to comments on that post and every day new moms would leave a comment with their twitter name until May 1, 2008 that is. Twitter sent out an email to everyone yesterday, May 1, and in it they included:
Mother’s Day: On The Way
We’ve noticed a trend of parents twittering the moments of their baby’s birth so we know there are some new moms on Twitter. Are you a mom on Twitter? Is your own mom on Twitter? Maybe you even made “The Ultimate List of Moms on Twitter”? Mother’s Day is just around the corner so don’t forget to @reply the moms you know with a thoughtful phrase–but keep it under 140 characters, moms are busy people.
And today I had 150+ comments in my inbox and they are still coming. Now she has close to 400 comments on that one post! Did she do anything extraordinary to make it happen? Not really. Did she tell people on twitter about it? Yes, of course. Did she know others would tell and re-tell more people about the list? Possibly. Did she know twitter would pick it up in their mass email to everyone? Doubtful (but I don’t know what went on behind the scenes). So in hindsight what played in her favor to have a post she wrote on April 8 (before her name change) take on a life of its own? Here’s what I think:
She took the initiative to do something that ended up being quite time consuming, but she saw from the responses it resonated with hundreds of moms on twitter that it was a worthwhile endeavor.
She told her friends about it who re-tweeted and blogged about it.
The tweeters kept the link going within twitter and in the blogosphere.
Mother’s Day was around the corner and the guys (I think they are all men) at twitter saw the activity and might have said to themselves “Hmmm. How can we mention a major holiday, get brownie points with our wives/mothers, and promote twitter at the same time” and voila a mention was born!
UPDATE: I sent a link to @Biz to this post and he informed me there are several women who work at twitter! So of course I followed them. Here is his tweet:
biz@aruni awesome! I included the moms list because it was noteworthy – also, women who work at Twitter: @crystal @krissy @alissa @lane @sara
In case you haven’t guessed who this friend is, it’s Wendy Piersall. I guess only Wendy can tell us if she planned all of this, but to me it’s another example of viral marketing that in hindsight makes sense but when started, the current result would have been highly unpredictable.
To me, this is why it is so hard to orchestrate a viral campaign. You can plan everything down to the “t” and still not have it work out the way you wanted. It’s hard to predict when there are so many variables. You can also just do something you enjoy doing that helps others and see a “spark” turn into a flame! Way to go Wendy! 😀
Oh and by the way, I am @aruni and Wendy is @eMom on twitter…
I’m applying for the Women 2.0 business plan competition in California for my company Babble Soft. Thanks to Angie Chang for leaving a comment on my recent Economy and Entrepreneurs post letting me know about it. At the time the deadline was April 1, but they’ve since extended it to April 15. They encourage companies located outside of California (and the Bay Area) to apply so we’ll see if they will actually select a company from l’il ‘ole Austin, Texas.
It’s a pretty short application form that challenges even the most frequent twitter user (i.e., type your thoughts in less than 140 characters) with maximum character requirements between 210 to 410 characters to describe things like your target market, business summary, or competitive advantage! It sure made me focus on picking what I believe are the right words. The online application form is run by Angelsoft, which I mentioned in one of my SXSW posts.
I will be submitting my application later today and then mailing in my paper napkin with my best paper napkin handwriting ability (UGH!) soon thereafter. I might have to ask my husband to write it for me because his napkin handwriting talent is much better than mine. 🙂
Entrepreneurs are all just a little bit crazy and add motherhood on top of that and you get a whole new experience! Entrepreneurs see the world differently, yet we still want to fit in, maybe more so if you are a woman and mother, for the sake of our children.
I’m sure there have been books written about the psychology of entrepreneurship, but I don’t have time to seek them out. I figure one will fall in my lap as I need it. And interestingly Liz Pabon, who wrote The MavHERick Mind, recently reached out to me and will be doing a guest post on my blog soon. I just began reading her book and so far it’s a fascinating read on how and why women entrepreneurs in particular hold themselves back from achieving the success that they are capable of.
A post also recently fell in my lap in-box written by Marc Andreessen, founder of Netscape and Ning, called The Psychology of Entrepreneurial Misjudgment. It is an excellent read where he puts modern language around observations made by Charlie Munger, Warren Buffet’s long time partner and Vice Chairman of Berkshire Hathaway. Here are the themes and you’ll have to head on over to Marc’s blog to read the rest:
The Doubt-Avoidance Tendency is the one that resonated with me the most. It’s true that “You’d better not have a lot of doubts about what you are doing because everyone else will, and if you do too, you’ll probably give up.” But it’s darn hard not to have doubts when the stakes can be so high. I would add that if you don’t have any doubts at all, then you might just run over a cliff without knowing it. But if you need a quick answer, you can always ask the Magic 8 Ball (thanks to Scott Allen of The Virtual Handshake for the link). I only had to ask my question 3 different ways to get the answers I wanted. 🙂
One thing I remember from Marc’s past blog posts is that there is a direct correlation between success and how many times you get up to bat. Many inventors had a string of things that didn’t work out before they found the few that did, and the chances of finding something that does work increases when you try more things. So Babble Soft is my second at bat. I believe we barely slid into 2nd base with our first company, which is still operating, so I’m swinging for the fences on this one!
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Unless you live under a rock or don’t drive a car, you have no doubt heard about or felt the state of the US economy. It’s in a state of well let’s say ‘confusion’ with indications it’s moving in the wrong direction. Gas prices are at record highs, people are filing for bankruptcy, they are losing their homes, the government has a record amount of debt, the stock market is going down, etc. etc.
So where does this leave us entrepreneurs who want to raise funds to take their businesses to the next level? Well, that’s a good question and a challenging one to answer.
I’ve had a handful of meetings with potential investors and a couple of them have expressed interest in participating, but they might change their minds given what’s going on in the economy. As the saying goes “It’s not in the bank, until it’s in the bank!” Fred Wilson, a venture capitalist in NYC, linked in his Read the Blogs post to a post on the Bear Stearns bailout by JP Morgan, which illustrates why even if you think it’s in the bank, it might not actually really be in the bank! Our personal savings accounts are also going down with the market.
I had several conversations with entrepreneurs coming from different parts of the country at SXSW Interactive who have been struggling for a while to raise funds for businesses that are up and running with strong visitor and user traction.
So despite only being less than two months into the process, all of this has forced me to revaluate my fundraising plans for Babble Soft. Entrepreneurship is not for the faint of heart as there are many ups, downs, and false starts. The economy changes however have a huge impact on the success or failure of a startup. If the economy is doing great you get all sorts of crazy new ideas/businesses popping up with chances to live and prove themselves. If it’s bad, even the companies with wonderful ideas can suffer, die out, or never even get a chance to shine.
The good news is that of all the industries out there (except for maybe the alcohol industry), the baby market is fairly recession proof. People don’t stop having babies nor do they stop buying things for their babies or things to help them take care of their babies. The bad news is that what we are trying to do at Babble Soft does not yet have a predefined “mental need or want” (because it’s so new) like say bouncy chairs, bright/shiny toys, Baby Einstein videos, or diapers.
On the plus side, we have not taken any outside money to date so we don’t have to worry about how and when we pay investors back like some other start-up companies. The downside is that if we don’t raise money right now, it will take longer to bring the exciting, potentially life changing vision I have to the world or worse we might miss the market opportunity.
I’m still trying to figure out the best plan of action. I wish we had more money to create a new user experience, enhance our current applications, and create new applications ourselves. I’m evaluating trying to raise a smaller amount of money and growing slower. Now’s the time when the creative juices start flowing!
If you know an entrepreneur, give them a hug (if you can’t give ‘em money) because it’s going to be a tough roller coaster ride for the next probably year or so. Some will be able to hang on and emerge stronger and better, some will get off gracefully, others might fall off unexpectedly, and yet others will wish they had fallen off before they lost their money and lost some of their sanity. 🙂
If any of you have any thoughts, advice, virtual hugs, or even questions please share below…
Yesterday was the last day of SXSW Interactive and I have practically a desk full of business cards. Our son came yesterday (yes, it’s Spring Break here) for part of it as well but went with husband this time to a panel he attended. I was only able to make one panel yesterday and spent the rest of the time networking. Check out my posts on events I attended on Sunday (including my take on the Zuckerberg/facebook interview) and Monday.
Robert Scoble even did an interview of me that was posted to Qik but for some strange reason (due to the 3G connection) it got broken down to 16 different few second clips. Here’s the first one, here’s a middle one, and here’s the last clip. They are going to try to see if they can string it together, but it’s looking doubtful. Guess that means we’ll have to do a more official one next time!
UPDATE: Qik was able to string pieces of the video together and you can see it HERE. Once they get Robert’s phone, they will see if they can fill in some of the missing gaps using the files on his phone. Once they do that, I’ll embed the video in a future blog post.
The Insiders Guide to Angel Investing This panel was not really a panel because the only speaker was David Rose. David is the founder of New York Angels and Angelsoft, a software application that helps angel investing groups manage plans received by entrepreneurs. He had some great info on angels and angel investing. He mentioned that he would make his slide-show presentation available and I will update this post if and when he sends the link, but here are some highlights:
There are 600K new companies started each year. Of those 350K are self-funded, 200K are funded by friends and family, 50K by Angel investors, and a mere 1200 by venture capitalists.
Angels are generally about 57 years old, they have a master’s degree, 15 years of entrepreneurial experience, have been involved with and/or started on average 2.7 ventures.
To be an accredited investor you must have $1 million in assets and have to have made $200K of annual revenue for the past 2 years.
The average angel investor has spent 9 years investing, had done 10 investments, had 2 exits (profitable or lost their money), and 10% of their wealth is tied up in angel investments.
Angels look for companies with Scalable Business Models, an “Unfair Advantage,” a Great Entrepreneur, External Validation, Low Investment Requirement, Reasonable Valuation ($1 to $3 million pre-money range), and a 20 to 30 times return on their investment within 5 to 7 years.
The single most important characteristic an Angel investor looks for in an entrepreneur is Integrity. Then they look for Passion, Experience, Knowledge, Skill, Leadership, Commitment, Vision, Realism, and Coachability.
David said most angel investors don’t end up making a ton of money from angel investing. In fact most lose money. Many invest because they want to give back and help other entrepreneurs. He even offered us a joke that goes like this: How do you make a small fortune angel investing? You have to make a large fortune first! 🙂
He then went on to talk about the process of applying to an Angel network and described what the entrepreneur as well as the Angel investor sees if they are using the Angelsoft software application tool. If you are an entrepreneur, he suggested you submit your plan at www.angelsoft.net/entrepreneurs. They will soon be launching a site called Open Deals where entrepreneurs who don’t have access to a local angel group can submit their plan. For a full list of angel groups, check out the Angel Capital Association site and their directory of angel groups.
All in all, I had a great time at SXSWi. I look forward to attending next year and maybe even being a panelist!
Several readers who saw my Fundraising Toolkit post have asked me about my experience raising funds from angels and VCs for my first entrepreneurial endeavor. We raised about $15 million of which $3.5 million was from angels or what I would call boutique VC firms (i.e. a group of angels under one investment roof). Keep in mind that was all before the bubble burst back in 2001. Here are some of my observations based on my experience and from stories I’ve heard from other entrepreneurs.
Angels
They tend to invest their own money and reputation in earlier stage companies that can benefit not only from dollars but also their advice and contacts.
The really good ones (yes, there are fallen bad ones) have built their own businesses from the ground up. They have a great appreciation of what it takes to build a business and are creative with solutions to the inevitable unexpected issues that arise.
They tend to get their ‘hands dirty.’ Our lead angel investor for my first company was Marc Seriff, founding CTO of America Online. You may recall that in 1999/2000 talent was scarce and the Internet bubble was close to its biggest. Marc actually manned a career fair booth that we had at The University of Texas at Austin. He also participated in the interview process of finding great developers! Needless to say we found some good people. Since Marc was our lead for our first round, he even assured our vendors that he would make sure (i.e. personally guarantee) they got paid if for some reason we couldn’t close the round!
They tend to bring their friends along for the ride. Marc and another of our angel investors, Jack Baum, brought in their friends and contacts making the fundraising process a little bit easier. Jack also introduced us to the owners of our very first big paying customer who ended up doing a nationwide rollout with us. I remember framing the check! He and his partner Steve Winter brought in two of our three venture investors. The two good ones! Steve even served as our interim-CEO between the time we parted ways with the first CEO we hired to replace me until we found the next one.
They don’t necessarily have to invest money to be an angel. Richard Benkendorf was one of our advisors who introduced us to our first key customer in the Coca-Cola bottling system that helped us achieve our first $1 million in revenue! We framed that check too!
When the dollars needed get big for future financing rounds, angel investors usually voluntarily step back or can’t provide the needed growth capital.
Some of them may not have sat on a Board or been involved in building their own businesses making some board meetings interesting to say the least. In other words, an angel who made his/her money from their own business versus someone who came in later at Google, Microsoft, or Dell have different perspectives and experiences.
Venture Capitalists
They tend to invest in later stage companies with some revenue, product completed, and market traction. They seem to like to come in after an initial angel round of investment (if the deal structure is not too messed up).
The really good ones (yes there are bad VCs – in case you haven’t heard) have had repeated success with other portfolio companies, have built their own businesses, and come with a big rolodex of contacts and partners to help you cross some of the early hurdles. One of our venture investors, SAP Ventures, led by Jeff Nolan who blogs at Venture Chronicles (the only former investor I found who blogs publicly) introduced us to departments within SAP who were targeting the same customers that we were. He also gave me a copy of The Monk and The Riddle by Randy Komisar (see below for book link) that was a great read at a time when I think he sensed I was no longer enjoying the journey.
They tend to be more bankers/financiers than operating (i.e., built their own business) people. They tend to look at a business with a black/white eye on numbers and how fast they can get their money plus a nice return on their money out.
The good ones will often bring along investment partners in what is called a syndicate. A few VC firms who have worked together before will join forces to fund a deal which makes life easier for the founders because they can go back to building the business versus fundraising sooner.
They seem to use and apply a formula that they have achieved financial success with before which often means replacing the founding CEO or other key founders with people they have worked with many times before. If more often than not something has worked for them with a portfolio company in the past, they’ll apply the same logic to future deals companies.
They are investing other people’s money (i.e. their limited partner’s money – insurance companies, wealthy individuals, other corporations) and if they perform well those people will give them more money to invest. In other words they are risking more than just their finances and reputations, they are risking other people’s finances and reputations as well.
Who To Choose?
Personally, I think it all comes down to the investor fit and the stage of the start-up game you are in. It’s definitely better to have people who have built businesses on your side. It’s also good to have people who have backed high-growth businesses if you plan to IPO or sell to an established business in the near future.
Most technology start-ups don’t make it big. It’s a unique combination of talent, dedication, luck, timing, and great people that make the difference between the companies who become household names and those who shut down on the wayside or find another comfortable existence. We often forget that it is more than OK to start a good profitable business that provides value to your local community. If you want to play with venture capitalists, then you need to aim for the ‘household name’ category like Google or Yahoo! even if chances are high you won’t make it to an IPO.
My biggest learning was how important it was to be able to communicate with your investors openly and honestly. Trust your gut and if they respect and trust you as a person and you respect and trust them, it will be much easier to weather the inevitable storms. It’s easy to take money for money’s sake but in the end it can end up being more costly than what it was worth.
As Ben Yoskovitz says in his Startup CEO School of Hard Knocks post, you must have fun! When you are no longer enjoying the journey, take a break and look around to make sure you are doing what you should be doing. Make sure you are in the right place at the right time for yourself and don’t be afraid to make changes.
I’m so excited to say that the first official video of Babble Soft Applications went live today on DadLabs – Gear Daddy. I have wanted to do a video demonstration of our applications for a long time now but I was cycling through my entrepreneurial hats so fast, that I didn’t have the time or money to do a really nice one. So now thanks to all the cool dads at DadLabs we have our very first one and it cost me some beers was relatively free!
Go to their site and please Digg/Stumble the post if you like it. They are fellow entrepreneurs and the more hits/visits they get to their site the more loved they feel and more importantly the more cool advertisers they can attract. Sitter City is their sponsor this week. Plus they always make me laugh which is one of my 2008 goals! If you for some reason you need even more incentive to go to their site, I’ve embedded the video below:
I also just found out that it’s on YouTube also. So you can check it out there too:
One of the many hats an entrepreneur wears is the “getting great press mentions” hat. It’s typically a frustrating process since unless you happen to know each editor personally, chances are quite high they will hit ‘delete’ or not return your messages thereby not giving you a chance to tell your wonderful, glorious story. This seems even more true in the baby/new parent industry because there are a bunch of cool new products released every day in this industry and the editors are inundated with pitches.
I know it must be tough for editors because they get so many thousands of emails from everyone wanting them to write a story about what they believe is TNBT (i.e., The Next Big Thing). But it’s tough for us entrepreneurs to get noticed too! Since we are spending money on SEO, I decided to take on doing the traditional PR work myself until we raise funds. This means emails and follow up calls to editors at places like Parenting Magazine, Twins Magazine, Parents, Pregnancy, etc., etc. Only the most popular magazines for parents….
That’s why our SEO firm has also submitted it for distribution in free press release avenues on the Internet which should drive more traffic to our site or at least build up some of our back links. 🙂
The problem with wearing so many hats is that you don’t have the time to wear one long enough to spend the required, necessary time to really dig in deep and make a big impact. I wonder what color the press release hat is?
I’m making some progress on my personal 2008 goals. I signed up for yoga and have lost between .5 and 1 pound. Regarding my business goals, I’m still working on the executive summary, financial projections, visuals, and finding an attorney in order to raise funds. If all goes well documents will be substantially ready by end of next week, and I’ll be well on my way to finding the perfect lawyer…if that’s even possible. 🙂
Posting will be light over the next few weeks so in the meantime please check out the Work It, Mom! interview of me where they asked me the following questions:
What inspired you to become an entrepreneur?
You’ve written that you and the other founder of your first company were “washed out.” How did you recover from that? Was it hard to jump back into the entrepreneurial game after that experience?
Many women entrepreneurs have mentioned that they felt they were not taken as seriously as businesswomen once people knew their companies were geared toward mothers. Has this been your experience?
What lessons from your first company are you applying to your second?
What’s most challenging part of your working-mom juggle?
What advice would you give a working mom who is trying to start her own company? What pitfalls would you tell her to avoid?
You have a great general attitude — what motivates you besides, well, creating a super-successful company?
Then pop on over to Thom Singer’s Some Assembly Required blog and check out my guest post on Building your e-Network where I expand on the following tips:
Do what you say you will do when you say you will do it.
When someone reaches out to you for help, answer them.
The Summer 2008 Olympics are now over. The national conventions for the Democrats and Republicans are happening. Democrats just wrapped up theirs and Barack Obama is the official candidate. The Republicans are up soon and John McCain just announced his VP, Sarah Palin. School has started for all kids across the country. Summer vacations are over. And life goes on. 
Once upon a time I met a friend on the Internet. I found her blog and commented away. After some time, we realized we had similar visions and she invited me do a guest post on her blog called 
, recently reached out to me and will be doing a guest post on my blog soon. I just began reading her book and so far it’s a fascinating read on how and why women entrepreneurs in particular hold themselves back from achieving the success that they are capable of.
Unless you live under a rock or don’t drive a car, you have no doubt heard about or felt the state of the US economy. It’s in a state of well let’s say ‘confusion’ with indications it’s moving in the wrong direction. Gas prices are at record highs, people are filing for bankruptcy, they are losing their homes, the government has a record amount of debt, the stock market is going down, etc. etc.
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