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Dave Walters

Dave Walters

Website URL: http://about.me/davewalters E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

After catching a bit of the TechCrunch Disrupt live stream this week, I was definitely interested to see the wide variety of startups gunning for the Cup. While I love the idea and design behind Uber Conference, I always have a visceral reaction anytime I hear a call-related startup show up with an amazing service that's free (although to be fair, the execs did mention freemium features). This dynamic is rooted in my two-years-ago curiosity around a widget I've used at various times during my startup adventures: FreeConferenceCall.com. I could never figure out how they offered as many lines as I could chew up for free – not like freemium-driven free, but just damn zero! And that's when I discovered a concept called traffic pumping.

 

The short version of the story goes like this: there is essentially a fat-ass loophole in the Telecommunications Act of 1996 that allows rural carriers to jack up their "inter carrier compensation fees" over a traditional urban carrier. And when I say jack up, I mean something on the order of 10-20 cents a minute. The original intent was to balance the huge investment needed to build out rural phone systems that will likely never carry enough volume to be self-sustaining. So enter some shady middlemen who aren't even required to maintain a physical presence in these rural areas (think Iowa, South Dakota, etc.); add some poorly written legislation (or perfectly crafted if you're a conspiracy theorist); and boom, you've got a business model that creates amazing free services.

 

The problem is there's never a free lunch. It might not cost me 6 cents a minute per line to connect my conference call, but who do you think is paying that 10-20 cents/minute juice? You guessed it: wireless and long distance phone companies like AT&T, Sprint, Verizon, etc. And you're the zenith of pollyanna if you can't imagine those charges aren't passed straight along to your bill. Just last week, I (yet again) became sick of my $225 family plan bill with AT&T and shopped some alternatives. The net-net is if you live or travel outside of major cities – where flat-priced services like MetroPCS or Boost Mobile can drive a voice + text + data plan down to ~$45/month – it's damn hard to spend less than $75/month on one phone line. That's insane, and I would contend is driven partially by hijinks like traffic pumping – and in larger part by carrier greediness. I mean seriously, $30/month for an "unlimited family texting plan" that has a cost-of-goods of a small can of Hormel chili? But I digress…

 

So I really hope that Uber Conference has the stones (and customer adoption stats) to move beyond traffic pumping to book revenue. Plus there are all kinds of legal wranglings involving carriers, states and the FCC, so it's utterly unclear if this gray-hat revenue stream is even going to stand the test of time. According to the thinly veiled pro-telecom research firm Connectiv Solutions, traffic pumping costs wireless carriers more than $190 million annually. Even if the number's half of that, you know the primary thing getting "pumped" is our phone bills.

 

On a more positive tip, I found Ark to be the most interesting thing I saw given I fundamentally believe the premise they're building something Google or Facebook never will – a people search engine. I'm always amazed that anything people related always ends up at some super-scammy, content-scraping website that's so shady you worry about just hitting the URL. The UI is a bit literal for me (with the left-hand nav bar full of a dozen filters I can manually toggle to create results), but these guys are clearly smart enough to begin to layer in some natural language intelligence that would smooth out the entire UX nicely. That's if they stay independent long enough given their already-deep exit conversations. I really do pull for them to remain free agents as their technology will be much more end-user beneficial without the political overlay they seek to avoid. Viva le Ark!

After the third time I saw Nick Bilton's weekend column fly across my tweet stream in a matter of 20 minutes, I clicked with much excitement. I've always enjoyed Nick's work, and think he's near the top of mainstream big-media writers focused on startups. By about the third paragraph, I was confused and literally scrolled up to check the byline. To me, the piece felt one-sided, starkly anti-startup and designed to maximize pageviews. My takeaway was to let it soak in a bit. But given i'm writing this post 24 hours later, I suppose it's fair to say I couldn't swallow the bitter pill. C'mon Nick, you're waaay better than that! Let me explain.


Firstly, on the topic of bubbles I'll defer to the consistently brilliant Chris Dixon whose weekend post noted the fundamentals of most of the big valuations are more sane than the late 90s. I've not lived on that side of the table, so I'll leave the nuance to those who have, but I don't think anyone would call this market anything short of frothy. From my point of view, I think Naval from AngelList nailed it in a tweet yesterday: "Current sweet spot in the venture business - being able to write a $1M+ check, and price and lead a late Seed / early A." So those with more investment cycles than me can continue to debate the bubble question, but here's my take: money is flowing quickly, and if you've got a great idea now is the time to push hard for user traction, which will lead to the funding discussion. Build a winning company, and the money will come. Start something that's a pile of dog s*%t, and your shoe will always smell.


Bottom line, Bilton's characterization of a vapor-loving VC community that actively dissuades startups from booking revenue was over the top. And lining up a bunch of quotes supporting a thesis doesn't necessarily make that thesis true. Sure, do professional money managers want to maximize returns? Of course. But it's become increasingly more difficult to be a vampire in the VC business. Companies are cheaper to build and operate, and entrepreneurs have more choice in who they align with than ever before. These shifting roles are good and bad for both entrepreneurs and investors but I think it's the new normal. I have little doubt that guys like Shervin Pishevar will win at this game, and that guys like Mike Arrington and MG Siegler will continue to provide a well-written, inside-the-beast account of VC life.


And so on to Instagram. I wish writers would stop using them as a case-in-point for a bubble — they have almost nothing to do with it. There are very few CEOs who are equal parts brilliant product visionary, competitively obsessed and still in direct control of their monstrosity of a company; Mark Zuckerberg is the apex predator example. How many CEOs would make a $1B acquisition in the middle of an IPO quiet period because he felt it was critical to the defense — and continued success — of his platform? Answer: No one else we know. It's this type of aggressive management style that will make Facebook a highly successful company — private or public.


So let's call Instagram what it was: the clear winner in a massively social app space (mobile photo sharing) that generates the *exact* type of content that Facebook has grown into a hub for sharing. Do you think it's a coincidence that demographics paralleling a use case like "grandmas-seeing-pictures-of-their-kids-and-grandkids" are exploding at Facebook? Of course not! Picture sharing drives Facebook's existence, and Zuck saw Instagram as a direct threat based on their organic growth — and as a force multiplier for another social network like Twitter to catch Facebook. And seriously, what's 1% of your post-IPO valuation to hedge that bet? Answer: a rounding error.


And while we're patting backs, let's not miss Instagram CEO Kevin Systrom. If you follow all the bouncing balls, this dude made a series of epic calls in a short period of time that propelled them straight into the Facebook acquisition at warp speed. Let's take a quick look at his five strokes of genius:


  1. Win the photo sharing app war. Done, and it didn't take $41M or have some sharing gimmick. It's just a great app based on something humans love to do.
  2. Add an Android version to the product mix at an absolutely brilliant inflection point. Guess what? Traction wins, and adding 20% to your customer base in a week seals deals.
  3. Close a $50M round a week before being acquired. It's like playing chicken, except he had all the bases covered plus super-powers! I can't imagine closing a round and negotiating with two potential suitors in parallel. Seriously, wow.
  4. Entertain talks with Twitter as a way to set your market price. Very few of us will ever know how close Twitter came to winning the prize, but they sure set the number for Zuck to obliterate. If the reports are true, it was a 2x premium made up mostly of Facebook stock — that's called compound value people!
  5. Pull the Facebook trigger when the moment was optimal. Best price, perfect timing, huge audience multiplier.

So at the end of the day, my takeaway on the Instagram deal is build something people love. And if you're a founder, be prepared to make some serious high-wire decisions under maximum pressure. Maybe you'll have an early monetization strategy — like the guys at Dropbox, who could exit for similar money — or maybe you spend a lot of investment dollars on user traction. You can even look at Pintrest as an almost-perfect in-between case — one with hyper growth and a clear e-commerce monetization strategy — even if they aren't driving any revenue. And let me be ultra-clear: there are VERY few scenarios when you can build a company to tens of millions of users without a monetization strategy. Your business probably isn't one of those — any more than my Parental Consent as a Service startup is. But just because one team did doesn't mean we need to break out the Chicken Little rhetoric.

What If Cringely is Right? How @Jack Could Run Apple

Saturday, 07 January 2012 04:29 Published in Unplugged

It's been a while since I've blogged here, which is mostly due to my new role as Product Evangelist at Silverpop. It's a company and team I’ve had incredible respect for since being their first corporate client ever in 1999 while at UPS. There were incredibly few full-time gigs I would have entertained, but it’s been awesome. So on to my (potentially) crazy theory for this post.

 

To begin, you have to be old enough to remember one of the true icons of tech media going back to the early 90s: one Robert X. Cringely. His InfoWorld column was center of all astrophysical prognostication for years, and it always seemed he knew just a little bit more than anybody on the block. If you're not a 20-year fan, you may also know Bob from his book ‘Accidental Empires: How the Boys of Silicon Valley Make Their Millions, Battle Foreign Competition, and Still Can't Get a Date’, which was made into an amazing PBS documentary in 1996 – ‘Triumph of the Nerds: The Rise of Accidental Empires’. If you ever see it on your channel guide, made it an immediate priority!

 

So Bob does annual predictions every year, and his #1 this year is a doozy: that Tim Cook will be replaced as Apple CEO. Personally, I'm not sure I agree 100% for multiple reasons, but I love the juiciness of the idea. Firstly, I believe Apple has a clear corporate memory for the crappy days of revolving door CEOs – and how they almost lost the whole damn enchilada with guys named Sculley, Spindler and Amelio. It was only the brilliance of Steve Jobs who pulled it back from the brink of destruction, and created the behemoth we know and love today. For continuity and momentum reasons, I think Tim sticks around for more than the next 11 months. But that’s not to say the wheels might not be turning...

 

The second reason is more about leadership style and the natural comparison of CEOs. As my buddy Heath Wilkes has contended from Day One, the next CEO of Apple couldn't be a visionary in the vein of Steve – he'd simply never live up. And choosing an operations guru who made epic contributions to wringing efficiency and profitability out of a huge machine certainly allayed investor fears. It would have been a tough move to elevate a guy like Sir Jony Ive into the role even if he's among the most influential product design dudes on the planet. In any other organization on the planet, Ive would be the CEO hands down.

 

So if Cook were to be ‘replaced’, here's how it could go down. The first move would be Apple buying both Twitter and Square simultaneously for an eye-popping $10-12 billion (which sounds like ton, but is less than 15% of their cash reserves). It'd have the desirable market effect of ‘exiting’ two deeply funded startups, and make no mistake there'd be a nice premium into the two-at-once deal. (BTW, think about the Investing Renaissance that could follow the freeing of that much capital!)

 

And from a product perspective, imagine a direct integration of Twitter in iOS6, along with the iPhone being the default payment platform for Square. No dongle -- just an NFC chip, the beauty of the Square UI, and the power of their growing merchant network. It's the base-level integration of messaging and payments that could continue to push iOS beyond today's competitors.

 

Oh, and you get the guy who I believe could lead Apple for the next 25 years – Jack Dorsey. Make no mistake, I don't believe any entity – even Apple and its double-digit billions – could take Jack off his current missions with Twitter and Square, but I do think he'd be an amazing understudy. A scenario where he had 2-3 years deeply embedded with Jony and Tim could be exactly the type of seasoning that could set him up for *epic* greatness. It would also make Twitter and Square better products by adding more engineering horsepower and pure R&D dollars, along with certainly making iOS even more powerful.

 

So why might this not ever happen? First of all, I don't know Jack personally but it's tough to see him running almost anything someone else created. By nature he's a definer and a builder. If anything, I could see him following the Bill Gates path of transitioning from business success into something more cause oriented – at an even younger age. I also believe he's probably near his maximum capacity with two full-time jobs, and is utterly dedicated to success of both ventures. He’d have to absolutely believe this was the best move for Twitter and Square, not just a promotion for Jack Dorsey.

 

But at the end of the day, this would be the tech version of the Dream Team. A brilliant product visionary obsessed with design and functionality paired with a global powerhouse who can scale manufacturing seamlessly and disrupt major media industries at-will. It would be the best of all worlds for users and shareholders – and an utter nightmare for Apple competitors and dinosaur industries like cable TV.

 

If it goes down, remember where you read it first. Happy New Year…

Thoughts from TEDxAtlanta: Balance

Tuesday, 13 September 2011 13:47 Published in Unplugged

As most entrepreneurs will tell you, managing "balance" is in an ongoing (and sometimes not winnable) struggle during specific periods of building a business. It's an awesome concept, and I've learned over the years to manage toward balance in small ways. Eating dinner together with my entire family every night. Being active at my daughter's school. Reading to both my daughters. These are the things that make a real difference for me personally.

 

So I time-shift big chunks of my work until after the entire house is asleep. I often joke I get more done between 10p and 2a, than during 10a to 2p. Sure I get less rest, but I'm a night owl by nature so it works.

 

The pursuit of balance is just as important professionally. Starting multiple businesses concurrently, helping other entrepreneurs build their companies, and staying on top of market trends can be an exercise in tunnel vision. Stepping beyond the everyday crush is the single most important aspect of TEDx for me. Whether it's the afternoon once-a-quarter I spend at TEDxAtlanta (which is my quick cleanse) or the day-long immersion of TEDxPeachtree (my deep cycle recharge), putting everything aside for a day is incredibly cathartic for me. It gives me increased focused following the events, and has even added a few things to my bucket list.

 

So today, I'll continue to add my thoughts to this post during TEDxAtlanta: Balance. You're more than welcome to join the live stream, and I hope you find as much value as I do.


 The Live Blog

 

 

And we're underway with Chuck Leavell from The Allman Brothers and the Rolling Stones. "You can't grow up *and* be a musician." Chuck also spoke of environmental responsibility. Brilliant, eoc-active guy!

 

Teresa Amabile, Harvard Business School: Managers have the power to remake creativity. What gets people engaged at work? Her team collected diaries from 12,000 workers. Making progress was the single most important event. Risk aversion is a classic symptom of non-motivated employees.

 

Dr. Charles Raison, Emory University: We must find better ways to deal with our enemies. It's the biggest threat we face. Everything in the world is becoming more interdependent. Our real enemies are not those whose oppose us, it's the anger and hatred we feel for them.

 

John McFall, Atlanta Ballet: Indian rain dances express through movement, like ballet. Belly dancing does more for a meal than dessert! Dance is happy, it's joyful. Tap dance was invited in the US - same for jazz and hip hop. What does that say about our creativity? It's limitless! Dance is a language. It has words, phrases, syntax and meaning. You just feel it, and it conveys meaning around the world without a single word.

 

Rita Charon, Columbia College of Physicians: Talking about death with joy and truth. Came to medicine through a love of reading. She wrote long form on a breast cancer patient of hers. It allowed her to create context for her treatment, and created the ultimate connection between the two. Facing death as an ultimate certainty together allowed new views into the process of disease.

 

The Holmes Brothers welcome everyone back from break with amazing soul stylings in the vein of Curtis Mayfield or BB King. New Job One: find these guys live in a small venue with great acoustics!

 

Ray Anderson, Interface Global: Converted his modular carpet company to be zero impact to the environment. A Georgia Tech grad, he worked closely with organizer Tod Martin. He gave a TEDTalk in 2009. He passed away earlier in 2011, and was known as the "greenest CEO in America."

 

Bill James, JPods: Proposes we operate within a solar budget by 2020. All our energy decisions were made durin WW1. We still have the same gas mileage today as when the Model T was state of the art. His JPods cost 4cents a mile versus 56 cents a mile to operate a car. They're small boxcar-like vehicles that are suspended from subway-like rails with solar panels on top. Can transport people or goods by computer control.

 

** Tod Martin just announced the live stream has had more than 10,000 viewers from more than 50 countries.**

 

Radcliffe Bailey, Artist 'Memory As Medicine': Went to art school intending to be a graphic designer, but was captured by creating things by hand. My studio is my central place. I do everything there. He paints in layers, but limits himself to only seven. Integrates pictures his grandmother gave him of unknown relatives. There are only two places I want to go: the deepest depths of the ocean and outer space.

 

Greg Best, Pursuing Mixological Balance: Began in the restaurant business from his love of theater. A bar is a microcosm of society's conversations. But a bar is also a fragile place. A bar has a lot of integers for one equation. Be conscientious and aware of those around you, and what they need. A great bar recipe: 1/2 measurement of excitement, 1/2 shot of topical humor, a couple dashes of conscientious perspective of oneself, plus 1 float of complementary observation of others. "The Welcome Bar Fly". A positively charged magnet draws other to it, a negatively charged magnet repels all.

 

Hugh Acheson, Empire State South: Southern food is a tone of history to the community. He grew up in Ottawa and Montreal. I dont believe in taking shortcuts -- a little inconvenience goes a long way.Telling tales of his favorite local farmer Tim. Tim doesn't sell to anyone outside of Athens, GA because he'd have to pick vegetables before they were ready to eat. Tim built a grain mill powered by his mule, which has been duplicated in Africa to feed thousands of people.We must support local businesses. First local, then sustainable, then organic.

 

And some light Q&A before pimento cheese sandwiches by Empire State South.

 

Or the alternate title: “Screw EHarmony, How I Met My Technical Co-Founder on LinkedIn”

 

 

This morning I got a reminder email from LinkedIn about my free $50 in ad credit. Being a new public company certainly ratchets up the pressure for recurring revenue, so here comes the AdWords-style promo code flinging! I really don’t have time right now to test another platform without a solid objective in mind, so I’d pretty much 86’ed it. And then my parallel entrepreneur disease kicked in…

 

Sure I’m neck-deep in spec’ing and working with my bad-ass technical co-founder to develop the core APIs for Mixee. And yes things have moved into warp drive in the last two weeks with a new licensing opportunity. But that’s the beauty of parallel processing – more oars equal a faster boat.


At the same time, my other startup Garkd has been equally burning a hole in my frontal lobe. There’s nothing quite like discovering a key building block or two in the API ether. It’s taken my insanely lofty concept much closer to a reality without 500 hours of coding time.


So here’s my insane plan: my $50 LinkedIn credit is going to be deployed to search for an API & data visualization beast to join me a co-founder. And LinkedIn is a great place to try this grand experiment given their data visualization prowess is epic. Maybe someone internally sees this and is intrigued? :-)


To be fair and upfront, here are the rules of the road:


1.    There will be no cash compensation early on. If we crush it, we’ll both do well. If it tanks, we’ll have both spent our hard-earned time in vain.
2.    My job is to intelligently and clearly outline my vision for the application – from user interactions to platforms to the business model.
3.    Your job is to add more awesomeness to the creation, and code stuff. (If you’re not a hands-on, hard-core hacker please don’t waste both of our time.)
4.    You should think APIs could save the world if we could integrate 10-12 of them and then add our own magic dust.
5.    Ideally, you have a hacker data scientist half to your personality.
6.    I will require you have a significant portfolio of work you can walk me through before we dive into the guts of Garkd (links, GitHub commits, StackOverflow profile, etc.).
7.    We’ll work together to architect the systems required to build a working MVP that can be launched.
8.    I won’t ask you to contribute a dime in hard costs.
9.    I will share the concept without an NDA, but will turn into super-dick if you violate my trust.
10.    Once we’re both convinced we can slay the world, we’ll paper our deal as co-founders (and yes, before anything ever gets publicly launched).
11.    If we make good (or great) money, we’ll pay each other good (or great) money – as long as it’s not investor money.
12.    If we take investor money, we’ll kill the shit full-time for as long as we can making pay-your-bills minimums – and then go another six months. Our goal will be to change how people save and access information.
13.    I live by Mark Suster’s well-proven advice on co-founders, so please know that coming into partnership with me.
14.    I’m willing to work with anyone in North America, but my Spanish is probably too rusty to consider a Spanish-only speaker.
15.    You must be one individual, not a company or conglomerate or agency.
16.    I reserve the right to add more ground rules publicly to this post as the process reveals how much junk I haven’t considered.


So here we go on this grand experiment. I'm excited to see how finite the ad targeting tools are at LinkedIn, but apologize in advance if they suck! I’ll request the Comments be used to ask any applicable-to-all questions and I’ll respond publicly – just like seller questions on eBay.


And finally, you can dig it all up through Google, but here are a few links for you to see who the hell I am: Twitter, LinkedIn and the index here at JumboMouse.


Who’s ready to do this thing?

After standing-up JumboMouse in June, I’ve been planning a post on why I did – and why any startup founder (or founder team) should have one as well. But first the disclaimers: I’m not a lawyer, accountant, financial advisor or any other type of service professional. My advice here should be sanity-checked with your own trusted advisors. So, caveat emptor or better said – sometimes you get what you pay for :-)

 

When most of us hear the word incubator, we think YCombinator or TechStars. Those are the versions where someone else does the organizing, but the principles are much the same when setting-up your own shop. They’re using the structure of an incubator to make many investments in many businesses, and effectively pooling the costs and resources needed to make those companies successful. That should sound amazingly familiar to a serial entrepreneur – we do the exact same thing just with our own projects and our own dollars. But the structure and organization provides some important benefits even for a single-member LLC like myself. Here are just a few:

 

1) Business Expenses Should Be Paid By The Business: This sounds like a no-brainer, but take your monthly household budget and run some example numbers for yourself. Most entrepreneurs I know can easily come up with a couple grand of server costs, domain registrations, business cell phone plans, automobile expenses, internet access, client meetings, etc. on a monthly basis. Your tax bracket drives the true savings, but paying these bills with post-tax money just isn’t smart. Get yourself in the habit of doing monthly expense reports. You’ll thank me at tax time.
 

2) Provide Structure To Your Ideas: Again, this sounds kind of elementary, but the importance here is delineating between real companies and junk-I’ve-been-thinking-about. As my buddy Rob Kischuk recently wrote, be prepared to provide meaningful updates on the big projects you’re working on – he used the word ‘momentum’. If you’re going to be serious about the startup game, be medieval about what you’re working on – and be realistic about what one human can do.
 

3) Incubators Incubate: Maybe most importantly, your incubator serves an important legal purpose both in pre- and post-formation of each company inside. While you’re early, it rarely makes sense to sink the thousands of dollars necessary to stand-up a separate company – but you need the basic legal protection offered by an LLC. While new LLCs are cheap and easy to set-up, they typically only last as long as seed stage capital when serving as the basis for an individual company. Your incorporation strategy will get more complex (and way more expensive) as your investors get bigger, so waiting makes good sense. And this benefits you as well. Personally, I’m a fan of keeping all my ownership interests (and any other outside revenue or equity) rolled-up in my incubator. For me, business stays business and personal stays personal on paper – even if they do collide at tax time.

 

So how hard is this process? Do you need to go hire a boatload of service providers and spend thousands to execute my plan? The answer is ‘it depends’, but here’s what I did, which is admittedly the low-and-fast version of the process. (Disclaimer, Disclaimer, Disclaimer).

 

1) Name The Company: This is hyper-subjective and I spit out a couple thousands words on the topic two weeks ago, but the short answer is find a name you love. And make sure the domain is available, and the name passes the corporation search in your home state.

Total spend: 20 minutes :: $0
 

2) Register The Domain: If it’s any of the standard domains, I personally prefer NameCheap but have been known to split my spend between 1&1 with the very occasional GoDaddy purchase (maybe the new PE owners will un-blackhat their horrendous sign-up process but at least I know their moronic CEO won’t be using my $10 to buy elephant bullets).

Total spend: 5 minutes :: $7.99
 

3) Register The Corporation: Go to your home state’s Secretary of State website. In Georgia, it’s all online and super convenient. The only odd deal was you have to pay $25 to ‘reserve’ your name, and then $100 to register the company. I’m sure it’s just some other ‘department’… And this part of the process will surely have state-level differences, so do your homework! 

Total spend: 30 minutes :: $125
 

4) Secure An Employee Identification Number (EIN): After you’ve got your incorporation articles done and your registration number, head over to the IRS site to get your EIN – yep, that’s online too.

Total spend: 5 minutes :: $0


5) Set-Up A Business Mailing Address: This is an optional step, and is personal preference. I like the strategy for one simple reason: I have a PO box listed on all my public-facing WHOIS records. Checking mail another place than home is a pain, so think hard about what’s near your everyday travels – for me it was the good old USPS. And again, the majority of the process can be done online with just one final signature and the key delivery happening at the post office.

Total spend: 30 minutes :: $41/6 mo.


6) Open A Business Banking Account: This is also loaded with personal preference, but this time around I came across a product feature that didn’t exist but one I really wanted. Instead of a traditional business checking account, I was in search of a brokerage account with Visa debit card abilities. Apparently, this was a Herculean request that didn’t fly at either Schwab or Fidelity – although Chuck’s folks were more upfront with the fact they couldn’t do it. So I ended up going back to Bank of America, who I have a love-hate relationship with. All the right features, but I once walked out of one of their branches with six cashiers checks after closing all my personal accounts. At the same time, their small business banking has more than enough features for a guy like me. We’ll see how long we coexist this time…

Total spend: 4 hours :: $0 (still deciding between traditional business checks vs. QuickBooks printable ones).


So overall, except for the chaos surrounding a debit card on a business brokerage account, the whole process to stand-up an incubator took me under two hours and will total ~$225 after I order checks. That’s well worth the tax benefit you’ll derive after meeting with your accountant to define the ground rules for your business. And you’ll be legally protected on any pre-formation companies, along with having your equity ownership centralized in a single entity post-formation.

 

How do you have your business set-up?

It’s All In A Name – And A Domain

Monday, 27 June 2011 16:10 Published in Unplugged

In kicking off the new JumboMouse site, I’m refocusing my blogging around the hardcore mechanics of defining, launching and building companies. And one of the first topics every entrepreneur faces is naming a company. While much of the process is incredibly subjective, I’ll provide some tips, tricks and tools that have been useful for me over the last 10 years.

 

First off, you’ve got to know what market you're taking on – and how mature it is. The further along a market is, the tighter (and more differentiating) your positioning should be – and therefore your name should reflect. For something as still-wide-open as search was when Google launched in 1998, a meaningless name worked easily enough. But I’d contend there’s an inverse relationship between the simplicity of your functionality and the specificity of your name. Search is a top-level concept that could be called virtually anything – from an adjective of joy (Yahoo) to a late-to-the-game random sound (Bing) to a made up name like Google.

 

At the opposite end of the spectrum, if you’re trying to convey a specific solution to a well-defined market, you’re much better off with a literal brand like SalesForce, Evernote or Illustrator. When you’re pointed at a clearly defined group of users (and even more when your solution is B2B focused) there’s plenty of reason to craft something straightforward and easy-to-understand. If it’s an enterprise-level solution, don’t name it something an IT executive will be embarrassed to utter in an all-staff meeting (think, FlyingSquirrel). The slightest out-of-place brand could be the difference between mad success and mediocrity – assuming the technology is killer.

 

For more emerging markets like we see with many of today’s hottest and most disruptive startups (think Twitter, Turntable, Quora, Hipmunk etc.) a hipster-friendly name will go a long way to cementing your web 3.0 positioning – and most importantly, getting your first 100K users. And there’s little penalty for deriving new words from existing ones – in fact, that’s often the norm.

 

The rest of the psychology, sociology and gut feel of creating a name should be owned by you and your core team. Don’t listen to junk science from other industries like telecommunications, automotive or pharmaceuticals that all have multimillion-dollar naming agencies. Make it authentic, and ensure you’re behind it 1000%. Remember, it’s the story of YOUR company – and shame on anyone who answers “because the domain was available.”

 

But let’s be real, the availability of the domain is among the most critical aspects of a name. And while we’re talking marketing channels, you should lock-up matching usernames on Twitter and Facebook – and get to work tweeting and driving enough likes to secure your vanity URL at Facebook. The rules of the road for URLs are pretty wide open, but I’ll share a few specifics I live by:

 

  1. Avoid purposeful misspellings of known words such as Klout. Until they reach widespread adoption, every single intro for every person in the company goes like “it’s like clout, only with a K.” And then there’s the issue of users misspelling your domain on direct visits. Unless you can own the correct spelling of an existing word, my opinion is move on.

  2. If you’re going to make up a word, focus on phonetically simple words and think about Scrabble points. In general, the higher the derived Scrabble score, the more unique the name – Zynga being a great example. Also, avoid homophones and homographs at all costs. In fact, stay away from anything in the blue, yellow or the overlaps in this Venn diagram on Wikipedia. Simplicity and clarity are the keys.

  3. Alternate TLD (top level domains) from non-US countries can be good options but only if they work in two ultra-specific ways: a) it’s an existing word that spans the dot, i.e., mixtu.re; or 2) if it’s rock-star short and the characters to the left of the dot are a known word, i.e., mix.ee.

  4. If you’re going to use an alternate TLD, register a matching .com like get<brand>.com or go<brand>.com and redirect that to your site. If you’re crazy lucky enough to hit Twitter-ish popularity, you want something a decreasingly web-savvy group of users can comprehend and reach via direct address.

  5. If there’s political unrest where your country’s domain is registered, go ahead and renew for 5 years at the first sign of trouble. Most problems (like the well-publicized issue for letter.ly) come when a domain expires. Once you’re registered, it’s normally set and forget.

  6. Base your name on one word that best represents your market position – ideally a word that’s less than five letters. From there, you can explore derivations like -rama, -ology, -ed, -ous, -ly, and hundreds more. For example, one of my startups is GARKD, which is based on the single word ‘gark’. It took a lot of cycles to get to that one based on the complexity of the technology behind the company, but spend the time – it’s well worth it!

  7. If you’re going to embrace texting vernacular by using GARKD instead of GARKED, you’d better own both and redirect the -ED. Following launch, I expect Clicky to show me that a fair percentage of my direct traffic is redirected to -D from -ED. Don’t out-trick yourself by preventing users from finding you at the exact moment you need them the most!

  8. And for the love of little puppies, PLEASE run a Google search on your new name before buying domains. You need to see who owns the first 2-3 pages of results, and whether a similar name already exists in close proximity to your market (the worst case scenario) or if an aggressive SEO buyer has a product in a similar space (almost as bad as a direct competitor having a similar name).

 

So once you develop the core of the name, it can be mind-numbing exercise to drive out the final derivation. And if you’re using a non-US domain, be prepared for a longer registration process (up to a month in some cases) and more fees (average seems to be ~$70/year, but varies widely). I’ll also share from experience that allowing random name availability to get you away from your core concept is nothing but a distraction. Pick one word (like ‘mix’ in my case) and stick to it. Once that’s locked in, here’s a set of tools to grind out your final name:

 

  1. Name Generator: I recently saw a tweet from Mark Suster about a great URL site called Panabee. It allows you to combine two words (or just use one as I prefer), and it applies a bunch of naming logic out ahead of a domain lookup function. Things like appending ‘go’ or ‘get’ to a word as I discussed above. It gives you literally 35-40 derivations of a word, and an instant status on domain availability. It’s hot!

  2. Scrabble WordFinder: I like A2ZWordFinder the best given it allows virtually unlimited use of # to wildcard letters. Take your core word and start by adding 4-5 wildcards. You can also control whether the core word is locked at the beginning or end of the candidate words – or even drive the exact placement inside the word. And finally, I prefer to sort the list alphabetically, but my most important filter here is length. The downside of this approach is you only get Scrabble-cleared words, which are often taken – so get creative with your own conjugations too.

  3. Text Editor: I use Word because I’m a kid of the 90s, but anything that can do Find/Replace All will suffice. Once the candidate list is built, copy and paste it into a new document. Then run a Replace All function to convert commas to hard returns. If you’re searching alternate TLD (like .ly or .ee), you can increase the complexity of the Replace to create the list with the appropriate syntax on the URLs. Or if you’re looking for just .com, then change the syntax to append that on each line. (Pro tip: only tackle one extension at a time given you may need to programmatically modify hundreds of lines.)

  4. Bulk Domain Lookup: Again, there are lots of options but I prefer the tool at 101 Domain given they support the widest list of country-specific TLDs. Once my candidate list is generated, I slam a maximum of ~500 domains at a time into their bulk search tool. I’ve found anything over ~500 creates some timeout errors. Just make sure the syntax is dead on, and there’s one domain per line in your final file.

  5. Country-Specific WHOIS: If you’re considering non-US domains, there’s one more critical step. Once you’ve shaken down what 101 Domain tells you is available, you still need to hit a domain-specific WHOIS to make sure everything’s cool. I found out the hard way that 101 Domain works hard to provide the most recent status, but things get weirder the more obscure your extension is. You can Google for these country-specific IANA pages, but in general the following link works when plugging the county-specific extension in the URL where I show **: http://www.iana.org/domains/root/db/**.html

 

The last bit of advice I’d offer is to have your own trusted inner circle to reality-check you during the naming process. For some, that’s your startup co-founders and for others it’s a small group of people who know you (and startups) inside out. Much of the experimentation and grinding process is best done solo (and immersively in my case), but having some kind of external view on your thinking is critical.

 

And if you have the opportunity (and predisposition), do some light focus group testing. I’m not a fan of wasting time in the whipsaw of medium-sized focus groups, so keep it small and quick with real customer targets. You’re looking for genuinely negative responses based on attributes you haven’t previously considered, so I’d ignore any ill-formed feedback or slight discrepancies. Selling your product to customers is Job One!

 

Good luck in the trenches, and I’d love to hear about any tools you use to crank out company names!

Turning The Beast Inside Out

Tuesday, 21 June 2011 19:54 Published in Unplugged

With the launch of the new JumboMouse Labs site, I've decided to kick-off a new content category: Unplugged. Having been 100% immersed in startups for more than five years this time around (with another 5-6 preceding the last bubble), I've seen and done a ton of ideation and company building. And while creating the two latest ventures for JumboMouse, it occurred to me that sharing the inner workings of the process could be beneficial for others.

 

So here we go. I'm planning to force myself to share all that's genius and all that's painful. The things every entrepreneur should think about – and the pitfalls to avoid. I'm not going to filter my content by anything other than my own reality. So apologies in advance for a few rants I'm sure will surface, but I hope it's more productive for most of my readers.

 

My first post on the topic will focus on the process I use for naming a company – including both the theories and the tools I use to get to the finish line. It's part gut, part science and a good old bulk domain lookup tool, so stay tuned later this week. 

If you were afraid true old school soul music was dead and gone, take a minute to shout AMEN with me! About a month ago, my late night TV was switched over to Carson Daly’s late night talk-n-tunes show Last Call. I (like most people I know) have a bit of a love/hate relationship with young Carson, but I’ve heard enough good music on the show over the years that I can put up with his goofy interviews. So imagine my surprise when he throws it to a cat named Charles Bradley who’s playing live from some concert joint in LA. I was GLUED to my TV at 1:45a!

 

It was like watching an old Al Green black & white clip, but the sound quality was of this century. His music has all the makings of the epic soul music of the 60s – pleading vocals, an always-on horn section, perfect harmonies from the female backup singers, and themes of love and social justice. I’m dead serious when I say it was the best stuff I’d heard since my favorite new-era blues dude Robert Cray. (Although the reverend Al’s Questlove-produced 2008 album ‘Lay It Down’ was pretty hot too and should be part of any soul music library.)

 

I was rather impressed with my self-control to wait until the following morning to jump on Amazon MP3 and buy the album. And it has remained a fixture in my playlist for far longer than the average purchase. I can easily listen to ‘No Time for Dreaming’ back-to-back while cranking on office work or mowing the lawn. It’s just that good, and if old school soul is your thing, drop what you’re doing now and click here. You can thank me later in the comments!

 

Enjoy the video below!

The (Unfortunate) Tale Of Two Twitters

Thursday, 17 March 2011 04:39 Published in Startups

In my last post, I opened the topic of how Twitter has set-off on a course to threaten their community in favor of finding revenue streams. I’ve seen a few people starting to write about this – most notably Mike Loukides’ great opinion piece at O’Reilly and Ryan Kim’s numbers-driven take at GigaOM. Between the two, they hit many of the salient points, of which I’ll only echo a few later on.

 

The strangest thing about all this developer controversy is it’s playing out at exactly the same time as the original founder Jack Dorsey is celebrating the fifth anniversary of being green-lighted to build Twitter. Jack is now dedicating his blog to the IM-by-IM story of the first moments of Twitter. (I selfishly wish he’d turn on an RSS function so I get the posts immediately in MacMail.) It’s the kind of inside story I absolutely love because it humanizes the creation of an epic Internet brand. And every entrepreneur should be following along on the hopes of picking up one tiny nugget about how to build a great company.

 

I can’t help but think this is the classic story of Management 2.0 – when the original founders who had the ‘dream’ are moved aside in favor of more professional managers. This is both a success and a failure of the original founders. It’s a success in the fact they created a service that captured the hearts and minds of millions of people – literally Ev, Biz and Jack changed the way people communicate, which is not a small thing.

 

At the same time, that success had a heavy price for a company that was built from the mind of a few “change-the-world” entrepreneurs. As Twitter’s valuation exploded and they continued to raise millions in VC money, the pressure mounted on creating a business model. There were stops and starts all along the way (the best example being promoted tweets), but nothing ever really stuck. The failure to stand up some type of revenue model clearly put enough pressure on the three co-founders to move them off into other ventures (in varying degrees).

 

And I’m guessing it’s not a coincidence that Jack has Square aimed at financial disruption the likes of what Twitter did to communications – but it’s got the revenue model built in from Day One. In fact, Square is aggressively driving the cost of merchant processing down, and being handsomely rewarded with reports of more than $1M/day in transaction volume. It’s yet another example of great UI/UX and design blowing up an industry segment that’s stuck in the 1970s. If there’s one guy on the tech scene right now that’s channeling the Steve Jobs mojo (and could absolutely be our industry’s next superstar), I think it’s clearly Jack Dorsey.

 

But what really worries me about Twitter’s current tone is that they’re simply turning their back on the incredible ecosystem they created while growing the company. It’s like any other platform-to-developer symmetrical relationship (think Apple/iOS or Sun/Java) – the real power play requires BOTH sides to be in perfect sync. If the platform gets too far ahead without developer support, you end up looking like RIM and if the developers get too far down the build path without platform support they simply die on the vine without buyers for their innovations. And platform lead Ryan Sarver may have couched the whole position in ‘customer experience’, but we all know it’s about Twitter’s least-common-denominator advertising strategy that requires them to control the client and the impressions it serves.

 

And at the user level, Sarver’s stats about 90% of people using a Twitter brand client once a month are completely meaningless. I actively use at least four separate Twitter clients depending on the task – Echofon is my first choice for synced timelines across all my devices, Brizzly is web-based and does a great job of integrating multimedia into my stream, and HootSuite rocks for it’s scheduling capabilities and metrics. All that being said, I’m a huge fan of the newest breed of Twitter-branded clients for both OSX and the iPad. They’re solid enough to be my Number One backup when Echofon just isn’t handling a task well. But the point is I have choice. I don’t care that the user experience in different in all of them – in fact that’s what I love.

 

Honestly, I expect more from the brand Twitter than resorting to crappy-ass advertising. These were the guys who changed how we communicate on a daily basis! They saved me from an overloaded inbox, and gave me the tools to personally curate information from some of the smartest people in the world (for me, that’s Mark Suster, Jack Dorsey, Esther Dyson, Dave McClure and hundreds more). My tweetstream is an always-on, thought-provoking expedition of all things startup and technology. But the true power is it’s something completely different for each user; witness today’s trending topics that range from Japan to Nate Dogg to Sharron Angle.

 

So yeah, I’m pulling for something bigger and better than banner ads ­­– and because I believe Twitter is one of the most important ‘startups’ of our time. But beware the tale of Canada’s poster child Research in Motion. After being the corporate darling of the 90s and early 2000s, their unwillingness (and inability) to cultivate a developer following exposed a nice soft underbelly that Cupertino eventually took advantage of with the killer combination of a watershed device and a well-incented developer community. While hardware and software clearly have different dynamics, the core issue is the same: epic scale requires a healthy ecosystem where all the players are appreciated, supported and make money. That’d be a tough lesson for Twitter to learn in reverse after five years of glowing success…

 

Cheers

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