Venture Capital in Two Trips Six Years Apart:

In late 1999 as the bubble was bursting, I called on a dozen or more Venture Capital firms pitching my idea for financialaid.com. I was was not well received, I was a young 29 years old and I was not expecting to be treated like a bad kindergarden student. I had built two small successful companies but that did not matter. Most of the VC's said no right away, stating that we did not have the experience to create the vision. We did receive a few offers but choose to pull equity from our houses and sign away our lives to raise the small amount of money needed to fund the nancent business. It worked out extremely well for us. When we sold the original founders held 96.25% of the shares. Had they invested they would have seen a 80x on their money.

In November of 2006, we decided to call on some of our friends on Sand Hill Road. This is the centerpiece of the Venture Capital community. It is truly an amazing part of the world. I can only guess how many companies have pitched their product on this street and how much money has been invested. One of the companies we called on told us they were responsible for 10% of the NASDAQ, had they held all the positions they had invested.

This trip was different. We were well received and treated with the level of respect that you would expect from business professionals. I do not know if it was the timing, my prior success or higher caliber of people but this trip was an amazing learning experience. Re-writing the business plan, putting together the PowerPoint and pitching your vision force you to quantify what you know to be true in your heart. (We are still engaged with a several firms so we will keep you posted on the outcomes.)

We have always kept our internal business plan, but it is much more difficult to write one for people who have no idea what you do. The process, which took two weeks, required the commitment and buy in from our top management staff and tech team. We walked away with a much better idea of what we need to do and how to explain it to all of our customers.

Another benefit that is not mentioned very much was that very intelligent people drilled into our business. They asked very tough questions and forced us to defend our passion for the business with compelling data and unique solutions. We walked away with a great sense of direction and confidence.

You do not have to travel to Sand Hill Road to go through this process. Write your business plan and present to intelligent people you respect who will give you honest input. They can help you through tough times and allow your to refocus you on your weaknesses. Companies can create a board of advisors to help with this.

Cheers,
Mike

Great Projects attract Great People:

There is a real-world balance between the job and the pay. How hard do you think it is for Yahoo to hire a web developer? How about the IRS? How about for the same pay?

Those with the greatest skills have the luxury of choosing the work that they want to do. For the most part they have solved the money part of the equation. So why are there great web developers who are not working new exciting projects? There are a series of reason including pay, location, company mission, blah, blah, blah.

So how does the little guy attract great talent?

I believe part of the answer is to dream big and work on projects that can change the world. Through climber, we have learned that in most cases people would rather work on a great project than get paid more money. They would rather be part of the great team that produced cool and exciting products than succeed in a company where their worldly contributions would not be recognized.

Interview and hire people whose beliefs are in line with your company goals. Turning them into believers is the first step in understanding your sales process. If your employees think your products suck, they probably do. Ask them.

Got Sucky Products?
You need to fix this first. It is extremely difficult to hire quality people if your products suck. However, if you can sell prospective hires on your new vision you may have solved your most of your problem. Be innovative, look at the people in your industry who are on the leading edge and jump over them. There is always an envelope to push!

Aspire to be innovative.

Cheers,
Mike

Simple Update:

We are working very hard on creating new tools in climber.com we have crossed into 6,000 users and have three Fortune 500 companies who are using our beta product. Additionally, have more than 22,000 jobs in our system. Our EDLOAN company continues to experience double digit month over month growth.

We are days away from launching an entire new front and back for both climbers and companies. This will provide all users with a better interface and a deeper suite of tools.

If your company is interested in becoming a beta client please email nickj@mingle.com.

Oh yah! It's time to start hiring again. We are looking for ruby developers who are interested in working on a new product for climber. If you got skills send your resume to careers@mingle.com!

Cheers,
mike

Been a long time coming:

I have been lagging on the blogging. Not to make any excuses but we have been so busy and more importantly eight weeks ago my second child, Lincoln Michael O'Brien, showed up !

As the business is coming out of its infancy and into being a toddler, I thought I would share some success metrics that we use.

Break Even Point: We have been going at this almost a year now and have hit an important milestone. BEP (when ones expenses match ones income) is a powerful place to be. At this point any additional sales profit that occurs drops directly to the bottom line. Basically, from this point your free cash flow and ability to deploy it effectively determines how profitable you are as a business.

Key Indicators: In every business there are leading indicators that provide insight into how the business is doing. The faster you can understand these and develop a measurable metric the closer you are to the pulse of the business. We created the MMX(marketing multiplier) which is our expected return on each marketing dollar. So if we spend $1 of marketing we expect a profit yield of 3.2 or $3.20. We then order all of our marketing by the MMX and allocate our budget appropriately. With this tool we can also update our marketing on a real time basis. We can compare the instant MMX (same day yield) and the tail ( days 2 through 365).

Good luck with finding your key indicators!

Cheers,
Mike

More Pictures

Pictures Speak a thousand words.

We have been working very hard! Go to Climber.com to check out all of our work! Check out some of these pictures.. I have some very exciting news so check back soon!

Great Minds Think Alike...

I had the fortune of meeting a fellow entrepreneur on a recent trip to adtech in San Francisco. He created and sold a business to a major online player. He poured his heart into it and took care of the people he worked with to make it happen. We had much to talk about and found that we had a lot in common. Our business practices of empowering a team and understanding the hedgehogs that make our businesses go.

What was even better was that he challenged to think deeply about venture capital and all that it entails. We spoke of the benefits and the problems. But the best part was that he drilled down into what Mingle's real needs are. He did not let me off the hook with high level answers. It was a great session. What I think was most important was being able to chat with someone who has no agenda and a similar mind set. I think this helped clarify some business strategies. It is important to find people of like minds to challenge you.

Cheers,
Mike

Late night work:
Sometimes the best work is done beyond the hours of 8 to 5. Tonight four of us are pushing hard to reach a critical goal and we are having a great time. It feels good to work as a team with a single purpose it is what collaboration truly is. A new type of extreme programming, four people on one computer all pitching in. It is these type of experiences that bring people together and bonds are created.

These are the times in a young business that will be reflected upon with a sense of pride when the product serves its ultimate goal, success.

And, the pizza and beer are not so bad either.

Cheers,
Mike

Be a Monkey!

One of the best ways to build a business is to be a pain in the ass to the existing 500 pound gorilla. Is there a market that they are under serving? Are their clients unhappy with them but have no alternative? These are very good markets to exploit.

The infamous 500 pound gorilla has got what I like to call the "Three M's", Money, Market Share and Momentum. But many times these make that gorilla an easy target to a broke, agile, no business having monkey.

Momentum carries the gorilla forward down the same path. Any change in business strategy can mean a loss of their current customers. He has to plan, measure, and move with passionless thought. The monkey swings from idea to idea and has to stay way out in front since he is often showing the gorilla the path. The monkey is the innovator the gorilla the executioner.

The monkey is hungry and does not have much capital, he needs to find some early success or die. He is willing to listen to his customers and create a product that is truly reflective of their needs. The gorilla pours huge amounts of money into marketing to convince customers that his product will solve their problems and to maintain market share. The monkey is passionate the gorilla is introspective.

Market share can be a pain for the gorilla. He has worked very hard to get where he is very resistant to change. Change means risk and uncertainty, this is bad for the stock price. New products might not sell as good as the old ones and he may lose customers. The monkey has no market share to speak of. He can create niches of customers for whom he will deliver the world. He can create new and innovative products where there is no market. He can steal whole markets with a shift in paradigm. The monkey is creative, the gorilla is protective.

And keep in mind some day you will be the gorilla to some young monkey.

Cheers,
Mike

Knowing the right decision:

We often hear about leaders who have made big decisions correctly, even though their decision goes against conventional wisdom. Take Steve Jobs, of Apple, who in 2001 launched their first Apple store. Their thought was that for someone to truly give Apple a shot at being the computer of choice they would need sales people who really understood the product. They opened this store just as Gateway was closing their stores due to soft sales. Many analysts thought this was a poor decision. The rest is history, Apple operates more than 81 stores nationwide and their 2004 sales exceeded 1.5 billion.

Apple was already the hip computer. Following the lead of such stores as BCBG, Disney and Hollister, they turned their store into an experience. This electronic hip experience was backed up with a superior product and a amazing product development team. Steve knew this was the right decision at the right time.

Many times I have a hard time articulating the reasons behind a decisions, however, I know to the core of me that it is the right thing to do. I often will sit and think about the basis of the pending decision and allow my mind to bubble the reasons for the decision to the top. If I do not take the time to do this I feel the decision is more emotional than rational and I will err on the side of rational every day.

Cheers,
Mike

Great Things Happening:
We launched our new corporate site (I use the term corporate lightly)! You can visit it at www.mingle.com. It is still a work in process, but check it out.

We are currently featured on blogger.com as a "Blog of Interest". So for all you new readers, please forgive my poor grammar and spelling errors!

If you are interested in becoming an alpha member please create a profile by clicking here. Why do you want to be an alpha member? It's free and you will be on the cutting edge of the future!

Enough with the infomercial.

Cheers,
Mike

Clarity:

Had a great call today with a prominent Venture Capitalist (have several more scheduled next week). He confirmed an opinion that we had been floating around the office for some time. We need to focus on our climber.com product. Like most entrepreneurs, we are thinking ahead to climber version 3.82 and in reality we are still completing our beta version.

Sometimes, it takes someone from the outside to gently nudge you in the correct direction. This does not mean changing the destination just the road. So we are working with godspeed to complete our user interface for Climber.com (by the way we are hiring talented User Interface people, send resumes to info@mingle.com). The new look and feel should be completed in the coming weeks and we should have a news set of features!

Cheers,
Mike

Clearing the Mind:

I just got back from a great vacation with my wife. It was a nice break from the hectic pattern of life. It was the equivalent of my mind letting out a big sigh and I realized that I really needed to take time to decompress.

Laying on a beach with nothing but blue water and the sun is the best medicine for clearing the brain. I think everyone will agree that once you do decompress it allows your mind to attack your problems from a new perspective. It frees you from some of the biases that could cloud your judgment. This allows you to create a new solution with true insight. Your mind sorts out what it needs and flushes everything else out. For me this happens in the background, without really thinking about it.

Many people talk about similar experiences when they do yoga or meditate. I often sit quite for a few minutes and try to let go of the world.

Cheers,
Mike

Burning Desire to Succeed:

One of the traits that I admire most in other people is a burning desire to succeed. When I hear the success of other people it inspires me. I recently was able to hear William Taylor speak, he is the founding director of Business 2.0 and author a book to be released later in the year, "Mavericks at Work". He provided many stories about success and the desire to succeed. It seemed that against all odds people succeed. He pointed to the example of the airline business where collectively it has lost billions of dollars since inception save one company, Southwest Airlines. He went on to say that Southwest was the best performing stock in the market since 1985 (I could be wrong on the year). The arguable worst industry in the world you find the most successful company. I take inspiration from this, Southwest understands itself and they can communicate their message effectively to their customers and shareholders.

I see this as a war of will and likewise I believe in any role you need a burning desire to succeed to stand out.. This passion for success is easy to identify in people. They are often high energy positive people who love a challenge. They are competitive and can see the value of a team of people with like mind. When many of these people get together with a single focus their chances of hitting that goal is increased exponentially.

Cheers,
Mike

Tough Weeks:

These last few weeks have been very trying. Anyone who has put together a software product know that this is a difficult process. Creating something that is unique online and creates true value for its users is even more difficult.

We have had to make some employee changes as well. This is very difficult in a young business, but the bottom line in the bottom line. A product that is delayed even a month or two means missing some critical numbers and also increases the burn rate. In order to stay on track sometimes it means making the tough decisions. This week was no exception. It is compounded by the fact that the changes we had to make were with truly great people, who will succeed elsewhere. They just were not the right people for the right job. In the book, "Good to Great", this is covered very well. The author explains that if you have someone in the wrong seat on the bus you are doing them a disservice and that you as the manager have to be the adult and make the tough decision.

Cheers to a better week,
Mike

Taking Employees Home With You:

I was visiting a friend who has a very successful design company. He was very frustrated with one of his managers. He had spoken to a lot of his friends and colleagues about this person. He had been thinking about it this person for some time and how she did not fit the company any more. She had become complacent and had some issues dealing with customers.

The bottom line is that she was stealing time from him. When he went home he was frustrated and consumed with her ineptness. Sometimes the toughest thing to do is to cut the cord. Today he is still struggling with this employee and time that he should be enjoying after work is being stolen by this employee.

He knows what he should do, but he has failed to act. As soon as he realized that this was happening, he became culpable. Once he solves this issue he will be free to work on items that will allow the business to continue to succeed.

Cheers,
Mike

Beware of Partners:

Sometimes lessons that you learn leave you jaded and hard. It is the difficult paths that we have walked before that we are careful to choose again. I hope that those who read this can learn from this lesson that I learned first hand. This is a very important lesson.

Choosing partners to start a new business happens everyday. Sometimes, people become so excited about the idea of the new business that they overlook attributes in their partners. They overlook many things in order to get the baby born. I have learned this lesson first hard. I had a partner who did not live up to her promises. It was only after the hard work of other that she wanted to become involved, after the business was profitable (she also had other non-business related motives). Keep in mind that a problem partner will always be a problem partner. If they are tough to take in the beginning, they will be unbearable later on.

So here is a list off must do's before entertaining the idea of a partner. This by no means is a catch all. Please feel free to send me some additions. These focus on their histories being an indicator of their future promise.

• Spell it out: Define the role and commitment level of each partner, down to the hours of the week that they are going to work on this project. Sign this document!
• Understand Outside Activity: Find out where their heart are. Are they working on outside projects? Are they 100% committed to your project?
• Talk to old partners/business associates: This is where I failed. People build a reputation over a period of time. What is the partners reputation like? DO NOT TAKE THEIR WORD FOR IT! Ask around, take your time. Talk to co-workers, business associates, employees and anyone else who knows this person. Failures are ok and expected, but what is their success ratio. Who invested in these ventures, how do those people feel about them when things went south.
• Google them: But don't trust the press releases, websites and any other media which they might control. You can use this to validate history, but, take it with a grain of salt.
• Background check: This is a must. This will tell a lot about a person and their credit/legal history. Someone with bad credit will have a negative impact if you need to borrow or raise money in the future.
• Trust your Gut: You know what the right decision is already. If you have any hesitation you already know what you should do.
  
• Trust Someone Else's Gut: Chances are you know someone who can pick people out. Get them to spend some time around this potential partner. Their bull-shit sensor will be better tuned than yours.
  
• Ask a mentor: To this day, I have people who teach me lessons all the time. These mentors help act as a unbiased sounding board. If you do not have a mentor, there are places such as SCORE that will introduce you to older business people.

Bottom line is that starting a business is a long term commitment and the more successful it becomes the more that is on the line. Bad partners will sink their teeth into you and bleed you as long as they can.

Great partners are the complete opposite. They are people who compliment your skill set and who from the beginning are committed 100%. They are also very difficult to find. Here are some ideas of places to look.

• Family & Friends: This is a double edged sword. These are the people that you trust the most, but sometimes these feelings get in the way. Be careful, but that said I have always done very well with family. You can't beat their commitment
• Co-Workers: This is great because you get to see how they work. Are they committed to task? Do they get their work done? Are they a dreamer but not a doer?
• Business Associates: Since they are in business, they have a reputation and history. Do you have friends or associates in common? Ask their opinion! This is a good group if you can find many good opinions about the potential partner.
  
• Church/Community Groups/Universities: All these areas have many people who know the potential partner. The more positive opinions you can get the better.

Thats it!

Cheers,
Mike

Spilling the Beans:

Ok here it is... today you guys will get a better idea of the team magic mingle is working on. Over the next few weeks, I will outline some products of the products that we are working on. Today it is about Climber.

Climber is a brand new spin on the whole work world. It is for people who are currently happy in their job, but, would be open to receiving job offers at a salary level they choose. Suppose you are just happy as a clam in your daily grind. What would you do if someone offered you a similar job at 30% more pay? How about doubling your salary? What if you only wanted to receive job offer from a specific company (Disney, Yahoo, Google, Apple etc...)? And, no one knows who you are... it's a blind system. Once a company finds you, you choose whether or not you want to share your contact/resume information with them. You are passively searching for your dream job. All completely anonymous!

This is beauty of Climber While you are involved in your daily life our proprietary search algorithm is working for you. Seeking to match you with a company which could offer you your dream job! Additionally, companies are using the product from the other side. They are using the same search algorithm to find new employees. If the salary is to low or its out of the area... you don't show up!

Sign up today as an alpha member and let us find your perfect job... Climber.com

On the Cusp of Greatness:

The gut feeling is so important in business. Many times you feel a nervous excitement about what is to come. This is one of the greatest times in business. All of your hard work is about to pay off, now it's all about execution.

Today, I feel that we are the cusp of greatness. The idea to make the Internet a safer place to start of relationship of any kind is a very simple idea. Staying true to that is tougher. But ultimately, your relationship with the customer is what will drive the business into the future. Our promise to our userbase is that they will always come first and they can trust that what we do will be in their best interest and not always in our best financial interest short term. But long term those two needs are firmly aligned.

The nervous excitement stems from having all the pieces to the puzzle and an idea of what the finished project looks like, but not knowing yet how to put it together. We figure it out as we go. We get feedback from what we have done and clues from the puzzle pieces placed properly.

Cheers,
Mike

Coming together:

Sometimes it takes mass amounts of thoughts to come to a single simple conclusion. Simple solutions are often the reduction a complex starting point. This takes time and energy to get everyone on the same page, and to buy in.

Today we had a great session. A uniform epiphany which each member of the team has bought into. A simple solution to an overriding problem of providing to many solutions to an even larger universe. This new vision is clear, until today it had been hidden beneath the clouds of past ideas.

Letting old ideas or products influence tomorrows decisions is a weak point in the armor of our bigger competitors. Sometimes, we too, allow a prior decision to influence future ones even though it clearly should not. It reminds me of the classic example of red and black on roulette. The chance of either color coming remains the same regardless of past outcomes. This is a lesson that I learn over and over.

Cheers,
Mike

Core Statement

We had some great internal meetings today. We truly have a great set of people and that allows us the freedom have conversations where everyone gets it. As the company grows we may not have the luxury of a constructive all in meeting.

A company must remain fluid, but must also be true to its core beliefs. I believe this can be done creating a core statement. This core statement is the benchmark by which we make company decisions. Our core statement at mingle is the desire to create the safest, most secure place online to create relationships.

Once the core statement is created we can then test our decisions against it. We ask ourselves in the choice at hand is inline with our core company statement. Even though a decision may make financial business sense short term, are we doing the wrong thing for our customer long term? Are we selling out our customer?

The core statement forces consistency and reliability in a company. As times change it may be necessary to change and augment the core statement. It is important to note that most companies will change their products or services more than their core.

If executed correctly, customers will feel your core statement.

Cheers,
Mike

Sometimes things are just so wrong: (OT)

Having a background in financial aid, I keep up to date on many things. On Feb 1, congress passed some changes to the federal budget that will affect every person in the country holding Stafford loans. In addition to disallowing students to lock their interest rates while in school (while they are at historic lows), they have made it illegal to use a free federal product (student loan consolidation) with any lender other than those who currently have your student loans. This means that even if another lender has a better interest rate, you are beholden to your current lender. If they provide you with poor service, you can not change. (These changes go into effect on July 1st. In order to avoid them you should consolidate before the deadline.)

The most disturbing part of this is how it evolved. Please take a moment to read this article and you will get an idea of how John Boehner and Sallie Mae have single handedly changed increased the cost of college for every student in the country. It is truly gross.

Other Reading:
New Bill Hurts Student Loan Program
Worries Mount With Rising Student Loan Rates
New Federal Legislation Makes it Important to Consolidate Loans

Sadly,
Mike

The Friday 15:

Communication is a big deal in a growing company. Each person has the ability to contribute more ideas than they let on. Most of us would contribute more if we were asked in a non-threatening environment. With this in mind we have a meeting every Friday for 15 mins. This is an open ended meeting with the goal of talking about the prior week.

We focus on three main goals for the meeting. The first is to talk about any problems in the prior week. This enables people to talk about their problems and ask for help within the group. The second is to celebrate our accomplishments and failures of the prior week. The final goal is an open format where we talk about crazy off the wall ideas which could evolve into something meaningful.

As a manger of the company my goal is to talk as little as possible. I do enough of that during the week. I act as a facilitator and am not worried about the time too much.

Cheers,
Mike

Gypsy Programming:

Working with a new group of people always creates new ideas... I think one the best that this team is involving into is gypsies. This means that we follow the water. Whatever is generating the most interest both internally and externally we pour all our into. We realize that what we are passionate about today may turn be thrown away tomorrow. So we allocate our time to where the water is. If someone needs help we all pitch in.

This focus also forces us to think about single focused projects that are simple to use. You will see that each product drives to a single goal. They are all tied together but will have functionality that is unique to each. The goal is to keep expanding the total package of tools to engage and provide additional value to each user. If they can not add functionality to the suite for existing users we must justify the work.

Currently we are working on threhttp://www.blogger.com/img/gl.spell.gife main projects, climber.com/natch.com and edloan.com. Check them out if you time. Most of the work is still behind the scenes.

Cheers,
Mike

More Progress:

Part of the problem of being on the Internet is that we are looking for everything to be done yesterday. We are still making lots of progress and we have a target launch date for climber.com of Feb 14 (Yes I know is valentine's day.) I do not expect the initial site to be all that pretty, however, it will have the functionality that sets us apart.

I have heard the phrase Web 2.0. When they mention this they mean all the companies who have been able to weather the storm and are now profitable as dot coms. I call these companies dot brawns. They are legitimate companies who use the Internet to make our lives simpler. EBay, Amazon, and monster are a few who have made the transition and changed the way we do and think about business.

I started to spill the beans about climber.com, but changed my mind. About a week from now I will paint the entire picture.

Cheers,
Mike

Replace yourself everyday:

Part of being a leader is delegation. Knowing what tasks to assign to someone else is difficult and letting go of important roles is even harder. Many new entrepreneurs have a tough time letting go period. You must let go to allow your business grow.

The best way to approach this is to get rid of any tasks that you repeat on a regular basis. This frees your time to focus on those things that make your business grow. Many people spend a lot of time writing checks and managing the day to day bookkeeping. In many cases those hours would be much more productive working with a new client or figuring out a new business strategy. Look deep into yourself and figure out how your business would do if you applied 100% of your time to what you do best.

Another benefit of this strategy is creating a business that runs itself, where no one person is its lifeblood. Everyone is replaceable including you. You may disagree but you will never get a larger company to acquire you if you can not convince them the business lives beyond your stewardship. In the book, Good to Great, one of the measure used in defining a great business is one that continues to succeed after the founder/leader has left. Thus, leaving behind a thriving business is a mark of your business acumen.

Cheers,
Mike

Props to my Team!

Sometimes you need to step outside yourself and look at what you have done in a short amount of time. In a very short amount of time we have been able to take a url and push it into the top 100,000 website online (according to Alexa.com). This is in great part due to the team that we have assembled here. Thanks guys!

Cheers,
Mike

Plan for Failure Deal with Success:

This may sound contrary to much of what is taught in business schools, but, in a startup failure is sometimes good for business.

Failure is close to absolute, success has many levels. It is thought to pick a direction when you are close to successful. Many close to successful companies spend a lot of time and energy trying to figure it out. Furthermore, additional changes in direction may lead down the path to failure, and more than money you have wasted time.

In my humble opinion, applying just enough grease($$$) to get the job done is what it takes to in a startup. If you fail, you know not to tread on those waters, if you are successfully you know where to apply more grease.

My strategy is to take several small shots in the dark that will either endear me to a customer or get me kicked out of the arena. Many times you will do both, with CampusDirt.com we angered some schools and endeared ourselves to students. But either way, you know you have something or not.

Dealing with success is its own slippery slope. Succeed to fast and every Tom, Dick and Harry will be on your coattails. Go to slow and never get critical mass to scale. I personally love to be on the edge of complete chaos. This is absolute startup 101, controlling the chaos of the daily changing wind. Success is fun to deal with, the problems that arise are not insurmountable because as long as you are successful there will be people to help.

Cheers,
Mike

Question of the day:

I received a question from a startup blog reader. They said that they had received a lot of value out of the blog and wanted to know how to help. After ruling out the fact that this might be a family member, I figured I would answer....

We need alpha members! Please follow this link and complete a profile. The more people that do this the better! Plus if you do, you will earn a nifty "badge" which says you are an Alpha member on your profile.

And that's not all, soon we will begin a contest for a Fully Loaded Ipod! that's right anyone who is an alpha member will get a chance for a brand new Ipod with 1,000 songs! Additionally, you can earn additional entries in the contest for referring other people who become members.

So there it is, help a brother out and get a chance to win a Fully Loaded Ipod!

Cheers,
Mike

Begin with the financial end in mind:

I was at dinner last night and was talking with a long time friend, who had an idea for a business in her home town. The town is missing this type of service and it would probably be a success if she put her heart into it! The problem is that she had not thought about the money aspect. How much would she want to make each year? Is it possible to make that out of her business? Would she have to have multiple locations to meet her financial goals?

One thing that handcuffs a lot of entrepreneurs to a business is a business that is successful but does not meet their personal financial goals. They choose an industry where even if they were the biggest dog in the area, they would not have the financial freedom a lot of entrepreneurs want.

I have a process, it starts with writing a business plan with financial projections. Now divide the financial top line numbers by two. How do these numbers make you feel, what is the chance of success. Sleep on it for a couple nights, ask some friends and decide how much passion you have for the particular business. I picture myself six months into the new business, what will I be doing? For me, I need to remain creative and fluid. Is this in line with what you feel the requirements are for the business at this point?

At some point, after all the excitement of starting the business is over you have to get to work. Is this the work that you want to do? Is it going to pay you enough to be happy? Can you get a job that will provide you with less responsibility and a more stable life? There are no sure things when starting a business. It's either in you or not. But you need to begin with the financial end in mind!

Cheers,
Mike

Here we go...

Here is a little taste of what we have to come. Please check out 68.107.47.194:3000. It is still very alpha, but you will get an idea of what we are doing.

Cheers,
Mike

Server Room Almost Complete!

Things happen so much slower than you want. It seems so long ago that we completed our seed round of funding. I have to remember that we have really only been at this for a couple months. It's tough to see the progress when you are on a road that never ends. The good news is that we should have the server room complete tomorrow, almost at the same time that we will be posting our first code.

Monday our new Director of Web Development starts. This will take our team to a new level and allow us to start digging deep into the future of search.
(Side note, we have also a VP of Software Engineering starting who comes from one of the big three search engines!)

Cheers,
Mike

XP and no I don't mean the Microsoft product:

Extreme Programming(XP) is a programming strategy which involves the customer and lead to faster development times and shorter release cycles. Getting to market faster is key to success with the online world. Today's hot site is tomorrows boring has been.

XP needs the customer/business owner to available and involved in every aspect of the project. This is great for entrepreneurs who have a technical background or just a desire to see the progress of development before the final product is finalized. This allows the project to stay on course with the intended outcome.

In XP, there are many short term goals and the project is often broken into small tasks the similar to object based programming. The ability to test items before they are complete save time and energy that might be spend working on a project that is slightly off course. These projects are measured by how fast they are completed, velocity.

The key here is to get the entire team to understand the process, many teams use metaphors. Metaphors allow everyone to understand the project in their own terms.

Fixing the broken wheel is easy with XP since the total project is broken down into usable parts.

Good luck!

Mike

Moving Along:

Nothing to show to the world yet, however, we have completed one of the core pieces that we populate our database. Probably towards the end of the week, we will be sending a note to alpha members to come and register in the system. This will be the first glimpse of the of our three main products; mingling.com, natch.com and climber.com.

After we have these up, upgrades will be coming hot and fast. We will be at full startup staff mid February, but, we will continue to interview and hire as we find extremely talented individuals.

Cheers,
Mike

Smart Customers and Imperfect Products:

Your customers know what they want. They have the largest amount of domain experience in what drives them. You can predict what they want and build products you think they will need, but, until they use them you are only predicting their needs. They are the smartest people in deciding what they need and want.

I believe in pushing unfinished products and allowing users to ultimately to decide the direction. These users are "alpha" users and generally are people on the cutting edge. They make all the difference in the world. If the organization develops a culture the "alpha" user define our DNA (who and what we become). Some of the most successful businesses in the world started in one direction and ended up 180 degrees from their initial course. They were reactive to their customers needs. The sooner you can get this valuable information the sooner you understand what your DNA looks like.

When we launch our first profile product, climber.com, in a few weeks our alpha members will help us decide where to focus. They will show us which features they like and lead us into developing new ideas. They become the backbone of our creativity.

In marketing, we often talk about branding. I define branding as a emotional response to a company or product. Our "alpha" members end up with an emotional bond because they help shape their product. They also become our best spokespersons. By definition, "alpha" members are early adopters and early adopters are often evangelistic in their recommendation about products. Want some proof? Ask anyone who had a generation 1 iPod or who is a believer in open source code.

Cheers,
Mike

Mac and Ruby: A great pair.

We drove all over San Diego to get our first two iMacs '20 for two new developers. When we bought these first generation Intel machines we are taking a chance.. there are always issues with first generation hardware. We have chosen to be an all Mac shop. This is rare in and of itself. (be a first generation Mingle member by sending and email to alpha@mingle.com)

We have also chosen to build our products on the open source Ruby development framework. This is working out well for us. If all goes well, by summer we should have the largest Ruby development team in the world. We should also be running the largest Ruby based website.

choosing Ruby also had an added benefit that I did not realize. The developers that have chosen to extend their knowledge base into Ruby are on the bleeding edge of the development world. Simple by requiring Ruby, we have isolated a group of people who have a desire to try new things and push themselves.

Cheers,
Mike

Focus

One of the toughest things to do as an entrepreneur is to maintain a focus. This is particularly true if you have a full time job or another business that is pulling you in different directions.

When I started financialaid.com, my brother and I were still running NationWide T-shirts. After hearing me complain about the lack of progress in financialaid.com, my wife suggested I "quit" NationWide and focus full time on financialaid.com. This was just the push that I needed to get things going. After talking to my brother, I transferred all clients and responsibilities to him (Matt stayed on until we sold the business in 2001). I was still going into work in the same office, however, my focus was on doing whatever it took to get the new business going.

This worked well for a while, then I found myself still interacting with my old clients (since I was in the same office) and slipping back into my old roll. We decided to do something drastic. We (Julie and I) picked up and moved the company 400 miles south to San Diego. We took the four employees we had and moved.

We were in a new city and had nothing no other distractions, it was truly sink or swim. These were some of the most fun days of the business. We moved the servers to my rented apartment and looked for office space... We found used equipment and cubes (saving thousands of dollars) and installed most ourselves. We added a nerf hoop in the office and spent time shooting when the phones were quite (which was a lot in the beginning.) We ate lunch in most days and stayed late in the night fixing database/website problems as we grew faster than we knew how. This is the adrenaline of startups.

And we succeeded.

Cheers,
Mike

Bumping and Jumping:

Today we made some significant progress with our technology. With the addition of some great staff members we have been able to increase the production of our Search Technology Natch. Natch stands for Natural Match, which basically give you the ability to search in natural language. This may not sound revolutionary. But the beauty of the Natch technology is that it gets smarter as searches are completed.

The technology learns about the search results and allows for user feedback. This feedback will be incorporated into the search algorithm and lead to a much more tailored search result.

I can't give too much away but each user actually is a contributor to the search results.

We still need alpha members, please send an email to Alpha@mingle.com if you are interested!

Cheers,
Mike

Mingle Alpha Accounts!

If you are reading this you need to send us an email at Alpha@mingle.com. What do you get being an alpha member?

1) You feel great since you are helping out a friend!
2) You will get a key preference in our system: Since you joined first, all other things being equal, you will score better than someone who joined after you.
3) Be part of a team of people who will get first access to new products!
4) Be kept up to date about exciting happens at our little company!

It's allays fun to be part of something exciting before anyone else knows about it!

Cheers,
Mike

Accounting Setup:

Met with the accountants for the second time today. Get a copy of quickbooks pro if you have not already done so. This is imperative if you are planning to make any money at all. In two prior businesses we did not do this early enough. It is much harder to go back and do it once you have started.

The most important of the meeting today was setting up the proper accounts and understanding how we treat expenses. It is very important because this come April 15th. Most accountants will not charge for the first meeting, so have a good idea of the questions that you will ask so you get the most out of this meeting. You should discuss business structure (should you be an LLC a partnership etc..).


Another key point to understanding how accounting works is the relationship between a bookkeeper and the accountant. The CPA is for heavy thinking (taxes, business structure) and the bookkeeper handles the day to day paying of bills and accepting of income. Usually someone on staff will handle the bookkeeping. Also, there are many bookkeeping businesses out there.

So now we are all set to make lots of money!

Cheers,
Mike

Taking money

Taking people money for a business endeavor has some additional benefits that people don't often realize. It's simple, you treat other people's money different than your own.

It is simple to come up with an idea that you love. Explaining it to others gives you a chance to really think it through. Explaining it to others and asking for an investment is the step that really crystallizes the idea. Once you accept the investment, you have a new sense of commitment and reality. Now you have to make it happen or else you let some people down. It is easy fail with your own money, it is harder when you take money.

Business owners will often be more risky with their own money that investment dollars , they can afford to be, after all it is their money. I have a much bigger commitment because people are betting on me with money they choose to invest for a return on investment (ROI). This ROI needs to exceed other investments that they could have gone with. They are paying me to do a job. I am going to do it as well as I can.

Think about it when you have your next great idea... Would I invest if it was someone else's? Do I feel comfortable committing to this task until it is done.

Cheers,
Mike

Old Dog, New Tricks:

Wow what a powerful programming language. I started to use Ruby for the first time today. Simple and Fun, I am not sure that a language could be described like that. This reminds me of the way I felt when I started ColdFusion.

I had not written a line of code for 3 years of more, thanks to the success of financialaid.com. But it was great getting back into it. The idea that you can create from nothing is very empowering. So I am reading a good book on Ruby now, "Ruby in 21 Days." It is very simple, but for a brain like mine, simple is great.

This reminds me about a change in mind set that I needed to make back in '94. I thought that I had missed the Internet Revolution, I had started a clothing company that sold shirts over the internet, but thought that I would not get a chance to leave my mark. By '98 I was sad that I had missed the bus and many of the people that I knew were becoming wealthy and having a lot of fun. However, in late '99 I came up with the concept for financialaid.com. We wrote a business plan and pitched 17 venture capitalists, 15 of whom said flat out no. Two said yes, however, the terms were so terrible we turn them down.

The point is, as the industry changed it became near impossible to raise money and you had to run real businesses. We changed our thinking and bootstrapped, raised $75,000 from friends and family and when we sold the company, the three original owners maintained 96.25% of the equity.

Change is good. Don't let preconceived notions weigh you down. Most everything can be done if there is enough conviction.

Cheers to conviction.

Mike

Great People:

Finding great people is tough. Today was a great day, we met a series of great people. With a diverse background. Nothing like that for building a great work environment. When building a company, it is a reflection of the people that make it up. The company DNA. It will feel a lot like you, but, if you do it right all you will feel is positive energy. Two companies that do this well are Google and Apple. Trying to pull bright people from these companies is near impossible.

Another important element in building a team is to make sure that all the people buy into the program. That they really drink the coolaid. If they don't get it, they should go to somewhere where they will.

Cheers,
Mike

Back in the Saddle:

Wow.. the rush of resumes is huge. I think I learned a new lesson. Part of the New Year is changing your life. As a part of that, many people choose to begin looking for a new job. When this happens you, as an entrepreneur, have the ability to build a strong team. This is an opportunity to choose from a wide selection of people. Use it or lose it.

In the book, " Good to Great," it talks about getting the right people on the bus and sending the wrong people their way. It goes on to say that you as an employer have the responsibility to remove employees who are unhappy. People by nature will not do this themselves. If they are unhappy, you are doing them and yourself a favor by moving them on.

Cheers and Happy New Year,
Mike