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