You Raised Some Capital! Now What?

Capital is precious—and must be treated as such. Below are three points companies should consider when allocating their funds in hopes of growing their businesses:

Hire Quality over Quantity

Many startups operate under the myth that their people should be paid a minimal amount, or even receive no salary for a period of time, in exchange for the larger payoff down the road. That may be fine for founders or executives that have other means to ride out the early days, but the reality is that most employees still need to “put food on their tables.”

It’s better to pay a smaller group of employees more money than to hire a larger number of folks on the cheap. That is, hire quality over quantity. Why? For starters, people who are paid less, even if they’ve bought into the startup opportunity, generally become dissatisfied sooner than later. Secondly, larger groups tend to work more slowly, bogged down by more meetings and lack of consensus.

While it sounds contradictory, smaller teams—especially top talent paid well—can deliver bigger results. Not only are they more motivated and productive, they also are forced to be more creative, they decide and act more quickly, and they build stronger bonds. All of this translates to a greater return on investment for the business over the long-term.

Keep Pitching the Company

When building a management team, many companies seek strong business development talent in one or more individuals. That’s fine, however in the early stages of startup, these leaders should remain focused on effectively pitching the company to raise more money—versus trying to drive sales.

After all, startup companies are typically small and not ready to take on tons of new business. Additional fundraising will enable a company to develop and market its product(s) sooner and then scale to handle increased business and revenue opportunities.

Investing in leaders with exceptional presentation and relationship-building skills is extremely valuable to a startup company, helping to succinctly get the desired message across to other potential stakeholders.

Launch Sooner than Later

A simple, reliable product today is better than a full-featured one tomorrow. Too many startup companies hold off launching their product(s) while trying to incorporate every last feature and functionality.

Not only does this delay time-to-market, but more complex products tend to have an increased number of “bugs” and support issues, which ultimately eats into existing capital more quickly.

Focus on a minimal number of features that will lead to the launch of a robust product sooner than later. And then use your remaining capital—not to mention revenue from the faster, successful initial release of your product—to incrementally add features and functionality.

While the above may seem obvious to most, many companies continue to take steps in the opposite direction when allocating their capital, only to find themselves struggling to stretch out their funds. The smartest, most successful startup companies tend to more efficiently manage their capital in these key areas.

Vijay Nadkarni is founder, president, and CEO of Mobiplex, Inc.

The Next Step In The Sharing Economy Is…

In the summer of 2012 Jaclyn Baumgartner got separate calls from her two brothers, each saying the same thing.

“I think I’m going to have to sell the boat. It’s just too expensive to keep up.”

At first glance, this probably sounds like a rich guy problem. But Jaclyn’s brothers are like the majority of boat owners in America. They make less than $100,000, own a small boat, and only use the boats and average of 14 days a year.

“Just rent it,” Jaclyn told her brothers, which does seem like the obvious answer. Except that boat insurance doesn’t cover renters. Boat rental companies pay for a whole other class of insurance that would never make sense for the average boat owner.

So, with her background as a strategy consultant, Jaclyn did some research into the car-sharing industry, trying to find something that could be applied to boats.

The ultimate problem is that even small boats are expensive and relatively unused, even by the most avid boater. The ability to rent out the boat would help with costs and provide boaters with a wider range of craft to experience.

The solution was, obviously, an insurance policy that would allow for rentals.

That solution, obviously, proved more difficult that you would think.

Jaclyn recruited help and spent 9 months knocking on the doors of major and minor insurance providers. She tried to convince anyone who would listen that a peer-to-peer insurance policy would solve the problem and provide income for boat owners and, ultimately, insurance providers.

“It was like trying to get them to invest,” she told me.

Finally, she convinced a major insurance provider to set up a policy, and Cruzin was in business.

In the spring of this year, Cruzin did a test run at the WesTrec Marina in Fort Lauderdale, FL. By the end of the test run, 10% of the marina tenants were signed up

on the site. The company found that boat owners didn’t just rent their boats. They were also excited to try out other boats and are also some of the most frequent renters.

After such a successful test run, WesTrec was happy to open up all their marinas to Cruzin, and since the summer soft launch, the site has grown to include 27 states. They’ve kept their marketing focus on Florida, so the growth they’ve seen is almost completely organic.

It takes a lot of trust to allow someone to man your boat. Cruzin also prides itself on thorough background checks and vetting processes. Boat owners maintain the right to refuse to rent a boat to someone, and they can even set up a test run with the potential renter. Those measures–plus the $1 million insurance policy–eliminate a lot of the hesitancy owners may feel.

Just a few months after launch, Cruzin is post-revenue, and Jaclyn knows they’ve proven the model. The company will present this week at the Angel Capital Expo, hoping to secure the capital that will help them scale in the coming year.

Find out more about Cruzin on their website.

How To Animate Your Branding

Animation is a form of creative technology that is increasingly being used by businesses to increase their brand awareness and boost audience engagement levels.

There are various styles of animation, e.g. explainer, whiteboard, 2D, 3D, stop motion, motion graphics and so forth, which can be used to:

Promote products and services
Boost internal communications
Strengthen brand ethos

Animation and Branding

Seth Godin defines branding itself as “the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another. If the consumer (whether it’s a business, a buyer, a voter or a donor) doesn’t pay a premium, make a selection or spread the word, then no brand value exists for that consumer.”

If branding is all about making the consumer talk about your business, or a particular product/service belonging to your business, then your mission here is quite clear:-

You have to make your consumers talk about your business!

Branding is about spreading the word about your business as far and as wide as possible. This could be through any of the following:-

Customer reviews on e-commerce websites,
Discussions on social media platforms,
Video testimonials on youtube, or
Video conferences (e.g. google’s recent launch of hangouts on air for businesses)

So, how could animation help strengthen your branding in ways besides the more conventional the more commonly utilization of explainer videos?

Well, there are several possibilities:-

Animated Infographics: When movement is added to static data, facts and figures, these are referred to as animated infographics.

Businesses are using animated infographics in increasing frequency, especially for sales presentations and highlighting the findings of research and development work.

The use of animated infographics is catching on because they can make it considerably easier for the audience to understand and remember the information that is being presented.

Animated Logos: When a logo is made to appear as if it was in motion, it becomes animated logo.

Including an animated logo could make a world of difference to your digital marketing collateral, such as websites, e-libraries online brochures, etc.

Animated logos are also great for impressing viewers in the intros of videos used for marketing and educational purposes and livening web pages and business presentations.

Animated Banner Advertisements: If you would like to improve the effectiveness of your online adverts, then you could consider making your banner advertisements animated.

The beauty of animated banner adverts is that they can convey more than one message at a time; similar to the way animated greeting cards work.

Animated YouTube Advertisements: If you are a YouTube user, you will be aware of the adverts that appear before a video starts to play.

Animation is being used in many of these adverts as it is great tool for producing videos that need to generate a high impact in a short space of time.

This is especially true for products that would be difficult to explain using more traditional live filming such as apps and software platforms.

Takeaway

Animation is a form of creative technology which can be used in a variety of different ways improve brand recognition and engagement levels, besides the more conventional explainer videos.

As the importance of both video and content marketing is growing, it may now be time for you to consider how you could start incorporating animation into your marketing strategy.

Dr Manroop Takhar is the founder of Qudos Animations, a leading animation studio that excels in producing outcome focused animations for businesses.

You can email him: info@qudos-animations.com, or circle him on Google Plus.

Do You Make These Networking Mistakes?

QUESTION: WHAT’S ONE COMMON NETWORKING MISTAKE OR TURNOFF THAT YOU SEE BUSINESS OWNERS MAKE?

GLOATING ABOUT THEIR PERSONAL WONDERLIFE

“We live in an era that affords many new entrepreneurs the opportunity to redefine work-life balance. But even though your life might be the most outlandish saga since Deep Space 9, talking about your personal life for a moment too long can morph “Hmmm…interesting guy,” into “This person is full of themselves.” Don’t over-emphasize personal stories when business is what brought you together.” – Kent Healy | Founder and CEO, The Uncommon Life

FOLLOWING UP TOO LATE

“When you meet someone in a networking environment, it is important to follow up by email within 24 hours or connect through Twitter or Facebook. We live in a fast-paced world, so if you meet someone for the first time and send an email four days later to say thanks and follow up, the timing of your note communicates, “The time I spent with you really wasn’t that important.’ Be quicker.”

– Erica Dhawan | CEO, Erica Dhawan, LLC

FORCING FOLLOWERS TO VERIFY HUMANITY

“If I send an email or direct message on Twitter and get back a verification link, I’m immediately turned off. Setting up barriers in networking doesn’t make sense when the point is to enable easier communication! Be personal, don’t act like a robot. Those who don’t have enough time should be outsourcing non-personal tasks more to make the time to connect without all the hoop-jumping.”

– Kelly Azevedo | Founder, She’s Got Systems

NOT LISTENING TO THE OTHER PERSON

“Sometimes we get so passionate when talking about our products, it seems as if no one else is in the room. That passion is great and people like to hear others who love their jobs. However, it is important not to dominate the entire conversation and allow the other person to share what is important to them. The more you listen, the higher likelihood of discovering a business problem you can solve.”

– Lawrence Watkins | Founder & CEO, Great Black Speakers

WANTREPRENUERS MISLABELING THEMSELVES

“You know who they are! The ones who are at these events looking for people to help them get started with their business, they’re still unclear about what exactly they do, or they don’t want to tell you their business idea because they haven’t started and they don’t want you stealing their millions. They’re immediately closed off to any type of relationship unless you can help them.”

– Angela Pan | Owner/Photographer, Angela B Pan Photography

LEADING WITH A BUSINESS CARD

“A big no-no at any networking event is walking up to an individual or group and chucking your card to everyone within seconds. It feels like you are desperately fishing for leads in the hopes that if your card touches enough hands, you might make a sale. It would be just as effective for these people to walk into the middle of the room, launch their cards into the air, and yell, “52 pickup!””

– Seth Kravitz | CEO, Technori

NOT SHOWING UP AT ALL

“As Woody Allen said, “80 percent of success is showing up.” Many business owners (including myself) can at times feel too busy to attend events, but that’s a mistake. It’s critical to get out of the office, bounce ideas off of other people, get fresh perspectives, and meet potential clients, vendors, and employees. None of that can happen if you don’t show up.”

– Phil Frost | Co-Founder and Managing Partner, Main Street ROI

ASKING TOO MUCH, TOO SOON

“A serious networking error is focusing too much on what you can get out of an interaction. If you meet somebody by asking for something from them, it’s a huge turn-off. However, if you offer up your services to help them achieve their goals without asking for anything in return, chances are they’ll offer to do the same, and they’ll enjoy working with you. Don’t bargain or trade, focus on giving.”

– Travis Steffen | Founder, WorkoutBOX

FORGETTING IT’S A MUTUALLY BENEFICIAL RELATIONSHIP

“Networking isn’t just about you – you should be thinking about how you can help the other person too. Why would this stranger want to help you if you’re only in the relationship for yourself? Think about how your skills and expertise might be useful to your networking contacts and give, give, give before asking for something in return.”

– Heather Huhman | Founder & President, Come Recommended

FAILING TO RESEARCH ATTENDEES

“Many events share attendee lists through Eventbrite or other sites. The biggest mistake one can make is not being thoughtful about who you target, and then not being prepared to speak with those folks. The more that you can make the conversation personal and thoughtful, the more likely you are to succeed when meeting new people. Take advantage of great resources like LinkedIn and prepare wisely!”

– Aaron Schwartz | Founder and CEO, Modify Watches

CONFUSING NETWORKING WITH SALES

“Too many business owners view networking as an opportunity to sell themselves or their company. Networking is about making connections that can lead to sales down the road. The biggest turnoff is when someone starts talking pricing and “What can we do for you?” at an event. Network, meet people and use the follow up as a way to set up a sales meeting. If you network properly, the sales will come.”

– Aron Schoenfeld | Founder & CEO, Do It In Person LLC

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.

LA-Based MemberPlanet Simplifies Group Management

In his time as a volunteer, Rob Hammond noticed something:

It’s a big pain to lead a group.

Group leaders are expected to use a variety of tools to get the job done. There’s one product for email lists, another for invitations, and a third for collecting payment. Only the most tech savvy (and bored) group leader could keep up with it all.

So, he founded MemberPlanet, an online platform that organizes all the group management tasks in one place. Interestingly, the company credits Facebook with their success. Before Facebook, people were used to having their group memberships scattered everywhere. After Facebook, it was normal to have all of our connections in one place.

That new normal, according to MemberPlanet, paved the way for their success.

Our Q&A with CEO Rob Hammond is below:

What is your startup called?

MemberPlanet. Everyone on the planet is a member of one or more groups, so we felt MemberPlanet was the perfect fit.

What is the product story? Where did the idea come from?

The inspiration for MemberPlanet was gradual and built over several years as both a volunteer and technology entrepreneur. As a volunteer, I was continually asked how we could use technology to assist various groups. The best available tools only provided a single feature, and thus multiple accounts across the web were needed. This was fine for someone who was tech-savvy and had a lot of free time; however I knew there had to be a better way to involve more group leaders and be more productive.

Who are the founders, and what are their backgrounds? The founders are Rob Hammond and Binu Thekinedath. Rob is CEO and also founded GreekBill.com, an online financial tools and communication platform for universities and fraternal organizations. Greekbill is now used by organizations at over 400 universities. Our CTO Binu was the Senior Director of Information Technology at CB Richard Ellis Investors. There he developed deep experience in building innovative new products, large-scale systems and strategic platforms.

What problem do you solve?

MemberPlanet makes the tasks associated with managing a group and communicating with its members simple. We have created a functional network that solves the problem of group leaders having to use multiple online tools all over the web that do not work well together. MemberPlanet becomes the single place group leaders go to manage their groups and communicate with their members. At the same time members now have a single place where they can stay connected with their groups, update their information, pay membership dues and buy tickets to the next group event. MemberPlanet becomes a replacement for groups currently using Constant Contact, Survey Monkey, PayPal, Eventbrite, Shutterfly, Google Docs and other online tools groups often use.

Why now?

Social networks like Facebook, LinkedIn and Twitter have connected people in ways we never thought possible at a social level. While all of these people have been connected and see the power of a social network, they cannot perform most of the tasks that are critical to running a group on these networks. MemberPlanet’s functional network is the perfect complement for any sized group’s social network.

What are some of the milestones your startup has already reached?

We have celebrated a number of milestones over the past year. Some of the more exciting were crossing the 1 Million user threshold, bringing on our 4000^th group and passing 5M in payments processed.

What are your next milestones?

We are launching our new app that is built for groups and essentially provides every group with their own group branded app for all of their members. In addition we are launching an enhanced events and ticketing module that our early adopters have been very excited about.

Where can people find out more? Any social media links you want to share?

www.memberplanet.com

Duck Dynasty, Getting Lost, & Startups

Tyler Matthews, a twenty-something whose beard is worthy of its own spot on Duck Dynasty, and I first bonded over the fact that we shared the same first name.

The second thing we found we had in common, though, was that, on occasion, we both had an extremely difficult time trying to physically find or meet people we were trying to find or meet up with.

Say your friend says something like, “Yeah! Meet me ________ at 7:00pm” before she hangs up the phone, but you couldn’t make out what she said because of the motorcycle engines in the background.

Or what if, on a trip to New York City, you wander through Central Park to feed your new pet pigeons? You need your boyfriend, who’s halfway across the city in his hotel room, to come pick you up. But how do you tell him where to meet you?

Tyler and his brother-in-law Ian Zink got to thinking: “There’s gotta be an app for that.” But there wasn’t – or, at least, not one that could actually do what they wanted it to do well.

Yougy was born.

If there was an ‘aha moment’ for Tyler and Ian with Yougy, it happened at the St. Louis Zoo.

“All we were trying to do was meet up with each other’s families. We were in one part and they were in another, so we were trying to describe to each other where we were. It’s super hot outside and we’re sweating; I’m waving my hands in the air. We’re sharing screenshots and pictures of what’s in front of us. Nothing was working.”

Tyler, who was finishing his MBA at the time of the zoo episode, was presented with a bit of a fork in the road. Tyler and Ian both had full time jobs, so the question became: “Are we going to do this or are we not?”

They had talked about a location-sharing app before the zoo, but that half hour of trying to find each other cemented the question of venturing into the world of startups or not.

So they dove in headfirst. Did they really know what they were getting themselves into? “I had no idea there was a full-blown startup scene out there,” Matthews said. So he started meeting with anybody and everybody he could meet with.

From there, Matthews says the ‘aha moments’ happened fairly regularly.

“At first, we would see other startups coming out of places like San Francisco and think, ‘These guys are going to do exactly what we want to do or they’re going to do it better because they’re in the Valley.”

But that wasn’t the case. “Every time we see one of our competitors add some kind of new feature onto their existing product we know we’re on the right track. At first, we might have been a little scared, but now we see how complicated and bloated these other products are becoming. We’re simple. None of them are solving the problem the way we think it should be solved.”

Learn more about and sign up for Yougy online http://signup.yougy.co/ and follow them on Twitter: @yougyapp.

Tyler Sondag is a startup connoisseur with a hand in anything and everything you could imagine. Hailing from the ever-developing Northwest Mississippi, an alum of Saint Louis University and currently a transplant to St. Louis, Missouri, one of his main missions in life is to get and keep young people engaged in the entrepreneurial ecosystem. Follow him on Twitter: @MrSondag.

Photo Credit

ProtoExchange Brings 3D Printing To Anyone

There’s nothing like procrastination to spark a startup idea.

In college, Jonathan Placa waited too long to get started on a project, and when he needed something manufactured through Shapeways, they had a 4-6 week lead time. With the project due in 3 days, Placa obviously missed the deadline.

Nonetheless, one bad grade is a small price to pay for the next great idea. After he missed his deadline, Placa talked the problem out with his roommate Orie Steele.

What if there was a whole network of 3D printers that could manufacture any project in a day’s time?

What would the platform look like and how would it work?

How awesome would it be for all engineering procrastinators in the years to come?!

(Now, I wasn’t there, but in my head this conversation sounds a lot like the “We should buy a BAR!” episode of How I Met Your Mother. Puzzles, anyone?)

Anyway, there’s a good chance it was less effusive than that, and the guys behind ProtoExchange actually thought through their business idea. They brought on Placa’s brother Jimmy to run the financial side of things. Jimmy had a background in finance, but he also ran a traditional manufacturing company, which gave the team a little bit of market insight.

They also moved from New York to Texas to participate in the first cohort of Techstars Austin.

Basically, ProtoExchange connects smaller manufacturers onto a national platform, giving them a wider network with which to compete against bigger manufacturers. For the consumer, it means they can access a large network of 3D printers and shorten the time it takes to receive their product.

The first working 3D printer was created in 1984, but in the last few years the idea has taken off. The rise of cloud computing now makes it simple to download and share any documents or plans, so 3D printing is becoming even more accessible to the average user.

Techstars Austin gave the ProtoExchange team a great start, and they are now working hard to build the network and platform, which should be available publicly soon. Placa assured me they currently have all the major 3D printing technologies and materials and are ready to compete with more established, centralized services.

The accelerator even introduced them to some current housemates who also moved to Austin to start up. Currently, they earn revenue on transaction fees, but they are also experimenting with other financial models.

ProtoExchange will soon be available to procrastinating students everywhere. You can follow them on Twitter for all the updates.

Keep Track Of Your Stuff With My Things App

Have you ever moved? Boxes and boxes of stuff, and only the most organized person can really remember where everything is.

That’s just one use case for the new My Things–Where Are They? app. Users can also catalog what they have in storage, their valuables for insurance reasons, and keep track of details during a house or car search. Small business owners can even use the app to keep track of inventory.

Founder Dhanush Balachandran didn’t exactly mean to start up. He was working full time at Intel when he launched the app in June. He launched, but then left it alone for awhile. To his surprise the app cracked the top 15 productivity apps in the App Store, and it was soon featured alongside apps like Evernote and Mint in women’s magazines.

Realizing that he had something on his hands, Balachandran quit his job in September and is focusing all his attention on the My Things app. Since then he’s launched the My Things Cloud, which offers secure cloud storage of user data.

The big question Balachandran asked was, “Are consumers ready to give personal data about their possessions?” With downloads growing month to month, it would appear so, but it will be interesting to see how many people continue to use the app after initial download. There are plenty of organizational apps available for every facet of life. Getting people excited about continuing to use it can be an uphill battle.

User experience is key, and the company is constantly iterating the app to make it user-friendly.

Corporations are making big investments in the “Internet of Things.” See the Evernote fridge and the Nest thermostat. During his time at Intel, Balachandran saw the rising tide of investment and is betting the My Things Cloud–and the data it holds–could become a valuable asset in the Internet of Things.

So far Balachandran has completely bootstrapped, but next week he is hoping to raise money at the Angel Capital Expo. With that capital he can bring someone else onto the team and develop web and Android versions of the product.

Check out the My Things–Where Are They? app on their website or in the App Store.

14 Things You Should Know About Finances Before Starting Up

QUESTION: NAME ONE THING YOU WISH YOU KNEW ABOUT MONEY AND FINANCES WHILE STARTING UP. DID IT LEAD TO A MISTAKE?

SAVE SOME FUNDS FOR LATER

“Getting money in the door is great, but high expenses can blindside you if you’re not putting money away for a rainy day. Having a buffer in the bank gives you confidence that you can keep the doors open long enough to get more cash into the business, and it also

helps reduce entrepreneur stress.”

– Nathalie Lussier | Creator, Nathalie Lussier Media Inc.

PAY THOSE BILLS ON TIME!

“I started my business as a 22-year-old kid right out of undergrad. I didn’t understand the importance of keeping track of my bill payments, especially student loans. As a result, I routinely paid them late, hurting my credit score. This hindered me later on as I wanted to access capital to grow, but was not able to by traditional means. I recommend I Will Teach You to Be Rich by Ramit Sethi.”

– Lawrence Watkins | Founder & CEO, Great Black Speakers

LEARN QUICKBOOKS QUICKLY

“In my last startup I left the bookkeeping up to my partner because he claimed to have basic knowledge with QuickBooks software. Unfortunately, his lack of expertise created thousands of dollars in accounting bills (not to mention the wasted hours). If I had known more about the program, I could have cross-checked his work and corrected course. Bookkeeping is too important to overlook — learn it.”

– Kent Healy | Founder and CEO, The Uncommon Life

HIRE AN AWESOME ACCOUNTANT

“There are a lot of solid online solutions that try to replace having an accountant, but ultimately nothing’s better than the real deal — and the real deal can often be found for a great price, as long as you ask around the tech community for someone who fits the bill.”

– Derek Flanzraich | CEO and Founder, Greatist

PAY YOURSELF A MARKET RATE SALARY

“Entrepreneurs tend to undervalue and underpay what we do at our company. Unfortunately, this creates a fundamental flaw in all of our financial models, thus clouding our ability to make smart decisions from our numbers. Even if you can’t afford to pay out cash yet, have your accountant track it to give you a clear view on the company’s profitability and financial health.”

– W. Michael Hsu | Founder & CEO, DeepSky

UNDERSTAND HOW CASH FLOW WORKS

“A pile of account receivables is not the same thing as cash in the bank. Having learned this painful lesson many times early on in my startup days, I always stress to other startups to hold off on new hires or expansion plans until the cash is actually in the bank. It’s painful when you hire someone due to a big pending payment, only to have it delayed, and then telling them, “I can’t pay you.””

– Seth Kravitz | CEO, Technori

KEEP CONSISTENCY IN BILLING TERMS

“We have small and big partners, from local boutiques to the Major League Baseball Player’s Association. When we started Modify, we had stated payment terms, but were always flexible with partners. Ultimately, the lack of clear policies significantly impacted our business. Not only did we create more work through negotiations but we also lost track of receivables, which puts us at a risk with cash.”

– Aaron Schwartz | Founder and CEO, Modify Watches

INCLUDE AN INTEREST CLAUSE

“It’s important to include an interest clause in contracts so that a company knows they will face a penalty if they do not pay you on time. Otherwise, there are no repercussions to them sending you a late payment, since it is unlikely you’ll take legal means to go after them for it. If they know they’ll have to pay interest if they’re late, they have incentive to get you your payment on time.”

– Stephanie Kaplan | Co-Founder, CEO and Editor-in-Chief, Her Campus Media

THEORY AND PRACTICE AREN’T PARALLEL

“I majored in finance at NYU, worked as an investment banker on Wall Street for two years, then worked as an associate at a venture firm investing in startups. And when I started my own company, I didn’t know how to manage my money. The reality is this: my financial models were theory; cash flow is reality. We ran into some early problems by spending on ”future earnings” that didn’t yet exist.”

– Luke Burgis | Director, ActivPrayer

REMEMBER REGULATORY OBLIGATIONS

“If you’re not clear on your regulatory obligations, beware of missed deadlines, costly fines, and time wasted attempting to correct these issues. Startups are responsible for more than state and federal taxes; look into franchise fees to the state in which you are incorporated or established, state and local business licenses, 1099 filing, and 409A valuation for companies with employee options.”

– David Ehrenberg | Chief Financial Officer, Early Growth Financial Services

EXPANSION HAS HIDDEN COSTS

“I wish I’d known about all the additional costs that come with hiring employees. There are health and retirement benefits, taxes and many other miscellaneous expenses that totaled to an amount that was quite surprising. Learn about this early so you are able to calculate exactly how much new employees will cost.”

– John Hall | CEO, Influence & Co.

ALWAYS BUDGET AND PLAN

“Even if you have little resources and capital, it’s still important to have a plan and a budget. Your business plan can be basic — as little as a simple list of goals for your venture. Of course, you’ll need a more detailed plan if you’re soliciting investors. TheSmall Business Administration website offers a great basic business plan template.”

– Andrew Schrage | Co-Owner, Money Crashers Personal Finance

PROFIT AND LOSS AREN’T EVERYTHING

“I wish someone had told me that P&L isn’t the only indicator for the health of your business — looking at and managing your cash flow is at least a weekly activity. Just because you’ve got big contracts coming in doesn’t mean you’re safe. Iif you ever want funding, you have to be vigilant about managing your cash flow and keeping your daily account balances high.”

– Raoul Davis | CEO, Ascendant Group

GET ACQUAINTED WITH TAX DEDUCTIONS

“When starting up, I wish I better understood tax deductions. That’s the reason I worked with a tax attorney to build a definitive tax guide for entrepreneurs. Taxes are complicated and intimidating, but having the right tools makes it easier to keep track, to spend money wisely, to maximize deductions and to stay out of trouble with the taxman!”

– Nick Reese | CEO, Microbrand Media

How Pitching Is Like A First Date

sales pitch Pitching your startup is like going on a first date. Entrepreneurs should be confident without being cocky, approachable without seeming desperate, and passionate without being over the top. The goal is to build up enough intrigue to be asked on a second date (or a follow-up meeting) without scaring the listener off. But that’s no easy task.

Here are four common pitching turnoffs that are easy to make — and advice for avoiding each:

PUSHING RATHER THAN PULLING

Picture going on a first date with someone who immediately rattles off the reasons why you should marry them. Not only would it eliminate the thrill of the chase, but you’d wonder what’s wrong beneath the hood. However, if the same person were to casually mention the homemade meal he or she cooked for some old Harvard buddies the other night, they would earn some serious points in the ‘potential mate’ department. It’s a matter of creating intrigue rather than trying to force interest.

The same goes for a company pitch. If the audience feels that they’re being force-fed a value proposition that they can’t relate to, their walls will go up. However, by piquing the their curiosity in a less forward way — such as describing the excitement you felt in saving thousands of dollars for one of your client companies — the audience would be left wanting more. Present genuine accomplishments in a modest, matter-of-fact way, allowing the listeners to discover the value propositions that are most applicable to their own lives. They’ll appreciate your product a lot more if it is their idea to latch onto it.

USING BUZZWORDS AND INDUSTRY JARGON

Buzzwords are like corny pick-up lines — they make the listener question the authenticity, credibility, and even sanity of the person pitching. Sure, you may have a ‘rockstar team’ that is going to ‘massively disrupt’ an industry with ‘game-changing technology,’ but using these clichéd words make you sound naïve. The listener immediately places you in a bucket with the 50 other ‘rockstar’ entrepreneurs that they’ve heard make the same ‘disruptive’ claims.

Keep the pitch genuine and crisp, using proof points, metrics, and anecdotes that the audience can grasp in a meaningful way. Similarly, steer clear of using too much industry jargon. Understanding a pitch shouldn’t require a dictionary or a biomedical degree. Speak in layman’s terms so that the audience is actually listening to the description and not trying to figure out what was just said.

PITCHING AROUND A POWERPOINT

Trust in a relationship is crucial, so another dating red flag is a person who sounds too scripted (ex: “I didn’t know beauty until I saw you.”). Similarly, relying on a PowerPoint too heavily can make the entrepreneur sound canned and insincere. The audience should feel like your pitch is unique and heartfelt, not like you’ve fed these lines to thousands of other listeners.

Though it’s tempting to build a PowerPoint at the same time as a pitch, trying to force the pitch to be visual right away compromises the story arc. Instead, start offline with 20 notecards. Use the first 10 to answer the basic questions: problem, solution, market opportunity/size, team, unique IP/technology, competition, distribution strategy, business model, financials, funding status, etc.

Fill the remaining 10 notecards with good company bragging points (aka “power cards”). Examples would be impressive metrics (4 out of 5 users tell a friend about the product), high-quality partnerships (three Fortune 500 companies agreed to beta test the platform), or powerful quotes from customers (“ABC company increased our ROI by 5X”). Then arrange, combine, and re-arrange these 20 notecards until they fit into a story arc that flows, using relevant ‘power cards’ during transitions. Memorize the key facts, but keep in mind that no one wants to date someone who is following a script word-for-word.

CRAFTING THE PITCH ALONE

It’s not a bad idea to get a second opinion on your outfit before a date. Likewise, a little guidance, encouragement and even tough love from your friends can be crucial for polishing your message. The perfect pitch isn’t created in a vacuum.

Since entrepreneurs are self-starters by nature, few accept the fact that they can’t create a pitch alone. In reality, however, you’re often too close to your own company to know how to pitch it.

During my three months in the TechStars accelerator, each company was challenged to pitch every Wednesday night to a room of 35-50 peers. When the buzzer rang (three to five minutes later), the person pitching would have to be completely silent and accept criticism with a smile. No excuses. The trick was to truly listen, say “thank you,” and accept whatever challenge was given for the following week. If someone suggested that you pitch without slides the following week, or to use a fake character as an example, you’d do it for your own benefit.

But you don’t need to join an accelerator to get peer feedback. Start a weekly Meetup group with other entrepreneurs in the area. Not only will this be good practice for investor meetings, but the variations will prevent the pitch from becoming too scripted.

At the end of the day, you make the final decision about what feels right for your pitch, but the process gives you needed perspective, confidence and practice. Just like dating, at the end of the day, your demeanor is more important than the words you use.

Heidi Allstop is the founder of Spill, a confidential site for young adults to “spill” about hardships and share life advice with one another. She launched the company as a psychology student at University of Wisconsin-Madison and spread it to 150 college campuses in 15 countries. A TechStars alum and the winner of the Global Social Venture Competition, Allstop is on a mission to bring empathy online.

Can Psychics’ Tricks Help Your Startup?

If you’ve never heard of it before, cold reading is the name of a technique used by many controversial ‘psychics’ and people claiming to be able to talk to the dead. The technique has nothing to do with supernatural abilities, but is rather a method psychics use to con their audience members into thinking they know more about them than they really do.

By using a number of psychological techniques and a lot of practice, these charlatans are able to convince anyone they meet that they must have some kind of psychic ability.

The canny founder out there is probably thinking that this sounds like a tool you could apply to your startup. Surely the ability to intuit lots of information about a person would enable you to be a better salesperson, to give better presentations, and to motivate your team more?

You’re right! Cold reading can be used effectively in business in a number of capacities.

How Cold Reading Works

The basic idea behind cold reading is simple. You talk quickly, make lots of statements, and pay careful attention to people’s body language. Then you can qualify your statements based on those reactions.

One of the methods used in cold reading is called ‘shotgunning.’ Here you make lots of quick statements that are generally quite vague and then look for responses from that person to decide which statements best describe them. Human nature works to your advantage here because the listener will only really remember the times that you got it right and will gloss over the times you got it wrong.

Another technique you can use is something called the ‘Barnum’ technique. Here you make statements that are generally true for everyone but that sound very intuitive and personal.

For example you might tell someone that they get nervous at extreme heights, that they keep lots of old photos of relatives, or that they sometimes feel insecure without really knowing why. These are universal experiences, but they sound intensely personal, and the listener will feel like you know them well.

In the ‘rainbow ruse’ you make a statement that can’t possibly be wrong because it actually describes two opposite situations. You might for instance say that someone is sometimes very angry but also very calm and placid. This is once again true of everyone and doesn’t really mean anything, but it’s not easy to completely deny.

When you combine the rainbow ruse and shotgunning, you can watch out for which statement the person reacts best to and start leaning your monologue in that direction. If they smile when you say ‘but also very calm and placid,’ you can then elaborate by saying, ‘In fact some of your friends would say you’re so laid back you’re horizontal!’ Naturally most people will believe the more positive statements about themselves

For a great example of cold reading, from someone who admits it’s just an act, check out Derren Brown. He also does a number of corporate events and has a brilliant live show.

How to Use it In Business

There are many ways this can apply to a business setting; you just need to use a little imagination.

Use these techniques in sales by suggesting that you know the person well and understand what they need.
Convince an investor that you’re the perfect company for their portfolio.
Insinuate that a project is coming along well, without lying!

Use these techniques well, practice them hard, and you can end up being able to tell everyone precisely what they want to hear.

Evan Thomas is a carefree and enthusiastic businessman. He enjoys writing about his experiences and sharing useful information through his articles. Visit www.incorporator.com.au for interesting tips.

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bringhub Makes Brick & Mortar As Easy As Ecommerce

As if startup life isn’t crazy enough. The Pantelides brothers decided to build the alpha product of their social marketplace from 3 different cities in 2 different countries.

Now they’re all in the same city–LA–and looking forward to the launch of bringhub, a platform that allows shoppers to discover local shops while enjoying the ease of online shopping and same day delivery. They will be launching a private beta later this month in LA, but they have ambitious expansion plans after they prove their model.

bringhub could be the bridge between the local movement and the “now economy.”

Check out our Q&A with cofounder and COO Philip Pantelides:

What does your company do?

Discover, Shop, Deliver

bringhub is a social marketplace that enables people to discover the best shops in their city, share with communities they trust and purchase products, delivered conveniently on the same day.

We connect shops in cities with their interest groups through a unique social networking experience. Our platform is developed around a social interest graph built specifically for shopping, so users & shops can make recommendations to people who are the most interested. Shops can have closer interaction with their customers, who have a more immersive online purchasing experience. Our beautiful SHOP WINDOWS marketplace lets users experience the store in the next best way to a real visit & gives retailers a new distribution channel to showcase their store.

Our positioning as an aggregator for courier partners both offline (Local courier companies) & online (e.g. postmates, deliv, Uber, Lyft…) allows us to offer same day delivery at an affordable price to customers (starting at just $6.99). We utilize existing infrastructures & improve the productivity of individual retail locations, making them more profitable & therefore bringing back revenues to the region. Our approach allows these local retailers to compete with national e-commerce companies due to the effective use of a location-based distribution tool, negating the need for high warehousing overheads. The supply chain becomes more efficient, resulting in the acceleration of delivery times for customers.

Who are the founders, and what are their backgrounds?

We are the Pantelides brothers: Dominik, Oliver & Philip.

As brothers we have naturally known each other for a long time & as a result work exceptionally well together. Previously, each of us took a separate path, gathering extensive experience in different areas. Now with bringhub our combined and complementary skill sets, passion and love for creativeness are our driving force to success.

We bootstrapped bringhub & built an alpha version of our product from three different cities and two different countries, all with the power of online collaboration tools – proving our team dynamics & productivity.

Where are you based?

We are based in and will be launching bringhub in Los Angeles, CA. Due to the lack of public transportation, a spread out & diverse population, & a large number of great shops, LA is the perfect starting point for bringhub. We hope to bring revenue back to regional retail through the convenience of same day delivery, a more immersive online shopping experience, & the social discovery of shops in the city.

What problem do you solve?

It is difficult to discover great shops around us – current platforms such as yelp are ineffective at showcasing stores in a way that is satisfactory to retailers & ratings can be easily swayed by paid for or fake reviews. People want an emotional online shopping experience, convenience & faster product delivery – people expect convenience & a great product experience as standard with the development of the “Now Economy”. Social e-commerce is still not a personal experience and does not represent real life buying behaviors. City retailers are looking for new distribution channels to compete with e-commerce & need a better way to communicate with their customers online. The courier industry is in need of new business revenues, with the decline of document delivery.

Why now?

Shopping promenades, malls and high streets have steadily decreasing revenues due to e-commerce becoming simple and comfortable. We are bringing back business to our cities through a new kind of social marketplace combining community and convenience.

Currently, people have limited options for shopping and sharing stores & products with people they trust in their cities. Although there is a current focus on location-based online shopping, flash sales or discount models are proving to be unsustainable & no one has quite found the secret sauce to represent stores online. Price value is the key & great physical stores always offer a more personal buying experience than traditional e-commerce.

There are two facets of localized retail: Customer service values & high quality products. Social e-commerce is the solution to transfer this experience from brick & mortar to the web. Retail marketing through current social media channels does not have a good ROI due to the message being lost in the noise. With bringhub stores & brands can target marketing to the people who are most interested in purchasing products to achieve better conversions. Same day delivery has been dubbed the savior of brick & mortar. However current models based on high courier commissions or in-house delivery fleets are unsustainable. bringhub makes same day delivery affordable, scalable & sustainable.

What are some of the milestones your startup has already reached?

bringhub is proud to partner with laedc.org & the Los Angeles Chambers of Commerce who endorse our vision of bringing revenue back to local retail. We have recently partnered with on of LA’s largest couriers Now Courier Services. bringhub now has access to over 300 couriers to execute same day delivery in the Los Angeles area ready for launch. bringhub is currently selecting & partnering with the best stores in LA. If you have a recommendation for a store you love please tweet us @bringhub or email us at hello@bringhub.com. If your store would like to be showcased on bringhub for free please visit http://bringhub.com/Partner/ for further details.

What are your next milestones? Where can people find out more? Any social media links you want to share?

bringhub will be launching in Los Angeles this Fall please sign up at http://bringhub.com/ to be the first to #shopyourcity.

In the mean time connect with us on fb.com/bringhub or tweet us@bringhub and tell us how much you #loveyourcity. To follow the bringhub journey please check out http://blog.bringhub.com/.

bringhub is currently raising a seed round for details please visit https://angel.co/bringhub & spread the word.

How To Hire A Programmer If You Can’t Code

I’m one of those founders who can do everything besides code. Marketing? A breeze. Accounting? Accounted for. Operations? Cake walk. Code? I’ll be right back!

Not being able to code has put a damper on my ability to hire the right programmer and further grow my businesses. I have hired three programmers who all seemed fantastic and brilliant during their interviews, but ultimately couldn’t deliver. I always blamed the programmers (it was their fault for misleading me about their true abilities). But then again, maybe the fact that I’ve had the same experience three times means that it had more to do with me than I would like to admit. As a founder, you need to be able to correctly assess the programmer you hire. But the question still remains, “How can I hire a programmer if I don’t have a programming background?”

For people who are code illiterate, I just might have unlocked the secret to hiring the best programmer available.

STEP 1: CONSULT PROGRAMMER FRIENDS

The first thing I did was reach out to friends who are programmers for other companies or who currently lead a team of programmers. One friend of mine, Ravi Patel, was generous enough to sit down with me and explain the hiring process he uses. I was able to get a better sense of how to approach first-round interviews, ask key questions, and judge responses. This was a great way to get my feet wet before the interview process started.

STEP 2: ASK THE RIGHT QUESTIONS

If you ask the wrong questions in an interview, you have no clear way to accurately measure the programmers’ ability. To avoid this, here are some questions to guide you:

“Tell me a little about yourself and your background.” I like to get to know the person, to learn how they first started programming, and hear some of the things they have built. While they share their stories, try to see if you can picture yourself and your team working with them on a daily basis.
“What hours do you prefer working? During what times are you most efficient?” This question helps me get a sense of how the programmer works. I personally need a programmer to be available during 9-to-5 hours, mainly to help our staff with any problems they might have. However, I don’t mind if they work whenever they are most productive.
“What are your current time commitments?” It’s important to know what else they are currently working on to see if they can truly commit. Only hire programmers who can commit to your company 110 percent.
“Do you see yourself as a project manager, a developer, or both?” This question can be a little tricky to answer. I want a project manager who can help me design new features and interfaces. I want a developer who can follow exact directions so they can build what we need. I prefer hiring programmers who can do both.
“How would you manage a team of programmers?” The key things to look for here are leadership skills and whether they can lead by example. I don’t want a programmer to take the back seat once they have a team to manage. They shouldn’t be afraid of getting their hands dirty.
“How you would fix these issues?” This is a make-it-or-break-it question. Provide a few examples of problems you’ve encountered in the past. Present them with the exact same problems to see how they would fix them. Their answers should be similar to the solutions you used, or better. If they can’t give a concise answer, that’s usually a good indicator that they are not the right person for the job.
“I need this done over the next couple of weeks. What steps will you take to finish them on time?” Present them with a few things that need completing urgently and a few things that need doing over the next few weeks. Listen to how they plan to finish each thing and ask them for an approximate time frame.
“What would you do to ensure that our servers are up 100% of the time?” If our servers crash, we lose money, our clients lose money, and most importantly, we lose clients. If the programmer I’m looking to hire has some database and server knowledge, they need to explain to me how we can maintain 100 % uptime and what flags we can implement to give us alerts on any impending server crashes.
“If I need something that you have never done before, how would you approach it?” I ask this question to see how they approach situations that they have typically never been presented with before. Usually, I look for how they would research a solution and if they are the type of person who enjoys a challenge.
“Here is what I expect from you.” Let the applicant know from the outset what you expect from them. Tell them how much commitment you expect: if you want them to be available during weekends, if they need to be available at odd times in case of big issues, what they are expected to build, etc.

STEP 3: BRING IN THE EXPERTS

These questions give me a better sense of who the top three or so programmers are. After I select my top candidates, I ask the same friends to help me interview them for the second round. During this stage, we ask more technical questions to better expose the talents of the finalists. If you don’t have any friends who can help, try contacting a nearby programmer through LinkedIn as a consultant. After you receive feedback from an expert, you should be in a good position to pick the right candidate for your team.

As a friend once told me, a decent programmer you get along with is much better than a brilliant programmer you can’t stand. The decent programmer can always learn through experience and research, whereas the brilliant programmer probably can’t change his personality enough to suit.

Shahzil (Shaz) Amin is the founder and CEO of Blue Track Media, a performance-based online advertising company that specializes in customer acquisition through multiple digital channels. His first company was formed after high school and his latest one, Plugged Inc., focuses on selling and manufacturing headphones. He’s always looking meet new people and learn from their experiences. His hobbies include playing sports, eating wings, and laughing.

Melbourne-Based Investorist Takes Real Estate B2B

As more people move into cities, apartment living is becoming the norm. In cities around the world, apartment buildings are going up, and tenants are lining up to buy or rent.

What most people don’t realize is that 70% of apartment sales are “off-the-plan” and are bought by investors. Off-the-plan property sales simply mean the apartment is sold before it is built, often a year or more before. Most of these deals are investors advised by accountants or financial planners.

It’s those professionals–accountants and financial planners–that the new platform Investorist is targeting.

Founder Jon Ellis has a lot of experience with off the plan sales, as he was a marketing executive for several companies dealing in these properties.

“I wish I could say it was a light bulb moment, but the truth is I just set out to fix a problem everyone in development has the world over,” Ellis told us. “There was no central location for aggregating off the plan property, no place for sellers and network partners to connect directly, no place for developers to share and expose their projects, and no place for network partners to compare and manage stock.”

Of course, there are other websites that offer off the plan listings. In Australia, realestate.com.au is one such site. Investorist is unique, though, because they are built specifically as a B2B platform. They cater not to the investor, but to the accountant, financial planner, or real estate agent who advises the investor.

They are also proud of the how the platform helps developers market their property. Because the site offers an experience similar to online shopping, properties look great, increasing the chances of a sale.

Investorist is growing fast. After just two months, they have $2.7 billion of stock listed on the site and 1,300 members. By the end of 2013, they expect to have the largest aggregation of off the plan property in Australia. Next year they will consider expansion overseas, namely Europe and the United States.

Find out more about Investorist on their website.