The Harsh Reality Of Launching A Startup

I recently came across an article talking about how startups should hit the panic button when they only have 6 months of overhead in the bank. This premise stunned me, especially since it came from someone who invests in startups.

What world are they living in?

Having built multiple companies and invested in several more, the idea that any startup should freak out with only six months of overhead left in the bank is just absurd. Most established businesses don’t have that much.

So let’s discuss the harsh realities of launching a startup and how to overcome them.

Rushing Your Dream

Before diving into this, let me first state that you should never hold back your drive to launch a company. But prior to making the giant leap into the unknown, make sure you have looked for as many pitfalls as possible, and been brutally honest with yourself about how much money it will take to stay in business and keep the lights on at home.

In the early stages of any venture your family and friends will be on your side. But the second you start needing to borrow money, can’t cover your rent, or begin worrying about putting food on the table, most of them will tell you to stop. If you quit your job they will tell you to go back to the 9-5 world. The encouragement and belief in your dream will suddenly dry up.

If you have a good job and this is something you can start to build on the side, then don’t just quit. Keep your personal expenses covered until your new venture can. Then make the full jump. It may not be as cool, but it can greatly increase your chances of success and save personal relationships that truly matter.

Prepare For Cash Flow Heart Attacks

Now let’s assume that you’ve gotten the company going and you are growing. Generally, growth requires an increase in overhead. New employees, office space, resources etc.

While you may be getting new customers and growing your accounts receivable by leaps and bounds, reality is you will lose clients, have ones that don’t pay you, an employee that quits at a bad time, or have an unexpected expense.

One day everything looks fantastic. The next you’re having a heart attack because that big check you expected hasn’t come in…and it’s payday tomorrow.

To be honest, there really isn’t a way to avoid these kind of obstacles. All you can do is prepare for them mentally, and make sure your gambles on growth and new expenses are well thought out. Then get ready to rise to the occasion at the eleventh hour.

Getting Investors Is Hard

In spite of the idealistic thought that you will be able to raise capital to get off the ground, cover your business and personal expenses, hire a great team; the reality of this happening is very unlikely.

Not that your idea isn’t a great one. It’s just hard to convince investors to back you. What if your idea is only worth $5 million if successful and you need $500k to get going? If the opportunity to make a 2.5 million ROI (5x investment) isn’t reasonable, many are out by default. If they even take the time to let you pitch.

Let’s be real, many investors lost that much at the craps table in Vegas last week, and don’t want to wait 5-7 years for potential return.

My advice, do everything in your power to make it possible to achieve success without an investor. Even if that wouldn’t be as big or quick as you would like. This approach will give you sound direction in your planning and give you a leg up with potential investors. A basic rule of sales is creating “fear of loss”. When you’re presenting, if it’s reasonable that you don’t NEED them but would enable faster return, interest will be piqued.

No Pain. No Gain.

The harsh reality is that becoming successful is never easy. We often look at all the success stories and forget about failures. This causes so many entrepreneurs to put on blinders and refuse to account for these realities.

In my opinion, it’s much better to accept that it will be tough. Put heavy thought into your plan and get ready for the rollercoaster that is entrepreneurship. There will be pain and heartache, but if you can overcome, it will be worth it when you achieve control of your life and enjoy the freedom it brings to be the person on top.

I hope this article provides both snap back to reality thoughts and encouragement. Would love to hear your thoughts in the comments section and don’t hesitate to reach out to me personally!

Turning Your Big Idea Into Reality

When I hired a painter to revamp the exterior of my house, I anxiously anticipated the results. He and his crew got started on a Monday morning, but by Thursday, I had yet to see the beautiful new look I was hoping for. So I asked him about it.

“I’m not a painter,” he said. “I’m a prepper.” Oh. Well, that makes more sense. Apparently, when you’re painting a house, you have to lay the right foundation if you want the work to last.

Starting a company is the same way. Entrepreneurs are innately optimistic quick starters; rushing to launch is a constant risk.

But brands are about trust, not who gets there first. Look at Myspace and Facebook, Commodore and Apple, Nintendo and Xbox. Those who prepare correctly — who slow down to make sure their big idea will actually attract customers — will succeed.

Prepare Like the Pros

There’s no magic formula to help you prepare, but the successful startups I’ve observed over the years follow these steps:

They base their big idea on research. To determine whether your big idea is viable, you should answer four questions: Who are you? Who do your potential clients think you are? What do your potential clients want you to be? What are your competitors not?
They build a brand on the research results. The personality of your brand should come from your answers to those four questions.
They design customer pathways. Create a roadmap of how you’re going to attract clients in the beginning and how you’re going to retain them. If you know where you’re going and how you want to get there, you’re less likely to make a wrong turn.
They make sure they have the right team to pull it off. Your team can be comprised of partners, employees, and/or vendors. You don’t have to have the team to fulfill your five-year plan on day one, but you do need a team to get you to day two.
They identify must-haves. For example, eBay needed a website before it could get in front of potential clients. What do you absolutely need in order to attract clients?
They then identify the next lowest-cost, highest-ROI pathways. It was essential that Facebook had a website. Duh. But it also needed an email campaign to let the first batch of users know the platform was available. It could then spend money on digital ads and SEO.

Use Preparation to Avoid Backtracking

I once watched a friend remodel a house into a setting for retail stores. He wasn’t a professional builder — just an enthusiastic entrepreneur. Sure enough, he began pouring concrete for the foundation before he installed the plumbing. Everything had to be undone.

You can never be sure you’re taking the right step. It’s more about taking your best shot at the right direction and time. Guarantees are for kids. Those who navigate successfully through the early days:

Stay calm.
Move steadily forward.
Modulate passion with rational thought and planning as they lay the foundation (the brand, resources, team, and network).

Plan Ahead for Long-Term Success

I’ve had to learn about the importance of preparation the hard way. I got involved in a venture a few years ago that was at the starting line. We were impatient. We had the team, the research, and the brand. We just didn’t have the map to show us what to do first.

We would try this and that, but only succeeded in frustrating ourselves when those things didn’t work. So we took a step back, relaxed, and started laying out the best pathways for our target clients.

We selected the pathways we could afford to take and started implementing them. As our cash flow improved, we selected the next pathway on the list and moved forward. Because we were “planning the work and working the plan,” the company doubled the size of its average client revenue for four years and continues to enjoy success today.

You, too, can achieve that kind of success. You just have to be willing to put in the work in the beginning. If you plan ahead and prepare for what’s to come, you can develop a solid customer base, avoid backtracking, and experience growth year after year.

Joshua Conran is a senior partner at Deksia, a branding agency that has been successfully developing companies for the past decade. Joshua’s focus is on winning for the client while expanding Deksia into multiple markets by utilizing systems and processes.

GripeO Launches Web & Mobile App to Help You Complain Effectively

A couple of years ago, my husband and I were planning a trip to New York City so he could run the NYC marathon. Thanks to his coaching job requiring him to be at a meet the day before the race, we didn’t get to make our normal trek 2 days early. We were going to be right up to the wire.

Then, early in the week of the race, Hurricane Sandy hit. Lots of back and forths between the mayor and New York Roadrunners Association, but the race was finally cancelled late Friday night, the day before we were supposed to leave.

“But, there was a hurricane in New York, maybe you heard about it,” my husband protested to the airlines as we asked for a refund.

I took to Twitter, complaining and hastagging the appropriate companies. Eventually, they did the right thing and refunded the cost of our flights. I’d like to say my complaints on Twitter did something to help that, but let’s be real. I was just one person complaining on Twitter that night.

New complaint platform GripeO is looking to change that.

Launched out of beta last week, GripeO lets customers post their customer service complaints on the platform, then notifies the companies that a customer has an issue. Businesses can verify with GripeO and take care of the problem right there.

Why not just continue to complain on Twitter?

“The effectiveness of complaint management on Twitter is vastly over rated for both consumer and business,” GripeO CEO Mike Klanac told me.

So, the make it better, GripeO allows customer to post their complaints on the site, but then share them socially so their friends see them, too. Customers can create a “meme” of the complaint, and the platform suggests hashtags and structure to help the complaint go viral.

No company wants that, y’all. Companies that choose to verify on the platform can avoid that awkwardness and potential PR issue by mediating with the customer right on the site.

While the company is not yet generating revenue, they plan to make money by selling leads, premium tools, and intelligent advertising. In their beta, they tested with 200 users and 4 companies, and they’ve currently signed up a few more big companies since launch.

GripeO is live now, so if you have a complaint you can check it out on their website.

11 Marketing Tools Your Startup Needs For Launch

Question: What ONE must-have tool should small businesses include in their marketing campaign when launching a new product? (events, pop-up shops, swag, social media campaigns, etc.)

Mailchimp Is a Must

“For every new product launch, we collect emails via MailChimp. We use their email campaign and auto-responder functionality to draft countdown emails so that our customers receive regular updates and pre-specified intervals prior to launch. These email campaigns get customers excited about our launch and result in increased conversion.”

– Bhavin Parikh | CEO, Magoosh Test Prep

Landing Pages with Unbounce

“Landing pages are a must when launching a new product. They let you easily focus the potential consumers attention on the actions that you deem desirable. With new products, money is scarce, so having the highest conversion rate is of necessity. My product of choice is Unbounce — it’s dead simple to use, and they also have new and improved features for the advanced user.”

– Lawrence Watkins | Founder & CEO, Great Black Speakers

Create a Dedicated Email

“As you’re building buzz for your product, there must be a customer and sponsor support team ready to handle incoming questions. Put your email out there everywhere and encourage questions, ideas and communication. Don’t just have the email account, but be ready with resources, FAQs and engagement specialists to nurture your early adopters and raving fans and help them promote you further.”

– Kelly Azevedo | Founder, She’s Got Systems

Set Up Google Analytics Properly

“You can’t have a good marketing campaign without tracking in-depth analytics throughout the entire process. Not only is Google Analytics great because it’s free, but they continue to add more robust features for tracking every detail of each visitor on your site, which will help you understand the location, referrers/keywords, behaviors, site usage, and transactions of each of your visitors.”

– Seth Kravitz | CEO, Technori

Incorporate Retargeting Pixels.

“Use a service like ReTargeter or AdWords Remarketing in order to drop cookies for first-time visitors to your website, so that you have the opportunity to remarket to them later and stay top of mind. Start building your remarketing list from day one.”

– Matt Mickiewicz | Co-Founder, Flippa and 99designs

Utilize Hacker News

“Hacker News is a great place to launch a product. If you submit your site correctly, it could drive thousands of visits within a few hours and collect excellent feedback. Make sure to read how to use Hacker News first though!”

– Ben Lang | Founder, Mapped In Israel

Put In a Squeeze Page

“If I had to recommend one tool for any product launch, it would be a “squeeze page,” also known as an opt-in page. Get an account with an email service provider (ESP), create a squeeze page, and point potential customers to it during your pre-launch. Send emails to your subscriber list building anticipation for the launch, and then offer your subscribers a limited-time offer upon the launch.”

– Pete Kennedy | Co-Founder and Managing Partner, Main Street ROI

Let People Use Your Product!

“If the goal is to get people to use your product and talk about your product, then it seems logical that you should get that product into as many hands as possible. If it’s online, this means a trial. If it’s food, it means having tons of samples. If it’s jeans, give away your jeans. You can talk and hype something all you want, but the product speaks for itself. A worthwhile investment.”

– Luke Burgis | Director, ActivPrayer

Bloggers Create the Buzz

“A lot of small businesses focus on long-lead, print media without realizing the power of blogs. Even relatively small blogs have the power to convert sales with links in a much more powerful way than print ever can — and even have the potential to take on their life of their own through social sharing.”

– Alexis Wolfer | Founder/CEO, The Beauty Bean

Coordinate a Social Media Push

“Including fans in the conversation or decision-making process prior to launch is by far the most valuable pre-promotion you can do. We generally narrow new watch designs or colors down to three or four options before running a vote on Facebook, Twitter, Instagram and Pinterest. It’s our “Threadless meets Kickstarter” model: whether we receive 100 votes or 1,000, we learn from our biggest advocates!”

– Aaron Schwartz | Founder and CEO, Modify Watches

Collect Real Testimonials and Reviews

“No matter what else you do to market a new product, you need to have proof that it does what you say it does. Getting people outside your company to try the product and talk about it is the only initial source of that proof that you can set up before the product goes on the market. So make the effort to get testimonials and reviews from beta testers and pre-launch customers.”

– Thursday Bram | Consultant, Hyper Modern Consulting

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.

Silicon Prairie Startup Flywheel Launches, Words Press Hosting Re-Designed

Often times when we talk about our friends at Silicon Prairie News we talk about our friend Jeff Slobotski, as the “Chief Community Builder” Slobotski is often times the face of SPN. His co-founder, equally as vested in the Silicon Prairie region, Dusty Davidson, is often times very busy building something. Well after six months in beta his latest “something” is now launching, and it’s a relief to many designers reliant on the WordPress platform.

Davidson along with partners Rick Knudtson and Tony Noecker have launched “FlyWheel”. The team, which Davidson calls a “…dream team of founders” has launched a “premium” WordPress hosting platform built for designers. “We’re re-imagining what it means for designers to host and launch sites on WordPress, and for them to collaborate with customers and other designers and developers. ” Davidson told us an in email.

One of the things that sets FlyWheel apart from other hosting platforms is that they strictly WordPress. “All we do is WordPress, our servers are tunes specifically for WordPress, ultrasecure and have top performance” Davidson said in a statement. That makes “light speed’ normal speed for designers that use FlyWheel for their sites.

FlyWheel allows design firms to launch demo sites for free and then easily transfer files to a client site to “go live”, a feature which Elevate’s Jake Stutzman, finds particularly useful. FlyWheel will allow a webspace for actual collaboration rather than having to send stills back and forth through collaboration platforms like BaseCamp.

To that end, FlyWheel has made it very easy for a designer to grant access to their site without having to send usernames and passwords back and forth through email, which may open up a client to a designers entire portfolio.

FlyWheel also caters to designers by cutting out a lot of the technical jargon found with hosting companies. Even with a technical background Knudston told Silicon Prairie News “I joke … what are acronyms like CGI? Or what version of PHP is it running? Or things like SSH access,” which is one of the reasons he came up with the idea for FlyWheel.

“The problem that we’re trying to solve is specific to web designers and agencies who manage large numbers of sites,” Davidson said. “Somebody like (Omaha design firm) Grain & Mortar will design 30 WordPress sites a year, and they need to manage those … they have to log into 30 different hosting accounts, or they have to remember passwords and user names or they have to do things that make managing that many sites and launching sites in that manner very difficult for them.”

FlyWheel also features an integrated management tool that allows design agencies to quickly get an overview of all of their WordPress projects and quickly login to a clients site, share credentials with a client or even bill a client for their FlyWheel hosting.

You can check out FlyWheel now at getflywheel.com

500 Startups Backed, Speek, Releases iPhone App

Last year after TechCrunch Disrupt NYC, most people thought that conference calling app Uber Conference was the bees knees. They had won the TechCrunch Disrupt Battlefield and were all the rage from the big publications. Meanwhile, back in the Washington DC suburbs Evite founder John Bracken and co-founder and PandoDaily contributor Danny Boice were busy working on Speek.

Speek is actually the easiest way to execute great sounding conference calls. Everything is handled through a web/cloud based interface and all you do to initiate a call is direct the participants to your Speek page, for instance mine is http://speek.com/kyle from there I can control who’s in the call, file sharing, information and anything else that pertains to a conference call.

The whole process is extremely easy and doesn’t require jotting down pin numbers or long codes, which can be quite cumbersome driving down the highway.

Well today Speek has released their iPhone app which makes it just as easy to initiate conference calls from your iPhone as it is from the web (although it was pretty easy just using a mobile browser like Chrome).

With Speek’s iPhone app, you can make super simple, free and visual conference calls. Reserve an easy-to-remember username (i.e.,http://speek.com/YourName) for your calls, instead of fumbling for a traditional phone number and PIN.

Features:

Talk instantly with one-click calls
Know who’s joined the call
Know who’s talking
Share images from your phone
Comment, mute and add/remove participants

Avoid the hassles of traditional conference calls with:

No telephone numbers and PINs
No scheduling
No elevator music
No interruptions

Check out Speek in the iTunes app store and go register your user name before all the good ones disappear. If for some reason you want to try it out feel free to Speek to me at http://speek.com/kyle

Join the nearly 1800 people who’ve bought tickets to the largest startup conference in the United States, more info here!

everywhereelse.co The Startup Conference Announced February 10-12th 2013 In Memphis Tennessee

MEMPHIS TN, & EVERYWHERE ELSE- “everywhereelse.co The Startup Conference” has been announced for Sunday February 10, 2013 through Tuesday February 12, 2013 and has already attracted an all star line up of speakers, panelists, investors,startups and entrepreneurs. The conference will take place in the heart of beautiful Memphis Tennessee at the Memphis Convention Center.

The three day conference will feature over 30 panels, keynote addresses, roundtable and fireside chats geared towards the challenges that entrepreneurs, startups and even investors face outside Silicon Valley. The conference will also include three signature networking events as well as a three day startup exhibition featuring 100 startups from “everywhere else”. Startups from every stretch of the country, and as far away as Israel and Romania have already committed to exhibit in the Startup Village.

Startup America CEO and founding CTO of Priceline Scott Case will keynote at the event. Best selling author and motivational speaker Tracy Myers,Rohit Bhargava,Bill Harris former CEO of Paypal and Intuit and many more, will also speak at the event. everywhereelse.co The Startup Conference will continue to announce speakers over the next two months.

Startups, startup founders, accelerator heads and investors will round out three fun filled and educational days in Memphis Tennessee on topics ranging from “raising money everywhere else”, “what I learned in an accelerator”, “what investors outside the valley expect”, “startups: life after hip hop, music and sports”, “kick ass female founders from everywhere else” and more.

There will also be three startup pitch contests with finals taking place at the conference; “The Best of Everywhere Else”, “The Startup Village People Awards” and the “Top of Tennessee” startup pitch contests will have their finals take place at the conference in front of a panel of well known angels, VC’s and celebrities. With the three startup contests over $100,000 in cash and prizes will be given away.

The Best Of Everywhere Else contest will begin with video pitches on November 1, 2012.

The Top Of Tennessee pitch contest will be open to startups throughout the state of Tennessee and will begin during Global Entrepreneurship Week.

In the Startup Village People Awards, Startup Village companies will compete for $25,000 in cash and prizes by audience participation vote via the official conference app.

“everywhereelse.co The Startup Conference” has made both exhibiting and attending affordable for even the boot-strapping startup from “everywhere else”. Attendee tickets are $60 with an early bird rate of $39 for all three days. Startup Village booths are $480 with a few $295 pre-sale booth spaces still available. An earlybird rate for Startup Village booths of $350 will continue through October 31st.

Linkage:

Check out everywhereelse.co

Attendees get your attendee tickets here at the special early bird rate

Startups, here’s a link for $295 startup village booth space that ends Tuesday at 11:59pm