Portfolio Rant

Around last fall, I started trading with an E*trade account to better understand other investors using Wikinvest.  Prior to that, I had spent some time positioning a 457 account, but nothing more than that. Just a few months into my time at Wikinvest, though, it was hard to not want to invest.  I’m constantly reading investment reports, finance blogs, news, and generally talking about the markets and investment ideas.  It was a perfect fit and, lucky for me, I decided to start my investment portfolio right around the time of one of the greatest stock market crashes ever.

Investing since Wall Street’s collapse in October (and then Geithner’s bobble in March) has its benefits.  With valuations seemingly at the lowest they’ve been in decades, it felt like a good time to be greedy (or as greedy one can be when purchasing 10-50 stocks at a time).

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Investing has since fascinated me.  I’m in awe of the thought that, for $9.82, I can own part of American Express (it certainly helps that their dividends offset some of my credit card interest too) or Tata Motors for $4.42.  Ownership can be addictive, and I certainly throughout some of the markets lows.

Since this is an entirely new portfolio of mine, I have a long horizon.  Unless we go into a 1990s Japan-like slide, I’m assuming that a monkey could make money with a long-term investment just after the Oct 08 to March 09 fall.  That said, I’m certainly not willing to count on that, and after markets rose this spring and summer, I’m now looking for quality companies.

I like a good, low debt-to-equity / high ROA / low P/E combo if it’s to make it into my portfolio.  From all the opportunities out there, I start with sectors and regions and work my way down to companies.  I stay away from retail in the U.S., but I embrace it in India and China.  I like companies that build things, or build things that are used to build things, or transport things, or dispose of the wreckage from buildings things.  I like financial institutions — a few of them at least, the ones I haven’t heard much about on television.  Before I invest in a company, I look at recent earnings reports, annual reports, investment reports, and read news associated with the company.

The Investment Portfolio as Venture Capital

It’s not long into this process that I realize what it must take for a VC to part ways with several million dollars of their and their client’s money for an unproven idea and company, all the while knowing they can only, maybe, get the initial investment back in three to five years.  If they’re incredibly good and lucky, they’ll get that investment back with interest.  It’s no wonder it’s hard to get money from a VC.

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I’ve found I have certain tendencies with my portfolio similar to a VC.  For my stable investment — the IRA — I’m less willing to risk an entire company’s collapse.  I focus on ETFs like ADRE or QQQQ that follow big emerging market and major technology companies, respectively.  On the other hand, I’ve come to think of my trading account as my “extra” savings where I can take chances.  It’s where I’m going to prove my investor worth.  I’m OK with it disappearing over night.  I’m willing to be risky with multiple small cap companies, looking for one explosive stock.  I spread those investments around; some work while others don’t.  I do what I can to be good and hope to get lucky.  Sometimes, it’s no wonder it’s so easy to get money from a VC.

Portfolios for Founders

The other part about running your own portfolio is — you learn to understand the levers for building your own business.  Create more value than you require.  Give away equity for cash; take on debt for cash.  Purchase people / space / machines.  Convince someone to give you more cash and continue the loop  It’s all there within your portfolio.  You expect management of your portfolio companies to control costs, increase their cash, and demonstrate health by increasing earnings, milestones, dividends, etc.  Management has to preach to employees and investors, alike, with probably a slightly different story for each.  It all sounds like start-up world to me (except those dividends, of course).

As an early founder, you’ll be stuck in the details of your business at all times.  Your investors won’t.  They’ll expect you to step back from the conversation about the misalignment of that button by 5px and figure out whether your market strategy is going to withstand this economy given your cash on hand.  They’ll want it in digestible figures and metrics.  Further, they’ll want you to put your thousands of hours a year into a half hour phone call and presentation.  They just want the basics — are you creating more value than you require?

It makes you understand both the weight of the founder and the risk a venture capital takes investing in a start-up.  Both parties are flying blind in this arrangement.  There’s no easily accessible “Sell” button like there is on my E*trade account, and a bankrupt start-up is worth even less than GM.  Investments are designed for a three to five year exit (at least) with only a hope and a prototype to go on.

Founders, it’s up to you to figure out the rest.  You should understand what your investors are going through (employees are investors too — but that requires another post).  Just remember to create more than you require.  Start from nothing and be willing to lose everything.  Create ownership.

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• Cheap equities are an opportunity for investors (telegraph.co.uk)
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Recently, I’ve gotten away from that.  I’d gotten away from writing about tools and entrepreneurial ideas, and I became focused on writing the international startup series.  Now, I’ve really enjoyed the international startup series, but it’s become much larger and takes up much more time than I originally intended. (And in these dire/crisis/trying times, )  I think the size of the series is a great measure of the sophistication of the international startup scene, but it was eating up precious time and keeping me from focusing on what Enter Venture is all about. (And in this time of economic crisis, we need to prioritize)

Now, a post about feedback, that’s what Enter Venture’s all about.

Image via Wikipedia

It’s been said before that being an entrepreneur is all about soliciting and applying feedback. Refining an idea into a business is a constant struggle between trying something new, assessing the outcome, and trying it again.

Whatever you’re doing, no one’s done it before — not the exact thing, in the exact space, at the exact time.  Every entrepreneurial experience is different.  Take some of my recent entrepreneur interview series posts — ZDONK is working to leverage their industry connections in a way most outsiders couldn’t, Ativiti is working by moonlighting, and Baveo is working off of equity, without funding.  All three of these companies approaches the business creation process differently.

At best, someone can relate to your experience.  Someone can relate to your startup and offer ideas for how you can improve.  Some will even criticize your idea and startup.  You might not like the ideas; you might not like the opinions.  The key to being an entrepreneur, though, is your ability to consider all of these opinions and create an advantage out of their feedback.

When I was recently discussing this and Enter Venture with Dennis of ZDONK, he said:

“To be honest, I’ve really enjoyed all your posts but never really got into the international startup series. It seemed like you were kind of investigating and making a list as opposed to really getting into a particular startup or particular software/tools you thought would be useful for a startup. They were definitely interesting but personally I just wasn’t as engaged as I’d been with your previous posts.”

There it was.  I had created the series to try something new, but after a while, it was all that I was doing and alienated at least one of my regular readers.  After Dennis’ feedback and a recent Quick Sprout post about improving your blog by creating that helps people, rather than reports the news. I realized I was writing my own form of news.

You can expect that to change with Enter Venture because I’m mindful of your feedback.  (Feel free to leave it in my newly-updated, Disqus comment system).  I want to get a bit more into the entrepreneurial process and talk about the tools I use and the processes I go through to manage this blog.  I’ve re-organized Enter Venture a bit so there’s even a preliminary Resources section with everything from the blogs I read to WordPress plugins I use, tools, etc.

The entrepreneur interviews will continue — but as a way to illuminate the entrepreneurial process, not as a way of reporting the news.  We’ll save the news for TechCrunch, and the entrepreneur-relevant, feedback-incorporating blog evolution for Enter Venture.

What do you think?

Making a movie is an extremely risky affair.  What better way to combat those risks than by measuring a movie’s financial success by crowd-sourcing it from both angles — investment and creation.

ZDONK will start out with a collection of existing Hollywood scripts that have yet to make it to the big screen.  If you’re to believe Entourage, that means there are a lot of great, hidden scripts simply sitting in studio drawers, waiting to be made.  ZDONK wants to let you, the users and investors, weed through that pile and determine which of them are fit to be the next blockbuster hit.

Want to own a part of a movie and invest in hits?  You’ll be able to invest in movies much like you can invest in shares of a company.  Want to be sure a particular movie makes it to the big screen?  Be a part of a group of investors that invest enough money to be sure it happens.  Want to turn your idea into a movie?  Start writing a script and have it ready for this spring, and, if enough investors believe in it, watch your idea become a reality.

The ZDONK founders

I’ve been following ZDONK and their founders since the idea was a mere glimmer in their collective eyes.  Before leaving New York this past September, Zack and Dennis — two of the company’s three founders — sat with me for lunch to share their experience building a company and navigating both the financial and film worlds.

Dennis is a former Bank of New York analyst who’s handling the financial side of the business, setting up the market for their scripts, and providing energy enough for the entire team.  Zack, a child of the Hollywood scene, has been helping the company make connections, find scripts, and create partnerships.  Roy, the third founder, is focused on project management and works with the company’s two other team members, their engineer and graphic designer.

Right now, the team of five is working to set up the core infrastructure for the site, making partnerships, and creating an online presence with their blog.  At the time that we spoke, they were learning to brand their idea and went through several logo iterations.  Since speaking with them, it looks like they’ve started to hit their stride with a collection of fun and informative blogs posts and a great tag line — Hollywood’s not just for asses anymore.

In December, they were in the process of raising funding to both build the site and start acquiring scripts, and they’ve since successfully raised a $1 million first round of funding.  Their next task, assembling their board of directors, also looks to be moving along with top-level experience from Fox, Walt Disney and Revolution Studios.

Image via Wikipedia

Since they’re essentially creating a stock market for scripts, a lot of their costs are spent on legal fees. Their business type — a market for movies — carries with it unique complications and intellectual property issues.

What they’re up against

Movies compete against a host of other media for our attention.  Once created, they’re likely to be pirated everywhere from college student dorms in Boston to marketplaces in Bangalore.  The financial crisis certainly hasn’t helped the industry’s outlook.

Heck, even ZDONK acknowledges what they’re up against in this environment — just check out recent ZDONK blog posts on startups in a crappy economy and the film industry during the financial crisis.

One of the ways they’re trying to combat this is by focusing on what can make money with less risk — comedies. (With a name like ZDONK, what else would they be focused on?) Comedies can be created on lower budgets and have the potential to earn significant long term revenue after distribution.  Also, during these hard times, board member Joe Roth points out, “It’s already bad enough, movie-goers need an escape.”

As things seem to be moving along, it seems now that one of their biggest challenges is powering through the low points and building a community to get behind them.  Working with the film industry requires a lot of connections, and at this point, their idea has been picked at from every angle.  Just ask Chris Albrecht of NewTeeVee, who takes a look at the hard economics of actually funding a movie online — 6,000 investors with $500 each.

At the end of the day, creating a website that could potentially help create movies is a great thing to be able to call “work”, the ZDONK’s founders told me.  This is the movie business, after all.  Everyone has a chance to become the next big blockbuster.

Update (1/4/2009): Since it had been awhile between when I met with ZDONK and when this post went live, it appears some of the post requires clarification.  I asked Dennis if I could re-post his response because it’s a much better representation of the company than I could make alone:

“create a market for new comedy movie scripts – For the most part, we will be working with agencies, development executives and riding the traditional industry channels to acquire properties (eg – talking with people who already have some level of vetting). We definitely plan on engaging writers on the site, but we’ll be doing that more through having “log-line” competitions where the winners develop comedy shorts to be distributed on zdonk.com and then syndicated across the web. Ideally, if a writer was very good, we’d eventually want them to write features for us but we are not comfortable rolling that out just yet.

We will definitely be encouraging writers to use their profile on our site to post their feature films and potentially receive feedback or find representation, but we will make it clear that we will not be scouring the web looking for feature scripts (too many IP issues). That is not to say, however, that a producer wouldn’t see a script they really liked on our site and pick it up and finance it themselves.

- Their next task, assembling their board of directors, also looks to be moving along with top-level experience from Fox, Walt Disney and Revolution Studios This was no biggy but we’ve had our Board of 5 people set for a while now. Lastly (and also unimportant), we raised about $1.4m and are done for now…raising money became too “expensive”.”

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The idea behind Ativiti is to identify and then expose all of the steps required to do pretty much anything. What are the five steps that you must take to learn the guitar? The hundred you must take to start a business? The experts out there have already figured out these steps and simply need a way to capture and ‘widgetize’ these steps into someone else’s project plan. Ativiti makes it reproducible — viral, even.

For anyone out there that learns through practice problems and example code, Ativiti is for you. Rather than just describe how to do something, you want to see the steps. Get rid of the project friction and those moments where you state “wouldn’t it be great to”… Instead of “wouldn’t it be great”, Ativiti plans to offer, “this is how you can”. Sign up for the beta now.

A few months back, I had the chance to sit and chat with one of Ativiti’s co-founders, Dave Whittemore. Dave is also a product manager at On Deck Capital, a financial services startup that provides small business loans, and an assistant organizer for the Blue Venture Community (formerly the Columbia Venture Community).

Dave talked a bit about some of the challenges of starting a business. Ativiti is being created by a team of moonlighters who find time to work on it outside of their day jobs on nights and weekends. This schedule makes getting their project off the ground that much more difficult, as it’s no easy task getting your idea vetted when you can only talk about it at night.

What the Ativiti team does have to their favor is familiarity. The Ativiti team has now worked together, in some form, for several projects dating back to Varsity Flicks and their Facebook application, MyOffice / Study Groups. Dave has settled into his role of working on marketing, blogging, and strategy with a product manager focus. Larry has been the developer throughout. Brandon takes care of external partnerships and analysis, and their newest team member, Nick, takes care of design. They’ve worked together for a while and know what to expect from each other. They’ve survived life shifts and now want to get something off the ground and popular.

Right now, the team is wholly focused on the product by taking a few mock ups and moving towards a working, private demo product. They’re using the blog to define their problem (and even list out their competitors) and following their three core principles:

1. Templating helps solve the problem of how to do something
2. I/O everywhere — meaning, tools need to move with you
3. Don’t reinvent the social network wheel

After that, they want to get their product out to the public and see what works and doesn’t. Only after this proof of concept stage, do they think they’ll focus on the business model with premium account.

Dave’s advice for any other moonlighting entrepreneurs out there — keep plugging away with consistency. Throughout the financial crisis (and as a New York-based team, this has been even more of a distraction), the team has continued to meet. Creating something new requires an evolutionary approach. At times, moonlighting helps — your day job influences your night job. Your night job influences your day job. It’s incredibly important to learn from both sides.

Baveo allows users to post photos, videos, and text updates to a blog devoted entirely to the newest members of the family. The site is well designed for parents and family on the go. Parents can post directly to their Baveo blog via their site or their phones, and friends and family can stay updated via email or text messages.

I recently had the chance to chat with Ari Greenberg, Baveo’s CEO and founder. Ari helped break down where the idea for Baveo came from, how the team came to be, what they’re up to, and a few other thoughts about being an early entrepreneur.

After witnessing a childhood friend and his wife blog about the birth of their first child, Ari’s idea for Baveo was born. Ari saw the chance to make a wonderful and important experience even better. Expecting parents deserved a better and more integrated blogging experience.

Previously at Magnify.net, Ari spent his free time exploring the project further. He had always known he wanted to start his company, but he lacked an idea worth pursuing.

Baveo quickly became that idea, and when he realized it, Ari wasted no time building a team of three. Everyone works for equity, and Ari wouldn’t have it any other way. It’s how he knew the team believed in the idea and wanted to see it succeed. It also ensured the team would be honest with him and tell him when things weren’t going right. Both are equally important.

The site is currently invite-only so the team is working towards building out new features and publicizing the site. There’s a large community of mom and dad bloggers out there for them to tap into, and they’re exploring ways for users to better capture and share baby memories.

No matter what they think now, though, the team is focused on letting their users decide where Baveo goes next. “Everything needs to be about the user,” Ari says, “Users will tell you what they want if you listen.”

For all of you expecting parents out there, sign up for a Baveo invite now. Let your friends know what’s going on with your little cherub and let Baveo know what you think of their service. They’re listening.

It’s the vision that’s tough. It’s hard to see all of the steps from beginning to end. You run into what some might call ‘project friction’ where, if only you knew all of the steps to get to your goal, you could get going and do something about it. Building a business, though, is a hard thing to explain on paper.

One of the best ways to see how it’s really done (as I mentioned in my SA to SV post) is to join a startup. That’s why I joined a startup, and it’s more important than any of the 9 reasons below. I wanted to see what motivated people to work for a dream and a prayer. I wanted to see how someone ran a company going through rapid change. I wanted to see what I’d do similarly and what I’d do different.

In Dave’s first post to Enter Venture, he really touched upon the inherent risk in every job. There is no such thing as a safe job (except for the few people in this country remaining in unions). Why not find the environment that suits you best? It may be a startup. It may not.

Personally, I think you’d be crazy not to even consider joining a startup. Here’s why I like my startup job so far:

1. Lack of structure – If there’s anything startups have, it’s potential. You can be anything and everything. You’re just going to have to figure out what that is, and as a startup employee, how to make it happen. No one’s going to tell you what to do.

2. Free food - Google’s cafeteria stories have created an industry standard among startups where you HAVE to offer free food. Hell, you’re probably not getting paid too much so the founders have to at least make sure you’re eating. (Full disclosure: I like free food — a lot).

3. Casual everything - I spent the previous year wearing a suit everyday. Now, I wear a t-shirt and jeans and play with the office dog in my spare time. ’nuff said.

4. Building something new – I’m going to defer to a comment I once heard from another Columbia alum. ‘There once was a guy named Goldman. There once was a guy named Sachs.’ You can build the next big thing a lot easier as long as you’re not working for the old, next big thing.

5. Like-minded, entrepreneurial people all around you - People in startups tend to come from all kinds of backgrounds, but they have one thing in common, they want what you want. If you’re like me, it’s the other 8 things in this list.

6. Define what you get paid… sorta – At a corporation, your pay represents your years experience, your peers, your role in the company, blah blah. At a startup, you can be a part of defining the success of the company and, therefore, the success of all those options you’re holding onto. You’ll still get paid more as an engineer over an office manager, but damnt, if the office manager figures out your business model, he’s going to do pretty well for himself too.

7. Work with people, not people playing the role of Manager/Executive/Director/[insert title of someone above you here] - The problem with highly structured organizations is that people are often put in roles where they actually believe in the titles they’re given. They feel like they have to live up to it and act the part. It’s hard to act superior in a startup, especially if you show up to work in your PJs.

8. Barely a meeting to be had – Every company has external meetings. The problem with internal meetings, though, is that they’re only useful for a few people. Everyone else uses them for doodling and quality ceiling-staring time. There are better things you can be doing for your startup than polishing your doodling skills.

9. Work on the most important stuff, all the time - There are always a million things to do. On any given day, you can only do those things that are the most important. Whoever liked doing the bullshit work, anyways?

If any good comes from the financial crisis, I’m hoping that it helps developers on Wall Street realize that there are paths they can take other than the supposedly “stable” employment that large banks provide. Scratch that — I’m biased. I’m hoping they realize there’s one specific path they should be taking: working at NYC-based startups.

After talking to a few of my friends who work in IT for various large financial institutions, it doesn’t seem like the crisis has had the effect I’d hoped for, yet. Instead of it giving them cause to seek out greener pastures, they seem to be happy that they still have jobs. Rather than adjusting their appetite for risk (or exposing the real risk associated with Wall Street), some developers seem more attached to their jobs than ever.

Now, this isn’t universal, but the fact is, a lot of blood has been shed on Wall Street. Lots of folks are looking for jobs and plenty more will be at risk. The risk/reward of working in IT on Wall Street will surely change even if that’s not obvious now. The alternative — working in a startup — needs to be better publicized.

Josh Kopelman is doing a great job leveraging the financial crisis to tackle this issue head-on with his new website, Leave Wall Street, Join A Startup. That’s the kind of awareness I’m looking for. He lists out plenty of reasons for joining a startup that are dead-on, from the work environment, to creative control, to the potential equity upside.

I love his approach. The startup community in NYC needs to jump at the opportunity, build sustainable solutions, and attract technical talent. It might be easy to hire talent in the short-term, but long-term solutions are needed to ensure success when the crisis ends (and they always do). With companies like Lehman and Bear Stearns tanking, there aren’t many left to complain about startups’ lack of credibility or brand equity. What other objections are there?

A long-term solution begins with creating a better funnel between the various local educational institutions and the startups that reside here (shameless plug: this is one of the goals of Columbia Venture Community). We need more insitutions like CVC, NextNY, and the NY Tech Meetup that can provide continuity of awareness and thought leadership and broadcast success stories throughout the rapid turnover of the startup lifecycle.

The long term solution also requires more awareness and a bit of a reality check. There’s as much risk in your Wall Street job as there is with a startup. Bail yourself out.

First, though, you need to get a startup job. Here are 10 sites (in no particular order) that I found helpful in my startup job search:

1. Doostang – Doostang may be the exclusive career community for top young professionals (whatever that means), but it’s also a great place to find startup jobs. A lot of startups are created by ex-young professionals, ergo, ex-young professionals are already on registered with the exclusive career community for top young professionals. They want you to join them in their “ex” status.

2. LinkedIn – For those of you that live by the “getting a job is all about who you know” mantra, well, you probably don’t work at a startup. With LinkedIn, “who you know” certainly helps you get started, and that’s sort of comforting.

3. Startuply – Startuply is quickly becoming the it place for listing startup jobs. A lot of the blog job boards further down in this list have 100-200 job postings, not even necessarily all for startups. Startuply currently has just under 1,000 startup jobs listed. They provide background information on the companies, and it sounds like they’re just getting started with their feature set. I have nothing but great things to say for their outreach efforts too. They quickly responded to a bug post I reported, and I was happy to send over a screenshot to help them out.

4. craigslist – This came as a surprise to me too, but craigslist turned out to be a halfway decent option for my startup job search. Startups are pretty tight with their cash, and craigslist has a price and distribution that can’t be beat. There are just two things you need to keep in mind with craigslist. One, there will be hundreds of resumes submitted for every job. Two, because there are hundreds of resumes submitted for every job (including the one you’re applying to), pick only those jobs that fit you perfectly.

5. Crunchboard – TechCrunch’s job board is one of the best places to find startup jobs because TechCrunch is where you go to find startup news. Makes sense, no? (Also, kudos to TechCrunch on the redesign. It’s about time.)

6. 37signals Job Board – 37signals job board is another blog with a great job board, especially if you’re a developer or designer.

7. Silicon Alley Insider Job Board – SAI’s job board is obviously a great place for New York startup jobs, especially with the startup boom in New York. What’s less obvious is that there are a few west coast jobs sprinkled in. You might get lucky with one of these.

8. Authentic Jobs – I’m not sure how I found Authentic Jobs, but I know that I found some of the most interesting opportunities on this site. There’s a mix of freelance jobs you can scope out too.

9. Company Websites – The great thing about applying for startup jobs is that you’re often applying to companies you’ve heard that have websites you’ve actually used. When you read about a new company on TechCrunch, go check out their website to see if they’re hiring. (Hint: They usually are.)

10. Get out, ask questions, meet people, make friends – (OK, I lied, 9 websites and a dose of the real world). You need to do a whole lot more to get a startup job than merely visiting job board sites. This list wouldn’t be complete without mentioning that. I was able to meet a few people during my search and most people were more than happy to send my resume along. People understand what it’s like looking for a job, and if they work with startups they certainly want to see them succeed. Everyone likes playing matchmaker.

(Also, worth checking out even though they helped only minimally in my search were Joel on Software’s Job Board and the Crayola Crayon-looking StartUpers site.)

Update (9/14/08): When I made this list, I focused on the startup job sites that were most helpful for me. It wasn’t a list of all the startup job sites out there. If I had done a bit more research, I would have noticed Sean Aune’s post with 18 Startup Job Sites (damn, 18 is more than 10) to help bolster this list. A lot of these are general sites, but there are a few in here worth mentioning that have some potential:

• CoNotes – I’d never seen this one, but it looks promising. If anyone’s used it, let me know what you think.
• GoBigNetwork – I’m not convinced this is a the best place to find a startup job. It seemed like a better place to find a startup partner or investor. The quality of job postings isn’t as good as some of the other sites in this list eiter.
• Mashable Jobs – The same logic works here as with the TechCrunch job board. It wasn’t as helpful for me, but it likely would be for others.
• nPost - nPost is more strictly technical though there are a few non-technical jobs in here. I used nPost to some success, but it’s more like a Joel On Software job board for startups.
• Venture Loop – Venture Loop lists companies backed by VC firms and so fills a need I mentioned in #10 of my original list. People like playing matchmaker in this industry, especially when they have an interest in that match’s success.

The Columbia Venture Community looks poised to be the group that finally brings entrepreneurship to the forefront of the Columbia community (and if not, it at least looks like it could save a senior or two from unwittingly going into banking or consulting).

I’ve written about the Columbia entrepreneur community, or lack thereof, before. In fact, it was my first post. Over the past several months, however, I’ve noticed a marked change in the buzz over Columbia’s commitment to entrepreneurship. It’s come from several places. The focus group I mentioned in my first post was organized by the Columbia Center for Career Education. In April, I attended a Business School-run event, the Columbia Entrepreneur Organization’s Pitchfest. In May, I attended my first Columbia Venture Community event run by Mark Peter Davis, a Business School alumn.

It was at the CVC event that it really felt like things were starting to come together. It was the first time I had really seen a group for all of Columbia — alumni, engineers, business, law, etc. It was the first time I saw an event and a group that looked like they had staying power. Not since CORE somehow got Mark Cuban to speak on campus have I felt that. (I’m not sure if CORE still operates since they’re still sporting the several years old Cuban photo so maybe this is a bad comparison?)

On Tuesday of this week, I attended my third Columbia Venture Community event (one of them slipped through my blogging fingers). On a lazy August day at 6pm on the upper west side, I was shocked to find 50+ people in the basement of Lerner Hall. School’s not even in session!

There were 50+ real, living and breathing people with some affiliation to Columbia who weren’t off ‘summering’ elsewhere for August (which probably means there weren’t too many VCs in the crowd), and who couldn’t think of anything they’d rather be doing than talking about startups. Brilliant!

I spent the networking portion of the night speaking with a variety of interesting people that helped reaffirm my gut feeling about CVC. GoodGame TV developer, Oliver, and I talked about getting started in PHP. GoodGame TV features an entertaining series of videos covering everything gaming related. Great content, not so great UI. (Oliver, expect an email from me. I think a few simple changes would take care of some of the UI issues). I also chatted a bit with Vikram Venkatraman and Sol Kahn, both classmates, colleagues, and friends from our mutual obessions with entrepreneurship.

Tejpaul Bhatia, founder of MediaMerx, promised a Guide to Raising Venture Capital post for Enter Venture in the future — and yes, I will hold you to that Tej. “Everything you’ve ever heard about raising money on blogs is wrong” Tej told a few us. We look forward to hearing what’s right, Tej. I also enjoyed conversations with Frances Ning and Jonathan Wegner. Jonathan’s business card he gave me at my first CVC event still ranks as one of the best I’ve ever picked up (Update 9/21/08: They’re called Moo Cards, and I just ordered a few for Enter Venture). Frances was notable as one of the few women at the event and aspired to to build feeder organizations that would bring Chinese nurses to America.

Everywhere I stepped I was tripping over interesting people, and again, remember, this is August.

Unfortunately, I was not able to stay for most of the presentations, but I was able to see Bartek Ringwelski and Sasha Davidov present InterviewPoint. InterviewPoint is a database of real interview questions from real interviews as recorded by real students. Users can share questions and strategies, as well as benchmark their resumes against other students in similar interviews. I haven’t been in the banking / consulting interview mindset for awhile now, but something tells me that a Vault guide + InterviewPoint combo would be the perfect recipe for your banking or consulting interview.

Of course, this is the Columbia Venture Community. After realizing you could start your own InterviewPoint, there’s no reason for you to go on that consulting or banking interview after all. With all of this excitement around the Columbia entrepreneurial community, there’s no better time to shun the all too familiar Columbia paths. Come out, meet other entrepreneurs, and see what else is out there beyond the banking / consulting world. Bring friends. Join a startup. Start a startup.

It figures that this group has only now come along just as I’m about to move to San Francisco. Two years since I’ve graduated from engineering school, it’s great to finally see entrepreneurship gaining some traction at Columbia.

Farewell CVC and good luck. I expect a Zuckerberg or two by the time I get back to NYC.

When it comes to experience, though, early entrepreneurs should broaden themselves. When you’re starting out, participate in a wide swath of activities to better understand each part of a business. Write a business plan. Code part of your site. Try testing the site. Present your pitch. Whereas a scientist knows how to do research, an entrepreneur must know how to do the research, the grant writing, the accounting, and the floor mopping.

Widening your experiences also teaches you what you’re not good at. When it comes time to build your perfect team, experience will tell you that maybe you’re not the best guy for accounting, even though you know how to do it. Find a rock star accountant as soon as you can.

In the spirit of this idea, here are the 5 ways I try to broaden my experiences:

1. Read.

I’m an RSS (and book) junkie. I read anything from typography and web standards to financing and marketing (and biographies, fiction novels, and an occasional book of the Core Curriculum variety).

2. Get out there.

I practice my message and get new material by going to NYC tech events. Try to find events that are targeted to your market but emphasize different parts of your market. I can’t say enough for Meetup to help with your search. NYC has several Meetup web groups, some specific to video, marketing, web standards, programming languages, etc. There are also sites that announce weekly events. For NYC, try Garysguide, NextNY‘s calendar, and Silicon Alley Insider‘s weekly posts.

3. Try it.

Enter Venture is just one way that I try out my ideas. I practice teasing out ideas on my whiteboard and rough site specs for feedback from friends. You can build a local version of your site to practice your coding skills. Open Photoshop, or Gimp and play with some color scheme ideas using tutorials on the web. Sign up to be a software tester at uTest.

4. Analyze.

I’ve been using Google Analytics, Feedburner, and WP Stats to track visitor usage and identify visitor trends. I’m in the midst of using Crazy Egg to better understand usage patterns on the site, which will help drive my next round of Enter Venture updates.

5. Improve.

If you follow #1-4, you should always be improving. Be aware of what you’ve improved on and celebrate it. Be, also, aware of what you need work on and work on it.

Start from #1 again.

(If there are any rock star accountants out there, let me know what you’re up to.)

1. It’s great to know how to teach one’s self
2. It’s great that there’s this thing called the “internets” to help

Point #2 is something I want to revisit later. Using the internet as a learning tool has its pluses and minuses. The pluses are obvious. You can search for anything and often, thanks to today’s search technology, find exactly what you’re looking for at the end of that long tail. The minuses, though, I think are less obvious and something I’d like to dedicate a longer post to. The internet has a time problem. We’ll just leave it at that.

Point #1 is the real reason for this post. Continuous education and self teaching are vital to the success of any early entrepreneur. It’s impossible for you to know at the outset everything you’ll need to know to be successful. Your success will be defined by your ability to continuously learn (and adapt, and get lucky once or twice).

Now, I have struggled for the past two years to better understand the value of my engineering degree. I have yet to really use the subject matter knowledge acquired from four years of biomedical imaging engineering. My single summer internship studying brain waves was fascinating, but a lifetime of working in hospital basements is not exactly what I’ve planned for myself.

What I’ve come to believe, and this past weekend substantiates this, is that an engineering degree teaches you the fundamentals to be a better self educator and problem solver. No matter what you go on to do after college, these fundamentals will help guide the way you improve, break down problems, and work with a team towards a solution.

Here are the 5 reasons I think my engineering education was crucial to my early entrepreneurship path. There’s certainly more, and I’d love to hear what other people think:

1. Self Education

I’m not sure if it’s by design or due to the general ineptitude of most engineering professors, but engineering tends to be really poorly taught. I certainly don’t blame the professors. Most of them were hired to do research. They simply aren’t there to engage you in the content, and the textbooks certainly don’t help.

You have to engage yourself in engineering. You have to find the right combination of study groups, office hours, and practice problems that work for you. You learn to focus and compile. You learn by doing.

The way we refer to ‘studying’ before an engineering exam is probably a misnomer. More often, this time is spent practicing. Take that problem from Week 10 that you’re sure will be on the exam. Write out the solution step-by-step. Then, write it out again, but this time, change the numbers. Last, give yourself a final practice test by doing the problem without the book in front of you.

Even when you work out the answer to the equation, your job still isn’t done. Your next class will ask you to implement that solution with a program in Matlab. You’ll never know everything about Matlab and all of it’s functions so you better get used to digging around it’s help files and teaching yourself what you need to know along the way.

2. A Problem Solving Framework

I think the problem solving framework is best represented in an engineer’s final thesis or project.

My senior BME project team took on the following project: How could we create a portable set of underarm crutches to be used by sports trainers? We spent the first few months simply breaking down the problem. How small is portable? (Trainers typically carry duffle bags). How much weight must they support? (Accounting for the football team’s linemen, a lot). How much money do we have to build this prototype? (A little).

Once we knew the answers to these questions, we could think about solutions. Using our newly acquired Self Education skills we figured out the details for implementing.

(In case you’re wondering, we ended up building a crutch made of hinged aluminum segments with a wire running through the center that could be tightened and released to extend and fold the crutch. Cool stuff.)

3. Finishing spirit

It’s incredibly hard to get partial credit in engineering. Say you have a Java assignment that’s due at 9am on Friday morning. You could spend every waking hour from the Sunday night prior working on that assignment. You’ll make all kinds of mistakes, get sidetracked by random problems, but still find incremental improvements. What every engineering student knows, though, is if their program doesn’t run at 9am on Friday morning, it’s all for naught. Everything has to work when you hit ‘Enter’. I think it’s this feeling that keeps us up the night before. Success is relatively binary.

4. Side-by-side work

I can’t speak for every major, but one of the best things about BME was working side-by-side with professors and TAs during projects and labs. You can learn so much more than answers to problem sets this way. You see their passion and technique. How do they hold their instruments? How do they comment their code? It’s typically worth emulating.

I don’t think this extends outside of engineering all that often. Your poetry professors can’t write an example poem with you looking over their shoulder. Your ChemE professor can run that experiment though. Your CS professor can dazzle you with that on-the-spot ‘Hello world’ program in CS1007.

5. Teamwork

This was a bit of a late edition to the post. It’s also different than reason #4. Side-by-side work has more to do with emulating the best than working with a team of your peers.

I’m not entirely convinced that my engineering degree helped instill an appreciation for teamwork that I didn’t already have. Twenty years of team sports had already taught me most of what engineering school reinforced. If you haven’t had a similar experience, count this as an important reason #5.

I can remember a conversation my lab team once had with a graduate teaching assistant during some downtime in senior lab. He was a BME PhD student with a BS in MechE. He told us that if he had to do it all over again, he would have been a BME student from undergrad onwards. Obviously he just wished he could have spent another 4 years of his life talking about BME, I thought, but that wasn’t it. Instead, he told us that a BME degree would allow us to do anything. If you didn’t like medicine and biology, you could leverage your EE and CS classes. If you didn’t like those, you could leverage all of those math classes. If you didn’t like those, well, you could just fake it.

As I’m writing this now, I think his words ring true for practically any engineering major. Engineering isn’t about finding the right path over the course of a short, immature 4 year period of your life. Engineering is about learning how to learn, learning how to problem solve, and learning how to improve.

Thanks Columbia. (I never thought I’d say that before I finished paying the bill).

Before I go on, Iet’s talk about the furniture in my room. There’s the desk. That was free from craigslist. Then there’s the bureau — also free from craigslist. The bed frame cost me about $50, and my bookshelf about $40 (also from craigslist. That Craig’s got a great list).

My whiteboard, the only other substantial thing in my room, cost me a cumbersome ride on the F train and around $75. It’s by far the most valuable thing in my room.

Now, why was it worth over 75% more than the rest of my bedroom combined? Quite simply, it’s the best tool for helping you get started on almost any project. It is the figurative “blank slate” come to life. It’s perfect for that idea you’ve been thinking through for days now and finally need to dump.

Actually, once you dump it on the board, you realize there are major gaps missing in your idea. You erase the whole thing, start again fresh. (Rinse, repeat, and you get the idea.)

A whiteboard is every early entrepreneur’s best friend. There are numerous different people you need to contact, things you’ve got to learn, and places you need to go. The whiteboard is a great place for all of this and more. Over the past few months, here are the different ways I’ve found myself using my whiteboard:

1. Task lists

This is the most obvious. My whiteboard currently has a few different task lists going on at once. A list of half baked post ideas for the Enter Venture blog are in the upper right corner. There’s a few technical topics I’ve committed to learning on the left, and a few people I need to email are listed just above my computer in the lower right corner.

On paper, you check or cross off your tasks and end up a book full of squiggles and lines. Whiteboards let you erase your tasks completely. This is somehow more gratifying, I think.

2. Blog Schedule

I’ve tried to keep a fairly consistent posting schedule with Enter Venture as well as keep variety in my posts. Creating calendars on the go has helped with this immensely. I don’t need to map out my blog’s calendar for 3 months. I certainly don’t have 3 months worth of ideas figured out, but a 2 week calendar is perfect for my needs.

I can quickly visualize when I’ll be at an event, whether I’ve added a book lately, or when Vik will be posting.

3. Idea Prototyping

Like any early entrepreneur, I’ve always got a few different ideas floating in my head. When I originally envisioned Enter Venture it was going to be a more comprehensive site with a wider range of social networking features. Prototyping these ideas on the white board made me realize I didn’t have a clear picture of what it was I wanted to create. I kept whittling down features until I was looking at a blog. Here you have it.

4. Doodling

Whiteboards are not only a great tool — your friends will love it! You’ll be the ‘it’ destination for various doodles and messages. People will enter your room and leave having felt like they left a mark, an impression.

Let them do it with a whiteboard. I’ve seen people try to do this with markers and a wall. It wasn’t pretty.

5. A fresh start.

This is the most important. Like any truly great tool, a whiteboard gives you the ultimate in flexibility. For a week, my whiteboard will have a series of screen shots on it. The next week, it has a calendar. Changing your frame of reference will help keep you and your ideas fresh.

In fact, I’m going to clean my board now. I could use a few new ideas for my next post…

Now, I’ve never lived or worked in Silicon Valley, but I’ve heard about it. I’ve heard that students are encouraged to pursue entrepreneurship. I know that they have startup career fairs. What I knew about the NY startup scene during college was this: nothing.

So, here are my two ideas for how Silicon Alley can change that:

1. Silicon Alley needs to go to school

At the CVC event tonight, I heard and participated in several conversations that went like this:

• “I had no idea there were startups in NYC when I was in school.”
• “Are there companies that come to campus that aren’t investment banks or consulting firms?”
• “Why doesn’t anyone just go recruit from SEAS (Columbia’s School of Engineering and Applied Sciences)?”

Great question. I graduated from SEAS in 2006. While there, I had no idea that NYC had even a single startup. I knew exactly who McKinsey, BCG, Booz Allen, Deloitte, UBS, Citibank, and Goldman Sachs were, or rather, after going to Columbia I knew who these firms were. I couldn’t agree more with Ari Greenberg of Baveo when he says that, “before I came to Columbia. I didn’t even know what the hell an investment bank or consulting firm was.”

I get the impression that Silicon Valley really cultivates the relationship with the young talent coming out of its area’s schools. I remember reading an article from Hacker News that said that many of UC Berkeley’s CS majors had multiple job offers.

Just before today’s CVC event, I ran into a recently graduated CS major who lived on my floor when I was a freshman RA (don’t ask). What’s he up to these days? He’s looking for a job. Looking for a job??!! Are you crazy?

Do you know how many times I’ve been at tech events lately where someone announces they’re hiring? This always strikes me as amazing. You’re looking to hire someone at an event full of people already working for startups or people planning to start their own? Really? Is there no better place to ask that question?

Silicon Alley should be hammering on Columbia and NYU’s doors. What more could a startup ask for than a recent graduate with lots of energy, the willingness to learn, and tons of time on their hands? Sure, it takes a leap of faith to recruit entry level developers from college, but it sure beats standing in a conference room while holding a “Looking for Developers” sign over your head.

The message to Silicon Alley is simple. Students have no idea that you exist because, well, you’re not hiring them!

2. Silicon Alley needs to be the most popular kid in school

I think this would be pretty easily attained by Silicon Alley once they start reaching into the area’s universities. How many college students really dream about donning that suit and tie when they graduate, anyways?

The area needs more buzz. It needs to create this buzz by looking outside its IAC walls. It needs success stories that people know about and hear about. Students shouldn’t find out about the Silicon Alley startup scene two years after graduation. They should be dreaming about being a part of it from the moment they step on campus. They’ll see startups, join startups, and think, “Hey, I can start one of these on my own.”

All of a sudden, that CS major becomes more attractive. You don’t need to move across the country. You don’t need to squeeze in that economics minor to make yourself more attractive to the McKinseys and Booz Allens (not that I’m advocating being one dimensional). Awareness will build on campus. Students will start telling stories about those firms that are dishing out free lunch and that let you wear jeans to work.

I can just imagine the career fair now. Imagine a table for Meetup right next to the table for JP Morgan Chase. How many engineers would choose writing back end financial software over working on a hot web product?

As Mark Davis said at today’s CVC event, “Columbia has a lot of people interested in entrepreneurship, but there’s not a lot of community.” The community has to come both from the universities and industry.

Columbia is starting to get it’s act together. Your move, Silicon Alley.

Sometimes the right choice is no team at all — but this is not the sustainable or scalable option for most operations.

How does an entrepreneur, and a starving one at that, build a team of like-minded, competent, individuals who will work with and not against the entrepreneur or each other?

I don’t know the right answer, but have a running theory:

The optimal team is build both with trusted associates, as well as with experimental new talent.  Unfortunately, payroll takes capital. If you’re starving, that capital comes out of the marketing budget or the R&D budget, or food/rent.

So how do you compensate a resource without funding?

Stay tuned for an upcoming post on incentives…

I have launched a social experiment of my own for new talent that includes both experiential incentives and targeted good faith.

My current team includes a few trusted associates, all part-time, and freelanced admin and skilled labor resources. If the experiment above goes well, it will include a few more feet on the ground.

I can’t seem to post word documents to the blog, but am happy to let people see it. It exemplifies much of what I believe in partnering with your talent and structuring fair incentives.

I would be glad to share it with anyone who is interested, and don’t even mind if you use it as long as you ask.

Whenever I go to one of these events, I enjoy a little chuckle to myself when I think of the conferences I’ve attended for my day job.  There’s typically a host of software providers, or a featured software provider, trying to sell any doohickie or widget they can stuff down the government’s throat.  I’m often the only person in the room under 40 and always the only one in the room with a spike of hair running over the top of his head.  For one of the more enjoyable conferences, NYC’s GovTech, the NYTimes tech blogger, David Pogue, gave a great, but revealing presentation about all kinds of new things on the internets — Skype, iPhone (1.0 not 2.0), etc.  It sometimes feels like stepping back in time.

Mashable was about as different from my day job’s conferences as one can get, but maybe it was a little too far in the future?  The event was hosted at Touch, a faux ritzy lounge / club that most people probably think of when they think of New York bars.  That’s right kids, plush couches, and a freakin’ DJ!  The only problem with this is that whole “Exhibit” part sometimes got kind of tough.  People were yelling over one another, and the exhibit area was packed, even during the first hour or so that I was there.  Not a bad bar scene, but again, the exhibit was kind of lost in the mix.

Don’t get me wrong.  I completely enjoyed myself at Mashable’s Exhibit Hall.  A bit of free food, (not free) beer, and internet geeks in the same room makes for a good time. Maybe they just needed a bigger space?

Rather than talk about the event, I decided to do something similar to what I did with the Columbia Venture Community article and review a few of the companies and websites I saw yesterday.  (If anyone else wants to review some of these sites, feel free to do so in the comments.  Yes, you, my 10 readers…):

NameThis – NameThis is another Kluster product and seems very similar to the Kluster site.  NameThis offers allows you to crowdsource the name of your company, product, or, well, anything.  My initial impression with the site is that I’m not in love with the wooden deck-like header overlaid horizontally on the vertically striped background.  It kind of hurts my eyes, but doesn’t keep me from being able to quickly figure out what this site’s all about.  They do a great job of using the most important screen real estate with the important functions of the site – naming competitions.

I ran into a few stumbling blocks when I tried to use NameThis though.  And by that, I mean, I can’t log in to use the site really at all.  I tried to log on to NameThis using my Kluster email account, the log on kept failing, but there was no message to tell me what was wrong.  I decided to “forgot my password” and had an email sent to me with a link to reset my password.  When I reset my password, I was taken straight back to the original log in screen as if there was another unannounced error with the system.  Grrr.  I can log in to Knewsroom and Kluster so I don’t think it’s me.

I can log in to the site and see the current naming competitions, but I can’t participate.  It’s too bad too.  The concept of this site is so simple and easy to understand that I want to participate, you know?  Just the tip, just to see how it feels?

One last thing about Kluster, they seem like they have found a system that will really be able to churn out products.  It seems like they’ve put together three different applications over night so I bet we can expect more.

edopter – edopter was probably my favorite site of the event.  Even better, Matthew from edopter was probably the easiest person to talk to of all the participants.  Great site.  Great people.  Good combination.  I don’t think I’m a part of edopter’s target market, but I can completely see the type of people who would love this site.  In fact, I have a friend of mine that I’m sharing the link with once I finish this post.

For the most part, the site design is great.  I came away with a few ideas for updating the Enter Venture blog design (whenever that will be) .  They do a really good job of focusing your eye on big, clear images and text, which makes for a fun browsing experience.

I do have a few complaints: Some of the graphic design makes it a bit difficult to scan for elements on the site.  The buttons blend in with the rest of the background and text a bit too much — for example, the log in button on the home page.  The search bar also suffers from a similar problem but looks more like a button than an input field.

Concertattack – ConcertAttack has a great, clean site that addresses the popular music / artist / fan / concert market.  I should be feeling great about ConcertAttack, but here’s the thing…  Haven’t I seen this site before?  Or some variation of this site?  I’m certainly not someone who would use the site.  There definitely are a lot of people who would — just check out the activity on the site.

My worry for them is how are they really, really going to stand out?  Something tells me the fans of these sites are pretty fickle.  Concertattack must do one or two things better than anyone else, it’s just hard for me to know what those things are.

VideoClix.tv – VideoClix was a crowded by people so I knew there was something worth checking out in them.  I just watched the demo of their product and can now see why it was so crowded.  VideoClix has made video interactive and clickable for more information and product suggestions.  While watching a video of Steve Harvey, you can mouse over the video for an indication of what’s clickable.  When you click on the video, a small sidebar slides out with more information about Home Depot, sandpaper, Steve Harvey, etc.

The product doesn’t yet seem perfect from the demo, but it’s a certainly on its way towards a really new and interesting viewing experience. I look forward to my beta invite to see more.

Rubicon – Hmm.  Rubicon.  I was at  first excited about Rubicon.  This might be something I could use in the future.  I have a blog.  At the point that I have more than 10 readers, I might want to put ads on this blog.  Unfortunately, I never found myself wanting to get started.  They do some sort of ad network optimization thing where we all magically make tons of money, or “mad cash”.  All I wanted to do is figure out what they could do for Enter Venture.  Instead, I filled out a form, that took me to their “User Interface” (I should have known to bail out here), then another set of questions, and really, I stopped there.  It was clear that this wasn’t something I wanted to use.

After writing the above, I decided to give Rubicon one last try and at least view their 3 minute demo.  Instead of a demo though, I got a voiced over sales presentation.  I think they’re really stretching the use of the word “demo” (short for “demonstration”) here.

MotionBox – MotionBox was another company and site that I really liked.  Put them in the edopter bucket.  MotionBox seems to have found a niche in the family video sharing space.  Their site uses all kinds of language and images that target the “Hi Mom, the baby did x today!” audience.  MotionBox’s user account screens look the best of any of the sites I saw at Mashable.  They’re well organized, have subtle design touches that compliment that organization, and they make it extremely easy to use their system — right down to the short but instructive step-by-step guide that’s just perfect for their target market.

Unfortunately, it’s ridiculously hot in my apartment right now as NYC just got slammed with a heat wave so I need to wrap this up here.  MotionBox deserves a more extensive review, but I’m (thankfully) short of any sample baby videos at the moment and don’t expect any soon.  Maybe then I’ll give them the full test.

Thanks again to Mashable and all of the event’s participants!

In this post, I will try to cover some of the more straightforward options.

1. Self-funding: If you are employed, or have any sort of income, some of that can be used to fund your idea. Depending on your circumstance, this may mean dialing back some elements of the “lifestyle” or re-examining your income and expenses to see what you can really afford.

Pros: Ease
Cons: Often inadequate

2. Bootstrapping: This works best for short term, high pressure, low risk usage of funding. While risk in a young venture can be difficult to grasp, suffice it to say that massing credit card debt or high interest small business loans (angel funding) should be held until they are truly needed.

Pros: Quick, relative ease
Cons: High interest debt

3. Big Bank Small Business Loan: This could also be the use of home equity or similar low interest collateralized loan. Typically taken from a bank or large money lender at published rates. In my experience this is very difficult to get without at least one success story under your belt. Defaulting can cost you your house.

Pros: Large sums, Low interest
Cons: Collateralized debt, track record needed

4. Venture Capital: So many success stories involve venture funding that it is easy to think this is the only way business ideas get funded. This is a great option if you idea is in some facet revolutionary, or mildly innovative in a field of interest to the VC firm. VC firms typically take a controlling interest in the company in exchange for their capital, which can be frustrating for the passionate entrepreneur. However, VCs can often provide the monumental sums that cannot be raised any other way. Typically, you need to have a compelling and differentiating business plan, and the patience to be rejected over and over again.

Pros: Enormous sums, no repayment
Cons: Very difficult, and not suited to all plans. Loss of control, track record a plus.

5. The Rich Uncle: While not always an option, friends and family are more likely to trust and understand the passionate entrepreneur and will frequently provide better payment terms and interest than lending institutions. However, defaulting will make you feel guilty, and may make family life uncomfortable. That said, many successful businesses have gotten their start this way.

Pros: Ease, terms
Cons: Risking family money can be worse than risking your own.

6. Grants: A new option to me, and one I am still considering. There are many institutions, the US government included, that gives away money to people who are doing things of interest to them in some facet. If your idea is, or can be adapted to fit that definition, you may be eligible for grant funding. Several colleagues of mine have raised thousands of dollars this way.

Pros: No repayment
Cons: Difficult to research, difficult to win

————–

Given the options facing a starving entrepreneur, what is the optimal path to funding?

The path I am going to explore follows:

Start with my own income capital, and build success on a small scale before approaching grant organizations for funding. Show them favorable track record on a small scale, and a detailed plan on how their funding will be used. This is an option for me as I frequently build charitable contribution into my plans.

Using grant funding to drive growth and payroll expansion, I will scout for a low interest small business loan, and more rounds of grant funding. The loan capital will be used as much as possible on appreciating or stable assets or property that can be used to collateralize it. After staying in the black for several months or a year, I will begin approaching VCs with the aim of structuring a deal that will pay off the loans and limit the level of control they seek. Ideal would be to gain funding from two firms so that their interests can be faced against each other when applicable.

Thoughts welcome.

-Vik

I’m not sure that everyone knows where we’re at. I’m not sure everyone knows what’s been created so far. I think there are a lot of basic, valuable tools that are right underneath people’s noses, but they don’t know how to use them.

There are all kinds of buttons popping up on your favorite websites these days like ShareThis, StumbleUpon, Facebook, Digg, Reddit, and [insert more here], but so few people have any idea what these things are. It’s like the collective web viewing public woke up one day to Web 2.0 widget chicken pox and everyone just decided not to scratch. What is all this stuff?

I’ve been informally polling my friends lately and found them reasonably unaware of what any of this stuff does. Are they a wholly web/software centric crowd? No, not entirely. Does that matter? Yes. That’s exactly the point. If no one knows what these things are, how in the world will they get used?

We all know that developers know how to use RSS. Or, as the joelonsoftware.com sidebar states, “We also have one of those RSS thingamajiggies. If you don’t know what that is, consider yourself lucky.” For non developers though, I feel like it’s the opposite. You’re lucky if you know what readers are, but it doesn’t need to be that way.

See that orange button just under my picture? Looks familiar, doesn’t it?   These buttons are all over the web. They’re on blogs. They’re on newspapers, sports sites, job boards, forums, calendars…

I wont try to explain what feeds or readers are because Wikipedia can do that. But Wikipedia doesn’t really tell you what these things do, or at least, not in a way most non-PhD computer scientists can understand. I think it’s really as simple as telling people that “Feeds deliver your favorite website’s content to you so you don’t have to keep coming back to the site.” Or “Readers are your personally constructed web newspaper.”

I don’t think Wikipedia’s the right place to tell people either. How about some of our Web 2.0 chicken pock’d sites start doing the explaining? Companies, developers, and entrepreneurs are creating an amazing set of tools, but only a fraction of web users know what’s going on. People would love to know what this stuff does. Tell them.

For those of you who don’t use those RSS thingamajiggies, here’s how you can get started. Find yourself a reader. If you’re a Gmail user, you’re in luck. You already have one. Click on that top-left link that says “Reader” (or “More” > “Reader”). Done. If you don’t use Gmail, or if you want to shop around, try a few out.

Once you’ve set up your reader, click on one of those orange (or green) subscription buttons you see on your next visit to your favorite website. Then, do it for a few other sites.

Clicking on one of these links does one of two things, either:

a.) You see a bunch of crazy code that scares you and must surely mean that something’s broken. (It’s not, though I’m really sick of this). Just add the subscription manually in your reader (“Add Subscription”). or

b.) You’re asked to add this feed to your reader with a click of a button. That’s it.

Now, rinse and repeat with your other favorite sites and watch your personal content get delivered to you.

It’s simple and convenient, but the internet viewing public has barely started to use these tools. They see these RSS buttons and widgets all over the web but have no idea what they are. People don’t often click on buttons when they aren’t sure what they do.

You know how you can read a book and skip over words you don’t understand? You can get along just fine without the word and going to the OED isn’t worth your time? It’s something like that.

Why haven’t more publishers made their readership more aware of their RSS feeds? I think there are at least two reasons. For one, they’ll lose their viewership and those eyes are driving their advertising revenue. This can be solved by adding ads to feeds, which some blogs already use. Readers could also offer advertising alongside feeds and share the profit with the content creators.

The second reason I don’t think you don’t hear more about feeds from a lot of websites is that feed readers rob publishers of their brand. People kind of like their brands.

With those two problems solved, why wouldn’t publishers want to alert their users to more and better ways to consume their content? In fact, if any early entrepreneurs out there are looking for an idea, these might be worthwhile problems to tackle.

I’d love to see someone smartly combine an email inbox and a reader. There are opportunities for different types of aggregation and different types of data for distribution. As more people grow to understand feeds, they’ll be more and more ideas and varied uses for this technology.

I think this is all great for entrepreneurs. I think there’s an enormous opportunity to ignore the urge to be the next best thing, and instead, focus on those things that we already have that just aren’t being utilized properly. I think these tools need to mature a bit more. Developers, entrepreneurs, and companies need to better publicize the benefits of their tools. I’d love to see start seeing a greater intersection between developers and non developers, but I’ll leave that for another post. Go try that new fangled feed reader out.

While we often talk about how great it is to be a nimble startup, the reality is that early businesses faces the biggest hurdles, the most fundamental constraints. There isn’t enough money to pay for everything. There aren’t enough people to do the job. Success is completely dependent on you and the way you decide to deal with these constraints.

Succeeding in spite of these odds is what makes us love entrepreneurs. Especially in the startup world, people love the struggling success story. Startup lore is filled with the guys who’ve built computers in their garage, written software at night after a full day of work, lived off of ramen and in their parents’ basement. No one roots for the juggernaut.

Without resources, early entrepreneurs have to learn to embrace these constraints and succeed in spite of them. If you don’t have money, figure out how much you can do without it. Better yet, figure out how to convince people to give you money. If you start your business with someone you meet on the internet on the other side of the globe, make efficient communication and 24/7 support your forte. If you don’t know where to start, start a blog.

Success is part creativity and part skill, but 100% owed to passion. The passionate will persevere and stick around long enough to trump any lack of skill or creativity.

This weekend I attended Salem State College’s 198th graduation ceremony and heard a booming, passionate commencement speech by Prof. Charles Ogletree of Harvard University’s School of Law. His words were funny, serious, and inspiring — everything you could hope for out of at commencement. At one point, Prof. Ogletree talked about the real driver of American strength (roughly 4 minutes into the video):

America today is not measured by the graduating class at Harvard. It’s measured by the graduating class of Salem Sate College. You are the single mother, raising children, cooking dinner, and reading course materials, all in the same night last week … You are the student working two jobs … You are the one who despite the skepticism of your friends and buddies, returned to college as an older student and stand here today proud of the fact that you’ve made it.

In the crowd listening to Prof. Ogletree at Salem State College’s 198th graduation ceremony, sat my Mom. She was listening to Prof. Ogletree while preparing to accept her diploma in spite of 20 years, 3 colleges, 4 kids, 1 husband, and numerous jobs. She persevered, dedicated herself to her goal, embraced her constraints, and now rightfully takes her place in successful, entrepreneurial lore. Congrats Mom.

I’d also like to welcome Vik Venkatraman to Enter Venture. Vik and I both studied Biomedical Engineering at Columbia, lived to tell the tale, and have run from the field ever since. After seeing his few posts on The Starving Entrepreneur, I knew I had found a kindred entrepreneurial spirit and we’ve shared experiences ever since.

He recently volunteered to share his content and continue blogging about early entrepreneurs on Enter Venture, and I couldn’t be more excited to add another blogger to the team (and by team I mean there are now 2 of us). His first post should give you an idea of what to expect. Vik should complement my posts well with a less web-centric, but more complete view of what it’s like to be an early entrepreneur. Welcome aboard, Vik!

1. Business plan = business success.

I think any endeavor will fail without a at least some planning, but a polished business plan document is neither a requirement nor guarantor for success. While a business plan will document your ideas and should clearly lay out your value proposition, unless you already have funding secured or a lot of staff, it will be too high level to be actionable. Recommendation: put more effort into the sales strategy and marketing plan.

2. Business plan is a tool for new recruits.

In two of my past startups, the business plan never graced the desk of a VC, but helped tremendously in communicating my goals and ideas to staff and potential partners that I came across. Be sure that your business plan clearly lays out operational details as well as clearly stating your high level concept and strategy.

3. Business plan is the gateway to real capital.

If you dream epic dreams (as starving entrepreneurs typically do) you will eventually want to use your business plan to get money out of potential investors. While small capital <$50K can typically be raised with a good story and a pleasant smile, landing millions of dollars from established VCs will surely take a polished business plan and more.

4. A business plan is a living document that changes with the organization.

When you do get up and running, don’t throw the business plan away, or let it collect dust. Keep it as a document that changes with your organization and catalogues your successes and failures — not only to show your readers how effective you are, but to keep for lessens learned and best practices in your next venture.

So how does one go about putting a business plan together? Typically with one of two tools — a normal word processor (Microsoft word) or else a specialized business plan builder
(Business plan pro). In my experience, the specialized editors work well if your scheme fits the mold of other mainstream businesses, like selling a product or service domestically through established channels, or if you are in the early stages of you plan. A wordprocesser is typically better if your plan is fundamentally different from established businesses — different channel strategy, different structure, global base, as your items may not be the ones offered to you by the template.

I have found that a good way to go is to use the template offered by business plan pro, and then edit the output in word until you like it.

Final Steps: Finishing

In the end, you are presenting more than your ideas, you are presenting yourself. Carry your brand through your document by finishing it in a way that defines it and you in exactly the way you want. Have relevant graphics in a layout that guides the viewers through your steps, and that makes the entire document easy to read. Pick a nice font, keep a consistent color theme, print on nice paper. Make sure that your brand is well defined and smells like success.

Do you have any other tips on a good bplan? Please share.

-vik

On January 23rd, I was fortunate enough to listen to a talk by Muhammad Yunus, one of the great entrepreneurs of our time. Muhammad Yunus is the founder to the world’s most successful — if not pioneering — microfinance institution, the Grameen Bank. This groundbreaking organization has profitably uplifted impoverished communities using small loans all across Bangladesh. He’s written a few books about his experiences, and it’s also earned him the Noble Prize. Not bad, huh?

Yunus’ speech drew a large and diverse crowd to the top floor of the Barnes & Nobles in Union Square, which was nearly overwhelmed by the event. The entire floor was filled with listeners straining over bookshelves to hear this man speak. I can say, without a doubt, that this was the best speech I’ve ever heard while standing in the Philosophy section of a bookstore.

Yunus spoke to the crowd for roughly an hour in a soft, understated tone that seemed more suited for a small seated gathering yet somehow worked with the swelling crowd anyways. It reminded me of what it must have felt like to have an elder tribesman lecturing by the camp fire. That is, if I were a tribesman. Yunus didn’t necessarily lecture or preach. He told stories, and in his stories you could find lessons

Yunus’ genius is most obvious in the way he diminishes his successes, the way he simplifies them. There’s no hint from him that he’s drastically changed the way the world views the financial clout of the poor. There’s no indication that he’s done something game changing. Instead, Muhammad has simply “given money to impoverished women so they could buy a goat and asked that they pay him back.” Talk about an understatement.

The Grameen Bank is one of those organizations that defies long-established conventions for what a business should be. It’s a profitable business, but it doesn’t only measure itself by profit. It’s “another type of business,” Yunus says. Rather, the bank is interested in profit AND the social uplift of its customers.

I have long been fascinated by these types of businesses and the entrepreneurs that create them. As much as I love tech and web businesses, the social sector represents the real apex of innovation. Not only do these entrepreneurs create new systems, but they are creating new frameworks. The social sector is redefining what a business is and what it serves to accomplish.

Even more impressive, these entrepreneurs and organizations typically operate in the most extreme of conditions. Can you imagine what it must be like organizing the distribution and collection of loans to impoverished women throughout rural Bangladesh? It puts your scaling issues to shame. Begun in the late 1970s, how many times do you think he faced doubting investors, personnel issues, and near failure ?

In creating the Grameen Bank, Yunus finds that everyone is entrepreneurial with the right conditions. Village women needed capital support to create sustainable businesses. Street beggars needed a support network of their peers to keep them accountable. “A seed from the tallest tree, planted in a pot will not grow,” Yunus tells us. For all of you early entrepreneurs, remember that. Success requires the right environment. Persevere. Improve what you can control.

Muhammad Yunus does not talk about Muhammad Yunus. Like any great leader, he talks about everyone that has helped make him successful and takes none of the credit. He talks about the the wonderful programs his staff have come up with, the amazing energy of the people he works with, etc.

For all of these reasons and all of the reasons I’ve forgotten since Yunus’ speech, Yunus is the embodiment of a great entrepreneur and someone that every early entrepreneur should emulate.

In my warmup post, I talked about the the issues facing the Columbia entrepreneurial community and how it struggled to gain traction. I’m happy to report, just a week later, that I feel the tide may truly be turning. I’m began writing this post from Room 140, Uris Hall at Columbia University where the first ever Columbia Entrepreneur Organization’s (CEO) PitchFest was going on.

The event was a first in more ways than one though. While CEO is a graduate business school organization, the event was open to students from all of the schools as well as alumni. Flyers covered the campus. I received three separate emails for the event, and I’m an alumni. I can only imagine how many times current students were emailed. While the numbers weren’t extraordinary, the 100+ people who attended the PitchFest witnessed one of the more successful Columbia entrepreneur events I’ve seen in years.

The idea behind the event was to bring together the skills and talents of the various schools at Columbia. Each person who chose to do so was given 1 minute to present who they were, what idea or existing business they had, and what they were looking for.

I loved this framework. I believe it successfully addressed two of the most frustrating pieces to networking events.

One, everyone had a chance to participate. There were all kinds of businesses and presenters. Very few people stood to start the event, but after awhile the sheer number of presentations made it easier to take your own turn in front of the room. After all, everyone was doing it.

Two, the event was efficient. What better way to force people to hone their message than giving them only one minute? Better yet, for those in the audience, how else would you have been able to hear so many different ideas and opportunities?

Some of my favorite presentations were about:

• A medical device company specializing in handicapped devices. Better yet, the presentation was made by a woman that used walking crutches. If I had money, that’s someone I would invest in — someone who uses their handicap to a competitive advantage.
• A freshman from the biomedical engineering program (BME, what what!) who has grown his pancake making hobby into a business that will challenge the vendors on campus. He was the youngest person in the room and one of the best dressed. I could go on, but let’s just say I was impressed.
• Finally, those people who simply offered their services were also among my favorites. These experience-offerers truly understood the spirit of the event.

I also presented and met some interesting people, but I don’t want to talk about that just yet. Right now I have an idea and a prayer but nothing more. I’m a firm believer in the fact that ideas are worth nothing and execution is worth everything. However recently, I’ve changed that belief slightly with my most recent idea. Ideas still aren’t worth anything and execution is still worth everything, BUT, timing is golden.

Overall, well done CEO. It’s good to see these types of events at Columbia, and I was impressed with all of my peers. Next task for CEO and other entrepreneurial groups on campus: How do you capture the attention of the rest of the 99.5% of the student body that missed this event (to say nothing of the alumni network in the area)?

We’re working diligently to start the enterventure.com blog, which will focus on what it takes to start a company, various topics in entrepreneurship, and the status of the creation of our own company.

Please be patient and check back again soon. Update: it’s begun!

Thank you.

Patrick