Today is important for two reasons.
- I had my first coffee infused drink of the year. After 4 hours of Frisbee tryouts yesterday my body is feeling it and the team suggested I have a mocha to provide me with the kick start I need for this full on week ahead of us.
This includes a proposal plan for a prospective partner alliance, our first customer sales brochure targeted at the political market to present at the Liberal party conference, and continuing on with the New Ventures BC competition and business plan completion.
- The word leverage is totally justifiable! Daryl & I have been accused of overusing the word `leverage’ when we discuss the FundRazr business model. However Eric Ries blog post talked all about leverage in product development. It may be a dirty word in finance right now, as he pointed out, but for us it’s fundamental.
Quoting Eric directly leverage is:` a force that allows startups to build products at parity with much larger companies – cheaper and much faster. It’s a key lean startup concept.
The idea of leverage is simple: for every ounce of effort your product development team puts into your product, find ways to magnify that effort by getting many other people to invest along with you.’
We’re building momentum every week right now and it often seems overwhelming but our small team is definitely up to the task and continue to impress me with the dedication they show to developing a quality product and meet the beta testing deadline.
If only the weather outside wasn’t so gorgeous and tempting right now!
There comes a time when you recognise, as a start-up, that you’re in it for the long run. For me the key signs have been the following:
- When the hesitancy about the chicken and egg problem no longer matters – i.e just start doing it before having the perfect solution in place (in reality no business just starts out complete, they should always be growing and adapting)
- When you recognise you can’t get off the rollercoaster ride encompassing dips of doubt through to peaks of exhilaration, you learn to enjoy every moment of it and use it to keep your ideas, emotions and strategies in check
- When you can explain your business concept and convince people on its worth far more effectively than just two months earlier because you’re living and breathing it and improving it every day
- When you look around and see that your small team is getting a little bigger and better with new additions that share the same enthusiasm about FundRazr as Daryl and I do
Even the new office location is taking on its own personality. In the space of a few days Daryl bought much appreciated plants for our office, we have wine glasses (all important) and water glasses, a new bookshelf, an extra desk. The broken window has been fixed so I don’t freeze at my desk.
I bought some Tin Tin paintings to add some childlike adventure to our days so we don’t get too serious and RazrMan (a toy bear with a caped crusader outfit), that I bought to help support children with cancer, adorns our window sill and to me iconicizes determination and a `just do it’ attitude.
More importantly Andrew Carlisle joined our team this week as our User Experience Designer. With a wealth of experience in web design, graphic design and user interface testing and design he’s the perfect package bundled into one person and a great fit with our team.
We’re also making traction with investors, customers to be involved in our beta testing and discussions with potential partners to align with.
Look out world, we plan on making a name for ourselves and using the benefits of history to learn from those before us and their strategies for success. As Seth Godin writes in his blog that I’ve linked to above: Every once in a while, a new technology is introduced online and it becomes the must-have, must-be-talked-about breakthrough. If you’ve got one of those, it would be useful to look at what made the last five work.
As with most successful business ideas they’ve generally been done before if you look back in history, it’s how you adapt it to the world we live in now and the future that counts.
It was a busy week last week – we picked up and moved the office!
Previously we shared some space with Time Search Inc. but changes in their situation made it apparent we needed to move. We have agreed to share some new office space with a public software company called Meridex.
Sharing space is a great way to save some money but more importantly boost the energy in the office. They see us making things happen and take energy from that; we see them making things happen and it boost our energy and excitement as well. The office is rockin’!
Our new address:
#320 – 321 Water Street
Vancouver, BC V6B 1B8
Here are some photos of the new space. As you can see, it is typical Gastown “quaint” with exposed brick walls, glass walls, post and beam construction and a view of the harbour.
Our “big” office – space for Daryl, Natalie and Luba (top right – our 4th year UBC Sauder School of Business intern). There is more space to the left…
The “fish bowl” so named for the glass walls on either side. Here you see Christian on the left and parts of Daniel on the right.
The “common area”. Meridex has two thirds of the space and uses this area for their interns.
The view out the window looking North towards downtown North Vancouver. You can see the SeaBus on the water and bits of the helipad at the bottom of the screen.
The view towards the North East. You can see Seymour Mountain in the background, a tugboat on the left and the cranes loading a ship on the right.
The view towards the North West. Canada Place is on the left (the roof that looks like sails). There are obviously railyards between us and the really pretty stuff but we don’t notice them that much during the day. You can see the SeaBus pulling into the terminal on the right. Grouse Mountain towers over everything on the top right and you can just see the twin peaks of The Lions jutting out behind the sails.
I think we are going to love this space…
Here is a quote from an article by Brent Holliday, a Venture Capitalist, published in the January issue of BC Business.
How does this sound? I want to start a business. It will not make a dollar of revenue for 24 months. It won’t be profitable for four years, at least. It has no assets whatsoever. In fact, the only asset it will have four years from now is a highly subjective thing called intellectual property. Here’s the good news: once I am up and running and my innovative product has caught on in the market, other larger competitors will buy me out with a stupidly huge valuation. Oh, one more thing. We will definitely need to raise more money after your money runs out.
Are you in?
I encourage you to read the article because he has lots of interesting commentary on the process of starting up and financing a small technology company. The main thing that I take from his comments is that, in comparison to many technology startups, ConnectionPoint (FundRazr’s parent company) is in very good shape both from our approach to this startup phase and from the basic characteristics of our target market and our solution. We are building the business such that we should have our first dollar of revenue by July this year, as opposed to the 24 months out he quotes in his article. We also should be profitable with the next 18 months, not the four years that is typical for many other startups.
We also have an advantage that startups in previous years did not have of generous support from the Ministry of Small Business, Technology and Economic Development in the form of EBC Tax Credits. These tax credits provide an immediate 30% rebate of an investor’s qualified investment in our company for residents of BC. What a way to reduce the risk of an investment in a startup!
We are lucky to live in a province with such supportive venture capital investment policies…
Raising money right now is a bit “challenging” and not for anyone lacking conviction. When we have our exciting “exit” in a few years, we will be able to look back and say “We raised money in the darkest days of the financial nuclear winter”.
Sounds like a badge of honor to me…
Surprise! VC Funding Fell Off a Cliff in Q4
As expected, the venture industry is seeing the fallout from the economic crisis, with fourth-quarter investments dropping to a total of $5.4 billion invested in 818 companies, according to a report from PricewaterhouseCoopers and the National Venture Capital Association based on data provided by Thomson Reuters. That’s a 33 percent plunge from the $8.09 billion invested in 1,051 companies in the fourth quarter of 2007.
With the exception of a few industries, these fourth-quarter numbers show a sharp pullback by VCs between the third and fourth quarters of 2008. Indeed, VCs are nursing their growing portfolios of later-stage companies that are unable to exit through a public sale or an initial public offering — and waiting for the economic fallout to subside.
Read the rest of the original article here…
Venture Funding 4Q 2008
There is nothing like the sweet feeling that courses through me when I see something I’ve imagined come into being on a computer screen. I was shown a great demo this afternoon of the ongoing success of our prototype development. Christian and Daniel showcased some of our new video upload and library management routines and they are looking very good.
The wonderful thing about actually seeing stuff is that is also gives us a reference point to talk about improvements and tweaks we need to make to give us the high quality user experience we are looking for (and frankly require). Christian and Daniel now have a good size list of things to add / improve over the next few days (gotta love Agile development!) and then will move onto new topics. Some of those new topics include creating the integration linkages with our payment processing gateway and running some test transactions through the system.
I’m really looking forward to seeing the next demo. Good work guys!