A Sack of Seattle

The benefits of RevenueLoan

I've been meeting and talking with lots of entrepreneurs about funding needs and getting feedback on RevenueLoan. We're learning that RevenueLoan really helps companies for the following reasons:

• RevenueLoan is different in type. It's neither equity nor debt strictly speaking. This different type of investment is attractive in lots of situations. I've heard from small business owners that the concept is simple and aligns investor and entrepreneur interest better than alternatives. 
• RevenueLoan plays nicely into existing cap table and doesn't require dilution of existing shareholders.
• The capital is flexible.  Because the money is not tied to specific ratios and doesn't require fixed coupon payments, entrepreneurs can use the capital in the best ways he/she sees fit to grow revenues and the business. 
• A number of entrepreneurs use RevenueLoan as an alternative or an addition to traditional lines of credit. RevenueLoans can be good insurance policies on sustaining a growing business through situations that are cash tight. 

3 drop dead simple tips for job seekers in technology startups

I've been looking for some marketing assistance for RevenueLoan and the process has hi-lighted the most simple of tips for applicants:

1. Make sure your resume is easily opened by Microsoft Word.  A number of people sent me .pdf file formats which is fine but don't open reliably in Google docs. 
2. Make sure you say something short and interesting in your email that the gets a recruiter to open your resume.  Remember that job one is converting your email into a resume opener. 
3. If you're in the technology field, having a vibrant social network on facebook, twitter, and linked in is an obvious filter. I use these three services as screens for all technical and business applicants. 

The slog of business

We have a saying around Founder's Co-op which is "chop wood, carry water"....which is a saying that comes from monk's practice in the monastery.  It is intended to get at the fact that much of business is not sexy. The day to day practice of business is a slog. The trick for most entrepreneurs is to be able to do that slog work day in day out for many years while keeping an eye on the excitement of the original vision behind the company. This is not easy to do!  People's sense of time as an entrepreneur was skewed during the 1990's internet revolution and is skewed by massive successes such as Facebook or Zynga. Most businesses don't grow to $1b in 2 or 4 years. 

I'm writing this post on Monday morning which is when the slog of chopping wood and carrying water starts. Personally, I'm excited about my work this week even though much of it is oh so unsexy! 

Keep your head down, put one foot in front of the other and you'll get there! Have a good week. 

NWEN First Look Forum

NWEN is looking for innovative, growth-oriented, pre-funded companies who could use some expert coaching (and for a lucky 12, some great exposure)  to get them to the next level. Because NWEN supports innovation across practically every industry (clean-tech to consumer products, web 2.0 to medical devices), some of the awesome companies could really benefit from this mentorship program.   Full disclosure--Chris Devore -- my partner is one of the 20 coaches for First Look Forum. 

I highly encourage you to apply-- it's a great forcing function to distill your business into one page, and no matter what the outcome, you'll get great support.  
Earlybird applicants get a hosted reception with insider tips. Every applicant gets feedback on the exec summary, and a workshop on how to pitch to investors.  The top 20 also get in-depth coaching from a pair of investors.  The final 12 get all that and exposure to 20+ funding groups at our invite-only investor event on October 12. 
Click here for more info and to apply! Earlybird applications close July 26.   Please note-- if you don't have time to complete the application to meet the earlybird deadline, just register online to get your invite to the reception. You'll be all set as long as you get the exec summary in by August 18. 

Us vs. Them

This mentality may appear useful but it often can undermine good relationships in business. More often than not there are win win scenarios in most negotiations that if you look for them move everyone forward. Keep your eye out today for the win-win....and stop playing us v. them. It's lose - lose. 

Reader Appreciation - Thanks Maggy!

Maggy Young lives in the UK. I think Bristol...but maybe London. She's been a longtime reader and commenter on this blog and in a weird way we've developed a nice online relationship. I just sent her $10 via paypal to thank her for her readership, support, and comments. I told her I wanted to buy her a beer or a drink from overseas. I hope we get the chance to meet one day. 

It's a small token of my appreciation -- comments and acknowledgement is why most people blog. Thanks Maggy and all the others readers. I promise to do this again sometime....but don't expect a beer just because you comment on my blog :-) 

The value of raising prices

Just spoke to an entrepreneur who took the unusual step of increasing monthly prices by 2.5 times approximately. They saw a slight 5% drop in conversion rate. My reaction? You didn't raise prices enough and I encouraged him to do A/B testing to try and get a sense of the demand curve for his service. It's the wonderful thing about web businesses -- you can actually draw out demand curves and really hone one of the hardest challenges in business: setting price!

Miscommunications in negotiations can be very dangerous

I have been negotiating a business contract with someone. I had my attorney write edits in a red lined version of the contract. The person I was negotiating with read that contract and believed that I was asking for about 2 times the money I thought I was actually asking for. We communicated back and forth via email while letting this miscommunication grow. He was thinking WTF. And I couldn't understand why he cared about the point. It never really became a major issue because we met for drinks last night and understood the miscommunication. That said, it reminded me of the danger of miscommunications while negotiating. Very hazardous. It's worthwhile to make sure that both parties are talking and understanding the same thing!

Business is a momentum game

One of the most powerful forces in business. It's important to one's career. And it's really important to a startup's success.  The important thing for a startup is to create some business momentum. That often comes in the form first of team and product and ultimately (hopefully) translates into revenue momentum.  

I think that companies that gain momentum make the most profit when they've got full momentum. Think about Apple. I think it was the ipod and the iphone that gave the company momentum -- but right now there's not much stopping them from making money.  When you lose momentum, it's hard to regain it -- just ask Microsoft. I love the company -- it's a critical northwest pillar, but they've lost some of their momentum. What's interesting is that, they had so much momentum 10 years ago, they're still making insane amounts of money today despite losing business momentum and mindshare. 

Now back to the world of small companies and entrepreneurship - -think about momentum and how you plan to generate it for your business. Once you get some, be sure to foster it!

Being Number 1

The recent hysteria about Lebron James and the potential payouts being offered to him have reminded me of the value of being #1.  It doesn't matter what game you're playing there's always a premium paid for being #1.  

I'm writing this in my blog as a reminder to all those entrepreneurs to focus on becoming #1 in whatever market it is that they're playing in.  

It's stupid obvious -- but sometimes stupid obvious requires a call out.