Shanti’s Dispatches

Okay, this post might be a bit boring / narcissistic for some people’s tastes - but if you haven’t been to one of these shindigs here it is layed out from one dude’s perspective.

Tickets were $10 which I got from a Googler friend (shoutout to anxman) and drinks were free (woot woot).

Getting There

August Capital is about 30 minutes away from the city without traffic. The drive was quite pleasant — nice scenery, etc.

Google Maps told me to make a U-Turn at Saga Ln but you actually just make a left there and go up the hill to August Capital, Benchmark, etc.

The Line to Go #1

Taking a leak proved quite cumbersome. While I was entering the party, a guy who looked like Ross Mayfield (probably wasn’t him) in a hawaiian shirt was stepping outside, mentioning how he needed to find a bush.

While standing in the whiz line I bumped into Josh Knowles, a Phoenix-area Ruby on Rails developer who I had met previously at Refresh Phoenix.

Phoenix Connection

Next I met up with several other Phoenix entrepreneurs/developers:

Kimbro Staken and Sean Tierney, who were there demo’ing JumpBox and Joshua Strebel of Obu Web.

While we were taking a picture with the four of us, Julia Allison, heretofore unknown by any of us, decided she’d also like to be in it with us.

Of course we happily obliged. Sean says those pics will be up on Grid7.com at some point.

Snip: edited to protect the innocent.

The “Million-dollar Members Only” Episode

A bit later in the evening I was standing by the margarita station and saw someone who seemed a bit out of place for the party. Sporting a cool black jacket & british accent, he looked like he could be a member of a punk rock band, not a startup entrepreneur.

Upon introducing myself, another buddy of his showed up, who had two nametags on. I didn’t recognize their startup / company, but one of the nametags rang a bell — Alex Tew, creator of the Million Dollar Homepage.

Now, I’m sure this is kind of an awkward situation for this guy. For 99.9% of the planet, making a million dollars from, let’s face it, a pretty simple webpage, would be seen as an incredible accomplishment.

But for the TechCrunch party scene, it’s not quite as monumental.

I personally still think it’s really fuckin cool - the ~20 year old doesn’t have to work a day for the rest of his life, if he doesn’t want to. And being an entrepreneur with a million bucks in the bank must certainly be a different experience than when you’re starting a company right out of school and living off of ramen noodles.

He was also the first out of the gates with, in hindsight, an ingenious idea that was executed brilliantly.

I called over Joshua Strebel who I know would get a kick out of meeting Alex. A few minutes later Joshua led a 10-minute long conversation on Member’s Only Jackets, because, apparently, Alex was wearing a jacket that looked very “Members Only”.

I asked Mr. Tew what he thought about all of the knockoffs of his idea, e.g. 1000 tags etc.

Tew responded (paraphrasing):

They’re all shite. It’s the kind of thing that can only be done once mate, y’know?

So true, mate, so true.

Michael Arrington’s Followers

I’ve heard the Arrington line can get as bad as 20-strong. It wasn’t that bad last night — at most I saw maybe 5-10 startup entrepreneurs playing man-groupie to the ever-powerful TechCrunch Founder & Blogger, Michael Arrington.

Hey — I don’t blame em. Web 2.0 lore is rife with stories of startups being featured on TechCrunch and subsequently getting inundated with calls from Venture Capitalists. (Scribd, for one, launched that way to phenomenal success.)

Photo credit: “Scott Beale / Laughing Squid” - laughingsquid.com.

Apparently a very attractive asian lady was in Arrington’s tow throughout part of the night as well. (not sure if that’s her pictured above or not…)

Other People I Bumped Into

Trip Adler - co-founder of Scribd

Babak Nivi — co-writer of Venture Hacks, a must-read blog for any startup entrepreneur

I’ll definitely be attending next time if I can get my hands on some tickets. The free-flowing drinks and bumping into some old pals definitely made the trip down to southbay worth it.

This is something I wish more people understood, at least when you’re talking to them about your startup or startup idea. “Dunkin’ Donuts’ CEO Jon Luther says his company is helped by its rivalry with Starbucks: “[It’s] created an awareness for the category, and we’re benefiting.”

The chain’s success illustrates a little-advertised truth of business. Too often the financial pages read like the sports section, filled with winners and losers. Reality is more complex. In many markets, business is not a zero-sum game, and competitors create opportunities.

Full Article. Via: 37 Signals

Too often you tell someone what you’re doing, and even if they don’t say it out load (sometimes they do), they’re thinking it. “Oh, you’ll get crushed by X.”

There are way too many examples to list here of underdogs or new spins on ideas that took off and crushed (or simply carved out a niche) formerly owned by a dominant 400lb Gorilla in a space.

Reading Founders at Work only reinforces that point.

Just a few examples (though the landscape has changed since then) from the book:

Early spreadsheet market: First pioneered by VisiCalc, which got crushed by Lotus 1-2-3, which eventually got crushed by Excel.

Early OS/PC market: IBM’s game to lose, of course. They got owned by Apple, who eventually got owned by Microsoft.

Just goes back to my mantra on small business and startups:

Aaron has a great post about what it’s like to work at Wired now that reddit has been acquired by Conde Nast.

It seems like there are usually three reasons why companies (well, it’s always people, somewhere, at the companies, who make the decision) want you working in an office:

1. Camradarie, team bonding
2. Rapid convergence on a feature set or UI functionality
3. Making sure you’re “working” and not, you know, goofing off
4. A very real explicit reason why you have to be onsite - like, you’re a Bank Teller, and they don’t make offsite vaults just yet

Startups usually have the first two reasons - which are very valid. (though, you don’t need to be in a shared workspace 100% of the time to accomplish this)

The third one falls amazingly short, and seems to be a major reason why many big companies have you working in an office. It’s sad that managers or CEOs think that if they just have a bunch of “warm bodies” in the office, that things are actually getting done.

A lonely, dark, quiet night from 9pm - 5am can be about 3x as productive for me as some days of a regular 9-5pm. Heck, make that 10x, or infinity-times (due to a division by zero error) as productive compared to those days that you just can’t seem to get much of anything done.

I’m probably just a “bad programmer” in this way, but I try to explain to my lovely girlfriend Abygale, how some days it’s hard to even get the ball in gear and start coding. She doesn’t have this problem - she can show up at work and start doing loan stuff (I still haven’t figured out exactly what she does, but it involves a lot of paperwork).

I guess this post was making the rounds this week while I was busy coding up a storm. Ironically, I was implementing a billing system so that we can charge cards at Sprout.

Hello. It’s never a good time to start a company without the intent of making money.

You don’t have to make a lot to begin with… Overture started by making pennies (literally) and went on to be acquired by Yahoo for $1.63 billion.

Evaluating Business Ideas

Whenever someone tells me about a new business idea, the first thing I ask about is the business model.

Here are some simple business models

- Buy widgets at $2, sell them for $4. (Wal-Mart)
- Offer a free, limited service to attract clients. Also offer a premium service and charge for it. (Sprout, 37 Signals)
- Blog about interesting things, sell advertising. (Weblogs Inc.)

It doesn’t take a rocket scientist to do some back of the envelope calculations to figure out how much dough you can potentially make with your business model.

If the model gets much more complicated than any of the above… I’m usually a little skeptical about its potential viability.

When to realize you’re in a Web 2.0 circle … you know what

99% of the population has never even heard of Web 2.0. Even in the tech industry in non SF Bay Area cities. (you’d be surprised)

These people:
- don’t have a gmail account, nor do they even know it exists (they are still using some crappy hotmail 2mb limit acct they opened 4 years ago)
- don’t read blogs
- especially don’t read TechCrunch (let alone know what it is)
- have never heard of Ruby on Rails
- Ajax? are you kidding? they think it’s a cleaning detergent

I’m not a part of the whole SF Bay Area thing (yet), but we do need to keep some perspective here… Pets.com isn’t going public again like it’s 1998. A few lucky (+ highly-skilled & passionate) guys in their garage got bought out for $15-30 mil. The rest of us have to actually bring in the Benjamins, with uhh, you know, paying customers n stuff.

Me-too companies… What’s the bfd?

Commenters on the Caterina post belittle all the ‘me-too’ companies coming out of the gates. I don’t really know what ‘me-too’ means exactly… Yes, there are some ‘me-too’ companies, but that’s really just a sign of competition and innovation.

The weaker ones will be weeded out, though, when hosting only costs $10 a month, what’s the bfd? Throw some AdSense on there and you’re all set.

Of course, if you’ve taken $5M in VC and your business model is “throw some AdSense on there,” well, you better have a lot of targetted content + traffic. They only make so many Yahoo/Google acquisition lottery tickets.