Old posts - here. New posts - there.

This page is a 'repository' of old blog posts.

If you want some new posts on similar subjects, go to here

Best wishes,

Aake

"Back to school" or "What happened to my cash"

Being a techie with business ambitions economy books has up till now been very boring reading for me.

Time to think again.

After some time of bad experience with startups low on cash I bought a book on 'business economics' again, and it is really great reading. As usual reading these kind of books, there is no hard thinking needed to understand things that "you already knew, but somehow forgot". It all boils down to changing behavior.

And to change behavior you have to be convinced that you need to.

Now I am.

Some "obvious" advice to anyone out there not paying attention to your company's cash flow: there are plenty of advice on how to prolong your company's life, but all these advice only apply as long as you have some cash left. If you keep on working beyond the company passing the liquidation limit, you might be doing something unlawful. Even if in best intentions.

Telling the liquidator that you didn't know your company was on minus might not help. It could as well look as if you were trying to get a better negotiation position against your shareholders. If you took out a salary at this point, even worse.

So, get into the details of your company's cash flow, budget, tax stuff etc. Also when having outsourced this to an accountant. Only you have the latest numbers. Yes, I know, you're supposed to be doing what you're best at. But, you're in a microstartup. You can't afford a good CFO taking this burden.

And, maybe even when you do maybe Abraham Lincoln's "War Is Too Important to Be Left to the Generals" applies to this too?

Curb Your Enthusiasm - from www.totalarticle.com

I think we all get The Idea now and then. Well, I do. How hard isn't it to stay cool and "wait for the perfect moment" when this happens. Being an enthusiast is not only great fun, it can be quite exhausting too, not only for the enthusiast but also for his/her environment. I found this well articulated article on the subject, worth reading if you're one of the enthusiasts, also if you're not but have some nearby. Not sure it helps much, but good reading still.

All entrepreneurs need enthusiasm. It's the fuel that keeps you going. Just treat it like gas: A great thing to have in your personal tank, but not something you want to spray over everyone you meet -- especially if they may be smoking a big cigar.

Read it all here.

Guiding start for anyone giving/taking advice

I have to admit it. My blog has more become a repository of good links rather than a source of new thoughts. Sorry about that, I'll try to post some novel ideas .... any day now. Meanwhile: do not miss this great article from Uncle Saul 

Free Advice, Worth Half The Price - Properly Compensating Entrepreneurial AddVisors

I try to give advice now and then to startups, so this article really caught my interest. I liked the "Any potential addVisor who demands cash compensation, has the wrong motives and should be eliminated from further consideration. If they want cash, they should get a job."

Spot on. 

Maybe better see yourself as an art-collector, rather than a in-for-profit person. You better love the art your buying, or don't buy.

The less venture capital there is for new startups, the faster the decoupling will begin

I read it, then I forgot to put a link here, thanks Alex:

The End Of Venture Capital As We Know It?

"Startups can be run so cheaply now (with open-source software, cloud computing, and virtual teams spread across the Web) that many more can achieve profitability without any VC cash. Up until recently, they still happily took that cash when it was handed to them. But certain classes of startups, especially Web startups, may now find they don’t even need that money. Y Combinator’s Paul Graham argues:

VCs and founders are like two components that used to be bolted together. Around 2000 the bolt was removed. Because the components have so far been subjected to the same forces, they still seem to be joined together, but really one is just resting on the other. A sharp impact would make them fly apart. And the present recession could be that impact.

. . . The current generation of founders want to raise money from VCs, and Sequoia specifically, because Larry and Sergey took money from VCs, and Sequoia specifically. Imagine what it would do to the VC business if the next hot company didn’t take VC at all.

The less venture capital there is for new startups, the faster the decoupling will begin."

Bootstrapping wonder - Caliroots.com,

On my latest trip, to Versailles of all places, I read an article in di.se (DiEGO) where they compared the 1998 year’s Boo.com with today’s bootstrapping startup Caliroots.com, both dealing with fashion on the web. I.e. boo.com was one of the more spectacular (and quite early) Internet bubble crashes, and today the URL points at something completely different.

I was a product manager at the time when boo.com went bust, the startup I worked for were even in ‘deep discussions’ with Boo.com about them using our technology (3d on the web) to show their goods. So, I did my homework and studied them, and their possible need for our wonderful product. Eventually they settled (after many delays) with some other techniques. We were disappointed, but not for long.

At about the same period, and for the same company, we tried to get a deal with a ‘collaborative bidding’ site in the Stockholm area, letsbuyit.com (of course ‘.com’). We got as far as driving (me, our CEO and our founder) to a ‘top management’ meeting – but they cancelled just as we were a block away from their expensive HQ in Stockholm. This felt really unprofessional, even with Internet Bubble standard, so when I got back home I put one of our secretaries to go through the letsbuyit.com web and try to get an approximate summary of their de facto sales. Poor girl, but it was helpful and I thanked her: the margins were either very low or much worse. Again we were lucky not getting a ‘reference deal’.

Now, back to the article about Caliroots.com. There is a nice summary table pointing out the following differences between a ‘traditional .com turkey’ and today’s bootstrapping wonders:

Market:
Boo.com (Sports/street)
Caliroots.com (Sports/street)

Sales estimates 1st year:
Boo.com (700 MSEK)
Caliroots.com (3 MSEK)

Venture Capital:
Boo.com (1,4 BSEK)
Caliroots.com (None)

Valuation before launch:
Boo.com (approx 3,3 BSEK)
Caliroots.com (“few hundred thousand SEK”)

Newspaper articles before launch:
Boo.com (700)
Caliroots.com (10)

IPO
Boo.com (yes, on three stock exchange places)
Caliroots.com (no, never)

Presentation
Boo.com (Virtual test room, products in 3D – this was 1998)
Caliroots.com (Products in 3D)

Founder’s living expenses
Boo.com (85,000 SEK/month each)
Caliroots.com (non paid by company)

Founder’s mobile phone bills
Boo.com (30,000 SEK/month each) – note, this was in 1998, but still..
Caliroots.com (“rarely over 500 SEK”)

Furniture
Boo.com (Jonas Bohlin, Tomas Sandell)
Caliroots.com (IKEA)

Salary first year:
Boo.com (1,2 MSEK each)
Caliroots.com (none first year)

PR marketing first year:
Boo.com (3,5 MSEK)
Caliroots.com (0 SEK)

Travels:
Boo.com (First, Concorde sometimes, sometimes private jets)
Caliroots.com (Economy class, but not the expensive companies)


Needless to say, it is healthier to eat noodle soup for a year before breaking even, than burning away on steroids. No, I don’t know what the Boo.com founders are doing today, but I read the book. No, I don’t think there will be a film, and if there’s a T-shirt, try Caliroots.com. They will be around for many more years. Bootstrapping zero cost wonders.

PS Just for fun. I uploaded this while waiting for my bag at the Stockholm airport, took a photo, mailed it, and here it is. Time for a taxi. DS

Web Presence Furioso

In the Old Times (ten years ago) you could get away with being at the right place in the right time. Nowadays the place is Internet - and the time is all the time.

Andy Warhol's "15 minutes of fame" translates to today's "In the future every url will be popular for 1.5 seconds" (Popurls). That's a 600 times shorter... Moore's law anyone?

To keep a presence on the web you need to pour a lot of your life into it: Your startup needs a proper webpage (ask me and I'll point you to www.btism.de, yes, there's plenty of great design in Germany - think Bauhaus, and continue from there); you need blogs spreading the word about your company and your product; you need twitter to twitter about your blog and web and product; AND you need to put (good) comments on all the others blogs and twitter etc. Get your 1.5 seconds TIMES all the pings you add to the web. If you're on vacation, you cease to exist. Really.

Again (yes, I know) see how much text (and good text) comes from Guy Kawasaki and his 'twittering' and blogging. It is truly amazing. I guess he leverages on his Alltop staff's input, but still. He is going completely truly Matrix virtual. .

I'm really new to twitter, just a few days. I still don't see the difference from RSS of someone's blog, but I guess there is something, at least it seems very active. Is this a marriage of blog and SMS and IM? Yeah, I'm new to this.

Here's two of my few (= five) followers to my tweet with links and thoughts about this:

Chris Brogan on "How Alltop Powers Bloggers"

and 

Rowell Dionicio and his blog on "Around The Watercooler - Week of December 3 2008"