It’s a great time to be an entrepreneur.[Thanks to Scoble for the link.]There’s never been a better time to be an entrepreneur because it’s never been cheaper to be one. Here’s one example.
Excite.com took $3,000,000 to get from idea to launch. JotSpot took $100,000.
[BONUS LINK:] Fred Wilson on Blogging 2.0. Gawker Media and Weblogsinc selling for hundreds of millions of dollars?
Posted by hugh macleod at July 1, 2005 1:32 PM | TrackBack
I suspect that's because Jotspot didn't staff up with 50 and give every one Aeron Chairs, Xooters, fully catered lunches/dinners/breakfasts and "prestigous" office space.
I concur, Jeff.
Let me posit a few corollaries
1) They know now what they didn't know then which is that VC's don't add much if any value.
2) They'd just rather not deal with VC shit
3) VC's have grown increasingly more conservative and wouldn't have invested anyway.
4) In the dotcom heyday almost any team with a modicum of a track record was able to raise ludicrous amounts of money.
5) Past success provides him the luxury of exercising his inner control freak, which is to say by sucking it up and doing the dirty work on his own dime, he will probably end up owning 70% of it by the time it reaches its conclusion (trade sale or IPO) instead of the
People spend their own money differently than they spend other people's money. That's just human nature.
EnglishCut.com, for example, was started for $500, and it's been pretty much self-funding since then. Can you imagine if we had had a third party investor with deep pockets?
"People spend their own money differently than they spend other people's money."
The amount of difference I've found, at least with myself, is relatively absurd. When I do the corporate thing (consulting/marketing/etc.) for a large company there is a really backwards mentality that you have to spend as much money as possible because how much you spent last year determines how much you get next year. That's the most prominent example because it becomes part of every decision. As long as you can justify why you spent it, then you should spend it.
I used to think, "wow that's crazy to think that way," but the longer I stayed in that environment, the more I got used to it.
Starting a site that I love and care about has put me back into the more ROI mode of thinking. I'm trying to hire a designer now, and it's taking a while. It's worth it though to me because it's my money.
Posted by: Cole at July 1, 2005 7:01 PMJotSpot looks pretty good, and a hundred thousand sounds like the right number. Not cutting any corners, probably paying a few people cost-of-living, but also not being wasteful.
For something around the size of JotSpot, you need a few programmers on full-time for something like six months, and of course some equipment, and then you're ready to rock and roll. At which point, you'd better hope your business and marketing team is sufficiently clueful.
One thing that's always baffled me about the VC world is this division between "funding" and "angels." When I look around now, I don't see much need for an "angel" to come in with $100K and take a big piece of the action. Because if push comes to shove, you can do it without the money, it'll just take a little longer (day jobs) and be a little more stressful.
But "funding" doesn't happen at those small levels. I think a really smart VC would toss around a *lot* of $100K chunks and not ask for the world in return. Why doesn't this happen? Why does everyone talk about millions? Why can't a true Venture Capitalist be on the same footing as the rest of the core team, except they give money where the others give sweat?
(Maybe because that's not how VC-types got rich in the first place, maybe because they're congenitally incapable of that kind of thinking.)
(Maybe that's going to change, with or without them.)
(Maybe there will be a new kind of VC, the Long Tail VC, who doesn't care about Sand Hill Road.)
(Maybe I should drink less coffee.)
Posted by: frosty at July 2, 2005 12:04 PMfound a post i thought you'd like:
http://www.strangebrand.com/46/imperfection-and-the-human-brand.html
Posted by: Sweet Lisa Jay at July 2, 2005 12:56 PMA lot has been said about Joe’s post during the past few days. Which made me think — is it also a great time to be an investor?
I think so and provide reasons why in my post, Web 2.0: It’s a great time to be an investor. It would be great to get feedback to see if others feel the same. It’s clear that Web 2.0 is not only changing the rules for entrepreneurship… it is also changing the rules for angel and venture investing.