Jul 10 2009

Sales is tough, but keep at it and listen to the quiet voice

Tom

Who likes sales?  Salesmen, do I guess.  To the average person though, sales is tough and at times feels dirty.  For an entrepreneur, it’s even tougher because you’re so close to the product that it’s hard to take rejection (i.e. failed sales).   I know I’ve written about sales before and I’ll be honest, I’ll be writing more on the topic.  There’s a reason for that.  Sales is tough, but required.

I think the reason sales is tough is the value proposition and communicating that value proposition properly.  Now, I know some of you will say, “Well, that’s marketing’s job.”  I don’t agree.

In our instance, take sponsorships.  There are a few “key” sponsorships we try to land per show.  One such sponsorship was lacking for an upcoming show.  (Yes, I’m being vague on purpose to protect the innocent.  LOL)  We approached one company.  We gave the value proposition and they just didn’t get it.  The phone call quickly went downhill into the area of painful.  I wanted to hang up on my own sales call.  How sad is that?  The phone call was followed up by an email from said company which showed even more how they just didn’t get it.

This unfortunate incident caused some doubt in me.  “Maybe the value proposition we’re making, just isn’t a good one? Maybe we need to rethink things?  Maybe I just suck at communicating?” etc.  Nothing is worse for a founder than doubt.  This is your company for goodness sakes.  If you don’t believe in the value proposition, who will?  John and I chatted and we still felt that there was good value to be had.  “March on!” was our conclusion.

A couple of weeks later, the beauty of gmail snooping comes to fruition as I get an ad for someone that might fit the key sponsorship bill.  I know nothing about them, other than at face value by their ad, they seem like a fit.  A small voice inside me says: “Persue this.  Stop what you’re doing and investigate.” So I check out the site.  As I’m reading it, the excitement level in my brain starts pumping.  I can mentally see the synergies forming between us and this company.  I finally track down the contact page, which has a form vs an email address.  I fill out the personal info and talk about the potential sponsorship in the provided text area.  After clicking submit, I think to myself, “Dang, I shoulda copied that text.  It was good.”

I get a phone call later from an unrecognized number.  I answer and it’s said prospect.  After clearing the air about a poorly laid out sponsor packet, we get to talking business.  I take the time at the start to explain the biggest concept divergence from us and other shows in response to sponsors.  “We want you to succeed in whatever it is you do vs take your money and run.”  He understands.

I talk about how we see business.  He understands.

I talk about how we want long term partners, not short sighted “deposits into our checking account.” He understands.

The contracts aren’t signed yet, but I’m pretty sure they will be soon.  If not, it was nice to know that there is value in our proposition.  We are right, not crazy.

The thing I don’t understand, and will explore later, is this: Does a good salesman convince Company A (the “i wanna hang up” call) that they’re seeing things wrong?  Or does a good salesman quickly move through leads to find the gems like Company B (the “we getcha” call)?

I don’t know, but any insights you have are appreciated.  Just remember: Follow your gut/heart, despite the letdowns/failed sales and listen to that quiet voice when it speaks to you.


Apr 15 2009

Partnerships: Business goals are not equal to personal goals

Tom

One would think that a goal of a business is simple: Serve customers and, hopefully, make money to allow you to continue doing that.  It’s true, business goals can be that simple.  However, business goals are not the same as personal goals by the business founders.

Individual goals can vary wildly from person to person in the same business.  For instance, Bill Gates did not have the same personal goals as Steve Jobs.  Heck, Steve Wozniak didn’t have the same goals as Steve Jobs.  And there in lies the topic of this post, goals of partnerships (though I think it can apply to anyone working as employer/employee or even peers).

When John and I started this business, it sorta happened by accident.  We didn’t have long term goals other than “Let’s start a business.”  The furthest long term thinking we did before the first 360|Flex was naming the company.  We chose 360|Conferences because of the thinking, “If we want to do another show besides 360|Flex, we probably should have a company name that supports that.”  We figured the “360|x” moniker would be cute and allow us unlimited growth.  That was it.  Discussion over.

Fast forward in jumps of several months.  You’ll see that discussions start to take place.  Ideas start to be shared that don’t resonate with both sides of the party.  Case in point: According to John, we’re not a business since it doesn’t pay us full time.  Whereas I think a business is something that provides a service or a product in exchange for money.

So what?  That’s just semantics and doesn’t really matter, right?  But it does, if you fast forward a few more months.  Now, we’re discussing being part-time vs full-time.  I’m think we were about a year into the biz when this discussion happened.  My goal, which I assumed was “our” goal, was to work the biz part time until it paid us enough to sorta make the jump to full time.  John’s goal, which he assumed was “our” goal, was to go full time as soon as possible.  If you look back at our earlier goal, it’s seems obvious that we’d have this difference of opinion.  Thing was though, it wasn’t obvious at the time.

Fast forward again and again, over the few years the business has been in place, we’ve had many such discussions.  Some were quirky revelations while others were heated discussions about how the other was flat out wrong.  Thing is though, these discussions and differences get old, quick.

John bought us books on partnership.  The one I got was The Partnership Charter and I really enjoyed it.  The premise of the book is how to do partnerships right.  It talks about laying things out for your potential partners before you enter the partnership.  Now for John and I, two new biz n00bs, that wouldn’t have worked out well.  We both really had no idea what we wanted from ourselves, much less our biz partner.  However, I think there was core ideas that we both had in mind prior to starting the business.

My advice would be to talk about concepts and ideas in regards to goals in business and life.  I think too many potential partners spend their time talking about ideas on what the startup should produce vs how they intend to produce the startup.


Apr 7 2009

Starting up is hard for a Tinkerer

Tom

Lemme rephrase that title:  Starting up for over 2+ years is hard for a tinkerer.

I’ll be honest, because I’m a horrible liar.  Conferences are fun.  Conference planning is even more fun.  However, I will never see myself as a professional conference planner, no matter how many shows I do.  It’s just not in my makeup.  Yeah, I like the social aspects of it.  Yeah, I like tracking the money in and money out.  However, when it comes down to it.  I really just like the people and making sure they’re taken care of.

I’ve been working the biz for 2 years now.  I’ve also worked a FT job during that same time frame.  In addition to these 2 FT jobs, I have 2 boys to raise, a wife to love and a faith to keep active in.  As you can imagine, that doesn’t leave much time to tinker.

Last week, I had an internal breakdown.  No one knew about it.  Not my business partner, though it shouldn’t have been a surprise.  My wife found out a few days later.  Only a close friend of mine, Daniel Brunk, knows the full details of what went down.  The gist of it was though, my spirit cracked.  Not my religious spirit or ghost like thing floating inside me.  No, no, I mean more like “the little 3 yr old inside me that likes to tinker” spirit.

You see, a lot of stuff happened this past 2 months, personal stuff that just left me with no free time at all.  I’ve had 0 time to tinker and for me, that’s rough.  Very, very rough.  So rough in fact, that I was very close to walking away from the biz.  Mentally, I was minutes away from walking away and not looking back.

It seems sorta silly now looking back, and surely for those of you looking in from the outside.  But for those of you in my situation, I can see that spark of understanding in your eyes.  I can feel you relating to my pain. It seems odd that a thing like tinkering can break an entrepreneur’s spirit more so than finances, inventory, products, or any of the countless other facets of business.

So how did I overcome it?  At the moment of breaking, I played loud music really loud on the headphones.  LOL  In the following days though, I worked my tinkering into the business.  Some businesses expand for global dominance.  Some expand to take out competition.  We’re expanding for more steady income.  Now though, more importantly, we’re also expanding so I can tinker.

The Kindle of my tinkering

The Kindle of my tinkering

John and I have Kindles now.  (Well, actually, I have both, but I’ll give John his tomorrow.)  I’m a huge book guy, so I wasn’t sure I was going to like it.  I have to admit though, I LOVE it.  It’s been allowing me to satisfy my desire to tinker as well as use my time exploring new business ideas.  (You can read my personal post on the Kindle experience for more details.)

Some may see the $800 as wasteful spending on eToys for two geeky founders ($400 per person for a kindle and case).  I’m sure there is some truth to that.  We do have plans that may include the Kindle though, so it’s not pure fun.  More importantly though, this $800 has probably saved the company, because a disgruntled founder is not a productive one.  When 1/2 of a 2 man team putters out, you can rest assured that no good will come of that.

Therefore, if your a tinkerer (like me) and have been starting up for a few years (like me), look for ways to expand.  Don’t go waaaay off course.  Find something that makes sense for your business, but is something fresh.  Then go ahead and spend a little cash to let you tinker.  Trust me, it’ll be worth every penny you spend.  If you check out and possibly get a Kindle, click here and support a struggling entrepeneur.  :)


Mar 31 2009

Sometimes the hardest part isn’t the business

Tom

I moved the first of February.  I had this dream:  I’ll get to Arizona, setup shop in about a week and then I can get cranking.  I’ll be able to work on the business, doing the stuff we’ve always wanted to do, while moonlighting on some Flex projects.

Life is funny.  Business is funny.  Neither really seem to care much about plans.

In the past 2 months, I’ve met and hired an attorney, moved homes twice and gone to the courthouse 3 times before settling a case with our slumlord.  That was just the life side of things.

My moonlighting didn’t really happen as quickly as I would’ve liked.  There was a learning curve, that was hampered by the fact that I was thinking a Jira assigned to me was in one area of the app, while I was being told it was in another area.  (That turned out to be a good thing though, as I learned more of the app than I would’ve if we were in sync.)  I finally got some good time to finish getting up to speed, when I did a 4 day on-site pit stop before our March event.  Once I got back home, I pulled off my first 16-hour day in a looooong time, working until like 2 am even.  The result: the project is fun but life and unforeseen business work detracted from my planned arrangement.

On the business side, our sites were hacked, so we tried everything under the sun to get them up and running.  The last ditch effort was to move off of our current cohost to another.  In addition to that, we switched from the blogger platform to the WordPress platform.  This entailed me learning how to write WP themes and converting our old themes so our customers wouldn’t notice anything.  I also had to wrap up our finances from 2008.  (One word of advice: avoid Google Checkout if you can cuz importing that data into Quickbooks is a pain in the butt.)

The one thing we did manage to do that we “wanted to do” was expand the business.  We launched 360|iDev, our iPhone/iTouch developer conference.  It was well-received by the iPhone development community.  By comparison, it was “easy” compared to the rest of what was going down in life.  Sadly, I was hedging that a potential partner was going to be coming on board.  They did…sorta, on the Friday before the show.  By then, it was too late so we never signed the contract.  The buzz I was looking for them to help gen never occurred and so we had a roughly $10K deficit.

Whether it’s life, hackers, prepping for taxes, or a partnership not coming through, you see that a bajillion things outside your control can and do affect your business.  It can be very disheartening.  From what I can tell though, it’s the norm.  LOL

Therefore, if you have a startup and are wondering if everyone’s non-biz stuff is as crazy as yours, I hope this proves it is.  Welcome to the party!  :)


Jan 17 2009

Pounding the Pavement and Getting Over the Fear of Sales

Tom

Part of my goal is to do an almost diary-like coverage of me doing the startup.  Until February, I’ll still be part time on the biz and full time on my developer job.  I did, however, get a taste of what’s to come last week.

When John and I decided to do 360|iDev, we figured we should go to Macworld for a day.  We agreed to do a show and then 3 days later, Apple announced it was pulling out of Macworld.  We saw this as a great opportunity to talk to sponsors and developers to let them know that there’s a new show in town: ours.  John and I reg’d for the expo and John bought his ticket for Cali.  Now we needed a plan.  What would we do at the show?

John and I do one offline marketing campaign per 360|Flex.  We print up a bunch of oversized postcards and mail them out to Flex User Group Managers.  They hand out the fliers and we give them a free pass or two to raffle in exchange for them hyping the event.  It works out great for us and for the UGs as well. Then that’s it for marketing. We never really go anywhere to promote our show.  We never really pound the pavement so to speak.  We’re blessed to have a community that loves us, so word of mouth pretty much takes over from there. With 360|iDev, we realize that wasn’t going to happen.

When we did 360|Flex Europe, we assumed our US brand would carry over and we’d have to do little work.  We were wrong.  It hurt to be wrong, but we learned a valuable lesson: Don’t think you’re brand is as recognizable as Mickey Mouse.  Success in one market does not in any way, shape or form guarantee success in another market.

Therefore, for 360|iDev, we realized we’d have to do more.  We put in our order for our traditional oversized postcards for attendees, but our Daneen, our marketing gal, got smart.  She pointed out that it would be better to print the sponsor cards in a matching fashion vs a ghetto inkjet print job done at home.  With these two pieces of collateral, this time we’d have to hit the streets and find people to give them too.  Find people who would not only attend the show, but also possibly speak or sponsor.

Last Thursday, John and I walked into the Moscone Center with a handful of general info cards and sponsor cards.  We were walking towards the main expo hall.  Along the way, we passed tables full of attendees awaiting to get into the expo hall.  Initially, we walked right by them.  LOL  Like I said, John and I are new to this in-person sales stuff.  :)  It hit me, “Crap, we need to be giving these people the attendee fliers.”  I make John pull over, grab the fliers and turned to the people.

Now, the people were oblivious to me.  I was just another goob in a conference shirt (a 360|Flex polo) standing with fliers looking in their general direction.  I probably looked no different than any other Apple Fanboy standing around.  Inside though, was a whole different story.  I so desperately wanted to turn to John and say, “Here’s the fliers.  Go give ’em out!”  It was that initial fear of rejection we all have regardless of what the task is.  The butterflies were a fluttering and the sweat glands were in the process of dumping all moisture they had in reserve.  I’m sure if I stood there much longer and doted on it, I would’ve not done anything.  I would’ve talked myself out of doing what we came to do: “These people probably aren’t even iPhone developers.  They wouldn’t want one of my fliers. I bet some might even get mad for me spamming them in person!”

After a few moments of inner arguing and turmoil, I said, “Oh shut up and suck it up will ya.  There’s work to do.”  With that I stepped to the nearest table and started handing out fliers.  I worked my way around to all the tables near the main expo hall.  There was maybe 40 of them spread about.  I walked up and dropped a handful of attendee fliers on the table.  I gave a smile to those that looked up at me.  You know what, not one person gave a bad vibe.  Quite a few actually said, “Thank you” as I put the fliers there.  “Thank you” is usually reserved for when you do something nice for a person, not when you’re trying to sell them something I thought.  Thing is though, if they are an iPhone developer or want to be one, they’d need some help getting their A-game on.  This conference of ours will help them do that.

I think that’s the aspect of sales I need to take more to heart.  Sales isn’t about being the sleazy used car salesman portrayed in movies.  Sales is all about attitude, which should one of helping.  John and I aren’t criminals taking people’s money and returning nothing in return.  In fact, we’re the opposite.  We take a lot less money than our competitors and we give as much, if not more, value than them in return.  We’re a value and we here to help our customers.  It is our duty as a business to make them aware of what we offer and how it can help them.  They, in turn, can then decide whether they see value in that offering.

After handing out the fliers to those on the tables, it become readily apparent to John and I that we grossly underestimated the amount of fliers we’d need.  Luckily, we had another 2800 back in John’s hotel room.  LOL  It was very cool to walk around and seeing people carrying/reading our postcards.  It gave a little more pep to our step as we hit the expo hall.

The expo would be a completely different beast.  Dropping the card on the tables involved a smile and fast movement.  In the expo hall, we’d need to sell the show.  Luckily, I had John with me.  I’m not quite sure how people start a business on their own. I’d be too scared to do most of the crap that’s needed.  John and I though, if nothing else, genuinely enjoy each others company.  We started out a bit timid.  As the day wore on though, we realized everyone was very positive about the show.  This lifted our spirits and helped us keep going after 6 hours of walkin around.  We did have two sour pusses: 1 – “What’s in it for me?” attitude from a marketing gal no less.  (I feel sorry for that company) and 1 – “Uh yeah, thanks.” as he folded up the flier to trash it.  The high points came when we approached vendors/dev shops and they already had our postcard from outside! w00t!!

By the end of the day, I was exhausted and exhilarated.  We talked to a ton of people and got the word out about 360|iDev.  It’s shaping up to be a great conference.  It was also a great preview of what’s to come for me.  Hitting a deadline for your FT job is a nice feeling, but nothing compares to working your butt off all day to support your own business.  If you haven’t tried it yet, you gotta do it.  I’m just sorta bummed I can’t do it again until the end of the month!


Dec 26 2008

What should a startup focus on: profits or expansion?

admin

This post is in response to a recent article on Businessweek, entitled “A Wrench in Silicon Valley’s Wealth Machine“.  It’s our first panel style post where we ask our startup contributors to give their views on a certain topic.  Let’s hope it works out. :)

-=-=-

John’s Thoughts:

VC’s seem to be largely morons and most startups seem to be the perfect match.

Only a startup would exist and not have a plan to make money. Only a VC would give money (large, large sums of money) to a startup that would “Make money in the future”, if everything goes according to plan.

That’s not to say startups have to be profitable or even bringing in money when they start, but Digg is what? 2? 3 years old? And not making money still.

From Businessweek

Jay Adelson, Digg’s chief executive, says it’s clear the environment has changed for all startups. With venture money harder to come by, entrepreneurs have to concentrate on building their businesses. He says Digg is dialing back some expansion plans and trying to reach profitability as soon as possible. “All I care about is making sure the business foundation is solid,” Adelson says.

Really? Now the focus is on profitability? Now that they’re being seen for what they are? Just another over hyped startup with no clue how to make a dime, hoping that profitability will find them on its own.

What really amazes me is that all the Digg fanboys and gamers of the system singing Digg’s praise etc. are simply filling Digg’s DB with data that they [Digg] intends to sell. Sell for a retardedly over valuated price of 300m! Holy crap! Smooth move guys, give your meta data and attention to Digg so they can hope to sell it. NICE!

One reason may be that Digg’s public profile is much larger than its financial might. Last year the company lost $2.8 million on $4.8 million in revenue, according to Digg financial statements reviewed by BusinessWeek. In the first three quarters of 2008, Digg lost $4 million on $6.4 million in revenue. Adelson declined to comment on the figures.

Those better be some damn good Christmas parties, and some 70 and 80’s style whoring and coke snorting, I’m talking Studio 54 here. Lost 4 million? On what? It’s a site that people give content too, they don’t pay for it! Oh wait, Diggnation probably isn’t cheap to produce, that explains it.

As some one who runs a business completely in boot strap mode, it’s insane to imagine how some of these businesses can exist. Tom and I started ’08 owing 15k on our line of credit and were contemplating closing up shop rather than continue moving into debt. Startups seem to have mastered the art of spending money that isn’t theirs in exchange for retarded amounts of their company and probably a sizable chunk of soul.

Is it worth it guys? You couldn’t have done with out millions of someone else’s money?

-=-=-

Tom’s Thoughts:

I wouldn’t say all VCs are morons, just the dumb ones.  :)  Perhaps that should read the greedy ones.  I understand VCs provide more than just capital.  Take a look at eBay.  It was successful, but Pierre realized that he didn’t have the knowledge needed to take the company to the next level.  VC investment helped him get Meg.  Then there are visionairies that have expensive visions but the visions have profits in mind ala Bezos.  Amazon took what, 4 years to reach profitability?  But Bezos had the system worked out in his head to reach profitability.  Heck, at least it was a goal for those 4 years.

Article Snippet 1: With venture money harder to come by, entrepreneurs have to concentrate on building their businesses.

Now, that could just be poor writing on the author vs something dumb Jay Adelson said, but that line just blows me away.  What the heck kind of statement is that?  What entrepreneur doesn’t concentrate on building a business?  And what kind of people give that entrepreneur millions of dollars?

I’ll be honest.  I thought about approaching investors to help us grow 360|Conferences in the early days.  However, I realized we had no street cred. We had never ran a conference before, much less a conference business.  Even now, John and I are contemplating approaching angel investors, but I still tell John, “We’re profitable, but I don’t think anyone will care.  We’re not trying to take on the world and we’re definitely not sexy.”  John and I have spent a lot of time making our business what it is.  Sure it’s been tough, but we went from no money investment on either of our parts to making some money in less than 2 years, part-time.  People think we put on the best conference they’ve ever been to and are shocked to find out it’s just John and I doing the biz, part time.

The reason I think we make money and why people love our events is because from day one, we’ve always concentrated on building our business.  John asked during year 1 of our biz,  “Why didn’t you quit this idea like you did many others in the past?”  My answer came swift and still rings true to this day, “Someone trusted me with their hard earned money and it is my duty to live up to that trust by providing them the very best service.”  The only way you can provide a great service is by building your business.

Article Snippet 2: [Adelson] says Digg is dialing back some expansion plans and trying to reach profitability as soon as possible. “All I care about is making sure the business foundation is solid.”

Here’s where millions of someone else’s dollars makes you delusional.  Whereas Digg is now gonna focus on profitability vs expansion, John and I have been focused on profitabilty and are now looking at expansion.  I didn’t go to business school, so maybe that’s why I’m lost.  But don’t you usually test an idea out first to make sure it makes money?  Then once you’re profitable, you move on to expansion?  Like I’ve always told John, “Our profit model depends on x number of attendees per show.  If we don’t get those numbers, that means people don’t like our show.  We either need to change to get those numbers or leave the biz as our ideas obviously are all wrong.”  Now x is not in the millions or billions, we’re talkin roughly a few hundred.  But if there is no profit in sight, then you may have a good idea, but you surely don’t have a good business.

Article Snippet 3: In the first three quarters of 2008, Digg lost $4 million on $6.4 million in revenue.

Now, I won’t make accusations about what Digg did with that money.   John could be right, but I’m sure there’s some costs we’re just not seeing.  Some people accused us of throwing an “orgy” when we spent $90K on food, but after you realize a 6 oz soda costs $4.  You can see how fast things add up.  One thing companies should do is be more transparent.

I’m not saying throw your quickbooks file on the net. (Yes, I know they don’t use Quickboooks, just work with me will ya.)  But lay out what gets spent where.  Show people what you’re doing with the money.  If nothing else, your customers will tell you what your spending too much on.  Though I’m not sure that would work for Digg.  They have users and not customers, i.e. no one pays them to do a service.  Maybe that’s the problem then.

Can you be defined as a business if you don’t have customers?  Or more importantly can you be called a business if you don’t focus on profits?

-=-=-

Andrew’s Thoughts:

My preference in starting a new business would be the conservative approach.  Save up money from a standard W2 job until you have a nice emergency fund before going for it.  Focus on those projects that get you to profitability the quickest.  Anytime you take money that you haven’t earned whether from a bank or from a VC, you’re giving up some control of how your business runs.  Unless the idea is truly revolutionary and needs to explode quickly, I’d stay away from taking VC or bank funds and doing it the old-fashioned way.  Having excess VC funds around is just plain distracting and a false sense of security.  It doesn’t make sense to have all those parties if you haven’t earned a dime.  Having a tight budget early on also forces you to find unique and cheaper ways of doing things.  One example would be a VC-funded startup throwing servers at a scalability problem whereas a self-funded startup would be forced to re-factor and optimize their code for maximum scalability.

-=-=-

Jeffry’s Thoughts:

Are VCs Morons?  I don’t think so, but I do get the impression they only expect 1 in 10 of their ventures to be succesful; kind of like the traditional record company model.  That 1 success makes up for the 9 failures many times over.  With that in mind, I may consider factors other than the business plan when investing in companies such as enthusiasm and adaptability of the owners.

Cash flow is king, especially in a down economy.  Generating profit should always be a much higher focus than expansion.  Build your profit model right into the business from the start.  Think it through before you start coding or building the service.  Controlled growth is the best way to build.

-=-=-

Ben’s Thoughts:

I have to say, I think this is a trick question. Let’s look at it this way, “What should a baby focus on: feeding itself or growing up?”. I guess the answer would be “yes”. Startups, like babies, require further growth by definition; otherwise you’re just running a business. So if a startup focuses solely on profit, it may never take the risks that are required to grow. By the same token if a startup focuses only on expansion fueled by VC money, it may not have legs to stand on when it needs to back up those extravagant claims it made (a la Digg). I’m not saying that VC is invalid or that projects with big ambitions (like mine) are dead, but I do think that inflated egos, hot-air pitches, and over-valued stocks are being market-corrected in short order. Hopefully that’s a good thing.


Dec 22 2008

Full Time Startup’ing vs Part Time: Which is the best?

Tom

Twyla Tharp is a choreographer.  While Twyla talks about a lot of things in this 3 & 1/2 minute video, the part starting at 2:53 is my favorite section.  She talks about how she didn’t immediately try to make her passion pay her bills:

I was lucky, in the beginning, I began to work to simply make the dances. I never thought it was going to make an income.  I never thought I was going to earn a living doing it.  I was just curious about doing it.  My mother also gave me lessons in stenography; We could type, we could do other things and we did.  We did other things and we did dance because that’s what we were really challenged to do, but we didn’t look at dance to pay the bills at the beginning.”

Creating a business around your passion is a good thing.  Forcing your passion to pay your bills overnight with a flip of the switch though is not a good thing.  My passion is helping folks grow and learn. The odd thing was that when John and I gave birth to 360|Flex (and thus 360|Conferences), I didn’t know that was my passion.  What I did know was that there was a hole in the market for a good conference focused on Flex.

The first year 360|Conferences was alive, we put on 2 shows and entered our second year $15k in debt.  We took no salary, so that $15K was tied to actual losses from the shows.  Now, John thinks because we didn’t pay ourselves it wasn’t a business but a hobby. I think Twyla sort of backs him up there.  There seems to be this strange stage of a business where it’s post idea and not quite making steady payroll, a business zygote so to speak.  During this time, you’re making money outside the business (in a day job most likely) while moonlighting on  your passion. To compare us to Twyla’s quote above, programming was our stenography and conferences were our dances. The one luxury this afforded us though was the ability to do it right.

I was so glad to have that luxury our first year. It’s very important to build trust in our brand by making it the best it can be.  Sadly, I don’t think we could’ve done that with no jobs and bill collectors breathing down our necks.  There’s a certain peace of mind and/or liberty about being able to focus on doing something right vs getting paid.

For instance, when we were $15K in the hole we decided to go international. It was a bold move and a painful learning experience.  However, from the dialogue in preparing for that show came our successful business model.  Now would we have made that same choice if we were $75K in debt (the loss of the shows plus some salary for us)?  I doubt it.  We would have stuck to US only and we wouldn’t have discovered our new business model.

In our second year, I think we finally hit our stride.  We had the new business model in place. This was the show breakdown:

  • Febuary in Atlanta, GA – profitable
  • April in Milan, Italy – not profitable
  • August in San Jose, CA – profitable

I remember being 30 days out from Atlanta and not having the numbers in ticket sales to make either Atlanta or Milan profitable.  I darn near gave up.  I told John, “We’ve tweaked the show as best we can to achieve profitability.  The one factor we need though is the numbers (in ticket sales).  If we don’t sell over 300 tickets, we’re in trouble.  If we don’t make that number, I think we have to concede that no one sees the value in our offering and throw in the towel.”

John, being the good biz partner that he is, gave me a pep talk and got me excited again.  I don’t remember much of the pep talk, sadly because i was probably wallowing in self-pity.  The one thing I did remember was this bit: “The money will come.  If there’s one thing I’m sure of, it’s that the money will come.”  There was also talk of us having to help it come, which we did late into the night but he had the faith.  I had the fear of failure, he had the faith of success.

Whether or not we should have gone FT at the start of year 2 is debatable.  In hindsight, we probably could have.  I think there was enough ground work in the conference biz concept to get to profitability. Being FT near the start of year two or just after Atlanta would’ve made the other two shows that much better.  It may have even been enough to make Milan a success or at least break even.  Hindsight is 20/20 though and I can’t very well say it would’ve been all good.

Now, I will say this though. As soon as it became clear that San Jose was going to be profitable (or at least by the end of the show), I should’ve jumped ship and gone FT on the conf biz.  Granted that’ll only be six months by the time I leave. Still, six months is a heck of a lot of time for a startup.  John and I did our first ‘corporate summit’ in October.  (More on summits in another post.)  It would have gone a lot differently if we were full time and for that I am sad.  My employer is great and I love them dearly for the opportunity they’ve given me.  However, I can’t help but feel that the impact my presence made at their company was negligible in comparison to impact my presence would have been at my own company.

Sorry if you’re looking for a clear cut answer, because I don’t think there is one.  You need to look at your situation and make the best call.  Ben knew what he wanted to do and thus set aside the funds to make it happen.  John and I had no idea we would be jumping into the conference biz until we did, so there was no way for us to set aside funds for that jump plus we needed time to learn the biz itself.

I guess it boils down to this: Go FT as fast as possible.  If you’re living at home and young, heck yeah jump ship and go FT the day the idea hits.  If you have a family, you have responsibilities that you need to think about.  Try your best to juggle both, but don’t get too comfortable.  Be honest with yourself and when the opportunity presents itself to go FT, see it and grab it.  Don’t push it off just because you can.


Dec 19 2008

Tom Ortega – The Eventual Entrepreneur

Tom

It’s taken me far too long to become an entrepreneur.  How long?  It was 1986 and I was roughly 11.  I walked onto the playground, went straight to my best friends and said, “I’m gonna be a successful businessman when I grow up.”  To which, they said, “Doing what?” I was stumped.  “I don’t know.  I just know it’s going to be successful.”  From that day forward, that was fact to me in my mind.  It wasn’t a “I hope to someday” or a “I wonder if…” it was a matter of inevitability.  So, I did what any rational person would do, I started prepping.

My dad taught me something very important a few years earlier.  He said, “Whatever you want to know, there’s a book on it.  Go find it and read it.  You’ll get all the answers you want.” It made sense to me then, and still makes sense to me now.  I can’t remember what my first business book was or when I read it.  I wish I could though, that’d be sweet.  I can’t really remember because I’ve read a few hundred over my life time.  No, I ain’t bragging.  I’m just laying out the facts, so you can determine my street cred.  The way I saw it was like this:  “If I’m going to be a successful business person someday, I better learn how to do it.” And like pops said, the only way to do that was through books or so I thought.

In 6th grade, another thing happened.  My mom took me shopping at Sears.  She bought me a pimp outfit.  (She still has the picture of me in it, I’ll see if I can dig it up and post it.)  On the drive home, she said, “I can’t really afford to buy you the kind of clothes you want.  If you’re going to want certain clothes, you’ll need to make money and buy them yourself.”  Therefore, I got to work.  I never had an allowance.  I always worked to make my money.  I mowed lawns, babysat, worked at the school snack bar, and even had a stint at Chuck E. Cheese.

I went to college for a year.  It was a private university (UPS in Tacoma, WA).  I was paying over $20K a year for that school.  It didn’t make sense to me.  “Let’s see.  I can pay $20K a year or I can go to work and surely make at least $20K a year.”  So I dropped out and started working for the man in January 1995.

For 13 years, I worked for over 10 different companies.  From the first job to my latest job, I did the same thing.  I analyzed the heck out of each company.  I looked at what they did good and what they did bad.  I watched their mistakes and learned from them.  I pondered on what I’d do differently if I were in charge.  Again, I did all this for the sake of applying to my own business someday.

I’ve dabbled in business (my own businesses) over those same 13 years.  Most of those were not very serious though and never made it past the idea stage.  It wasn’t until October of 2006 that I finally ran with an idea.  John and I, with some help from Ted Patrick, agreed to do an all Flex Conference.  This meant that I was going to be funnelling a lot of money and not wanting to put it all in my personal account, I tell John: “We need to incorporate.” We did and in February of 2007.  360|Conferences was born.

For the first 2 years of it’s life, the conference business took a backseat as my part-time job.  In those two years though, it went from being in the red to being in the black.  (Look for a post from me on how I think this is the way most people should start a biz.)  Times are getting tough economically though and if I’m going to make this business succeed, it’s going to need to not be my PT gig anymore.  Therefore, in early 2009, I’ll be making the move to Queen Creek, Arizona.  360|Conferences will become my primary focus, while side projects will become my PT gig to help pay the bills.

I’m going to do some posts on what I’ve learned in the past two years: the good, the bad and the ugly.  John may or may not do that, you’ll have to read his posts to find out.  After I clear out the closet a bit, I’ll start detailing our little conference business as it enters the toddler years.  I’m sure there’ll be some stumbles along the way, but that’s business (and part of being a toddler).  It’s the downs that make the highs so rewarding..

I hope you’ll join me along the journey.  Thanks for reading.