Jun 1 2011

Our Startup Story: No Money, No Problem

James Kim

You’ve got the idea and you know all about the business solutions that are available to help get your business off the ground. Trouble is, you don’t know where to get the money. To help get your dreams of starting a new small business on track, here are some of the most common ways to get funding:

 

Personal

Before looking anywhere else, you’ll want to figure out what your options are personally. You can go to a site like guidantfinancial.com to learn how to get money through loans against your 401K or IRA funds. In addition, you can just take the traditional approach and go to a bank and get debt financing, which is just paying a set interest rate at a scheduled set of repayments. The advantage of these options is that they don’t require you to give up any control in your business and keep your reliance on others to a minimum.

 

Friends and Family

Friends and family are an ideal source to get money from if you don’t need too much. You’ll be working with people you trust and you’re bound to get a better deal from them than you would from the nearest bank. However, the most important thing to remember when getting funding from people you know is that you should always write up a contract. It might seem silly, but you really don’t want to end up in a situation where there’s a disagreement later on that breaks up your relationship.

 

Angel Investors

An angel investor is just someone who will give you money for your business in exchange for either equity or convertible debt. If you trade for equity, you lose some control over your business, but you’ll also have a partner that might be able to help move things along. In order to find angel investors, you can go to directories at places like inc.com or keiretsuforum.com.

 

Business Accelerators

Business accelerators are just companies that will usually give you around “$25,000 for a 6 percent ownership stake” in your business. However, even though you’re giving away equity, you get a lot in return. A business accelerator will teach you how to start up your business and will be a true partner. Basically, they’re going to ensure to the best of their ability that their initial investment in you pays off.

 

These common methods of funding have hopefully struck a chord with you. If you’re able to secure the funding you need, you should be well on your way to successfully starting up your business.

 

James Kim is a writer for Choosewhat.com. ChooseWhat is a company that provides product reviews and test data for business services and products.  Their goal is to help small companies make informed buying decisions on business solutions that help their business.


Dec 3 2010

Our Startup Story – No plan is foolproof

John

If you looked at 360|Conferences now, and compared us to the early days after 360|Flex San Jose ’07, you’d see a lot of differences.

As 2011 approaches, and we’re working on our last event of 2010, it’s clear (as much as these things can be) that 2011 will be a big year for us.

Things that Tom and I started that were, according to us, at the fiber of our beings, are changing. 360|Flex, at least for 2011 will only happen one time. Ditto for 360|iDev. Going to 1 event a year, was something were were firmly against, but the realities of business and the community can’t be argued with indefinitely.

Having an event 2x a year, obviously means our expenses are doubled. Sure something can be bought in bulk for both to save, but mostly, things like hotel rooms, venues, food, AV, etc are just doubled. However having an event every six months makes it very easy for folks to “skip this one, I’ll come to your next one” because really they only have to wait 5-6 months. That’s all well and good, but for the business to work, we need folks coming to both. I mean it’s not like 1 is a repeat, both events are unique and offer a ton of stuff, but I can’t count how often we heard, “I’ll see you at the next one”

So as we wrapped up 360|Flex DC (Failure BTW) and 360|iDev Austin, Nicole and I decided that 1 a year, a bit larger in size to make up for the second one going away, made the most sense for us and the community. Looking at the other events in the space, most are annual conferences. Those that aren’t (from the outside) seem to be struggling to put butts in seats as well.

So yeah reflecting back on the start of this business, it’s clear, you can have one vision, but when you look back a few years later (assuming you’ve made it that far) you’ll see that the initial vision was a bit blurry and out of focus.

Here’s to 2011 being the year that 360|Conferences makes stable money, can grow, and do even more cool things for the communities we serve!


Jul 29 2010

10 Mistakes made in starting up.

John

I saw this post on quicksprout, and the first one pinged right off the bat. It’s a great post of 10 common mistakes.

When I saw that #1 was “Speed” i knew I had to post something there. Tom and I argued… ok fought about speed a lot. I’m a very now now now, let’s do it now vs. wait around and do it later person. Tom is the opposite.  So is Nicole for that matter, but she’s at least open to letting me convince her I’m right :)

#3 is a good one. Hard to make work, but a good one. It’s really hard to remove emotion from the equation. A sponsor being lame, or backing out, or people abusing press passes, it hurts. It’s an affront to you, and feels like a slap in the face, and it’s hard to not do the first thing that comes to mind. But I agree it’s often (I don’t know if I’d say always) best to let logic win out.

#7 Is interesting. 360|Conferences wouldn’t exist without Tom and I. Neither of us is likely to have done it on their own. I know it wasn’t on my mind, and pretty sure it wasn’t on Tom’s. But the two of us together bootstrapped the company into 4 anchor events a year, plus a few one-off trial events etc. And not to be all horn tooty, pretty sure we’re why several others have created events. A business partner is a huge asset, but as Tom and I learned, you need to be more than just friends. You need to be on the same page. Turns out Tom and I were rarely on the same page, and only sometimes reading the same book.

The rest of the list is great, and I agree with each item. I take vacations, sometimes a weekend off, etc. I plan for just enough of tomorrow to know what I want to do the next day, but if you were to ask me what 2012 or even 2011 looked like for us, the best I’d be able to say is 4 events, a possible location. That’s it.It’s grand to plan out to 2015, but it’s the stuff in between that’s FAR more important.


Jul 27 2010

10 Tips for Bootstrapping Your Marketing

John

i saw this and thought it was it an interesting list. With very little budget, beyond what I spend on Google adwords (Not a huge pay off, but does get a few registrations) and some moo cards from time to time, the marketing budget for 360|Conferences is very much bootstrapped.

The twitter rule is a big one. I manage about 7 twitter accounts. tweeting discount codes, RT’ing things I think the communities those accounts care about would be interested in, etc. It’s damn near a fulltime job on it’s own. but it does pay off over time. It’s not huge, or fast, but when looked at cumulatively, it’s a steady building wave. The more I tweet, the more people RT, the more widespread the message gets. For events, it’s especially important to leverage the network effect. the 360flex account has about 1500 followers, each of those has their own number, etc. so each person who helps spread the word, has near infinite reach.

#5 is something I need to do better at. I’ve got awesome friends, who introduce me to new people when we’re out. They do a great job of talking up the particular conference they’re tied to, but then it’s my turn and I nod, agree with their statements, and maybe add something boring. I’m working on that aspect. Not quite an elevator pitch, but a short burst of “Why you should be attending as well”

#6 is timely. We started video taping sessions this past spring. They’re very successful, each is $3.50 there’s currently a buy 5 get 1 free deal, and they’re selling pretty well. Not paying my phone bill, but covering hosting, etc and giving me lunch and beer money. Which is great since even if I’m at an even keel, that’s better than spending what little I have. We’re already planning to increase the video quality for the fall events, by buying some HD flip cams. Not everything this time will be HD, but we’re phasing out SD.

We’re also going to get more testimonial, man on the floor type video this fall, to produce some fun/cool videos to show people why they should be at 360|events.

#7 I think we came close to pioneering :) We reach out to our speakers to help get the word out. We don’t demand it, but we ask each one to help make noise, help raise awareness, etc. After all people pay more attention to the speakers, they’re big names in the communities, well connected, etc. When they speak people listen. It works really well. Leveraging their names, and fame to help increase attention on the event, is a big boost.

#10 is a tough one for me. As a developer and person who’s on lots of lists, every email campaign I create I have a mental block to get past of “is this too much?” For the most part, and this was awesome advice from Liz.. Go just past your comfort zone on sending emails. If you think you’re getting close to annoying, you can probly send one more email. Our own filters are naturally strong, so it’s tough to reach past them. But it’s true. My mailing lists for the most part grow weekly/monthly as I send out more and more interesting things.

What works for you? Leave a comment, share your thoughts.


May 21 2010

Shady business practices – Not required

John

I’m always amazed (sadly) when companies do things that are just plain shady. Not dishonest, but boarderline, more just icky, things most people would feel guilty about.

Case in point (I’m not naming names… at least not right now)

At the most recent 360|iDev conference I met 2 guys who run a small software developer newsletter/newspaper. They also do events. One of them paid for a regular attendee ticket, they other asked for and received a press pass.

They came and said hello when I was at the desk, and nicely let me know they were planning their own iPhone conference.

More the merrier, sure I’d love to be the only show, but I’ll settle for being the best. They expressed their desire to not overlap, or in any way interfere with 360|iDev, and presumable receive the same from me. Cool.

One thing that stuck with me was that they flat out said in the course of our conversation, “we like to think we’re the good guys in conferences”

I didn’t see them much the rest of the conference, turns out the “press” only came for 1 day and posted a nice post on his personal blog about the conference.

The other guy spent (to the best of my knowledge) the rest of the conference poaching speakers (and possibly/most likely sponsors)

Now, don’t get me wrong, poaching speakers and sponsors is par for the course. Recruiting speakers to your events, involves seeing them at other events. However I find it completely slimy that I basically helped finance the poaching by giving a press pass.

Sure passes are largely a soft cost, but there’s an expected quid pro quo in giving someone from the press a pass. IF they even come (a lot will ask for a pass, but then never show. I don’t get it, but whatever) they write about it. Heck even a “X event was nice” something to show that you appreciated the pass, and the courtesy extended for the press.

I finally wrote one of the offenders, expressing my feelings of being taken advantage of, and got back

“There wasn’t any hard news  (ie, product announcements) that were picked up but Alan did blog about the conference:”

No explanation or denial that I had indeed helped fund their fishing trip, no apology for an act that didn’t come across as the actions of a “Good guy”. Just the above and “If you want to come to our event, let me know” Not even a “here’s a discount code”

Off the top of my head there was the merger of two indie iphone dev companies, Fastmac had all kinds of cool new products they were announcing/showing, we had a round table discussion about Apple’s SDK agreement clause 3.3.1, we had a 12 year old who had several apps in the app store, and was working on iPad games in attendance, we had a 12 hour game jam going on over night,  and more. Other press had no trouble finding plenty to write about (see here)

It’s sad that there are businesses who find this type of behavior ok.

It’s sadder still that as a result, the “no longer allowed press credentials” list has an entry on it.


May 4 2010

When the formula works you’ll know it.

John

360|Flex San Jose made over 110k…. We of course were in huge debt coming out of 2009, so we cleared no where near that. but that’s the most a 360|Event has ever made.

Clearly we’re doing better at this than before :)

Not super terrific awesome, but better.

I think we’ve found pricing that works ($499 first 100, $599 the rest), and stays true to our “Not breaking the Indie bank” ethos. We’ve also found a rhythm in selling sponsorships. Turns out I’m actually pretty good at it. These two things combined, with really aggressive selling to the community, seem to be paying off.

Our sponsorship package has gotten more wide ranging, and I think truly offers our sponsors a great value. For 360|iDev, I actaully had to turn people away, we simply didn’t have anything left to make into a sponsorship, and I refuse to simply take people’s money without giving them the absolute more value for their spend.

As the transition from 2 man team to 1 man team (Actually my wife is a major part of the company now) finishes it’s 6 month progression, I find myself even more excited about 360|Conferences. There’s lots to do, and plenty of uncertainty, but that’s exciting. I’m working hard to get 360|Mobile locked in. I’ve already begun looking at locations for 360|Flex and 360|iDev Fall. I’ve even started the ball rolling for 360|iDev Spring 2011, if you can believe that!

Oh and Europe. We might actually make it to Europe in 2010. Still TBD.


Nov 2 2009

A Bird in the Hand…

John

Tom and I had an interesting discussion the other night.

In looking at past sales Tom noted that offering a Team price, resulted in about $10,000 more in profit at the end of the day (the last day of the event, for the sake of discussion), vs. our current model of offering 100 tickets at a reduced price, typically $100-$200 off the regular price.

It was interesting because while $10,000 is certainly nothing to scoff at, at this point in the business, early sales are more important. While I hate the concept of early bird ticketing to inflate early numbers, I do like offering those who want to save some money, the opportunity, AND I like having some early money to pay the bills

So is $10,000 down the road, worth no sales, and no income in the short term? Currently, my answer is no. In the longterm, I think the answer is different, obviously I want to do right by my customers, and make money, so I’m not sure it’s ‘either or’, but I do think things with change down the road.

You?


Sep 17 2009

Ups and Downs and Downs and the need for paper

John

So it’s been announced that Tom is leaving 360|Conferences after our 360|Flex Conference March 2010.

It’s definitely a sad week.

unfortunately it highlights a glaring omission in our business, a lack of written agreements and/or even mutually agreed upon definitions of things.

Sure we have the actual incorporation papers, our ownership split, but that’s it. I won’t lie and say it never occurred to me, it did, several times, and each time I either back burnered it or prioritized another expense over it (lawyers ain’t cheap). And like all things put off, it’s biting us in the butt.

I don’t foresee any Calcanis/Arrington style online bitch matches, but I’m not gonna kid myself, the next few months will be messy as Tom and I figure out what it means to work 1 partner out of the company; assets (what few there are), debts, responsibilities, etc all have to be figured out.

On my end of things I have to figure out where I’m going from here. I mean the company is going to continue to bring Flex and iPhone developers the best community conferences around, but will I do it alone? It’s no secret money is tough for Tom and I because we have 2 people to pay, and doing an event 2x a year doubles expenses, but doesn’t double income. It might make sense for 360|Conferences to be a one man show, at least for a while.

It should make for some interesting blog posts :)


Jul 6 2009

How do you compare to free?

John

This topic applies to many spaces, and it’s one that has come up for 360|Conferences a few times. Our events are  often compared to barcamp style events, which are more often than not, free, because we’re usually far less expensive than most events, that charge.

I suppose on one hand it’s a compliment, since often those events are 100% community and usually entertaining and fun, if not informative. On the other hand though, it’s not a very fair comparison.

  • Barcamps aren’t usually 3-4 days long
  • They rarely include meals and/or parties
  • They don’t often have SWAG (of varying importance for sure)
  • They don’t cover any speaker expense

We recently had someone complain that we should still be charging $100 dollars for 360|Flex, our Flex Developer conference, because that was what we charged the first time.

That’s all well and good, except we lost money. $100 for 3 days, without it being completely a marketing event, with fun parties, good content, etc, is as we’ve found, unrealistic.

Barcamps are great, but they’re not a business. Barcamp style events are typically organized by local community members who want to do an event. The barcamp style event is very easy to get setup and has very few, if any requirements on the organizer. Barcamps rely on sponsors to provide things, like lunch, badges, parties etc. and if that doesn’t happen, that’s just too bad. “You didn’t pay to come, or you paid very little, what do you expect?” is often heard.

The organizer is most likely employed, and not relying on the conference to pay his phone bill let alone mortgage. His goal was to bring people together, which is awesome and applause worthy, but not a business.

Barcamps (like MashupCamp, startupCamp, etc.) don’t have defined speakers, and rely on people coming prepared to speak/present, and finding enough people to do so, the day of.

It’s hard to stack up against a free event, when the free event isn’t intended to be a business. Tom and I would love to do free events, but unless everyone wants to be schilled at 100% of the time by the sponsors we’d need to subsidize the event, it’s unrealistic.

I think comparing one event to another (regardless of whether they’re similar or not) is a bad practice to get into (and I often do it myself, I admit), when the real comparison is the value and ROI to the attendee.  Compare what attendees take away, compare what they get from the event. After all that’s the important thing. It’s not a ‘who gives more SWAG, or has the best parties’ contest, it’s who gives their attendees the most bang for their buck, that’s what counts.

It’s tough sometimes to keep that in mind, I admit.


Jun 15 2009

Setting your price

Andrew

One of the most difficult decisions a startup company will face is how to price their product or service.  Price it too low, and your business may become unsustainable.  It also may be seen as having little value if your price point is too low.  Price it too high and you could drive away potential customers.

The first thing to realize when pricing your product or service is that there is no such thing as an “actual” value of a product or service.  Everything deals with perceived value.  As a vendor, you have a perception of the value of your good or service.  The customer will also have a perception of the value of the product that plays a role in whether they buy or not.

Before moving on, let’s take a step back and talk about the US system of ethical capitalism.  Capitalism is by far the best system we have going on the planet for improving the quality of life for people on earth.  Unfortunately, capitalism in its purest form will not work if unethical people are involved.  In a capitalistic transaction, each party brings to the table something the other one wants.  In modern society, where we no longer have a barter system, one party brings money, and the other brings a good or service.  The beauty of this system is that the game is set up so that BOTH the buyer and the seller win in the transaction. The seller receives money which they want, and the buyer receives the good or service that they want.  If one of the parties starts to act in an unethical manner, both will end up losing in the end.  The seller will lose because people will stop buying from him if he’s perceived to have “cheated” people in the past.  The buyer will lose because he’s either been cheated, or because the good or service is no longer available.  Any business transaction is built upon the trust between the buyer and seller.  In the US, we don’t have a capitalistic economy, but rather a mixed economy.  We take the priciples of capitalism we like, but also add some government regulations such as anti-trust, and price-gouging laws to the mix because we inherently know that not everybody will behave in a purely ethical manner.

So, how does a seller make the decision of where to price a product?  In the seller’s mind, the thing they’re selling has some set value to them.  In the buyer’s mind, they also have a perceived value.

Some startups make the mistake of pricing their product at the level of customer perceived value.  They put themselves in the customer’s shoes and say something like… Ok, if the customer uses my product, they’ll save 4 days of effort on their side as opposed to doing it themselves.  Therefore, I should price my product at 4 days of the buyer’s salary.  This approach completely misses the subtle fact that a buyer will not buy a product unless the price is somewhere BELOW their perceived value.  The buyer NEEDS to feel like they’re getting a deal.  This also misses the fact that the buyer may not care about buying additional days.  They might be buying “cool” or “useful”, not necessarily something practical like “days of effort”.  They also might be buying something intangible like “prestige” as is the case when you buy a Ferrari, BMW, or Lexus.

Assume you’re the buyer for a second.  If the price of something is exactly at or above what your perceived value is, you won’t buy because you don’t win in the transaction.  You either come out behind or exactly where you started out.  The default position for a buyer is to do nothing.  A buyer won’t be moved to act unless there is a strong feeling that they win in the transaction.  A buyer will perceive value in a product when they feel like they’re getting a deal.

While we’re pretending, let’s say that I’m in the market for a basejumping wingsuit.  I have some perceived value in my head of the fun I’m going to have while basejumping with that wingsuit and what amount of money that is worth to me.  Let’s say that the experience is worth about $2000 to me.  What’s important to note is that I won’t buy anything at or over $2000.  If I were, then my perceived value is actually higher than $2000.  In this scenario, the basejumping wingsuit store first looks at their hard costs for time, materials, and labor.  Let’s say they can build a nice wingsuit for around $500.  Their perceived value for the wingsuit is actually a bit higher than that, since they wouldn’t have undertaken the effort to begin with if it wasn’t worthwhile for them. The seller then has some flexibility in pricing their product from $500 up to $2000.  I probably won’t buy at the low end because the product will feel too “cheap” for me.  Since I’m taking my own life in my hands, I don’t want to buy a “cheap” wingsuit. I also probably won’t buy at the high end because I’m not getting a good enough deal.  In the end, I go with a $1500 wingsuit because I feel like I got a deal and I got a higher-end wingsuit so there’s some intangible prestige value to me there.  The seller also walks away happy from the deal since they just made a nice profit of $1000 from me.

This principle of buyer perceived value vs. seller perceived value can be seen starkly on display when you watch a TV infomercial.  In an infomercial, they usually try to tell the buyer what their perceived value should be.  They say something like, “All of these items…A $60 value, all for $19.95″.  They try to put a perceived value of $60 into the head of the buyer, but sell the items for their own perceived value of $19.95.  The buyer may or may not actually perceive the value to be $60 dollars, but that doesn’t stop the infomercial people from trying to put that idea into the buyer’s head.

I’ll leave you with a little bit of inspiration:
http://www.youtube.com/watch?v=6xlQdx9nCeM&feature=fvsr