Angel Investment Journal – Angel Investing and Entrepreneur Blog

Two Reasons why people won’t like your idea

Posted in Startups by angel on the March 29th, 2007

A lot of the time people will give you one of  two reasons as to why they don’t like your idea:

“It’s been done before”
“It’s never been done before”

One of those two phrases has been true of every idea or business that has ever been successful.

From Seth

Paul Graham’s Start Up School Speech

Posted in Startups by angel on the March 28th, 2007

There is a interesting piece on Paul Graham’s site posing the question, Why To NOT NOT Start a Start Up.

I heard good things about Start-Up School this year. I spoke with Ben Roodman, who runs a mobile social network start-up – with David Gorman. Ben attended Start Up School and said it was a great place to network. He even had a chance to speak with Paul Graham.

If you are a start-up, it may be a good idea to check the school out next year.

Berkshire Hathaway’s 2006 Chairman’s Letter

Posted in General by angel on the March 26th, 2007

If you are a Warren Buffett fan like me, you will probably be interested to know Berkshire Hathaway’s 2006 Chairman’s Letter has been released.

h/t Feld

How getting out of bed can predict your chances for success

Posted in General by angel on the March 22nd, 2007

Like a normal college kid, I usually struggled to get up in the mornings to get to class while at Mizzou.

Since my degree was in elementary education, I was able to student teach in the second grade my last semester. People with other degrees did not understand the concept of student teaching. We had to work 55+ hours and dealt with 26 eight year olds with absolutely no pay. In fact, most of the time we bought our own supplies. This was happening while other students were getting 35-38 hour internships for the summer making good money.

Well, I absolutely loved it!

Keep in mind that I was still in college, meaning my partying was not restricted to the weekends. However, I noticed a funny thing on school-day mornings after a night of partying. Instead of going through the “morning struggle” of getting out of bed, I would wake up, usually before my alarm clock and (sometimes, literally) jump out of bed. The reason was because I loved teaching and I was excited to get to the school to get the day going.

For me, and likely most people, the desire to get out of bed is an indicator of how much I enjoy what I am doing. And, as most people will tell you, having a passion for what you do is one thing that will undoubtedly increase your chances for success.

“Your chances of success are directly proportional to the degree of pleasure you derive from what you do.”
– Michael Korda

How fast do you get out of bed?

The Importance of the “Start” in a “Start-Up”

Posted in Startups by angel on the March 19th, 2007

The Myth of the Great Idea talks about the fact that a lot of people talk about starting up a company, but claim they need to find their great idea before they begin. He claims that the problem with this is that a lot of times it is just an excuse not to do something. No company can simply rely on a great idea, they need to be able to execute. A brilliant idea is better than a crappy one, but without execution, even a brilliant idea cannot succeed.

In addition, successful companies may start with a great idea (or at least one which they feel is great), but end up changing their focus as they grow and learn. I have been reading “Founders at Work” that has some very interesting stories about successful start-ups. The stories in the book support the idea that many companies change their entire concept as they grow. Most find a niche within the industry or with just one aspect of their company and change their entire game plan.

The most important part of a “Start-Up” is actually Starting. Start to do something and learn from it. Failing fast and often is fine (as long as you can do it cheaply).

STD Marketing

Posted in Marketing by angel on the March 14th, 2007

Everyone would love to apply viral marketing to their concept. The problem is that getting an idea to become viral is extremely hard. It can’t be simply interesting or cool. It needs to be remarkable.

The term viral marketing is derived from a “virus” in the real world. And what is the best type of virus you can mimic online? According to David Hornik, it is an STD. The reason? Well, because there is something fun associated with it and it is highly contagious. If you have a concept that is fun and engaging and gives you incentive to get other people involved, it is likely you will have a viral concept.
And who are the best carriers for the virus? The most “active” people, of course. They are much more likely to spread it. So if a well read blogger gets ‘infected”, you are likely to have it spread to a much larger audience than you could ever reach by yourself.

So your goal is to try to come up with something so fun, exciting, and engaging that it will become contagious. And hopefully you can get in bed with some of the big bloggers.

Value of Ideas

Posted in General,Startups by angel on the March 9th, 2007

Greg Moreno has a cool post about the value of an idea:

Awful idea = -1
Weak idea = 1
So-so idea = 5
Good idea = 10
Great idea = 15
Brilliant idea = 20

No execution = $1
Weak execution = $1000
So-so execution = $10,000
Good execution = $100,000
Great execution = $1,000,000
Brilliant execution = $10,000,000

I would say that it should be altered a bit since weak and so-so execution should probably be negative numbers. Spending time and money on an idea but not having good execution will likely end up with a negative result.

Finding a Niche to Scratch

Posted in Funding/Investing,General by angel on the March 9th, 2007

Seth talks about how finding your niche is much better than attacking an entire market.

Related to this, a lot of entrepreneurs try to present to investors and say “We only need 1% of the market”. Guy says this is pretty ridiculous. First, why would anyone want to get a 1% market share? Second, how do you know 1% will be the magic number? How do you know it won’t be .1% or 5%? Entrepreneurs should do a bottom’s up forecast. Define the niche in the market you are going to target and make a forecast based upon this. Don’t say you need to capture 1% of the worldwide hat industry. Instead, say you want to capture 20% of the Church Hat market (that was a quick plug for Evetta).

Side note, isn’t it cool to be known just by your first name (like Seth and Guy).

Start-Up School

Posted in Resources,Startups by angel on the March 6th, 2007

Stanford will be hosting Start-Up School on March 24:

We’ll have a range of experts speaking on all the things you need to know to start a company: what makes a good startup idea and where to get them; what to look for in a co-founder; how to get angel and VC funding; how to incorporate a company and what agreements founders should have among themselves; when and how to apply for patents; what can go wrong in a startup; what acquirers look for; and how the acquisition process works.

I have not been, but it looks interesting. Matt Knox’s blog has some notes from Start-Up School 2006 that can give you an idea of what to expect.

2007 – The Year of the Phone

Posted in General by angel on the March 1st, 2007

Email is a fantastic tool. But spam issues have gotten so bad that attempting to contact someone for the first time dramatically reduces your chances of actually getting a response. This can be a result of spam filters, the person not paying attention to it or taking your email serious since they aren’t sure of the legitimacy, etc. In fact, our response rates on emails have fallen by over 50% just in the past year, even though they were relatively consistent for the previous 3 years.

Mainly as a result of the hungry and foolish whiz kid (Brandon) in the office, we are all starting to pick up the phone more often. You don’t have to worry about spam filters and will definitely have the person’s attention, but you will have much better chance of achieving whatever it is you are after.

I just had to do something with the BBB regarding a reliability seal for a site. I sent an email to the specific address regarding the seal. I then made a note to check back in a few days to see if I had received a response and if not, I could follow up with it. Then I remembered the phone, I made the call and got it taken care of immediately.

Not only can you get results faster, but it saves time – you can talk 3-4 times as fast as you can type. In addition, VoIP can reduce your costs if that may be a concern for you.
Don’t be a slave to email and it’s uncertainties. Achieve better results (and in less time, to boot) by using this revolutionary device called the telephone. 2007 will be the year the phone makes a comeback.