Category: Lean Startup

Action is the foundational key to all success.
Pablo Picasso

I honestly think it is better to be a failure at something you love than to be a success at something you hate.
George Burns

Startup Weekend Orange County #swoc Date Announcement and Registration to begin Monday, September 9th.

Startup Weekend Orange County

I will be an Organizer along with my pal, Andrew Medal and we are hustling to put together a phenomenal event.

Speakers, judges and mentors announcements will be released Monday as well, we are still waiting to get solid confirmations from a few people and those announcements will come as they are confirmed.

Check it out at http://orangecounty.startupweekend.org

If you are not familiar with Startup Weekend, than you are missing out.  It’s your opportunity to create, co-found or be apart of building a startup company in 54 hours.  You will have the opportunity to work with other co-founders, entrepreneurs, developers and lean startup practitioners, be mentored by successful coaches who have walked the path before and network with some of Southern California’s most prominent Venture Capitalists, accelerators and incubators.

More updates to come on Monday.

 

All you need is ignorance and confidence and the success is sure.
Mark Twain

Success is a lousy teacher. It seduces smart people into thinking they can’t lose.
Bill Gates

The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.
Vince Lombardi

When it comes to launching a startup, where does the seed stage money go? It goes into funding resources: office space, programmers, developers, engineers, designers, and business plan writers. The trend that is emerging, which has worked for numerous successful startups, is for entrepreneurs to skip seed stage VCs and tap into collectives instead. A collective is a pool of resource providers that invests in startups – but instead of investing capital, they invest their services and the other resources they have access to.

seedhatcherySo instead of giving an entrepreneurial startup founder $100,000, the collective gives him office space. The programmer in the group writes code for him, and the designer helps with the layout. Another member works alongside the entrepreneur to write the business plan that will be presented to the multi-million dollar VCs in the growth (Series A) round. Everyone in the collective has something to contribute, somewhere.

Ultimately, the resources provided by the collective are used to create a minimum viable product (MVP) to present to the growth investors. In exchange, the collective owns a small percentage of the company; it collects that equity when the business turns a profit, or when the founder sells. For the collective, it’s a fairly low risk investment: If the company fails, each member only loses whatever time was devoted to providing resources. For the startup, it’s a win-win; there are fewer costly decisions to be made in the initial stages, because all the necessary services were provided at no cost.

There will always be a demand for cash, but let’s be honest: Cash is only a means to an end. What every startup really needs is resources. Collectives such as Cogent Collective can provide those resources that will impact a new business: services, space, software. If your startup is in need of resources, reach out to them.

Article originally written for BizHack.IT Investing More than Cash: The New Demand for Resources 

According to some experts, the traditional VC model is broken. In fact, it has gone the way of Palm Pilots and dial up. If that is true, then how are startups supposed to…well, start up? The answer is in the “sharing economy,” with models such as AirBnB, Lyft, Surf Air and BlackJet leading the way. These companies, which make money by helping consumers share their tangible assets with other consumers for profit, have the right idea. Thanks to the convenience of our digitized world, they create efficiencies from portable assets. How does that apply to raising capital? Because of another aspect of the sharing economy, crowdfunding.

CrowdfundingWhat is Crowdfunding?

Crowdfunding, wherein individuals each contribute small amounts of funding to a project in return for a tangible or non-tangible benefit, is an aspect of the sharing economy that has the potential to significantly diminish the need for small business loans. For that matter, it stands to wipe out the demand for VCs. Crowdfunding has many permutations, as it can be used in nearly any project that requires vast resources: movie production, scientific research, invention development.

How Crowdfunding Applies to Startups

Tech startups can benefit from crowdfunding as well. There are plenty of ways a new mobile app, video game or web-based service can compensate its crowdfunders. If film producers can give a producer’s credit to all the crowdfunders that send them a few hundred dollars, why can’t a tech startup do the same?

Thanks to the effectiveness of crowdfunding, the traditional venture capital model may be on its way to being replaced. According to well-known VC expert Fred Wilson, more VCs are waking up to the fact that they will have few assets to work with in the future. At one forum recently, Wilson was asked a question commonly attributed to Paypal’s Peter Thiel: “What do you believe that very few people agree with you about?” His answer was this: “In the venture capital market, there ultimately won’t be a need for VCs to ever have funds.” Huh?

Here’s one explanation. Today, VCs raise money from Limited Partners (LPs), who trust the VCs to invest in companies that will grow over the next 3-10 years and deliver a good ROI. Because their money is not their own, VCs may eventually become obsolete as LPs begin to take a more active role in identifying opportunities.

The Shift is Beginning

Although Wilson admitted the transition will happen years down the road, he believes this is already starting to happen for early-stage investing. “Expect to see more and more ‘out-there’ experiments,” he said, when it comes to the seed round for new startups. Crowdfunding is one of the tamer models of experimentation, but as more startups see its value (providing user validation is just one example), more experimental funding methods are bound to start sprouting up.

Established VCs have little to worry about now, but as any former Palm Pilot user will tell you: Things can change very quickly. That’s why we believe those with smart money need to smarten up about the traditional VC model, and look to crowdfunding as a new way to make ideas happen.

Article originally written for BizHack.IT blog Is the VC Model Broken? Smart Money Needs to Smarten Up 

Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.
Dale Carnegie

I don’t measure a man’s success by how high he climbs but how high he bounces when he hits bottom.
George S. Patton


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Updated August 2016 - Matt Dubois