Some quick thoughts on my day at The New New Internet Conference this week.
First off, hands down to the Executive Biz team for a great job pulling this off. I know it was their biggest event to date, and they did a great job executing on everything that needed to happen to have a good event. Just about every seat in the house was taken. This is a conference that had only 200 people registered 2 weeks before the event. This is the trend effect I have seen at the last 3 events I have been to, the last week or so you get a ton of registrants AND walk ups the day of. It reminds me of my concert promotion days
Great talks by lots of smart and interesting people (see previous post). I particularly enjoyed Mike Arrington’s lunch keynote talk on the winners and losers of web 2.0 (so far) and his analysis on the key attributes that both “winners” and “losers” share. Luck definitely does have something to do with it
As many people know, aside from the great folks speaking at events like this, the really good stuff happens when you connect with folks in the hallways in between sessions and during breaks. After all of the sessions and discussions throughout the day, one of the key things I left the conference feeling, was grateful. Grateful that my company had not taken any VC money in the beginning (although we didnt have a choice in 2001). There was a lot of discussion about taking VC or not to take VC, discussion of companies that had, and how too much VC affects the ability of the company to grow at the ever precious early stages of start up, etc.
I look back and think that even during the tougher times earlier on when the money would have helped us get through the rocky times, those experiences just made us tougher and more resilient. We adapted as needed. Now, 5.5 years later of organic bootstrapped growth, the company is cash flow positive and profitable. This is not to say that we do not want to ever raise money, but if and when we do we will be in a much stronger position to work our deal. Like any company who has a business model, has customers, is cash flow positive and profitable, raising money at this stage occurs for strategic reasons only. Check out my earlier post “Bootstrapping: A Preferred Method” to read the story and opinion.
There is more and more evidence of the “too much money too fast” syndrome happening. The much linked to post at GigaOM highlights Evan Williams of Odeo’s talk at The Future of Web Apps conference where he openly discussed the things that Odeo had done wrong as a start up. On his list was “Raising too much money too early.” Arrington noted in his talk that the time to raise money is after you have already “won.”
Perhaps one of best perspectives I have read on this topic is one by Clarence Wooten, CEO of Collective X on the Ventrepreneur Partners blog. Arrington made a reference to this particular post during his keynote this week. The case is not against VC money, but rather the initial amount that a company needs. Clarence provides a unique and interested perspective on this topic.
When it comes to funding early stage start ups, maybe its Y Combinator that has it all figured out:
“Y Combinator makes comparatively small investments. The most we’ve invested in one company so far is $24,000. It’s in your interest to take little money early on, because that way you get the least dilution. Ideally you take a little money and use that to build something that gets you your next round at a higher valuation.”
With the amount of businesses being funded at the start up level, its important for the founders to really consider what they are trying to achieve. Now more than ever, in regards to technology companies, the barriers of entry have lowered. It doesnt take a lot of money to launch your product anymore. Starting small can still net large results. This weeks event put that back into perspective for me. Thanks again guys looking forward to the next Executive Biz event.