Thursday, February 23, 2017

Shad the White

Shadrach White is a hawk. He makes no apologies for this. Like the bird, his present company CloudPWR is dynamic, focused, and on a mission. Their vision statement reflects this.
  • We are an agile software company with extensive design and development experience. Our products and the solutions we deploy reflect the joy of simplicity.
  • We are listeners, thinkers, and doers.
Being two of the three won't work. It's imperative for him to listen to the client's needs, think about how to solve their problems, and then obviously actually do the work. To do this properly requires a team. One thing that Mr. White is concerned about is the character of who he works with. Skills can be taught, but character is molded through life and difficult to correct when poorly cast. White understands this and seems willing to invest in employees of integrity who may take more training in the short run, but are much more valuable in the long run.

This is not to say that he hires charity cases who can't do their jobs. On the contrary, money has been the biggest motivator for him. That's why he is, what he terms, a "revenue hawk." He explained that everything else can be perfectly set up for a business to succeed, but it's all for nothing if the finances are not in place and are not well handled.  Otherwise, the business would be a non-profit (and even then, it usually still matters.) White is in business to make money, but he has other motivations as well. His pricing structure for CloudPWR shows that.  He offers what is, in effect, a substantial discount for the small businessman. He doesn't call it that, but the price per hour of work ends up being a lot less for his smaller clients. That might seem counter-productive for a revenue hawk, but White believes in balance.

To achieve that balance, he shares his four secrets of success:
  1. Be a revenue hawk. Always remember that the bottom line counts, and that money drives your business. Understand what selling is. Ask the money questions first.  He shared that an otherwise successful sportswear company of his failed to reach its full potential because this concept got buried. Keep your eye on the money, and have a 3-6 month cash reserve.
  2. Be a person of good moral character. Smile, be kind, treat others fairly, and let your word be your bond. Create a culture that people want to be around. His advice is to make friends quickly, without oversharing. Associate with other people of good character.  This benefits all parties as you build each other up. Trust your gut: run if your "spidey-sense" tingles. If you intuitively sense that something is off with a potential partner, trust it. 
  3. Make time to relax and rejuvenate. Work matters, but the whole of your life matters more.
  4. Learn about things outside your wheelhouse. Be a whole person, because a well-rounded person brings ideas, skills, and knowledge that come from more than just one place. The ability to communicate on a small-talk level is important in building relationships.
White chose to get a GED, and went the technical school route instead of a university. Before he could get his bachelor's degree, he began a landscaping business. Clients were happy and the business was successful. His second business, a sportswear company, fared well until some mismanagement of funds. White moved on to document management, and when he saw the need for better cloud management in the government sector, he founded CloudPWR. His plan is for a more altruistic company in the next go-round  It is precisely because he concentrated on being that revenue hawk in his previous companies that he now has the ability to focus his efforts on "giving back" to his community.

Lastly, he recommended studying the Securities Act of Washington, to make sure you're protected when handling employees and possible future employees.

Tuesday, February 21, 2017

My (Work In Progress) Mission and Vision Statement


"To create an online database that keeps track of your computer games -- and everyone else's."

My goals are to keep this statement short but informative. I think this gets the basic idea of the website across without overloading the reader.

"[my company]’s purpose is to become the premier site for information on computer games by providing access to an online database that is easy to use, intuitive, efficient, and content-heavy. We will continually gather information from our customers for real-time updates, and respond to usage needs and requests in order to ensure that we meet their desires."

This statement still needs some work but I think this is a good basic outline that I can tinker with for my business plan. The core principles of the site are being easy to use and, most importantly, being efficient, so that needed to be stated somewhere.

Thursday, February 16, 2017

John Dimmer

John Dimmer is a successful businessman and entrepreneur who knows that the financial side of a business is at least as important as the inspirational side. As he put it, “The two most important parts of a business are The Big Idea and Funding.” Dimmer wanted to run his own business, and had several ideas to do so.  However he was smart enough to know that his good ideas were not enough. He felt that he needed some experience, and some money, before venturing out on his own. Having an analytical mind, he went into banking for a few years. In addition to gaining experience, he built contacts and strengthened his skills. It was then that he sought funding for his own projects.

There are three main sources of funding: Equity, Debt, and Investors. Savings and family members (maybe close friends) make up the first. For most of us, that is going to be a small portion of the total. Debt is the second choice. This is certainly possible, especially for a smaller idea. Loans from the Small Business Administration are typically relatively low interest. These work for those who can secure them. However, the third choice is often better for larger projects. Use other people's money through investment. Investors, often referred to as angels, invest in a project in exchange for something, often shares or future returns.

Investors invest in people. It's not enough to show a simple business plan; you have to sell yourself. How are you going to make them money? What are you going to use their money for? What is the end game? One of Dimmer's warnings was that if you seek funding in exchange for equity to make sure you're always above 51% ownership of shares of the business. Majority interest is always to be maintained, no matter how attractive the offer. The first round of funding is just that – the first round. Each "raise" needs to have the next one in mind. Rather than selling out more and more shares to the limit, concentrate on making each share worth more through growth funded by others like angels.

After a few years the company Dimmer was working for, that he had a percentage of specifically for the exit event, was acquired by Luminus for enough money that he could retire. Three weeks and dozens of golf games later, he was bored with retirement. That's when he went into business for his father's company, FIRS Management, and started investing in others. He had come full circle, now taking on the angel role.

One main point I took away is that you have know yourself – what is the reason you want to be an entrepreneur? For Dimmer, it was money. For me, it's both that and to create a product I want to use that does not exist. The former is to eventually fund more of the latter. My plan is deferred gratification. Working hard and smart, living simply, and reinvesting profits mean that a point will come in the future where my money is doing the majority of the work. At that time, concepts such as working for pleasure or having the freedom to do what I want might come into play.

A second main point was one that seems to be repeated in many of the speakers in the class – relationships matter. Dimmer and Andrew Fry have known each other since high school. They've known each other before either had substantial success. That knowledge meant that they knew each other's characters beforehand, and knew they could trust each other.

Tuesday, February 14, 2017

A Website as Intellectual Property

Great minds think alike, and usually this is a good thing, but not so much when more than one person has the both the same idea and drive to see that idea come to life in a market you're interested in. As much as we would like to hold onto them, ideas cannot be protected. It is only the expression of those ideas that the law recognizes. This can be enough -- if you're first or you offer a clear advantage to using your product over your competitors'.

There are other bidding sites that have better customer service, easier interfaces, and certainly lower fees then eBay, but eBay captured the market early. Others got into the game late, and by then eBay was too well established for serious competitors that weren't offering anything unique.  Sometimes, however, even a well-established site or business succumbs to a competitor who simply does it so much better.

Blockbuster is a good example here. In 2004, Blockbuster had 8000 stores and millions of DVD and on-demand consumers. And then Netflix launched. More services for less money. They did the electronic portion of Blockbuster's business better, and Redbox killed off the rest. Similar ideas, different execution.

There are other websites that have attempted to seize the market in the past, but they've all failed to pick up any steam or a customer base. There aren't any that are the standard for the industry.  They are mostly clunky, not intuitive, and not attractive, and they end up failing. My plan isn't so much to protect my property, but to be the first industry-standard quality site of its kind. There's one potential competitor from the makers of RateYourMusic who have already established a loyal customer base and can advertise on their own site for a new project.  They are in closed beta after a successful crowdfunding campaign several years ago. Getting a quality product out quickly is essential for my success.

While a list cannot be copyrighted, a database can, and that's what my site will have. It will have its copyright notice and terms of service listed. Much of the information will be user-submitted, and their submission will assign that information to the company. Information will be able to be used, with attribution. In addition to advertising the site, this attribution on users' sites will help with SEO. The more links, the higher the ranking, the more users submitting data, the more links, the higher the ranking, the more users, etc.

The World Intellectual Property Organization has an excellent write-up on the specifics of protecting the intellectual property of a website. I've linked it here for accessibility.

Tuesday, February 7, 2017

What'm I Gonna Charge

My business idea, a database for computer gaming that also allows users to create lists of titles they own, will be free to use.

Similar sites like IMDB make revenue through advertising on their site or with a premium membership based on a subscription, and this site will obviously take a page out of their book by using banner ads. A premium membership could be implemented after launch, offering incentives like making custom types of lists for your profile or ways to easily contact other members of the industry if you're a part of it, but it would have to be aster a customer base is already established.

A new avenue for making money has been introduced recently as Patreon. Like the patronage of the arts during the Italian Renaissance only with results less impressive, donors support new artists.  In this case, the artists are generally videographers, web content writers, comic book creators, musicians, writers, and website developers. In the vein of Kickstarter, Patreon funders choose projects in which they see potential. In exchange for their support, they receive gifts from the developer.

It's a symbiotic relationship - the artist is sustained while building his business and his base; the patreon is in on the ground floor of something and receives exclusive content and updates or status. Each patreon chooses his own level of financial comfort, and funding can be stopped at any time - knowing this means that the patreon can be assured that what he is getting is quality. If it's not, it dries up quickly.

I think a minimal amount of ads followed by a Patreon campaign to help with server costs can help establish a base of users going to the site. After that point other forms of profit such as the premium membership can be set up. What's important is ensuring no content that the user is going to the site to see is locked behind a paywall at any time - only additional content.
To get rich, you have to be making money while you're asleep.
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