Category Archives: Entrepreneurship

Bootstrapping your Startup

puzzleFor most of us (entrepreneurs), bootstrapping is not an option, is the only way to launch our startup.
Keep in mind, even if you are bootstrapping, you will have some expenses beyond your maintenance (you will be without salary several months and you have to live in the meantime).

These are my experiences bootstrapping projects and more specifically Jooicer.

Remote Working

If your project doesn’t require physical components, I’ll recommend you 100%, to be a distributed team, not only because you will save up on office and infrastructure, but you won’t be limited to your location when looking for talents, you don’t have to set schedule… There is lot of info out there about the advantage of remote working, and a great book called Remote.

Communication

Communication is one of the most important challenges you will face with a distributed team. There is lot of tools that help you to communicate, but each one in the team will have his preferences. You have to be sure to choose one with which everybody is comfortable. Once you have established a communication channel, try don’t use different ones to deal with matters that should be of general knowledge in your team, because people who are not in that others channels will feel displaced.

In Jooicer we prefer to use text chat. It is very useful because you can keep a log of your conversations for future reference, also, in a distributed team not everyone have the same timezone or the same schedule, so you can be updated just reading the log. I like it too because is not intrusive so when your are doing something that require concentration, you can forget about the chat and dive yourself in the task.

The Team

communicationProbably, this will the most important thing in your startup, you can’t do it everything by yourself. Even if you can code and design the entire project, you still have to give support, customer development, improve it, fix it, accounting…

I think to have at least one more co-founder is important. The process is going to be long and hard, so you will need support when your motivation is low (you will face this a couple of time). If you don’t have this support, you could quit early.

When you look for members of your team, look for people who share some other interests with you (sports, hobbies…). You are going to spend lot of time with them it can’t be all work.

Where To Find Them.

I found builditwith.me, a really interesting idea to find people or join other people’s ideas, however we didn’t have luck there.

What we do is to look for experts in Linkedin, Duckduckgo (or Google), Twitter… wherever they could be and ask them to talk. These will be your first pitchs, if you can’t convince them to join you, how are you going to convince customers to buy your product or investors to give you their money?

Identify your lacks and look for experts who can cover them. Don’t be afraid to ask the betters, you will be surprised. In Jooicer, we ask two experts in the same field to join us, we didn’t think they would, surprisingly both say they were interested and we had the problem to have to choose between them (it was a leadership role, if not I would have keep both of them).

Availability

Try that your team members have the same availability and same commitment, if not, you will have timing problems. If you have some people committed full time with the project and other part time (because they have their own jobs), you will find that the full time people need to launch while the part time people only want to, and that is a problem.

Be Patient

Don’t leave people think they are doing you a favor and they can laze or not work like if they were being paid. Your team is elite and people have to proud to be part of it.

Be ready to face that some people will leave the project or you will have to fire them, you will find yourself looking for new members often until you have your definite team.

Equity

People can work for free for a while, but they want to know what they will have once the project become successful. We have launched many bootstrap projects and at the beginning we saw this perfectly normal, so we shared equity based in what will do each one, even worst, because they were working for free, we always thought in shame equity for everyone. You will find, like we did, that not everybody work the same, not everyone have the same commitment and not everyone will have same responsibilities. For Jooicer we are testing a different approach. We explain people who join us our bad experiences assigning equity without know each other, or without know our commitment. We explain that our intention is not to keep the big piece of the pie, once is done, but to create a pie sufficiently large so every piece of it will be big. Also, we tell them that we don’t want to take advantage of their work, so if the relation doesn’t work, we will pay for their services, even we pay more than their usual rates, but they will have to wait until the project have funds.

Once we have some traction we will value each one commitment until that moment, consider what will be expected from him and the role they will assume. Based in these factors we will assign the equity.

We didn’t know if people were going to join us with this approach, but everyone have understood it and nobody said no because they wanted to know their equity/salary from the beginning.

Outsourcing

There would be times when you need some task done and anybody in your team can make it or you need a person in your team but you can’t find anyone. In Jooicer we tried 3 different guys for a position and after 3 months we didn’t have that work done, so it became a bottleneck for us. Although we need one in the team, we had to stop looking for and hire a freelance. In this case you have to ask for budgets and find the money to pay for it.

To avoid to have to look for too much money and finally hire something too cheapest, you can try to agree some payment facilities with the freelance so you can afford it in your early stage (maybe you can give them free access to your product once is done, so you can reduce their price).

If you are good attracting people to your project, you could be tempted to save money attracting them for each task of your project however small it is. I won’t recommend that, once your project is online and working, you will have people in your project that don’t do nothing.

Tools

Even if you are not a distributed team, you will need some tool to manage your project. There are lot of good tools there that will cover your needs and I think you can find a free tool or with freemium plan that is enough for you. Remember, you are doing bootstrapping, there will be things you will have to pay for sure, so don’t spend your money where you have alternatives. Once you are monetizing you can search your perfect tool.

This is some of the tools that we use in Jooicer:

  • Basecamp: It has a freemium membership. It only allows one project, but that is good for us. However each time we use it less and more Drive.
  • Drive: For documentation, knowlegment base or to share files.
  • Skype: We have different groups chat “product”, “general”, “traction”… Currently we are the same people in the same groups but we use them to be organized.
  • Whatsapp: We don’t use it pretty much, but we have a group there.
  • Bitbucket: So different developer can work in the same code with version control.
  • Mail: To be in contact with our users.

We have to improve how we use them and try others (we need something to put tasks and allow people to auto assign them, some kind of SCRUM management), but we are in an early stage and we still have to find our best methodology. I’m not worry about this because each team/project have its own and it will emerge with the time.

Traction

Once you have launched and you start to sell your product, surely it can’t cover all your company’s expenses from the first day and you can’t do bootstrapping all your life, your team deserve a salary, you too and you will need money to scale and compete against the big ones. This is the point when we want to go for funds in Jooicer.

Traction is the proof that your project is working. Is not only that you already have customers but you have a working team and product. However if you already have customers, surely you will have a working product and a working team too.

Investors will use your current traction to measure your startup and decide if it’s worth to invest in. Try to have as much traction as possible before approach them, so you have more possibilities to attract them and you won’t have to grant too much equity.

These are my experience bootstrapping projects, I would love to know what do you think about them and your own experiences. Any recommendation ?

My Mistakes As An Entrepreneur: City Coupon Deals

From the beginning City Coupon Deals was a side project for us, at the same time we were working on WWT, but it was the boom of the coupons sites and we didn’t want to waste the opportunity to launch something related.

ccd

Our idea was to create a coupons aggregation. There wasn’t so many then, so it was a good idea. Also it was simple, you only had to scrap or use the API from coupons websites and show all of them from your, sorted by city, category… etc.

At first we were going to show from all sites, but our idea, once we get users, was to show only those who pay commission for leads or sales.

We contacted with two guys who were going to help us with the project. A really good developer, who will develop the entire website and a designer with social media knowledge who was going to act like CEO once the website will be finished.

We did the same mistakes we did in WWT project plus new ones. It is not we did the same mistakes twice, but we were doing the two project at the same time so we didn’t realize we were doing mistakes until it was too later.

Lucky for us, this project development was much more easier than WWT, so code, design were done quickly.

Clarify the roles from the beginning

The two guys worked really good. We found a talent in the developer (we still are in contact). The designer was really good to, but the problem was that he was supposed to lead the project once finished. He didn’t know about it and he didn’t want to. So we found with a project finished and nobody to lead it.

This project didn’t take too much to build it, but I learn a great lesson from it. Clarify the roles of each member of the team the first. The roles could change along the life of the project, but be sure that you have your important roles cover before starting nothing.

Currently City Coupon Deals is working alone, without attendance, and it give some bucks by Adsense. So at least it pays itself the server and domain cost.

ccd-a

My Mistakes As An Entrepreneur: Wine World Trade

I’d like to publish some articles, relating my experiences as an entrepreneur. Along the way, I have made all kind of mistakes so I’d like to publish them as a reminder to myself (hoping to avoid them in the future) and for anyone who want to know another experiences.

“We learn little from victory, much from defeat” Japanese Proverb

I think I have material for almost 4 or 5 articles with different projects I have tried, some of them have died before launch, others are working like zombies, others are working and are profitable and others have been sold. In all of them I have made mistakes that I could have avoided if I had read books like the ones I’m reading now or heard other entrepreneurs experiences.

Wine World Trade

Wine World Trade

Wine World Trade (WWT) started around 2010, my partner David met a guy, Victor, in Ibiza who had worked for one of the few online business which traded with wine and other spirit drinks. Victor didn’t end very well with this company and he wanted to do something similar but improved.

We talked about it and we conclude we wanted to build a SaaS with social network functions. Distributors and importers could publish a call for tenders and producers, wineries, export managers could offer their stocks. The social network part will be something similar to LinkedIn but focus in wine industry.

Build a bottom-up forecast.

“Don’t say that there are three billion people in China and if we get 1% of them to spend $50 then we will be a $1.5 Billion dollar company. This is not realistic because getting 1% is really hard…” Guy Kawasaki in The Art of Start.

In our research we found a db with more than 40,000 related contacts (wineries, distributors, importers, export managers…). We thought,  if only 1% of them become our users we could make about 400*99$ = 39,600$/month (99$/month was the cheaper membership). Only 1% and only counting the basic membership, this was a realistic scenary, isn’t it? Some years later I read “The Art of Start” by Guy Kawasaki and it was funny to find this same theory like one you never should make.

Obviously we didn’t reach the 400 clients, we didn’t reach even one.

Barriers to entry.

The business looked very profitable and there was only two big competitors. We knew we can do it better with lot of new features and a nice interface for the users. It will be easy to reach clients and defeat the competitors.

If the business looks very profitable and there are only two competitors, why is this ? We should had asked this question to ourselves before continue and then we could have learned that this two big competitors were supported by big players (A country and a big consortium). This players publish their call for tenders there and they were not going to publish in anywhere else.

MVP.

“if you are not ashamed of your product when you launch it, you launched too late.” Reid Hoffman of LinkedIn

So, it looked very interesting and we didn’t spent many time in form a team and start to work in our MVP. The true is we didn’t even know what was a MVP, we thought we need a perfect product to launch and we worked very hard in it.

WWT DB Model

We picked a great domain, wineworldtrade.com (now free) for our brand, and some others that we wanted to use like landing pages like winedistributors.biz (working) and similar.

The design was outsourced to speed up the launch. Fernando, a great developer and knowledgeable about the wine industry, joined us and we spent more than one year developing our perfect site. The database model image has 61 tables, so imagine the code :)

We developed lot of cool features but we didn’t ask any client if they need them until the last moment. When we were almost ready, we built a landing page and tested our 40,000 database contacts asking them feedback about WWT.  The results weren’t good, some wineries answered and they were interested in the product (only the part where they could sell their stock), export managers too, but distributors and importers were missing.  They had so many offers in their desks that the last thing they were going to do was join a community where wineries and export managers were going to be able to send them more offers. No distributors or importer = no business.

Focus.

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.” Steve Jobs

David and I were supporting the project economically and it become difficult. We heard about some others ideas which could provide us fast money. With the current team there will be a couple of days only. So sometimes we parked WWT and tried another “fast money project”. They weren’t two days projects and anyone of them provide us fast money (or other kind of money), only delayed WWT.

Give up.

In the meantime we had gone losing members. Too much stress, misunderstandings, loss of motivation… Finally only David and I remained in the team but we didn’t give up. We knew there was a great opportunity with wine through internet, we only had to find how could we combine them. So we started from scratch. David came to Madrid and we drove around Spain visiting wineries and personalities in the wine’s industry asking about their needs and how could we help them (At last we did it !).

The experience was great and we found lot of kind people who spent time with us answering our questions and giving us valuable feedback. But there came a moment when we realized that what users wanted, it needed a huge investment in money and an experience in the wine’s industry, which, neither David nor I had (we not even drank wine then). It wasn’t a startup. It wasn’t our business. We realized we continued with the idea by inertia, because we already had invested 2 years. So we stop and thought about it with the conclusion that it wasn’t what we really wanted.

So finally we gave up with WWT. I’m not pretty sure if our mistake was to give up or not having gave up before. Maybe if we had searched for external funds we could have redirected to our territory and make something great… who know?

Mistakes.

These are the mistakes I can extract from the experience:

  • We didn’t research why there was only 2 competitors.
  • We wanted to have a perfect version before launch.
  • We didn’t make Customer Development before start coding.
  • We should have search external investment but we didn’t want to share.
  • We lost focus sometimes.
  • Give up?

Let me know if you have any thoughts or questions about our mistakes on entrepreneurship. I’d love to hear about yours too!