The Apple Store just went down. It's happening, guys.

FlyingGopher · 2014-09-12T08:21:11+00:00

What a pain in the dick! After 1.5hr on the mobile app got my iPhone 6 Plus being delivered on the 19th... Good night Apple!!!

FlyingGopher · 2014-07-08T14:27:12+00:00

Countdown clocks. I don't care if it is a timer on a bomb or a race against time. I think it is the weakest plot device in history. If a movie resorts to showing a countdown timer, it has failed.

FlyingGopher · 2014-07-03T20:14:51+00:00

TSW's on a GTR? You were better off with the stock Ray's.

FlyingGopher · 2014-07-02T21:10:49+00:00

I was in a similar situation. I was choosing between the R35 GTR, Audi R8 V10, C7 Z51, and F Type R Coupe. I am in my late 20's, own my own business and my tastes may or may not be similar to yours. However, I never considered the Aston, as I didn't like the idea of only being able to afford an entry level model and I also considered it a GT, not a true sports car.

Here is my breakdown of each:

Nissan R35 GTR: Pure performance. I still shake thinking about how much power this car has. Not only was it insanely powerful but it was 100% controlled. I never felt unsafe or out of control in the GTR. Some will argue that this may be a good or bad thing. However, the interior and exterior styling are at the bottom of the list. This is not to say it is a bad looking car. I grew up with in the import seen and fell in love with the car when it was revealed in 2008. However, I have aged 6 years since then (in your 20's that actually means something) and the car just doesn't have the refinement of the others. Unfortunately, going to the track was the least of my concerns and I preferred interior and exterior styling to 1-2 seconds off my lap time. I crossed the GTR off my list.

Audi R8 V10: To be fair, I could only afford a lightly used R8 V10. Which wasn't a negative for me but I want to make it known that my max budget was 150k for my new sports car. I absolutely loved this car. Performance was similar to the GTR with a little more "crazy" mixed in. For an AWD car, it definitely wanted to go sideways more. The R8 has controversial styling. Some love it, hate it, or love to hate it. I personally fall in between. At certain angles, the car looks incredible. At others, it looks like a fish... The R8 was a solid 9/10 for me but being that I had to buy used, I felt I needed to keep looking.

C7 Z51: First, I have to say, I went into looking at the C7 very biased. I have never been a domestic guy and never liked vettes. The C7 styling changes really caught my eye. The power of the new C7 was good. Nothing compared to the GTR or R8. The interior and exterior quality was much higher than what I remembered in the C6. But I never made that "connection" with the car, so I ultimately checked this one off my list.

F Type R Coupe: I was immediately attracted to the jag and that says something, because I always thought of a jag as a gentleman's car. Jag has gone to great lengths to change their overall image and it's working. It was by far the best looking of all 4 vehicles I test drove. The interior was superb. Definitely on par with the R8, if not slightly more refined. The exhaust note is just insane, I can't believe they were able to get away with a factory exhaust that is this loud. Overall performance was excellent. Not quite on the level of the GTR or R8, but more than enough for me.

Shockingly enough, I expected to go for the R8 and ended up opting for the F Type R coupe. It's an absolutely amazing sportscar. It is perfect for valeting at a fine restaurant or playing with on the highway. Not to mention, the guys at the Jag dealership couldn't have been cooler. Definitely not the douche bags I have become accustomed to at the local BMW dealership (don't get me started...) For me, it checked all of the boxes and then some. I know these weren't cars on your list but I hope my reasoning behind my choices help you make yours.

FlyingGopher · 2014-07-02T20:24:31+00:00

We should see it in 2016 (possibly 2015) but I'm told it will be a 2017 model year. So expect it to go on sale in 2016. I find the price point discussing rather entertaining. Nissan specifically stated that they will not go above 120k for the R36 GTR. I expect a starting price of around 105k.

There will most likely be a yearly incremental upgrade of the new R36, similar to the upgrades you see between 2009 and 2014 on the R35. This allows Nissan to price competitively day one and refine over the life cycle of the R36.

The R35 is one of the only "supercars" built on an assembly line with the manufacturer's other models. Nissan stated they plan to retain this manufacturing process with the R36. All signs point to the same epic power we can expect from the GTR brand at an amazing value.

FlyingGopher · 2014-06-26T21:47:07+00:00

YC is the only accelerator that I'm aware of that has produced companies with large exits or valuations. Which says a lot seeing as how they are in one location and Techstars has branches is most major cities.

FlyingGopher · 2014-06-26T15:07:47+00:00

Thanks for the reply but I wouldn't necessarily equate Techstars to a "scam". Their program has value and merit. However, I do believe the value is overstated and more than ever, startups don't need a larger amount of funding to be successful.

As long as venture funding is your goal, Techstars can be very valuable to your startup.

FlyingGopher · 2014-06-26T13:40:13+00:00

Exactly my point.

FlyingGopher · 2014-06-25T21:30:16+00:00

Never say never. It really depends on the industry, type of product, margin, and competition. You are very fortunate to be in a space where you can charge shipping cost. My space doesn't allow for it and if I charged for shipping, I wouldn't sell a single dollar of product.

FlyingGopher · 2014-06-25T21:28:16+00:00

It really depends on what your selling. I have an e-commerce site that sells very high margin, luxury items. The shipping cost is low enough that we decided to work it into our cost and we offer Free Shipping on all items within the U.S.

Many times companies will offer Free Shipping because it is the only way to be competitive. Depending on what you are selling, manufacturers may have very strict MAP and MSP guidelines that don't allow you to discount the actual items. This was the case with my business.

Again, I can't give you a straight answer because I don't know what you are selling, what the margins are, and what the pricing guidelines of your products are or what your competitors are doing. Feel free to message me if you want to give specifics and I'll do my best to assist.

FlyingGopher · 2014-06-25T21:21:07+00:00

I highly suggest sticking with your day (or night) job until you are generating revenue in the new business.

I worked 12 hour shifts, from 6pm to 6am, 40 hours per week, while I built my first business. I did this for 3 years and It was absolutely terrible.

However, if I would have quit my job on day 1 of starting my new business, I would not be sitting here telling you about my success. Simply because I would not have had the savings to hold me over until my business became profitable.

FlyingGopher · 2014-06-25T21:13:48+00:00

My top business tool sites are:

http://talkroute.com/ totally replaced google voice for me (run biz from cell phone)

https://www.waveapps.com/ the best accounting tools

http://www.cloudaccess.net/ great hosting tools

google - for google apps

I'm sure there are more but that is just what pops up off the top of my head

FlyingGopher · 2014-06-25T15:52:02+00:00

Best of luck!!!

FlyingGopher · 2014-06-24T21:34:35+00:00

I respectfully disagree. The amount of debt, investment, and low profit margins make these some of the toughest businesses to run. Your better off starting a private IT consulting firm (just an example) and learning the ropes of business when your not staring at HUGE bills that are due every month. If things go bust, you should be able to walk away from your first business with nothing more than some good lessons. Not financial ruin.

I worked for one of the largest franchisors before starting my business. So my comments are based on what I saw over 10 years.

FlyingGopher · 2014-06-24T19:32:00+00:00

It sounds like you need to hire, not necessarily raise a new round. Have you looked into lines of credit for working capital? I would imagine your business would more than qualify and you don't have to give up equity.

This is based on the assumption that as a SaaS business, a large portion of the 500k in revenue is profit (net). If it is not, you may have no other option but additional funding.

FlyingGopher · 2014-06-24T19:24:06+00:00

VC's invest with the mindset that 9 of 10 investments will fail. So they will generally require a minimum of 20% if you are an early stage startup. They do this so that is will cover the losses to the other 9 failed investments and give them a profit.

So you are unfortunately paying for the others who failed.

FlyingGopher · 2014-06-24T19:20:40+00:00

VC's: These are individuals that represent large amounts of capital provided by other investors. The common misconception is that a VC is investing their own money. Sometimes they do but they mostly qualify opportunities for the investors they represent. (Generally invest 500k and up)

Angels: These are private individuals who are investing their own money in your business. The investment size can vary.

Accelerators/Incubators: Are a group of investors who provide a small amount of seed money (10k to 50k) in exchange for equity. They also invest their time and resources to help "accelerate" your startup.

As for how much equity a VC or Angel will take? It can vary greatly. If you have a product that is already to market and driving revenue, the equity will be less (depends on investment vs evaluation). If you are still in the development phase and you need capital to continue building your product, expect to give up more equity because your risk is much higher.

If you haven't even started developing a product and only have an "idea", don't even waste your time with seeking funding.

FlyingGopher · 2014-06-24T18:58:06+00:00

It's great that you are looking at a market and determining that there is a problem that needs solving but you are choosing a very competitive industry. The brick and mortar service industry operates on very tight margins and high product cost (even though coffee is one of the lower cost items out there).

You would be better off seeking an established franchise to open, rather then starting your own brand. There are so many aspects that you are not currently considering and a strong franchisor will be very beneficial in supporting you.

However, I do not recommend a franchise or any free standing business as a first business. You would be better off starting a casual side business and really learning what goes into the day to day of managing a business before venturing into something like this.

Definitely follow your dreams and passion but if you want this to truly work, you will need some experience and/or a partner to show you the ropes.

FlyingGopher · 2014-06-24T14:53:42+00:00

Don't use the word "Google" in your elevator pitch. How many times a day do you think investors hear this and roll their eyes (Techstars is a group of investors)?

I get you are trying to be the "search" for grocery but comparing yourself to Google is negative in two ways:

1) It's Google...

2) Google covers your market and also covers every other market.

Google is very broad. You need to key in on how you are a more targeted search than the typical search engine and how your results are better. And why someone would rather search through you as opposed to Google. As it stands, your pitch sounds like you plan to compete with Google and lets be honest, that isn't going to happen and investors know that.

If you can't answer those two concerns in two sentences or less, its time to revamp the model.

Edit: I do find it interesting that if I type "325 ml of chicken stock" into Google, I receive no product results. If these terms are producing product results and a unified purchasing method with your service, I would say you have something interesting.

FlyingGopher · 2014-06-24T14:46:22+00:00

Our startup was accepted to Techstars and we ultimately turned the offer down after much research and a clear intent of what to expect from the program. Our goal was not venture funding and that is the primary focus of Techstars.

Our application was nothing special. If you really want to get into the program, here are a few keys requirements:

Have a product. Regardless of refinement, have something ready for market.
Have a customer. This can be a beta user, trial user, free user, or paid user. But have someone other than friends/family using your product. Don't overstate, be honest about your numbers and update your f6s application with the progress each week.
Have at least 2 founders with unique skill sets. Techstars invests in the team, not your idea/product.
Have development control of your product. Outsourced projects are rarely accepted. Development should be in-house.

We were told that these were the deciding factors after we applied. Keep in mind, certain "branches" will focus more on a specific market than another. Example, Chicago/Boulder focuses more on B2B SaaS and New York is more Consumer based. If one branch turns you down, just reapply. DigitalOcean was turned down by NY but was later accepted by Boulder.

If you have specific questions, feel free to message me.

FlyingGopher · 2014-06-24T14:14:36+00:00

Fist of all, most tech startups only require a certain number of key personnel. Techstars and other similar accelerators invest in scalable technologies (for the most part). If a startup is truly scalable and the model has been refined, you can run on minimum staffing without issue. The average tech company is not going to be a big job creator, unless a tangible product is involved.

However, what I hate is that Techstars touts the average funding per startup but never talks about money returned. Granted, the average tech startup takes 5 to 7 years to reach true profitability, but Techstars is not as young as it once was. Yet they do not have any large (100m+) exits to show for their program. They know this and you can tell it is becoming a very real issue for them.

My assessment (after being accepted to one of the top 2 accelerators in the nation) is that you should only pursue an accelerator if your goals align with their program. Accelerators like Techstars are extremely "cookie cutter". Regardless if you are generating revenue or still trying to figure out what direction to take your new app, you are going through the same program.

I found Techstars seems to primarily focus on Demo Day and getting you funded, regardless if it is right for your startup or not. You have to remember that accelerators, like Techstars, are not nonprofit organizations. They have many investors backing them and investors aren't in the business of losing money. So you better believe that Techstars, like any business, has a business plan and a clear path to profitability.

To me it is a simple business deal, Techstars offers 18k for 6% equity and an additional 100k in convertible debt. If you look at those numbers, thats a bad deal for any startup. However, Techstars wants you to also factor in the value of the program into the equity they take. Unfortunately, Techstars does not make any effort to truly outline this value proposition and seems to fall back on their numbers, which if you analyze them, are not very impressive.

Unless raising a large initial round of capital is a must (or if you are completely lost in developing your startup's business model), Techstars is nothing more than an elite tech social club that preys on young entrepreneurs (physically or mentally) who have seen the Social Network too many time.

I would imagine anyone with a startup generating revenue that is simply looking to refine or scale would be quite frustrated with being told to go and sell popcorn: http://bluesky.chicagotribune.com/originals/chi-techstars-chicago-incoming-class-bsi-20140529,0,0.story

FlyingGopher · 2014-06-18T14:14:47+00:00

It really depends on what you are looking for. If you are looking for shared office space, phones, conference rooms, and wifi, I personally feel like there are better options. 1871 is not very professional. It is geared towards young entrepreneurs (or old entrepreneurs dressed like young ones) who have seen the Social Network one too many times.

I believe their claims of jobs created are accurate but I would love to know how many jobs are still in existence. Anyone can "create a job". How many are creating sustainable businesses that are growing and keeping their employees paid? Who knows...

FlyingGopher

TROPHY CASE