Author Archives:
“It is simply what you would have if you were to dream up your best possible get together with your best friends.”
Interview by Mike Sullivan of Sully’s Blog
dk whose full name is Dr. David Klein, is one of the most well connected individuals in the Internet industry. In addition to being an Internet entrepreneur and founder of Purpose Inc. dk is also chiropractor in La Jolla, California. Purpose Inc. has always had as its motto, to help others achieve their purpose. dk’s bio includes having been a professional skim boarder, a lifeguard in Laguna Beach, as well as far as he can tell, the second chiropractor to ever be on staff at a medical school which was UCSD. He is responsible for some of the Internet industry’s most successful events including the annual poker tournament at Pubcon and the Purpose Inc. thinktank along with an impressive list of business contacts. He has done things as diverse as helping facebook with marketing their advertising product, helping Azoogle with public relations, set up national facebook campaigns, and monetize an e-mail list of close to a million people.
thinktank is an invite only event for the top people in the Internet industry. This includes domainers, entrepreneurs, site owners, SEO experts, marketers, programmers, and more. Many of the top players attend this event. This year’s Think Tank event sold out before it even officially was promoted for sale. The event kicks off on September 17, in Del Mar, California.
MO:
With your background as a chiropractor, successful practice and experience in treating patients, how did you get so heavily involved in the Internet?
dk:
It started with a simple message to help humanity. I had written what I consider to be the easiest to understand materials ever written about what chiropractic is and how it works. Chiropractic is one of the greatest secrets that only about 5% of the population have any idea about. If someone understands the simplicity of chiropractic, their life can be made immeasurably better, but most people did not, and many still do not understand it. This started a long journey about literally having to learn the Internet from html and css, right up to the most sophisticated SEO, and mass networking skills to create massive links to the site.
MO:
What are some of the things you and Purposeinc do to help businesses acquire new customers?
dk:
We are really, really good at reputation management. Very simply if someone googles your product, or name, and you don’t like the way the results look, contact us and we can help. Amazingly, we can do it without violating any of google’s T.O.S. with absolute confidentiality. We can also help with Facebook Advertising, and have done this for many companies. One of my favorite games that I have been playing lately, is helping companies with large lists of e-mails, figure out how to maximize the monetization of those lists.
MO:
thinktank appears to be a massively successful collection of the top names in the Internet industry. The “Who is coming to thinktank” list on Purposeinc.com touts some impressive names. When did Think Tank start, and how did the idea originate?
dk:
This is the third year. It started from the fact that me an the other hot shots would stand around networking in crappy places like halls of convention centers, and uncomfortable lobbies of mediocre hotels. Often I would be standing for hours with a bunch of millionaires with no food, and nowhere to sit. None of us ever go to the sessions unless we are speaking. I basically got rid of all the parts of conferences that the experts don’t like, which is the conference! What was left was what they enjoy most, beautiful setting, other experts, lots of seating, sports, open bar, great food, and fun with no one around who would judge them. It is simply what you would have if you were to dream up your best possible get together with your best friends.
Is it Time to Sell Your Business?
Selling a business is oftentimes a prime goal of a business owner. The “big cash out” can bring wealth, freedom, prestige and closure. It also can be one of the worst decisions you’ll ever make.
How do you know when to pull the trigger?
To begin, let’s look at the reasons why selling your site or business might come about.
You’ve worked hard, and you’re tired.
The wear and tear of launching any venture is taxing. With the Internet, “business” was redefined. I know starting a website to generate phone calls or leads has a lower barrier of entry than starting a local store. But a business is a business, and you get everything that comes with it.
After a certain amount of time, you may get tired and lose focus. 20 employees, insurance, taxes, payroll and fighting with your competitors tooth and nail – tough stuff. Even if you have a business that’s killing it, the ‘sameness’ of your day-to-day or simply a desire for a new challenge can make you weary of the current venture.
You want change.
You just got a killer offer.
Of course there’s more to it than deciding you’ll put a “For Sale” sign up and the buyers will come a chomping. Maybe things are going well, and you just got a call from an interested buyer. An offer was made. It’s for 7x your yearly profits. Killer!
Time to sell? Well, that’s when the gut-check questions start to settle in.
Do you love this business? Where’s it going, up or down? Sideways?
When there’s an offer on the table, or even not, it’s key to project out where your business is heading and the direction of your competitive market. When we sold Show-Me Tickets, an overriding reason was Brant and Brock’s negative outlook for the ticket broker industry beyond 2005. There was consolidation, VC money, competition was fierce, margins were so-so, and legal changes might disrupt the business.
The people who sell out at the top always look smart. But it can be hard to call. Bottom line is you know your business, and should always be considering where it’s going. Cashing out and moving on to something new isn’t bad thing.
Where should you spend your resources – Time, Money.
Looking at moving out of one business, and into another, involves careful consideration of your most valuable assets. Those are time, money, and talent.
Could your team do better in another industry? Do you want to cut the staff from 20 to 5, and run lean at something new? Are you happy with your day-to-day?
That last one is a big one. Many business owners will find that they have lost the love for their business. It’s partly what I mentioned above, about wanting a challenge and avoiding sameness.
You can see and hear the down-to-the-core entrepreneurs never settling for one success or dwelling on one failure, or truly ever putting their head down and ignoring the world of opportunity out there.
You want to drive a Maserati to the bar in Sao Paulo, and sip caipirinhas.
This one creeps in if you’re making big money, and don’t want the responsibility or liability of the business anymore. That, or you just got that killer offer and all you can think about is Tupac saying “I’m seeing money but baby I gotsta get mo’!”
Most business owners have a little slice of wanting to pimp it out and flash their success. Phat money can be fun. And you know, screw everybody who says that it’ll get boring after awhile. So? Then you can start another business, with all that money you just got paid. (Beware: cocaine, yachts, Las Vegas, buying domains while drinking, and bad real estate investments. Set up a separate account for that stuff.)
You have no idea how this happened, and if you can keep up the charade.
Not really joking here. A successful business or site usually takes a combo of a good idea, hard work, and timing. Sometimes timing, or luck, helps out in a big way. How did this happen? If you aren’t sure, signing those sell papers quickly and with a smile might sound like the best idea on the planet. Do it.
There’s all kinds of reasons, and thoughts that stew together into the psychology of selling a business or website. It can be irrational – just look at how scattered the list above is. But it’s your business. That’s why you started it, to be in charge and make decisions like this.
So, is it time to sell? If you’re considering it, make sure it’s for the right reasons, and remember what I said about that separate “fun” account. Keep enough for your next venture. You’ll be back and to the races again some day.
(Next time, we’ll look more into smart ways to make sure you get the most out of a sale. Two words – investment banker.)
Image: Refracted Moments™
Internet Entrepreneur Elliot Silver of ElliotsBlog.com and Silver Internet Ventures
Interview by Mike Sullivan of Sully’s Blog
Elliot Silver is very well known and highly respected in the domain industry. Involved in domaining since 2003, Elliot stepped out of a successful corporate career at AIG in 2007 to focus on his own business of domain investment and development.
Elliot is the founder of Top Notch Domains, LLC, which he started as a grad student at NYU. Later, in 2008, he founded Silver Internet Ventures, LLC, an Internet media company that currently has several developed web properties. Elliot also leads the award winning ElliotsBlog.com, one of the most popular blogs in the domain name industry.
MO:
Stepping away from a successful corporate career is a bold move and one that every entrepreneurial mind dreams of. What was it like to do that and what steps did you take to make it happen? Did you have a backup plan? Any regrets?
Elliot:
I had been with AIG for 2.5 years, and it was just my second job after graduate school. Although I felt that I was doing well at the company, I wasn’t loving what I was doing (direct marketing management of insurance products). This was probably one of the key reasons I continued to pursue my domain business on the side. Just before I resigned in October, I had a couple of large deals lined up for the following January, and I knew just those deals could carry me for a year even if business fell off of a cliff for some reason.
I had been making significantly more money with my business than I was earning at AIG, although the domain business (as with any new venture) has much greater risk. I figured if things didn’t work out with my company for whatever reason, I could find another marketing position elsewhere after a year. I was ready to move on from AIG, and I knew the domain business would either be a stepping-stone to something else or it would be a new career for me. Luckily, things have been working out well, and I have never regretted my decision.
I come from an entrepreneurial family, and I’ve always imagined that I would work for myself. I was really lucky to have discovered this business when I did, and I am very appreciative of all the advice that has been given to me over the years.
MO:
You have quite a number of moving parts in your business such as domain buying, domain sales, domain investing, developing, blogging, and more. When you’re out at a party with the wife and someone asks “What do you do?”, how do you answer that question? What type of reaction do you receive?
Elliot:
Your question is very funny because Karen and I were just discussing this the other day.
It really depends on the crowd and the knowledge of Internet business. If I am with a tech/Internet savvy group or person, I will generally say
“… transforming the building industry by reinventing the supply chain”
Quality Building Materials for Less
Jeff is the founder and CEO of BuildDirect. Jeff’s previous experience was in the real estate and construction business, and has been President and CEO of BuildDirect since 1999. Jeff is a frequent speaker in North America to industry groups as well as a lecturer at The University of British Columbia and Simon Fraser University in Vancouver.
BuildDirect is transforming the building industry by reinventing the supply chain. The company accomplishes this by partnering with manufacturers who benefit from outsourcing their sales infrastructure. BuildDirect has been able to reduce prices to buyers by up to 50% when compared to big box stores. BuildDirect has cut out all of the middle-men in the building materials business and passes the savings on to customers of all sizes.
MO:
First off, I want to say that I admire what you have done with BuildDirect. In a sense, you’ve built what embodies the first generation of internet business – transforming the way industries do business and leveling the playing field for customers of all sizes. You started in 1999 and have been working on this for over a decade now. In internet terms, you’re ancient (I mean that in the nicest sense!). Where did you find the inspiration, come up with the business model and how do you continue to stay relevant?
Jeff Booth:
Well first off, thanks for your admiration.
The inspiration came when I began to look at the complexity of the building materials supply chain, and began to call into question what I eventually came to see as unnecessary mark-ups within it. When I say unnecessary, I mean unnecessary to our customer at the end of the phone, or a visitor to our site.
The motivation to innovate is about seeing a better way. It’s been a long journey because any time an industry changes, there will be winners and losers. Fortunately, our customers and growth keep telling us that we’re on the right track. Re-fashioning our approach to the supply chain, simplifying it, and turning it on its head by using Internet technology to make it more cost efficient is really just a means to that end. We’ll stay relevant as long as we keep adding value like that, in whatever form that may take in the future.
MO:
I read an interesting post on your blog about using Twitter. You argue that using it symbolizes openness and trust (I am assuming trusting your employees). You don’t however mention the financial benefits. Do you think the value of such systems can/should be measured directly? What other benefits do you see in social media?
Top 5 Gadgets for the International Entrepreneur
For the last couple months, I’ve been traveling internationally extensively so I wanted to share my top 5 gadgets / technologies that enhance my productivity while traveling abroad.
By far, the most important gadget for the traveling entrepreneur. Allows you to share pricey hotel Internet connections without being billed for every MAC address you connect. I’ve used this same router for 2 years now, and never had any problems. Connections are always rock solid.
Unfortunately, my ultra-portable laptop has poor quality speakers. Watching videos and listening to music is important to me, so I always bring along my X-Mini. This speaker packs a punch and its tiny! I especially like it because It recharges using a mini-USB (just like my BlackBerry).
3) VPN / Proxy Software
An annoying thing when going abroad is that I can’t see USA targeted Google Adwords ads and SERPs are distorted. That’s why I pay for VPN / proxy services that let me tunnel back to America and surf the web as if I were still in the USA. VPN software is also helpful for watching Hulu and Netflix while abroad.
4) Android Phone or iPhone w/ Fring or Skype App
The Skype app for iPhone is extremely valuable when traveling abroad. In my experience, it works flawlessly and gives you the ability to make cheap international calls over WiFi. The last time I checked, the only way to get Skype working on Android was using the Fring app. Nevertheless, my primary phone is still a BlackBerry with international roaming / data plan because I hate touchscreen phones.
5) Belkin Mini Surge Protector + Dual USB Charger
This gadget is especially helpful in airports / lounges where power outlets are scarce. The convenience of being able to charge my BlackBerry + laptop is awesome. Plus, since there are multiple outlets, you can score easy karma points by sharing your powerstrip with other travelers.
Bored? Maybe this will help… our interview with the man that sold his website, Bored.com, for more than $4 million, Eric Borgos
Interview by Mike Sullivan of Sully’s Blog
Eric Borgos is well known for the sale of Bored.com for over $4 million. Born an entrepreneur, he spent his childhood days turning hobbies into profits by collecting and selling coins and baseball cards. As a teenager, he had an interest in trading stocks and it was not unusual to find him reading the Wall Street Journal. In college, Eric ran a “976″ phone line teaching people how to make money. After college, Eric stared a computer consulting business and soon moved into designing websites for others and then for himself.
Impulse Communications, Inc. was founded in 1990 by Eric Borgos and was incorporated in 2000. The company runs over 300 developed websites and owns over 9,000 domains. The company’s revenue comes from ecommerce sales, domain sales, advertising, and parking undeveloped names. Impulse Communication has been featured in several blogs and in the traditional news media as well.
MO:
Eric, the evolution of Impulse Communications, Inc. is impressive, growing from your post college computer consulting operation to the domain and website force we see now. Tell me about Impulse Communications today. Is it a one man operation, or do you have a staff? How are you able to manage 300 active sites and a portfolio of over 9,000 domain names?
Eric:
My company is somewhat unique, in that I plan never to work from an office no matter how big my business gets. I have everything setup to be as virtual as possible so I can work from home. At one point I had 15 people working for me from their homes in many different countries, yet I had never met any of them or spoken to them by phone, we just communicated by email.
My mailing address is a virtual PO Box where a service scans all my mail online so I can read it, and I have a phone number where all my voicemails are translated to mp3 files (and also translated to text) and emailed to me. All of my company’s bills are setup to be autopayed from my checking account/credit card and all my income is deposited automatically into my bank account. For the few companies that still pay me by check, my mail box service scans the checks and deposits them into my bank account for me. I even signed up for a new e-signature service today that allows me to sign documents (like domain name sales contracts) online so I don’t need to manually fax or mail them back to people.
All that being said, my business still requires a lot of work. Although I use several programmers, I handle everything else myself. I spend my first few hours each day just dealing with emails. There is always something that needs my attention, like a server that is down, domain name offers that need a response, paying money to workers, questions from programmers, changes that need to be made to a site, billing issues, etc. I also need to deal with all the general hassles of running a business, such as accounting, taxes, computer software and upgrades, calls from sales people, contracts and paperwork, legal issues, and more.
Aside from when problems arise, most of my sites/domains run themselves. Much of my time is spent on new projects, like creating new websites or adding to my existing ones. In the past few years I have done a lot of work adding content to my sites Dumb.com and Adoptme.com, since I think those have a lot of potential.
MO:
You have had success with developing sites as well as selling domains. Which criteria do you use when deciding which domains to develop and which to sell?
Researching the Business Plan
So you’ve decided to investigate writing a business plan…where do you start.
CHEAT! See what has already been done. Find business plan samples in the same industry you are interested in. While I don’t want to endorse any particular source available realize that they are everywhere. For example, Bplans.com provides a small database of business plans that you can edit (for a price) using their Business Plan Pro software. However, there are various free resources that are available. Two notable freebies are at CarnegieLibrary.org and ReferenceForBusiness.com. Be careful in reading the examples from any one site however. They are not your business. They do not serve your clients or customers. They do not operate in your marketplace. They don’t have your financial assumptions, income statements, or balance sheets. You cannot just put your name on one of these and open for business.
So you’ve decided to do some homework. GREAT! First, homework requires some effort. With the internet, the effort is usually just a few keystrokes. The internet and your local library offer a ton of useful information that allows you adapt any business planning template to your specific market.
The United States Department of Commerce’s Bureau of the Census conducts a lot of research on U.S. commercial and consumer markets. The information they collect is free! Use it! Their online source is [census.gov]. One of the most useful tools they provide is the American Community Survey. It provides fairly detailed data about a specific geographic market you might be considering targeting with your business. It provides data concerning income levels, home values, age, race, etc. This information can be extremely useful depending on the type of business you are thinking about. For example, if one was interested in a home repair business a simple entry of a zip code can reveal the physical characteristics of the housing units in that zip code such as age of homeowner, year built, vacancy rates, etc. This information allows the user to better focus marketing efforts on neighborhoods that might need more maintenance attention than others. A quick search of my zip code on this site reveals all kinds of information. For example, the median age is 33, younger than the national average. 13.5% have some type of disability status, much lower than the national average of 19%. 56% of the folks in my zip have some type of bachelor’s degree, over twice the national average (it’s a college town…GO TIGERS). Our median family income is about $61,000, about 20% above the national average. Again, some of this is useless trivia…but it can be a goldmine depending on what data you need to determine if your business is viable. Additionally, for an established business the census data can be drilled into down to the street level so you can truly target your marketing efforts on the demographic you want to reach.
If you are trying to logically determine a good location for a retail business the decision should focus on revenue generation. In the past I have used vehicle traffic counts as one factor to consider. Traffic counts means exposure to your customers. Your state department of transportation’s website probably provides this data free too. All kinds of information is available. If you can’t find it on the internet it might be time to put the bagel and grande’ café latté away and head out to the library. You’d be surprised how great a good research librarian can be. We’ve got one in town that knows where to find any nugget of knowledge that has ever been collected for business research. If your local library has limited resources and subscriptions try a local college or university and ask specifically for the research librarian.
Again, depending on what you are looking for you may want to try some good ole’ hardcopy library references such as:
- Susan Mitchell’s American Generations: Who They Are. How They Live. What They Think.
- American Incomes: The Demographics of Who Has Money.
- Cheryl Russell’s Best Customers: Demographics of Consumer Demand.
- Hoai Huong Tran’s Household Spending: Who Spends How Much on What.
- Lifestyle Market Analyst is a good data source of what people do in their spare time. It breaks down different metropolitan areas in terms of hobbies such as reading, fishing, hunting, gardening, etc.
- Encyclopedia of Associations is a listing of industry associations…and their websites. This is an invaluable tool to find detailed information about a specific industry.
The real work. While the templates for business planning are widely available you will still have to fill them in with your unique business pitch, strengths, opportunities, etc. This requires some effort. But once you’ve done your homework you will have a better understanding of your business niche, your competition, your customer, and, how to reach your customer. While the real work may take some effort it can save thousands of dollars in business mistakes and wasted marketing.
“People started asking how we got the site so fast, and soon we realized we’d have more success with our speed-up-website software than our original website. That’s how we started.”
Interview by Mike Sullivan of Sully’s Blog
Ed Robinson specializes in designing and bringing to market software that builds business value for developers and IT professionals. He has developed specific expertise in making big sales to Fortune 500 companies. He has worked for major technology companies including Microsoft where he designed and helped market Microsoft Visual Studio, Microsoft Content Management Server and Microsoft SharePoint; and also for smaller companies through the start up phase.
Ed is the CEO of Aptimize, a New Zealand-based company that develops and sells the Aptimize Website Accelerator (WAX). WAX is a software product that helps companies dramatically increase the performance of their websites and intranets.
MO.com:
Aptimize is a young company. Out of the box, you have a laundry list of huge and well-respected clients such as Google, Microsoft, Northrop Grumman, Fidelity, and on and on. How did you manage to land these giants? What is the secret of your sales technique?
Ed Robinson:
From the beginning we didn’t worry too much about building up automatic systems and things like that. We just connected with people. We e-mailed everyone we knew utilizing our networks. Anyone approaching our website, we offered to just talk to them to help them with any web performance questions that they had. People buy from people and from the beginning we’ve tried to build relationships rather than just sell and I think people sensed that we genuinely wanted to help them do better business online.
Also, we developed a product that people needed, one that quickly developed a reputation for being the best at what it does – speeding up websites. The internet giants and Fortune 500’s tend to be well informed about the benefits of fast page load, for example when Shopzilla increased the speed of their website by 5 seconds it resulted in a 25% increase in page views, a 10% increase in revenue, a 50% reduction in hardware, and a 120% increase traffic from Google. The ‘big’ companies are constantly looking for ways to improve visitor experience, be more competitive, and increase their bottom-line – as we can see with the Shopzilla example, increasing the page load speed of a website is an effective way to do this
So here’s how I pitch our product: We’re a software product. You download it, put it on your web server. It will immediately double the speed of your website with no code changes and no extra hardware, and that’s all it does. And so that’s very simple for people to understand, and some people will say, “I’m in the Marketing department for a company,” or the IT Engineer, and can instantly see how this can help their business – so you can see how simple it is.
Here are three important rules – especially for a start-up company:
1. Have a very focused value proposition: Aptimize’s products instantly accelerate websites and intranets.
2. Be good at it: Our software works really well – a lot of our customers instantly see a reduction in load times of 50%. This is powerful
3. Love your customers. We work across the internet, but pride ourselves on providing better support than most companies you’d deal with locally.
With these three rules you’re equipped to sell to small and big companies.
MO.com:
You were a program manager at Microsoft and then Intergen before being involved in Action This, a catalyst to Aptimize. How would you describe the difference in working for a large corporation to leading your own company?
Get In Business!
Interview by Kevin Ohashi of Ohashi Media
Dana Robinson is an entrepreneur, investor and a lawyer. He received his JD from The University of San Diego School of Law School where he graduated cum laude. Before starting his own businesses, he worked in Nevada focusing on intellectual property and managed some of the most well-known trademarks around such as Mirage and Bellagio.
Today, Dana is a founding partner at Tech Law LLP, an IP law boutique in California. He also runs FreeLegalAid.com, a service and directory to help people assist themselves in legal matters. His latest venture is Get In Business! which is a resource center for budding entrepreneurs.
Kevin Ohashi:
You have worked as a lawyer involved with startups for quite some time. What sort of unique insights do you gain with your background that someone from say a technical or business background misses?
Dana Robinson:
I tend to bring that experience to the table, in a way that doesn’t just help a new business owner accomplish some task, like forming a corporation or drafting a stock offering or filing a trademark. What my background gives me is the ability to empathize with the people I work with. I’ve been in their seat. I try to think of what I didn’t know when I was in that position and to bring some cost/benefit thinking. A typical IP lawyer will get a client who wants a patent and they will do a very good job filing for a patent. I’m going to ask if you need a patent. Don’t spend the money if you don’t need it or if in the end it won’t do you any good. That’s a fundamentally businessy approach. Businesspeople tend to think that their lawyers and accountants and consultants think this way, but in reality they don’t. Service providers tend to think of their tasks individually, not as part of the whole. As a result, novice business owners overspend on services and don’t end up with what’s the best for their business.
Kevin Ohashi:
Your own startups seem to mirror your personal expertise in the legal field. Has the internet changed the way legal services are provided in a major way?
Dana Robinson:
Absolutely. The Internet has meant two things for me:
Partnership and Development Structures for Online Businesses
A Look at Partnership and Development Structures for Online Businesses
I’m often asked how I prefer to structure a partnership with another business owner. After all, part of my ‘MO’ is to invest in existing online companies and/or domains and ramp up their marketing.
When you’ve got the chops to make a website purr, the challenge becomes finding the places to put your time and energy. Not just the right niches and timing, but the right partnership setups and well . . . partners.
Is it money up front? For equity? Buy the domain straight out or lease it with an option? Revenue share only?
With traditional angel investing VC, most of us know the common deal structures and ownership splits. People tend to ‘get’ the concept of putting money into a business for a defined stake over time.
But the internet world acts just as you’d expect when it comes to partnerships and the like – it’s more wide open.
Here’s a look at how you can approach a deal, and some pros and cons of each. Hopefully by the time I’m done writing it, I’ve figured out which option I like best.
Cash Up Front for Equity.
You invest cash in an existing web business in return for a % of equity.
This is as traditional as it gets, like the angel deals of the world of yesteryear.
Simple example. A site is making $20k per month. You agree on a value of 4x yearly revenue (~$1 million), cause it’s an up and comer. But it needs marketing help. So you drop in $50k for a 5% stake.
I like this setup cause it’s easy. I’d do it if the company already had a good base, like a kick ass software product that I was not going to do much to improve. It’d be a straight marketing push, apples for apples, that’s all I bring to the table and all i expect to earn on.
Of course, I’d like this deal a lot more if we add in a bit of . . .
Additional Equity Earned for Increase in Revenue.
Instead of just a straight cash for equity trade, how about getting some
