A friend of mine told me about a presentation he was preparing for a company event a few weeks ago. It was very important and all the other groups in this company had months to prepare for it. But he and his team were only notified the week before the event.
At first they felt unprepared and unable to get anything ready in time and on par with the other presentations. But they didn't have a choice so they worked hard for a week and just gave it their best shot.
The result: their presentation was by far the most original, clear and professional one of all. This is an endorsement for my Deserted Island Strategy ideas but it also reminded me of another lesson from art school: If you add too many colors to a painting and mix them all up the result is a painting that isn't bright and multi colored but muddy brown and without depth.
And muddy brown and without depth is a pretty accurate description of most company presentations, isn't it? We all know how these things work when too much time is spend and too many people have to look at things and offer their opinion. You start out with a fresh and genuine idea but then everybody has to throw in their own original ideas too just to show that they are quite inventive too. The end result after all this friendly advice and modifications is a weak product with no identity and no sharp edges.
Sometimes is pays off to take a more intuitive approach to making a presentation, writing a document or doing anything in general. Try this on Monday:
If you have to make a decision, follow your first instinct
How do you do that? Simply by doing the first thing that comes up and sticking with it. Your second thought might be 'That doesn't seem logical' or 'that would be too funny' but ignore those thoughts and just do what you intuitively thought was right. Post the result in the comments here.
Word of advice: when you operate a nuclear sub or work with dangerous substances or doing any other work which might kill you if done wrong please ignore this post.|W|P|114633806205601255|W|P|Intuitive Decision Making|W|P|bomega@gmail.com
|W|P|Actually, research has shown that the first thing that pops into your head is usually not the best/right thing to do. Statistically speaking :)
Boris Veldhuijzen van Zanten|W|P|Malcolm Gladwell disagrees with you! Blink : The Power of Thinking Without Thinking by Malcolm Gladwell
http://www.amazon.com/gp/product/0316172324/
It's a great book with many examples of how we can use our intuition and first impression for the better. But he also gives us some examples of how sometimes ourt intuition betrayes us so you might find a few arguments to help your point fo view too...
|W|P|Dosen't it contrasts with your idea of "Hidden Economies"? Boris Veldhuijzen van Zanten|W|P|Hi Anonymous: you just wrote 'Dosen't it contrasts with your idea of "Hidden Economies"?' and I hope you can give me a few more details about what you were thinking about before I answer. How do YOU feel it contrasts with my earlier posts?investor: "So how much money do you need" entrepreneur: "About a million" investor: "Sounds reasonable, and much do I get for that?" entrepreneur: "10%" investor: "10%??? So you value your company at 10 million right now? I don't think so. I was more thinking along the lines of a 2.5 million valuation."I have had to defend myself a few times in this situation but also used the same argument when talking with other entrepreneurs. But I don't like it one bit. I think we need another way to look at this and I have come up with a simple formula which I would like to call the Sliding Scale Valuation Formula.
The basic thinking goes like this: If I pay 1 euro for 10% then 100% must be worth 10 euros. Simple and clean and shown in the illustration. But what entrepreneurs and investors often overlook is that in reality each share has a different value.
One simple way to prove this is if you would own 10% and would be able to buy 1% more. If the company would be worth 1 million that one percent would cost you 10.000. Right?
Now let's assume you have 50%. Would that extra 1% still cost just 10.000, or would you be willing to pay more for it? Having 50% or 51% in a company makes all the difference so my guess is that you would easily pay more than 10 times the amount.
So all percentages are not created and valued equal.
Another example, in the form of a very old joke: a man pulls into a gas station and asks the owner: 'How much for one drop of gasoline? The owner replies 'don't worry, that's free' to which the man replies 'Ok, give me a full tank of gasoline drops then'.
We all understand that there is a huge difference between one drop of a full tanks of gas. So why does this not apply to a start-up? Why does the selling of 10% for 10 imply that the other 90% must be worth 90? It doesn't. In fact, the other 90% is completely worthless to anyone but the owners. If they would sell the full 90% there wouldn't be a company left.
So in fact there is a sliding scale in the valuation of a start-up which I illustrated here too. Each company is different and the numbers are influenced by the percentage you sell, the number of shareholders and the age and status of your company and so each sliding scale will be different. In some cases the scale might even tip the other way which would mean that the percentage you are selling is worth less then the percentage you keep. And the more value is inserted into the company and the more shareholders you have the more likely it will be that the scale evens out and a percentage actually equals a percentage.
But for start-ups I think we need a Sliding Scale Valuation Formula.
So what formula do we use? If you find a good investor, with a great network and fantastic ideas his investment easily doubles the chance that your start-up turns into a successful company. So it doesn't really matter if he has 5%, 10% or 35%, his investment is responsible for 50% of your success. So let's use that as a starting point and construct the following formula:
What the investor invests is doubled to calculate the value of the start-up
Simple, elegant and effective. It helps you defend the percentage you are offering and puts a bunch of feathers up the butt of the investor because you get to explain that he is responsible for 50% of your success.
So the next time a VC or investor asks you about your valuation I suggest you tell them an old joke, about a drop of gasoline...
|W|P|114631518117459117|W|P|Sliding Scale Valuation Formula|W|P|bomega@gmail.com |W|P|Boris - Interesting post. The valuation question is challenging and is less concrete the earlier in an endeavor. Implied valuation based on share price clearly is imperfect in early stages. Although it is very useful further along. I tend to liken the valuation question to the scenario of a bunch of people getting into a boat to take a journey. The destination isn't set nor is the size of the pot of gold in the promised land. But if you don't pay to get on, you'll never have a shot at getting there. Similarly, if you don't pay the driver a good amount, he will surely steer you the wrong way...
Boris Veldhuijzen van Zanten|W|P|Hi James, thanks for offering this comparison!
Erik at publicworks.nl just mailed me a link to a page for the Computing and Communications Infrastructure Futures Laboratory. They have a logo that is strikingly similar to our logo. The good news: my design looks better!|W|P|114629802188747860|W|P|No original thought?|W|P|bomega@gmail.com |W|P|Haha is that even legal? It's such a blatant copy. Boris Veldhuijzen van Zanten|W|P|well, the question is if I blatantly copied them or that they blatantly copied me. Judging by the retro lkook of that logo I assume they were here first... |W|P|Well I'd say they copied you because as you said, your logo is much nicer. They don't know what "smooth" is seemingly.
As we are finishing the alpha version of the software we grow more and more anxious and insecure about, well, everything. It's a natural phenomenon to get nervous just before the finish but knowing that is only slightly comforting.
As I was walking home from the office today I noticed a Keyfinder in a shop. It reminded me of all the great inventions that seemed great at first, but weren't after all. When my father first told me about this particular invention (I must have been 8) I was thrilled with excitement over this beautiful and extremely useful gadget. I imagined never losing anything again and saved money until I could finally buy one.
But theory was better than reality as it often is. The keyfinder I got only worked if you were within 10 feet of it, it was clearly in sight and I whistled straight at it in just the right tone. In other words: it didn't work at all.
Stuff like that scares me to death am I'm sure it has this effect on every serious entrepreneur. After all; it is our job (as entrepreneurs) to convince other people of something 'new and improved' and make some money in the process. But sometimes your 'new' isn't much of an improvement and there is no other way to find out than to try and risk everything. And some people get so scared that they might say 'Maybe the timing isn't right' or 'It's not perfect yet, maybe I should wait' which is all nonsense of course. It's just another way of saying 'I am scared shitless'.
And still, every time when I'm nearly finished with a project I feel the same anxiety, which I will now call 'Completion Anxiety Syndrome'. It is that feeling that slowly creeps in and starts messing with your 'Completion Euphoria Status'...|W|P|114599370033778508|W|P|Completion Anxiety Syndrome|W|P|bomega@gmail.com |W|P|Well hopefully your alpha release doesn't disappoint :) Any idea of a date when you'll let people join the alpha/beta program? (Well, those not living near you.)
Boris Veldhuijzen van Zanten|W|P|Edd: Somewhere next week. Don't know when exactely... |W|P|Cool! Cant wait for it. |W|P|u$s 250 for a job post?boris, dont say again you have money problems!
lol
Boris Veldhuijzen van Zanten|W|P|I don't have a problem with money but money seems to have problems with me. It keeps runnign away from me. I don't know what it is. Maybe I don't respect it enough? |W|P|hahahahadid the job post worth it?
Boris Veldhuijzen van Zanten|W|P|Fefe: yes it was worth it. More than 10 applications and several hundred visitors in one day. Not bad... |W|P|when i read the fleck post i said, look boris looking for some traffic!hahha, it is all about marketing isn't?
SvN say that they will put a sidebar on the blog whith the lastest posts, i dont know how many visitors they really have, but if you got several hundred of visitors for that post, i'd like to know what happen when they make the sidebar on the frontpage. and i know you boris will be there to test it! do i am wrong?
hahhaha
greetings from a argentinian reader living in italy.
|W|P|I know the feeling... but as long sa you Believe in what you have constructed... (at least in the principle of what you have constructed ;-)
We are looking for people in Amsterdam who are willing to test the Alpha version of Fleck somewhere in the following week. Testing will take place at the Fleck office and we will shower you with beer and pizza.
You will have to bring your own laptop (Mac, PC, Linux or any other OS as long as it has LRF support) with Firefox installed (and Wi-Fi or Ethernet) as you will be needing that to install the Fleck Extension...
Aha, so it's an extension??? No, Fleck is more than JUST an Extension. But the Extension is an important part of Fleck and we need to test it.
Please contact us if you are willing to participate.|W|P|114595578476477076|W|P|Fleck Alpha Version Testers?|W|P|bomega@gmail.com |W|P|in amsterdam? aww. Boris Veldhuijzen van Zanten|W|P|The ctual testing wont be on Queensday but I don't know what day it will be. And it will take about an hour, beer and pizza might take longer... |W|P|Please make sure you have a version that works with Flock too! That or make sure Flock'd can conver it or something! Boris Veldhuijzen van Zanten|W|P|Hello Edd, don't worry. Flock will be supported... |W|P|Good good, glad to hear it :) Chris|W|P|Hit up andy -at- flock.com. He's in Amsterdam now -- and planning Barcamp Amsterdam II -- another great place for you guys to test your mettle. Boris Veldhuijzen van Zanten|W|P|As mentioned in the post: it ALSO an extension. There will be other ways of using it... |W|P|Count me in - I ma just getting curious.Please contact me for planning.
jerome@mediality3D.com
http://visualcuriosity.blogs.com/geodesign
|W|P|Anything for those who dont live in Amsterdam? Boris Veldhuijzen van Zanten|W|P|Abdul: patience...:-)
|W|P|Hey Boris, I would love to help out. Can I do it whilst ironing?
Boris Veldhuijzen van Zanten|W|P|Hi Katie: ironing shouldn't be a problem. Will you bring your own ironing gear or should I bring mine? |W|P|It is almost here!!!! I can't hold my excitment.About time betas get released outside of the US...wait I live in the US!
I guess I will just have to be patient.
Today I received an email from Joseph, one of our regular Fleck Blog readers, with an interesting question. Here it is:
How do you keep a team motivated when there is no revenue. We are about to establish our Corporate Guidelines and the subject of equity came up. How do you establish who gets what piece of the company at start-up, while the site is being rolled out?I was just having a discussion today about the same subject and spend some time thinking about it. There is no easy answer and I'm sure different people have different strategies. My strategy is simple: give away a lot, make big steps soon, try to make the circumstances as ideal as possible to grow big fast. Now before you give away your whole company and then complain to me when this doesn't turn out well, a few words of caution. I have no problem with making other people rich if they help me get rich faster and easier. I have always felt that way and have never regretted it. But this strategy can fail miserably too. You need to be very sure that the partners you have are the right people for the job and that they will indeed make your company or product grow faster and better. So if you are sure that your partners are good and are going to make your company a success I would reward them well. Remember that people get motivated most by being appreciated. Respect is a much better motivator than money. So don't try to negotiate their shares down to the last penny. Show them you respect them, care for their opinion and want to give them a fair share. Explain why the percentage you chose is reasonable and that they are valuable to the company. I call my model the distributed wealth model: make sure your employees are happy and make a lot of money, your customers are satisfied and your investors get rich and you will do fine yourself too.|W|P|114590879500338998|W|P|Distributed Wealth Model|W|P|bomega@gmail.com
|W|P|Hi Boris,You've already got my email address, so you know where to distrbute the wealth to ;).
Seriously thought I'd be interested in learning more about your approach to the equity sharing amoungst your developer(s).
Adam|W|P|Hi Boris. Excited to hear of the progress! In the spirit of continuing the equity discourse, what % have you set aside for an option pool and what equation do you use for your founders distribution model? Thank you for your help and I am happy to keep any and all information you may share with me in strictest confidence. Boris Veldhuijzen van Zanten|W|P|I think the industry average is 10% for employees. The founders want to keep as much as possible! ;-) |W|P|I've been thinking exactly these kinds of thoughts lately about my own projects. But how do you balance the creativity and productivity of a resource-less project with the need to have income to sustain life? In my specific situation, I am certainly more creative and productive when I'm on a shoestring, but I still need to provide for my family. Boris Veldhuijzen van Zanten|W|P|Hello 'Anonymous'. I paid for college cleaning toilets and doing other simple jobs. As I was doing this work at first I felt terrible for wasting my time. Then I found out that the work on the side actually gave me time to think about what I was learning. I used the mindless work of sweeping and vacuming floors to contemplate everything the teachers told me. I had a great time and learned more in less time than other students who studied full time.In other words: it might not be such a bad thing to make some money on the side and do two things at a time. I always say that I would take a job cleaning out carbage if I would have to to be able to keep doing the work I do now. And I'm serious about that...
BillyWarhol|W|P|timely story & as always yer words are bang on*i've been taking baby steps with my blog & i have a lot to learn but the overiding theme is going to be "How to allow anybody in the World to earn a decent living doing what they love to do"
a little "pie in the sky" perhaps but we'll see how it shakes out*
;))
|W|P|Thanks for the response. Allow me to clarify with a more direct question: When the money is there, how to do you emulate not having it? Boris Veldhuijzen van Zanten|W|P|Hi 'Anonymous', that is hard indeed. What we do is try to forget we have money and make a game of not spending ANY money. Trying to get a good deal on anything and congratulate each other for saving pennies. We rent office space €600 per month. That isn't much and even double that would be ok. But we are now renting an extra office, rent it out to someone else and now we have our own office for free. All for just €600 a month! But we havee a lot of fun getting a deal like that! |W|P|That's a great example Boris. I do the same thing registering domain names for family and friends. I charge maybe 15% more than I pay, to set up things like mail forwarding etc, That extra cash helps towards paying for my own domain names.
On Sunday I was visiting my parents house to celebrate Easter Day. As we drove there we noticed a perfect white rabbit sitting by the side of the road. I stopped to show it to our children and told them it must have been the Easter bunny. My parents hid painted real eggs and chocolate ones in the garden, which the kids had to find, and then had lunch. After lunch I took a nap in my sisters room. As I woke up I looked around the room and noticed a drawing of a white rabbit. I stared at it for a while and noticed that that painting was actually a very good metaphor to starting a company.
When you start a company you have to know the answer to the question:
'How do you paint a white rabbit'In art academy (which I attended) you are taught to think different and one way to practice that is to think in negative shapes. You can paint a white rabbit, or an invisible form, or a bright light by outlining the outside of the form you wish to make visible. In the case of the white rabbit painting in my sisters room there is a background and a shadow which make the white rabbits stand out from the paper. In art academy they call that 'inversion' or 'a negative'. In Flecks case the white rabbit is our product. As you start to establish the company you build the background. We started with a patent, a blog and logo, then a website and a little funding. Then we hired developers and worked up a demo. You could say that we started working on all the stuff around the actual product and the more stuff you but in the background the clearer the white rabbit/our vision becomes. This is a scary procedure. All the time you are building around, talking about and building upon something that simply isn't there yet. You are constantly thinking "this is all background stuff, I want to see the actual product!'. But to get there you have to go through all that other stuff first. It is strange to talk with investors about your dreams and vision. What you are actually trying to do is show them the white rabbit. The more stuff you show (Excel sheets, patents, demos and plans) the more clearer the white rabbit becomes. Then one day, you wake up, and are suddenly staring at a very real and white rabbit and everybody can see it...|W|P|114520215840133105|W|P|How do you paint a white rabbit?|W|P|bomega@gmail.com
|W|P|Beautyful, Boris!
Warning: If you like cats and/or have strong feelings about animal cruelty you might be shocked by part of this story.
The first time I started a company I spend a lot of time writing a press-release. On the day we launched I faxed the press release to a few newspapers, relevant magazines and websites. I hoped the press-release would get picked up and make us famous. I was hoping for a spark to start my media engine. And it did.
These days things are different. Sure, I would still write a press-release but just a spark isn’t enough to start an online business and attract millions of users. What you need is (a great product or service and) a Burning Cat Strategy.
When I was in college there were a lot of fires in the city where I lived. Every month a shop that wasn’t doing very well burned down in an effort to collect money from the fire insurance. Most of the time they failed because the investigators, by looking at the source of the fire, could easily show it wasn’t an accident.
But then a strange thing happened. The investigators suddenly were confronted by fires that seemed to have started everywhere in the room. The whole room seemed to have caught fire at once. After a few months of similar fires the investigators started to notice one similarity in those unexplainable fires; they always found a dead cat.
It turned out that the arsonists poured gasoline over the cats and used them as living torches. The burning cats would run around the store and spread the fire everywhere in seconds. Cruel but effective.
You are now thinking ‘Who comes up with such a cruel thing’ and the answer might surprise you. Forrest fires and often spread by burning rabbits and other animals and sometimes fires are spread from one house to another by a burning mouse that tries to escape to the house next door. These criminals probably just watched National Geographic.
I thought of this story as I was trying to explain the marketing strategy of Fleck and other internet companies like us. We can’t rely on a single spark to get us noticed. To start our fire we need a Burning Cat. We use a blog to get users interested before we launch, promise journalists a first look at the beta, talk with potential users, give speeches at universities, design affiliate services, tools for webmasters, collect email-addresses for the beta program, organize a conference and do a hole range of other things to make sure that when we go live we are everywhere.
And even this post is part of our ‘Burning Cat Strategy’. I'm coining the term, partly to get mentioned in the ValleySpeak post on Valleywag, and hope you will use it too. So if you blog about it, please make sure you mention Fleck.com and link to it.
We need all the sparks we can get...|W|P|114511298988515632|W|P|Burning Cat Strategy|W|P|bomega@gmail.com theconsultant|W|P|Boris --This has really been said before in Seth Godin's book "Purple Cow." In other words: 4PS, 7Ps, 8Ps...You can have as many elements of your marketing mix optimized as possible. But, if you don't do something extraordinary to differentiate yourself in multiple media channels then you won't get a lot of exposure and impact.
check out: sethgodin.typepad.com
Also, if you do create mystery through a purple cow, one had better deliver the payoff, the goods, the punchline, the special sauce, or the end user/consumer will be very disappointed and bad news will spread more virally than one can imagine.
JC
Boris Veldhuijzen van Zanten|W|P|Hello Consultant; thanks for the comment. I have read a few of Seths books so I'm aware of the similarities. I don't remember however reading anything about burning cats. I thought this particular graphic example might help explain the phenomenon better. But I guess Seth does a pretty good job too... theconsultant|W|P|Boris - "Buring Cat" was expressed at our design meeting yesterday. We were arguing the whole "less is more" Google, Craig's List, De.lici.ous Paradigms versus something a little more jazzy, snazzy that impresses upon users and encourages better Brand recall. I think my colleagues like the Buring Cat metaphor, much better than the Purple Cow. The argument is almost a cliche: the finance, tech type fellows on the team want less while the design & artsy people want more -- almost an even split down the middle. Understanding the functionality and the target market is of utmost importance. My question: Is the "Burning Cat" used to attract the Low Hanging Fruit (people who will adapt the product/service more readily because they are already informed) or is it used to cast a wide net in order to net more fish? Don't you love metaphors? I hope I was not too agressive in my commentaty about "Burning Cat" I was simply expressing the fact that the idea is out there -- not that Seth's is better or worse. I think I would turn people off if I used "Self-Immolating Grandmother" or "Suttree Galloping Horse" as my metaphor. Poet's are cursed with this kind of wordplay. |W|P|Are you actually ever going to release Fleck? I mean people have lost interest and the amazing buzz you once had has been completely destroyed by the lack of information. Surely you have something you can release and prove this isn't a hoax. |W|P|i know what fleck is about, it was writen in the html source of the home page, in the meta tag "description", im the only one that saw it?ok, i will not say nothing about it boris but, come on with the beta!
ciao!
fefe.
Boris Veldhuijzen van Zanten|W|P|Hello Edd, and everybody else,I understand the frustration and disappointement and I share the same feelings. But I also hope you understand that we rather wait a few more weeks than ship something incomplete. I know a few people think this is just hype. It' not. We understand it isn't good to keep people waiting too long and we regret it. But quality is more important to us than hype. Let the hype die a little and we will surprise everybody with the product once we go live.
|W|P|Yeah SF my neck of the woods! I was beginning to think if I wasn't in Amsterdam, i wasn't cool! Even if it is just a phone number. Welcome to San Francisco. Boris Veldhuijzen van Zanten|W|P|Thanks Gina, we feel very welcome now. We will visit SF in september. Know a good place to hold a Fleck Party? |W|P|There are loads of good spots for parties in the city. Here are some great ones:Bimbo's 365 Club 1025 Columbus Ave
Mezzanine 444 Jessie St.
Medjool, 2522 Mission St
Rockit Room 406 Clement St.
Bimbo's is my top pick. Have fun, let me know when your in town. ;)
Cheers.
Gina
Boris Veldhuijzen van Zanten|W|P|Thanks Gina, I'll check out those places...
|W|P|114440758235024543|W|P|Blogger doesn't know what a 'Blog' is???|W|P|bomega@gmail.com |W|P|umm,hello? nowhere on your blog or your .com site does it say what fleck is!i'm thinking this may be intentional and part of the whole 'in the know' thing but if not, guys, too much coffee!
Zo|W|P|anyway, i already knew this.so what good is your post?
how does it benefit me?
Boris Veldhuijzen van Zanten|W|P|Hello ZO; it was just a funny story and supposed to make you laugh. Aha, I just noticed the title of your blog. Now I understand why you didn't think it was funny! :-)Other visitors: click 'ZO' to find out ...
|W|P|boris' retort is hilarious
A few weeks ago I read this blog post from Charles from Mailroom (excellent service!) about the cost/reward ratio of attending a conference versus getting mentioned on the Signal vs. Noise blog. Let me quote:
Launch at DEMO Cost: almost $30,000 increase in traffic for two days following: 100% Cost per % increase: $300Brief mention on Signal vs. Noise blog Cost: $0 increase in traffic for two days following: 50% Cost per % increase: $0
As I was reading that post I wondered how I could get the best of both worlds? You DO want to attend a good conference and get your company known. But $30.000??? I figured, for $30.000 I could host a whole conference myself... And so we present to you, the conference from heaven, initiated by Fleck.com, organized by Live Solutions and hosted by Barbizon Palace in Amsterdam, The Netherlands. We called it: The Next Web Conference 2006 We recycled the Fleck webdesign for theNextWeb.org website and I designed a simple but elegant logo and left all the work to a professional organisation. Although it won't make us rich, it will cover our expenses. And we think it is quite cool to actually break even or make a little money on your marketing. We will be able to attend a conference we would love to attend, get to know all the speakers, meet every Web2.0 company in Europe and promote our own company in the process. We did spend a lot of time on how to present ourselves. We decided to sponsor the party and not plaster our logo all over everything. We would like to promote our company but this conference should be more than a vehicle for Fleck promotion. More information: http://www.thenextweb.org|W|P|114440630841054257|W|P|Fleck.com & The Next Web Conference 2006|W|P|bomega@gmail.com
|W|P|Actually I have a 24" flatscreen.:-)
BillyWarhol|W|P|i'll have to read that article!i remember seeing the Barnes Exhibition & was blown away how this guy had all this Art from the turn of the Century that U thought for sure had to be painted by psychedelic Hippies in da 60's*
;))
Boris Veldhuijzen van Zanten|W|P|Hi Billy. Here is the link to the article: http://www.theatlantic.com/doc/194507/bushYou SHOULD read it. It is great and will give you enough energy to last you a week...