Starting a new venture
I’ve been reading The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything and it has excited me about starting something. In my head, starting up would be like the boom years all over again. In reality, I’ve started something from scratch (Kristin’s optometry practice) where I don’t play a pivotal role in service delivery or day-to-day operations. Starting the optometry practice was very different than starting a services or product focused software company. I’ve had to step back and look at the business as an investor, not as an employee. It has given me an appreciation of what the Board of Directors for a company must experience. I don’t know anything about being an optometrist, delivering effective eye healthcare, or the legislative and regulatory changes the industry is going through. But I do know how to interpret numbers, evaluate risks, develop a strategy and then track performance against results. Kristin’s practice is growing (slowly). I learned how to debt finance an early-stage business. And, learning that deal size doesn’t have to be $10,000 – $100,000+ for a business to be interesting.
But I’ve been thinking about getting back into the startup game. I slog away at a job in a unmoving, monolithic educational institution trying to change a 1950s view of human resources and a 1970s view of systems to deliver a consumer-like experience for employees, managers and faculty. Books like The Art of the Start and my recent experiences keep me thinking that maybe the next startup doesn’t have to be software. I was flipping through The Money of Invention: How Venture Capital Creates New Wealth
by Paul A. Gompers, Josh Lerner when I decided that I don’t necessarily want to create the next Cognos or Workbrain. This is a big change, I thought I needed to be part of the next big thing. And in reality, I want to have fun, be great, and survive. I keep thinking that there are more and more examples of smaller companies and teams that I admire, including 37signals, LudiCorp, Ranchero Software, and others). I don’t have to raise bags and bags of money to start something. I just need to find a problem and have a solution or service. Look at the revival of the small hosting business at TextDrive (who incidentially did a very interesting "venture rounds") and Zaadz.
I’ve started to think small, I re-read High-Tech Ventures: The Guide for Entrepreneurial Success by Gordon Bell and I realized that raising capital is really useful in an old-school mentality. The costs associated with starting a new technology business are shrinking. eWeek covered the efforts ofthe United Federation of Teachers to use open-source technologies to reduce costs. Evan Williams is using webapps to start Odeo. Kottke is raising money to blog full-time. Tim Oren describes this model as two-stage ventures where you build as little as fast as you can, then get to cashflow quickly. You can see open-source projects and smaller software firms using the tools available to them to generate revenue (Calacanis on AdWords revenue, WordPress gaming Google). It’s time for me to think small, I’ve spent so much time thinking about purchasing enterprise software (think Oracle and PeopleSoft) that I’ve stopped thinking about building software for Kristin, where the companies and tools I admire are doing exactly this.