Archive for October, 2009

Adding Value

October 28th, 2009

The other day I stumbled across a quote that stuck with me:

Advice

In helping create a BrainHuddle community, I want to help create value and not give out generalized advice that is of limited usefulness. Despite having strong feelings regarding startups, my life experiences in this area could certainly fall under the limited classification. Fresh out of college I joined a startup in a young state and was lucky enough to experience some of the highs and lows of startup life and then acquisition. However my experiences in the startup arena are mainly technical. I’m interested in finding ways to provide unique benefit to those who are in a similar situation to myself – looking to begin and/or develop new ideas.

One idea I’ve been considering lately is documenting the development of a business idea on the public stage. I’m thinking of creating a sort of startup case study where I can openly show just what steps and investments (time & money) are involved in bringing a simple business idea to life and what kind of return I see for that investment. I’m always appreciative of people who are willing to openly describe the investment and rewards of their work. I’m hoping to bring a new idea to life soon and let its progress(or non-progress) unfold in the open in hopes that others in a similar situation can get an idea of what awaits them. I’m also very open to helping others share this type of information in order to provide a growing body of experience-based, specific advice that can help move our ideas forward.

Live Long and Bootstrap

October 27th, 2009

Bootstrapping: term used to describe the process of starting a business out of very little or virtually nothing specifically without external funding in exchange for equity.

So you’ve got this great idea and cool people to work with if you only had a little money to get it up and going you’d be set. You can pitch your idea to family and friends and see if they’re willing to donate to the cause. Or you could try to pitch your idea to some investors-angel or venture capital investors. Maybe you could max out your credit cards until you start making a profit and then pay it all off when it starts rolling in. Each scenario has its pluses and minuses. You could also try a small business loan but they frequently want collateral.

Another approach is to try your hand at a new financing model. Peer to peer lending. These include sites like Lending Club, Prosper, and Kiva. They all work a little differently, some better for the investors and others get better rates for the loan applicants. For our purposes we’ll reference Prosper.com.

Basically, you apply for a loan with one of these places and they post it for the peer investors to bid on. The peer investors can loan as little as $25 which in turn is consolidated with others who have done the same until the entire loan has been funded. Then as you pay some closing costs (.5%-3% of the loan) and as you make monthly payments you pay the company who then divides it up amongst all the investors after taking a little shipping and handling fee for them until the loan is paid in full.

The rates can be cheaper than credit cards and easier to get than bank loans. The other cool part is that the interest that you pay goes to actual people who are taking a chance on you not faceless corporations. Does anyone else have any other ideas on how to finance a start-up?

Does it make Cents?

October 23rd, 2009

As a follow up to my previous post on monetizing your blog or website I wanted to give a little substance to those hopes and dreams of living off the advertising revenue.  It may sound like the beginning of a bad joke but “How many visitors does it take?” is a question that needs serious consideration to make your dreams a reality or at least a goal.

So I off I plunged into the wonderful world of search engines finding more than my share of advice columns and websites. Like the good book says “Ever learning, and never able to come to a knowledge of the truth”-that definitely describes the internet. (a little nod to Tevye while I hum If I Were a Rich Man.)

One of the frequently referenced mechanisms for getting advertisers on your site is Google’s AdSense. For those who are unfamiliar with Adsense I’ll show you my proverbial vacation slides. Click

A site called Adsensesecrets explains the service this way,” Webmasters {that’s you} can place Google Adsense ads on their web pages. The ads that are shown on the site are from the Google Adwords network, where Advertisers buy space on websites and pay per click through to their own websites. Every time an Adsense ad is clicked by a visitor to your site you get paid a share of the revenue that Google makes from charging the Advertiser to place.” Click.

So know you know how it works let’s get back to our question-I stumbled across this article that provides a simple walk through of how to do the math to figure out the answer (no, it’s not 42). It is a little dated (mentions Overture bid tool- gone-acquired by Yahoo and recent CTR averages are 1%-7% not 8% or 25%) but gives you a good way to estimate.  Click.

Since the bid tool was gone I wanted to find a way to estimate the number of clicks per day for various search terms, like a quick market analysis. I eventually stumbled across this free tool.  Click.

AdsenseGoogle Adwords is also a good place to start. Click. Hope you enjoyed the slide show. Anyone else had success with a certain method?

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