Our President (Brandon) and I (Brent, CEO) spent three hours last night as guest lecturers for the University of San Diego’s undergraduate and graduate Entrepreneurship classes.  It was a great experience and we look forward to going back soon.  The general MBA curriculum often lacks knowledge transfer on some of the hard core truths of owning a business, having a start-up, learning from mistakes, and understanding what it really takes to succeed.  The word “sacrifice” comes to mind!

Whether you are in the Internet marketing business, biotech field, or launchig a new brand of energy drinks you must understand your goals and what it will actually take to achieve them.  It doesn’t matter if you are graduating from Wharton MBA or launching a business while you are an undergrad.  There are certain things you will have to give up in order to gain long term success. 

I learned these hard truths during Navy SEAL training here in San Diego.  I spent five years in the Navy SEAL teams and completed multiple combat tours in Iraq, Afgh, and Northeast Africa.  SEAL training is much like entering the world of entrepreneurship.  Many people want to give it a shot, and very few are left standing when its all said and done.  In my BUD/s class (Basic Underwater Demolition/SEALS – the initial 6 months of hell) we started with 200 people and 20 of us graduated and made it to a Team.  You have to be physically and mentally strong and really want to be there…otherwise the pain and stress will take over.

I truly believe that my experiences in combat have added value to my ability to build a company and lead a team to success.  When starting any kind of business you have to believe you are “phyiscally” and mentally stronger than the competition, be dynamic and willing to adapt, and embrace the stress and long hours.

Here is a short start-up check list:

• Step One – Self analysis:  Talk to other entrepreneurs and gain a sound understanding of the sacrifices they made to get their businesses off the ground.  Ask yourself “Do I really want this and am I passionate about this endevour?”  If the answer is not a definite YES, then you my have some soul searching to do.  If the answer is YES then move on to step 2.
• Step 2 – Discovery:  Before you even start business planning, learn as much as you can about the industry you are entering.  Read blogs, chat in forums, read white papers, review the competition and their websites.  Get your hands on as much information as possible so you can define how you are as good, better, and different than the competition. 
• Step 3 – Business Modeling:  You can spend months on a business plan but in my opinion the core factors are:  market research, competitive analysis, define product and service, revenue/profit goals, fundraising (how much money you need and what you need it for), etc.  At some point you are going to have to execute so don’t get too hung up on the minutia…the principal element that differentiates successful entrepreneurs from “wannabes” is execution.
• Step 4 – Define your team:  Who are you going to battle with and do they have what it takes to succeed?  Before you place any legal documents, incorporate, finalize an LLC, etc. you need to know who is going to be in this for the long haul (and who is just riding the wave to see if it works out).  The last thing you want to happen is to have people that are not fully committed owning  a large percentage of your company.  It can get messy later on.
• Step 5 – Long hours: Be prepared to give up free time and work 90 hours a week 7 days a week.  You will be glad you did.
• Step 6 – Bootstrapping and fundraising money: It is very tough to get money and the following comments are just my opinion based on experience.  If it is appropriate for your company and growth plans, stay away from VCs…at least initially.  That is a long road and can end in disappointment while sucking away time and resources you could be putting towards launching your business.  Additionally, if you like the idea of being the boss and owning your own business (i.e. calling the shots), VCs are not the way to go.  Bootstrapping is the most realistic method at first.  Once you have some headway and a solid business plan, engage friends and family. I recommend offering a debt scenario where they lend you X amount and in 12 months you give them X plus the determined interest.  If you are successful in the process, then you can launch and build revenue.  Once you have some revenue it will be easier to present your company to angel investors.  Again, you need to update your business plan so that it is current and reflects how much money you need, the use of funds, the burn rate, profitability, exit strategy, and the offer itself (i.e. how are you currently valuing your company and how much equity are you giving them for their hard earned money).
• Step 7 – Execution:  Once you raise angel capital it is time to really execute.  Now its not just your friends and family expecting to at least get their loan back, but you have investors seeking a return.  Every situation is different and sometimes the investors are passive, and other times they want to have a lot of involvement.  Either way, this does not change the fact that they expect a return at some point in time depending on your exit strategy.
• Step 8 – Leadership:  Entrepreneurs earning initial success quickly find their role changing from hard working “start-up” guy to leader/manager/inspiration driver.  As your company grows the head count will grow.  Your head count will be made up of real people with different goals, personalities, aspirations, and needs.  Having a great management team in place will help make this part of the grow process easier.  If it is just you at the beginning I suggest reading books about leadership and learn as much as you can from peers, mentors, and other professionals. 

This is obviously a very short list and there are MANY factors involved in starting a business.  Hope this is helpful. 

A startup incubator is basically a company, organization, or even an individual that supplies startup companies with resources, mentors, and even seed capital to get their new business off the ground.  Good incubator programs combine a little of everything including a deep level of education, mentors, guest speakers, trainging on how to pitch investors, and of course funding.  The funding from incubators usually comes in very small amounts (under $20,000) but incubators usually work with very early stage businesses.  Here is a list of some great incubators:

1. NYU Poly Incubator:  This is part of New York City’s program to help keep the business climate active and new privately owned businesses growing.  This 16,000 square foot space houses startups for only $200 per month and offers other resources.
2. Techstars:  This is one of my personal favorites and provides great resources, training and networking for the young entrepreneurs who make it into the 3 month long program.  At the end of the program they get to pitch investors on “Investor Day” and some earn seed capital of up to $18,000.  The program creates a very tight bond in each class.  They have some great information on their site at www.techstars.org.
3. Environmental Business Cluster:  This company was rated the nation’s top business incubator in 2008 by the NBIA (National Business Incubator Association).  They specialize in young clean-tch startups – based in San Jose, CA.
4. La Cocina:  This non-profit based in San Francisco supports low income and immigrant women starting food businesses. 
5. TechColumbus:  This incubator does more funding than most, they pumped $4.3 million into 32 companies last year and attracted more VC funding for themselves so they can grow and fund more companies.  Well done!
6. Slingshot Labs:  Many of us have probably heard of this one as it was started last year by the creators of MySpace, Josh Berman and Colin Digiaro.  They focus on four or five new media startups each year.
7. Clean and Alternative Energy Incubator:  This incubator came out of the University of Toledo and focuses on alternative energy companies.
8. STAR Technology Enterprise Center:  This non-profit has a 30,000 square foot space in Tampa, FL and supports the growth of manufacturing and technology based startups.
9. Nidus Center for Scientific Enterprise:  This company resides in St. Louis and helps life-science companies.  Nidus is home to 20 companies that have attracted over $150 million in capital investments.
10. Ben Franklin TechVentures:  This high-tech workspace helps all kinds of early stage startups grow and provide 11,000 square feet of work space.

The economy has of course changed how companies get off the ground.  Bootstrapping is taking on a whole new meaning and entrepreneurs are working harder than ever to grow and show value to potential investors.  Advances in technology have provided many new free resources, especially for Internet based startups.  Internet marketing is taking on a more “do it yourself” feel to with the growth of social media.  However you plan to grow your company, remember that working hard and providing a product or service that helps improve the lives of your customers is a must.  Now get back to work!

Recent times have made things tough on everyone.  The economy has forced many companies to downsize or even close their doors creating a flood of talent in the job market.  For companies that are growing and hiring, this has created great opportunities.  Some recently “unemployed” professionals however have taken this opportunity to go out on their own and start their new businesses.  The recession has actually created a massive influx of new start-ups in all kinds of industries!

Even when times are good and funding is readily available, it is wise to tighten your belt and stay as lean and mean as possible.  Here are some tips to ensure that you don’t burn through your available capital and achieve profitability sooner.

1. Business Plan:  Have one.  Even if you are not striking out on the fundraising path, this is a good excercise for understanding your goals, defining budgets, creating cash flow projects, and know what it will take to get to an eventual exit strategy.  This process will also force you to know your competition and the costs that will be involved in gaining market share.  Set goals and milestones.  I do not recommend spending months on this however.  There will be a time when more planning won’t get you to the next level, execution will. 
2. Your website:  Naturally, the kind of website you need depends of your business.  However, the availability of open source technology and advanced templates have made website development more cost effective.  You still must make the investment and be willing to spend at least a few thousand dollars.  You will be judged by the appearance of your website, that is certain.  So take ownership of the process and find a firm willing to understand your business goals.  Make sure you communicate the exact functionalities you require upfront to avoid additional costs down the road.  Also, make sure the firm knows SEO and will build a website that is search engine friendly and adheres to basic SEO site architecture guidelines.  Otherwise, you may incur more costs later when investing in SEO. 
3. Resources:  If you are used to working for a large corporation where you did not have to worry about expenses, then you need to put your start-up cap on.  Try to avoid too much credit card spending for unnecessary start-up expences.  You probably don’t need office space right out of the gate.  Keep overhead as low as possible – it may be uncomfortable for a while but that’s what it takes to earn your stripes in the start-up world.
4. Hiring:  Don’t over hire.  Only hire the people you really need and be willing to wear most of the hats at the beginning.  Most business owners start out as the CEO, accountant, marketing director, receptionist, and sales director!  You will be working long hours so don’t think you need to outsource everything right away.  This is also the time where you learn all of these functions which will make you a better leader later on.  If you land a big account early on, be careful about hiring people just to service one client.  This is tough because you must have the ability to provide a great service or product, but can’t over hire just to support them.  Consider hiring additonal help on an hourly or part time basis.  Freelance workers can be a good resource too.  Also, consider hiring free of hourly rate interns from local colleges.  Interns can be an amazing resource if you hire the right ones.  These people can become great potential hires after they graduate!
5. Marketing:  Internet marketing is probably the most realistc and cost effective way to go other than guerilla marketing and basic grass routes marketing.  You may not be able to afford search engine optimization right away, so consider social media marketing to drive traffic and awareness to your site.  This is also a great way to start building your brand and communicating with potential customers.  Set up Facebook, Twitter, and possibly You Tube accounts and get after it!

If you are in fact heading out on the fundraising path, be ready to meet with at least 30 VC’s or angels.  As we all know, funding is tough to come by and even angel investors are trying to stay more liquid.  Don’t just go for the investment partner willing to get involved.  You will need a partner with experience in your field and one that shares similar passions.  You will be spending a lot of time with them so make sure you actually like them!  The interview should go both ways.

So you have a new online business and want to get it up and running. As we all know, money is scarce and both VC’s and Angels have tightened their belts. Angel investors are trying to stay a bit more liquid and really looking hard for the right investment. Often times they are looking for proprietary technology rather than service based businesses. The problem with that as an entrepreneur with a new company is that its take time and money to develop proprietary technology. So how does someone with a new start-up tackle the challenges and stresses of bootstrapping?

These economic times are going to forge smart, savvy, and tough minded business people because we will all be forced to make hard decisions and in the long wrong might be better off for it. Not getting those much needed investments can often turn out to be a blessing in disguise. You will be forced to work hard, keep your company lean and mean, and focus on your core initiatives.

Step 1: At first, focus on cash flow rather than profitability (this will quickly change of course and profitability will be your life line). The reason for this is that you will have expenses and your own bills to pay (need cash to pay them). Keep your overhead as low as possible and pay your bills on time.

Step 2: Forecast from the bottom up not the top down. In so many business plans you see people making projections based on the percentage of the market they plan to capture…usually it is the standard 1% to 5% depending on the industry. Rather than make these estimates, keep it more simple. By focusing from the bottom up you can project the productivity of your team, the ability to sell a certain amount of your product or service each month, and the growth plan for each component.

Step 3: Hire people you can actually afford. It may not be the time to go out and build your dream team. This can lead to a massive payroll expense and overstaffing issues. You will end up having a bunch of high paid people sitting around doing nothing. Make your team building strategy gradual and understaff if you can. This will lead to each team member having to work a little harder but so what…thats part of the start-up experience right? Once you hit a threshold where you think quality might start to suffer, go hire another person.

Step 4: Make good hiring decisions. You can’t afford to waste money on people that will not produce for you. Have a formal hiring process even for your lowest level positions and call references given. At the end of the day though you have to go with your gut feeling. I have hired people who I knew would be great even though one of the references was not that great. It turned out to be one of the best decisions we have made.

Step 5: As mentioned above, even if you plan to develop proprietary technology, you may not have the resources to start with this at the beginning. This will take time and significant resources. Have a service you can sell that will build a client base and get your name out there. This can include providing consulting services related your industry and future proprietary offerings.

Step 6: Don’t spread yourself thin. Focus on your core competencies and internal processes. The more formal your internal process is, the more scalability your model will have.

Step 7: Keep your eye on the competition and have a value proposition that differentiates you from the existing competition. Be ready to answer the question, “Well ABC Company has been around ten years and has a similar pricing model…why should we use you”. The answer can of course include more customer attention, better quality, a unique approach, a niche focus, etc.

Step 8: Accurately project your cash flow. Now how much cash you have; and if you are running negative, by how much? What is your burn rate and how can you decrease/slow the bleed?

Step 9: Have a cost effective Internet marketing strategy in place that will help bring you new business. If you can invest in SEO then my suggestion is to never wait. Creative social media marketing can also be a great way to drive some awareness to your new online business.

Follow some of these basic steps and you will be able to focus on growing your business rather than constantly worrying about investors that aren’t calling you back. In the long run, you will make better decisions and still have controlling ownership of your company!

I’ve always wondered how people come up with their company name and have made note of certain trends. Many financial institutions name their company after the last names of executives. Many internet based companies have a name that means nothing but sounds web savvy ie: TechCrunch, Mashable, Technorati. Day Spas name their company something that sounds relaxing ie: Revive, Rejuve, Tranquil. Some companies such as Internet Marketing Inc. have a name that describes exactly what they do and then there are companies with names that are completely random.

Your company name plays a role in your overall branding strategy, marketing campaign and sets the tone for how many perceive your business. When creating a company name some of the most important things to keep in mind include:

Can the name be spelled?- There are many words people are prone to misspell ie: Words where the “I” may come before “E” except after “C” etc. If your company name is commonly misspelled then keep this in mind when doing keyword research for SEO and PPC. You might even need to include misspelled versions in your campaign and purchase domains with the misspelled version that directs back to your homepage.

Can the name be pronounced?- If your name is commonly mispronounced then people will also have a hard time spelling it when entering it in search engines. You can structure your marketing campaign to include many audible elements so people get used to hearing the pronunciation. You can integrate videos on your website. You can also run radio commercials that direct people back to your website and embed MP3s of the commercials on your website.

Does the name describe what you do?- There are so many choices for brands that it’s important your marketing campaign really sends a clear message about your company. If your company name has nothing to do with the product or service you offer then it’s even more important to develop a strategic branding campaign so people are used to associating your company name with your specific service or product.

Whether you’re just starting a business or have been around for a while, it’s always a good idea to work with an Internet Marketing Company that can also help you with brand consulting for your business plan. If you want to know more about using your company name to strategically brand and market your company, please contact me!

-Melodie Tao

With all of the marketing tactics that your company can choose from today it is more important than ever to be able to track your conversions. What other marketing strategy can track your potential clients so thoroughly? With our analytics we will be able to track how each visitor arrives to your website. From there we can track how long they were on your website and what pages they visited.  The first step is to install the Google analytics code onto every page of your website. Be careful when installing the code and make sure to install the whole code; if you don’t, you will not be able to receive the tracking reports. From here we not only just watch the statistics but we continuously reposition our internet marketing strategy around the information we receive from the analytics to continuously optimize your strategy. Lastly when you are setting up your analytics account you want to add filters so that your reports are the most accurate possible.

When you are deciding where to spend your marketing dollars in 2009 the first thing you should think about is how you can increase your company’s ROI. With a proven method that can accurately track conversions, having a great online marketing company on your side will be your first and smartest marketing choice of the year.

The days of building a website with no revenue streams except for advertising are over. Thousands of people are still building websites and expecting to get enough traction on the website to sell banners and they expect to do well. In this market and especially this economy where advertising is drastically down, unless you have myspace or facebook like traffic, this model will no longer work. If you are launching a start up Internet company, I beg you to have a revenue model in mind where significant revenues will start coming in within the first year of operations. Either sell a product or sell a service. Do not give away a product or a service and expect to sell advertising space around it.  This worked for awhile, but it has ceased to work and it will never work again.

Especially if you are trying to raise angel capital or venture capital for your company, no one is going to fund your company unless you can actually bring in revenues to support the costs and growth of your business. Sites based soley on advertising dollars are now considered dead money in the finance community. I urge all entrepreneurs to go after a revenue stream and make sure they bring in money for their company.

One of the easiest ways to do that is to set up a user friendly website, perform search engine optimization on the website to drive traffic, and then make sure you actually sell something. It is a simple business concept and it is what works in this economy.  Find the money and follow it. Do not chase dead money!

-Brandon Fishman