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Written by Dave Lavinsky on Wednesday, December 2, 2009
Many of you might recall that I interviewed Bambi Francisco, founder of Vator.tv, months ago.
If you’re not familiar, Vator.tv is an online community that allows entrepreneurs to showcase their ventures and communicate with customers, partners, and investors. I fully recommend that you check out Vator.tv.
But that’s actually NOT why I’m writing today…
Today I wanted to tell you about Vator’s upcoming “Splash” competition, which will showcase 10 promising startups, and the hottest companies in social gaming and iPhone app development. Plus, you can meet and network with elite venture capitalists.
Best of all, I’m excited to announce that I’ve secured you a 25% discount to this event.
Here are some more details:
On the evening of February 4th, 2010, ten seed- to early-stage companies (selected by their peers) will have the opportunity to pitch the Silicon Valley elite. These 10 companies will also have a high quality video of their presentation produced.
In addition, Mark Pincus, CEO of Zynga, will talk about how he built the leading social gaming company in a few years, and Jeff Smith, CEO of Smule, will talk about how he built some of the hottest iPhone apps.
Additionally, venture capitalists from Google Ventures, August Capital, Greycroft Partners and Norwest Venture Partners will also be present.
To submit an early stage company to pitch, click here:
If you’d like to attend the event, you can reserve your 25% discounted ticket or pitch table below by using discount code: Vatorgrowthink, here:
Note: This special 25% discount ends December 11th.
Written by Dave Lavinsky on Monday, November 9, 2009
Watch my video review of the book below:
Written by Dave Lavinsky on Wednesday, September 2, 2009
I read a very interesting blog post the other day about "survivor bias," an important statistical principle that could greatly affect your future success.
In brief, survivor bias occurs when an analysis excludes information since that information no longer exists.
Let me give you an example...
The English forces, during World War II, sent planes each day to bomb the Germans. As you might expect, several of these planes were shot down. And, the ones that did come back typically returned with multiple bullet holes.
Now, the English obviously wanted to maximize the chances of its planes and soldiers returning home. So English engineers studied the planes that returned. In doing so, they found patterns among the bullet holes. Specifically they found lots of holes on the wings and tail of the plan, but few in the cockpit or fuel tanks.
As a result, the English added armored plating to the wings and tail.
As you might have already concluded, this was the wrong thing to do. The better decision would have been to add armored plating to the cockpit and fuel tanks. For, the planes that were shot in those places were the planes that were shot down and never returned.
The English engineers' analysis missed this data because these were the planes that they were unable to examine. This is "survivor bias"-- their inability to include this critical data in their analysis since it was unavailable or didn't "survive."
So why does this matter to you?
It matters because as you start and/or grow your businesses, you will have to hire service providers and staff. And naturally, you will want to hire those with a track record of success.
But, when you hire staff who have only worked at successful companies, you may fall victim to survivor bias. That is, they have not learned many of the lessons that individuals and companies learn when they fail.
Likewise, when you hire a service provider that claims that every one of their clients has been successful, maybe they haven't learned from client failures.
They say that you learn more from failure than from success.
While that can be debated, from personal experience I can say that I've learned a ton from both failure and success. From successes, I have learned principles and formulas that worked. The ones I strive to replicate on a daily basis.
And from failures, I have learned things to avoid. I have learned flaws in my thinking. But importantly, many of my successes have come out of failure. From tinkering ideas and plans that weren't quite working. And making them work. And, these new ideas would never have come to me had I not failed first.
Now, clearly my advice is not to hire failures or those with a habit of failure. But, likewise, it's not to hire staff or service providers who claim to always succeed. Since a balance between success and failure often provides that winning combination of wisdom.
So, the next time you are interviewing a key hire or service provider, make sure to ask about their failures. Ask about tasks and jobs that they or their companies failed at. And find out what they learned from that failure.
Ideally they are the types of candidates that learned a lot from their failures and were able to overcome them. This is because the vast majority of growing companies fail at things over and over again. It is their ability to constantly modify and improve their businesses that enables them to excel. Surround yourself with people that have this ability.
Written by Dave Lavinsky on Monday, August 10, 2009
Several months ago, I came across YouNoodle, a website which offers tools and a platform to help startup companies succeed. What I was initially drawn to was their Startup Predictor tool. The idea of a tool that could help predict the success, or lack thereof, of a new company really intrigued me.
Written by Dave Lavinsky on Thursday, June 25, 2009
In a world with a poor economy and uncertain economic outlook, the knee-jerk reaction of most entrepreneurs and business managers is to layoff employees and thus reduce labor costs.
While I agree that reducing labor costs is key, you can oftentimes do this by increasing the amount you pay your employees.
Take the case of The Container Store. This Texas-based company has a unique HR strategy. That is, they have just one employee for every three that their competitors have. But, they pay their employees double the industry average and spend 160 hours training them.
The result is that their employees are better trained and happier, and thus provide superior service at a 33% overall lower cost than competitors.
Interestingly, when The Container Store opened in New York City, it had 100 times more applications than available positions. With numbers like that, they are able to hire the best of the best each time.
Similarly, Harry Seifert, CEO of Winter Garden Salads gives employees bonuses just before Memorial Day, when demand for its products peak. The bonuses boost morale and cause the company's productivity to jump 50% during the busy period.
Paying employees more to improve performance and boost company-wide profits is a historically proven tactic. In fact, back in 1913, Henry Ford doubled employee wages from $2.50 to $5.00 per day. The move boosted employee morale and productivity and caused thousands of potential new workers to move to Detroit.
A final key point to note is that laying off employees is often a bad strategy. While it will save you money in the short-term, in the long-term, hiring new employees and training them is much more expensive than the cost of keeping the employees that you laid off.
Rather, a strategy that you should consider is to ask (or require) employees to take pay cuts and/or offer employees company stock in lieu of a portion of their cash compensation.
Written by Dave Lavinsky on Tuesday, June 23, 2009
When entrepreneurs ask me what sources of capital to tap to fund their businesses, my answer is generally "as many as you can."
I often point to companies like Google, who relied on credit cards, angels and venture capitalists in its early days.
Recently Animoto heeded my advice. In it's most recent round of funding, Animoto raised $4.4 million from a venture capitalist (Madrona Venture Group), a corporate/strategic investor (Amazon.com), and two angel investors: iStockphoto founder Bruce Livingstone and angel investor Jeff Clavier (Clavier is also the founder and managing partner of SoftTech VC, a seed-stage venture capital firm).
What's even more interesting is what Animoto is. Animoto is a website where you can quickly and easily turn photos into videos. Why is this interesting? Because you can use Animoto to create a video about your company to market it to investors.
So not only is Animoto teaching each of us about how to best raise capital to fund our growth, but is offering a tool to help us market ourselves to investors.
To see how it worked, I created an Animoto account (doesn't cost anything and is quick to do) and created a quick video. I was home at the time with my daughter, so we did it together and created one with a few of her recent horseback riding pictures.
The good news is that it was really simple to create the video. The negatives were that 1) rendering time was slow (plan to wait at least 5 minutes before the video is ready to be viewed for a 30-second clip), and 2) the non-paid version only allows your video to last 30 seconds. Fortunately for $3 per video, or $30 for a year, you can create full-length videos.
Overall, Animoto is a great lesson in capital raising and a great tool to use when raising capital for your business!
Written by Dave Lavinsky on Thursday, June 18, 2009
Over the past decade, I have written countless articles on how to raise capital. I have taught thousands of entrepreneurs how to create a great business plan, how to develop a strong financial model, and ways to devise a slide presentation that gets investors excited.
Written by Dave Lavinsky on Tuesday, June 16, 2009
Every day I hear pitches from entrepreneurs about the great new product or company they are launching (or want to launch).
Written by Dave Lavinsky on Tuesday, March 24, 2009
I recently wrote a blog post about Kiva and all the good it is doing worldwide.
As you may recall, Kiva is "the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world." Specifically, on their website, individuals who need small loans to start or grow their businesses request funding. And, other individuals from around the world offer this funding in increments as low as $25. To date, nearly 500,000 users have lent almost $65 million, interest-free, to developing-world entrepreneurs through Kiva.org. $3.5 million was distributed last month alone.
Not surprisingly, since the majority of you are based here in the United States, in response to my email about Kiva I received lots of emails saying that Kiva should launch in the United States. I agreed.
And now, a few weeks later, Fortune Magazine is reporting that Kiva plans to launch in the United States within a few months. This could be a HUGE funding opportunity for American entrepreneurs!
Importantly, while the highest loan amount for entrepreneurs in the developing world is $1200, in the United States, it will be $10,000. One issue that hasn't been fully resolved is vetting. In the developing world, Kiva "uses microfinance institution partners to vet entrepreneurs before allowing them to solicit funding. By asking a series of questions to assess roots in the community and the legitimacy of a business, Kiva is able to establish a risk profile for each entrepreneur. Before offering money to, say, the proprietor of a Dominican fruit stand, any lender can read the entrepreneur¹s profile, history of defaults, and a bit about the business."
In the United States, Kiva says that they are "signing on microfinance partners in the Bay Area and in the Northeast," but have not released who these partners will be or how the vetting process will work.
In any case, this is GREAT news for American entrepreneurs.
You can read the full Fortune article here.
Written by Dave Lavinsky on Monday, March 16, 2009
I want to tell you about a technique I picked up, that I can directly attribute to millions of dollars of revenues that I have generated over the years. But, even so, I'm far from mastering it.