E.C. - Burn Rate

In the words of Tony Robbins, “The only limit to your impact is the is your imagination and commitment.” And this book really sucked me into another world! A burn rate is Burn Rate is the cash drain of a startup company. The book mentioned his own dot.com to dot.bomb experience back in 1997. It was funny how his lack of interest in the stock market suddenly took a 180 degree turn once startups and even ‘Wired’, a famous magazine with operations company took a hit. As mentioned in the book, “This was a revolution, because now computing would involve everybody, not just scientists, engineers, and accountants.” It was an extensive process for the Wolff to change his way of thinking.  Even living in New York City, the center of all these new technologies, he found the metropolis was lacking individuals proficient with how to use the internet for proper business purposes without losing everything.

Throughout the book he explains what he recalls people told him AOL, AT&T, Sports Illustrated, Time Warner, and IBM. He even goes over how he tried getting in deals with AOL, Magellan, and Washington Post and the only conclusion to everything was how he had to go back to his roots of being a journalist. From what I read, it seems like anyone who was an entrepreneur saw incredible aspects and application for internet while other usually whined over it. Sometimes while reading I felt a disconnection from the main character since he tends to make me see and hear him as the author instead of a writer.  He seems like a wondering soul just trying to find his place in the world and I feel it parallels how most of us feel when we deem ourselves lost. I really enjoyed this book since the way he words his speech and description give me an eerie feeling that opens up a door to the distant past, much further than the 80s or 90s of course.

E.C. - Startup.com Documentary

The documentary for Startup.com was a movie we watched near the beginning of the quarter. It featured 3 guys who were high school buddies and entered the business world together to try to make a new company during the explosive growth of the first years of the WWW. Very early on in the film the 3^rd high school friend, Ki, got his cut of the profits ($700,000) after doing his part of the work and cut loose from the company since he had qualms about taking it further on. The two remaining friends, Tom and Kaleil, stayed in the company and continued to build it. The company purpose was that anything done through the government can be done online. Such things like paying parking tickets.

The two friends had a lot of difficulty finding companies willing to invest their confidence and money in their efforts and it started to take effect in their friendship. Unfortunately, Tom and Kaleil’s personal values were very different and became relevant over the course of the year. Tom valued family, while Kaleil seemed to value success more. Kaleil’s girlfriend left him because of this.

The main competition for their company, ezgov.com, showed no worry after taking a look at Tom and Kaleil’s company, and the reason became very heart wrenching later on. Website testing unveiled glitches as the due date for the site was vast approaching and this was freaking out Kaleil. Around that time someone also broke into his office and stole his computer, which had important company data on it. On Friday the 14^th the stock market crashed and one immediate concern was that the number of employees for their company dwindled. This was an issue since back in January they had 120 employees, which rose to 200 in April after the crash. Increasing the number of employees under the current circumstances was probably the wrong move at this point.

Tom and Kaleil were having greater difficulties with Tom ending up being terminated from the company in May 28^th of 2000. They friendship had taken a damaging blow, though Kaleil stayed with the company. Six months later the company had a mere 50 employees and not long after it completely failed in comparison to ezgov.com which had a superior website. This company of theirs was only one of the many companies to rise and fall during these years taking into consideration the economy change. Watching the change in the two’s relationship over a course of months really cemented the concept to me that life can bring you down and ruin friendships no matter how close they may be. Friendships can be tight, but business can be unforgiving.

Dot.com to Dot.Bomb

This is a breakdown of the Dot.com to Dot.Bomb years. According to our professor it can be separated into 5 stages – An innocent beginning, Boom!!, Insanity!!!, Bust!, and the crawl back to sanity. Before the world wide web, Tim Burnes laid out 2 uses for the web. HTML had to be created and standards had to be developed such as HTTP. Apple computers came out in 1984 which in turn led to computers becoming ubiquitous and people wanted to connect them. Big systems were coming out of the woodwork and at the time were heavy hitters all their own. Prodigy, a private network, had 1.1 million users and was owned by Sears and IBM, Compuserve, which was owned by H&R Block, had 1 million users, Genie, which was owned by General Electric, has 200,000 users, AOL, which was using a CD distribution strategy, gained a large user base, and Delphi, another service, had 100,000 users. This was not to last though.

It began in 1994 when Microsoft used Compuserve to localize programs to other regions. Free range media was allowed use by corporations. DealerNet was one such example of an extremely successful website. At the International Web Conference that year, Tim Burnes delivered a paper describing the potential of the WWW. There was also another individual who proposed that there should be 2 different versions of the WWW – one for businesses and one for science. Cole and Weber were 2 individuals at the time who worked together on web advertising and Mosaic was an alternative to using Internet Explorer.

During the years of 1995 to 1997 the Boom!! Stage occurred. Netscape became the browser leader worth $1 billion, the web became a market, and PathFinder was going to be a compilation of online magazines. Burnes was contacted by Advertising Age magazine about free range media’s advertising strategy. Prodigy rose and fell in the course of that time, Compuserve purchased Spry for $120 million, Yahoo launched and became big, Amazon aimed to be the largest bookstore (causing Barnes and Noble to throw a fit), and the USWeb became a large web development company.

In 1997 the Insanity!! Stage occurred. AOL bought Compuserve, InfoSpace went public, Burn Rate was written, and the InterNet Bubble was published. This led to the next stage, which was Bust. Many .com companies advertised on the SuperBowl, Pets.com went bust, the stock market made a downturn, layoffs occurred in many .com companies, and many more companies fell alongside them.

Over the course of the following years the businesses have crawled back from the ashes of defeat and new ones have formed, but the introduction of the WWW has changed business forever. The big change was going from an Industrial Age economy to a computer age economy. Some could shoulder the pain, but most were unable to bear the burden. In essence, the strong consume the weak, though that is just what happens when a large upheaval of change takes place. I didn’t honestly notice these changes that easily even though this occurred during my childhood years, but some of the ramifications that came from this and some of the technologies used back then that aren’t used now were things I was familiar with. 

Guest Speaker - Shadrach White

Being revenue hawk involves many objectives. You need to understand what selling means since your business won’t go anywhere otherwise, you need to smile to create a welcoming culture that becomes infectious, you need to be able to make quiet time to let your mind relax, and you need to read other subjects other than matters relating to business so you can connect to others by being well-rounded. Those were the first points made to us by the Speaker of the day… Shadrach White.

He briefly went over some of the startup companies that led to his eventual 4^th company. One of these was called Sportswear and its purpose was to sell vintage basketball jerseys. His angel investor gave him $700,000 to get rolling, though he didn’t manage his finances well and it ended up with him owing a lot of money and paying it back for 6 to 7 years. He also built up a business called Olympia, though he didn’t have much to say about it.

Cloud PWR was his 4^th company and the purpose was to build it up to a $1 million company then make use of an exit event to make a large profit. He made it a point that you should never underestimate the power of a good attorney and not to cut corners since it may be expensive earlier on though pay off in the long-term. His company was responsible for Air Lift. It involved building applications for government institutions and services as well as making them simpler.

Lastly, he made sure to go over 4 ways to protect intellectual property – trade secret, copyright, trademark, and patents, 4 directions a company can go – close it, continue operations, sell/merge, or openly trade, and ways to fund a company – equity, debt, or other options such as grants, business plans, etc. The details behind these were all covered earlier on, though he organized them into a simpler format than the first time we saw them. He basically told us he was in entrepreneurship for the purpose of making money and it was alright if that was what we were aiming for. Creating companies for the purpose of exit events is just another form of business and some individuals just don’t want to spend their entire lives doing one thing or running one company and he assured us all that entrepreneurship didn’t mean dedicating your everything to one option, but dedicating your everything to any option.