Serial Entrepreneurs

Now in the midst of my second startup, people often say to me, "Wow, so you are one of those serial entrepreneurs."

It's true, I suppose. I didn't exactly plan it this way, but here I am.

The whole notion is regarded with a great deal of reverence, the latest example of which is here. (Hat tip Brad Feld.)

I'm not disagreeing with any of the sentiments. Lord knows I learned lots of lessons in my first one, MyTrafficNews, that I'm applying to the Legislative Database,

But allow me to throw one other thought into the mix:

Let's just say that I wanted to get a big job at a big company. Part of the accepted wisdom is that I would never want to do that, that I could never work in such an environment. There's probably a grain of truth in that, but lets say that I could set that to the side and get excited about the goals of a large corporation, and would enter that organization in a position that would be interesting. The pay would be great, I wouldn't have to worry that I'm taking all the risk, and when I went on my paid vacation I could leave the job at the job, and not think about it constantly, the way I do now.

Let's say that could happen. Here's the problem: It would NEVER happen. Never.

Why? Because I would feel stifled the first time I had to fill out a form to get a box of paperclips, or whatever?

Well, maybe, but it wouldn't matter, because I would never get that job. It just wouldn't happen.

For all the talk from big business about how they need to be more entrepreneurial, bla bla bla, they really all like their gig exactly the way it is. Nobody working within any large corporation is going to hire someone who will come in and upset the apple cart.

"Entrepreneurial" is another word for "Disruptive." Corporations will issue press releases embracing "market disruptions" but what they really mean is they want to keep doing the same thing in the same ways, and by issuing a press release the execs can feel that they have done what they need to do to react to changes in the markets.

I'm not just blowing smoke here. If you are a person who has a steady career, you should think carefully before becoming an entrepreneur. It's great, no doubt about it, but you may never be able to go back even if you want to.

(One note about this blog, it's been quiet for a bit. It will be seeing some big changes and a big announcement soon. Stay tuned!)

No Compunction about No Competition

Quite often, it seems, people violate, or come too close to violating a non-compete clause after they sell a company. Here's the latest example.

Davis previously sold a recruiting blog to Jobster, and worked with the company for a while. He eventualy left, but apparently had a non-compete in place.

I never really understand why this noncompete stuff ever comes up.

When I sold MyTrafficNews to, I worked hard for them, and enjoyed it. When the contract was over we parted as friends. I gladly signed the non-compete.

Now I'm running another startup, but in a totally different indsutry. As much as I loved the traffic business, I'm very happy to NOT be in it any more.

That's why I don't understand when this kind of thing comes up. I would think entrepreneurs, by nature, would want to move on to a different challenge, and apply what they learned in one area to a different industry or niche that needs the same kind of new thinking.


University Hospital is the last I see in a series of this kind of announcement.

Despite moving to a new facility, the University of Colorado Hospital is expected to layoff up to 70 people by the end of the month due to a budget shortfall.

"Despite"???? How about "Because of"?

We've seen this several times in Denver just in the last few months. Certainly newspapers are laying off around the country, but the layoffs at the Denver Post and Rocky Mountain News come just after moving into a shiny new building shown here under construction (in a link that gives a clue about when Google took all those cool new street level pictures) or here for some more recent shots.

And just a few blocks away is the DAM expansion, a dramatic new building that millions of people are not going to. Hence, they had a round of layoffs also.

What does this have to do with your startup? Well, just when you are thinking that it's time to get a fancy new office, maybe that's the time to hunker down.

Another Credit Card VC adopter

I know I'm linking to Guy twice in a row, but his latest post makes it clear that he fully groks the Credit Card VC ethos:

By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09

Because of Truemors, I’ve learned a lot about launching a company in these “Web 2.0” times. Here’s quick overview “by the numbers.”

  • 0. I wrote 0 business plans for it. The plan is simple: Get a site launched in a few months, see if people like it, and sell ads and sponsorships (or not).

  • 0. I pitched 0 venture capitalists to fund it. Life is simple when you can launch a company with a credit-card level debt.

Now, Guy will tell you that this is not the next Microsoft or Google, it's a service that may grow on its own and maybe someday some bigger organization will want to add it to a portfolio because of the user base or whatever, and so it may have a nice exit someday.

But the best part, I think, for Guy is that when people send him business plans about how they really need to have $1 million Angel Round so that the team can develop a prototype, he can look them right in the eye and say, "Why? I launched a site for $12,107.09, and within two weeks it had 315,000 hits in Google. Why do you need 82.596 TIMES the money I spent to do what you want to do?"

They better have a darn good answer to that question.

This is the end, my friend

I don't live or work in the valley, but it's becoming more and more clear that things are koyaanisqatsi (life out of balance).

Michael Arrington, founder of TechCrunch, wrote about this with great clarity this morning.

Times are good, money is flowing, and Silicon Valley sucks.

I don’t know what it is, but the same thing happened in the late nineties before the bubble burst. Lots of startups got funded that made no sense but people got excited anyway. A unique, beautiful and well executed idea was not a story worth talking about until that first round of big, eye-popping capital. People become more anxious, and more likely to snap at someone in anger or jealousy. Rumor mongering spikes, and a crucial balance is lost. It’s no longer about beautiful products and genius developers. It’s about the money and the status, and hot PR chicks and marketing departments.

I wasn't in the valley for the first one, but started MyTrafficNews by bootstrapping, and the whole dot-bomb thing actually helped us, made it possible for me to afford developers.

Now it's a bit nutso, and I am actually out looking for investors, but I'm not doing it in the midst of the insanity. I love my current startup, love the people I work with, I even love the customers -- the real live paying customers who depend on us for the tools they use every day.

I think that's the only way to avoid not only crashing when the bubble pops, but to have fun along the way.


Introspection for a blog is a good thing, and will always be part of any good blog. Old media doesn't do as much of that, they don't have to wonder what is their core purpose -- they know that their job is to deliver advertising. The good ones try to reach that goal by being interesting, etc., but that's not why they exist.

(That said, it's clear that the big papers will soon be much like sports teams, owned by people with oversized egos. The two best examples are David Geffen trying to buy the LA Times and now Rupert trying to buy the Wall St. Journal. Warren Buffett and I spotted this trend at the same time!)
A blog is different. Well, it is for all those people who aren't so nefarious as to get into pay-per-post, etc.

I've seen two great bits of introblogtion recently from two of the best.

The first one is from A VC:

I know one thing for sure. This blog has to have a personal feel or its just another windbag pontificating about technology and we already have enough of that on the web.

The other one is local to me, Brad Feld. In that one, he makes a connection between what he read about Global Warming and what a reader sent to him complaining about the blog.

Both are good, but Brad's, I think, does what good blogs do best, which is make connections between things that may not seem to be connected.

Now, you may be asking, why am I linking to two different VCs in a blog that is designed to talk about how to avoid VC? That's a good question!

Here’s a CreditCardVC Role Model

Don't think that it's actually possible to start a company using only credit cards and then have it grow until something good happens?

It's a good thing that Randy Morin didn't think that way.

He started a project in his spare time and it just sold to NBC Universal.

This was certainly not a blockbuster deal, just one of dozens of deals like this that happen every week, most of them getting little or no mainstream media attention.

But, lest you think it's easy, take a look at this quote, which instantly enshrines Morin into the CreditCardVC hall of fame:

And lastly, do you have any tips for someone starting their own business?

Let’s start by saying that 95% of Americans and Canadians don’t know what an honest days work is. Most people reading this will likely say they are part of the 5% that do. Those people should ask themselves a simple question. Do you honestly work 40 or more hours per week? Remove lunch. Remove water-cooler downtime. Remove all breaks. Remove personal phone calls. Remove solitaire. If you are part of that 5%, then do it. But don’t quit your day job. Do it part-time until you can pay the bills.

That sounds like a guy who groks the CredictCardVC manifesto.
OK, back to work for me.

Thanks for nothin’

If you are building a company, and you are hoping that company has a healthy exit some day, the way to do that is to focus on what it is you are doing, and do it so well that some larger exit opportunity comes along.

It's kind of Zen, but you really can't focus on the exit, you have to focus first on the task at hand. Sure you have to be smart, be well positioned for an exit, etc., but most of getting well positioned for a good exit is the same stuff you have to do to run a smart and solid business in the first place.

There's a flip side to all this, however. If you do have an exit; If your company does get bought by some larger company, the way the rules of this country work, and the way the rules of human nature work and even the way manners dictate is that after the exit, it's no longer your thing. It belongs to the ones that wrote the check. You have to just let go.

Here's an example of two otherwise fine young men screwing that up. If you don't want to click, it's the story of two guys quitting Google because -- grab your Web 2.0 Kleenx -- they weren't getting enough attention from their bosses.

So.... Alex and I quit Google on Friday.

It's no real secret that Google wasn't supporting dodgeball the way we expected. The whole experience was incredibly frustrating for us - especially as we couldn't convince them that dodgeball was worth engineering resources, leaving us to watch as other startups got to innovate in the mobile + social space. And while it was a tough decision (and really disappointing) to walk away from dodgeball, I'm actually looking forward to getting to work on other projects again.


Look, if these guys want to quit, I have no issue with that. Fine. It's the whining about not getting enough attention that rankles me. If they wanted to complain privately, I'm sure they could and some other sources could make their case in probably a much more effective way, as in this post from A VC pointing out how Google really is just a big company now. He easily could have written that post without having to link to that whiny missive.

I speak from direct experience here, as my first company was bought by bigger guys. I suppose I could have complained about something or another (though probably not as it was a great transaction.) And now that I'm out looking for investors in my next thing a connection from California through New York actually made it back to in Pennsylvania. The key guy there had great things to say about the whole transaction. If I had complained publicly, would I have gotten that positive back-channel feedback? I don't think so.

And worse, I'm now running a great business, one that won't be as big as YouTube or DoubleClick, but still could be a great acquisition for Google or some other big name. Knowing the bad taste left in the collective mouth of Google about this Dodgeball thing, aren't they going to be just thismuch more shy about all the deals that are less than $1.5 billion?
Look, if you didn't get the support you needed from within the acquiring company, that says more about your inability to work within the structure of a big company. If you can't succeed at that, don't blame the big company for acting like a big company, blame yourself for not being better at playing by those rules. If you just don't want to be good at it, that's fine, but don't burn those bridges... other people may still want to use them.

So, thanks for nothin', Dodgeball.

First-Name basis

I heard that Cher and Madonna are friends. They're on a first-name basis.

Over at my day job, the worlds best legislative database, we struggle sometime with our name, which can be hard to prounounce.

It'd be nice in some ways to go out and spend 30 Large on some consultant to come up with a great name, but that's not the Credit Card VC way.

Luckily there are some great (free) naming resources out there, and some of them don't even take themselves too seriously.

Natural Structures


Don't do it.

I know sometimes it's tempting, especially when mothers are going around cheating on board games with their own children just because the mother -- not the child -- is bored.

Michelle Hastings admits she's sometimes cheated to get through a game of Candy Land with her 5-year-old daughter, Campbell. The board game can take just too long, she said.

Candy Land?!?!?

I've played Candy Land plenty of times with my 3-year-old son. The game doesn't take that long, and if he was bored he would just walk away, but he never does.
What does this have to do with running a business without VC? Simple: Follow the rules, don't get bored, stick with it. If that woman wants her child to learn to succeed, and not to cheat to fulfil her own need to be constantly stimulated, she needs to start right now.

Same for us: If we want our businesses to succeed, we need to behave ourselves in the way we want the business to behave; with real confidence, determination, stick-to-itness, and above all trust.

OK, maybe it's not that related, but thanks for letting me rant.

Here’s some good news out of DC

How often do we get to say that?

The Wall St. Journal has a story out this morning that Congress is considering a tax break for Angel Investors.

The idea, as reported, is that investors would get to write off as much as $250,000 per company -- up to $500,000 per year -- in Angel investments.

It sounds awesome, though part of me wonders if the unintended consequence will be way too many Angel investors, and too many investments going to stinky companies. The investor will have already written off the investment, so they may see any possible gain down the road as something like winning the lottery. The upshot: Who cares if they don't really understand the business model or have much faith in the founders? They were going to be writing a check to the IRS, and now they will be writing it to some startup, so how much do they care if the company they invest in is going to passionately go after a new idea?
I think it's a risk worth taking. All the good jobs are being created by startups, and it's just the way the world is going. If there are a few more dogs out there, oh well.
(One shameless plug joined with a hint of Catch 22: My company, LgDb, the Legislative Database, would be really useful to the Wall St. Journal, and any other blog writer or publisher of any kind to allow people to easily see the proposed legislation, and all of the associated links. That way people could easily read the actual bill, which is something I wanted to do after reading that Journal story, but I knew there was no easy way to do it. If the bill was in Colorado, I could do that now, but LgDb doesn't yet have Federal stuff. For that, we need an angel investment. Catch-22.)

By the way, I know that the fact that LgDb is looking for investors is not totally consistent with the idea of Credit Card VC, but as I write in the Credit Card VC manifesto, if an idea is big you shouldn't stifle it by keeping others away from helping you to grow. You can't throw a big party AND keep all your beer in the fridge.

Spiritual Ancestors of Credit Card VC

I stumbled across Founders at Work, and was immediately entranced. Guy Kawasaki had the same reaction, and quoted some of the best bits, including this: “All the best things I did at Apple came from (a) not having money, and (b) not having done it before, ever.” That's from Woz, who founded Apple with Steve Jobs.

(I always feel a special kinship with Woz, because like me and Bob Redford, we attended CU Boulder, but did not graduate.)

Reading through the list that Guy has, it's amazing how many of the quotes have to do with NOT spending money.

Focus, determination, drive, passion -- those are the things most often talked about when it comes to success in entrepreneurial ventures. Money makes the world go 'round, but it is not the key element of success.

The Pitch for Angel investment

This is a forum for those who don't want VC. If you are funding your own startup yourself, be it with credit cards or whatever, you are in a sense your own Angel investor.

Last week I attended an event in which five companies made a pitch for an Angel investment. The driving force behind the idea was Boulder's David Cohen, who wrote about the event on his Colorado Startups blog. It was also reviewed by the mysterious 5280 Angel. I think I saw that guy in the audience, though it was hard to make him out behind the fake glasses, nose and moustache.
The audience got some play money, and got to "invest" in one or all of the five companies. My only complaint with the format was that they lined the investors up and you put the cash right in their hands. A little awkward.

I was surprised by my own reaction to the companies. If I read a story about lice, or even Genetically Modified food, I get itchy, queasy or otherwise squeamish. Two of the five were medical companies, and I thought both of them would be solid investments.

The panel of experts picked Livengood, which makes essentially a glorified cart for use in hospitals. The presenter was Dr. Livengood, I presume, and he was anything but polished, but he showed one slide of a patient in a hospital trying to take a walk surrounded by an IV pole, a walker, a nurse, and aid and a family member. He said something like, "Anyone who's ever been in or visited a hospital has seen this scene many times." Everyone in the audience nodded, in fact I think I saw the fake nose almost come off of the 5280 Angel guy. His contraption basically puts all the stuff that hangs on or near a bed in one place. They've had some customers, and those customers helped with the second version of the product, and now they just need money to build some more units and do some marketing. Great investment, I think.

The other medical one was Torii Medical, which had a great patch that basically makes a patch that holds any tube that gets stuck into your body much more securely and cleanly than tape, which hasn't advanced much in 40 years. The presenter was the weakest, making the deadly sin of reading every word on every slide in the presentation. The product, however, was awesome. Just as with the other one, it fits in the category of medical advances where they are really needed. I know PET scans and all the new drugs are all super, but there seems to have been very little advance in the more mundane things like enabling a patient to take a walk or keeping an IV tube where it's supposed to be.

The audience winner was Chaperon, which has built a tool that makes offshore coding slightly more secure. The concept is that an offshore coder would have to use this software when writing the code, and this software prevents a person from copying and pasting the code to steal it. I think this company is on to a serious problem in a big-picture way, especially as made clear in China Inc. Intellectual Property protection is a huge issue, and will be for a generation.

One of the others, Kerpoof, probably has a great chance to make money, but they are involved in something I would never put money in: figuring out new and clever ways to get advertising in front of 3- to 5-year olds. Any business plan that carves out any demographic and then tries to figure out how to get advertising in front of it is inherently foul to me, but doing it with pre-schoolers is especially opprobrious.
The other was Magic Home Entertainment, which makes a kind of a glorified iTunes interface for very high-end home audio systems. I like country music on AM radio, so I just don't get it, but that probably says more about me than about that company.

Seeing the presentations was also an important reminder that anyone running a business should be able to make the business case for their business clearly and quickly at any time. It's not just a mind-game; it's being clear about goals, which is a crucial first step to reaching them.

OK, back to work!

Buzz Kill

Credit Card VC has not exactly caught on as the buzz word of the moment, but that's OK with me. It shouldn't. You have to be nuts to start a company on credit cards and expect everything to be OK.

Still, I like "Credit Card VC" better than "Peer Production," which doesn't seem to say very much and yet seems to have some people trying to use it as though it's the accepted way to describe... something... perhaps the "movement" behind Open Source software. It comes from an academic, if Wikipedia is to be believed. Figures.

I first learned of it from an alert reader who sent me a story about some of the political ramifications of "Peer Production." If you have better things to do, and I know you do, don't read the whole thing, and for sure don't read the comments, which devolve into a miasma about the Future of Journalism.

And I'm not sure I buy into all of the political ramifications of lowering the cost of production. Maybe I'm missing something. I just think it's the way the world is going in so many ways: Cheaper, more complicated, more interconnected, more information-driven.

So, you can either sit back and ruminate on that, or you can get to work and create some cheaper solutions that are more complicated on the back end and yet they makes things easier for people on the front end and -- by the way -- those solutions are more intereconnected and information-driven.

So, use whatever buzz words you want, but if you really want to change the world, you've got some work to do, and blogging about buzz words doesn't count. Not even for me, so back to work I go.

This is what I’m talking about

Credit cards are bad, evil, a pain in the arse, etc.

But they will never do this to you.

Michael Arrington does an excellent job, as he always does, of being honest and open about the stuff that other people are  only honest about in private. Kudos to him for that post.

I'm a huge fan of Guy Kawasaki, and I wonder if he will be able to talk about this mess in his blog. More likely, as Arrington points out, he not want to foul the waters. I'm sure his lawyers are telling him to keep quiet, and there's a reason that lawyers get paid what they do, so he'll probably listen to them and keep quiet.

Clearly not all VCs are the same, but one way to avoid getting fired from your own company is to never use a VC in the first place. Any ethical VC will tell you the same thing.

Say yes to saying no

A VC is talking about the importance of saying no. Sure, of course. A VC eats "no" for breakfast and poops it all day long. That's what VCs do.

The discussion from that post gets into the need for startups to say no to customer requests, which is different than a VC saying no to a pitch, but it's the same answer. I'm not sure I agree with the idea that you should reflexively say no to customer requests. I mean, if you are trying to sell something then the customers are the experts on what it is they are buying. If they won't buy it, then why wouldn't you change to have it do what they want?

But those are not the "nos" that concern us here in the CreditCardVC community. We say no to VC before they can say no to us!

The most important no, however, is saying no to spending. We just had some good publicity over at, and with it came a raft of people wanting to sell us all kinds of doodads.
I'm trying to sell a new thing, too, so I'm sympathetic to the people trying to make a buck off someone who was just in the paper. My job, however, is to have more checks coming in, and fewer checks going out. Saying no is the only way to keep that balance.

Keep your eye on the ball

OK, Apple, nee Apple Computers, announced a phone that looks so awesome, I'm seriously bummed that I have to wait six months for it.

It's clear that the gang at Apple has put all their effort into making the best phone possible. Some marketing will flow out of that, but it will be easy, basically telling people, "Hey, why not own the best phone possible?" Not too tough of a message.

Microsoft, on the other hand, is doing whatever it can to make you look at anything other than their products, going so far as to send you into outerspace. From there, I suppose, even Microsoft products look good.

And compared to the new iPhone, the Zune looks really silly.

OK, back to my sales calls.

Fellow believers

The core meme of this blog is a bit unusual, if only because it goes against the grain of so much of the conventional wisdom.

So when there's an exception, it jumps out.

I just today came across this blog post from the amazing gang at I missed it first time around, but they included it in their year-end wrap-up. The entry is a critique of an article from a Money Magazine imprint called "Business 2.0" that shows how to build a "bullet-proof startup." 37Signals correctly points out that following the advice would not make you bullet-proof, but instead is more akin to shooting a bullet right through the startup.
They don't go quite as far as I do in this blog; they say there's no reason to spend $20M to get to be a $20M company, and that makes all kinds of sense. They don't say you should startup a company using your credit cards. You'd have to be nuts to advocate that.
I would like to say one thing here that the blog item did not say: Part of the reason it's more possible than ever to build a new idea on the web for less money than ever before is Ruby on Rails, a web application framework that comes from ... 37 Signals. These guys are so good that they didn't even feel the need to pat themselves on the back for being a core part of why it is that the "Business 2.0" pabulum is so wrong, and so dated.

They didn't pat themselves on the back, but I will. Good job 37 Signals!

External Validation

OK. If you are really thinking about CreditCardVC, if you are really thinking that you should take your idea and fund it yourself, there are a few things that you need to have.

Most of them are listed in the CreditCardVC Manifesto, but here's another: External Validation.

This can take many forms. Some of them don't count. For instance, if you tell an old college buddy about it, and he says it sounds like a great idea, and then changes the topic and talks about sports, it doesn't count. If he wants to talk about it for a while, and says, "Good luck with that, man!" it still doesn't count.

If he says, "Awesome, man, you're going to be the next Bill Gates." that is actually a sign that you need new old college buddies.

If he says, "Hey, I love that idea. Can I quit my job and come to work for you with no pay for the first six months?" that counts. Anything short of that does not count.

Also important is feedback in public from someone with nothing to gain or lose one way or another based on what they say. That is, getting a positive mention on the aforementioned college buddy's MySpace page does not count.

I've been hesitant in this space to write too much about my current project because I fear that potential customers will see LgDb as undercapitalized and therefore somehow not trustworthy. But that probably doesn't matter that much. Either LgDb will become the most-used site for state-level legislative information, or it won't. Either LgDb will save them an hour or so of mind-numbing busy work every day, or it won't. Either it will help an association make a meaningful web page, or it won't. I think it will in all cases, which is why I shouldn't worry so much about perceptions of perceptions.

But I want to say in this space that I'm pretty psyched about our first bit of external validation from a serious and respected blog: David is usually pretty gentle with his subjects, but is willing to -- correctly I've found -- point out in his helpful way a seriously flawed business model or a glaring technical glitch or user-interface problem.

For LgDb, however, he had a positive, felicitous, and succinct summary. He even increased my base price by $45, which I see as a sign more of his perceived value in the product than a sign of his note-taking skills from a month-old conversation. ;-)
In any case, it sure is better then telling me I'll be the next Bill Gates, so I'm excited for the write-up, and thankful to David.

And I'm looking forward to getting through the holidays so that people will focus on business again and I'll get some more of the best external validation of all: paying customers.


OK, I hate to admit it, but I'm getting a bit wobbly. I'm all alone out there right now and the wolves are howling.

It would be so nice to cuddle up in the warm embrace of some VC, or even an angel. With a name like "angel" how could I go wrong?

I'm even deeper right now in the situation than I was when I wrote the manifesto. I'm scraping by, trying to pay more than just the minimums but looking at some much bigger bills in the next couple of months.

What's going to keep me solid? Well, it changes from day to day. Yesterday it was finding a couple of sites that encouraged me, I'll have more on those soon.
Today it is the fact that I got some great confirmation from a customer -- a real live paying customer -- in the form of a check and also some encouragement about how precisely we are solving a huge problem that she knows she's going to have in January. Unfortunately not everyone is able to project forward to January, so I know the phone will be ringing then.

But for now, it's quiet.

OK, time for me to get some marketing stuff done. You go back to work, too!


The more I think about this drug analogy for credit cards, the more apt it seems.

Sure, credit cards are legal, and the credit card companies -- just like drug dealers -- do whatever they can to get you what you want, but they never really come out and say it.

Think of the typical credit card ads on TV: They seem to promote mostly the idea that they are not as bad as all the other credit cards. The new Discover ads show scissors everywhere cutting up cards. The Capitol One spots display the terror of using cards, cards other than Capitol One anyway.

So, why is it OK for me to parade around here saying that using credit cards is a good idea? Well, because it is. To paraphrase Winston Churchill, it's the worst way to start up a new company, except for all of the others.

  • VCs want your first born.

  • Angels are typically people who had one good idea, and now have enough cash on hand to help you out, except that they're going to be hanging around all the time telling you about how their one good idea was really good, and you should be more like that.

  • Banks: puh-lease.

  • SBA: Banks with even more paperwork, that sounds like a good idea.

  • Family: Personally, I like Thanksgiving dinner, and want to keep it that way.

So, if you have followed my rules, then go out and get some credit cards and live the American Dream.

Sunday Nights

The job of an entrepreneur is not clear, there are no defined job descriptions, or whatever.

But boiled down, your job is to worry about everything, and then act on the things that are the most worrying.

So, when do you do that worrying. For me, it bunches up on Sunday nights. I've spend a blissful day or two with my family, and then all the worries come creeping up, making it impossible to get to sleep.

Turns out, I'm not alone.

"I think what most people experience are thoughts of dread," said psychotherapist Dr. David Wright. "Before going back to work they experience withdrawal behaviors, they don't enjoy their Sundays."

OK, it's a bunch of psycho-babble, but I find it to be true.

What's interesting to me is that a TV station did this story, and yet TV stations have their worst programming on Sunday nights late. I can't tell you the number of times I've been unable to fall asleep Sunday night and then was stuck watching some bad sports interview show, infomercial or other crap. I suppose it's good, because it reminds me that TV doesn't help anyway, and I should really go dig up an old WSJ and read that instead.

Don’t get the wrong idea

I realized I should be clear about one thing before someone takes this the wrong way: Do NOT get in over your head with unsubstantiated hopes.

If you have a solid business plan, really solid, and you have some certainty that you will be out of credit card debt in six months or less, then it does make sense for you to use the cards, the no-interest balance transfers, etc.

If however you are just holding onto a dream that even though you have no revenue and no customers in the pipeline but somehow Google is going to find out about how cool you are and call you up and offer a gazillion dollars, well, look, I think you should get a job delivering pizza to make sure you can pay off your cards soon.

Do not take up drumming! You know the difference between a large pizza and a drummer? The pizza can feed a family of four.

I digress.

Look, here's a good rule of thumb: If your current revenue is enough to cover the credit card minimums and your other fixed monthly expenses, and you have customers in the pipeline that will mean you can pay off the cards before the special rate expires, then you should be OK. If you are taking out new cards to pay the minimum payment on other cards, you need to stop right now, go get a job, and keep your dream going on nights and weekends.


Welcome to Credit Card VC, I'm Scott Yates.

This place, I hope, will be a home for people like me: entrepreneurs starting their own high-tech company. Maybe -- like me -- you aren't doing this for the first time.

And while it may be a big idea, you are financing it yourself... maybe with some retirement money, maybe with the proceeds from your last sale, maybe and probably most commonly from that Uniquely American method of the Credit Cards.

I went looking for a place for people like me, and couldn't find one. There are zillions of sites out there for startups looking for VC or Angel investors. If that's what you want, you won't find that here.

There are also lots of small business sites, helping people decide, for instance, if they should use a broker to help them purchase a dry cleaner; if they should open their own concept sandwich shop or buy into a franchise. This is not that site, either.

No, this is for the entrepreneur who sees clearly "the business." You know the product inside out, you know what the marketing plan is, you have a good idea of the cash flow. You may not have written out a whole business plan, but if you had a spare 20 hours you could. It's probably web-based, and certainly high-tech.

Even 5 years ago there's no way you could have done this business on your credit cards.
* Coders wanted too much money and moved too slowly.
* The problem you are solving didn't really exist, or if it did the tools to solve it weren't around.
* You didn't have the confidence that comes from surviving the dot-bomb era more or less in tact.

So, now you have a vision of a product that really will revolutionize your niche; that's awesome!

What else do you have?
* An executive office (that accepts the cards, sweet!) or a basement office.
* Some coders working, billing you on paypal (pay them with the card, too... sweet!) and some other workers typing or transcribing or something from Madras or whatever. (You tried the Indian coder thing until you realized they all suck.)
* Some marketing stuff you made digitally; read: cheap.

Maybe you have to go to a trade show, but the show, the hotel, even the cabbies these days take the plastic.

The customers are in the pipeline, but not here in force just yet. A couple months more, maybe six, they'll be beating down the door, and you won't have time for any of this crud.

But right now it's all you. It's your job to keep all those minimums paid, keep the coders on track, keep the marketing up. And there comes a moment when you feel so all alone, so completely isolated with customers not calling you back so there's plenty of space on your voip to have vendors calling you for payment. It's right at that moment that you want to throw out your plan, write up a quick couple of pages and send it off to Guy Kawasaki or maybe Union Square Ventures and have them take care of all your needs, and be your friend to boot. You just want someone to share your burden.

I'm there for you, man. I've been right there. I've been so tempted to submit that plan, go start hanging out with all those smart guys. But I'm telling you, don't do it. You and me, we'll stick together, and get this thing done.

Why? I'll tell you why. It is your dream. Selling your dream is like selling a child.

I've been through the whole cycle now. When it's time to sell, you'll know it. It's like sending a kid to college, it's time for the kid, and it's time for the parent. But not now, when the kid is needing a fresh diaper and a walk or 30 around the living room to be put back to sleep.

Right now you have nothing but bills and a dream. Go to a VC or Angel now and it's like sending your kid to college when he's 3 years old.

Look, VCs will talk a good game about how they just want to help you realize your dream, but if that's so then why do they get half of your dream? What is half a dream, anyway?

I'm clearly over-generalizing here. There are lots of ideas that really do need lots of cash and lots of good advice, and for that, there's VC and all the rest. But remember, for every youtube, there are hundreds of others that get funded and then die in a pile of resentment, legal documents and animus. A few of them move forward a round or two, changing along the way until nobody knows what the heck the dream was in the first place, and everyone walks away feeling... well not really anything. Kind of like the feeling after your sophomore year viewed a few years later. "Was that the year we made that great trip to the lake? No? Well, crap, I know I did something cool that year."

So, that leaves you all alone with your credit cards and nobody else.

Until now. Now you've got me, and I have you, too. Thanks for stopping by. Leave me a note, I'd love to hear about what you are doing.