One Saturday afternoon while my wife and daughter were grocery shopping I was sitting in my home office thinking about Twitter. I had begun to find some business related utility in it and feeling as though the Twitter platform had some cool possibilities for business owners. I had been trying all sorts of products and services while I was toying with how to make Twitter work for me. I downloaded or signed up for pretty much every Twitter service/application you can think of. I hired some dudes in India to do some boring manual labor on my Twitter account. It was all a big experiment and I wasn’t sure what I was doing or where I was headed. My gut just told me that there was a need going unmet and as an entrepreneur, that is the kind of stuff that literally keeps me up at night.
So, back to that Saturday afternoon – I’d finally tried pretty much everything I could find to help my businesses use Twitter in various ways. I found some cool stuff I liked, but I found a bunch more stuff that I thought was a waste. The problem was that a lot of the good stuff was tangled up with the wasteful stuff too. I wanted something that put all of the tools I needed in one place. Since I couldn’t find it, I decided to build it myself. When I say ‘myself’ I don’t mean I started writing code. TwitJump would have been a non-functioning disaster had that been the case. Instead, I started emailing people I knew that had related expertise and asked them for recommendations. Who did they know that was a Twitter API expert? Who did they know that was a PHP ninja? What other types of contractors would I need to build my project? I got a lot of great suggestions and began to narrow it down to a few key players – a twitter API expert, a team of experienced PHP developers, a creative designer, and some all-around smart web entrepreneurs. Take note – this might be the most important contributor to TwitJump’s success:
I knew what I didn’t know. I went to those that either did know, or knew someone that did, and then I went about interviewing them. How much did this cost me? Zero. How much did it help me? Immensely.
How do you interview someone who is an expert in something you are not? Read! While I had/have no ability to code, I read enough to be able to talk the talk. I spent a lot of time learning about Twitter and how it worked. As I mentioned, I paid for (where necessary, some stuff was free) all the apps and sites I could find in order to find out how they did things. I took the good stuff and noted it and I also took the bad stuff and noted it too. I also was having regular discussions with my good friend Greg Warnock. He’s a mentor, has invested in other businesses I’m involved in, and he knows a lot of people. He liked what I was doing and put together a late night brainstorm session with a bunch of smart people. We talked about all kinds of things – Twitter, TwitJump and a variety of related tangents. It was a very intellectually stimulating meeting. I made a few friends in that meeting that I continue to talk to regularly and hope to further in the future. After this meeting, continued discussions with Greg and others, I developed a good road map of what I wanted done and after some work, had a good team of experts to make it happen and TwitJump was officially moving ahead, we had a logo and everything 
TwitJump Is 'Born'
So what’s next? Well, we really got rolling. No investors, no banks, no friends or family, no offices, no employees, no advertising, no meetings. I was determined to make TwitJump a virtual company with the highest margins possible. The costs to develop were not inexpensive, but those costs can decrease dramatically over time for a single use, web based product like TwitJump. I was focused on the recurring expenses. As mentioned, TwitJump used the latest technology to not only create an incredibly scalable business (TwitJump can handle millions of users with a few hours of work if need be) but also to keep costs down. There has never been a better time to affordably start a business – there are so many things that used to cost a lot that now cost a lot less due to the improvements in various technologies. We were able to get emails, mock ups, a website, logos – simple stuff – all quickly and very inexpensively or even free in some cases. My focus was to get a working product and then go and talk to people about it. This is a concept that I think a lot of entrepreneurs need to zone in on. I wrote a post called ‘Build, Sell, Sell, Sell – Build, Sell, Sell, Sell – Repeat‘ that talks a lot about building a business this way. As the great Alan Hall, founder of MarketStar/Mercato describes it (paraphrased); “Entrepreneurs build this shiny object, and say look, buy my shiny object! But they don’t talk to their customers enough to learn what shape, size, color and price they are willing to pay for it. Without that, all you are holding is an expensive, personal, shiny object.”
After we had something to show, we started to give away the service. No advertising, no SEO, no SEM, no PPC, nothing. We had a single landing page and that was it. Why? Because although we wanted to run fast, we wanted customer feedback to continue to build a beta that we hoped they would eventually pay for. As a result, many of the features you see today were not thought of by TwitJump, they were thought of by TwitJump customers. In fact, I’d guess that over 50% of the features were ideas that had something to do with a customer comment, email or meeting. As we continued to build and develop, customers continued to give us feedback. As we got to the point where we felt we had something that met some of their needs, we started to ask them to pay for TwitJump. Amazingly, many wanted to pay. Many more inquired about paying without being asked to pay. TwitJump was profitable and cash flowing nicely within 90 days of it’s launch as a result.
As the next few months progressed, I increased my bet. More money, more developers, more customers and thankfully, more revenue and profit. The model was working, the ideas and comments kept coming in, and the customer count increased more and more each day. We now had thousands of users from all over the world – still no advertising of any kind – customers nonetheless. The trends were certainly encouraging. TwitJump also has a built-in viral nature in that every time someone ‘tweets’ from TJ, it says it came from TJ and it is linked to our site. We get hundreds of new customers every week from this simple link at the bottom of our customer tweets. The combination of a customer built product, with low operating costs and high growth made for a business that was becoming more and more attractive to industry insiders who were watching what we were doing.
I was anxious to take TwitJump to the next level. While I had/have some good ideas for it, I didn’t want to lead it to the next level. While I love Twitter and find great utility in it, I didn’t want to work on TwitJump full time. I often joked it was an expensive and profitable hobby that was quickly becoming a serious business. I started meeting with a lot of talented people about buying and/or running TwitJump. The list of people I was talking to was very flattering – TJ had some good momentum and it was being noticed. Things were progressing nicely, and then the ‘TechCrunch” effect happened. I’ll not soon forget being in a meeting and getting an email from a friend saying “hey, nice article on TechCrunch, that’s awesome!”. I had no idea what he was talking about as I knew no one at TechCrunch and I had not been contacted by them. I should note also that earlier that day I received a term sheet out of the blue from a group I had been working with. I thought it was a bit odd to suddenly receive it, but after reading the article, it became clear to me why. TwitJump was now a publicly known ‘hot commodity’. Here is a link to the article (we are listed in #4):
TechCrunch Top Ten M & A Deals for 2010
Within a few days I received emails and phone calls from some BIG companies outside of Utah. I also sped up talks with the current ones I was already talking to. Things were a bit crazy, but really fun. I felt (and feel) very fortunate to have had such quality companies and people expressing real interest in acquiring TwitJump. Some of the offers included more cash then others. Some included more stock. Some included me moving. Some included me continuing to help with TwitJump, some did not. As it came time to act on this great momentum that TwitJump was receiving (thanks again Kelly – you definitely helped spark an early exit for me. I look forward to meeting you in person soon), I had immense clarity on what was the right fit for TwitJump and for me. Since TwitJump had no employees and no office, it really was all about what was best for TwitJump and me – I didn’t have employees, partners, leases or other things to factor in. I’ve never had that before when selling a business, so it was a different angle to view selling from.
As the title of my blog states, I am an entrepreneur. I love other entrepreneurs. I like to be around them. I like to talk to them. I like to work with them. I like to help them. It’s in my DNA. It’s my one true passion (business – family is my real true passion), plain and simple. So when FundingUniverse put together an offer that included me becoming a full partner in the company and a member of the Board of Directors, as well as leadership of the TwitJump product and other fun entrepreneurial initiatives, it was the absolutely perfect fit. It didn’t hurt that FundingUniverse was doubling revenues and profits every quarter and that they were quickly becoming a national business that was on it’s way to being “..the best in the world at matching qualified entrepreneurs with banks, investors and other funding sources”. The partnership there I had known for many years. I liked and respected them and knew that I’d fit in well to the partnership. I’m an entrepreneur so I wasn’t looking for a job and that’s what some of the offers post-acquisition were. FundingUniverse offered me the opportunity to be a full partner/owner in the entire business, to take a leadership role in some key initiatives – I got to stay in Utah, which I wanted to do – and I would be working with really smart people who had complimentary skill sets. The timing and fit were perfect, so to the surprise of many, I chose FundingUniverse over the other more ‘well known’ suitors. One important note – I’m not a philanthropist, FundingUniverse’s offer was competitive economically as well as otherwise. They had a MONSTER year in 2009 (note – 2010 is blowing away 2009 which helps me confirm that I made the right decision) and they were in a good position to make an acquisition. Here is the press release about the deal, as well as a nice follow up article from TechCrunch:
Social Media Acquisition Next Growth Step for FundingUniverse
FundingUniverse Buys TwitJump To Help Startups Leverage Twitter
So TwitJump went from an idea to sold in about 6 months. I have had businesses fail in that period of time, but never succeed in that short amount of time. I learned a lot from this experience, and I hope that the account above is useful to some/any of you. Now that FundingUniverseis my full time business, I plan to blog about it and all of the exciting things we are doing to get that company to $100MM in revenue. It won’t be long before that happens. It will be longer then 6 months – but we are well on our way to building a global business that solves an enormous problem. That’s the key isn’t it? Building a business that solves a lot of problems for people. For me, the ‘people’ in that sentence are entrepreneurs, and I am overly excited about the opportunity to build a business and a technology that will help millions of them all around the world.
So that’s the story and that’s what is next. No rest for the weary, lets GO!
I’ve been thinking a lot lately (perhaps too much?) about business, strategy, growth and other big picture decisions that can help push a company forward towards lofty goals ($100MM+ in annual revenue). I’ll be the first to admit, my mind gets a little mushy sometimes when I think about all of the moving pieces it takes to get to that level of annual revenue. There are a few revenue related milestones that are significant in an entrepreneurs career. The first is the almighty $1 million dollars (in Dr. Evil style voice). Some readers are starting companies or own a business and have high hopes to generate $1M in annual revenue in 2010. It’s not an easy thing to do. I realize that revenue can eventually mean little without profit, but for the purposes of this blog post, I’m focusing on revenue goals. We’ll assume we all know how to control expenses enough to stay in business (or can raise enough money to afford losses until we hit profitability), and as such, the discussion will stay focused on the top line number.
So what kinds of things do you do when building a company from $o to $1M in sales? All of the really scrappy, dirty, I-wanna-hire-someone-else-to-do-this kind of stuff. This stage is the scariest in my experience because it feels the most risky. You don’t have revenue to fall back on if you screw up bad, and you are likely taking financial risks that you aren’t getting a return on (i.e. putting money in, not taking any out). Also, its a time when you are certainly more lonely then at other stages of revenue growth. There are some really cool parts. You make lots of fast decisions, your team is really close (because it is small!), and you get to really celebrate critical ‘wins’ that propel the business forward. Also, energy is perhaps at an all time high here as you are so completely consumed by your new shiny idea that you cannot sleep. Every extra minute is spent thinking about new features, benefits, revenue models and ways to sell more, add more, and find more users and customers.
The next step up in revenue seems to be around $10M in annual sales. Surely between $1M and $10M some incredible things have to happen. I have been fortunate enough to experience this stage a few times in my career. There are a lot of things that happen during this stage of growth that are entirely different then the previous stage ($0 – $1M). A lot. The company undergoes drastic change in almost every area. The team gets a lot larger. So do the offices. So do the bills. Hopefully so do the profits! But not always. A lot of what happens depends upon how fast you go from $1M to $10M. The longer it takes, the more the companies are likely to feel and act totally different. Case in point; if you go from $1M to $10M in sales in a year, is it likely you are a technology/internet/viral consumer business? Yes. If it takes you seven years to do it, are you more likely to be a ‘traditional’ type of business that acquires customers in ‘old school’ formats? Yes.
Let’s assume you are trying to build a business that will go from $1M to $10M in less than seven years. Heaven knows, every business I have been involved with certainly fits into this assumption – although only a few have actually been successful in doing it. If you want to grow your business at a brisk pace, and get into the double-digit millions, you have to take some pretty decent risks. There is no way to sludge your way to $10M in sales in under three years, it just doesn’t happen. You have to go at a bit of a break-neck speed. There are always exceptions, but I’m talking about the rule, since 9 times out of 10 that is what I seem to relate to most. Anyhow, I digress.
So your sprinting towards $10M by adding employees, customers, financing, products, services and square footage. You are also likely adding partners, debt, complaints, stress, turnover, and hours. There is a lot of trade off as you can see. It’s worth it though if you manage it right. What does ‘manage it right’ mean you say? I don’t know. I’m not so sure I’ve figured that out yet. I can say this though – it’s different for everyone. I’ve done a pretty good job at making it ‘worth it’ for me and my family – with emphasis on the phrase ‘pretty good’. I can do better and it seems that over time, for the most part, I improve. Be prepared for the biggest challenges you will ever face though in terms of tough decisions. You will likely have to fire some friends, put some stress on your personal life and go thru some frustrating choices all in the name of revenue. Does that mean it isn’t worth it? Of course not. It’s totally worth it. Why? Because you are going to have a bunch of crappy stuff happen to you whether you hit $10M in revenue or not, so you might as well just do it.
This is the part in the post where I have zero experience to call upon. Going from $10M to $100M in sales is something I have never been a part of. I have been a ways north of $10M before, but not even close to $100M. Everything that happens from here on out is based on several things in my opinion (in no particular order):
- Quality of people that we hire – they know their stuff and are a great fit within our company culture
- Expanding direct sales and adding channel sales
- Potential VC’s on board to accelerate growth, help with key hires and strategic decisions
- Maintaining momentum, culture and energy amidst great change
- Not getting lost in too many new ideas – find that balance of focusing on core competencies while still being innovative
I know there are a lot more things that should be on this list. Care to add any? I welcome them in the comments.
As my CPA friend has told me time and again “sales cure a multitude of ills’. I couldn’t agree more. If there was ever a time when sales was the answer, its now. Banks are being stingy, customers are more selective, competition is fierce. I’m not a huge fan of a lot of conferences and conventions, but when Mercato Partners holds a conference on sales, I’m there. Why? Because they (and their speakers) know what they are talking about. The proof is in the pudding, or in their case, the ROI. Mercato is invested in some of the fastest growing (sales growth) companies in the West. Alan Hall, their founder, started MarketStar out of his home and it now generates over $10 Billion in annual revenue for it’s clients like HP, BlackBerry, and more. If your company needs sales, needs profits, wants to grow and wants to survive, then you should attend. I’ll be there, let’s meet at the conference. Here is a link to sign up, it’s money well spent.
FundingUniverse is on a tear. I will be posting periodically with various positions we will be hiring for. Feel free to email me – alex AT fundinguniverse DOT COM. We offer a really cool place to work, great benefits, a stable and successful company, with a fun group of nice people to be around. Sounds decent enough, eh? Here are some of the details:
Senior PHP Developer
PAY: $60,000 – $80,000 DOE
Description:
Lead a team of developers building an exciting new site from the ground up. Plan, track, and develop along with the team during sprints.
Experience:
3 years minimum PHP 5 experience
OOP expertise
Experience with PHP frameworks (Kohana, Code Igniter, Cake)
MYSQL, with experience planning and deploying databases
Solid UI skills
HTML/CSS/Jquery experience
Experience prototyping and planning large consumer web apps
Rapid development (SCRUM) experience preferred
Bachelor’s in computer science, information systems or other technical degree a plus
Well, that didn’t take long. Shortly after TechCrunch predicted that TwitJump would be acquired by Twitter in 2010 a virtual firestorm of activity ensued. I received a number of term sheets from some very strong companies. I’m thrilled with the result. It will be fun to formally announce it next week. TwitJump will have some INCREDIBLE new features rolling out under the new ownership. Watch for updates. In the meantime, it’s kind of crazy that an idea I had 8 months ago was sold this past week. It’s fun being an entrepreneur and these types of experiences are why we/I do it I guess. I couldn’t be happier with the result.
Next big thing? FundingUniverse. We are well on our way to breaking $100MM in sales and changing the entire landscape for small businesses. Well beyond funding, we are building a platform to help all stages of business with a variety of needs. I love what we do as I mentioned in a previous post.
Stay tuned for more exciting stuff
A business I started, www.TwitJump.com, has been predicted by TechCrunch to be purchased by Twitter in 2010. I am incredibly flattered that TwitJump is included by TechCrunch in this short list of five companies. If nothing else, it solidifies TwitJump as a highly valuable tool for Twitter. What do you think, should I sell this business to Twitter in 2010? Read the article here:
http://www.techcrunch.com/2010/01/03/top-ten-digital-deals-2010/
‘Tis the Season for New Year’s Resolutions (NYR)! I have read a lot on Twitter and Facebook. Change this, improve that, do this differently, experience this or that, etc. Another underlying them is the “won’t let bad people in my life, will focus on positive stuff, removing those that drag me down, etc.”. While all of these are great pursuits and worthy efforts, most will fall short. Why? Because if you set goals once a year, you are likely to follow thru on them just as often. It takes consistent, regular effort to make, maintain and achieve your goals. In addition, it takes, in my opinion, a much more granular approach to goal setting and achieving and NYR are just goals, right?
I liken NYR to something my Dad often talked about with me. Leadership was his favorite subject and one he knew quite a bit about as a Leadership Mentor for over 40 years. He mentored some of the best and brightest CEO’s in the region and had great stories to tell. Along with that, he would often talk to me about what Leadership training and mentoring really meant to him. He said it ‘wasn’t’ the quick fix weekend seminars, the NY Times Best Seller book on tape, the package of DVD’s and manuals, or the big rah-rah weeklong go find yourself types of corporate adventures. My Dad thought they were useful, and helpful, but had only a very short term impact on an individual. They were meant to augment a much more detailed plan. He thought, and I agree, that the way to find true change was to work on it daily/weekly/monthly for years at a time. No quick fix, no weekend rah-rah’s. Just a detailed plan, executed often, analyzed periodically, measured, and then reset for the next round. This is NOT what NYR are in their truest definitions.
So, with that in mind, I’d like to suggest you reconsider trading your NYR in exchange for detailed, regular (one a month, or once a quarter at most) goal setting with plans on how to get there, accountability steps along the way, reconciliation of goals at stated times (month/quarter) and then a reset/adjustment for the next time period. In my opinion, this is MUCH more effective. You want to achieve your NYR goals, right? Consider trying this method as an alternative to the annual ritual of ’set and forget’. Being good at anything takes practice, and practice by definition is something that happens more then once. So practice your NYR at regular intervals, with the check-in methods described, and see if you have a better year with regard to achieving your stated goals.
I am not even close to the most successful person I know. However, I have had pretty good luck at setting and accomplishing goals for myself each year. I’d attribute it to my shunning of the NYR tradition. What I do happens all year round, no one day to turn it on or off. I think that is a big contributor to my reasonable sucess (reasonable = doesn’t happen all the time). Do you want to try it? Let me know how it is going if so. OR, do you think I am off base missing this long time tradition? Either way, I am going to continue doing it my way, because it generally works for me. And I guess that is what really matters. Do what works for you.
I’ll be there January 7, 8 and 9. Please email me: alex AT fundinguniverse DOT com if you are interested in potentially getting together to talk business in Las Vegas next week. Should be an interesting show, I’ve got some good meetings scheduled but am always looking for more.
Our family is actively pursuing adoption. We would really appreciate it if you would keep us in mind if you know of anyone that is pregnant and might be considering adoption. Please spread the word, although keep our names confidential at this time. Email me – alex@theentrepreneursblog.com if you’d like to connect us with anyone. Thanks so much in advance for helping us add to our family. MERRY CHRISTMAS!!!!!
I was contacted by Steve at techlifemashup to do an interview with him about my career as an entrepreneur. he’s a great guy and I appreciated the opportunity. Here is a link to the interview. Thanks again Steve.
http://www.techlifemashup.com/2009/12/interview-with-serial-entrepreneur-alex-lawrence/
Tags: Entrepreneur
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