How To Build and Sell A Company In 6 Months or Less – The Story of TwitJump

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!