Recently I’ve come to know about Adrian at 7Million7Years. He’s a successful entrepreneur with lots of experience in running businesses and investments. Adrian decided to share his success and his wisdom with the next 7 “apprentices.” I applied on the first day and today, I’ve got featured as one of the applicants on his 7m7y site.
The first task I have to do is to get more traffic to my so-called “profile” page. I intend to leverage the traffic to my blog and open a pop-under to the page. Yes, I know pop-under is annoying, but I only have the pop-up until June 2nd (in a week).
This year, Startup School 2008 again had some excellent speakers. I enjoyed it as much as I did for last year. I came in late for about an hour but I hope I did not miss much. I also bumped to a few old faces from last year as well.
Paul Graham is charismatic and funny with his advices as always. He gave a revised speech (a bit different from the one from last year) about the usual topic: “how to start a start up”. A good analogy for his advices is the relationship between the founders and the investors (VC) is similar to a relationship between girls and boys. If you show that you can live without money (or love) and generally be okay on your own financially (or emotionally) then more people would be interested in you (either fund you the money, or trying to get a date with you). A strong start-up with an action plan and a profitable potential will more likely to spark more interests from the VC than one needs the cash infusion to struggle along.
Paul paused, then brought up the next slide:
“A startup needs to be like a roach”
This clicked me. Personally I’m not afraid of any insects or reptiles, but I disgust roaches. Can’t stand them and just imagine how they would crawl up my legs makes me want to find a shotgun and smoke their tiny brown ass. Nonetheless, a startup should have a roach as a hero to look up to for its survivability, adaptation, and persistence. For millions of years, the cockroaches still survive just fine while the almighty dinosaurs went belly up, fossilized, and became the crude oil we got addicted to more than cracks. A startup needs to change when the weather changes, needs to survive from the fierce competitions or the VC’s liquidation, and be persevered to keep going when the odds are all against you.
In his book, “How to get Rich“, Felix Dennis (SOLE owner of Maxim and tons of other magazine) wrote about the idea of acting small and think big (not the other way around). A startup must keep coming even when facing failures is not even an option but a reality and knows how to act small and determined to come back to take a piece of that pie and steal more of the market-share. Personally, after watching a roach running for its life so many times, fleeing away from my smoking shotgun, I should know better how a roach would zig when I’m about to zag it. It would predict my next blow, running as fast as it could on all its got (6 tiny legs and a pair of paper-wings). No matter how much I tried to kill them, they still get away, and come back with more roach-warriors the next day. Acting like a cockroach will definitely help in dire situations when one is starting a startup. We usually learn the best lesson and experience from Mother Nature. Well-done, Paul, and it is hilarious too.
Another old speaker from last year, Greg McAdoo from Sequoia talked about the VC industry and how Sequoia love to work with Startups. Since I am not much interested in getting funded from VC (more of this later), I only listened to him with half the attention. Nonetheless, he is a really good speaker with lots of advices. His observation: the successful entrepreneur needs to have the skills to identify the trend and ride it to where it is heading to. Don’t fight the trend but leverage it to supercharge ahead. Isn’t that what people call “chances” and “luck”? Greg ended his speech with an impressive video, showing this one guy rode the biggest wave I have ever seen:
As much as Greg McAdoo pushes how the VCs are interested in working with little startups, my most favorite speaker of the entire program, (drum rolls…) David Heinemeier Hansson (DHH) dissed the whole general startup mentality, i.e. build something, raise VC’s money , go big, and hope for an exit (or just die in flames). DHH is truely a business man in how he approaches the subject of startup. He knows his goal (making ENOUGH money to enjoy life) and hits the bullseye with his skills (RoR is just amazing - I’m so thankful for his release of RoR to the open-source community and how he has helped me get to my dream).
Focus on the customers
Build something good that you can have the customers hand over their card numbers
Going through VC is NOT the only way to make a profit for startups
Everybody is a winner in the market if they can grab the customers. The internet is HUGE
Instead of technology makes the business profitable, it is the well executed business with the correct technology which will be the cash-cow.
Work less hours: 12 hours of work is not necessarily as productive as a good solid 3 or 4 hours of focused, zoned-in development.
Shift the mentality of building a tech startup to building a self-sustainable and profitable business
Customers can either consumers (harder to get money from) to the Fortune:5,000,000 (easier to get money from, provided that the application is solving a business problem)
As I just wrote, the idea of raising money for my startup never stuck in my mind for long. I’m in this game to build businesses that MAKE money. What DHH said did truly touch me. I want my business card to say “Alex Le - Owner”, not just “Alex Le - so and so of this business”. I want to trade my sweat equity for ownership. With RoR and a little imagination, the road to success has never been as accessible. The real question is that do I really have the guts and perseverance walk down that path. in the future, I may change my mind about raising money from the VC, but it’s only when I know that I can use this money to rocket the business, and only when I am financially independent through my own businesses. More specifically, when I don’t need VC’s money then that is when I want to raise more from them. Why? I can run the business my way if I have the choice to say NO anytime I want to.
I can’t help but post this photo:
Yup, DHH and me. I got a chance to talk to him when the lunch break started. A group of other people gathered around DHH and asked him questions about running an online business. DHH really shines as a extremely smart guy (he is!) and business-savvy. I took a video with my camera for almost of the DHH-group interview but the file is rather big (1.04GB!) so I’ll post it on YouTube later. You’ll probably get a lot of kicks and nuggets of wisdoms from the side-walk talk with DHH. The end result: no more pizza when I came out and I was starving for the rest of the day. But between pizza and the opportunity to talk to DHH? You tell me.
DHH is simply awesome and to see him shot down what Greg McAdoo had just said is equally interesting. DHH has the most credibility and right to say what he said because he has singlehandedly changed the startup/IT industry and happens to get rich along the way. The most important thing is: he is totally right.
However, I am a bit disappointed with Paul Buchheit’s speech this year. He delivered an un-energetic, monotonous talk with a somewhat sparse slide. The big theme for his presentation was to listen to people’s needs, build what they want, but don’t “obey” (the hello-kitty slide was rather cute) all their requests. The talk was stretched into 15 minutes and occasionally got some laughs from the audience. Probably the people already know Paul so they laughed to show him some support. Maybe I set my bar too high after hearing DHH’s speech, but seriously, Paul’s last year speech was a lot more inspirational and energetic than this.
Don’t get me wrong, I enjoyed the contents and message of his talk, but have criticism over the way he delivered it. Don’t shoot the messenger, that’s what people say. However, in this case I think the messenger a bit sloppy in the preparation. Probably Paul had been up late working on FriendFeed the night before.
After the lunch break was Jeff Bezos, CEO of Amazon. From his talk and the way he responded to the questions from the audience, I believe that he is genuinely a nice and humble person. From his vision and actions, he is a man of conviction and strong beliefs in what he does. Amazon Web Service reflects that and I did write a post praising him back in 2006, even before Amazon ’s stock rallied up when people realized the true potentials of the company.
Jeff was promoting and evangelizing AWS, EC2 in particular. He did so rightly because he is more than happy to see more startups using AWS as the underlining infrastructure. As I mentioned in my 2006 post,
Amazon is building the new web economy and they are collecting tax already.
I totally agree with Jeff’s response to a question regarding the competition about Google Engine: the market is huge and everybody wins, i.e. it is not a zero-sum game but everybody benefits as the adoption grows and more and more values are being created everyday.
For the technical questions, Jeff handed to an engineer from Amazon (just wished the engineer was given a microphone so the poor guy did not have to scream his heart out in a 600+ person hall). Nonetheless, I’m so glad to see Mr. Bezos took the time to give a speech at Startup School this year. And I can’t help but to post this …
Hey … he’s the man, I don’t think I can allow myself to miss the chance to take a picture with him. Are you kidding me?
Next was Marc Andreessen. It was a QA session with the host lady and was informative. Marc is a passionate person and I could really see his passion for the web when he talked. I will definitely check out his blog more often.
Last but not least, Peter Norvig, the Director of Research from Google, a guy with intimidating white hair that makes me feel so young, little, and reckless, gave his speech on some data mining techniques. He showed some interesting clustering results from algorithms that Google is employing to enhance the Image Search quality. The example he used was a search for Mona Lisa (with safe search on, he stressed). To come back with good and relevant results, Google look at the contexts of the images (surrounding words, image tags, DOM structures, etc.), then from this result set, they establish the common features of the pictures (main structures, shapes, etc.) and establish clusters of “connected” images by comparing each photos with one another. The end results are clusters of images, with the center images being the most relevant to the search query and the outer ones are still related but with a much lesser degree. Another interesting example was a search for Abraham Lincoln: the algorithms generated 3 clusters for the results: 2 for the indoor statue, and one for the outside building. Seeing the Director of Research from Google giving a presentation on his work is pretty inspiring, considering that Google is spending only(!) $2.1bn in 2007.
A guy , self-proclaimed as the “evangelist” for semantic web (now that was arrogant), asked about Google’s interest in pushing for semantic web. Norvig responded (indirectly) that with the vast amount of text data from the web (50% more spam than ham?), it is already possible to run data mining techniques and algorithms to achieve good results. I think this is true. Analyzing the DOM trees, structures, and other aspects of the vast number of websites out there, one can establish a good working knowledge for relationship between the words and can potentially solve interesting problems already. Semantic web will be helpful, but it won’t be a make-or-break feature of the web, as Norvig answered wittily “Semantic Web is the future of the web, and always will be.”
This is my mini-coverage for the 2008 Startup School. I think I’ll wrap up some other stuff before heading to bed (Note to self: It’s been a long but awesome day already and I’m flying back to Chicago tomorrow afternoon so getting some rest now would be useful :).
A quick photo of me taken with Justin (from Justin TV), Trip (CEO of Scribd), and Wu (I bumped into her at last year Startup School while finding my way to the Kresge Hall)
Running a website should be considered as running a business, albeit a unique kind of business that everything is virtual. The designs and implementation is no longer the most important part. Managing contents, marketing, SEO-ing, and monetizing become a lot more critical, especially if the site is within a niche and crowded markets. Google is now rising to be the big G of the web: getting “Google-slapped” means dropping number of ads clicks and losing revenues from advertisements.
How profitable is a website?
Very and varied. When a site reaches a certain “critical mass” in terms of visitors, page views, Google page rank, it can pull in at least a couple hundred dollars a month. Smaller content-based sites (such as my website) can pull in a couple bucks to $10, $20 a month. On the other hand, there is a few blogs that pull in $1,500 to $2,000 dollars on average a month from advertisements. Other more successful blogs pull in $20,000 to $30,000 a month. John Chow’s personal blog is a notable one as the mastermind behind it publicly posts the monthly income on his website (that is also one of his marketing/PR techniques too). Mega site MySpace’s revenue is up in the hundred of millions and a writer from Forbes estimated the 1B number.
True story: a friend of mine is running a non-for-profit search page (www.searchkindly.org) that collects advertisement money and donate to charities. He was able to raise $817.25 for March alone. It is quite amazing to look at his “proof of giving” page.
With that kind of revenue, running a website as a business is much more profitable than any other kinds of investing, including real estates. The downside is that it takes a certain kind of people to run such a virtual business since there is no schools, no classes, no books to teach you about making a living off the internet. There are e-books being sold all the time with the promise of teaching you how to “make $5,000 a month from home in your pajamas using your laptop “, but I highly doubt the contents and techniques from such sources. There are certain things you can pick up and learn as you go. Making a money off the web is certainly one of them.
If you talk to people around you about making money online, most people will look at you with puzzled eyes. They probably won’t be able to grasp the concept of how a banner and some text links can generate such money. Alchemy they think. But as the internet become more and more crowded, the site that can generate leads and capture visitors attention will certainly win the breads.
Where should one start?
The easiest way is to start a blog and start writing about your favorite hobbies and ideas. I love web technologies, I love coding, I love making money so this is the theme of my blog. Your interests is different than mine, but it is something unique and better yet, you can start making money off it right away. John Chow’s advice is to write not about money but what you love. He is making money doing exactly just that.
If you can program a web application then it is even better way to make money through both advertising and subscriptions. However, the efforts will be significant higher. Trust me. It still hurts me every time I think about all the failed ideas, postponed projects that I worked on over the years. Motivation and PERSEVERANCE is the biggest key to success.
The risks associated with such an endeavor is also mountain-high if you financially invest in it. The risks get even worse if you don’t have the technical background and hire developers to implement your ideas. The cost of developing an application is not cheap, at all. You will get conned, get ripped, get sold on compromises, and delayed deadlines. Your dream idea can become a nightmare, both emotionally and financially. If you are not tech-savvy, then don’t start a web project until you find the right team and the right technical person to relate to. Otherwise your loss is guaranteed. Speaking from my own personal experience, the best way to start a small web application is to have a team of 3 people: 1 designer, 1 lead developer/ thinker, and 1 co-programmer. At an average rate of $50/hour per person, the numbers adds up quickly.
Can anyone make money off the web?
Yes. You have to pick a point where you want to start. Visiting lots of other sites with proven revenues to get ideas. Experimenting with your site to generate more ideas and use that as the launch pad for other stream of revenues.
In the coming months, I will share more of my experience of making money online so definitely it will be more interesting.