Startup lawyers know everything about acquisitions. They see them first hand from a unique vantage point: CEOs tell them stuff they won't tell investors, and vice versa. They are the only people that know the whole picture.
VC: "We want to buy your company". Me: "Umm. Okay. But, I am still developing". VC:"No worries. Come down". I do (plane flight). Show up in this big office. They make me wait in a huge room at a table that could seat 20. One guy walks in with a thick printout, throws it on the table so the printout slides to me and says "This is how we value a company. Read it." I read it and the value of my company would be based solely on revenue.
What I learned: Don't let them put you in the defensive position. If there is a strong fit then revenue and metrics shouldn't play much of a role (at least initially). If you are taking the time to meet them face-to-face then I don't think it is too much to ask for a ball park figure.
Hope this helps.
b) No. Never tell a car salesman what you're willing to pay for a car. That becomes the starting point from which he'll only go up. In your case, the reverse. I'd hire an independent auditor to valuate your business, giving you a high, low and median selling point from where you can intelligently negotiate.
Your diligence needs to be done as to whether or not they're actually a good fit to buy (qualified?) and research them to see if it looks like they may be interested in your company from more than just a buying perspective, because they could just be shopping you and there's no need to disclose everything.
Sure you'll end up paying them a hefty cut...but you won't get screwed.
Plus, if you're getting interest from one large company, there are probably others interested as well and a good broker can run an auction for you to get a much better deal than trying to do it alone.
Selling your company isn't something you should do by yourself in my experience.
If not drop, then drop the distraction and get back to work.
If maybe, decide if you really want to go work for the big company and if so, hire a pit bull to work out the deal on your behalf, then get back to coding in case it does not go through.
Flirting can lead to marriage, but it can also lead to a case of the clap. If your product is strong, there are "plenty of fish" as they say.
If you really want to have an exit then you need others involved as well - other buyers and smart experienced people to help with valuation and legals.
DEcide what you are worth - and use gut feel (your number) and someone that can give you a quick and dirty valuation. If you actually have revenue or even profit then this stuff is easier, but mainly it's doe by comparing you to other deals.
Reach out to other likely buyers and let them know that these guys (named or not) are sniffing around. The code words used by big companies are that your are 'in play' and you want to court the decent buyers before creating an auction situation.
Control the process yourself once you have the buyers lines up. Give them consistent information, deadlines for tabled offers and then start playing them off against each other. YOu'll get a great understanding of how they operate and can choose the company with the best money AND fit.
Before you share anything too private then do make them sign an NDA - you should have a stock one, and the negotiation process to get them to sign will be a good telltale.
Oh- and the unsolicited offerer should always come to see you - at least at first. No acquirer is too important to come to see you.
If you don't, consider finding someone as a last minute advisory board member explicitly for this purpose.
They are all in your head anyway. I've been thinking about the Harry Potter thing of how they get to the train station for wizarding school by running straight at the brick wall with confidence, which carries them through it and to a different world, where a train awaits to whisk them off to a magical place, a place to learn yet more magic. I think it's a great metaphor. The brick walls aren't really there. Just go at them head on, believing they aren't really there.
Oh, and there's no spoon either.
Best of luck.
I know another guy that was rejected from YC and just sold his company to another company all of you have heard of.
YC is great, but it's one of many paths. Every time I read, "YC rejected me but....." it sounds like "Harvard rejected me, but somehow my life didn't end."
Sometimes you wonder how a company managed to exit with their idea but people count for so much. I have friends that, if they had the dumbest idea in the world, I would put my money down because betting against them is a losing game. If it sounds ludicrous, is because you've never had friends like that.
If you had pitched with the same co-founder and same idea and still got funded, you could have given PG a big 'told ya so', but different idea, different co-founder, is really a different sitation. Plus, I'm sure YC doesn't invest in many ideas/people that they wish they could, as they have to make selections on very little details.
Out of curiosity, what stage are you at with the new company? Did you close your round with a working prototype? moderate user traction? existing customers?
Again, congrats on the funding. Best of luck with the new biz.
when YC has told us no in the past --> just sparked the fire that much more.
my personal motto: doubt me...please do ;)
I'm not convinced ability to get funded matches with likelihood of profitability.
Personally I wouldn't require this whatever possible, even in that case, but that is a different topic altogether so...
It's even more impressive that YC helps founders succeed by rejecting their applications, and motivating them to try harder.
The latter is a truly scalable business model. Maybe YC should get a chunk of stock simply for letting companies apply to the program...
Sorry to say so, but this sounds like a classic case of 'a stitch in time saves nine.' I appreciate that you were nervous, but you should have brought in outside help/advice when you first realized you had a cash flow problem. They may have been scamming you, but then again you may have caused them a major cash flow problem; manufacturing margins are relatively slim, and $50,000 is a lot of money by Chinese standards. Suppose the factory has had difficulty paying its workers or your broker has been prosecuted over unpaid bills? At the very least, your broker has suffered a major loss of face, and serious damage to her commercial reputation. Meanwhile, you have not just lost $50,000, you appear to have lost your entire supply chain - and it's possible that you now have a reputation as a buyer who doesn't pay on time, and will have difficulty negotiating terms with alternative suppliers in addition to the more generic problem. Although you might have had to spend a few thousand for legal assistance a few months ago, look how much more it has wound up costing you.
So, get help immediately. A lawyer is like a doctor for your business in this situation, and your business has developed a serious problem. As well as the legal costs, you may have to pay compensation to your Chinese broker or supplier, and possibly go there in person to demonstrate your sincerity and restore their reputation as well as yours. You should also be exploring alternative avenues of supply, commercial credit, and how less flexible payment terms might impact your cash flow. It's going to be a lot of work. Good luck, and I hope it all works out for you and your firm.
Seriously though. Why not just fly there? It's a couple grand to likely get back $50k (cash or merchandise). People are far less mean in person.
In the future it's best to have an expediter in China that can check the facts on the ground. Also you should not have to pay for manufacturing before the product is shipped or at least checked by an independent contact in China. Usually terms are around 30-90 days depending on the industry and product (sometimes up to 6 months).
I put up a manufacturing guide a few months ago where I talked a bit about this: http://news.ycombinator.com/item?id=1840896
In my experience legal advice from people that do not practice law is rarely helpful and potentially harmful.
In my experience, Chinese manufacturers have very little incentive or desire to provide credit or terms of any kind. They also have little desire to problem-solve issues or defects. So, it's no surprise that your problem is (according to them), your problem. I don't know if there is even a Chinese equivalent to the saying "the customer is always right".
The net is swamped with illiterate postings so your service should be in hot demand.
1. Anonymity: I guess, but not sold.
2. Hosting & IT Infrastructure: Isn't this largely a thing of the past? Could you really offer hosting and such cheaper than the likes of Heroku/GoDaddy/the like?
3. How many start-ups, in the mode you speak of, "need" this? Hey, having an accountant ready to go is great, but most certainly you'll be charging extra for that? Payment systems are also something that has become easier and easier to implement.
4. Legal Umbrella: For me, this is the scary one! How am I going to get that umbrella without giving something major up in return? This is something I'm already working on...right? So why give it to someone else? Now, maybe offering up a GOOD set of standard docs and/or legal services to get ME setup with my own protection would be something worth considering.
5. Moral Support - Can't argue with that. I get a heck of a lot of it right here on HN though! What would be better would be skill augmentation! I suck at graphic design/visual stuff and I equally suck at bizdev/marketing - and I would gladly trade some of my coding skills for someone to help me on the stuff at which I suck.
6. Solidly supplied by HN users, but can never get enough! This has a stronger impact in a "non-virtual" setup where you work next to these like minded individuals "x" number of nights a week.
Sounds like a negative response, but you asked if it would appeal to me and unfortunately, in this case, with the parameters described, I don't think it would. But I'm just one voice and wish you the best.
Has anyone ever considered a virtual incubator? I think the biggest con to something like that is the loss of face to face interaction with others. But considering that more and more startups are getting there start in areas where a traditional incubator may not be available. It may be a groups best option to get access to some those resources.
All this knowledge is power. Some risks have been reduced. More importantly, others are the same but I now have a much better idea of what they are!
HN provides me whole new level of confidence!
Thank you everyone, especially those of you who share all the nitty gritty details of your successes and failures!
(ps related thanks to proggit and the BoS forum as well)
Our IT guys just screwed up both UPS & Fedex's systems here at work just last week. I'm a programmer at a distribution company, and had a front row seat to the mess.
We had a power surge that fried two of our shipping stations, and the last backup was about a week old. Since all the stations are identical, they cloned the hard drive from one station and put the image onto the two replacement stations, thereby getting them up and running quickly.
The imaged system and the replacements then started generating identical tracking numbers. While the packages arrived correctly (the address is encoded into the barcode), the tracking information was garbage on the both companies websites. It would show packages jumping from California to Georgia in a matter of minutes for instance. Packages were delivered multiple times, etc. No major harm was done, but customer's who were attempting to track their packages were very confused.
Not sure what you can gleam from this, but at the very least it's obvious that neither company treats the tracking number as unique, and they don't use them for anything of importance internally.
For example, I am currently receiving a TV from UPS. I have to be at home to sign it. But, I have work. I'm not going to take an entire day off. But, the delivery window is an entire day. Surely, the trucks have some sort of route and surely the trucks should have some sort of GPS. I don't need to know exactly where it's at, but c'mon at LEAST a 2 hour ballpark.
Agreed, and then...
- Contact the site admins for the major airport hubs (SFO, LAX, ORD, JFK) and sell to them- Contact all those independent Wifi operators at airports and sell them, they're hungry for content- Contact Virgin, Richard's guys are always up for something new & different!- Add Twilio.com SMS API, a "GroupMe" for flight notification?
The project died after I couldn't get much interest in it. But I still have the domain - took everything offline some time ago though...
After about a year or so, the same features started popping up in sites like kayak.
(although that may be in part to me showing early revs to a buddy who worked there)
If you want to get your toes in the water a bit with ML, there are some great ML libraries that encapsulate some of the popular algorithms. Mahout, Weka and Mallet are popular in the Java world,
A lot of folks use Python for ML as well, and there are some good libraries there.
The R language is also popular in ML circles; as is C++. If you learn some combination of Java, Python, C++ and/or R, you'll be in good shape from a programming language standpoint.
Check out http://mloss.org/software/ also.
Some good books to get started with include:
Algorithms of the Intelligent Web
Programming Collective Intelligence
Collective Intelligence In Action
Stanford make a great series of lectures available online that you might find useful.
Good References:1) Elements of Statistical Learning - Hastie, Tibshirani and Friedman
2) Pattern Classification - Duda, Hart and Stork
3) Pattern Recognition - Theoridis, Koutroumbas
4) Machine Learning - Tom Mitchell
As someone who does work on a startup in London, but didn't go last night, it's because I've found the HN London meetups to be chock-full of people who don't work on startups, but simply talk all evening about recycled opinions they've garnered from reading HN posts.
Not an interesting way to spend an evening.
(For future reference if Springboard runs one of these events again, it's definitely worth going. I got a lot of practical advice that's going to have a major impact on my business, plus I had an early stage VC ask me for a pitch deck. I'm not sure how the event could have been any better.)
Honestly, and this is not a criticism, that evening felt much more like "talk about programmer stuff" than it did "talk about startup stuff". There were a couple of good talks about the business of startups, and the rest felt like coding, or pitches, or both (and again, this is not a criticism).
I used to go to quite a few tech events in London but found I was spending too much time with like-minded people (techies) and not enough with people who had other backgrounds and interests.
These days I pretty much just go to LRUG once a month to socialise with the good friends I've made there over the years.
HN strikes me as a fairly diverse group though, so I'd be interested in going to the next meetup.
Due to work pressures, i.e. launching soon, I saw it better to spend my time working on my startup than going to the HN event. I have 2 children, and work from home, so I need to grab any opportunity I can to work.
Also, there are now lots of startup events in London, and if you are busy then you really need to pick and choose which ones you go to. In my case I am going to the lean startup one next week, which I see as being currently more relevant (and maybe more useful) to me than the HN event.
(Speaking of which, nearly everyone I know ‚Ä"¬†including us ‚Ä" is hiring.)
(I regret that I missed the talks - unfortunately I was held up by a meeting that ran late).
Off the top of my head, possible options:
1. Startups don't engage on HN, or don't feel part of the community. This seems pretty unlikely.
2. (London) HN readers are predominantly people in full time jobs, or just not entrepreneurial.
3. Startups are too busy working.
But none of those seem particularly probable. Maybe it is a cultural difference?
Or maybe it was just a bad night for startups :)
Raises hand (see profile for details)
If they're not already working at a startup, are people who attend these events likely to be open the idea of work for equity or co-founding?
If you use MSN messenger ... add me as a contact. (That goes for everyone else)alainrichardt [at] hotmail.com
I hate it when people use that - but if anything deserves it, it is "This."
zefhous, do you have this photo? Can you make it available?
Amazing submission, thank you.
I've seen this covered all over the news and can't understand the logic. Despite the fact that the United States has publicly backed the will of the Egyptian people, calling for an orderly transition - there seems to be a pathological need to throw some egg. No one is grabbing the 7.62 casings from the Misr-AKM and saying, "see the gifts Russia sends to Egypt?"
Things have gone up a notch in the last 24 hours or so.
1) Respect etags / last_updated tags. This will save you a ton of bandwidth, for one, and keep you from getting banned by the feeds you're pulling. It's important. What I ended up doing was a different method for new feeds vs. ones I already knew about -- on the initial parse (and subsequent ones too), I would check for an etag or last_modified indicator. If I can't detect anything, I set a poll frequency to something like a half an hour. This kept me from slamming servers that didn't properly implement etags, while I could check headers on the ones that did more frequently.
2) Hang on to your sockets. Opening / closing sockets is expensive for this particular task. What ended up working for us was queueing entries and using the same urllib handle for as many as needed polling at a time. Otherwise, we were flooding the box with open sockets.
3) Use a task queue. My environment was Python, so I had the beautiful Rabbit and Celery to work with. Never ended up having to scale, but the intention was that using a distributed task queue, it was built such that we could just add other nodes to do the fetching tasks if we needed to.
I don't like dicking my accounts! :-P
EDIT: epic fail, but honestly it looks like dick: http://imgur.com/c44Hf
For example, if I'm at a bar in NYC drinking with my friends and I get a text (from a stranger) asking how much a pitcher of Coors is, I'm likely to answer because it's a quick text back. But, if someone asks me to list what's on tap, I'm likely to ignore the message because it's a lot of work and the payoff seems very little.
Also, I would have been quicker to signup if I didn't have to use a third party.
Overall, I think it looks awesome.
I came up with a similar/not-so-similar concept that I'm still working on (http://www.xuland.com) only I'm not leveraging Foursquare, Facebook or other location-based apps. I'm depending on folks actually logging into the application and posting/replying.
Of course, my app is also done in Flash (jury is still out on whether that proves to be a good idea or not) but I discovered well over a year ago that it would be great if I could find out what was happening at this very moment in a given location so kudos to you and your team for recognizing a need. Good luck!
I think users will enjoy feeding data into the system as long as it's fun and they get a sense of accomplishment from helping out their fellow man. Robust, rapid answers will definitely be the hinge on which the app relies.
EDIT: On a 13" MBP the "Have an invite code" link is below the fold and was difficult to find at first.
The response has been fantastic. I can't wait to see what else comes in.
I'm going to be self-serving here, but it makes it easier to articulate my idea and point. I have a small, "lifestyle startup"/hobby -- a daily email newsletter where I share awesome/true facts like how Abraham Lincoln created the Secret Service the day he was fatally shot. (Really -- http://dlewis.net/nik is the subscribe URL, the archives are linked thereto, and it's in the archives.) There are a LOT of small, wannabe thrillist/daily candy email newsletters out there. Featuring one is stupid, but writing about this emerging/cottage industry is interesting.
Basically: "Ten Interesting Email Newsletters" is a great post, potentially, as is "Ten Ways To Manage Your Business Connections" (hashable? cloudcontacts? cardmunch?), as is "Ten Sports Startups" and ... well, you get the idea.
I suggest you get in touch with Andrew from Mixergy.com - he has plenty of connections to get you started.
I was trying to find a feed that let me exclude certain authors, but I ended up ditching everything.
I agree, there needs to be more news about startups. Good to see that other people are doing this as well! There are plenty of startups to write about.
I hope you're going to have an editor :)
Wait, that was something else. Just sent some info on ParkGrades.com...
Any particular reason for asking it again?
For the ones that seem feasible, I do a one-page business plan. How would this work, how would it make money, would it be profitable, are there any awesome features I need to write down while I think of them. This gets it out of my head and onto a piece of paper. The paper goes into a folder, and I don't allow myself to think of them again.
From time to time (normally when I get one of them stuck in my head once more, good ideas are like viruses) I review that folder. A quick look now reveals that 3 (of the 7 that are in there) remain good ideas (the others really wouldn't be profitable, though I might try some of them for fun).
Now I must compare those 3 to my current business - which energises me more? Energy is a combination of excitement (where the new ideas have an advantage) and revenue likelihood (Money is energy). I'm in an income phase at the moment (having recently moved my coaching business to the UK), and the income potential of my current business is far greater in the short term than any of those other ideas. So current business wins my energy, and if I really need to validate that in a thinking space I can.
Once I have a coaching income base once more, I will likely repeat that exercise and see if I can take on one of the others. By giving myself permission to have great ideas, and a process to nurture them based on my priorities, I manage to stay more focussed on the business at hand. Certainly, that works better than trying to ignore them (and, simultaneously, remember them for later!) in my brain.
If you actually want to chat more about this and talk about your ideas send me an email. Im always looking to network with people.
PS - Don't second guess yourself after you've made a decision.
PPS - Don't undervalue the work you've already done on your current project. Execution is harder than ideation.
PPPS - Lay off the coffee.
Many have parts that are broken, they are slow, have really messy HTML, rely super heavily on flash, and just lack most modern features that most sites would have.
I just have yet to run across a good porn site that looks technically as impressive as someone's 4 hour rails project even. Of course, I wouldn't mind being proven wrong.
www.gfy.com is the most popular adult webmaster forum, but there are others like www.justblowme.com, www.adultwhoswho.com, etc
Just keep in mind that the adult business is a business. The people involved are interested in making money.
On a side note, we are hiring programmers! Shoot me off an email if you're interested.
It will generally have little impact on future jobs; especially if you get hands on experience with massively scalable architectures and high traffic volumes. The problems you solve outweigh the environment you worked in. From my experience, adult companies keep things professional due to the nature of the business and the risks of being sued.
I have a buddy that was in the industry for awhile, and there are a number of forums they all troll on. Here's a couple:
Anyone know where a freelance admin could find such jobs? The smaller the shop, the better.
http://gofuckyourself.com NWS) is pretty much the hangout for adult affiliates and webmasters. If you're trying to build traffic, that's where you want to be.
Funny enough, I seem to be at it again. My latest client is a porn startup.
IMHO the best thing about working in adult is that you gain a good understanding of affiliates and seo / marketing / conversion rates etc... and that is information that has helped me with my mainstream clients as well.
The best part of it was the "best orgasm faces" contest we had. I was a programmer so I just benefited from it but those working on touch ups would screenshot and save the orgasm faces into a shared network drive and we had new stuff to laugh at every day.
About 4 months later we got a cease and deist letter from Hasbro asking us not to use the term Kandyland as it was too similar to Candyland the game.
Being young and not exactly flush with VC money, we simply changed it to California Babes or something like that.
Eventually after about one and half years, our girlfriends asked us if we are going to make this a career or not? We picked our girlfriends and have left the business altogether. The experience did help my web development career though.
Unfortunately, I wasn't a coder then, just support staff, but it was a great experience and I learnt some things about how they run a multimillion dollar biz from a basement.
Got a view on everything from creditcard processing, to the sysadmin side. And of course dealing with performers and customers was always fun, as they are not that usual people.Still remember a "crazy stuff" folder, where we used to collect the funny moments.
The site has languished, as I'm not really sure what to do with it, but I'm proud of the features I implemented, the UI, and the things I learned in doing it.
I saw the potential for seriously automated stuff, but sadly when I went to Uni it all fell by the wayside. Got back into it a little after, but lost interest: it had got a lot harder to get converting traffic in the 5 years between the first dabble and later.
Now everyone wants video. That's gotta be a killer on your bandwidth bills.
E-mail me if you'd like an alpha invite.
One night I got into an argument with a fellow waiter who badmouthed me for coming along and picking up american jobs (I had just started making a lot of tips b/c I served humans better). Manager took his side so I got pissed and quit. I went home and my now ex-wife told me she wanted a divorce and was planning to move in with one of her friends from school (she was a student too). I got depressed and had an accident with my Pontiac POS. It was a freezing cold Chicago winter with temps 20 below. I got even more depressed, sat home on a couch and drank bourbon for a week.
That's my absolute lowest point. Everything got better after that. Much, much, much better:)
The money was not great, but I rationalized myself into taking the work because the teaching time was compressed so I could work from 9-4 each day and then cram away at development until 2am or so. Or that was the idea. In reality the job was a massive psychological drain. There were no textbooks or support of any kind so doing anything half-decent required a lot of energy and creativity. Meanwhile, doing a bad job would have meant letting down the kids and being actively complicit in a system that functioned primarily to separate their parents from their parents' money.
It wasn't what I had signed on for, but it seemed easier to push through and try to do the best job I could than back out. The work was only a month or two, and what other choice did I have, I asked? And so it happened that as I walked in to class one day about three weeks after starting I literally burned out in the hallway. I had just dragged myself out of the stairwell when I suddenly felt like the bottom of the world. I was tired and depressed and exhausted and all of a sudden found myself perceiving myself from the outside and looking down and pitying myself at the same time. Before that I'd been able to shelter myself from those emotions by convincing myself that my actions were positive sacrifices that were necessary to start the business. But in that moment I saw my defenses as pointless delusions. I felt like a dead man walking. I was clearly the world's biggest failure. Career. Business. Whatever. Anyone with any sort of objectivity would have to agree.
I stopped working there after that first class wrapped up, but the money paid the bills and helped get me to the break-even point, or what I managed to convince myself was the break-even point. I don't think it is as bad as coping with bankruptcy or death or anything, but it was my lowest point and I don't want to go any lower.
Vault and eBay are another two examples.
What these all have in common is requiring a critical mass of users to work, which gives them a barrier to entry that allows them to become complacent.
Both sites have forums. Neither of which are particular active. TV.com's forum takes the lead in that area, however it seems the audience for tv-serie forums are located on fan-site forums instead.
Both sites use userbased contributions (to some extend). TV.com seems more professionally handled (also endorsed, so obviously has an advantage), whereas TVRage summaries, bios etc., seem more random and not necessarily added to complete a show's info.
Perhabs a better ranking/modding scheme could make for a TV.com/TVRage competitor? I haven't given it much thought, but taking something simple and easy to use like, say, up/down voting (which web users of today are familiar with) as an aid to moderate the info on the site could be an idea.
An advantage of TVRage is it's open-ness and (willingness to have an) API. I've used this many times, and in a web-age where people want to present stuff at their own website how they want (kind of like a new-age "embedded link" or "widget"), APIs are a great way to show that your core speciality is information, and the accuracy of this, and if someone wants to present it in a blue/yellow website so be it, as long as people know where to go to get to the source: you.
Recently, though, a lot of videos haven't even been getting that far!