My In-Laws have been visiting for the past week, which is one of the reasons posting has been light.

Since (a) I like them and (b) I’m a suck-up, I usually make something my Mum used to make when I was a kid. It’s a ridiculously good caramel/chocolate dessert thing that’s pretty easy to make.

This stuff has been called “like crack” and described as “rocket fuel for kids”. Use responsibly…

Introducing Mum’s Caramel Slab…

Step 1

4oz Margarine
4oz Plain Flour
2oz Sugar

Cream the margarine and sugar together. Stir in flour and mix thoroughly. Put mix in a greased 8″ tin (should be 1/4″-1/2″ deep). Bake at 300f until light/golden brown (takes a while). Leave to cool

Step 2

4oz Margarine
4oz Sugar
1 can of Sweetened Condensed Milk
1 tablespoon treacle (can use Golden Syrup also) or Molasses
Large bar of chocolate

Melt margarine and add sugar, treacle, sweetened condensed milk and bring to gentle boil, stirring constantly.

Boil for approximately 5 minutes.

Get a glass of cold water. Drip some of the caramel in to the water. When it forms a solid drop that you can pick up (without it dissolving), it’s done.

Pour the caramel over the base and let it set.

Fill a medium sized saucepan with water. Place a bowl in the water. Break up the chocolate and put it in the bowl. Heat the water, stirring the chocolate until it’s all melted. Pour the chocolate over the caramel and let the whole thing set.

Mmmmmmmmm.  Yummy.

Categories: Cool Goodies 'n' Stuff
No Comments »

I’ve had my issues with Apple, but broadly speaking I’m a fan.  Quick recap:  I find the hardware reliable, the UI/design ahead of most other vendors and some of the software tools impressive.  But their nickel and dime approach and reliance on closed/proprietary systems does drive me a little nuts.

Having bitched about a negative experience, I figured I should blog (blitch?) about a positive experience.  About a month ago, when running on battery power, my MacBook started shutting down when the battery still showed 20-30% charge left.  In the past two weeks, the shut off point has climbed to 70%.  That gives me about 20-30 minutes of non-plugged-in usage before the laptop does a hard shutdown.  And I mean hard — no graceful hibernation, just a full system stop.

I was in the Apple store in Durham the other week and I asked one of their tech guys if he had any suggestions.  I saw a similar issue once that was actually a software issue.  He suggested I bring the thing in for a “Genius” consultation.

Not the answer I was looking for, but such is life.

Earlier today I was heading back to Durham with my family, so I decided to see if I could get a Genius appointment.  It took a second to find the right link on the Apple site, but it turned out they had availability this afternoon.  I punched in some details and was all set.

Skepticism engaged, I rolled into the store.  Lo and behold, my name was already on the plasma screen — number 3 on the list.  I waited a few minutes (less than 10) and got called up to the Genius Bar.

A guy who actually knew what he was talking about took about 1 minute to check the laptop serial number and check the battery stats in the System Profiler. The quirky thing was, he actually read the notes I submitted through the website, so I didn’t need to explain a thing.

He disappeared into the back of the store to see if they had any replacement batteries in stock.  They didn’t, so he printed out an order form.  What’s more he apologized for the inconvenience.

At no point did he ask when I bought the laptop, or whether it had Applecare (it doesn’t).  The data was actually in the system he was using to provide support.  Crazy!

For the record, I bought the laptop on April 21, 2007, so it was out of warranty.  I didn’t buy Applecare because I used to work retail (looong time ago) and know exactly how much of a profit center/scam extended warranties usually are.

As I looked at the order, I saw a $99 dollar charge on the order form.  Before I could even ask, Genius bar guy explained that the system showed the cost, but they were not going to charge me because I was only just out of warranty.

I’m guessing they’ve had some battery issues.  I’ve been too busy to Google it and find out.  But still, the whole consultation took less than 15 minutes.  Yes, I have to go back to pick up the battery, but that’s really not a big deal.

In short I was treated like a valued customer by a knowledgeable and competent employee who actually gave a damn about his job and about my satisfaction.  In a retail environment?  On a technical product?  Now that’s some kind of special event worth noting.

Crazy stuff!

Categories: Random Raves, Thoughts 'n Ideas
No Comments »

As a marketing guy, I understand the need to name things. It gives tangibility to a concept, and that allows the concept to be marketed.

But I hate all this “2.0″ sh*t. And “Marketing 2.0″ is a good example of why.

I have several issues with the 2.0 moniker. First of all, it’s mostly defined by what it’s not, rather than what it is. Just as describing a chicken as “not a cow” is nonsensical, defining “Marketing 2.0″ as not like “Marketing 1.0″ is silly. But my bigger issue is that being “2.0″ anything usually means throwing out everything that was part of “1.0″. I’m all for removing the dead wood, but throwing the baby out with the proverbial bathwater isn’t smart. It may come as a shock to some people, but direct mail and print advertising is actually still effective. For certain targets and products, it gets better results than eMarketing.

But it’s hard to imagine tactics that are more old school than direct mail and print ads…

Anyway. Why this rant today? I was in a meeting a few hours ago and someone asked me what I thought about “going viral”. I can’t even begin to count the number of times I’ve heard, seen or read that all you need to do to ensure success is “go viral”.

To me, “going viral” is the 2.0 equivalent of my least favorite marketing concept: “to get the brand out there”. Fluffy marketing cr*p at its finest.

A good business knows what it costs to get a customer and how many customers they’re going to get next month (and the month after that). You get to that point by understanding your sales cycle and what the inputs are that drive your goals. The tool for driving and optimizing your sales cycle is marketing.

Marketing should aim to be a machine. $X in these places generates Y leads, which leads to Z sales and revenues of $A in B months. For example, perhaps $30k in CPC generates 1,000 leads, 25 sales and revenues of $75k over 4 months. You can then test to see if $45k generates 1,500 leads and correspondingly similar increases in sales and revenues.

While I’m simplifying a lot, the point is to test, see what works (and what doesn’t), scale, and test again. In theory (and life is never so simple) you then know what you need to spend on Marketing to hit a given sales target.

So why do I dislike “going viral”? First of all, it’s a result, not a process. You don’t “go viral” as an action, you end up with something that has gone viral. Hollywood has spent 100+ years trying to figure out what makes something go viral. Will all their billions of dollars, they have yet to figure it out… and no one else has either.

Secondly, you have no ability to consistently repeat or scale something that goes viral. So as a tool for reliably building your business, it’s useless.

By all means go ahead and create a video that might go viral. Just don’t try and build a company on the back of it.

* and if you didn’t know, “lurgy” is english slang for “disease”.

Categories: All Business, Thoughts 'n Ideas
No Comments »

While I was attending the recent inaugural Triangle Startup Drinks on Friday night, the subject of Venture and Angel funding came up. I figured it was worth a post…

Two different folks raised the question. One has an idea that they think can be big. They’ve been doing their research but don’t have a product yet. The other has a beta product and is looking to expand their business.

The first thing to realize is that in the context of funding, there are two types of business. For want of a better description, I’ll call them Lifestyle and Growth.

A lifestyle business is a perfectly solid small business. One of my former startups, 12 Inch Design, is a good example. It serves a relatively small market (tens of millions, not billions) and ticks along at a nice pace. Since the market isn’t that large, there is a clear upper limit to how big the business can and should be. And the ultimate size is simply not that big.

If you have a lifestyle business, you should NOT pursue VC or Angel funding. If you need financing, debt or friends & family will be by far the best route to take. Your business will not be able to provide the kind of return an Angel or VC investor is looking for.

So what if you have a growth company?

Well first of all, a true growth company needs to be a “sky’s the limit” kind of business. Your addressable market should be in the billions, or at least be likely to be in the billions at some point (search wasn’t a billion dollar business when Google got money, but it certainly had potential for very broad adoption).

Secondly, the business has to have an exit path. There are two: get acquired or go public. And that exit needs to be at a value where the investor can get 5-10x their investment.

Let me be very clear: if an investor puts $1M into your company, they expect to get $5-10M back. If they put $5M in, they expect $25-$50M back.

This may sound like a lot to you, but the numbers have to be like that because VC investments are high risk and many will fail to yield a return. Don’t get carried away with feeling bad for VCs, but they are in a genuinely tough business. I forget the exact industry stats (and I’m too lazy to look it up) but they go like this… Over 10 investments, 1 will give a great return, 4-6 will return 1-2x the investment, and the remainder may be a loss. So if a VC invests $50M across 10 companies, they can expect $35-50M from the hit and maybe $25-30M from the rest. So $50M invested may return $60-80M.

$10-30M in profit sounds like a good return, but it may take 5-7 years to see that. Doing some handwaving math, with those numbers over a 5 year period, the interest rate on the investment is about 10% annually. That’s no better than the S&P 500 index, and the VC’s risk is much higher.

So they expect a big return. And you will have to sell your company or take it public for them to get it.

Now presumably you want to make a buck or two out of your company also. But your ability to do that will be tied to the deal you cut with the VCs that are investing in your company. Simply put, the more risk you take off the table for the VC, the more of your company you can hang on to.

What does that mean? Well, if you have an idea, no product and no customers, you are (a) very early stage and (b) very high risk. If you have a product, some customers and even modest revenues, you are comparatively much lower risk. The closer you are to the second scenario, the better deal terms you’ll be able to get.

I’ll skip on details (this post is long enough already) but there are many different aspects to a VC term sheet. One that people tend to focus on is valuation. Let’s say you’re very early stage. Maybe the VC values your company at $1M. If they invest $1M, your “post money” valuation is $2M. $1M of that $2M is from the VC, so they will own 50% of the company. Or to put it another way, your ownership just got cut in half.

If you have customers and modest revenues, you may get a valuation of $2-$4M. With the same $1M raise, you have a post money valuation of $3-5M. The VC’s percentage is now more like 20-33%.

And of course, odds are good that you will need more than one round of investment to build your company, so the original founders can expect to end up owning 25% or less (combined) of the company at the end of the day.

I’m simplifying a _lot_ here, but you get the idea.

The point is that the VC investment should dramatically increase the overall value of your company. Without investment, maybe you can own 100% of a $5M pie. But with investment and a good outcome, maybe you end up with 25% of a $100M pie.

If your company can be a growth company and you’re willing to give up significant ownership over time, VCs and Angels may make sense. If you want to own it all, or your business isn’t going to give the right kind of return, VC/Angel investors are not a good fit.

One more thing on a related subject: it’s interesting how many early stage companies die because of squabbles over ownership. In one case that I know about, the dispute was over 5% of the company. Founder A owned 50%. Founder B owned 40%. Founder B wanted to be equal with Founder A and was very aggressive in their demands. But step back and look at the big picture. After multiple rounds of investment, A & B combined may end up owning 25% of the company. That disputed 5% is now 1.25% of the final pie. Is it really worth torpedoing the relationship with Founder A for 1.25%? What’s more, if two founders have a strained relationship, how much does that increase the odds of overall failure? Is a 1.25% gain worth risking the whole company?

If any of this sounds unfair, then the growth company/VC route is not for you. It’s a well trodden path and things work the way they work for some very specific reasons. No matter how good your idea is, the game will be played the same way…

Categories: All Business, Thoughts 'n Ideas
No Comments »

I’ve always respected the ancient Chinese proverb/curse of “may you live in interesting times”, and I’m certainly living it right now.

Since the sudden implosion of disruptorMonkey, I’ve been busy looking for a new home. It feels like a long time has passed, but it’s really only been about 6 weeks… In the last two weeks a bunch of options have started popping up. But just like public transportation, I’ve been waiting for a job for ages and suddenly three come along at once…

So now I have a bit of a quandry.

One position is relatively corporate, well within my abilities and the proverbial safe bet. The company is a decent size and growing and has money & clients. Another is with an earlier stage team that I have a lot of respect for — they’re scrappy and doggedly persistent. But it’s higher risk and they may want me as a consultant first. And speaking of consulting, three very different opportunities fell from the sky. One is a dream job, but the details are very squishy right now. Another is almost as interesting and a great fit for my ADD. The third would be a potentially rewarding challenge that I could really get my teeth in to.

Oh, and I had a pretty solid concept for a startup too thanks to some very good ideas from my wife. And that concept is a perfect fit with one of the consulting gigs.

What to do!?

I haven’t finished scratching my startup itch, but a regular paycheck sure sounds appealing. Decisions decisions!

I’ll post more news when I have it… In the meantime, I’m off to buy a Magic 8 Ball.

Categories: Thoughts 'n Ideas, Uncategorized
2 Comments »