NEW route from Edinburgh to Munich
Here we go, another try by Easyjet this time. After Duo failed and BMI never got of the ground it must be third time lucky. I can't wait it would make my life so much easier. Probably only one flight per day, timetable to follow in December, stay tuned.
easyJet.com - NEW route from Edinburgh to Munich
Gold Class cinema experience
One of my favorite cinemas in Edinburgh is the Dominion. It has long ago started to differentiate itself by putting in swish leather couches and reclining seats., complete with complimentary drinks at weekend showings etc. Now it created a a seperate website for that experience and I was able to pay through PayPal - How cool is that? Nonen of these nonsense IVR systems including booking fees for the pleasure of serving yourself and saving the (usually chain) money in the process. James Bond roll on ;-)
Dominion Cinema Gold Class
E11 - impressive climbing film
If you ever tried to clinch a deal that just kept evading you, or butted your head against some pesky problem refusing to go away then you will appreciate this film, download the trailer if you download one thing today, nay this week. It is really mindboggling, trust me.
E11 tells the story of Dave's ascent of ‘Rhapsody’, the worlds first climb graded at E11 (French 8c+ / US 5.14d). The film shows the determination, talent and bravery needed to tackle an imposing line. This film enters unchartered territory. Taking you beyond the action it reveals the frustrations and the shear physical and mental effort that goes into climbing at the very highest level. We see MacLeod take a series of terrifying, gut-wrenching 60 ft falls and the strain begins to show as he struggles to cope with the difficulty and seriousness of the endeavour.
I'm proud to say that the music was provided by my good friend MC Hasta of Solidara which goes really well with the theme. Way to go!
Ken Hess - Bootstrapping vs VC funding
More from the Edinburgh - Stanford link/EDI Bus School Entrepreneurship Club (see previous post) lectures: a Scottish Executive funded research exchange, esp in the AI and language technology areas. Also tasked to improve the entrepreneurial culture at the university. Tonight's talk was by Ken Hess, the "World Expert on Bootstrapping" (not is words), well he's written the book anyway ;-)
His big success was Family Tree Maker: the company behind it made 23m turnover, 150 employees, eventually sold to Broderbound.
Free notes, no claims to accuracy or completeness; the entrepreneurship club promised to put up the slides.
- Bootstrapping: pull yourself up by your own bootstraps;
- Today: very limited capital; cant do it with every company.
- if done right it earns more money for the entrepreneur than through VC funding (but only if not a homerun exit)
- however, even if you compare a $100m exit with a bootstrapped $20m exit, the likelyhood of the latter is much greater... [hm, is that on comparable timescales?]
- plus: fundraisng is costly: opportunity cost, VCs have different agendas from entrepreneurs not least concerning the exit.
- arguably constrained funding increases creativity, example of unsuccessfully hiring an ad agency
- Being in the marketplace is more valuable than just sniffing around; get feedback and have knowledge of the channels
- With an bootstrapped, low burn rate you get to know about opportunities first
- With VC funding, you switch on a rocket and cant switch it off again, or alter direction easily...
- crucial to pick the right product:
- high value product that sells itself, which can sustain direct personal selling
- a solution to a task people perform despite difficulties which gives you a 10x improvement
- productivity play: differentiable, solvable problem/task, that people perform anyway despite the difficulty, yielding a solution that provides an order of magnitude improvement. Why? because otherwise the sale is too tough
- management offers special expertise in product area - you need to be the world expert in the given area
- no significant existing competition and barriers to entry
- takes advantage of technology
- profitable: very short development time and reasonable support cost
- control over all key technologies and relationships
- Key lessons:
- top management attention to product architecture (best years out)
- essential features only to begin with, scruffy is good enough
- resourceful and on time strategy: subordinate design to available components and features set to schedule
- don't rely on opinions when facts are cheap: test test test
- I would have thought even a vc backed firm would benefit from this advice.
- Early sales and marketing:
- Ken says stay in stealth/under the radar before you ship
- Direct sales channel is best: control message, caputer feedback, distributors are too powerful, simpler & cheaper
- Learn about sales options (aka Sales learning curve)
- Development team:
- as small as possible (cheaper and faster cf "the mythical man month", Fred Brooks)
- one team member must be able to hold the whole design in their head (irrespecive of written spec which is also essential)
- founders should be able to code
- don't quit your day job as long as you can
- dont rent an office, Go bedouin!
- apply for credit lne before you quit job
- Play on being small
- measure everything so you don't repeat mistakes
- Just say no: eg dont believe the minimum 3 advertisements to judge its effect
- Bootstrappers paradox:
- salary is biggest expense hire young or experienced hires?
- sweet spot: some experience, but not too much: expenses are moderate, traning is minimal and respond well to growth opportunities
- plus: move sweet spot: good documentation, hire self learners, not ust self starters (use tests for that)
- "entry department": one manager to focus on training and acculturation; eg create one expert at hiring and training
- Hiring: controls
- only hire people if you had extra x$ in sale per employee ie hire ONLY after extra sales are achieved
Leaving bootstrap mode
- When product has sustainability
- markers: founder must delegate tasks, look at product development again, increase employee experience level cautiously
Very likely: first product will be not quite right, but gives you the market knowledge to succeed; require very good market knowledge to really go for the 10x improvement.
My takeaway: comparison of VC funded vs bootstrapped is bogus.
The argument goes like this: 1 out of 100 firms manage to raise VC money, and if they do, much time and effort is spent on managing the investors. Moreover, the success probabilities of VC funded firms are rather low (few home runs, a couple of middling exits, an few insolvencies) - so the odds are stacked against you as an entrepreneur even then. So Ken had some figures that showed the chances for the entrepreneur for a vc sized return are not worse in the bootstrapped area, due to the higher ownership retained, and the likelihood of success is much higher. The risk is more that it takes longer and the downside is potentially it just turning into a lifestyle business. The important qualification here is that the bootstrapping approach is a genuine alternative for entrepreneurs, but probably not in markets that are so large as to attract venture funded entrants. So look for the 10x improvements but think niche not google sized markets. On the plus side, if you manage to identify a product/service that does offer a 10x improvement and practically sells itself, then you should be able to take VC money if your competitors are threatening to, but on rather better terms. Punchline: VC vs bootstrapping is a a somewhat bogus contest, and I imagine it's only really an issue if you have VCs banging on your door but you can see that you can bootstrap successfully anyway (like Microsoft, or OpenBC closer to home - although both eventually took the money).
Silicon Valley in Scotland - Sean Foote
Interesting speaker series that I only just discovered, put on by the Entrepreneurship Club by the Edinburgh University Business School and the Edinburgh Uni School of Informatics. Pretty switched on if they can pull talent from Silicon Valley like Sean Foote from Labrador Ventures last week.
Sean's lecture last week was actually driven by questions from the audience, and covered a good deal of familiar venture capital ground. The most interesting insight to come out of his talk was his emphasis on advertising driven business models, something they actively seek and look for (besides tech and material science investments). In the context of the Web2.0 backlash (I've mentioned before that some believe the whole thing to be nothing more than a "Google affiliate program" and describe the Web2.0 business model as "Ajax, Adsense and Arrogance" ;-). However, it is probably true that if you build a webproperty with an unfair advantage of some sort (he mentioned Pandora, one of their investments), addressing a defined audience, then you will be able to make money in venture sized proportions from advertising. I wonder to what degree that is true for European companies. I can't think of many that live successfully off advertising alone.
Another interesting remark was about the "VCs as lemmings" debate - he agreed that most (presumably himself included :) do behave like lemmings often; however in their defense he pointed out that particularly early stage funds such as his rely to some extent on follow on financings from other, later stage funds. That requirement works against contrarian anti-lemmings.
EDI-MUC direct flights
YAY! Now book-able on the BMI site – direct flights from Edinburgh to Munich. I do hope that will become an institution. Plus, the times are decent: Morning and evening flights.
Only makes you wonder: what took them so long – Munich and Edinburgh are twinned, there should be plenty of business opportunities and the traditional hub-and-spoke model is so broken. Please all book flights to make sure this route survives.
Update: The route has been more or less confirmed by Lufthansa's UK Manager in this Herald article. It also says they retained the larger 737s on the EDI-FRA route due to demand and are looking at opening a Glasgow route. Cool.
Bloggers to go backstage at Live 8 in Edinburgh
Dave Sifry writes:
"up to five bloggers will be given the opportunity to fly to Edinburgh and back with the Live 8 group"
I'm already in EDI, can anyone join the action?
Link: 50 bloggers to go backstage at Live 8.
40k Germans in Schottland
Germany is Scotland’s top export destination and the Germans, it seems, cannot get enough of Caledonia: 40,000 of them live here, 1,165 German students study in Scottish universities and 175,000 Germans visited in 2003 - spending £105m.
Says Scotland on Sunday.. But nobody knows just where they are ;-)
Rock Icon's new clothes
Bob Dylan couldn't be fussed to sit through the students graduation ceremony when receiving an honorary degree last month, too much the star apparently. However, he was not above making off with the crermonial robe afterwards (awestruck officials felt they couldn't say no?)...