Category: Journey

General events which chronicle where we are at with the journey

Divine Discontentment

Posted on by Steve Sammartino

A friend hates his job.  He’s good at it and well paid. He delivers results, mentors youngsters, and builds awesome customer relationships. He is currently working in a Service Industry. He’s not so good at the political game. In the corporate scene that is ‘the game’. In large corporations buffoons can do well, if good at internal politics.

He wants to start his own business. His Industry has next to zero start up costs, a real Bootstrapper. Some of his firms previous customers would give him all their business, tomorrow… it’s there if he wants it.

After a discussion today he has hit the point of Divine Discontentment: 

Definition: The tipping point where one decides to move from employee to entrepreneur.  

Dissatisfaction has taken over fear. This is a beautiful moment if you have the composure to recognize it. Keep an eye out for when it arrives.

Bad Day

Posted on by Steve Sammartino

Yesterday was one. Got shafted in every direction. Started considering the merits of a regular pay cheque. The difference for an entrepreneur is that bad days can’t be justified with ‘pay’ at the end of it.

It reminded me of Robert Kiyosaki’s view on the difference between Freedom & Security.

“Security and freedom… are opposites. The more security you seek, the less freedom you have. The people with the most security are in jail. That is why it is called maximum security.”

Time Bomb

Posted on by Steve Sammartino

 A mentor is careful with his words and the meaning behind all he says. I mentioned how difficult it is doing this when I could be earning X working. He stopped me and said, “Your time isn’t free, you just chose to hire it out to yourself. This is because you know how valuable you are.”

Never under value what you are worth and the opportunity cost of your time. Use it wisely while you can afford it.  

Family Car Theory

Posted on by Steve Sammartino

Today we met with a Venture capitalist and potential business partner. He arrived in a Range Rover 4WD. A flash car in any country.

Got me thinking about his general financial position. Cars create strong impressions about wealth and success. If a potential business partner arrives in a 20 year old junk heap you can’t be blamed for thinking you don’t want to deal with him.

Your best bet is a new-ish family sedan such as a Ford or Holden. It removes the question from peoples mind on both sides of the equation.Commodre

You want to remain confident in their ability, but you certainly don’t want to believe they are about to stitch you up and buy a new car with the profits.

What message does your vehicle send to your investors?

Who funds who?

Posted on by Steve Sammartino

We have discovered we need $500K to fund our project. So far this has proven to be our biggest obstacle. We haven’t the cash ourselves. To investors we are asking for too little to be taken seriously. This is what you get by being diligent. Forecasting to the dollar, and finding innovative ways to produce and promote your business.

VC’s incorrectly believe that the size of the opportunity is proportionate to the size of the capital required. They are stuck in the post war TV industrial complex . Heard of Google? They started in 1996 with $100K USD. It would have been the easiest thing in the world to put a $7 million advertising launch campaign into the financials. Thereby boosting our cash requirements to $7.5 million. Would the VC’s then stand up and look? If they do, you don’t want their cash. They simply don’t ‘get it’.

Business funding in Australia can be place into 4 categories:

  1. Family & Friends ($50k – $500K)
  2. No Mans Land  ($500k – $1m)
  3. Angel Capital ($1m- $3m)
  4. Venture Capital ($3m+)

Attitudes vary significantly by category. We realized quickly that we were not in traditional VC territory. Only in no mans land can you invent your own funding rules. However, you need to move up or down the funding food chain to make it happen. You need to ask if you can ‘bootstrap’ the idea with less cash, or sell the dream to some hardened investors. Also, not to be underestimated is the ‘close knit consortium’. Topic of the next blog.

Ideas & water

Posted on by Steve Sammartino

Once you have completed your financial guestimates (and they will be guestimates) you then usually discover you haven’t enough cash to fund it. Now it gets exciting. Enter the Venture Capitalist.

Forget everything you believe you know about business funding right here. This is not justifying your department share in the budget of conglomerate X. You are asking people to write you a cheque from there own savings account. You need to convince them of this:

“I will make you 10 times your cash by investing in me”.

Without revenue, it’s no easy task. They are investing in you first and your idea second. Don’t forget this. If either component of that equation is missing, forget it. The first serious Venture Capitalist we presented to said 3 things. “You guys are impressive, you’ll get your money. Your thinking is good. Your presentation is too long.” He didn’t say, “I think you’ve got a great idea”. In start up land great ideas are like water. Vital, but they’re omnipresent.

All Aboard !

Posted on by Steve Sammartino

As the title would suggest this Blog is about my journey in starting up my own company. The main purpose of which is to provide an account of the adventure – for myself primarily. Secondly, to provide some tips from the battle front for those choosing to take a similar path. Hopefully your scar tissue will be minimized through the advice herein.

It all began more than 12 months ago. Hence, some of the tales will be retrospective. However, I will try and maintain a diary of events so this blog can maintain a symmetry which is useful.

All aboard… (At this stage that would be me and a few of my close friends!)