Finance Archives - Page 4 of 5

The wealth misconception

Posted on January 5, 2011 by Steve Sammartino

People so often begin their adult life (teenage?) chasing financial wealth without even thinking about it. They believe the benefits of money automatically outweigh the costs of its accumulation. That there is no downside, and that all problems in a world of endless cash flow can be bought out.

It is certain that too much money is a better problem than not enough money. But the overriding misconceptions of wealth are simple:

We only ever have 24 hours a day.

We can only ever eat 3 meals a day.

We can only sleep in 1 bed each night.

No amount of money can change these things, or improve the relationships with those around us. It’s worth remembering this in 2011 before we embark upon a new program of attempting to garner things we might not actually want.

Have a great year, Steve.

I don't…

Posted on August 19, 2010 by Steve Sammartino

I don’t have a rich Father

I wasn’t left a sum of money from my Grandma

I didn’t go to Harvard

I don’t live in Silicon valley

I wasn’t funded at Techcrunch 50 or Y combinator

I’m not technical genius

I can’t code the latest killer app

I guess I’ll just have to build my startup the old fashioned way. Work my ass off, invent my own revenue, build a team and improve what I have to offer as I learn from the mistakes I’m bound to make. If you’re still around in 10 years, look me up.

Wasting money

Posted on July 5, 2010 by Steve Sammartino

As we embark on new projects we hope will be the one, a lot of money gets invested. Hard earned money we’ve saved from busting out a living on week days. The left over money after we’ve paid the mortgage and paid the bills. Sadly, much of it never returns. It’s easy to feel cheated when our projects don’t pay off.

But let’s for a few moments consider the alternatives:

A flat screen TV

Dinner at fancy restaurants

A better car

A new gadget for the kitchen

Other stuff which will eventually gather dust

…….

Turns out the money we lost in startup projects was never really wasted. In fact, it wasn’t lost at all. It’s the investment we have to make to get that elusive win. The alternatives are very poor substitutes with zero chance of a return. Which means we should never be afraid of investing in our projects. What we should really be afraid of is succumbing to pointless consumption.

Reasons for running a startup

Posted on July 4, 2010 by Steve Sammartino

There are many reasons people wan to run a startup.

Fame

Fortune

Social justice

Sleeping in

Pioneering

Redefining work hours

Creating something

Answering to no-one

…… we must really think hard about our motivators. Then….

Choose wisely.

Why spreadsheets are the enemy

Posted on June 18, 2010 by Steve Sammartino

Spreadsheets cause far more problems in business than they solve. When we sue spreadsheets too much we start to believe our business is the numbers we make up to fill in the columns. Turns out the numbers on the tidy little sheets have very little to do with our business. Our business is about people, emotions and serving needs. It’s about human movement and insight, not predictions and forecasts.

In recent times brand managers and entrepreneurs have become spreadsheet managers. Busy forecasting, doing profit and loss statements for upcoming launches and estimating sales revenue and market share for the upcoming quarter. The problem with most of these activities is simple, they are predictions. They rarely turn out to be correct, and they suck time we should be investing in getting our products to the market, talking with our customers and promoting what we do.

In startup land there are only two colums we need. Expenses and revenue. Once we have these we just need to make sure the revenue side is greater than the expense side. After that we ought leave the spreadsheets to our accountants.

The law of focus

Posted on May 13, 2010 by Steve Sammartino

We can only beat the big guys with focus. It has to be so small the big guys don’t care. Big guys rarely buy big businesses anyway, especially not in the tech or web scene. They want it to fit tightly into their portfolio. We ought put all our eggs in a tiny basket. In this way we wont get short short of resources, both human and financial.

When we do this in startup land, we have a chance of winning.

Economic irrationalist

Posted on April 16, 2010 by Steve Sammartino

Lately I’ve been making a few decisions which are economically irrational. Making decisions which are, on the face of it, financially inept.

For example, I starting to feel a sense of loyalty to my chief technology officer for rentoid.com

He’s not the cheapest and he’s not the best. Probably somewhere in the middle for both. I could probably get someone cheaper with similar skills, or better for the same price. But I don’t. In fact I tell him that I’m loyal to him. A large part of why I want to succeed so that he can succeed also, to share it with him. Even though he has not risked the capital, or the time that I have on the project.

Why would I act this way. Well I like working with him. He’s a nice guy, and sometimes that’s enough.

I guess you could call me an Economic Irrrationalist. And it just feels right.