We all remember our first time….
Several articles ago, I wrote about my coming to terms with the importance of marketing. I didn’t really even understand what marketing was during my first startup, but this time around, things would be different. However, although I realized how critically important marketing would be for any venture, I had a very difficult time sorting through all of the technology that has been developed in recent years to make marketing both easier and more effective.
The idea for my first business, Twistage, came to me while I was reading an article about iTunes. The music industry was struggling with piracy and being dragged – kicking and screaming – onto the Internet. I was acutely aware of what was happening to the music business. It wasn’t just from reading articles either. My then girlfriend (and now wife) was the music editor at People magazine and between appearances talking about Britney and Christina on shows like Access Hollywood and Entertainment Tonight, she would regale me with stories about declining album sales and frustrated label execs. I was closer than most to seeing how the sausage was made, but despite watching all of the butchering, there was something so…sexy about the music world.
“I found this thing called gripe water. We have to buy it!” announced my wife.
There are literally thousands of LinkedIn profiles where people describe themselves as visionaries. Why does that matter? Let’s save that for the end of the article….
I have some serious deal flow here, in Goldfish Tank. Roughly every other day, I get an unsolicited ping from a startup entrepreneur. And before I get critical, I want to give the proper kudos to them for having the cajones to ask for an investment. When I started my first company, Twistage, it took me two and a half years to raise dollar one. I ate a lot of peanut butter (high caloric density for the price) and hot dogs (one of the cheapest “meat” options) during that time. And it led to interesting conversations, like the one I had with my future in-laws when I called to get their blessing before proposing to my then-girlfriend/now-wife. Needless to say, my opener – though earnest – is not one that I’d recommend for most: “I realize that I haven’t had an income for two years, but I think I’m really, really close.” (For those who are curious, they said, “Yes,” and so did she.)
Every week, my DVR records the latest episode of Shark Tank. And every week, when I’m done watching it, I wonder why I continue to do so. The show is not without its merits — it’s compelling television. However, aspiring entrepreneurs whose views on business are formed largely through “Shark Tank University” are going to be ill-prepared to succeed. Tempted as I am to clickbait you with “The Five Things Shark Tank Gets Wrong,” I’m going to focus on one thing at a time. In this article, we’re going to take a look at what is likely the most contentious subject on every episode: valuation.
I had forgotten the feeling.