My very first start-up…. ugh

This is actually kind of a sad story, something I am definitely not proud of. But I feel getting on “paper” might be the best way for me to learn from the experience.

It actually occurred many years ago, it seems I have since blocked it from my mind. I probably did this so I wouldn’t have to feel the embarrassment every time I talked (read: brag) about my entrepreneur-ism.

It was probably the first business that I sincerely tried to start-up. I was one year out of college and just finished working for one of the slimiest companies on the planet. I was over working for “the man” already, only one year into the workforce. I moved back to my college hometown and became focused on starting my own business.

Back then I definitely had “sexualized” the concept of starting a business. I had thought that money would start rollin in right away and after six months, I would be a billionaire with vacation houses in the Hamptons and Waikiki. It was less about enjoying the business and more about becoming a millionaire.

The business idea was a beer delivery service. Yes, you heard that right.

That idea was mainly to get things started, eventually I wanted to brew and distill, but to do that meant thousands upon thousands of investment, which I didnt have. Doing beer delivery meant aggregating all of the local brewery’s beer as well as some cheap kegs, and putting them all online. I actually still like the concept. It was perfect for my college town, where it was a drive to pick up beer and there were a ton of beer drinkers.

I worked quite a bit on it. I learned just enough coding to build a simple website, and learned all of the laws required to get a license to sell beer. I’m not so sure what the rules are now, but back then even if you sold beer you needed an actual store front. So I went and got one, a small beat up retail spot almost 30 miles from town. It was cheap and was an actual store front, so I met the requirements needed.

Here comes the sad part, and its tough for me to admit. In order to get the license, I had to mail letters to all of the local people asking permission to open a “convinience store” something I am positive no one else on earth did, but because I wanted to do everything correct, I did it.

I got a reply back from an old 77 year old lady saying she didnt want this sort of establishment so close to her home. I was 5 miles away from her.

I got so worked up over this that I stopped working on this project completely. I gave up. I told everyone that it was some crotchety old lady that ruined my plans to be a billionaire. I knew deep down that there were many many things I could have done to circumvent this. One simply being to talk to the old lady.

My best explaination for this was that I was afraid of both failure and success. Things were getting tough, and I wasnt sure if I could get through it, so instead of fighting for it, I found a good excuse that could save face with my friends, and I used it to get out of my predicament. The need to have to pay money to suppliers was getting close, and I lacked the funds. The requirement to pay the $500 to obtain the license was coming soon, and I didn’t have that money. So many new obstacles, and my response was to quit.

I think the lessons that one could learn from this is to give every project your best shot, even if you fail, your close friends and family will see you working hard at it and respect you more than if you just throw your arms up and blame the system like I did.

What I Learned (and am Learning) about Start-Up Capital Sources

I read a lot of Hacker News and have learned by reading the many articles that you really dont need a great idea to get angel investors to fund your business. I see tech and internet start-up ideas that baffle me, and then I see that they just got a $1 million dollar round of funding. They must be somewhat successful though seeing how much success Y Combinator has. This whole concept is somewhat foreign to me, I wouldnt even know where to start, that is until recently.

Networking can apparently easily land an idea into a room full of investors. Of the articles that I have read, if you have the talent and an OK idea, angel investors will not only consider your idea, they are willing to risk hundreds of thousands of dollars to take a piece of your company and help you to bring it to a point where you can either make good profits or sell it. This seems to be the way that Y Combinator and many local angel investor organizations work. Networking plays a huge role, and is actually easy to do, I will write more about it in another post.

From an outside perspective, and someone who has never actually been through the process, it seems there would be positives and negatives of getting seed funding:

• A positive would be that you get to pay yourself and employees while you develop the product or service, jumpstarting your company so you are much further along the process
• A (big) negative would be that you are now accountable and responsible for returning the funds that were originally loaned to you. Not only that, but you are giving up part of your company to an outsider, which means you and your founders do not make 100% of the decisions anymore.

I may be a bit naive, but my vision of a start up is similar to those of Bill Gates, Michael Dell, Mark Cuban, and Steve Jobs. You gather a friend or two who have the same interests, you start from the ground up (sometimes below the ground up), and you work with them to build it up. All the while, you are doing what you love. This way seems to require a lot of work (which is good!) and a ton of networking, it also requires that the founders know a lot about their profession, programming, engineering, etc, because you cant just go out and hire someone to do it for you with no start-up capital. I think that this way also inspires people to learn more about their passions in order to provide something beneficial to the world.

Angel and Capital Seeding may be good because you skip a lot of the bull and get right to employing people and paying salaries, but I think that it takes a lot away from the start up. For some people, that may be a source of passion in their lives, building something up, then selling it. I’m not sure why, and I cant really relate to that. It could be similar to what I am doing with the CPA license, starting something that may not be exactly what you want to do in order to do what you really want to do… I guess it all depends on motivation.

I prefer to choose to own my business with myself and maybe some friends, not be accountable for someone else who only has an interest in the business because of money, and most importantly build that business and keep building, make it a part of myself.

Side Note: I am going to deservedly write a whole post about my philosophy with money. In short, if all you’re interested is in being a millionaire and all of the perks that come with it, this blog may not be for you. If your interested in finding a profession and doing what you love to do, and let the money naturally follow, that’s what this blog is all about.