I came up with the idea for the World’s Smallest, Safest, Strongest Fire Escape ladder and brought it to market with Kevin Dodge and Aldo DiBelardino.

Here’s a video about the company and the experience…I decided to move on after the battle but Aldo stuck around…

Let me know what you think….

Related posts:

1. 10 Things to Remember When Starting A Business

The first two companies I started began with Angel Investments – for the first start-up, where I had designed an award winning fire escape ladder, the angels cash allowed me to quit being a minimum per hour waged Consultant (given I was working 100 hour weeks…) and pursue my passions to start and build this business.

So – a few moments ago I Googled ‘Angel Investors’ and most of the results focus on what Angels are (broadly) and where to find them…all good points but much too ‘money-centric’.

Huh? You are probably thinking…isn’t that what Angels are all about?

Well I’d like to offer you a different way of thinking about it. 

It’s true that Angels tend to get involved in very early stage companies and often look for a high rate of return on their cash…let me explore that for a second…

“Angels tend to get involved in very early stage companies…” – in my case, the first $XXXK of funds were raised while I was still an employee elsewhere – at that time I had…a business plan and a prototype. THAT WAS IT~!

No customers, no employees, and no office – literally just a stack of pages I’d sweated blood and tears over and a prototype of a product that would go on to look very different.

What these angels were really investing in was ME! And I would guess that most Angels who go ahead and invest in a business ultimately make the decision not because of the business plan, the prototype or even the first few customer endorsements but because of the person with their hand out…

So – back to the money.  Angel investors get involved at the RISKIEST stage of a start-up – most start-ups don’t go anywhere and their money goes POP! Now even if Angels are people with a high net worth – they still (probably) worked hard to make it…so as, in the investor community, the angels tend to take the most risk – they also look for the highest multiplier on their money.

Multiplier?  Whassat? So – for example, they give $10K – if they get $100K back when there is some form of liquidity event then they have made 10X on their initial investment of $10K (i.e. $100K divided by their initial $10k).

As a for instance – I have heard of angels looking for 20 times or even 30 times of their money back. So, for that $10K, they would hope to get $200-$300K back from some form of liquidity event.

Liquidity event? Whassat? …that’s basically even that allows the investors to get some or all of their cash out. (Example – IPO, acquisition etc)

Bringing this full circle – So why Andrew – do you think that the Google results were too ‘money-centric’? Isn’t that what angels are all about?

Yes and No! In my view, the money you get from Angels tends to fall into one of three categories.

Either CHEAP MONEY, EXPENSIVE MONEY or just, plain old, MONEY!

Am I talking about the multiplier again? Absolutely not! The amount of multiplier you, as the entrepreneur, can guarantee to the angel investors is zero! You can guarantee absolutely nothing.  You business might go gangbusters and someone could come along and buy you for a fortune. Likewise, your business could go gangbusters and you could IPO – the multiplier the angels get could be very different…you have no way of predicting what it will ultimately be…

Let me explain what I mean by cheap and expensive Angel money…it’s quite simple…

When I took angel money for my first start-up, it became obvious, very early on, that I had three types of investors:

1)  The Value Add Investor:

This is the investors that calls you up occasionally and is looking to help…they are opening up their contacts database and connecting you with other angels, advisors, entrepreneurs, suppliers or whomever…to help you and your business grow.

Money from this kind of Angel – I call “Cheap Money’ – because you get much more value than just the cash – it makes their money really worthwhile so whatever multiplier you ultimately pay, it was partially because these value add angels helped you every step of the way – their payout is cheap money. You get me?

That leads us to the other kind of Angel…

2) The Pain in the Ass Investor:

There are some investors who, as soon as they give you the check, become an absolute pain in the rear.  From that moment forward, they believe they own you…no, not just a piece of your business (which they have)…but YOU!  They will call you 24/7…they will ask you to jump through hoops that may have very little to do with the businesses immediate needs and, they will tell you, loudly and often how bad a job you are doing and how you should be doing it some other way. And do they open their contact database to help out? Rarely if ever.  Their function is to become a complete time sink and a constant annoyance.

I consider money from this kind of Angel…”Expensive Money”. Wouldn’t you?

The third type of angel is just plain, old money – they give you the cash, you put it into the business and they are happy to get the monthly or weekly updates about how the business is going – their value was limited to the initial cash they may put in.

Now – before I finish this post – I want to leave you with the challenge the above creates…and tell you that over the next few postings I tell you the technique I eventually discovered to ensuring you only EVER get cheap money i.e. Angel Investors who bring a considerable amount of value – perhaps enough to really make your Business the success it is destined to be.

So here’s the challenge – “You can’t tell which angels are going to be in category 1 or 2 or 3 until AFTER you have taken their cash and they’ve signed on the dotted line.”

Its true – you can interview and screen angels (if you have choices…and you ALWAYS have choices…even if its to bootstrap and use your credit card while working at a day job) and it’s tough to tell if they will add value or be the bane of your existence.

I hope the above has given you a few things to think about. And come back so I can take you through how I managed to have a higher chance of picking the value added Angels and getting ‘Cheap Money’.

Please join my mailing list if you would like additional information .

In the meantime – here’s a video with some key intial points regarding angel investors – worth watching:

Here’s to Your Entrepreneurial Success!

Andrew

Technorati Profile

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What a great pick-me-up after a long week to read your take on our site. I’m glad you like it and I’m flattered you chose us as one of the sites you review. I understand your suggestions, and will take a look at those elements with a fresh eye. We’re continuing to improve the site as each day passes, so please stop by again in the future. Thanks again for the vote of confidence. If you ever want to consider making that virtual investment a real one, let me know. Your bio would suggest you’d be a great person to have giving us additional counsel. All the best!

Doug Worple
++

Doug

Thanks for your comment…I have just about resurfaced from banging my head on the desk after seeing 3Luxe…it was one of those moments that happens all too often ~ ‘Why didn’t I think of a highly demographically segmented product search engine?”.  I mean really!  It’s so obvious when you think about it.  So come on folks, before 3Luxe – who can really lay claim to creating a product search engine that specifically and tightly targeted a specific demographic of consumer?  And No, tech geek is not a demographic before folks start jumping up and down about CNet and that ilk.

Again, good luck to 3Luxe! Stay in touch and let me know if there is any way at all I or the Advisor Garage site can support you as you take the discriminating consumer market by storm!

Andrew

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3Luxe.com is a product search engine with a difference…other search engines use algorithms, numbers and fractions as the cogs and wheels to regurgitate a whole string of very near misses to everyone that plugs in a search phrase. 3Luxe uses no algorithms or numbers…it more relies on the taste and interpretive skills of its founder and pooled review site results to determine the top 3 products currently available.

Like Flash floor cleaner and hundreds of P&G commercials, draw a line down the middle of your computer screen and compare and contrast – on one side you have a big complicated machine delivering a homogenized gloop of product results to anyone that asks and on the other side of the screen, the three best products in any given category according to the 3Luxe founders.

Business Model:

• Advertising from key manufacturers who are ultimately lucky enough to have their product/s in one of the top three results
• Affiliate links with Amazon or Shopzilla et al when people take the next step after the search and review and treacle forward towards purchase
• Google ads (ugh!)

Some Core Functionality/Elements:

• Um…Search!
• 3 Results only of perhaps the most expensive but kick butt products you can find in any given category
• Thumbs up or thumbs down vote for any of the items returned
• A very cool drop down of review results from cnet and others, along with consumer reviews from other sites
• Bookmarking
• Send to friend
• Comment posting for all items

Likes:
Like, Like, Like.  This site is well built, thoughtful, intuitive and not surprising the Worple Brothers have got it right…I say not surprising because Doug Worple, the CEO is another former proctoid that went on to create what looks to be a very cool creative / advertising agency called Barefoot.  Like it or not, the great advertising agencies are helping to shape the tastes and desires of us all…so it is not a shock that by combining their own tastes for items with consumer reviews from multiple sites they are delivering product results that actually seem to be the best 3 luxury items.  I guess my original concern was “What makes these guys able to choose the best three items that I’m going to like?” – but in a sense, better to combine the science of review sites such as cnet with some degree of taste than relying upon the Google number crunchers. This business model opens up a number of now obvious business opportunities i.e. segmented product search engines according to demographics – so now we have the ‘A’ search engine, anyone up for creating the ‘B1′ product search engine?

Dislikes/Suggestions:

• The home page has more of a ‘website’ than a search engine feel.  You could argue that this is so different that going for the minimalist search format is wrong – but the current look and feel of the home page is almost of a templated website.
• Taking a note from P&G brand training – too many fonts, and no clear obvious focus for the eye causes confusion in terms of what are the priorities on the page.  We have caps competing with flowing scripts with more modern fonts, moving photos and all in all its a great concept which, from a design perspective, needs some tweaks.

My Virtual Investment:
With my virtual $1M, I would consider it a luxury if I were able to make a $500K virtual investment in 3Luxe. Good luck Guys!

http://www.3Luxe.com

Interested in other articles about Its Our Movie?

• http://www.coolbusinessideas.com/archives/consumers_seach_engine.html

Andrew

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1. 3Luxe Speaks Back: A $500K Virtual Investment
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3. Farecast: A $500K Virtual Investment

As never before the ability of online networks has the potential to shape the world.  Tumpang is preparing to take advantage of this dynamic by offering people who come together online the ability to put their joint purchasing power to work.

The Tumpang model is interesting.  Manufacturers are asked to discount their products if Tumpang can guarantee a group purchase of a certain quantity of items.  Then, within their site, they offer the items for sale at the discounted price providing enough people agree to purchase the item at the discounted rate.  As individuals the customers may not be able to get these ‘bulk’ discount prices – as an online mini-purchasing group, they suddenly have more power.

Tumpang is currently focused on the Chinese market…but are making moves to go international.  There are two obvious challenges at this point:

Products are often country specific so although they have international plans, this may not translate well for the mini-groups.  Will a German purchaser be interested in a kettle for the Malaysian market? See my point?

Most of the products on the site at this point seem relatively low quality i.e. Tumpang does not seem to be striking deals with Apple, Panasonic etc but rather more unknown brands. However, as their purchasing power and traction increases this should give them more negotiation strength with the bigger, more popular manufacturers.

So, Tumpang is one to watch.  This crowd purchasing approach could create another shift in online purchasing.

Andrew
Founder -Advisor Garage
http://www.AdvisorGarage.com/community

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I wish I could tell you all about Flixor but I’m not allowed to today.  What I can say is that Flixor is a very cool up and coming company focused on tools that have both consumer appeal but also the potential to revolutionize the advertising industry.  I recommend you go to http://www.Flixor.com, bookmark it and watch as this company moves from stealth to a very compelling young company. If you are a potential angel – reach out and I’ll forward on your contacts – you won’t be disappointed…

Andrew
Founder – Advisor Garage
http://www.AdvisorGarage.com/Community

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2. Zaplee: An Update
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For anyone that has read any of the posts on this blog, you’re probably used to seeing a review of the business model of an up and coming young company.  Today’s post is different. It’s a Startup ‘Quick Intro’. My goal is to intersperse the usual type of postings with ‘Quick Intros’. We’ll see what reception these quick intros get!

A friend has been working on a startup called Zaplee.com – so given that I’m particularly excited about the company and it’s opportunity, thought I would do a quick ‘drive by’ about Zaplee.

Zaplee has been working on creating consumer software to provide small and medium sized companies with call center functionality via the Skype service.  This gives Zaplee the capability to offer a other companies call center capabilities without painful and expensive setup costs and processes and like Skype, gives users very low monthly costs for ongoing call center services which have tradtitionally been unreachable by many young companies.

There are many exciting elements to the Zaplee business model but as they are still so ‘fresh’ I’ll need to wait a month or two before getting into details.  Zaplee is currently going through an angel investment round.  This is one of those ‘once in a decade’ opportunities so if there is anyone out there that wants to explore this opportunity…send me an email and I’ll pass it on.

http://www.Zaplee.com

Andrew
Founder – Advisor Garage
http://www.AdvisorGarage.com/community

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2. Flixor: Stay Tuned!
3. Geni: A $500K Virtual Investment

I can’t tell you how much I love this business concept!  I’m not 110% convinced about the capability to make significant amounts of investor revenues but frankly…that’s just not the point of this neat new business.  So, let me tell you about “It’s Your Movie”.  The basic idea is for the online community to fund, audition and vote for characters in a movie called “The Flirting Club”.  It’s a complete mashup of a number of popular ideas…think “The Producers meets American Idol” and you are some of the way there!

Business Model:

• Members of the public can buy a ‘stake’ in the movie of $10, $100, $100.  What’s not clear on the site is what stakeholders get for their stake although the site does say the higher the stake the more ‘say’ in the movie.
• Advertising is another revenue stream for “Its Our Movie” although as the site currently has a 4,000,000 Alexa ranking the revenue is likely to minimal at this point.
• Movie Rights and Sale:  I could find no reference to movie rights or sale as it relates to stakeholders but it is a new business so that may appear in their FAQs.

Some Core Functionality/Elements:

• Auditioning:  To audition for a part, members download the script, choose a character and video themselves. After uploading the Audition to http://www.youtube.com / http://www.metacafe.com / http://www.dailymotion.com the code is then re-pasted within the “Its Our Movie” Website so the community can review and vote on the auditions
• Characters: A summary of each character is included in the site and video auditions can be added against each character
• Voting: Members can vote on a 1-10 scale for each audition.  They will also be adding the ability for people to vote via text message/SMS
• Photos/Videos: Photos and videos of each person auditioning
• Member blogs
• Member forums (Is this a Drupal site with a skin? Hummm)

Likes:
Sometimes new business are not about money…OK, rarely new businesses are not about money because money is oxygen for startups but in this case, its about the excitement of being involved in creating a movie. Doesn’t EVERYONE want to be involved in creating a movie? Even if it’s a bad movie for goodness sake.  Now here’s a little prediction, as momentum grows for this new site then it won’t be long before Simon Cowell and the rest get wind of it.  Before you can say “Teletubbies” I’m guessing that this process may move from the web to other mediums.  When that happens then this could become a significant opportunity for the founders.  If I was a stakeholder, I’d be looking for some reassurances that I’m buying a tiny piece of that potential success.

Dislikes/Suggestions:

• Be explicit about what stakeholders are getting!  It’s great that you’ve raised $100K but if you want to hit the $1M target then I would outline what those folks were getting…really clearly!
• My understanding is that the Director is Alex Jovy. Is it THE Alex Jovy that received an Oscar-nomination for his film Holiday Romance who also went on to produce and direct the thriller Sorted starring Matthew Rhys and Jason Donovan? If so, let us know people! At the moment it looks like some obscure guys idea that is absolutely exciting but we need to know it’s legitimate and this isn’t paying for someone’s extended vacation in the South of Spain.

Additional Opportunities:

• Plug this into the TV machine and turn it into a show.

My Virtual Investment:
With my virtual $1M, I would personally stake a virtual $500K providing someone gave me virtual percentages of the revenue.

http://www.itsourmovie.com/

Interested in other articles about Its Our Movie?

• http://www.crowdwisdom.de/2007/08/15/crowd-casting-fuer-einen-spielfilm-itsyoumovie/
• http://www.klhagen.com/provokingthought/2007/08/using-creative-new-ideas-crowdsourcing.html

Andrew – Founder
http://www.AdvisorGarage.com/community

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2. Farecast: A $500K Virtual Investment
3. 3Luxe: A $500K Virtual Investment

Lyro is a new web based application that allows people to create and share online, searchable digital ‘business cards’ across multiple.  It isn’t so much a social network as much as personal ‘branding’ and broadcasting but saying that, as well as the core elements of creating a digital online business card (think a micro Plaxo) there are some typical social networking elements such as people creating interest and geography groups. I would really like to hear back from the Lyro folks because I’m not seeing how this differs substantially from Plaxo, especially given Plaxo’s recent moves into the ‘connections’ territory and their longstanding digital business card creation, sharing and searchability. If I’m missing something, let me know!

Business Model:

Four account types with increasing functionality. 

• FREE: 1 Free Card and 3 messages that can be sent to other members per day
• Basic: $5/Month – 3 Cards, 7 messages per day, 50MB file storage, professional bio, logo on card
• Premium: $9/Month – 5 Cards, 15 messages, 75MB storage, other elements of basic plus notes on card
• Elite: $20/Month – 8 cards, 25 messages, 200MB storage, all other elements of Premium plus saved searches and visible email addresses

Some Core Functionality:

• Create searchable online digital business card
• Internal email to other card members according to numbers above
• A Dashboard ‘Pocket’:  Drag and drop business cards that interest you for future retrieval
• Download card
• Create Groups – and invite others to join your group
• Invite Friends
• Send card to friend
• RSS feeds of cards etc

Likes:
The user interface and usability has been created with thought.  Navigating and using the site is very intuitive.  More focused on developing new business relationships than Plaxo with similar functionality to Plaxo early days plus some tried and tested social networking elements.

Dislikes/Suggestions::

• I just am finding it a real challenge to see this as a step change from a very ‘early days’ Plaxo and we of course, already have Plaxo and a significant number of people have been using it for sometime.  It is true that Lyro is less about creating your own online contact book from your existing contacts and has a focus on creating new contacts through joining groups plus browsing and reaching out to members.
• Although the usability is nice and simple, the interface has a lack of ‘personality’ i.e. it’s more functional than sticky. With Linked In there are a number of hooks that get you diving into the site and staying around.  Lyro does not really have those hooks yet but it is early days…maybe version 2 guys?
• I understand the need for a business model but limiting the amount of messages is limiting the perceived value of the system.  By all means encourage upgrade through a strong more personalized ‘branding’ on the site but have people use it…alot…so they want to improve their presence and are prepared to pay for it.  Key to that is messaging each other…take off the ludicrous limits, get real activity and they’ll upgrade when this site becomes a staple of their online activity.  You are restricting your growth!

Additional Opportunities:

• Consider adding some personalized scripts for each member so they can add the fact that they are a Lyro member to their websites or blogs.

Last thought:

My Virtual Investment:
With my virtual $1M, I would personally broadcast my interest to the tune of a virtual $100K.

http://www.lyro.com/

Interested in other articles about My DNA?

• http://www.coolbusinessideas.com/archives/lyro_cards.html
• http://getentrepreneurial.com/recommendations/lyro_online_business_cards.html

Andrew – Founder
http://www.AdvisorGarage.com/community

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And now for something completely different! Not a neat and innovative website but an actual, real product…something you can touch…well, not so much ‘touch’ as smell. My DNA fragrance is a new company which offers individualized perfume based on your own individual DNA. Each fragrance is a one of a kind product which My DNA creates after you submit a swab of your saliva. My DNA then uses a patented and revolutionary new process to create your individual fragrance which arrives in a clinically approved 4oz. aluminum bottle with a fine midst sprayer and if you want to do it properly, create your own bottle too.  As My DNA puts it, it’s not self centered, it’s self scented!

And yes, I know the swab sounds kind of a gross way of giving My DNA your DNA but you only do it once and it’s alot more pleasant than some of the alternative ways of giving up your DNA.

Business Model:

• A one time swab kit and lab fee: $99
• Your own 4oz bottle for women: $89
• Your own 4oz bottle for men: $59

Some Core Functionality:

• One time swab process to give your DNA via a kit my DNA send then just re-order
• Patented fragrance development

Likes:
Why smell like a guy who’s played polo all day?  Why smell like a suit designer? Wouldn’t it be better to have a fragrance that is in tune with your own smell…sort of like buying white wine to go with the fish? I’m not sure that metaphor actually works but as regular fragrances are created without ‘you’ in mind then how can they compliment your personal fragrance notes? Alright, that’s enough…my real point is this is different and believe or not, my belief is that there are enough people out there who will make a concept like this work and help create a sustainable profitable business.

Dislikes/Suggestions::

• The website needs to be significantly improved. The design is fine but not in keeping with the potential strength of where this brand needs to position itself.  It looks like a website created by a one week contractor. This takes away from the ‘Selling a Dream’ approach and brand that will translate into real and significant revenue. And guys, please use the whole page and pretty please take off the ‘Disney’esk’ sparkles that appear when you move to a navigation button.
• The price point is a lot less than I expected.  This is NOT a business where you gain traction through a lower price point and increase your prices later.  Increase your prices now!  Double your prices and you should see an increase in volume.
• In the website descriptor at the top of the browser it says ‘Discount Perfume, Discount cologne’…no, No, NO!  People don’t spend money on a unique and exclusive fragrance if they’re told it’s discount.  Make it super exclusive…better yet, get some photos at some exhibitions with celebs. Seriously – avoid discount and double your prices.
• Allow website users to refer others to your site – you’ll be glad you did.
• DOUBLE YOUR PRICE!
• The only real worry I have is ‘is this real?’ Will a fragrance be unique because of my DNA or just unique because it get’s pulled out of that moments fragrance catalog – a fragrance lottery if you will.  And if it is created specifically for me and will smell better because of it. Prove it on your website or at least outline the rationale.

Additional Revenue Opportunities:

• Consider launching personalized shower gels, soaps etc

My Virtual Investment:
With my virtual $1M, I would bath in my very own citrus notes a virtual $250K and pass it over.

http://www.mydnafragrance.com/

Interested in other articles about My DNA?

• http://tracingthetribe.blogspot.com/2007/08/dna-personalized-music-fragrance.html
• http://www.mundochica.com/obten-el-aroma-de-tu-adn/

Andrew – Founder
http://www.AdvisorGarage.com/community

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