Wanton Wantrepreneur: The FAT startup

Some startup methodologies that emphasize learning and shit have taken hold in the startup community in recent years. They suggest things like running lean, the idea that spending less money while you are learning is a good idea, and customer validation, determining whether or not you have customers for something before you actually build it. These ideas have caused more entrepreneurs to live on ramen noodles while venture capitalists fly their private jets around the world going on golf vacations. Is any additional explanation needed? Welcome to the FAT startup movement!

Today we will discuss the first tenet of the movement. In future posts, I will outline exactly what you should be doing if you want to build a massive company.

Impress your potential customers

We should all know by now that nobody gets fired for buying IBM. Because this is true, you should look at IBM for guidance on how to make your customers feel comfortable. And what do we know about IBM? They have some of the most amazing corporate campuses in the world, R&D labs with all of the latest technology, and lots and lots of employees doing important things.

You clearly need to do whatever you can to look like a big, successful, 100 year old company. Get fat fast! Hire as many employees as possible and make sure your potential clients know how many people you manage.

PRO-TIP: if you hire lots of contractors, you can make sure they only work a few hours a week, but claim them as employees in the numbers you tell your clients.

When it comes to your furniture and facilities, everything should be top notch. IKEA is for punks and Europeans. Only buy original designer pieces so you can tell your guests about how authentic your space is. Google is a huge company doing trillions in revenue each year, do you think they have IKEA egg seats and massage nap beds in their lobbies? Neither should you.

PRO-TIP: if you really want to impress, make sure you have your architect personally hand build a sculpture of themselves in your lobby. Your clients will awe at how much pull you have and immediately want to give you their money.

Your perks have to match your klout (score), so don’t settle for second best. Massages during lunch hours and laundry facilities are for scrubs and companies that manufacture physical goods. THIS IS THE INTERNET! You should offer on-site broadway musicals, complete with the original casts, in between professional race car lessons from Formula 1 drivers.

Wanton Wantrepreneur: 6 business models you should be using right now

Licensed under cc from sepblog on flickr.

An unbelievable number of founders come to pitch me on their companies with no idea what their business model should look like. It is never ok to put off figuring out your business model when there are so many great ones available to you. Here are a few of my favorites.

Pyramid scheme

Because most startups never figure out how to provide a product that meets any kind of market need, why not use a business model that doesn’t require any kind of product at all? Better yet, the only work you have to do is recruit people who recruit more people. Of course, pyramid schemes are eventually unsustainable, but so are most startups that get acquired. Know when to get out.

Shell company

This is what most startups are anyways, so it strikes me as odd that more of them don’t just adopt this business model from the start. A shell company is usually a company with only cash assets and no real operational purpose other than to hold and spend that money, much like Color.com. So get your investment capital, start paying yourself a salary, and wait for the cash to run out.

Tax haven

In the rare case that you know someone making an actual profit, chances are they are in a country with high corporate income taxes. While you are busy trying to get ahold of your first yacht, why not bring in a little bit of income operating as a tax haven? It’s extremely simple. Your profitable colleagues funnel all of their corporate transactions through your business, which happens to be incorporated in some Caribbean country with no corporate taxes. They get to keep more of their money, and you don’t have far to walk to look at yachts.

Ponzi scheme

Ponzi schemes get all kinds of unfair bad press, but nobody ever talks about the success stories like Groupon. As long as you have something going that looks like it could be big, just keep raising money and buying back your own stock with it.

Multi-level marketing

To be a proper MLM company, you really have to have a product that people could sell, but that they won’t actually be able to sell. So make some shitty software, sign up a few customers, and then come back and offer to pay them some percentage of future earnings if they can get more customers for  you. Make sure to promise that they will get rich easily. I mean, how hard do they think this will be? This stuff sells itself.

 

 

Flickr photo link.

Could you please teach your uncle how Socialcam works? [OPINION]

Today’s post was written by a teenage girl, and then heavily edited for spelling and grammar.

I don’t think your creepy uncle knows how Socialcam works. Or maybe he really is just that creepy. Does he know we can all see what he’s watching on his Facebook? It was fine when he was watching stuff like My new kitten first jump fail. A little strange for him, but at least its cute. And I’d expect TOP 10 NBA Lucky shots. Not my thing, but whatever. But it is not OK for Check out Ashton in our football bikini to show up in my feed. I don’t want to know that he’s watching that. Isn’t he like 49? Or Lost my bikini. Gross. And why is he watching Guy caught masturbating in car? I don’t think he knows how Socialcam works.

This is becoming a real problem. You really need to do something about this. Does your Aunt know he’s looking at this stuff? Does she know she’s married to a total creeper? If you don’t stop him, it could really ruin his marriage. And weird stuff like Something is Growing. Double Gross. Where did Two-Headed Animals come from? Where did he find that? Why do I have to see that?

Look, for the rest of us, could you explain to your creepy uncle how the Internet works? God knows what will happen if he figures out he can use it on his phone. I don’t want to see him posting his own videos. He doesn’t have an iPhone, does he?

And why did your uncle friend me on Facebook anyway? Creepy.

The Wanton Wantrepreneur: The foolproof way to calculate your company value

Licensed from 401K on Flickr.

If you are like me, you have put up a LaunchRock page and updated your LinkedIn profile to reflect your new status as CEO. You have a team of crack developers that you recruited away from the Geek Squad at Best Buy. You copied a business model off of DocStoc and put your name on it. It’s time to raise money, but how much is your company worth?

Founders

It has been said that investors invest in the team, not the idea. This is total bullshit. Investors like people that are young and stupid, which explains why they love college dropouts. How much money did Facebook raise anyways? Like a trillion dollars.

Add $100k if you are 27 to 29

Add $200k if you are 22 to 26

Add $400k if you are 19 to 21

Add $100k if you dropped out of college

Team

Your founding team needs to be big so you can prove that you can recruit. The internet is filled with VC’s telling you to always be recruiting, and if you have 4 or 5 cofounders, then everyone knows you can close, and that is worth lots of money.

Subtract $500k if you are a solo founder

Add $50k if you have 2 cofounders with you

Add $100k if you have 3 cofounders with you

Add $500k if you have 4 or more cofounders with you

Customers

This is the worst thing for your business. Customers always feel like you owe them something, mostly because they gave you money, and then they try to tell you what to do. Worst yet, once someone pays you, then you have to tell investors how little the customer gave you. If nobody has given you any money yet, then you are ahead of the game.

Subtract $1k for every paying customer

Skills

Everyone working at a startup has to be good at something. And what is the best way to tell if someone has skills? Where they worked before.

Add $50k for each ex-Google employee

Add $100k for each ex-Apple employee

Add $500k for each Facebook employee

You are probably wondering why Facebook employees are worth so much to the value of your company. Investors only hate one thing worse than losing money, and that is looking stupid. The more Facebook employees you have, the more likely you are to get some newly minted millionaire idiot to invest in your company when it implodes.

Miscellaneous

There is plenty of other stuff that can impact your valuation.

Add $100k if your developers use Apple products

Subtract $100k if you know what Windows Azure is

Add $1m for: The Instagram of X

Add $100k for every five thousand Twitter followers you have

At the end of the day, just remember that entrepreneurship is not about creating value, it’s about raising money and buying a yacht. Follow my guide to valuing your company and you will be on the ocean in no time.