Filed under: Philanthropy, Utah Entrepreneurship, Utah Events
I received this email from the UVEF mailing list. I love the Utah Valley Entrepreneurial Forum. I’ve been attending its lunches for 8 or 10 years. I’ve also heard Alan Hall speak, and he is the most active and inspiring promoter of the entrepreneur->philanthropist cycle that I have ever met. Please don’t miss the chance to hear him in person.
We’re sorry for the short notice on RSVP’s for the luncheon this month, but if you are planning on coming, please let us know by tomorrow, Sept 13th by 1:00 at the latest to ensure that we can make a place for you. Thank you for all you do to support UVEF and entrepreneurship in general!
Growing Utah’s Businesses
Founder & Chairman of Grow Utah Ventures
11:45 a.m. to 1:30 p.m.
Thursday, September 14, 2006
Novell campus, cafeteria. Follow the UVEF signs
Alan E. Hall is the Founder and Chairman of Grow Utah Ventures. Hall also founded MarketStar, a company specializing in getting the innovative products of emerging technology companies into national markets. Although Grow Utah Ventures primarily assists early stage Utah business ventures in obtaining equity financing and in meeting revenue milestones, the company also facilitates all forms of financing, provides meaningful mentoring, and is creating an ever-expanding circle of resources. Close partners in the Grow Utah Ventures include Junto Partners, Top of Utah Angels, and the Olympus Angels.
Alan Hall received a degree in psychology from Weber State University and a Masters of Business Administration from BYU. He is the past President of Netline Inc., a current board member of UTA (Utah Technology Association), and a member of the Wells Fargo Bank Northern Utah Advisory Board. Hall was honored in 1997 by Ernst & Young as Utah’s Entrepreneur of the Year.
Don’t miss this exciting opportunity to learn how to grow your business from one of Utah’s top ‘movers and shakers’ in entrepreneurship!
Call today to reserve your place.
RSVP by Tuesday, September 12 to: danpurdon AT cedo.org
or call 801-226-1521.
I am very impressed with Google’s recent launch of its News Archives Search. Basically, in partnership with major content owners, Google is indexing newspaper and magazine articles going back to the 18th century.
I spent an hour doing various searches and found the content very interesting, although a lot of the historic newspaper content is full of typos and OCR errors, and much of the best content is available only for a fee. Over time, more and more good historical content will be free. The Time Magazine content is very useful.
I’ve been listening to an audio book called “Lies My Teacher Told Me” that reviews 12 American History textbooks and shows how false and full of misinformation they are, especially when it comes to religious, race, and economic class issues in American History. Textbooks gloss over these issues and almost never quote from original sources.
Google’s News Archive Search is a step in the right direction. Combined with Google Print, which will bring millions of public domain books onto the web (and into PDF format for free downloads), more people than ever before will be exposed to actual historical content. I really wonder what it will do to our view of ourselves when we realize how racist and bigoted we have been in this country (like under Woodrow Wilson), and how interventionist we have been (according to “Lies My Teacher Told Me” the U.S. has intervened in Nicaragua 17 times) and how the way other nations view America is shaped in part by what they teach in their history books and we omit from ours.
My own political views have been affected by listening to this audio book and discovering some historical facts I have been ignorant of. I look forward to learning more.
Filed under: Entrepreneurship, Internet Marketing Tactics
I’m starting my internet marketing class today at BYU. It’s Bus M 457. The class is Thursdays from 3:30 – 6:20. There are currently 29 students enrolled and room for more.
Today Marty Fahncke and I did our first Conference Call University teleconference call. We had 22 registrations for the call. Our next call will be in 2 weeks and we are hoping for 100 callers. Callers submit questions to Marty in advance and then he asks and I answer the questions, although he provides some great input as well. Today there were questions about fundraising for startups, pricing strategies, books to read, and how to focus on the most important things in a startup. The call was fun. I look forward to future calls. (Sign up for the next call)
This morning on the radio (about 3:00 am on KSL’s Wall Street Journal Broadcast) I heard the last few seconds of some big announcement about genealogy content digitization efforts. If you know what this was about, can you please comment or email me?
Filed under: Blogging, Provo Labs Companies, Utah Entrepreneurship
A month or so ago I held a difficult meeting with all the employees at Provo Labs. I started the meeting by admitting that I had made some mistakes in the past six months. Specifically, our burn rate got too high as we hired too many people, particularly developers. Our sales and marketing investments weren’t sufficient enough to cover our overhead. And more importantly, we weren’t creating dedicated teams for each new company idea, and giving the team members equity and letting them take risks along with the investor (Provo Labs), risks such as lower-than market salary. Instead, we were paying full salaries, and not giving options out, and shifting people from project to project. We should always be in bootstrap mode and we should not try to do so many things at once.
In fact, I now believe that rapid serial entrepreneurship is superior to parallel entrepreneurship, at least for me. I’d like to do one company at a time until it gets on its feet, before shifting attention to the next one. Maybe I’ll try that in the future.
So at the company meeting I announced that Provo Labs would return to its roots as an investment company in seed stage startups (usually from ideas that I generate) and that all the existing staff would be assigned to one of the existing portfolio companies (some of them were already dedicated to a single company already) or be let go.
Our remaining funds were not going to be used to incubate new startup companies, but to support the 11 companies in our current portfolio. Specifically, I am choosing to fully fund 10Speed Media, a promising company that runs a video affiliate network mainly for direct response video, and WorldVitalRecords.com, which aims to be the #2 genealogy company in the world.
I was blunt in saying that our other companies would have to sink or swim, or as one developer put it, eat what they kill. This of course causes everyone in each company to focus on generating revenue. That is a good thing.
I also said that options would (finally) be available for employees in each company. (It was always the intention to do this, but we didn’t always get around to it). If sacrifices have to be made by team members, then of course they are taking risks and deserve the reward of more ownership.
The meeting went better than I expected, but it still made it very difficult to let go of 6 talented employees who don’t fit with the current needs of any of our portfolio companies, or where funding just isn’t adequate to keep them.
Hardest hit was the development team, led by Phil Burns, an extremely creative and well connected technology, and someone who has become a good friend over the past year. My proposal there, since Phil had been working for a few weeks to find contract work from outside clients, was to spin out the technology team into a new company that does Web 2.0 development work. One of my close friends helped form Erudite, a development outsourcing and training company in the 1990s that was the fastest growing company in Utah for 2 years in a row. Doing contract development work is not necessarily a high margin business, but with a focus on Web 2.0, and with a large network of developers and a nice reach into the blogosphere, I was hopeful that Phil and his team could land some large contracts and keep things going.
Provo Labs original vision was to fund 12 companies over a 3 year period with up to $250,000 in funding, and to use that seed capital to get to cash flow positive or to be positioned to raise capital from angel investors (thus, the importance of FundingUniverse.com) or VCs.
I think we hired too fast and spent too much money, so in the end, we’ll probably only end up with 8-10 portfolio companies that got as much capital and as much as my time as I would have liked.
But in the seed stage investment game, if just one small investment goes well, the entire fund gets repaid and the investors do well. In our case, we hope that more than half of them will succeed. And to me that means at least a million in annual revenue within 3-5 years. We have several companies that should achieve that. And we have a couple that are very promising — big ideas and a great team.
What we don’t have is a large payroll now (we’re down to 3 people on the Provo Labs payroll) or a lot of talented developers working on new technology.
What we do have is the peace of mind that comes from a low burn rate and a focus on the top priorities.
I believe that I have maintained a good relationship with most of the people affected by the layoffs, and I am of course still involved in the active portfolio companies, helping where I can with strategy and marketing.
I have read some of the blog posts about the changes at Provo Labs. When every employee in a company is asked to blog regularly, and then when a change like this happens, of course lots of people will have lots of things to say.
I know this was a difficult change for many people. But we couldn’t have gone on indefinitely without running out of money. Our fund is a small one and it has a definite strategy. For me, this reorganization was a painful but necessary return to the original vision of Provo Labs being an investment fund, not an operating company.
I made the changes openly at a company meeting, admitting my mistakes, and I hoped for and actively worked for a good outcome for those who were affected. I can’t guarantee that everyone will end up with a positive outcome, but as one former employee said in a recent email, he is a better person and employee for the time he spent at Provo Labs and what he learned from our successes and failures. I hope everyone feels that way. If not, I’m sorry. I’d be happy to have a private conversation with anyone who hasn’t yet given me a piece of their mind.
I’ve been very gratified by the amount of goodwill that exists among the former Provo Labs team and the current portfolio companies. If there is any animosity or back-stabbing, I haven’t seen it (or felt it yet!). Well, I saw a little, but it seemed resolved with an anonymous poster bravely stepped forward to apologize about what she had written.
I welcome any comments to this post and any questions that you want me to address in future posts.
Filed under: Customer Surveys, Entrepreneurship, Provo Labs Companies, Utah Entrepreneurship
- Yesterday was our best FundingUniverse.com board meeting ever, in the wake of another successful speed-pitching event. The team is energized and the company should be profitable soon (maybe October or November). Then, it will have an indefinite runway on which to launch new products and services for entrepreneurs and angel investors. Great job, team!
- 10Speed Media, our video-based affiliate network led by CEO Erik Johnson (formerly with iBahn), rated very high at the speed-pitching event. Getting good feedback from attendees is a great motivator.
- This week Evident Marketing had record sales of Childrens Miracle Music as our first email campaigns began hitting. We have some very exciting marketing plans for this product. My philosophy is to always do a split A/B test on email campaigns. Never miss out on a chance to learn something. This time, we tested subject lines. One generated an open rate of about 3.9% while the other was under 3%. It’s very important to learn something every time you invest in an email campaign.
- LDSAudio.com, an LDS music download site is having an excellent month. It’s home page promotions (daily discounts on certain products) have increased revenue significantly this month.
- Yesterday I hired an experienced manager to help me finish the build-out and furnishings of the new Provo Lab office space on ninth east in Provo, next to BYU. The entire 1st floor will be occupied by members of the Provo Lab Academy. For as little as $200 per month they get shared office space, equipment, and training on internet marketing and entrepreneurship. I hope this will become the smartest place to start a new company in Utah.
- But yesterday I also saw the new E-Station at the Davis Applied Technology College. What an incredible facility! FundingUniverse.com has an office there. I am very impressed with the commitment to entrepreneurship that is being demonstrated by this building and those who are there to provide training and services to entrepreneurs.
- Yesterday I surveyed the nearly 30 applicants to the Provo Labs Academy that have signed up in the last week. We are going to do a random drawing soon (maybe this afternoon) to choose 1 applicant who will get their first month free, a $200 value. I asked the applicants what kind of phone systems and computer systems they want, and what most attracted them to our Academy. Every business owner needs to do regular surveys of customers and potential customers if they want to know how to provide better service and how to make their marketing messages better. Anyway, I was pretty surprised that 36% don’t even want an office phone–they rely on their cell phone for their business. Another 36% want a live receptionist to answer their phone calls. 54% don’t need a computer–they’ll either bring in a desktop or their laptop. 36% want us to supply them with an Intel based desktop. No one asked for a Mac. 45% are ready to move in to the new space in September. 27% in the fourth quarter. The #1 reason for people wanting to join the Academy was to be close to other entrepreneurs! 2nd was internet marketing training. And #3 was the location. I liked the write in votes that said they wanted to be close to me. Made my day!
- This morning I got up at 2:30, couldn’t sleep. So I worked on my Chamber of Commerce talk today. It will be about the economy, China and India, the need for more entrepreneurship, and some of the most powerful internet tools that modern entrepreneurs need to learn how to use. I’ll definitely be plugging LinkedIn.com and promoting blogging. But there are so many things to talk about.
- Then I worked out and ran 12 miles at the gym. Did you realize Gold’s Gym also spells "go LDS" gym? Hey, I like to promote my favorite religion whenever I can. I’m training for the Las Vegas marathon on November 18th. I really hope I can pull this off. I hope my knees hold up.
- I’m listening to the Portable MBA audio book from audible. While I was watching the local news, I noticed that LogoWorks, a company founded by Morgan Lynch (who has been kind enough to lecture at my UVSC classes in the past) was ranked the #1 fastest growing company in Utah by Inc. Magazine, and #66 overall nationwide. So now I need to go see what other Utah companies made the list. Usually, we are the top state in terms of companies per capita making the list. Congrats Morgan and team!
- Now, due to popular demand, I finally need to write a very thoughtful post about the recent changes at Provo Labs.