Edward Cruz of Melior Talks about BountyStorms
Where did you grow up?
I was born in Las Vegas, grew up in Tucson, and lived in San Francisco for 15 years before moving to Austin in 2005
What brought you to Austin?
Affordable real estate. (At least compared to San Francisco). And the opportunity to immerse myself in another tech-friendly city. Austin definitely has as broad and rich a tech community as Silicon Valley.
What university did you go to?
I went to both Washington University in St. Louis and the University of Arizona. I was a double major in Physics and Russian.
What is the idea behind your startup?
The idea for my startup came many years ago when I was working for a SF-based consulting firm. Our architect was working on the company's methodology, but he couldn't come up with a name for it. I suggested we take pieces of paper, write words, concepts and phrases that were related to our work, throw them into my baseball cap and then take them out two out at a time. Before long, two of the words that came out were "Simple" and "Fly", so our methodology became "Simplify". It was then that a realized that taking unfinished ideas and freely associating them was a simple but powerful way of getting people out of their tunnel vision and spurring creativity. I promised myself that someday I would bring this same idea to the web, so that was how BountyStorms was born.
Tell me more about your startup concept?
BountyStorms is an online brainstorming site, but it's also a marketplace for ideas. For people who need help with brainstorming, it provides an instant team of creative thinkers who will provide great answers in just 24 hours. For the creative types, it's an opportunity to flex their creative muscles and to earn some bounty money for their great ideas.
What exactly does your product do?
It starts when a brainstorm is created on the site with a bounty (currently $5 to $25), which is the financial incentive for BountyStormers, as we call our community members, to suggest great ideas. Brainstorming last for 12 hours, then voting on those ideas lasts for just another 12. After just 24 hours, the votes are tallied and the top 3 ideas earn a share of the bounty (40%, 20%, and 10% respectively). The top two idea fragments (used in Molecular Thinking, the site's proprietary brainstorming technology) also earn 5% each. The remaining 20% is used for "get out the vote" bounty: while it lasts during the voting phase, BountyStormers can earn $.25 for each brainstorm they vote on.
Who is it for?
BountyStorms serves two key communities: creative thinkers, who drive the site's brainstorming engine, and the people who need their help. BountyStorms is a classic crowdsourcing and wisdom-of-crowds application in terms of how it brings these two constituencies together, providing community-created ideas and community-driven ranking of those ideas in exchange for an opportunity to earn the bounty posted for the site's brainstorms.
What was the most challenging aspect of starting up a business?
Finding a business model. I felt confident that the brainstorming part would work, and because I've done web development for many years, I knew I could execute the site technically. But finding a way to monetize it wasn't obvious at all and was the single most critical breakthrough in the launching the site.
What is the next step for you and your startup?
Getting the word out! The site has been live for just a few weeks, but we've already gotten rave reviews from our community members and from everyone who has come to see the site and blogged or otherwise commented on it. Our goal now is to grow the community and to reach out to customers who need a quick and affordable way to outsource creative tasks, such as naming and branding.
What advice do you have for entrepreneurs?
I think there are two key steps for launching a business. First, do a demo. It can be a pitch, a PowerPoint presentation, or a mockup. You will need that for step two, which is to put the demo in front of your potential customers. You need to ask them: would you pay for this? how much would you pay? Will you pay for it right now? If the answer is yes, then you have the seeds of a business, not just a great idea. Keep iterating and demoing -- that's how you'll launch your product, grow your company, and meet your customers' needs along the way.
Best regards,
Hall T.
Wednesday, February 18, 2009
Monday, February 16, 2009
Artie Berne of Performance Capital talks about His Move into Equity Financing
Artie Berne of Performance Capital talks about His Move into Equity Financing
What kind of work did you perform in the past?
I sold fiber optics components and semiconductors for 23 years and lived all over the country. I like the weather in Texas the best due to its great diversity, with no harsh winters.
How did you get to Austin?
I was living in Los Angeles with my wife and we “researched” the next place to live so we took various “working vacations” to check out different areas of the country and decided to move to Austin. It was big enough, but small enough. It had a great intellectual crowd, plenty of night life and cheap real estate.
I wanted to have my own business so I took up consulting on alternative financing deals for businesses that was having trouble getting financing. I started consulting by solving problems for companies that had working capital problems.
I’ve since met various private investor groups that do equity, debt and joint venture funding to companies that are financially challenged. We don’t do start up funding. We only look at companies that are starting to generate revenue even a small amount of revenue.
What type of companies and programs do you have?
I represent various private equity individuals and groups of investors and hedge funds that specialize in corporate investing and other alternative sources of capital . They typically look at deals of $1M and up to $20M for a piece of equity in the business. The group doesn’t normally take a large equity position typically around 5-8% of the company. They might charge a retainer and due diligence fee depending on how much work goes into getting the “package” perfect.
What kind of deals are you seeing these days?
Medical, gaming/entertainment, technology, web, software and alternative energy is hot. The deal has to have an interesting, unique place in the market. The deal needs to be able to capture a large market share through some unique selling proposition.
How do you evaluate the deal?
After first initially talking over the phone (Artie Berne – 512-261-0024) I usually ask for an executive summary, pro forma and financials of the company. Once I get those then we do a conference call with one of my funding sources. If that goes well, we then meet face to face. If the parties are still interested in working together we start the complete comprehensive paper work gathering so we can package the opportunity perfectly. We then have the principals come back in to do a formal presentation to the investors for their comprehensive due diligence. We presently have a 60 percentish rate of getting deals funded.
Best regards,
Hall T.
What kind of work did you perform in the past?
I sold fiber optics components and semiconductors for 23 years and lived all over the country. I like the weather in Texas the best due to its great diversity, with no harsh winters.
How did you get to Austin?
I was living in Los Angeles with my wife and we “researched” the next place to live so we took various “working vacations” to check out different areas of the country and decided to move to Austin. It was big enough, but small enough. It had a great intellectual crowd, plenty of night life and cheap real estate.
I wanted to have my own business so I took up consulting on alternative financing deals for businesses that was having trouble getting financing. I started consulting by solving problems for companies that had working capital problems.
I’ve since met various private investor groups that do equity, debt and joint venture funding to companies that are financially challenged. We don’t do start up funding. We only look at companies that are starting to generate revenue even a small amount of revenue.
What type of companies and programs do you have?
I represent various private equity individuals and groups of investors and hedge funds that specialize in corporate investing and other alternative sources of capital . They typically look at deals of $1M and up to $20M for a piece of equity in the business. The group doesn’t normally take a large equity position typically around 5-8% of the company. They might charge a retainer and due diligence fee depending on how much work goes into getting the “package” perfect.
What kind of deals are you seeing these days?
Medical, gaming/entertainment, technology, web, software and alternative energy is hot. The deal has to have an interesting, unique place in the market. The deal needs to be able to capture a large market share through some unique selling proposition.
How do you evaluate the deal?
After first initially talking over the phone (Artie Berne – 512-261-0024) I usually ask for an executive summary, pro forma and financials of the company. Once I get those then we do a conference call with one of my funding sources. If that goes well, we then meet face to face. If the parties are still interested in working together we start the complete comprehensive paper work gathering so we can package the opportunity perfectly. We then have the principals come back in to do a formal presentation to the investors for their comprehensive due diligence. We presently have a 60 percentish rate of getting deals funded.
Best regards,
Hall T.
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