Kristy Bowden of the Digital Media Council Talks about her Organization
Where did you go to University?
I graduated with a Master’s degree in English Literature from the University of Texas system. I love learning and hope to find myself back in the classroom one day.
How did you get to Austin?
I applied to several programs at the University of Texas in Austin. Upon my acceptance, I promptly moved to Austin. Of course, I never quite made it to registration, but I found Barton Springs!
Austin has been my home for 7 years now, and I have some suspicion I may never leave.
What did you do before you joined the DMC?
I worked for a start-up game development studio in town, called Roxor Games. I spent two years as the PR Manager, developing the publicity and marketing plan for the company’s titles. Eventually, I led the team to host a national tournament series around our most popular tile, an arcade dance game. The tournament finals were held at Circus Circus in Las Vegas and garnered national press. I spent about five months at the end of my time at Roxor learning to be an Associate Producer, managing the development process between our team and publisher. It was an incredible learning experience.
What was it like to work in a startup gaming company?
It was exciting. I felt like a rock star! The developers and fan community were really passionate about what we were doing. This is not to say the job was easy. We worked hard, and we played hard. But, ultimately, I feel this was a great way to learn about the industry, its strengths and challenges.
What lessons did you learn from that experience?
I learned many lessons, but my most significant personal lessons have to do with process. Almost everything can be accomplished through a systematic and diligent process. (Ok, that’s boring. But, true!). I also learned how important it is to ask questions. Whether you’re an investor looking to fund a project or a development lead trying to get a product out the door, the more information you can pull from others, the better your decisions usually are.
Additionally, I learned a lot about the game industry, from how it functions in day-to-day operations to the trends that make up its landscape. I have been a part of its growing pains and am encouraged by the tenacity with which the industry continues to bounce back.
What is the DMC?
The Digital Media Council (DMC) supports and creates industry-led collaborations with educators and community leaders to promote the economic growth of the digital media and creative technology and design industries of Central Texas. We develop training and educational programs that provide our local workforce with knowledge, resources, and skills to ensure the continued security, expansion, and innovation of these industries in our region.
How was it formed?
Our parent organization, Skillpoint Alliance, began as the Capital Area Training Foundation, which provided extensive training programs to meet industry needs for skilled entry-level workers. This industry-led approach grew to support cluster initiatives to support the semiconductor, digital media, and high tech fields. The Digital Media Council was formed at Skillpoint Alliance in 2006, led by video game studio executives and community leaders hoping to support the growing workforce needs of the emerging digital media fields.
What do you hope to accomplish this year at the DMC?
We want to really strengthen the relationships between our local digital media companies and the community. Our quarterly networking series, called DMC Presents, highlight local companies and their work and give industry leaders the chance to network and socialize with their peers. During SXSW Interactive, we are also sponsoring the Entrepreneurship & VIP Networking Lounge, which is designed to provide entrepreneurs, venture capitalists, bloggers, and members of the press a place to gather during SXSWi and is really designed to give our local startups looking to engage with national investors and VCs. We have demo stations available for companies (http://tinyurl.com/demoapp2009) and a limited number of tickets available for Sunday, March 15th (http://tinyurl.com/2009lounge).
Best regards,
Hall T.
Wednesday, February 11, 2009
Wednesday, February 4, 2009
The Baylor Angel Network – a New Angel Group
The Baylor Angel Network – a New Angel Group
The Baylor Angel Network just launched this week with a fresh set of investors and capital to go to work. Led by the Business School faculty member, Bill Petty, the Baylor Angel Network seeks to fund deals related to the “family and friends” of Baylor University. Built mostly on alumni the group seeks to make investments into deals with a portion of the proceeds going to the Hankamer School of Business at Baylor. There’s no connection with Baylor Medical Center at this time.
The Baylor Angel Group consists of twenty members and is actively seeking more members to join. Two Baylor alumni, Bob Brewton and Pat Horner spearheaded the organization of the group and championed it into its current position. While most alumni organizations seek donations for the university, an angel network gives another avenue to connect the alumnus back to the university.
While the majority of members are in Texas, those outside the state are invited to join as well. Presentation meetings will be held in Waco, Dallas, Austin, and Houston.
The group is open to accepting deals. If you have a deal that fits the requirements which are
– Baylor friends and family
– At least prototype product/service offering
– In discussion with customers and have roadmap to customer signings
– Seeking $250K to $2M (if over $500K, then you need to have a lead investor and a terms sheet signed)
then please submit an application.
Best regards,
Hall T.
The Baylor Angel Network just launched this week with a fresh set of investors and capital to go to work. Led by the Business School faculty member, Bill Petty, the Baylor Angel Network seeks to fund deals related to the “family and friends” of Baylor University. Built mostly on alumni the group seeks to make investments into deals with a portion of the proceeds going to the Hankamer School of Business at Baylor. There’s no connection with Baylor Medical Center at this time.
The Baylor Angel Group consists of twenty members and is actively seeking more members to join. Two Baylor alumni, Bob Brewton and Pat Horner spearheaded the organization of the group and championed it into its current position. While most alumni organizations seek donations for the university, an angel network gives another avenue to connect the alumnus back to the university.
While the majority of members are in Texas, those outside the state are invited to join as well. Presentation meetings will be held in Waco, Dallas, Austin, and Houston.
The group is open to accepting deals. If you have a deal that fits the requirements which are
– Baylor friends and family
– At least prototype product/service offering
– In discussion with customers and have roadmap to customer signings
– Seeking $250K to $2M (if over $500K, then you need to have a lead investor and a terms sheet signed)
then please submit an application.
Best regards,
Hall T.
Monday, February 2, 2009
Austin Entrepreneur Network will soon offer Startup Business Classes
Austin Entrepreneur Network will soon offer Startup Business Classes
In working with entrepreneurs I often hear the question, “where do I go to get help in starting my business?” Universities offer educational programs that take far too much time and often don’t focus on the practical issues of starting a new venture. Having worked with angel groups, I found that most want to focus on the few deals that investors are actively interested in funding and not the majority of the deals which are not ready for funding. The problem is particularly challenging for those who are early on in the seed stage.
To help solve this problem, we’ve created the Austin Entrepreneur Network, which will roll out its first class on February 24, 2009. The course runs eight weeks 2 hour sessions each week, featuring classroom-style instruction, assignments, expert speakers, and a course book. The course also offers two hours of one-on-one time with the instructor focusing on your startup.
Based on my experience in funding startups, the class will focus on validating the market, identifying the business model, and building the management team. These topics tended to be the key elements that kept most from getting very far towards funding.
Speakers will include Mike Maples, Thom Singer, and other experts talking about topics such as product development, networking, crisis management, financials, intellectual property, and more. A little bit of guidance and instruction in the early days can go along ways to achieving success for a startup.
If you are interested in learning more about the course, please email me at
Director (@) austinentrepreneurnetwork (DOT) org.
Best regards,
Hall T.
In working with entrepreneurs I often hear the question, “where do I go to get help in starting my business?” Universities offer educational programs that take far too much time and often don’t focus on the practical issues of starting a new venture. Having worked with angel groups, I found that most want to focus on the few deals that investors are actively interested in funding and not the majority of the deals which are not ready for funding. The problem is particularly challenging for those who are early on in the seed stage.
To help solve this problem, we’ve created the Austin Entrepreneur Network, which will roll out its first class on February 24, 2009. The course runs eight weeks 2 hour sessions each week, featuring classroom-style instruction, assignments, expert speakers, and a course book. The course also offers two hours of one-on-one time with the instructor focusing on your startup.
Based on my experience in funding startups, the class will focus on validating the market, identifying the business model, and building the management team. These topics tended to be the key elements that kept most from getting very far towards funding.
Speakers will include Mike Maples, Thom Singer, and other experts talking about topics such as product development, networking, crisis management, financials, intellectual property, and more. A little bit of guidance and instruction in the early days can go along ways to achieving success for a startup.
If you are interested in learning more about the course, please email me at
Director (@) austinentrepreneurnetwork (DOT) org.
Best regards,
Hall T.
Wednesday, January 28, 2009
Micah Adams of Vencore Capital Talks about the Current Economy
Micah Adams of Vencore Capital Talks about the Current Economy
How is business for you?
The traditional lenders have pulled back so we’re seeing quite a bit of interest. It’s an opportune market even though we find it more challenging to lend ourselves.
How do you see the economy shaping up?
One fear within Vencore is that the economy won’t turn around till 2010 at the earliest. Once it starts to roll again, I’m also concerned about the potential inflationary consequences of the government bailout. We’re looking at new opportunities but at the same time we’re spending a great deal more time with our current portfolio companies to make sure they are taking the necessary steps to handle their business in this environment. The basis for some of our concerns comes from our institutional investor, DE Shaw, which is also forecasting a down year for 2009.
What are some warning signs?
If a company has one big customer or potential customer they’re relying on then we need to look at alternatives. It’s better if the company has several smaller customers rather than one big one. We also look for recurring revenue generation rather than one-off sales. Enterprise sales tend to be one-shot deals. If they miss that one shot then it’s game-over due to current market conditions for some startups.
What’s coming up for you?
I’m speaking on the Association for Corporate Growth panel in February. Usually, ACG members are companies that are middle market which are further along than most startups that we deal with. I’m seeing some opportunity in later stage companies as capital is quite scarce.
What’s a company to do in this environment?
From the startup perspective this is an ideal time to start a company because the costs are low and labor is plentiful. For larger companies it’s an opportunity to refocus on the core business since the envelope-pushing business is not going to happen given the pull back on budgets. It’s an opportunity to go back and re-evaluate your business.
Best regards,
Hall T.
How is business for you?
The traditional lenders have pulled back so we’re seeing quite a bit of interest. It’s an opportune market even though we find it more challenging to lend ourselves.
How do you see the economy shaping up?
One fear within Vencore is that the economy won’t turn around till 2010 at the earliest. Once it starts to roll again, I’m also concerned about the potential inflationary consequences of the government bailout. We’re looking at new opportunities but at the same time we’re spending a great deal more time with our current portfolio companies to make sure they are taking the necessary steps to handle their business in this environment. The basis for some of our concerns comes from our institutional investor, DE Shaw, which is also forecasting a down year for 2009.
What are some warning signs?
If a company has one big customer or potential customer they’re relying on then we need to look at alternatives. It’s better if the company has several smaller customers rather than one big one. We also look for recurring revenue generation rather than one-off sales. Enterprise sales tend to be one-shot deals. If they miss that one shot then it’s game-over due to current market conditions for some startups.
What’s coming up for you?
I’m speaking on the Association for Corporate Growth panel in February. Usually, ACG members are companies that are middle market which are further along than most startups that we deal with. I’m seeing some opportunity in later stage companies as capital is quite scarce.
What’s a company to do in this environment?
From the startup perspective this is an ideal time to start a company because the costs are low and labor is plentiful. For larger companies it’s an opportunity to refocus on the core business since the envelope-pushing business is not going to happen given the pull back on budgets. It’s an opportunity to go back and re-evaluate your business.
Best regards,
Hall T.
Monday, January 26, 2009
James Rogers of Whagaa Talks about His New iPhone Application
James Rogers of Whagaa talks about His New iPhone Application
What is your background?
I was an executive at Remedy where I ran the IT Service Management Operations team. This was the team the developed and launched the Remedy Help Desk, Asset Management, Change Management, and Service Level Agreements applications.. I have a lot of enterprise software management in my background. I had 250 people in the organization. I was also the VP of Product Marketing at Merant/Serena for over 3 years, and responsible for driving ALM solutions to market. What got me to Texas is that I’m the CMO of Troux Technologies for the past 3 years.
What are you doing now?
I’m working an iPhone application development system. We’ve been working on this for the past 6 years. The only company that I know of locally as far along as us to the new mobility marketplace, is Digby. We have 7 apps on the Apple app store. We’re making revenue now from the $2.99 to $7.99/application that people pay. Where companies will make money in this marketplace is from a subscription/advertising combination model.
What’s the value proposition?
It’s a rapid application development platform so application developers or content providers don’t need to build their own system. It’s a platform-play. It’s taking instructional content and using GPS and other iPhone capabilities to enhance the application. We’ve actually solved a key issue with iPhone apps in that they can only run one application at a time and cannot share data between the apps. We’ve cracked that problem.
The application you show is related to sports?
That was the first co produced business partner applications we signed. In fact it took us less than 2 weeks to get it produced. Within 48 hours of going on the app store we were in the top 20 in the sports category. This is generating quite a bit of interest from other fitness/sports content providers. We’ve been approached by companies that provide instructional content in the areas of Swimming, Soccer and Snowboarding just to name a some examples. If you look at our new website you’ll see we’re expanding into other areas quite a bit.
How many users do you have?
As of 2 months ago we had 10,000. It’s gone up since then by a quite a bit.
Are you seeking funding?
I went to raise money in October which is the worst time since the Great Depression. We have the complete business plan that will take us to 15 people.
How much are you trying to raise?
It’s in the $1M to $3M category. But when the economy went bad most investors pulled back. We could bootstrap it or we could raise $250K to $500K investments from angels to get it going.
I see the company is based in California. Is that right?
I have an agreement with the founder that if we raise funding then they’ll move the management team to Texas.
Best regards,
Hall T.
What is your background?
I was an executive at Remedy where I ran the IT Service Management Operations team. This was the team the developed and launched the Remedy Help Desk, Asset Management, Change Management, and Service Level Agreements applications.. I have a lot of enterprise software management in my background. I had 250 people in the organization. I was also the VP of Product Marketing at Merant/Serena for over 3 years, and responsible for driving ALM solutions to market. What got me to Texas is that I’m the CMO of Troux Technologies for the past 3 years.
What are you doing now?
I’m working an iPhone application development system. We’ve been working on this for the past 6 years. The only company that I know of locally as far along as us to the new mobility marketplace, is Digby. We have 7 apps on the Apple app store. We’re making revenue now from the $2.99 to $7.99/application that people pay. Where companies will make money in this marketplace is from a subscription/advertising combination model.
What’s the value proposition?
It’s a rapid application development platform so application developers or content providers don’t need to build their own system. It’s a platform-play. It’s taking instructional content and using GPS and other iPhone capabilities to enhance the application. We’ve actually solved a key issue with iPhone apps in that they can only run one application at a time and cannot share data between the apps. We’ve cracked that problem.
The application you show is related to sports?
That was the first co produced business partner applications we signed. In fact it took us less than 2 weeks to get it produced. Within 48 hours of going on the app store we were in the top 20 in the sports category. This is generating quite a bit of interest from other fitness/sports content providers. We’ve been approached by companies that provide instructional content in the areas of Swimming, Soccer and Snowboarding just to name a some examples. If you look at our new website you’ll see we’re expanding into other areas quite a bit.
How many users do you have?
As of 2 months ago we had 10,000. It’s gone up since then by a quite a bit.
Are you seeking funding?
I went to raise money in October which is the worst time since the Great Depression. We have the complete business plan that will take us to 15 people.
How much are you trying to raise?
It’s in the $1M to $3M category. But when the economy went bad most investors pulled back. We could bootstrap it or we could raise $250K to $500K investments from angels to get it going.
I see the company is based in California. Is that right?
I have an agreement with the founder that if we raise funding then they’ll move the management team to Texas.
Best regards,
Hall T.
Wednesday, January 21, 2009
Jerry Bowerman talks about the Gaming Industry in Austin
Jerry Bowerman talks about the Gaming Industry in Austin
What is your background?
When I first got out of college I was an investment banker, but since 1993 I have been either doing video games or computer games or something like that. I did take a break after the sale of Sierra (we had non-competes). I co-founded a company to create one of the first business communication systems over the Internet. You could actually broadcast yourself over the Internet with a PowerPoint, instant surveys, whiteboard, audio, video and all that going with it (before there was WebEx or anything like that). I mean this is back using Real 2.0, Real 3.0, in early 1997. We took a lot of bad habits from doing PC games and applied them to enterprise software and got smacked a few times. We had some great accounts like Nortel which used our system for a company meeting back when they actually had employees and it crashed our whole system. That was a great learning experience.
After that I worked at Electronic Arts in Seattle and Las Vegas. I was asked to move to Vancouver, BC and “create the largest game studio on the planet”. By 2006 it had over 1,700 employees.
Where are you from originally?
Seattle. There are a few of us that grew up there and hate it. My wife and I decided to find another place to live so we went through an 18 month process to find another home.
What were the big criteria for coming to Austin?
Well, it was the same criteria for everywhere we looked and I don’t remember all of them but education for our boys was really important, climate (days of sunshine!), political climate, cost of living, and technology were a few of them.
So what did you do when you came to Austin?
When EA found out I was moving to Austin they asked me to stay on and work from my home. They were really quite good to me – a real class act. But, it was hard to be “connected” from my home office and so I resigned for good after a few months of being in Austin. Then I joined Sevin Rosen Funds, a Dallas based venture capital company, as an Entrepreneur in Residence.
The Sevin Rosen guys were great to work with but I found when it comes to consumer software the VC community in general is scared to death of Microsoft, Google and Yahoo. I spent a good chunk of my career competing with various divisions of those behemoths and, you know, they are not the big bad boy everybody thinks they are. I should qualify that – I mean they are predatory but they move incredibly slowly and they are willing to buy their way into a lot of businesses. That can be good for an entrepreneur.
Around a year ago I got a call out of the blue from the president of Lucasfilm. They wanted to make changes at LucasArts and I ended up consulting to them for the better part of 2008. As my consulting work was winding down they asked me if I would be interested in joining their board of directors. That was an easy answer – YES!
I really enjoy gaming and technology and one of the things I want is to get more involved with is technology growth in the State of Texas. Through my contacts I get a call a month from a startup that needs help. I run into the challenge that a lot of them find it’s really hard to differentiate yourself from the competition. Typically they haven’t factored in the cost of customer acquisition – or even how to attract new customers. They often feel their product will “sell itself”.
The industry structure is also challenging with the way publishers setup the business. What do you think?
Many independent developers dream of creating their own intellectual property by being able to save some of their advances or ship a hit and make a ton in royalties. For most it is much easier said than done and so many independent developers resort to selling. Some publishers buy gaming companies for the talent and not the game itself. If an independent developer doesn’t have their own IP the deal is usually tiny.
What do you think about the iPhone market?
I think the iPhone is great for the iPhone owner, great for Apple and not good for developers. History has shown time and time again in “open markets” the price trends to zero over time resulting in losses for +95% of the developers. Also, many developers have an interesting idea but are not solving enough of the problem and to get customers to go from something that’s free and painful to something that costs money and is pain free you have to improve the overall experience by about 10x.
What business models have you found that work?
One idea is to attach your game to a company with a product to sell and use the game to attract and entertain customers through the website. That way there’s something to monetize such as the product the company sells.
Best regards,
Hall T.
What is your background?
When I first got out of college I was an investment banker, but since 1993 I have been either doing video games or computer games or something like that. I did take a break after the sale of Sierra (we had non-competes). I co-founded a company to create one of the first business communication systems over the Internet. You could actually broadcast yourself over the Internet with a PowerPoint, instant surveys, whiteboard, audio, video and all that going with it (before there was WebEx or anything like that). I mean this is back using Real 2.0, Real 3.0, in early 1997. We took a lot of bad habits from doing PC games and applied them to enterprise software and got smacked a few times. We had some great accounts like Nortel which used our system for a company meeting back when they actually had employees and it crashed our whole system. That was a great learning experience.
After that I worked at Electronic Arts in Seattle and Las Vegas. I was asked to move to Vancouver, BC and “create the largest game studio on the planet”. By 2006 it had over 1,700 employees.
Where are you from originally?
Seattle. There are a few of us that grew up there and hate it. My wife and I decided to find another place to live so we went through an 18 month process to find another home.
What were the big criteria for coming to Austin?
Well, it was the same criteria for everywhere we looked and I don’t remember all of them but education for our boys was really important, climate (days of sunshine!), political climate, cost of living, and technology were a few of them.
So what did you do when you came to Austin?
When EA found out I was moving to Austin they asked me to stay on and work from my home. They were really quite good to me – a real class act. But, it was hard to be “connected” from my home office and so I resigned for good after a few months of being in Austin. Then I joined Sevin Rosen Funds, a Dallas based venture capital company, as an Entrepreneur in Residence.
The Sevin Rosen guys were great to work with but I found when it comes to consumer software the VC community in general is scared to death of Microsoft, Google and Yahoo. I spent a good chunk of my career competing with various divisions of those behemoths and, you know, they are not the big bad boy everybody thinks they are. I should qualify that – I mean they are predatory but they move incredibly slowly and they are willing to buy their way into a lot of businesses. That can be good for an entrepreneur.
Around a year ago I got a call out of the blue from the president of Lucasfilm. They wanted to make changes at LucasArts and I ended up consulting to them for the better part of 2008. As my consulting work was winding down they asked me if I would be interested in joining their board of directors. That was an easy answer – YES!
I really enjoy gaming and technology and one of the things I want is to get more involved with is technology growth in the State of Texas. Through my contacts I get a call a month from a startup that needs help. I run into the challenge that a lot of them find it’s really hard to differentiate yourself from the competition. Typically they haven’t factored in the cost of customer acquisition – or even how to attract new customers. They often feel their product will “sell itself”.
The industry structure is also challenging with the way publishers setup the business. What do you think?
Many independent developers dream of creating their own intellectual property by being able to save some of their advances or ship a hit and make a ton in royalties. For most it is much easier said than done and so many independent developers resort to selling. Some publishers buy gaming companies for the talent and not the game itself. If an independent developer doesn’t have their own IP the deal is usually tiny.
What do you think about the iPhone market?
I think the iPhone is great for the iPhone owner, great for Apple and not good for developers. History has shown time and time again in “open markets” the price trends to zero over time resulting in losses for +95% of the developers. Also, many developers have an interesting idea but are not solving enough of the problem and to get customers to go from something that’s free and painful to something that costs money and is pain free you have to improve the overall experience by about 10x.
What business models have you found that work?
One idea is to attach your game to a company with a product to sell and use the game to attract and entertain customers through the website. That way there’s something to monetize such as the product the company sells.
Best regards,
Hall T.
Monday, January 12, 2009
Maury McCoy of Penny Portrait Talks about His new Web-based Startup
Maury McCoy of Penny Portrait Talks about His new Web-based Startup
What is the idea behind your new startup>?
It’s a kit that allows you to make a portrait of Abraham Lincoln out of pennies. It’s educational and also fun for the kids. It’s an 18 x 24 poster with four shades of pennies on them. Kids match their pennies to those on the poster and glue them on to create a work of art.
How did you come up with the idea?
I was surfing the internet and was inspired by a story about a father and son who created this giant portrait of Abraham Lincoln out of $25 worth of pennies. I thought maybe other people would like to do the same thing. So I added a few additional shades which allowed me to make the image a more manageable size. After several iterations, I came up with a version that looked good but only used $8.46.
So the user glues the pennies onto the poster?
Yes. It does take awhile- about 5 hours in total. As it comes together there’s a real sense of satisfaction. The poster also comes with a booklet with fun facts about Abraham Lincoln and coin collecting, so it’s educational too. For example, the booklet tells you which pennies are valuable so you don’t use them for your poster! I also include a 1943 steel penny in each kit. I had one as a kid and it was one of my prized possessions, so I thought other kids would enjoy having one too. They are worth about 15 cents today, but they are a rarity and pretty neat to have.
Who buys it?
In addition to families who buy it for their kids, we’ve had a lot of interest from educators doing class projects and, of course, coin collectors buy them!
Can you do other portraits based on other coins?
Abe Lincoln makes sense with the penny but other coins don’t really turn different shades so it’s difficult to make it work with say, nickels or dimes. Abe is also one of the more popular presidents.
So you sell it through the web. How was the process in setting up your web-based business?
I originally thought I was going to put all this together in a weekend but found it took closer to 3 months by the time I launched. The most time-consuming part was researching all the various service providers to find the best deals. If you do a little work yourself, you can save a lot of money.
You always hear about how huge the web is, and that if you put something out there the clients will come, but there’s definitely an art to how you market on the web. That has been the trickiest part so far.
What techniques are you using to market it?
Google Adwords and search engine optimization are often used. But those tools only work if people are searching for things related to your product and most people aren’t searching for a penny portrait of Abraham Lincoln! I’ve found success with marketing directly to coin websites and on coin forums, doing blog interviews, etc. I’m also working on some retail outlets.
I’m hoping in 2009 I may get a boost from the fact that it will be 100th anniversary of the penny and Abe’s 200th birthday. To commemorate the occasion, the mint is launching four new penny designs next year. It will be the first change to the penny in 50 years. Spielberg is also doing a movie about Abe Lincoln starring Liam Neesen.
What was the hardest part about setting up the business?
Shopping carts. There are so many out there. It’s amazing how many of them don’t follow the rules such as how to tax orders. Making sure the software worked with payment processors and complied with tax rules was a challenge. I ended up using E-Junkie which was an affordable solution for only $5 a month.
Did you find any cool tools in the process?
In addition to E-Junkie, Google offers a variety of tools including Google Checkout which competes with PayPal.
Paypal takes a big cut of the transaction – over 30%. What does Google Checkout take?
They charge me 2% of each transaction plus $0.20. The real perk with Google Checkout is that any money spent on Google Adwords helps offset transaction fees. So by advertising on Google Adwords, I essentially get the payment processor for free.
Google also has a nice backend to their process. It takes care of the credit card management and tracks shipping. I’ve tried other keyword ad providers like MSN but Google is the only one that has really worked for me.
How about building out the website itself?
When I first moved to Austin, I worked on the www. AMD.com website. I have a background in web production and graphic design but for this project I found it easier to use some free web templates that were available. I also used GoDaddy to register the name and setup e-mail.
What is your biggest expense today?
Initially, it was printing and shipping tubes, but now my biggest expense is actually Google. There are some weeks Google makes as much from my business as I do!
Best regards,
Hall T.
What is the idea behind your new startup>?
It’s a kit that allows you to make a portrait of Abraham Lincoln out of pennies. It’s educational and also fun for the kids. It’s an 18 x 24 poster with four shades of pennies on them. Kids match their pennies to those on the poster and glue them on to create a work of art.
How did you come up with the idea?
I was surfing the internet and was inspired by a story about a father and son who created this giant portrait of Abraham Lincoln out of $25 worth of pennies. I thought maybe other people would like to do the same thing. So I added a few additional shades which allowed me to make the image a more manageable size. After several iterations, I came up with a version that looked good but only used $8.46.
So the user glues the pennies onto the poster?
Yes. It does take awhile- about 5 hours in total. As it comes together there’s a real sense of satisfaction. The poster also comes with a booklet with fun facts about Abraham Lincoln and coin collecting, so it’s educational too. For example, the booklet tells you which pennies are valuable so you don’t use them for your poster! I also include a 1943 steel penny in each kit. I had one as a kid and it was one of my prized possessions, so I thought other kids would enjoy having one too. They are worth about 15 cents today, but they are a rarity and pretty neat to have.
Who buys it?
In addition to families who buy it for their kids, we’ve had a lot of interest from educators doing class projects and, of course, coin collectors buy them!
Can you do other portraits based on other coins?
Abe Lincoln makes sense with the penny but other coins don’t really turn different shades so it’s difficult to make it work with say, nickels or dimes. Abe is also one of the more popular presidents.
So you sell it through the web. How was the process in setting up your web-based business?
I originally thought I was going to put all this together in a weekend but found it took closer to 3 months by the time I launched. The most time-consuming part was researching all the various service providers to find the best deals. If you do a little work yourself, you can save a lot of money.
You always hear about how huge the web is, and that if you put something out there the clients will come, but there’s definitely an art to how you market on the web. That has been the trickiest part so far.
What techniques are you using to market it?
Google Adwords and search engine optimization are often used. But those tools only work if people are searching for things related to your product and most people aren’t searching for a penny portrait of Abraham Lincoln! I’ve found success with marketing directly to coin websites and on coin forums, doing blog interviews, etc. I’m also working on some retail outlets.
I’m hoping in 2009 I may get a boost from the fact that it will be 100th anniversary of the penny and Abe’s 200th birthday. To commemorate the occasion, the mint is launching four new penny designs next year. It will be the first change to the penny in 50 years. Spielberg is also doing a movie about Abe Lincoln starring Liam Neesen.
What was the hardest part about setting up the business?
Shopping carts. There are so many out there. It’s amazing how many of them don’t follow the rules such as how to tax orders. Making sure the software worked with payment processors and complied with tax rules was a challenge. I ended up using E-Junkie which was an affordable solution for only $5 a month.
Did you find any cool tools in the process?
In addition to E-Junkie, Google offers a variety of tools including Google Checkout which competes with PayPal.
Paypal takes a big cut of the transaction – over 30%. What does Google Checkout take?
They charge me 2% of each transaction plus $0.20. The real perk with Google Checkout is that any money spent on Google Adwords helps offset transaction fees. So by advertising on Google Adwords, I essentially get the payment processor for free.
Google also has a nice backend to their process. It takes care of the credit card management and tracks shipping. I’ve tried other keyword ad providers like MSN but Google is the only one that has really worked for me.
How about building out the website itself?
When I first moved to Austin, I worked on the www. AMD.com website. I have a background in web production and graphic design but for this project I found it easier to use some free web templates that were available. I also used GoDaddy to register the name and setup e-mail.
What is your biggest expense today?
Initially, it was printing and shipping tubes, but now my biggest expense is actually Google. There are some weeks Google makes as much from my business as I do!
Best regards,
Hall T.
Wednesday, January 7, 2009
Jamon Crockom and David Breshears of CrockomBreshears Talk about their New Startup
Jamon Crockom and David Breshears of CrockomBreshears Talk about their New Startup
What do you guys make?
We have a social networking platform with a few unique monetization components. Instead of relying on the existing advertising model of banner ads and ads words to generate revenue, we seamlessly weave consumer activity and interactive advertising into the user experience.
Much of social networking is about self-expression, learning about other people, and connecting with them based on shared interests. Lifestyle based social networks have begun popping up all over the web to address user demand for social networking to be more contextualized along these shared interests. Brands and products are integral to lifestyle. If I’m a parent I’m buying diapers and cribs and if I’m a golfer I’m buying golf clubs and shoes. Additionally, the products we buy are indexes of our identity. The fact that I drive a minivan and not a two-seater convertible is an indication of who I am. We’ve woven consumer activity into the user experience by making products a means of self-expression and social product recommendation for users, and word-of-mouth marketing for brands. It’s also a way for users to connect with one another by extending the concept of user profiles to include brands and products.
We designed the platform by first looking at where user demand was driving social networking, and found growing numbers of users migrating to sites that provided a more personalized, lifestyle-oriented social experience. Because a person’s identity is made up of a variety of lifestyle interests, they currently have to join a different niche social network catering to each of their lifestyle interests. The problem is that these sites exist in isolation from one another, and users are forced to create multiple profiles, maintain relationships across multiple networks, keep up with communication across multiple messaging systems, and deal with a variety of user experiences. So, the user experience is fragmented, and it’s a self-cannibalizing model – people just don’t have time to maintain 5 profiles, 5 networks of friends, 5 sets of photos, 5 blogs, and everything else. People are going to figure out the ones that work and that they’re most interested in and triage the rest.
So how does your platform address this problem?
We resolved the fragmented user experience problem by creating a platform that addresses niche lifestyle communities as parts of a whole. By joining one site, users have access to a variety of lifestyle communities. As a result, we offer users a single, unified online identity – one profile, one inbox, unified network management, personal expression, and communication tools, and a unified social experience.
What’s the challenge with niche social networking sites?
It’s hard to gain traction, to attract and retain users. Niche social networks generally lack brand recognition. Additionally, while advertisers are willing to pay a premium for the targeted nature of advertisements on niche social networks, they haven’t really figured out a way to effectively integrate advertising into the social environment. Banner ads and search based ads are incredibly unproductive on social sites. Although brands want to do interactive and social media advertising, this is very much a market in search of a solution. What is needed is something that integrates the brand into the community in a way that encourages user engagement. We can safely say that none of the social networking platforms we have seen have figured out a way to accomplish that goal. You can’t just bolt interactive advertisements onto a community and expect users to interact with them. When users view themselves as lifestyle consumers they actively seek out brands and products that reflect their interests, and that is really the key to successful brand integration.
So you sell it to companies that want to do social networking, and put it on their site?
We started down this path over two years ago building a niche social network from the ground up, and from that experience we learned some valuable lessons. As such, we’ve identified a target market that we think is ideally suited to leverage the advantages our platform offers – publishing companies. Publishing companies are increasingly moving onto the Web, and they have top tier, lifestyle-based content, recognizable brand names, extensive relationships with advertisers, and a broad base of existing users. With our platform, publishing companies can provide their users with seamless access to their entire content offering, unifying the user experience and massively increasing the value of this audience to advertisers.
This sounds like the next generation of advertising?
We are talking about a paradigm shift in advertising on the web. At the very time that every article that you read out there from every blogger and every analyst and everybody is saying advertising on the web is broken. Whoever comes up with the solution is going to make a lot of money. We just hope it’s us.
Best regards,
Hall T.
What do you guys make?
We have a social networking platform with a few unique monetization components. Instead of relying on the existing advertising model of banner ads and ads words to generate revenue, we seamlessly weave consumer activity and interactive advertising into the user experience.
Much of social networking is about self-expression, learning about other people, and connecting with them based on shared interests. Lifestyle based social networks have begun popping up all over the web to address user demand for social networking to be more contextualized along these shared interests. Brands and products are integral to lifestyle. If I’m a parent I’m buying diapers and cribs and if I’m a golfer I’m buying golf clubs and shoes. Additionally, the products we buy are indexes of our identity. The fact that I drive a minivan and not a two-seater convertible is an indication of who I am. We’ve woven consumer activity into the user experience by making products a means of self-expression and social product recommendation for users, and word-of-mouth marketing for brands. It’s also a way for users to connect with one another by extending the concept of user profiles to include brands and products.
We designed the platform by first looking at where user demand was driving social networking, and found growing numbers of users migrating to sites that provided a more personalized, lifestyle-oriented social experience. Because a person’s identity is made up of a variety of lifestyle interests, they currently have to join a different niche social network catering to each of their lifestyle interests. The problem is that these sites exist in isolation from one another, and users are forced to create multiple profiles, maintain relationships across multiple networks, keep up with communication across multiple messaging systems, and deal with a variety of user experiences. So, the user experience is fragmented, and it’s a self-cannibalizing model – people just don’t have time to maintain 5 profiles, 5 networks of friends, 5 sets of photos, 5 blogs, and everything else. People are going to figure out the ones that work and that they’re most interested in and triage the rest.
So how does your platform address this problem?
We resolved the fragmented user experience problem by creating a platform that addresses niche lifestyle communities as parts of a whole. By joining one site, users have access to a variety of lifestyle communities. As a result, we offer users a single, unified online identity – one profile, one inbox, unified network management, personal expression, and communication tools, and a unified social experience.
What’s the challenge with niche social networking sites?
It’s hard to gain traction, to attract and retain users. Niche social networks generally lack brand recognition. Additionally, while advertisers are willing to pay a premium for the targeted nature of advertisements on niche social networks, they haven’t really figured out a way to effectively integrate advertising into the social environment. Banner ads and search based ads are incredibly unproductive on social sites. Although brands want to do interactive and social media advertising, this is very much a market in search of a solution. What is needed is something that integrates the brand into the community in a way that encourages user engagement. We can safely say that none of the social networking platforms we have seen have figured out a way to accomplish that goal. You can’t just bolt interactive advertisements onto a community and expect users to interact with them. When users view themselves as lifestyle consumers they actively seek out brands and products that reflect their interests, and that is really the key to successful brand integration.
So you sell it to companies that want to do social networking, and put it on their site?
We started down this path over two years ago building a niche social network from the ground up, and from that experience we learned some valuable lessons. As such, we’ve identified a target market that we think is ideally suited to leverage the advantages our platform offers – publishing companies. Publishing companies are increasingly moving onto the Web, and they have top tier, lifestyle-based content, recognizable brand names, extensive relationships with advertisers, and a broad base of existing users. With our platform, publishing companies can provide their users with seamless access to their entire content offering, unifying the user experience and massively increasing the value of this audience to advertisers.
This sounds like the next generation of advertising?
We are talking about a paradigm shift in advertising on the web. At the very time that every article that you read out there from every blogger and every analyst and everybody is saying advertising on the web is broken. Whoever comes up with the solution is going to make a lot of money. We just hope it’s us.
Best regards,
Hall T.
Monday, January 5, 2009
Nell Edgington of Social Velocity Talks about Socially Responsible Investing
Nell Edgington of Social Velocity Talks about Socially Responsible Investing
How did you come to Austin?
My husband and I were in graduate school in Dallas Chicago and we moved to Austin after that. Austin is the only place we wanted to live. We love it. We’ve been here for the past six years.
How did you get involved in this idea?
I’ve been working on this idea for about a year. I knew I wanted to start a business in this sector space and thought about a venture philanthropy fund. A VC fund except it makes investments into non-profits. I’ve been looking at various models in other cities. San Francisco and Boston have funds like these in which there is a social return although not a financial one. For Austin, I’m trying to build a fund to help non-profits grow and scale their business beyond incremental growth. We help them create that business plan and then pitch to investors for that growth capital. It’s a new idea in Austin to pitch for growth capital for a non-profit. We also help them diversify their revenue stream to earned income, sponsorship and more. This is an idea whose time has come and I believe it is timely for Austin. You probably know of several companies that have a social result.
What are some examples of companies in this area?
One example is Citizens Schools which is an after school program for middle school students. so Tthey bring people in who have special skills such as how to create a web site so teenagers find a connection to school. It’s proven to raise retention all the way through high school. The program works well on the national level but here in Austin they struggle because they are underfunded. We’re putting a plan together on what would growth look like. If you could grow this program through Austinto all the Austin middle schools that could benefit from it you would see a dramatic increase in retention rates in both middle and high school. Austin’s dropout rate is above the national average. It would take $300K to $500K growth capital for this program.
What are some examples of investment groups that do this?
Investors Circle in San Francisco which is similar to an angel network. They come together twice a year and review social and financial return opportunities. For example, they’ll invest in solar power companies or a company that recycles books with a portion of the revenues going to a non-profit. There are similar groups in Denver, Boston, LA, and New York. There’s a movement throughout the country in which investors seek a social return in addition to a financial return.
Any local company examples that have a social benefit in addition to a financial one?
Another example is Blue Avocado here in Austin which replaces plastic grocery bags with a reusable bag system which helps the environment.
Where can investors find out more about this?
I write a blog that focuses on this area.
Best regards,
Hall T.
How did you come to Austin?
My husband and I were in graduate school in Dallas Chicago and we moved to Austin after that. Austin is the only place we wanted to live. We love it. We’ve been here for the past six years.
How did you get involved in this idea?
I’ve been working on this idea for about a year. I knew I wanted to start a business in this sector space and thought about a venture philanthropy fund. A VC fund except it makes investments into non-profits. I’ve been looking at various models in other cities. San Francisco and Boston have funds like these in which there is a social return although not a financial one. For Austin, I’m trying to build a fund to help non-profits grow and scale their business beyond incremental growth. We help them create that business plan and then pitch to investors for that growth capital. It’s a new idea in Austin to pitch for growth capital for a non-profit. We also help them diversify their revenue stream to earned income, sponsorship and more. This is an idea whose time has come and I believe it is timely for Austin. You probably know of several companies that have a social result.
What are some examples of companies in this area?
One example is Citizens Schools which is an after school program for middle school students. so Tthey bring people in who have special skills such as how to create a web site so teenagers find a connection to school. It’s proven to raise retention all the way through high school. The program works well on the national level but here in Austin they struggle because they are underfunded. We’re putting a plan together on what would growth look like. If you could grow this program through Austinto all the Austin middle schools that could benefit from it you would see a dramatic increase in retention rates in both middle and high school. Austin’s dropout rate is above the national average. It would take $300K to $500K growth capital for this program.
What are some examples of investment groups that do this?
Investors Circle in San Francisco which is similar to an angel network. They come together twice a year and review social and financial return opportunities. For example, they’ll invest in solar power companies or a company that recycles books with a portion of the revenues going to a non-profit. There are similar groups in Denver, Boston, LA, and New York. There’s a movement throughout the country in which investors seek a social return in addition to a financial return.
Any local company examples that have a social benefit in addition to a financial one?
Another example is Blue Avocado here in Austin which replaces plastic grocery bags with a reusable bag system which helps the environment.
Where can investors find out more about this?
I write a blog that focuses on this area.
Best regards,
Hall T.
Monday, December 29, 2008
Alan Kane of Archangel Ventures Talks about Raising a Fund for Game Developers
Alan Kane of Archangel Ventures Talks about Raising a Fund for Game Developers
What is your background?
I came to Austin in 2004 after earning an MBA in Entrepreneurship from Babson College. I started my career in gaming at Midway Games, where I was the studio CFO & COO for 4 years. Prior to Midway, I was an Investment Banker and quite frankly was not a “gamer.”
At the time, Midway had a great business plan and a bright future. My job was to focus on the business and operational side of the studio, while a very talented group of directors managed the production and creative development. The local studio grew from 35 to over 220 in just 18 months. We built out a new 40,000 square foot facility in the Domain. We released a couple of AAA titles and had a few more in the works. Then rather abruptly last summer, Midway corporate was forced to scale back their 2010 and 2011 plans, which led to a massive layoff here in Austin.
I stayed on for the transition and focused on securing employment for those who were let go. Then I decided to start my own consulting company focusing on CFO for-hire type engagements for game developers. I see so many studios that need help or want to outsource the operational and financial management side of their company, so that they can focus on making great games and not negotiating leases, bookkeeping, planning for growth, writing HR policies, etc. When I was growing up, my father was a brilliant engineer, however he couldn’t nail the business side of running his own company. So this is an issue I understand quite well.
My company provides investment capital and advisory services to game developers who are willing to do what it takes to succeed. My investments are equity stakes in actual game projects and not directly in the studio.
How much are you raising for your first fund?
For this first fund, I’m talking to successful angels and high-net-worth individuals in an effort to raise $10M to $15M and that will be structured as a typical VC fund. Over $15M the economics start to breakdown given the size of each project I am looking to fund and my investment criteria.
What are you going to provide your portfolio companies?
I’m looking for projects and studios in which there is a good fit. This is defined as a situation where there is a compelling risk reward at the project level and where the studio is willing and able to do what it takes to succeed. Let’s face it not every project is going to be the next Halo blockbuster, but if you structure the project in such a way it does not have to be, to be profitable. I will work with each portfolio company to help make this possible by investing the money, time, and energy necessary for success.
How does it work?
This is a new business model for funding game development projects and understand that each project is relatively unique.
However, without giving away the secret sauce I’ll give you a profile of an investment I will look to make. I will partner with an experienced game developer with existing technology to fund a specific project(s) rather than funding the studio itself. I will work with the studio to hash out the project (or slate of projects) budget and timeline that they are looking to produce. I will also base my investments geographically to take advantage of government matching funds programs. With these types of programs, you have a collateralized type of principle investment. In addition to a share of backend royalties, if a larger publisher is involved in the deal you can create a larger return by working with their milestone payments.
In each deal I do, I’m looking to make a return of 3-5x on a $250k-$500k investment. While this is not the typical VC target of +10x return, my risk is much lower than a traditional VC. The number of losing investments in my portfolio will be minimal due to my unique investment structure, shorter investment duration, and my liquidity events will be clearly defined.
How is it different?
Traditional investors will look at a gaming company and try to come up with a valuation for the company as a whole based on cash flow projections and a terminal value at some future event. What I do is make an investment based on a game project no more than 30 months out with a clearly defined revenue stream and terminal value. If a publisher does come into the deal great, I get a cut of that money too. The investors get their cash back out more quickly because they don’t have to wait for the company to be acquired or the studio to issue dividends. Movies are funded somewhat the same way. From an investor’s standpoint, this model works and is not simply based on the commercial success of the title.
How many projects are in the pipeline?
I currently have 6 very promising projects I’m actively looking to fund. There are another half dozen on my desk I still need to vet. Once I close my fund and word gets out I have $10M-15M to invest, I have no doubt the studios with the best projects will come looking for me. This industry needs an alternative funding model and I believe I have it.
Best regards,
Hall T.
What is your background?
I came to Austin in 2004 after earning an MBA in Entrepreneurship from Babson College. I started my career in gaming at Midway Games, where I was the studio CFO & COO for 4 years. Prior to Midway, I was an Investment Banker and quite frankly was not a “gamer.”
At the time, Midway had a great business plan and a bright future. My job was to focus on the business and operational side of the studio, while a very talented group of directors managed the production and creative development. The local studio grew from 35 to over 220 in just 18 months. We built out a new 40,000 square foot facility in the Domain. We released a couple of AAA titles and had a few more in the works. Then rather abruptly last summer, Midway corporate was forced to scale back their 2010 and 2011 plans, which led to a massive layoff here in Austin.
I stayed on for the transition and focused on securing employment for those who were let go. Then I decided to start my own consulting company focusing on CFO for-hire type engagements for game developers. I see so many studios that need help or want to outsource the operational and financial management side of their company, so that they can focus on making great games and not negotiating leases, bookkeeping, planning for growth, writing HR policies, etc. When I was growing up, my father was a brilliant engineer, however he couldn’t nail the business side of running his own company. So this is an issue I understand quite well.
My company provides investment capital and advisory services to game developers who are willing to do what it takes to succeed. My investments are equity stakes in actual game projects and not directly in the studio.
How much are you raising for your first fund?
For this first fund, I’m talking to successful angels and high-net-worth individuals in an effort to raise $10M to $15M and that will be structured as a typical VC fund. Over $15M the economics start to breakdown given the size of each project I am looking to fund and my investment criteria.
What are you going to provide your portfolio companies?
I’m looking for projects and studios in which there is a good fit. This is defined as a situation where there is a compelling risk reward at the project level and where the studio is willing and able to do what it takes to succeed. Let’s face it not every project is going to be the next Halo blockbuster, but if you structure the project in such a way it does not have to be, to be profitable. I will work with each portfolio company to help make this possible by investing the money, time, and energy necessary for success.
How does it work?
This is a new business model for funding game development projects and understand that each project is relatively unique.
However, without giving away the secret sauce I’ll give you a profile of an investment I will look to make. I will partner with an experienced game developer with existing technology to fund a specific project(s) rather than funding the studio itself. I will work with the studio to hash out the project (or slate of projects) budget and timeline that they are looking to produce. I will also base my investments geographically to take advantage of government matching funds programs. With these types of programs, you have a collateralized type of principle investment. In addition to a share of backend royalties, if a larger publisher is involved in the deal you can create a larger return by working with their milestone payments.
In each deal I do, I’m looking to make a return of 3-5x on a $250k-$500k investment. While this is not the typical VC target of +10x return, my risk is much lower than a traditional VC. The number of losing investments in my portfolio will be minimal due to my unique investment structure, shorter investment duration, and my liquidity events will be clearly defined.
How is it different?
Traditional investors will look at a gaming company and try to come up with a valuation for the company as a whole based on cash flow projections and a terminal value at some future event. What I do is make an investment based on a game project no more than 30 months out with a clearly defined revenue stream and terminal value. If a publisher does come into the deal great, I get a cut of that money too. The investors get their cash back out more quickly because they don’t have to wait for the company to be acquired or the studio to issue dividends. Movies are funded somewhat the same way. From an investor’s standpoint, this model works and is not simply based on the commercial success of the title.
How many projects are in the pipeline?
I currently have 6 very promising projects I’m actively looking to fund. There are another half dozen on my desk I still need to vet. Once I close my fund and word gets out I have $10M-15M to invest, I have no doubt the studios with the best projects will come looking for me. This industry needs an alternative funding model and I believe I have it.
Best regards,
Hall T.
Subscribe to:
Posts (Atom)