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Micro-lending for Agile Entrepreneurs

These are indeed exciting times for the bootstrapping entrepreneur! If you haven't already, please join our self-help networking group, Agile Entrepreneurs where entrepreneurs help each other with a variety of issues in a format borrowed from the Toastmasters club.

And if you're in a tight spot for money, you should join our group on Prosper.com, an excellent people-to-people lending web-site that I wish had found six months ago. In fact, I wish I had founded this group a year ago! I had certainly been talking about the concept- my friend Pravin can attest to that fact.

Regardless, I've dived in and created a closed group in Prosper, called Agile Entrepreneurs. I intend to invite other entrepreneurs to join the group and use it to raise small loans until they are able to generate cash flow or get funding.

And if you're looking to make money while helping out your fellow entrepreneurs, you should support Agile Entrepreneurs on Prosper.

You make money on the interest that i…

Agile Entrepreneurs

Agile Entrepreneurs is an organization created with the entrepreneur in mind, first and foremost.


Perhaps your dream is to own a lifestyle business where you’re the boss of your business and you make more than you would in a job- that’s it. Or perhaps you have a plan to develop a product that you can sell to Yahoo or Google for $10 million in 2 years. Or maybe you dare to dream big- a $100 million company that can compete with the big boys, and may need Venture Capital someday.


You must have heard about entrepreneurs who wrote a business plan on a proverbial napkin, got VC funding, built a product, and made a lot of money selling it (the company, and optionally the product too).


Well, the reality is that far too many first time entrepreneurs end up in the heart-breaking position of seeing their companies get “successfully” bought out, but only the investors make some money and the entrepreneurs lose out completely.


For a startup to have a fair chance of success (hint: why do the vast …

Getting somewhere in America

The problem with the designated driver program, it's not a desirable job, but if you ever get sucked into doing it, have fun with it. At the end of the night, drop them off at the wrong house.
- Jeff Foxworthy

Made me think about how in the 21st century, we're still trying to figure out how to get from Point 'A' to Point 'B'. Seriously, how many of you have a reasonable legal solution to this problem of getting home from the bar or a late night party- when you're buzz drunk?

How about getting to the airport? Do you really pay $90 for a cab ride after 9 pm to the SF airport from Sunnyvale? Perhaps you get a friend or spouse to drive 30 miles to the airport and back. Maybe you belong to the small minority of people who have figured out the $31 door-to-door shuttle- and can put up with it.

Well, think about how you usually drop off and pick up your car for oil-change or repairs?

The list goes on and on - think about all those times your old faithful lets you d…

Listen - How to Learn to Learn

Good listening skills, in particular Active Listening is essential to learning- and success.

Listening- you think you know it- most of us think we're good listeners. It's very hard to know and acknowledge that you are not good at listening. You may never become a good listener because so many personal emotions and prejudices get in the way of listening.

A good listener tries to understand thoroughly what the other person is saying. In the end he may disagree sharply, but before he disagrees, he wants to know exactly what it is...
- Kenneth A. Wells, American

Active listening is about focusing on the person who is speaking. An active listener needs to focus full attention on the person who is speaking.

Here are a few good links to learn more about listening:

What is listening?
Poor Listening Habits, Poor Listeners, and Good Listeners.Active Listening

You'll find here the four characteristics of empathetic listeners.

Attributes of Good Listening

Have you ever stopped to think th…

To dream or not to dream? How about keeping your mouth shut?

Here's a really nice quote from one of my dear friends in response to one of my dreams.
Between the bigger things you cannot do,and the smaller things you don't want to do,you may end up doing nothing The problem with quotes and analogies is that they are almost always approximately appropriate, but rarely if ever exactly applicable . A quote is by definition a generalization. Also, we are by nature biased with our prejudices, biased by our own very personal and unique experiences, and biased, by nature, against those who are near and dear to us. While we want them to succeed and would eventually be happy if they succeed big, our natural instinct is to "help" them "stay grounded".

I disagree with this helping nature, of course. I can - and will- expound on the virtue of dreaming big and having a big mouth. But that will be another day.

Today I'm going to present a few quotes on the flip-side of my friend's quote. Feel free to add yours to the list…

HotMela? HotMall? HotMahal? HotNagar?

Sabeer Bhatia is at it again. Generating hype, that is.
This time he's building a city, Silicon Valley to be precise, in India.
It's called Nano City and the idea is to create an environment that will foster innovation and create a Silicon Valley in India.

Well-informed readers would shrug and yawn - this has been tried umpteen times before without credible success. Paul Graham discusses the futility of it all in his essays "How to Be Silicon Valley"and Why Startups Condense in America.

But for India it's a win-win, regardless of whether Bhatia succeeds in his vision. At a minimum, India will end up with a modern development housing some universities, some companies, and rich residents with a lot of disposable income- creating a mini-economy of their own.

But Nano City? Am I the only one who is sick and tired of the Cyber-Xs and Nano-Ys? Why not give it a nice Indian name?

To get started, check out some of the more popular suffixes for city names in India. And Sabeer, …

Your Conscience (Part-2) and Test-Driven-Development

... contd. from Part -1: Your Conscience is Your Compiler

Friend: Ok, got it. I used to think these are instincts.

Me: Well, you can hack it, i.e. ignore your conscience, but then you're corrupting your "code" and it affects your "program" behavior. And soon, you can't fix it anymore.

It's gone, unless you do major "refactoring".
Or a complete rewrite- which for humans is death and rebirth... and what does anyone know about death and beyond anyway?

In this life, you can only do refactoring, there's no rewrite.

Friend: Nice analogy. TDD!

Me: Well, TDD- Test-driven development is to ensure you are always following your conscience...But at the same time, allowing yourself the oppportunity to learn and the privilege to change your mind some day as you mature. TDD lets you easily incorporate lessons you learn as you grow and mature. It helps you change more easily than would be otherwise possible for you. It helps you easily figure out what we…

Your Conscience is Your Compiler!

Your Conscience is Your Compiler! The following is the exact transcript of an IM chat about "Conscience" I had with a friend:

Friend: I follow my instincts.

Me: Animals follow instincts - humans follow their conscience. It's the only God I know. Your conscience always tells you what's right or wrong.

Friend: No murali, I disagree. How do you define what's right?

Me: Your conscience tells you- always. If you do something you believe is wrong, you'll feel guilty. If you don't believe it's wrong, you won't feel guilty

Friend: Yeah, but why do you do things?

Me: Because we are human.

Friend: No, it's because we want to survive.

Me: It takes a lot of character to always obey your conscience, a lot of strength.We survive either way. But if you and your conscience are on good terms, you have unshakeable self-belief.

Friend: Yeah

Me: And you'll care about little things like pride, self-respect, principles, character, reputation...because they are…

Startup Valuation: Meebo.com

... continued from "Milk Money for Meebo.com"

I’d put the percentage equity that the VCs took for their $3.5 million at Meebo at a lot closer to 20% pre-money given how hot Meebo was (again, based on all the buzz about them on Sand Hill Road).

Still, let’s assume 25% pre-money.

That makes the pre-money valuation of the company 3.5 * 4 = $14M.

In other words, Sequoia put in $3.5 million and got 25% of Meebo, putting the company’s value at $14M pre-money.

After the investment, Meebo’s post-money valuation is $17.5M (i.e. 14 + 3.5, the value of the company + the cash). That means, Sequoia now owns 20% of Meebo, post-money. Like I said, that’s about the minimum any self-respecting VC firm in the Valley would like to hold in a startup after Series-A financing. And Sequoia is right up there with Kleiner-Perkins at the top of the VC hierarchy in the Valley.
---
Note that at the other extreme of 40% post-money, Meebo’s post-money valuation $8.75M. That puts the pre-money valuati…

Agile Entrepreneurs, Part 3 of 3: Agile Software Development

The Agile entrepreneur has a choice all too common these days.

Implement it yourself. Or hire smart people for equity only- easier to do in the Silicon Valley than anywhere else (it's amazing what a single ad in Craigslist can do). Or pay young, super-smart programmers in India for a fraction of your monthly salary- you may not be able to afford it for a whole year, but we're talking about 3 weeks (i.e. iterations) here at a time.

Regardless of the approach, practically every software entrepreneur in the US now has the ability to incrementally implement the features defined by the customer(s) , one iteration at a time. And get valuable feedback. And sooner or later, you'll have a paying customer as long as you stay true to the principles of Agile- "The Customer Is Always Right At The Beginning Of Each Iteration" (apologies to Sam Walton and Kent Beck:).

Alternately, the customer(s) might realize soon enough and declare that the product doesn't have as much va…

Success

Ok, so you've all heard zillions of quotes on success- and how to achieve it.

Here's my take on it- that takes all extraneous factors and mind-games out of it, and puts the responsibility for success squarely on *your* shoulders:
You can Choose to have an Excellent Reason for Failure; orYou can Choose to Succeed It all depends on how much you want to succeed!

Milk Money for Meebo.com

Here’s something that I highly recommend y’all read:

milk money…” - parts I, II, & III


It’s an amazingly detailed and honest account of the fund-raising process from someone who raised the money just over a month ago - in December 2005!

One thing that’s not mentioned in the story is the amount raised from Sequoia. I know it’s $3.5 million- straight from the horse’s mouth.

So let’s do the numbers.

$3.5M in Series ‘A’ means anywhere between 20% to 40 % stake was given away, based on how much leverage each party had.

Note that regardless of leverage, any experienced VC will typically want to own *not more than* 40% and *not less than* 20%, “post-money”. [VCs taking more than 40% drastically reduces the founders’ feeling of ownership and thus, their incentive to succeed. Taking less than 20% would mean the VCs will spend very little time or effort on this company- instead choosing to focus on the other companies in their portfolio where they have a greater “interest”.]

... continued in &quo…

Agile Entrepreneurs- Part 2 of 3: Agile Requirements & Planning

Too often wannabe entrepreneurs fade out because they do not have the resources to put their ideas to the test. They may be able to talk to a customer or two, but there they often reach a dead end when the customer asks for a prototype or demo. It costs money - and takes time - to build one. And most aspiring entrepreneurs don't have a lot of money- or not enough - at least that's what they think.

If you're an aspiring software entrepreneur, without an infinite capacity for risk, your prayers have just been answered.

Imagine this scenario. The entrepreneur uses an online (web-based) agile project management tool to define the requirements. He then meets with potential customers, gets their feedback and refines the requirements, and prioritizes the features.

Next the entrepreneur defines a short Release that contains the bare minimum functionality needed to "validate the business model". In plain English, this means that there's a customer out there who is wi…

Agile Entrepreneurs- Part 1 of 3: Agile Methods for Startups

Mark my words, it is going to start happening within a year. I can see it in my Crystal Ball :) And remember, you read about it here first- Friday, Jan 27, 2006!

Agile methodology, XP, and Hosted Agile Project Management tools (like Rally) are poised to take software entpreneurship and offshore outsourcing to the next level.

India is finally going to shake off it's mentality of servitude and take major steps towards fostering Silicon Valley style innovation.

How? Agile/XP approach of rapid, iterative development with customer feedback at its core is screaming from rooftops with a megaphone for very very v... early stage startups and budding software entrepreneurs to notice it. It's a marriage made in heaven!

I can't think of a more natural fit of a solution to a problem. Agile development is for software entrepreneurs what lithium is for bipolar disorder (ok, so I guess the analogy proves that I can actually think of a more natural fit).

... contd. in "Agile Entrepre…

RallyDev- Hosted Agile Project Management & Collaboration Tool

UPDATE: Feb 2010: I wrote the following in Jan 2006 before I had enough exposure to User Stories and before I got stuck in the quagmire that Rally - at least in that version - turned out to be. I stopped using it a month later. The problem was ironically the same problem Agile development evolved to solve- Rally itself was over-engineered, tried to do much and did the simple & important things not well enough-- if at all. To make matters worse, it was very slow and highly cumbersome to input info into- these were the early days of Web 2.0 and Rally seemed to be going overboard with use of AJAX. I've heard good things about Rally again lately but haven't validated it for myself. I'll do a separate blog post on this topic when I do.

I'm smitten by the Agile software development methodology. It's not as if I've heard about it only today, but now I have a tool that can (I believe) help me manage the CommuterStation product development in India more effectively…