Startup In A Box - Travis Corrigan

There’s a lot of literature out there that promises to teach you everything  you need to do to start and grow a successful business. Though a lot of it is written by really smart guys who think hard about it, I think that a budding businessperson looking to start selling a product or service needs a little more direction. The problem I have with how-to business books is that they have a high probability of being written by someone who hasn’t actually started a business, but is really good at sounding like they have, or worse, written by someone who succeeded because they got lucky and think that their way of starting a company is THE way, a self-centered opinion which is likely to hurt someone trying out on their own for the first time.

I’ve included a list of a few invaluable entrepreneurial tools, along with a couple of thoughts on starting a company with almost nothing.

The frustration I have with these how-to books is that they tend to “talk about doing” rather than actual “doing”. If you are looking to get started and want to know some great first steps, I’ve laid out some of my favorite tools for starting a company on a shoe-string budget. I must note that this is not THE toolbox to use for every new company. Some things from the list below may not work for you and your venture. You are welcome to try them out or suggest any better options in the comments section.

Product

The one thing I’m not going to tell you is what you need to offer. That’s for you to decide. However, when considering if a new or retooled product is worth the effort of building a business around, look for these two critical characteristics:

1. It must add enough value to the customer that it takes no longer than two sentences to describe. One sentence is ideal.

2. It’s best to have a gross profit margin of 50% per unit. You can certainly go lower, but if it’s your first time starting a company, I suggest something that’s no lower than 40%.

Sourcing Manufacturers

Simply enter whatever it is that you are trying to see into Google.

Example: “Neoprene case manufacturers”

Start going through all the search results and simply email the manufacturers from the “contact us” page on their website. Just say that you are interested in what they have to offer and will be starting small (I usually say 5-10 units a month). They usually get back to you in a couple of days. It really is that easy.

Website: Facebook Page

Screw the website. Your business isn’t legitimate for one in two ways: 1) You should use the money normally spent on website development to fund cheap, iterative experiments to validate your product-to-market fit, and  2) your business likely doesn't have enough traffic in the first year to justify the monthly hosting costs. year. Go with a Facebook Page. It’s free, you can post pictures and links, create and share events, and easily converse with your market. Make a couple of your trusted friends “Page Admins” and have them suggest it to their friends on the site. Can you say insta-cult?

Payment System

Paypal. It’s free for everyone (both you and your clients) to set up. Your customers can link to their credit card or bank account. You can move money from Paypal to your bank account and vice versa. It’s great for billing because all you need is someone’s email address to send them a request for money. Keep in mind that, however, that there is a 2.9% transfer fee for you, so make sure to calculate that into your product costs.

Email

Gmail or Google Apps. If you own the URL for the website you’ll be building in a year, Google Apps allows you to add up to 50 email addresses for that URL. Example: travis@miniballer.com.

Server Space

Dropbox. I love it, it’s super awesome and free. Click here to check it out. 

Scheduling

Google Calendar

Phone Services

Google Voice or Jive Networks.

Online Collaboration

Google Wave.

Workflow Documents

LucidChart. These guys rock and I am a huge fan of their products – they’re pretty much all you’ll need for mapping your startup “strat-tigery”, and they’re free. Here is a link to the LucidChart site: http://www.lucidchart.com/

Logo

Just go to the art or graphic design department of the local community college and strike a deal with a starving, “misunderstood” art student. I had a lot of friends exchange design work for a Happy Meal. Just tell him he can use the design as part of his portfolio and that he can put the project on his resume.

Marketing

Send messages to your Facebook followers. Create a Twitter account and link it to your Facebook page. Update your status like crazy. Do a lot of giveaway promotions to get more people to “Like” your page and/or subscribe to your newsletter. You can also create an invite-only Facebook group for your top customers in which you release special promotions. Make sure you make it clear what a customer needs to do to be considered for an invite. You should also start a blog on Google’s Blogspot. A great way to promote your blog is by placing links to your articles on your company’s Facebook page.  I recommend using Google Analytics to see how much traffic you are driving and if that has any relation to sales in order to understand how your market is reacting the brand that you are building.. Again, all of this is free.

Accounting

Quickbooks Online by Intuit. I recommend this over free/open source accounting system because it makes reporting for financial management and taxes a breeze. Just get the cheapest one. There I got through twelve startup tools without having to pay for anything. If you need more help, email me; my former CFO has her own tax and accounting firm that specializes in start-ups.

Incorporation

If you are reading this, then I assume you know absolutely nothing when it comes to legal entity stuff. Check out this YouTube Channel, [Usparkfoundrytv]. It walks you through everything that you need to know about what legal structure might work for your company and the respective managerial implications of the business entity at various stages of growth..  There are seven 5-minute videos so those who are ADD like me can easily pay attention. Make sure you comment on the videos. My friend Matt loves it when you give him feedback. To begin the incorporation process, go to earlystagelegal.com. You’ll pay about $500-$750 to set up corporate entity.

In my experience playing in Startup Land, every company that I’ve founded or helped launch has been using some mix of the tools that I listed above. They found it to be helpful, I’ve found it to be helpful and maybe you’ll be able to find it helpful. The point of this article was to share some of the tricks that I use to get a company running on almost nothing, not to tell you “how to do it.” Entrepreneurship is all about self-discovery. Telling you how to use them would pollute your own experience.  These are simply my tools, feel free to use them as you find YOUR way of starting companies.

-Travis Corrigan

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The Phantom CEO: Building a Network

The more I do, the more that I realize how much my network has contributed to any accomplishment worth mentioning.

Building a network is not networking. It is not creating a rolodex of transactional relationships. You know you’ve built a network worth having when there are about fifty people whom you engage in life with.  It’s having people you love (and who hopefully love you) to stay in constant contact with in order to provide the best of yourself to further their aspirations.

Let me repeat that: You provide your network the best of yourself to further their aspirations.

Building a network like this requires two simple things: first, a ration of 10:1; second, NOT being an asshole.

The ratio of 10:1 indicates that you do something for someone ten times for every single thing you ask of them. Why ten? Because by the time you hit four or five you stop counting – and thus stop being subconsciously transactional – and start being a genuine and arguably better human being.

The key is to build a network BEFORE you need it. That’s what having a network MEANS.

But what does “having a network” look like? Great question. To me, I know that I have added someone new to my network when they start asking me for help. This is key because I know that our relationship has developed enough that they feel comfortable asking for my help. I know that they trust me enough to follow through on what I say I’m going to do. I also make sure to follow through on those promises— because in the currency of relationships, promises that are kept are gold. I’ll say it again, this time in all caps: GOLD.

Because of this I’ll also note that the quickest way to gain a reputation is to not follow through on promises. Remember, this is not transactional. I do not keep a tab of how many things I’ve done for people because I get enough enjoyment out of seeing my contribution help them progress. I ensure that this happens because I usually make requests on behalf of someone else. I hardly ever make any requests for myself.  In fact, often my one “ask” is to help someone else , someone, for example, who is just getting started and wanting to build their own network or get a few actionable items under their belt.

There are two VERY important pieces about maintenance that I’ll mention when it comes to networks.

One, treasure it. Make sure that it is the number one thing in your life. Why? Because that’s all you have in life. Good, bad, or ugly, the relationships with those around you are all you will have in your life. Nothing else comes close.

Two, safeguard it. Don’t fuck it up. Follow through on promises. Don’t make a recommendation for someone you barely know. Make sure you have your shit together. With every interaction you have with the people around you, you are creating—whether intentionally or accidentally—your personal brand. Your personal brand is the initial emotional response people have when they think of you or hear your name. Regardless of whether or not you think it’s fair, how we as social beings weigh the importance of the relationship with others is based on one thing: our subconscious emotional response to them. How you control that comes down to a simple equation: Outcomes/Expectations - Your direct behavior with them - The feedback they get from other people about their interactions with you.

So to recap:

Don’t be an asshole.

10:1

Make sure you make people feel comfortable asking for your help.

Make sure you actually follow through on your promises.

Your relationships are all you have in life. Act accordingly.

Unfortunately, perception is everything, and how it is developed has nothing to do with the logical aspects of the brand. Manage your personal brand to be what you want it to be in the minds of the people whom you wish to engage with. 

- The Phantom CEO

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The Phantom CEO: How to Throw and Entire Industry Under the Bus

The industry that I operate in pisses me off. On one end you have all the high-end competition who are so good at feeding you bullshit that you don’t realize that you are paying a premium for a brand name. And on the other end you have the low-cost competition, a bunch of mongrels that bank solely on the fact that the majority of the masses can’t afford the “high-quality” of the luxurious brands. One end of the spectrum makes you believe that you should aspire to the ideals they represent and the other remind you that you still haven’t gotten the promotion you were promised.

Both treat you like shit.

My industry, like many industries, has fooled you into thinking that quality and price are correlated: when one goes up, it must mean that the other is up there too. The punch line to their joke is that this is simply not true. There are very few differences in the quantum leaps between the low-end and the high-end, the difference is how they spin their respective messages to you.

Here is how you throw an industry under the bus: burn the damn house down.

What my company found out is that high-end product is not much more expensive than the “cheap” products, in terms of unit manufacturing cost. So, we decided to sell high-end products at a price that is not much higher than low-end products.

“But you’ve got to make a profit somehow, that’s why they are so expensive.”

Actually, when you are smart about which overhead costs are necessary, it becomes easy to reach solvency and still undercut the competition. The “premium” brands will now have to respond to the fact that their spin of what defines quality has been nothing but egotistical shenanigans. The “cheap” brands will now have to figure out how they can up the level of their game just to match what I offer to their customers.

Like in the Wizard of Oz, business takes an interesting twist when a company breaks rank and pulls back the curtain to reveal the fact that it’s all really just smoke and mirrors.

Now you have to be prepared for the entrenched organizations that bank on tricking their audience in order to extract cash to do everything in their power to bring you down. And in all likelihood, they may eventually bring you down (i.e.: they buy your company and disband it). But it doesn’t matter, because the market now knows the truth, they’ve seen my competition with their pants pulled down just long enough to see what’s really going on.

So what do you do if you are like me and like to see things burn but don’t know where to get started?

I’m glad you asked. Here’s my suggestion:

Pick an industry, any industry, where correlation between costs and price become disproportionately related as you move up in product quality. This means that companies are making more in unit profit for selling higher priced items because they manipulated you into thinking that there is something “extra” special. Here’s an example:

ABC Company sells widgets in 4 categories: Basic, Professional, Super Rad, and Premium. As you move up from Basic to Premium, you get more features and upgrades. Below is a list of how much it costs to make a widget, how much they charge and what their gross profit margin is:

Item	Cost to Make	Price	Gross Profit Margin
Basic	$20	$40	50%
Professional	$25	$60	54%
Super Rad	$30	$80	62%
Premium	$35	$100	65%

See how the company makes more money off of you for selling Premium compared with Basic or Professional? Want to pull back the curtain? Start offering a Premium quality product at a Professional price level. Marketing will be easy, just show on your website that everything is similar between your widgets and those of ABC Company and explain to your customers that the reason why you are doing is simply because ABC Company has been lying to them and you think that’s wrong. Say hello to the sound of stolen market share, customer loyalty and an opportunity to cash in on honesty. Is it me or is it drafty in here?

That, my friend, is how you throw an industry under the bus.

Happy burning,

The Phantom CEO

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