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Well, We Failed – Wattage is shutting down

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Re: Well, We Failed – Wattage is shutting down

#81

Post by smackfu »

ryanSrich wrote: post #38
Lord_Zero wrote: post #33

"Having previously raised $250,000 from friends & family" I cant imagine any of my friends or family being able to give me a quarter million.

Right? I see this a lot and it's often an investors first response when asking for small seed rounds: "Well have you considered raising money internally? Ask around your friends and family". If I had friends and family that could just toss me a $250k I don't think I'd be in this position.

But they have to ask, because if the answer is no, that's a huge red flag. "You are willing to lose my money, but not your friends or family?"

Re: Well, We Failed – Wattage is shutting down

#82

Post by karambahh »

pbreit wrote: post #74
ryanSrich wrote: post #38

Earlier quoted context omitted.

Right? I see this a lot and it's often an investors first response when asking for small seed rounds: "Well have you considered raising money internally? Ask around your friends and family". If I had friends and family that could just toss me a $250k I don't think I'd be in this position.

Raising $250k from your close network should be very easy for anyone hoping to be a founder. If you can't get 10 people to write a $25k check, you should reconsider founding a company.

If, for your first round, you end up with 10 individual investors each forking 25k, you'll end up with board management issues.

1 with 100k, 2 with 50, 4 with 12.5 : yeah, why not.

With that, you have one clear lead, with whom future investors and bank can relate to.

My bank wouldn't have bankrolled us if we had 10 "small" investors from the start.

[This said, I'm no expert on the subject, just anecdotal evidence...]

Re: Well, We Failed – Wattage is shutting down

#83

Post by jguimont »

I built the Timbuk2.com bag customizer (http://timbuk2.com/customizer) and I would say that 50% of their business is on the custom side. People are playing with the product and often they surprise us. Timbuk2 ends up charging a premium for the custom bag, but it a unique bag.

Same applies to Nikeid or adidas or converse or ... A lot of people are trying to build custom products and let the consumer get access to their manufacture, but it is not as simple as it sounds. There are, as in all things, a lot of moving pieces and enough rope to hang yourself.

Re: Well, We Failed – Wattage is shutting down

#84

Post by pbreit »

karambahh wrote: post #82
pbreit wrote: post #74

Earlier quoted context omitted.

Raising $250k from your close network should be very easy for anyone hoping to be a founder. If you can't get 10 people to write a $25k check, you should reconsider founding a company.

If, for your first round, you end up with 10 individual investors each forking 25k, you'll end up with board management issues. 1 with 100k, 2 with 50, 4 with 12.5 : yeah, why not. With that, you have one clear lead, with whom future investors and bank can relate to. My bank wouldn't have bankrolled us if we had 10 "small" investors from the start. [This said, I'm no expert on the subject, just anecdotal evidence...]

None of those investors would get a board seat.

Yes, your breakdown is both preferable and more likely. But my point stands.

Re: Well, We Failed – Wattage is shutting down

#85

Post by pbreit »

merb wrote: post #79
pbreit wrote: post #74

Earlier quoted context omitted.

Raising $250k from your close network should be very easy for anyone hoping to be a founder. If you can't get 10 people to write a $25k check, you should reconsider founding a company.

It's really stupid what you are saying. Some people live with $25k per 10 years... Not everybody is rich or knows rich people. You just need to be smart to start a good company. Also only the "american" style starts with huge amount of money and burns it. It's not always good to just "fail-fast". Sometimes business needs some time, time to grow, not just "put a lot of money in it and if nobody likes it it will die."

> Some people live with $25k per 10 years.

Not sure what that means or how it's relevant.

> You just need to be smart to start a good company.

Short answer is, No. Longer answer is, if you're really smart a) you realize what I said is true and b) you'd figure out a way to raise the money.

Re: Well, We Failed – Wattage is shutting down

#86

Post by billyhoffman »

Lord_Zero wrote: post #33

"Having previously raised $250,000 from friends & family" I cant imagine any of my friends or family being able to give me a quarter million.

See the comment above. It's not "Friends and Family." It's "Friends and Family who qualify as accredited investors." This is not your extended family giving you a $500 or $1000 to pursue your dream.

Re: Well, We Failed – Wattage is shutting down

#87

Post by karambahh »

pbreit wrote: post #84
karambahh wrote: post #82

Earlier quoted context omitted.

If, for your first round, you end up with 10 individual investors each forking 25k, you'll end up with board management issues. 1 with 100k, 2 with 50, 4 with 12.5 : yeah, why not. With that, you have one clear lead, with whom future investors and bank can relate to. My bank wouldn't have bankrolled us if we had 10 "small" investors from the start. [This said, I'm no expert on the subject, just anecdotal evidence...]

None of those investors would get a board seat. Yes, your breakdown is both preferable and more likely. But my point stands.

Your point stands, however, I didn't mean "board" management literally. I should have said "shareholders management". I'm not entirely familiar with US corporate law, but on roman based civil law, 10 investors with 25K of seed capital (ie non trivial amount of % votes) can get messy.

(although we did create a board with the breakdown I suggested, because we were lucky to pick the "right" FoaF investors, attorneys and counsels)

Re: Well, We Failed – Wattage is shutting down

#88

Post by Animats »

DevX101 wrote: post #73
Animats wrote: post #56

It's not about the pitch deck. It's about the product. How many people really want a custom radio front panel? There are other customized products in that space which might be more useful. * Customized entertainment remotes. Tell us what gear you have, what you like to do with it, and we make a remote or remotes that makes it easier to use. You might have a simple "watch TV only" remote, and a tablet type "does every…

> * There are lots of industrial products which need heavy customization. Offer on-line ordering tools for such products as a service to industrial sellers. Yup. This definitely should have started out as a B2B play. Industry will pay an arm and a leg for customization for lots of random parts. Use the cash to build the foundation of the biz then go after the finicky consumer market later.

Yes, and there's a business model. There are industrial companies that are good at making things, but not so good at making web interfaces for ordering complex products. So there's a niche for an online service. There are lots of things a good online service could do that few industrial companies now offer. Consider:

    * proper cross-checking of compatibility of items ordered
    * generate image of finished product
    * on-line generation of installation drawing/CAD file,
      including mounting holes and electrical connections.     
      Let users play with the options. Huge win for
      designers - "If we add option B, will it fit?"
      This, in fact, is the big win - let users try your
      options and see what works for them.
    * generate manufacturing data in format the seller's
      production system can use
    * provide cross-company integration.  If you need
      something that requires parts from several
      companies, and they're often used together, give
      the user help in getting everybody going in the
      same direction.
Most industrial sites have a big parts list and a "call for details" phone number. Getting all the right pieces together is hard. The automation level in this space is low, except for a few big companies.

Re: Well, We Failed – Wattage is shutting down

#90

Post by Retric »

Animats wrote: post #56

It's not about the pitch deck. It's about the product. How many people really want a custom radio front panel? There are other customized products in that space which might be more useful. * Customized entertainment remotes. Tell us what gear you have, what you like to do with it, and we make a remote or remotes that makes it easier to use. You might have a simple "watch TV only" remote, and a tablet type "does every…

IMO, the custom radio is not really a terrible idea; the problem was all the pictures where of the same radio with a new paint job. At least make the knobs look like chess pieces, rocket ships, airplanes, or cats etc.

Then again who buys radios? Custom clocks seem far more universal and let people use a wider range of shapes.

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