I’m really psyched to announce that Highland Capital Partners and Charles River Ventures have invested $3.1M in CampusLIVE. In just a few short years the CampusLIVE team has grown from 1 to over 15. This is by far the most exciting time of my life. Thanks to all who have been a tremendous help to me and the rest of the CampusLIVE team.
TechCrunch: CampusLIVE Raises $3.1 Million To Help Brands Connect With College Students
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A great article was just posted on the Harvard Business School website (http://hbswk.hbs.edu/item/3348.html), listing out the most common legal mistakes made by entrepreneurs. I thought it would be worthwhile to see how many of them I’ve personally experienced – the answer is many more than I’d like. The good thing is, it just takes one time to learn these things. My future ventures will benefit from not having to learn all these mistakes.
The one that really bit my ass was #7. If there is ONE thing you do right in your startup, file the 83b election in a timely manner. If you don’t, you will get screwed, intensely hard by by the IRS – in the tens or hundreds of thousands of dollars kind of screwed.
The List:
(mistakes i’ve personally been through are underlined)
#10: Failing to incorporate early enough.
#9: Issuing founder shares without vesting.
#8: Hiring a lawyer not experienced in dealing with entrepreneurs and venture capitalists.
#7: Failing to make a timely Section 83 (b) election.
#6: Negotiating venture capital financing based solely on the valuation.
#5: Waiting to consider international intellectual property protection.
#4: Disclosing inventions without a nondisclosure agreement, or before the patent application is filed.
#3: Starting a business while employed by a potential competitor, or hiring employees without first checking their agreements with the current employer and their knowledge of trade secrets.
#2: Promising more in the business plan than can be delivered and failing to comply with state and federal securities laws.
#1: Thinking any legal problems can be solved later.
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CampusLIVE is changing banks in the next couple weeks. We’ve narrowed the search down to two recommended banks, both of which would provide close to identical services for us. In the end the decision came down to their responses to a few questions we had – on a Friday night at 5pm. We emailed both banks an identical set of final questions about costs that we needed answered before we moved forward. Banker 1 picked up the phone and called in less than 5 minutes of the email – explaining everything to us. Banker 2 emailed back saying he would try to put some information together for us on Monday. One provided exceptional service, one is just doing enough to get by.
Guess which bank we chose?
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Saved about $1,000 by building it myself.
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I was catching up on some episodes of Parks & Recreation last night on my Netflix connected XBox (awesome). All of the TV shows on Netflix have zero commercials. I find this interesting because the actual reason I pay $9/month for Netflix is not because of it’s commercial free content, but because I get to watch TV on my schedule. It’s convenient. Regular TV doesn’t allow this. In fact I’d still pay $9/month if every TV show and movie had commercial breaks in it.
So why doesn’t Netflix offer a free version of it’s service with commercials in the TV shows and movies? It can’t be too difficult to monetize this enough to earn at least $9/user/month. Or let’s say someone has to watch at least 4 hours of programming a month for them to break even with advertising – well, just bill them $9 if they watch less than 4 hours in programming per month.
Consumers like free. We like to enjoy entertainment on OUR schedule. We have accepted that ads are part of life.
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Amazon recently invested $175mm into the group buying underdog – LivingSocial.com. Of course it must be said that for an underdog, they are still doing extremely well – printing money.
I wondered what the first big move might be to establish themselves after jumping into bed with Amazon. Today I found out – $20 Amazon giftcards for $10. Brilliant. They have now far surpassed the $11mm in gross revenue brought in by chief competitor Groupon during their $25 for $50 Gap deal.
As of now they’re up over 1 MILLION sold. We can now count Amazon’s total investment in LivingSocial to be at least $185mm.
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Over the past couple years the vision and business model for CampusLIVE has significantly changed, in ways I could have never guessed. Overall for the better I must say.
The original goal I set out to solve was organizing everything students were looking for into one, easy to use, website. It’s amazing how university websites actually do the polar opposite of what their visitors actually expect/desire.
If i could recreate the pitch deck I originally went out to investors with, I think the image would sum it all up, without the need for any paragraphs or bulleted lists.
Image from Aimee Knight’s blog
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There is a great post up on SoftwareByRob right now about his experiments with offering a free plan for his SaaS tool for designers. The research by him, 37Signals and CrazyEgg all show that removing or shrinking the link to a free plan greatly increases conversion.
I experienced this subconsciously last week when i signed up for a CrazyEgg account. I had an account a couple years back and recalled them having a free plan. When i arrived at the pricing page there was no free plan, so I just paid for the $10/month plan.
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When costs for a particular product or server get prohibitively high, typically in a monopoly situation, it’s a great time for a startup to come in and level the playing field. Competition is the golden key to creating a price point that matches supply and demand.
Yesterday i reached out to a company i found online that offered movie time data and a cool affiliate program that could let my site visitors buy tickets, creating a nice affiliate revenue stream. In the ideal world, the data stream would be free, which would then increase the amount of tickets sold through a now increasing amount of affiliates. In this theoretical world, the movie producers would think logically and offer this data to anyone, knowing that more access to tickets = more sales = greater profit.
The pricing i received back from the company was somewhere between mind-blowing and ludicrous. $3,500 PER MONTH to access the data. That’s $42,000 a year. Absolutely ridiculous. Of course they also have a similarly crazy pricing plan where you pay $0.25 per screen per week. So for a typical 12 screen theatre, you pay $12/month just to see what times movies are playing. Now of course if you try to build any sort of national app that integrates a users geo-location, you’re looking at much more than $3,500 a month if paying on a per screen basement.
I’m sure somewhere in this company a sales guy is doing the math for us entrepreneurs – Why spend $15,000 a month by paying per screen when I can get you EVERY screen for just 12 easy payments per year of $3,500.
If anyone hears of a better alternative, somewhere in between scraping the data and paying through the roof for it, i’d love to hear from you.
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