Thoughts in Time

There are some days when the whole day is a blur. Today was like that. One of Higher One’s programs is launching and a lot of misinformation was posted by 12 students on a site used by many students at the university. This caused a lot of students to get confused about how our service worked and a minor crisis to break out. Students where writing in through our web site and asking relatively simple questions, but it was obvious through the tone and some of the statement they referred to that they were confused and worried about how this change would affect them. I replied to a bunch of inquiries and also called a few of the students. I really enjoyed it. I could understand how the information that they had received could scare them. Basically, what had been posted implied that we charged fees to get them their refund money (we don’t) - and they were worried they don’t have a choice in how to receive their money (they have 3).

I would say the most interesting part of the call or response to my email was that they were shocked that I got back to them. But the truth is that when someone takes the time to write in to the company, the least I can do is write back or call. I know that if we got thousands of these inquiries, it wouldn’t be possible, but I always like staying in touch with customers to understand their concerns, how they see our service, and understand how they’ve come to learn about it.

In general, after speaking for a little while, the students I spoke to understood the service, thanked me for helping clear things up and expressed that it wasn’t really as scary as they’d thought. I also asked them if they would be willing to share what they learned with their friends and also their experience having actually now had an interaction with Higher One… everyone said they would!

It’s amazing what an affect speakingn to a customer or potential customer can have!

I just added my first post. Check it out at winbiglivelarge.blogspot.com.

Full Disclaimer - This experiment involves gambling - I don’t condone gambling - If you gamble, please do so responsibly.

So - I’ve been reading about people making money blogging and through their web sites through ad words. I haven’t seen too many blogs that detail exactly how people do this or how they’re doing. In the entrepreneurial spirit, I thought I’d start a little experiment. I like poker. I don’t like gambling… but online - the biggest payments for affiliates come from online gambling and poker sites… So - I thought I’d start a blog about gambling. Now - these sorts of blogs do exist - witness - the party poker blog, or Ken Smith’s Black Jack Blog, thus I would have to figure out a niche.

This got me thinking - why do people gamble? It’s the big payout right? It’s the chance to win the millions….It’s hard for people to understand that if they play slots, they will slowly lose 1% of whatever the house edge is…So -the most interesting way to set up a site in this genre would be to combine information about the games, tips, tricks, advice, how to’s, with reviews of outrageous items that you would buy with the big winnings. Think of it as “Card Player” crossed with “The DuPont Registry.”

Ok - so I have my theme. Now for a name… Win Big - Live Large… That works - also - I don’t want to do this on SeanGlass.com - I don’t condone gambling. It’s entertainment and should be treated that way. Set a limit, etc. etc. That being said (again)…

What next
1. Sign up for affiliate Programs
2. Setup Blog - I decided to use Google’s Blogger
3. Write first entry
4. (Repeat)

1. I chose to sign up for Party Gaming’s affiliate programs. Why? They’re a public operation in the UK, their sites have good brand names, and I doubt they will not pay me what I’m due. They also have casino, bingo, and poker sites. I will also sign up for traditional affiliate sites like buy.com and amazon as I’d like to refer people to books and nice items to buy with their winnings (ok - so Amazon’s not high end, but I’ll get there when I start writing those reviews… when I’ll have time- I don’t know… maybe I’ll let my brother write these and give him revenue sharing. He’s an aspiring director - Glass Bottle Productions - and could use some passive income.

2. I chose to setup a new blog outside of my site - as mentioned above - this is an experiment and I’d like to be able to easily shut it down at a later date…. The Blog to see and send to your friends is
WinBigLiveLarge.Blogspot.com…
3. It’s in progress…
4. I’ll let you know as they happen.

As I slowly build content on the site and start to get hits, I’ll post updates. My plan is to also publish my results each month. Will it work? I don’t know, but 20 minutes of writing a night is worth it for an interesting experiment.

It’s amazing how often I’ve gotten into a conversation with someone about the dynamics of starting a company and am struck by how complicated the person I’m talking to thinks it is. What does this mean? Usually the conversation will include discussion of - in no particular order -

Technology
IP (intellectual property)
Capitalization and business structure
Founding stock (and associated vesting agreement)
Business model
Venture capital or angel investors
Sales Channels
Marketing
Distribution
How Google or Microsoft can or can’t kill the business
How X other large company that probably couldn’t really do it but sounds scary to investors can’t do it
Etc. Etc.

If I’m talking to another entrepreneur, this is usually when I like to take a step back. Before getting started with the tactical steps involved with setting up a new enterprise and making it work, it’s important to focus on what the basics of a business are…

1. Find a product or service that customers will pay you for - and where that payment will be for more $ than it cost you to build the product or deliver the service
2. A market where there are enough customers that you can do this enough times so that the amount you make through each sale covers your overhead
3. A situation where either you can repeat this procedure year after year, or where each customer you sell provides recurring revenue into the future (this is the best model.
4. Ability to leverage resoures to grow sales with out growing overhead (economies of scale) - this is especially important for venture backed businesses…

That’s it. Creating a new business is inherently simple! Now - finding a business that you can grow quickly, with large margins is not as simple…. but as long as you have the basics covered, you should be able to build the business into a profitable enterprise.

When I’m thinking about a new opportunity or talking to an entrepreneur looking to get started, the main questions I like to ask are:
1. Who are the customers and what does it do for them?
2. How much will customers pay for that value?
3. How does the company provide the product or service in such a way that it costs less than (2) - marginal cost
4. How much will it cost to acquire a customer?
5. How many customers are there (now and in the future)
6. How much investment will it take to get the product to market

So for my current company - Higher One...
1. College and Universities - and ultimately college students
2. Banking customers in this segment spend ~$90 per year in banking fee revenue (interchange and fees such as wires, stop payments, etc)
3. Through an online service and delivery model
4. A couple dollars through the distribution with college and university customers (they get a better student payment experience)
5. ~2000 colleges and universities and ~16 million college students
6. It took ~2-3 million

Getting a company off the ground is never easy - we’ve certainly had a lot of help and luck with Higher One, but I believe by keeping the basics of business in mind during the earliest stages of planning a new company, one has the greatest chance of success.