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Equity Crowdfunding: Open letter to lawmakers

You know what creates jobs?  New businesses.  I have heard people argue that it doesn’t and that is crazy.  I am trying to start a business and it will create 13 new jobs in Texas.  And don’t you think the jobs they leave will probably need to replace them?  All this creates a greater demand on the workforce, lowers unemployment, the increase in demand on the workforce raises the average income per capita.  And the people with new, higher paying jobs?  They spend money and all this creates an economic ecosystem.  My guess is anyone saying otherwise is vested in a business that does not pay its employees very well.  I have no sympathy for them.

So what is equity crowdfunding?  It is raising the money for small business through unaccredited investors through online solicitation.  Unaccredited investors are investors that have less than $1 million in assets or make less than $250,000.  So the 99% of us.  If you are familiar with Kickstarted, it is similar but instead of getting goods or services, you get equity.  Here is a great video that explains some of the ends and outs.

I think the coarse Facebook and other recent startups have taken is both interesting and telling.  Facebook raise a considerable amount of money through angels and VC.  Traditionally, people have used IPOs as a way to raise money.  In other words, they would sell shares on the open market to fund their business.  Facebook instead raised money in a non traditional fashion.  I imagine because they could artificially keep demand high and get more equity for themselves.  By the time Facebook had an IPO, arguably all the growth was realized.  It is this growth in startup businesses that has value.  It is the reason we invest.  I think this demonstrates that the opportunity to make huge gains comes by investing early in a company.  Not once the businesses growth is realized.

If that is true, people could potentially see greater returns investing in startups.  Investing in startups is riskier but the higher the risk, the higher the reward.  Taking risk is part of investing.  Another thing that is interesting about equity crowdfunding is that the level of interest in a campaign can indicate the markets interest in a business.  If Google Fiber did a crowdfunding campaign to bring high speed internet to Dallas, you better believe every Time Warner Cable customer would be the first to put money in that.  Why?  They want the service.  And they can invest money to make it happen.  I am sure that scares the shit out of shitty companies that sell shitty services or products or exploit there employees.  Imagine a world where employees could quit their job and start a business that competes with their previous employer.  And if a lot of people give small amounts to a business, it indicates to larger investors like VC and Angels that this is a good investment.  If there is a strong demand for equity in a business, there is probably going to be a strong demand for that service or product.  I heard a great example from my friend Chris Camillo, who wrote Laughing at Wall Street.  He told me of how there was a friend of his that was going to make dance shoes and was looking for investors.  The idea sounded a little crazy until he put it on Kickstarter and pre sold the first batch.  After that, Chris invested because he knew people that dance wanted this particular type of dance shoe.  But equity crowdfunding is different in that instead of pre selling products or services, you get equity.  It would be like buying shares of Dell while he was still in the dorm room before the IPO.  Those shares would see the greatest return.

Right now lawmakers are trying to decide what rules to put around equity crowdfunding.  How much can each person invest in one startup?  How much can a startup raise?  What documents must a startup disclose?  How do you avoid fraud?  These are all important questions.  As far as how much can a person invest, I would say there should be no limit.  There is no limit to playing the lotto and that is considerably more risky.  By a magnitude of infinity.  The amount a startup can raise should be dictated by the market.  This is a good thing for the economy and investors.  I think they should be prudent and have a diversified portfolio but a few investments in startups could be very lucrative.

I plan on running a equity crowdfunding campaign in the new year for Jables.  Go sign up for our email list and we will be sure to keep you informed.

Why Edge of Tomorrow is great and misunderstood

Let me get right to the point.  I think the aliens won.  This is a great movie.  Everyone is comparing it to Groundhogs Day because of the time loop, but it also reminded me of the book Ender’s Game.  The reason it reminds me of Ender’s Game is because the aliens are looping time for a reason.  Why are they looping time?  To refine their strategy.  By starting over, they get to correct their mistakes.  This advantage is passed through blood to Tom Cruise as it had been on Emily Blunt previously.  She used that advantage to win a decisive battle.  But there is an important plot point that I think a lot of people are not really considering.  Emily Blunt and Noah Taylor (Dr Carter, the weird scientist) believe the aliens intended to lose that battle so that 1) the humans would believe they could win and 2) they would pour all there forces into a combined effort so that they could eliminate the insurgency in one effort.  There is another plot point I think people are overlooking.  The aliens had a plan in the event their power was passed to their enemies.  Do you remember that?  They gave false visions.  They showed that the Omega was in Germany in or around a damn, which they later realize is not so.  It is actually in the Louve.  But something unexpected happens when they kill the Omega.  Tom Cruise is killed in the successful attempt on the Omega.  And time resets.  Obviously the twist is we expect, since the Omega died, that they would  continue on.  But not only does time reset, it resets at a different time period than it has throughout the movie.

I would suggest that killing the Omega was indeed a big blow to the Mimics, but not fatal.  Presumably this isn’t their first rodeo.  They can control time, after all.  So they reset.  That is actually bad news for humanity because this time and each consecutive attempt will fail since the Mimics will refine their strategy.  That is, after all, the whole reason they loop time.  This time, as like in the first battle when Emily Blunt loses her ability to loop, we can only assume Tom Cruise has also lost his, losing their strategic advantage over the Mimics.  Strategically speaking, if you held the bulk of Europe, you would place your critical chess piece, so to speak, in a better protected position.  If in water, deeper.  And you would prepare for an attack regardless if you thought it was possible.

Trello: Simple Project Management Tool

I have a couple developers working on the Jables app.  They showed me an application that I think is pretty cool.  It’s Trello.  Trello is “is a collaboration tool that organizes your projects into boards.  In one glance, Trello tells you what’s being worked on, who’s worked on what, and where something is in a process.  Made in New York City by Fog Creek Software.”  So basically each board has three columns: To Do, Doing, and Done.  You create “cards” which act like post-it notes.  On the card you write a task to be completed.  You can assign one or more people to it and add a deadline date.  You can also add color, but I haven’t used that that much.  Once work has started on a task, you can move it to the Doing column.  And obviously once it is completed, you move it to the Done column.  It is a simple but effective project management tool.  And best of all, it is free.

You can also have multiple boards.  So we have 4 boards which are iOS Mobile App, Android Mobile App, Backend, and General.  Each board has a log so you can see who moved or edited what.

It seems that pretty much all the functionality I would want is free.  There is a Business Class version that is $5 per month per user or $45 per year per user.  It lists the additional functionality as easily manage boards and members, Google Apps integration, additional and custom board background, additional and custom stickers, 250MB attachments, one-click bulk data export in CSV and JSON, bulk export history, and an observer role.  I think if we had more people and were juggling more that would be useful.

Tools To Make A Killer Prototype

I think the prototype process is the first step to creating a great site.  It is critical if you are making a custom site.  It helps you think through the user experience and answer things like “what happens if I click on this.”  There are a ton of tools out there.  The method I used to create a prototype was really easy and created a prototype so good that people often think the site is already built when they look at the prototype.  I think there are basically three steps to prototyping.  Some people just do one but I think three is really helpful for the site creator if you do all three.  If you go through each of these steps, not only will you give the developer solid PSDs, but he can see how they interact with each other.

Step One: Mockup Wireframe

This step is where you think through UX and UI.  Some people think you should keep this step as free from design and work only on function.  I think the real answer is somewhere in the middle.  You can use tools like Balsamiq to make a really simple wireframe, but I really liked using Axure.  At $289, it is much more expensive than Balsamiq’s $79, but you can use photos and make the wireframe look really close to what you think the final version should look like.  You can also see what a shitty designer you are.  You can see my wireframe here.  After step two, I am embarrassed to even show it, but it really goes to show what a good designer can do.

Step Two: Design with PSDs

This step is the step that is going to make the site look good.  And you are crazy if you don’t hire a good designer for this.  To put “good” in perspective, I paid a designer $75/hour.  If you don’t know where to find designers, Dribbble is a great resource.  This should get you PSDs for each page.  If you look at a source like oDesk, you will see most front end developers are building from PSDs.  Getting the front end built from PSDs is really cheap, too.  In my opinion, spend the money for a good designer and save money on the front end.  You can find good front end developers for about $10 an hour if you are comfortable with going overseas.  And if they have good PSDs they will know exactly what to do.

Step Three: Make a Final Prototype

This is the fun step.  Once you have all the PSDs, you can upload them to InVision.  There is a free version, but it is worth it to pay for the Pro version while working on the prototype with the back end developers.  With the pro version, you can download and host the prototype.  You can see my prototype here.  You can link all the pages together so a developer can see what page they go to when they click on a link.  It begins to break down if you have a function.  For instance, if you a list that you sort and filter.  It will, however, let the developer see the bulk of links between pages.

Conclusion

After using this process for the main site, I used these three steps to make a prototype for the mobile app, and I couldn’t believe how quick the process was.  I think the mobile prototype is amazing.  I would be comfortable showing that to anyone.

 

Clone Scripts

I was at a networking event last night and was telling someone that I wanted to build something similar to Yelp.  His first question was, “I wonder if there is a clone script for that?”  What the hell is a clone script?  It basically turns a CMS like Drupal or WordPress into a popular site.  Want your own Twitter?  Get a Twitter Script.  Want your own Facebook?  There are almost a dozen Facebook clone scripts.  There are sites like clonescripts.com that host hundreds of sites.  It seems like if there is a popular site, there is a clone script for it.  And most in PHP.

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