There’s no two ways about it, we’re in a tech bubble. It has cooled down a little but there is still a lot of dumb money floating around just looking for somewhere to go. What is dumb money? Dumb money is money provided by people who can bring no other value to you other than money itself. Its often the easiest type of money to get in bubbles as these people are the johnny come latelys who want to jump off the last bandwagon they were on and onto the latest and greatest thing. These types of investors do not understand your market nor do they want to, all they want is to give you money and have you do all the work and get more money back. Dumb money brings very little except high expectations and pressure for you to constantly be moving the graph up and to the right on their timetable.

Why Do People take Dumb Money?

There are many reasons why people take dumb money but I believe the two biggest reasons have to deal with the type of people who become entrepreneurs. First, as Eric Reis states, entrepreneurs operate in areas with very high uncertainty. Getting investment capital makes you feel good. It means someone believes in you or your idea enough to put their money behind you. A type of personal validation. The other reason is often entrepreneurs are arrogant enough to believe that all they need is money and they are capable of doing everything themselves. While this may be true, it is rarely the case and great angels and VCs can offer so much more than just cash.

Dumb Money does not mean dumb people

Dumb money usually never comes from dumb people. If people have that kind of money to throw behind an idea, they are usually not dumb as they got to that point somehow. What makes smart people hand out dumb money is when they try to invest in things they don’t understand. If they can’t understand your situation as an entrepreneur AND your market, chances are you may be accepting dumb money.

 What can you do as an entrepreneur?

If this is your first rodeo, I’d highly recommend bootstrapping your first business. It will allow you to wear multiple hats and find out truly how tough it is to start something and how its even harder to grow something substantial. You’ll discover what areas you’re weak in and need to outsource and what areas you excel at. It will ultimately prepare you better for success even if your first bootstrapped company flops.

If your mind is already made up that you need investment capital, I would highly recommend being extremely selective in who’s money you take. Only take money from people who can directly bring value your company, even if this means turning down money from someone you highly admire.

There are many ways investors can bring value to your company. If you are starting a consumer facing company, find investors who have deep connections with your target market that can bring instant credibility and brand awareness to your company. If you don’t know much about scaling a company bring on investors who have experience growing a team and revenues. If you are starting a B2B business, find investors who are already engaging in commerce with your target market. If its not instantly clear how this investor can benefit you and your company, DO NOT TAKE THEIR MONEY.

There’s a ton of dumb money floating, don’t take it, taking it makes you a dumb entrepreneur.

If you can’t. Fuck you. You’re not an entrepreneur yet. You’re a poser, wantrepreneur.

Why do we teach ukulele on the internet? Because the vast majority of the people in this world cannot express any emotion they feel without the help of someone else. They depend on the works of art created by others to tell their story. The average person cannot express how they truly feel about someone, or how they feel when something happens. They listen to songs written and recorded by other people, they watch movies and cry because they can relate, but they themselves cannot communicate effectively.  Not only that, they don’t realize they can’t!

The value of music and therefore musicians is the fact that they can create things that help other people express how they feel. There is tremendous value in that, as we see by the millions and millions of dollars that musicians, directors, artists earn. Society has shown with their wallets just how valuable the creation of tools of expression is.

This is why Ukulele Underground is important.  Our goal is to create more new musicians.  More new people that can help others express themselves, or at the very least, we help someone express their own feelings. For those who play music, they know how much it really does feel like a gift. For a long time I couldn’t explain why it felt so powerful to me but now I understand its because as a musician, we help others feel. Feel excitement, joy, sorrow, grief, passion, the gift of music is the gift to express how you truly feel inside.

That is our Why.

During the event I got to hear all the exciting things that are developing on Oahu and Maui and I have to admit it got me a little jealous. Hackerspaces, Meetups, Conferences, just the ability to easily meet up with and hang out with like minded people, that’s something I’ve wanted since we started UU 3 years ago that Kauai really does not have. Though Hawaii as a whole is still very far away from becoming a geek hub like San Francisco, Seattle, Boulder or Austin; Oahu and Maui seem to be taking steps in the right direction while Kauai… well ignorance is part of its charm.

After exchanging some emails with Russel Cheng, I’ve decided that if no one else is going to hold the flag for Kauai, I’m going to have to so I’ve decided to start a monthly Kauai Tech group.

The mission of the group is simple. To help culture the tech (Web Ap, SaaS, mobile ap, interactive content) scene on Kauai and develop a true startup culture here on the island.

The monthly meet ups would be a way for like minded people to get together and share their projects, get feedback and help each other grow their businesses. On an island where the only thing you do with computers is IT (at least according to most here); finding people might be a little difficult but I think I can wrangle 5 or 6 people together for a test run. It might take a while to get traction but like any venture the most important thing is to start. Will keep everyone updated on the progress as we work towards our first meet up.

This whole concept is completely contrary to the best way to learn anything. NOBODY is an expert when they start. The best way to learn, is to do. If you fail, you get back up, learn from your mistakes and try again. Its the process of doing, failing, and trying again that creates real world expertise.

Don’t be afraid of failure. Conquer the fear and try to fail in the most spectacular way possible. Most importantly, when you do fail, get back up and try again. The path to success is comes with scraped knees.

Fast forward 2 years later, I now have to eat my words and a big slice of humble pie. This girl knows her stuff and her latest venture Indinero is a product I have never been this excited for.

What is Indinero?

Not UU's indinero dashboard

Indinero is best described as Mint for small businesses. Its a cloud based application which links all of your business’s financial accounts (bank accounts, paypal, credit cards, etc) together and presents the data in a google analytics style format.

When I started my first business in 2005, I went out and bough Quickbooks because its what I knew my dad and his accountant used to do their book keeping. To this day, I still have no idea how to use that program even after numerous attempts at learning.

Indinero is the perfect alternative to Quickbooks for many small businesses, especially web based businesses who earn most if not all of their income through their merchant accounts and paypal.

As soon as you have your financial accounts linked, the dashboard provides easy to understand graphs and charts that visually display your cash on hand, your cash run-way (how long you can survive with no income at the current burn rate), this month’s income, this month’s expenses, and the net result.

There’s also the ability to categorize transactions so you can create graphs that show where your money is being spent. Once your transactions are categorized, you can study trends if your company is on the rise or fall and it makes it easy to see what things you may need to invest more attention to.

The application even generates monthly P&L statements for you to get a quick overview of your company’s health.

Is it Safe?

For those worried about the security of their money in their accounts, Indinero uses a high level SSL and https on all their pages. Indinero also has no ability to take money out of your accounts, only displays data. They also have security consultants on hand constantly making sure their site is protected. Its probably no more or less safe than using your bank’s online banking features. It comes down to you comfort level with these things. If you’re not someone who links to do online banking, Indinero might not be for you.

Any Complaints?

My only complaint about Indinero is their lack of pricing options. They currently have three account levels, Solo (free for 50 transactions), Small Business ($30/month for 500 transactions), and Enterprise ($100/month for unlimited transactions). My current business does a little more than 50 transactions a month but much less than 500. I wish there was a plan in between 50 and 500, maybe a Ramen Profitable level for $15 /month?

Conclusion

All in all, I can’t say enough great things about Indinero, it is a fantastic idea executed incredibly well. It was one of those things for me where I didn’t even know I wanted this until I saw it. If you own a small business and have trouble tracking your company’s financial health, you owe it to yourself to give Indinero a spin.

I hope to accomplish a few things by doing these interviews:

1. I want to champion the idea of pursuing your dreams and following your passion. If you choose to pursue your passion, you will probably bring more value to the world than if you didn’t. Money is how the world tells you that you are bringing value to it. Follow your passion and you will be rewarded. Its so ironic that the people we idolize are the ones who are doing what they love, yet our whole lives we are constantly discouraged from doing so. I want more people to realize this fact.
2. I want to inspire people to start something. I want to show them that they can do it. That they are smart enough and will succeed if they are willing to work hard. It is especially important to me that the youth of Kauai realize that with the internet, they have all the same opportunities that anyone else in the world has. Nothing is impossible anymore. Everyone has a shot. It’s up to you to take it.
3. I want to learn from these people about how to grow my own businesses. What I could be doing better and some of the hurdles any successful person must fight through and overcome. I’ve made a lot of mistakes in business and I’m sure many could have been prevented by learning from those who have been through it before. I also think by listening to those who have done it before, I can pick up some new idea on how to grow my own business.

If you have any suggestions on who you would like me to interview, please post them in the comments below and I will take a look and try to get them on. I will probably start close to home and with people that are accessible to me.

Thanks!

This is an excerpt from a web series called This Week in Startups or TWiST hosted by Jason Calacanis (episode 47 if you want to check out the full program). I love this video. I love it because it is 100% true.

My generation has grown up in one of the most prosperous times this country has ever experienced. Everything was great in the 90s. This has lead my generation to become soft. We’ve been raised to develop a sense of entitlement. Things have been given to us so easily by parents who wanted to provide a better life for their kids. Through this nurturing, my generation has developed a sense of self worth that is not in line with our actual worth. My generation thinks that the world actually gives a crap about them. We think that because we exist, we are special.

Though most people my age and younger will be not enjoy this video, its a necessary watch. I can say this because even until this day I struggle to escape that 80% he’s talking about in the video. Here is my story.

When I got out of college, I thought I knew everything. I thought I was an awesome web designer. I thought I deserved to be paid like an awesome web designer. I went job hunting truly expecting every resume I sent out to come back saying, “Wow, where have you been this entire time? When can you start???”

I got nada.

I ended up getting a job at a local design shop in Honolulu. It was my first REAL job, I had no connection to these people other than the fact that I applied and got hired. It was the most necessary experience I’ve ever had. Right off the bat, they broke me down. They told me straight how much I sucked at designing. They told me that I would work for free for them and if I improved they would hire me. That they could not justify hiring me until I could produce work that they could actually use for clients. I remember being very shook up. This is not the world that was sold to me growing up. I was supposed to be a genius.

The first three months, I got digital equivalent of having my work crumpled up in front of my face and thrown into a garbage can. It was brutal but I stuck it out. I learned more about designing in 3 months than I did in 4 years in school. One night my bosses took me out for drinks and sat me down. “Alright Ryan, we like you, and we’ve decided to bring you on full time”

“Here it is! The payoff for all my hard work! ” I thought.

“And we’re going to start you off at $10 / hour”

I distinctly remember being hit was two very different emotions. I was validated; I was good enough to get paid, yet I was also crushed; the amount I was to be paid was so little. Is that what I’m worth? I remember thinking.

This is not what they told me in college. I took the offer, and thanked them. I worked there for four more months and quit.

I thought I was worth more than that. How could I not be? I’m good at designing now. I started my own company. It failed. I blamed market conditions and tried again. Failed. I blamed the clients. I tried again, failed. My partner didn’t want to stick it out. I came up with all these excuses for my businesses failing. It has to be external! It can’t be that what sucks is me?

Two years later I’m sitting in my office in Halawa, I remember at noon one day looking in my wallet. There was no money just a bunch of receipts. I had enough money in the bank to pay rent for maybe two more months. We had a tin of cookies in the office. I remember crying alone eating them because I realized that was my lunch for that day. I was a failure. My past failures were all because of me. I came to realize that day, the world doesn’t owe me shit.

I soon took a job at a great company to pay my bills. Actually I should be more honest. I was given a job at a great company because my uncle married the owner of the parent company’s sister. Like a bad habit, my Gen Y ego was back.

I got to choose my own title and like the piece of crap Gen-Yer I am, I said, “New Media Director” as if that meant anything. My starting salary, $32k. Not what you would expect for a “Director” but hey I had the title and boy did I like telling people my title.

I worked my ass off for that company for the first year. We had a great team, I really liked my boss and coworkers. There was pretty much only one person I did not like at the company, but its all good, he doesn’t really affect what we do. It was the first time up to that point I enjoyed going to work every day.

One day we’re all called into my boss’s office for a meeting for some “good news”. The president of our company decided to promote the one person who I did not like above all of us, even above my boss. We’d all be following his lead now. It felt like someone punched me in the gut.

I realized my title that I had been so prideful of never meant anything. I was so busy looking down at people below me, I never looked up to see how small and insignificant I was. This asshole who I really didn’t like was promoted above us, given a better title and more money. I realized, in that situation, at that job, I was not the master of my own destiny.

My work rate declined as I became less and less inspired to put my best in if that person was going to get the credit.

Eventually through circumstance and fortune, Aaron (one of my business partners) approached me with the idea and opportunity to create Ukuleleunderground.com. After thinking it over for a little while, I agreed and we (Aaron, Aldrine and myself) put our heads down and got to work.

2 years later, through countless hours, blood sweat and tears we have a company that is respectable and still growing. We have not achieved anything near our final goal but I do believe we have made our little dent in the world.It’s a small dent right now, but we hope to make it much, much bigger.

I cannot say that I have completely escaped the 80% Jason talks about in that video. To this day I still fight to stay on task, I still struggle to not let my ego get the best of me. I am human, but I am trying to improve. I have realized that for a long time I was a part of that 80%. That 80% who thinks the world owes them something. The world doesn’t owe me anything, I need to earn it.

Here’s to joining the 20%

1. They are crazy / weird - Not, “Oh God, I got so hammered last night it was CRAZY” I’m talking something is seriously wrong with the mental state of this person. The synapses in the brain fire just a little (sometimes a lot) differently and it gives these people a different view of the world. Being able to see things differently is the key to discovering the truly great business ideas.  If a normal person were to sit and really get to know them, they would more than once say, “that is crazy…” to something this person says or does on a regular basis. You will either find this person weird or fascinating.

2. They are quick to pull the trigger – Status Quo is the bane of these people’s existence. They simply cannot tolerate doing the same thing every day over and over again. Which is why, these people are not the type to sit around and create a business plan or 5 year projections. They jump into the deep end. Shoot first, ask questions later. Whatever metaphor you want to use, these people are compelled to execute ideas. When they come up with an idea, they literally cannot stop thinking about it until some action is taken. Change is their drug. This is more a character flaw, because to have any type of success takes persistence and ADD is the opposite of persistence. Truly successful entrepreneurs have learned to tune down the idea ADD and stay persistent on a project until they consider it complete.

3. They have laser focus – Wait a minute, you just said they have ADD…. They do in the sense of what the idea of the month is, but once the decision is made to move forward, their focus is deadly. They will work longer and harder than “normal people” because they crave results. Results are the “high” for these crazy people. They will work 17 hours a day until they have something (real hours, not 17 hours checking email or facebook). They will devour content and learn more about the subject matter in a week than others who spend years studying. Often the results seem to come out of the blue to spectators, but its because this person has put so much energy into the project.

4. They are unreasonable -  These people set unreasonable, “unrealistic” goals. They work unreasonable hours. They create “unmarketable” products and services. Yet everyone is surprised 2 years later, 5 years later when it actually worked. What is considered unreasonable to normal people is 100% plausible and can be accomplished by these crazies.

5. They are cheap - These people will squeeze a dollar of a nickel. They will always look to try to get anything done cheaper. Barter, exchange of service, negotiation is always first before the check book or credit card comes out.

6. They are resilient – These people once their mind is made up, once their sights are set, it is almost impossible to knock them off course. Everything can be going to shit, but they will continue. You would be surprised how many successful entrepreneurs will tell you that they were “too stupid to quit”.

7. They have a fairly high opinion of themselves – Some may call it arrogant, but these people hold themselves in high regard. They believe that there is something special about them which is why they are going to be successful. Whether its, “I’m smarter” or “I’m going to work harder” or “I’m the best” these people are aware of their strengths and dedicate more energy towards that. It’s necessary because many times, especially at the start, there is no one else who will believe in them.

What do you think of this list? Do you know people like this?

So this brings me to this internal debate I’ve been having with myself for the past few months. I want to start a podcast series about entrepreneurship and the process of starting a business (focusing on web based) from the ground up. In this series I would cover my thoughts on the changing business environment, how the internet is changing everything, resources, book reviews, inspirational interviews, etc.

I basically want to help as much people who want to start something of their own live their dream life.

What’s Holding Me Back?

Well basically three things.

1. I am embarrassed by the fact that although I feel I know what I am talking about, I still don’t have the proof that I do. I haven’t hit a homerun in business yet and I wonder if its too early for me to start talking business without having anything (financially) substantial to show for it. Right now, I have many theories/beliefs about what works, what doesn’t what’s important but I’m only now beginning to validate or invalidate these ideas.

2. I honestly have no idea what people want to hear about. There are many things that I’ve learned along the way that I guess I’ve taken for granted. I recently had a skype meeting with a few friends of mine who are looking to launch a new website. The questions I thought there were going to ask were completely different from what they actually wanted to know. They were asking things that I honestly thought everyone knew, but when I took some time to think about it, no not everyone does know these things. Questions like, “What legal things do I need to form a business?” or “How do I get payments online?” I’ve learned such a long time ago, I forgot that when I was first starting, I didn’t know where to start either. I think many things I don’t even think would be good topics are exactly the type of things people want to hear about.

3. My plate is becoming increasingly full. Although we’ve brought on some great people to help with the workload at Ukulele Underground, The projects we are launching will take up a lot of time. Not only that, Eatkauai.com still has a long way to go, and the record label needs at least 1 project this year. I also have some client work I need to finish up and a lot of other people who are asking me to design and create their website. I’m worried about spreading myself too thin with yet another project. It’s always been a bad habit of mine to not finish things that I start. It’s a habit I’m trying very hard to break.

So That brings us to this…

This project is something I think would be incredibly fun for me as I can honestly talk for hours about business if the party on the other end will bear it. I do have my concerns though, so honestly I would like some feedback so please leave a comment if you think its a good or bad idea. I’ll be mulling it over and hopefully by the end of the month, I’ll have made my decision if I’m going to do it or not.