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The Post Money Value

Rick's Rants or A VC Loonie with a Toonie.

The B WordYesterday

Warning: You are going to hate this post.

Why do start-ups have bonuses in their budgets? What's up with that?  Let's roll back a bit and figure out what we collectively start with.

First, you come to me with a plan. You believe this plan is extraordinary and the idea, product, or service is amazing.  It is the next Google.  Fine. Let's assume I believe all this and not only drink the Kool-Aid but eat the packaging, cups, and pitcher you served it in.  I'm in. You are funded, baby, let's rock.

You've told me in year 1, 500k of revenue but year 2, Katy bar that damn door, good golly Miss Molly, it is 10x in revenue over year 1.  Amazing! So, why are you asking for a bonus if you met these objectives that you set out.

According to Dictionary.com, ‘bonus’ means ‘something given or paid over and above what is due or expected’. Said differently, it’s compensation for extraordinary performance.

By definition, what is “expected” or “due” of venture-backed companies is “extraordinary” growth. The whole idea of taking venture capital and putting it to use is to grow an enterprise well beyond any natural rates of growth. Accordingly, the basic compensation that a management team earns should be to compensate them for that extraordinary growth. Ordinary growth, even good growth, is less than what is due.  And growth,

Budget Rental Car: So Close, YetYesterday

Slog after Slog, you begin to become numb to many travel things (like LAX and the absolute shit terminal Air Canada flies out of) as well as starting get really annoyed with trivial things that should just be better.

I use Budget Rental Car so this observation only applies to them.

I'm in the Fastbreak program in an attempt to speed things up.  Make the reservation online, get on the bus, grab a car, yer outta there.  By and large, except for the inconsistent ways you get those keys, it generally works. When you return your car, a nice person with the magic box walks up, scans the bar code, looks at the gas gauge, prints, tears off a receipt and you are gone. You also will get an emailed copy of your receipt if you are in the plan, they have your email address, etc.

Today at San Francisco airport, I delivered my car back and had to wait for another person. So, I had my BlackBerry out, checking the emails.    For grins, I stand there and watch my BB as this guy checks the car in.

Before the print out is even started, the electronic receipt is on my BB.   You know where this is going. 

I ask: "Can I just not get a paper receipt? Just ask me before you waste the paper?"

Answer: "Oh no sir! We have to print it or the system won't work correctly. But if you don't want it, I'll throw it away, we recycle."

Sigh. Waste of paper, waste of a precious few seconds (which add up) in processing, ext

My Bad Timing beats YOUR Bad TimingNovember 18

It's Air Canada Flight 759 and I'm heading to San Francisco for a Tuesday morning meeting, then off to Newark that night, back in TO Wednesday morning.  That must mean it's time for more business plan reading.

A group of entrepreneurs from Fort Worth, Texas sends in a business plan that essentially is going to "revolutionize the acquisition capabilities of retailers especially in these tough economic times".  Sweet, let's dive in and take a look.

Slide 14 Title: Our Immediate Target Customers/Pilots Pipeline.

On this slide lists 8 big companies with either Pilot or "Round Two Discussions" next to the name.  Well done, guys, well.. errr, hold the phone:

Of the 8 companies on the lists 6 are bankrupt or going out of business (Circuit City, Linens and Things, CompUSA, etc).  Not the best timing, eh?

I looked inside the properties of the Power Point deck and saw the presentation was done 2 1/2 years ago. 

Lesson for you: Update your slides.  [I know. You are insulted that I would even suggest this. Re-read the above. I'm just saying..]

Moving on.

Here's one of the funniest introductions I've gotten in awhile, courtesy of a company in Calgary, Canada.

Dear Rick,

Attached please find the executive summary of [] our gig out here in Calgary.  A couple of points before you dive in.  We can't tell if you are doing the American English or Canadian (Queen's) English thing given the schizo

Memo to Seth Godin: They fixed the wrong thingNovember 18

Some time ago, Seth Godin had a blog post up about Air Canada's in flight entertainment system blowing his ear drums out by not resetting the systems properly between use.

Well, fear not. Those crack engineers inside the depths of Air Canada were hard at work trying to resolve this.  Unfortunately, they got a little side tracked with another more pressing problem.  People had figured out how to skip over the 10 ads prior to any show starting.  Well, that's just unacceptable so that problem was solved!

The first pile of the ads are in one glob with the controls disabled including the volume control.  Now what you have is the volume all the way up, people jerking the ear buds out - the ones you now pay for- pounding on the screen, and scowling until the show comes on.  Pissed off people, ineffective system, and completely broken usability.  Paging CIBC. Nobody is listening to Maria and dreams being fulfilled with here AeroGold card.

Brilliant.

Features of the World: UNITENovember 16

As I mentioned a few posts ago, I do get lots of plans and try hard to respond to everyone. On the Saturday flight, I read tons of plans, looked at tons of power point presentations, etc.  Here is an observation.

I have 21 folks wanting to compete with Loopt.  21 plans show Loopt as the major competitor and 21 people point out 21 DIFFERENT things missing from Loopt and why each of these missing features will be the killer feature that blows everybody away, etc, etc.

Good news: Lots of room for improvement and lots of new ideas.

Bad news: 21 companies are not going to get funding on the basis of finding a better/missing feature of another product or service.

The hardest realization for any start-up to deal with is that in many cases that cool software/service doing that amazing thing should be a feature in something else.  Sorry, I know I'm going to get blasted for this but it is true of many offerings which come across my desk.

I've often emailed folks with that feedback.  Here is a small excerpt:

Hi []

Thanks for letting me take a look.  From my perspective, while I appreciate the solution you've laid out, I think it is a feature of something else and not a stand alone business; certainly not one that I could invest in, unfortunately.  I've seen a number of variations on what you've proposed and maybe an interesting approach would be if you teamed up with a few ot