All of my ideas seem to come to me on drives to clients or work. About 3 years ago, I was driving to work when I had the idea for JumpstartTV.com. The site was going to be a central how-to hub for videos on the web. The old saying is once you come up with an idea, you have to implement it in 18 months or you'll lose it to someone else. With bandwidth becoming so cheap, 18 months was unrealistic. In this world of the Web 2.0, in hindsight, we had to react in 6-8 months. So, I formed a team of trusted developers and we set out to make a website and a business.
Our first decision after we formed a rudimentary business plan was whether to fund the website ourselves or through an option like venture capital. Having funded my first few companies like SQLServerCentral.com successfully with a $50 investment from the partners, I decided to lean towards bootstrapping the business. In other words, spend my weekends and nights growing and building the business with minimal investment by pulling up my bootstraps and loosing sleep. We leaned towards this strategy because we didn't want to give up more than 50% of what we thought was a fantastic idea. The strategy worked well during the development cycle, allowing us to release the website in 4 months.
While we worked on our version 2.0 of JumpstartTV, other websites began to launch with similar concepts and on an accelerating scale. These other websites had a massive amount of funding behind them. Two such websites had received 35 and 40 million dollars of investment capital to scale their efforts. We began to fight to keep up with them on the amount of content we could produce "on the side" bootstrapping.
Knowing we couldn't keep up, we struggled. At a certain point, it was difficult to justify putting more money into generating content but then at the same time, I received letter after letter of gratitude for the site, justifying the site's purpose. Ultimately, there wasn't enough people pulling the cart and we stalled.
What I learned from this entire experience I thought I'd share in this blog post. My first lesson learned was to really know your competition. If you have a business where people are probably going to be pouring money into, you've better be willing to match that momentum. Bootstrapping works great but in some cases, if your competitor has $40 million, it will not work unless you're particularly blessed. If you can't match them in funds, try a different route. Find a more unique idea or become more focused. In my case, I had a broad website that had thousands of how-to videos about everything from how to make a drink to how to restore a database. If I had focused on a given market first and really conquered it first, you'd be reading a different post here. In other industries this may mean to not start just another dating site. Instead focus on baby boomer or divorced parents dating.
In case you were wondering also what happened to JumpstartTV.com, well it is about to relaunch in a big way after I merged it into another company with new partners. These partners (Steve Jones and Andy Warren) you may recognize since they helped me put SQLServerCentral.com on the map. Because of this, we now have a full time staff working on the site's relaunch, scheduling this week. It will be more focused on technology and will have a new level of content that I could never have done bootstrapping :).