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Oodles.com founder Steve Sherlock has set himself the goal of raising a multimillion dollar Series A funding round by early 2010. He is documenting his trials and tribulations and seeking feedback from readers on AnthillOnline.com. This is the tenth post in his series.
Week 10: Naked Bungie Jumping
The capital-raising process can be an emotional roller-coaster ride and I’ve found it challenging at times over the past couple of months to keep myself motivated and my team focused.
That’s especially true now, when we have a couple of potential suitors considering the company, which means in some ways the process is in a state of limbo.
If ever my optimism or motivation wains slightly, I try to picture it all working out in the end, just as planned. And if that doesn’t work, I just imagine how lucky I am not to have to get up each morning and do something really challenging, such as naked bungie jumping. Suddenly, seeking capital, staying motivated, etc., seems relatively simple, not to mention a lot less embarrassing.
Another good way I’ve found to keep my mind focused and engaged is to stay abreast of industry developments and contribute to blogs, forums, etc. Wotif.com’s recent launch of Wotflight.com for example gave me the opportunity to share my opinion on the venture (my review), and reflect on the potential impact of the company moving into to the cars space.
I also accept invitations to speak at travel industry conferences — such as Eyefortravel Singapore and the Australia Aviation Summit — about innovation and differentiated business models. This gives me the opportunity to sit alongside some of the world’s biggest and most successful travel companies, and I enjoy the chance to speak as an entrepreneur and travel professional (toastmasters training was useful after all). These events also help build Oodles’ profile and provide a level of credibility that potential investors can see first hand.
They also keep my adrenaline going and force me to keep thinking about our overall strategy for successfully executing and realising our plans once we have secured funding.
Ensuring the people around me stay focused is not always so easy.
We have a small full-time team plus half-a-dozen outsourced professionals and I try to keep everyone up to date. Sometimes, however, I wonder if I communicate so much it’s actually detrimental.
One of our staff members recently resigned, and she admitted her move was at least partially influenced by concerns about job security. Given I’ve been very open about talking to potential investors based in Europe, the US and other parts of Australia, she was a bit worried that Oodles would re-locate post investment. It was a reasonable concern because there is a good chance the business will relocate if it makes sense, and I’ve tried to be completely transparent about that.
I guess it’s about finding the right balance.
I’m currently tackling the same awkward issue in relation to communicating with potential investors — i.e. what is the right amount of contact to ensure a lead doesn’t go cold but that you don’t look like your dagging them?
I think I’m pretty patient because I appreciate that potential investors are often busy running their own companies and the key issue can be timing. Plus it’s not that we are necessarily in a hurry; it’s simply that I’m chomping at the bit to start executing our post-funding strategy.
This week I decided to follow up one potential investor and received confirmation that the company remains interested but it is in the middle of a major project and needs more time.
I’m glad I contacted them because the fact that they are still considering investment is encouraging but I started thinking about how it would sometimes be easier to receive ‘no’ and just move on.
It wasn’t long before I found myself contemplating another naked bungie jump.
Steve Sherlock is co-founder of Oodles.com, one of Australia’s leading online car rental aggregators.
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View Comments
Peter Clutton
February 25th, 2010 at 9:57 am
Steve …food for thought!
I believe we can all save ourselves a lot of angst and retain our energies for the REAL prospective Business Partners by putting all of the “interested but busy right now”, “we really like it, just need to finish a few things before we can look at it in depth”, etc.responses straight into the NOT INTERESTED bin.. for the following reasons ….
1.Retaining them as ‘possibles’ (even at the back of our mind)can lessen the drive or focus available for more likely prospects.
2.They are almost certainly just keeping the door open for themselves in case they find some reason down the track to take more interest. (whilst we grow old waiting for them to get to that point)
3.If the venture hasn’t fired them up enough from the very outset to have them trying to secure our commitment(even an option)so that others can’t get to it …. then they are not really interested.
4.The process we used to “qualify” them in the first place was probably flawed or misguided.
5.Our initiative in giving them a NO and not wasting undue energy on them can be energising and remove the cap-in-hand feel that we can all do without.
6.We can use the time (and thought processes) that are spent on these ‘not-possibles’ in seeking out and qualifying more genuine options.
I believe most deals come together when the qualifying process has already defined why they are defined as a genuine prospect(suits THEIR needs). The first meeting will almost always prove our assumptions right or wrong and the second meeting will show whether they really want it to proceed. Third meeting … negotiations !
If it doesn’t shape up this way… I think we best move on.
[Reply]
Steve Sherlock Reply:
February 25th, 2010 at 11:36 am
Peter – thanks for your feedback.
i think you make some very astute points! i agree that holding out hope of an offer is a long way short of getting an actually offer and should effectively be discounted and move on. ive done this with the vast majority of potential investors ive met, simply because i didn’t think they were a good fit.
however i think there is also a greyer area of posturing. Where either or both parties try to not appear too keen, and see who blinks first and moves from particular and stated stand points.
though i concede one could easily delude themselves that this is the case. but if it genuinely is the case then the dilemma is to revise one’s stand points, in an attempt to move interest forward (ie. compromise) or stick to your guns and just move on.
So its not quite so simple, though more generally i think your points are valid. (food for thought: would be easier for me to put your comments into context if i knew where you were from. googling you didn’t give me any direction).
ps. @anthill – suggest making these comments boxes wider (on new site), as they are only 18 character wide.
[Reply]
James Tuckerman Reply:
February 25th, 2010 at 3:09 pm
Hi Steve – We’re in the process of incorporating Disqus. Watch this space!
[Reply]
Lloyd
February 27th, 2010 at 6:07 am
Steve. Grabst thou a copy of Pirates of Silicon Valley (Warner Bros) and watch it a few times, focusing on Bill Gates’ selling technique to Altair, IBM and Apple. The night before you do a selling meeting, watch it again. It is a guiding principle to our business success.
[Reply]
John Power Reply:
February 27th, 2010 at 4:15 pm
@Steve, You’ll be humming “ina gadda da vida” for weeks!
[Reply]
Steve Sherlock Reply:
February 28th, 2010 at 12:24 am
good one lloyd, will check that out.
@john – im a bit slow but i get it now. that song was used in the soundtrack of pirates of silicon valley. (song released in same year i was born 68)
apparently its a drunken slur of Spanish for “in the garden of venus” (amazing how one can ‘almost’ sound knowledgeable after a couple searches).will see if i can reference the movie in my next post.
[Reply]
John Power Reply:
March 1st, 2010 at 9:36 am
Specifically, when the “other” Steve (Jobs that is) makes his entrance at a computer expo, it’s playing in the background.
[Reply]
Lloyd Reply:
March 12th, 2010 at 5:13 pm
According to Bill Gates, the issue is to find a need in the person you are selling to (“make them need us”). Having found that need, you then sell that need, so that you have positive recognition and feedback from the potential customer. Then you relate your proposition to that need. This may sound like an academic Sales101, but it’s amazing how often the right answer does sound like Topic101. These aren’t my ideas … these are from that movie.
Now we get to the point: what need does your target VC have? You’ll recall Gates trying to sell to Steve Jobs: “G: You’re vulnerable … we can help you”, “J: have a Tshirt”, “G: we have Multiplan running on different platforms”, “J: Nah”, “G: we have multi-tool interface …”, “J: Nah”, “G: IBM is going to want all our stuff”, “J: Uh … IBM? Why should I worry about them?”, “G: We can help you so that you don’t have to worry about them”.
So understand what are the problems a VC needs to address to keep his/her business successful. No, don’t sell the nth+1 business plan for the week. What worries the VC? Dealflow? Getting the investors’ money earning income? Talk to some VCs about VC needs, then try Bill Gates’ tactic: make the VC need you. If you can’t do that, then that’s the most valuable feedback you can give yourself!
Hey … It’s time for a beer!
lloyd
March 12th, 2010 at 6:49 pm
Hi John … the song from the movie that sticks in my mind is “The Guess Who” “No Time” 1968. I made the mistake of looking it up on You Tube and it’s now permanently playing up there. Most appropriately in the context of Steve’s article, it plays when Steve Jobs is touring the banks trying to get finance for the Apple 1 (electronics in a wooden box).
[Reply]
Steve Sherlock Reply:
March 15th, 2010 at 12:23 am
@john @lloyd
just watched the end of pirates. thanks for the tips on where that song played. will download the full song.
just re-enforces that nothing is totally unique. good book on that is Borrowing Brilliance.
i agree that movie is too entrepreneurs pitching as is eye of the tiger to boxers.
guess also says – no matter what level of success so far or how much money, does not necessarily co-relate with having one’s shit together.
i like to see the ending added to slightly, to reference ipod and iphone impact. (just to rub it in to gates a bit)
google now being the next generation incarnation
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