Entrepreneur Office Hours - Issue #101
Time to bust some fundraising myths
You may have noticed I often write about fundraising. It’s not because I’m personally obsessed with fundraising. However, early in my startup career, I was. Now that I work with lots of new entrepreneurs, I notice they are, too, so I try to do what I can to dispel the (many) misconceptions lots of inexperienced fundraisers seem to have.
In this EOH issue, I break down some of the bigger of those misconceptions, which you’ll find in the first article. It was inspired (slightly) by the conversation I had with this week’s Web Master’s guest who, during our interview, talked a little about fundraising as well.
The guest on that episode, by the way, is Marshall Brain. If the name sounds familiar, it’s because he was the man behind HowStuffWorks. In fact, for a while, it was called “Marshall Brain’s HowStuffWorks.” That was before he sold it to Discovery Channel for $250 million and he stepped away.
For what it’s worth, if someone offers me $250 million for “Aaron Dinin’s Entrepreneur Office Hours,” I’ll be stepping away from this project, too. Just figured I’d give all of you reading this fair warning so you don’t get too attached… 😉
These 4 Common Fundraising Misconceptions Could Be Stopping You From Raising Capital
If you’re struggling to get investors for your startup, at least one of these reasons is part of the cause. Maybe it’s all four.
The Writer Who Built the 'Coolest Site on the Internet'
The Internet has always been a place to learn about new things. But, in the early days of the Web, one writer took that opportunity for learning to an extreme by creating an entire website devoted to explaining how stuff works. He named it -- quite appropriately -- HowStuffWorks. His name is Marshall Brain, and you can hear his story on the new episode of Web Masters.
Listen now on:
…or search “Web Masters” wherever you listen to your favorite podcasts.
FROM THE ARCHIVES…
How It Actually Feels When an Investor Writes a Check at the End of a Coffee Meeting
Despite what you may have read or seen in a movie, investors don’t actually pull out their checkbooks and cut you a check at the end of a meeting. Except sometimes they do, and it’s not necessarily a good thing.
Office Hours Q&A
I know you generally talk about entrepreneurship, but I’d love to know what you think about Meta and the impending “metaverse.” Do you think it’s a good idea for Facebook to be moving in that direction and are they right?
Curious to hear your thoughts,
I’m willing to count this as an entrepreneurship question. At the very least, I’ve got lots of thoughts about Meta and the metaverse, and I’m happy to use your question as an opportunity to dump them somewhere.
In terms of whether or not it’s a good idea for Facebook to be moving in that direction, I know they need to be moving in some direction beyond their current model. Whether the metaverse is the best direction is up for debate, but it certainly seems like one of the more logical pathways the company could take.
From my wildly uninformed perspective, I can’t help but look at Facebook and see a company that, while enormous, has a fatal flaw in its core business model. Specifically, audience-based advertising (i.e. their “bread and butter”) is something that’s going to become increasingly obsolete as emerging technologies continue bridging the gap between our online and offline lives.
Consider, for example, Alexa. Alexa lives in my kitchen next to my pantry. When I run out of dog food, I just say, “Alexa, order me more dog food,” and the food gets ordered. Where does Facebook’s audience-based advertising fit into that purchasing chain? Maybe at the very top when I first learned about the brand of dog food, but nowhere after.
To be fair, for lots of years, that’s been the extent of advertising. Advertising makes consumers aware of a brand, some portion of those consumers become buyers, and then they keep buying. But how long will it be until Alexa is also (effectively) introducing me to the brands I ultimately buy? She’ll do a much better job of it because, again, she’s literally in my kitchen… and my bedroom… and my kids’ bedrooms.
That’s just one of dozens of examples we could point to if we want to see the decreasing impact of Facebook’s core advertising model. So what’s Facebook going to do?
One option is the metaverse. If Facebook helps control how we operate in the metaverse, then Facebook will be able to control our purchasing in the metaverse, and that will lead to lots of potential revenue opportunities. I have no idea whether or not Facebook will be able to pull off their vision, but, if I had to bet on a company being able to do it, Facebook would be one of my top choices.
As for your question about whether or not they’re right about the metaverse becoming, for lack of a better word, a “thing”... I suspect the metaverse will exist (and kind of already does), but it won’t look (or feel) quite like anyone is picturing. By that I mean I’m guessing the metaverse is going to be more of a hybrid AR/VR kind of thing than an exclusively VR world (which is what most of the hype tends to project).
Or maybe that’s just me hoping. I’m personally not excited about living in an entirely VR world. And, if the pandemic has taught us anything, most people seem to feel that way, too. From what I can tell, humans seem to really like being in-person. I know, for example, that I much prefer teaching in-person classes, and my students seem to prefer taking them.
Will that last forever? I doubt it. But, at least for the foreseeable future, I doubt in-person experiences are going away.
To tie this all back to entrepreneurship, the metaverse represents a huge opportunity for interested founders. Regardless of whether oFacebook is the dominant player, and regardless of whether it’s a fully immersive versus augmented version of life, I guarantee lots of people using the metaverse will encounter problems that need to be solved. That means lots of opportunities for entrepreneurs to build valuable businesses. Are you ready?
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!