kidmercury

When I had my jaw surgery in June (during which I was not able to open my mouth for four weeks) I focused on writing a business plan. I then intended to contact investors and try to raise money.

I wrote the business plan, but I only submitted it to three places: Nivi (who had previously encouraged entrepreneurs to "cold call" him), Union Square Ventures (as I am totally down with their vision of where the opportunities in the web are), and New York Angels (NYC angel investor network). New York Angels charges $150 per submission; they claim two people will review your plan.

My original plan was to see what type of feedback I can get, particularly from New York Angels. I would then implement this feedback and contact more investors.

I never heard back from New York Angels, which I do think kinda sucks from a professionalism standpoint. I realize $150 is not much money, although I think in principle if you are going to charge an application fee, a response is sort of what you are paying for. Fortunately, I do think the changes we are seeing in the investment area will end up ensuring this problem is minimized in the future; angel networks that charge application fees will have a tough time competing with stuff like TechStars and YCombinator, which in my opinion are far better positioned for the future from almost every conceivable vantage point.

Ultimately, though, the lack of response is not particularly important for me, as I don't think what I am working on is the kind of thing that fits into the angel or venture capital model particularly well. The ActoNetwork is more about a network of small businesses that is owned by the small businesses; this type of structure is something Facebook, Google, and the entire Silicon Valley model won't be able to compete with, in my opinion. I also think it has the potential to enable the development of a management system and a capability building engine that can outperform anything we are seeing today on a large scale -- and thus is the ticket to creating the next big disruption that will unleash an unprecedented amount of economic value.

That sounds good and well, at least in theory. But without capital, how can this idea be executed?

Well the answer begins with a deep appreciation of the fact that starting an online business these days costs next to nothing. People need less of money, and more of skilled labor and time.

To minimize costs associated with scalability, I think businesses should look to minimize infrastructure costs -- or push infrastructure costs outside of the firm. Successfully doing this is, in my opinion, a big part of the next major disruption; the current Internet environment is one in which ROA (return on assets) is largely about measuring return on infrastructure assets. I think the next major disruption will realign value chains so that ROA is more about measuring return on the value of labor -- and thus employee metrics will be where it's at.

For the ActoNetwork, the game plan outlined a few years ago is still our guiding light. The ecommerce system that will allow us to intermediate markets is coming, at which point we can really accelerate marketing. While product development is a neverending process, Round One of the development process is at least coming to an end.

Of course, that's not the only thing coming to an end. My availability of funds to continue spending all my time working from home is also dwindling. Because of this, I've begun taking on freelancing gigs (if you had something in mind, let me know). While it always sucks to have to go work for someone else, the timing of this is appropriate; I did the product development work, and can now pass things off to my colleague, who will be working on promoting InformedTrades. I can also go earn some money so that I can do luxurious things, like move out of my $500 apartment and stop sleeping on a futon, and invest a bit more into the business (although operating costs are near zero, should stay that way for the foreseeable future). I sold almost all of my belongings a little more than a year ago and moved into this hellhole so that I could go as long as possible without income. Mission accomplished, in a way -- but of course, the journey has just begun, and the best is yet to come.

And so there are two immediate steps in the ActoRevolution:

1. Get one profitable node (working on aggressively InformedTrades)
2. Save up money in case it is needed for the business (and also prepare for the coming economic collapse)

Slowly but surely, we're getting there.