Why @ZackShapiro wants to be an entrepreneur

This is a guest post by Zack Shapiro, a student at the University of Colorado. He also runs an iPhone
development company called 59thirty and is currently working on a stealth
startup.

Want the short version? I want to be an entrepreneur because I can’t sit still. I work on projects and help others out all while day dreaming about my own goals, my ideas that I can’t seem to shake from the front of my mind.

I’ve had business ideas since I was 12 or 13. That’s as far back as I can remember throwing away small amounts of money on short-lived ideas. I created and developed blogs and then dumped them for a new one. I outsourced web design and small coding projects only to realize I didn’t know what to do next.

I didn’t know this was entrepreneurship. I just thought I was antsy.

In high school I ran my most successful website, a comedy blog. This lead to a podcast that culminated with former Tech TV personality Martin Sargent appearing on our second-to-last episode and his sidekick, Joey the Intern appearing on our final one. That was my first “exit.” I couldn’t top myself there, so I went out on a high note.

Fast forward to my freshman year of college: the iPhone is taking over the planet. I take a computer science class and develop what would become my first app. With the encouragement of my newly found mentor Dave Taylor I finish it and release it as an experiment. 8 months later 1200 copies have been sold.

I’m in.

A friend once told me that he knew most of what he learned in college prior to going, he just didn’t know the associated terms. I guess I’ve always known this was what I wanted to do. I just didn’t have a name for it.

So now I’m two years through undergrad, sure of what I want to do, and tapping my foot impatiently to do it full-time. Classes like astronomy are a waste of my time, so I’m auditing an MBA class on venture capital. I’m hungry for knowledge and dying to apply it.

Once I walk across that stage I’ll put in an order for business cards that screams with a full ethos, “I’m an entrepreneur.”

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Why @ZackShapiro wants to be an entrepreneur

Does the CO tech explosion resemble the GoldRush?

This weekend I saw a sign from the Goldrush era in Colorado. The language extolling the virtues of buying land for “profitable exploration” instantly resembled the sales copy I’ve come to recognize on websites.  I wondered if we [tech startups] were living the modern day version. I set out to research and determine what, if any, were the similarities and differences between 1859 and 2009.

Gold Rush Mining
Prospecting for Gold

Let’s start with some facts. The Colorado Gold Rush was set-off in 1859 by the discovery of gold in what is today Denver’s Confluence Park. The news, coming out roughly 10 years after the California Gold Rush, set off a stampede of prospective miners from across the plains. The towns of Boulder, Golden and Denver sprung up to serve the booming mining operations across the front range. In total, 21 million ounces of gold were mined from Colorado between 1859 and 1861, more than the combined total of both the California and Alaska rushes earlier in the century. In addition to making individual prospectors rich, it provided lucrative jobs for those who didn’t want to risk it on their own and lead to the development of significant infrastructure investments. This included rail links, highways, farming operations and a booming tourism business.

In the common conscience, including mine, a Goldrush is an irrational search for a quick fortune. Not a laudable endeavor. The result, however, is that a single 2 year period in Colorado transformed a largely uninhabited part of the country into a well connected economic hub and set it up for a century of rapid population growth.  Us Boulderites love our town, and it wouldn’t exist as it is if it weren’t for the Gold Rush.

The reasons people have moved to Colorado to start technology companies are very different. The most frequent reason people give for moving here is lifestyle. Starting a business is hard work, but is also fun and engages people’s passions.  The startup community consists of passionate people living their life to the fullest.  The type of startups moving to Boulder during what I want to call the Startup Explosion are not the Gold Rush people blindly seeking wealth.  They are smart, confident, adventurous and looking for a community where they belong and that can help them accumulate wealth and a reputation.  These are people who can have, and largely already have had, top-notch jobs elsewhere.

Clearly the human factors aren’t the same as the Gold Rush.  The outcomes, however, are exactly the same.  The influx of new companies has led to a large service and infrastructure expansion.  200 years ago it was the creation of railroads, highways and cities. Today its VC firms, incubators, law resources and potentially Google Fiber *cross my fingers*.

So does the tech explosion resemble the GoldRush?  Kinda.  It has the same influx of resources and expansion of infrastructure, but it lacks the irrational underpinnings of the Gold Diggers.  While people left their homes for fortune during the Gold Rush, more than 150 years later people are moving for the startup infrastructure, mentors and lifestyle.

Does the CO tech explosion resemble the GoldRush?

Why we chose to bootstrap

We are often asked how much money we have raised and it seems that our success and capabilities are sometimes judged on that metric.  To be sure, having a vote of confidence from a VC is a badge of honor and may even increase your chances of success, but the decision is a lot more complicated than that.  We decided not to seek outside investment despite having access to wealthy friends, colleagues and professional investors.

Before we dive into the reasons why we chose this path, I must disclose that I’m a sucker for prestige.  It hurts when others don’t see me as successful or doubt my capabilities.  Luckily, Chad is well grounded and reminds me that making the right decision to build an enduring long term business is more important than my ego.

With that in mind, there are plenty of reasons to get investors, in fact getting adequate capital is sometimes necessary to make a technology business model viable.  Certainly this is true for businesses that want to keep growing but must float significant costs for inventory, development or user acquisition while they’re recouping the customer’s lifetime value.  It’s also true if the founders don’t have personal savings, they need at least some money to live.  There are, of course, also soft benefits like access to an investor’s contacts, prestige, great advisors and being able to hire outside help instead of learning to do something yourself.

With this line of thinking in our heads, we decided against an investor because we didn’t see any need to trade equity for money to grow the business.  We can build the site ourselves, the business model doesn’t requires floating a lot of user acquisition costs and we both saved diligently for years so we’re not starving without a paycheck.  The soft benefits like PR and great advisors was the one benefit we needed most.  To fill the gap, we’ve been identifying strong mentors.  We’ve been treating this as a core part of our strategy, and have had a lot of success.  On average, we’re meeting with 3 new mentors a week and identified a lot of absolutely phenomenal ones.  We’ll continue to grow our network, but are committed to concentrating on developing deep relationships with a select few that are passionate about helping us succeed by introducing us to their network and being brutally honest with their feedback.  Is it the same as board meetings with investors, no, but so far it’s been pretty effective.  The true test will be whether we can get the corporate partnership and PR contacts we’ll need in a couple months.

The guys at Everlater thought the same way and ultimately changed their opinion and got funding from with what I understand is a great VC partner.  We’ve talked with them at length about that decision, so if anyone else is interested in getting in on this discussion, feel free to jump in.

Why we chose to bootstrap