Somewhere in a coffee shop
Yeah… let’s celebrate! An entrepreneur just crowdfunded $500,000.00 to build the next big thing. Oh wait… No he’s building a Twitter clone. What? Do we really need another Twitter? But it’s going to be open, have an API and no Ads like Twitter was before they decided to start making tons of money. Um.. One more thing, it’s going to be real-time and for developers! Ok, so it’s Twitter meets Githup without the ads?
Let’s get a few things straight before I continue and don’t want to sound too much like a hater or sceptic about Dalton Caldwell’s App.net and the croundfunded model, but over the last few years I’ve had tons of entrepreneurs reach out to me either for advice, mentorship or trying to get into the accelerator I help launch saying they’re working on the next big thing, or they have the next facebook or twitter. My first reaction would be really and almost from that point the conversation would go downhill from there as they have done very little customer development or have yet to state the one reason why or how they’re going to get 955 million users. As an entrepreneur just saying you’re going to build the next twitter or facebook is almost a red flag to potential investors. With very little traction, an incomplete product or an awesome team good luck on the funding. Better yet, saying you’re going to build the next big thing without clearly stating what problem you’re solving that’s different than what the current big thing is another red flag. But Dalton Caldwell is NOT a first time entrepreneur!
Let me say that I have never met Dalton before or at least I don’t think I have, but I’m sure we have been in the same room before(I think). Regardless here’s a brief history lesson on Dalton. In 2004 by Dalton Caldwell and some former engineers from Napster launched imeem which was sold to myspace and then shutdown. In February 2010 Dalton launched Mixed Media Labs which created picplz, a photo broadcasting application for iPhone and Android mobile devices which eventually separated from the company then raised $5M From Andreessen Horowitz . In September 2012 Picplz shutdown (instagram won). Before Picplz shutdown Dalton launched App.net a platform for the distribution and monetization of iOS and Android mobile apps in March of 2012. Around July 2012 Dalton and team pivots App.net with a plan to build a “dependable, ad-free version of Twitter”. Whew! I may be off here or there but I’m close on the dates.
When I first heard of App.net first piviot I was like, wait don’t we have an open source, ad-free version of twitter already? It’s called http://identi.ca . Anyway, I was very impressed with the the tool App.net created to crowdfund to raise funds. It very much reminded me of kick starter. I was thinking why not white label the site as a tool, allowing anyone to host and manage their own kickstarter campaign. Just an idea. Still I kept my RSS loaded and kept an eye on App.net. Currently App.net has 8,269 backers, with $555,700 and 34 hours left. When it’s all said and done Dalton may reach $600 to $650k. Then all eyes will be on App.net. Everything the company does good or bad will be covered in the beloved tech press and Dalton is now the new face of crowdfunding startups.
Doesn’t this all sound too familiar? Remember Diaspora? What happen to those guys who were building an open Facebook? Diaspora raised $200k using kickstarter. Visit the https://www.joindiaspora.com lading page for updates. Just like Diaspora, timing was everything for Dalton and team. Diaspora launched their fundraising efforts when the media was crushing facebook on security, data export and privacy. For Dalton’s App.net things were not as agressive against Twitter but Dalton used hackernews, an open letter to Mark Zuckerberg on his blog about an Facebook Acqui-Hire attempt and today a without any term sheets a nice crowdfunded $500k and growing. Heck, maybe I need to stop writing and get to kickstarting….
There are a lot of lessons to be learned from all of this. Here are a few:
- Build and ship fast when funding raising
- Have a great development team
- Attack a pain point to attract people to join you. For App.net the pain was ads
- Be persistent
- Learn from your failures
- When you raise capital spend it wisely
- Make noise so the rest of the world will listen ( the facebook post was epic)
- Be passionate
- Have a great landing page and hype up your product in the tech press
- Don’t be afraid to take on giants
- Ignore the criticism and stay focus
- Never give up.
I’m no first time entrepreneur but I’ve been there. If you’re somewhere like in Detroit, North Carolina or Atlanta and thinking you’ll just bootstrap your startup or crowdfund $500k like App.net I would think twice about that especially if you don’t have a strong team or a product. Many first time entrepreneur would just love to raise $100k. Still at Ben Parr tweets:
App.net is further proof that the crowdfunding of startups is the future.
— Ben Parr (@benparr) August 12, 2012
Now the hard work begins and six months a year or two from now let’s see where Dalton and the App.net will be. My bet is Dalton will join some VC firm or another startup will swoop in and acquire the team and product and all of this will be washed up in more fairy tales of Silicon Valley.
Hats off Dalton Caldwell, we’re proud and watching you.