Collar Free funding info

This is the article on startupSD.com you told me about. Collar Free discloses monthly revenue, priviate capital already obtained, and angel capital they are seeking.  It’s hard to believe that Collar Free has been around for 7 months already, time is flying by!

I was with Jimmy Hendricks and Patrick Dillon the night they official launched Collar Free, the online community for graphic and fashion designers, to the public. They invited me to their North Park pad turned office and I got to see a very real portrait of an early stage startup. Now, 7 months later, Collar Free is starting to emerge as one of San Diego’s more innovative startups. I recently checked in with the Co-Founders to find out what they’ve been up to and where they’re headed.

The Collar Free brand has transitioned from an edgy and almost too hip lifestyle brand—remember the condom with every t-shirt gimmick—to a savvier and more sophisticated brand focused on fashion for independent people.

…they’re working with $180,000 in private funding and looking for an additional $200,000 in angel investments. They’re already bringing in $25,000 in revenue per month with a pretty legit business model.

Using some quick numbers, a $25,000/month revenue average equates to roughly 1000 shirts sold at an average price of $25.  Not too shabby.

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Sources:
http://www.startupsd.net/startupnews/post/collar-free-grows-up-and-goes-retail

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Collar Free's new Office Space

I thought this was pretty cool idea when I saw it.  They are going to try to rent out a good portion of their office space to cover the cost of rental and possible even make some profit.  They are able to do this by offering this to their current designers and other business affiliates.  Seems like a great way to leverage their business relationships during a slowing economy.

My partner and I sat down and asked if we could go further and not only cover our cost of expansion, but make money as well. It is a little easier since we sell apparel. Our brainstorming turned into the Collar Free boutique co-op concept: half office, half retail boutiques made of small stores and independent designers looking for a small economical storefront.

We are going to lease about 3000 sq. ft in downtown San Dieog and sublet to 5 or 6 independent designers for $800-1200 a month. We will be providing shared staff, advertising, and rent. We will help support the struggling retail industry, allow for our expansion with lower risk, and create another outlet to sell our inventory. We will be launching this venture Jan 2009. Here is the promotional creative.

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MySpace is worth between $3-20 Billion

Wow, you were right Mike.  I remember you telling me a little while back that Facebook was not profitable yet.  Only MySpace has been able to successfully monetize advertising in a complex social networking model.  Turns out Rupert investment of $580M was a maverick move to expand his media empire.  Although MySpace is still larger and more popular than Facebook, I enjoy using Facebook more.  To me Facebook is cleaner, more simple, and more to the point.  MySpace feels a bit cluttered, but it does have the advantage of being more customizable and media friendly.

Three years ago today, Rupert Murdoch bought MySpace and its parent company Intermix for $580 million. That turned out to be money well spent. The last time we ran the numbers, we figured that MySpace alone is worth between $3 billion and $20 billion, depending on how much you value each user. Fox Interactive Media (which is mostly MySpace) accounted for about $850 million in revenues last fiscal year (which ended in June), and is projected to hit $1 billion next year.

It was supposed to hit $1 billion this year, but never mind. Unlike other social networks, MySpace is actually making a profit. The company now employs 1,600 people worldwide, compared to 150 in October, 2005—more than a tenfold increase.

The social network has grown as well. MySpace now has 73 million unique visitors a month in the U.S., according to comScore, compared to 24 million three years ago. (Facebook has 41 million). That means MySpace reaches about 40 percent of the online population, compared to 14 percent three years ago. Those visitors, on average, spend 263 minutes a month each on the site, versus 83 minutes in 2005.

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Sources:
http://www.techcrunch.com/2008/10/15/three-years-later-buying-myspace-looks-like-one-of-murdochs-smartest-bets/

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CollarFree Profiled on KillerStartUps.com

I thought this was a great description of the company’s model, so I decided to record it.  According to what you were saying, the 4 phases they are planning:

1. Online Community Development
2. Retail Sales through boutiques
3. Opening up the website for corporate sales trials
4. Allowing designers to experiment with different mediums (shoes, hats, wallpaper, etc)

Collarfree.com – Fashion For Independent People

Collar Free is an online design and e-commerce platform for fashion. Designers submit fashionable t-shirt designs to Collar Free’s website where the public votes on their favorite designs and determines what the company produces. Designers are then paid a royalty for every item sold with their design. This model predicts demand and incentivizes winning designers to promote the company and create sales. Collar Free is expanding upon the traditional Threadless model with a simple head to head voting competition. This allows the site to host custom competitions and partner with other companies to engage their consumers. The site is using crowd sourcing not only for design review purposes, but allowing other companies to tap their design community as well. Lastly, Collar Free is allowing companies to contact the designers and request custom work. If you’re a designer and want to submit one of your very own designs, visit CollarFree.com and see how you can be a part of the competition.

In Their Own Words

Our goal is to Support Independent Artists. We include a custom story with each shirt sold, print the designers name on the inside of the shirt label, send out a press release for each designer, and pay the designer $200 + royalties on each shirt sold. We look at ourselves as a record label and we want to build the designers name with us and find that next big name.

Why it Might be a Killer

Collar Free is not just an internet company. Our goals are to build a $100 million brand. We are selling online and offline through existing retail outlets and we are stocking about 2 stores a week right now. We went the royalty route for designers because a shirt may sell 500 units online, but if a major retailer picks the design up it could sell 5000 and brand that designer nationally.

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Sources:

http://www.killerstartups.com/Site-Reviews/collarfree-com-fashion-for-independent-people

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TAKE LESSONS

So I went out to dinner 2 nights ago with  Mike Dawid, Justin Donald, Pat Dillon and Chris Waldron.  Chris was old school Vector before i was there, is great friends with all mentioned above, and lives here in SD.  He started working with a startup in downtown SD called http://www.takelessons.com 

I looked into their website and company info and it is pretty promising.  They are considering selling into specialized schools (which I do) to help them with lessons so he wants to get together to pick my brain.  I will find out everything I can about their bus. and get back with you on the details.

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Sonic Lighter iPhone App – good viral marketing case study

What a simple app is my first impression. But what makes Sonic Lighter impressive is the sophisticated viral marketing genius behind this appearingly simple little lighter app.  Unlike its competitors, it’s effectively leveraging location awareness and social networking/human team building instincts to create a bit of a phenomenon. The result is a viral spread.

As TechCrunch comments:

I wasn’t impressed: there are no less than ten different virtual lighter apps in iTunes, which is what I’d call a saturated market. And it gets better, because Sonic Lighter costs $.99. The official Zippo iphone app is free. The basic functionality of all of these is similar – you have a virtual lighter, you light it and when you move the iPhone the flame moves around. 

So, how did the creators make it stand out?

You can optionally share your location information with the application, and when you light it you show up on a virtual earth-like globe. France and Japan are going absolutely crazy with users, which you can see quite clearly from the virtual globe and the screenshot to the right. The longer a person keeps the lighter going (I have mine sitting here burning while I write this), the more”KiloJoules” you burn. And that helps contribute to the geographical teams that are sprouting up and trying to be the brightest on the globe. Oh, and you can blow on the microphone and extinguish the flame.

Sonic Lighters can also ignite other lighters on other iPhones, which is a fun party trick if you’ve had enough to drink. Pretty soon iPhone users in the room who don’t have the app will be happily paying $.99 based solely on the geek peer pressure.  See the video below:

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Sources:
http://www.techcrunch.com/2008/09/26/what-is-the-deal-with-this-stupid-lighter-iphone-app/

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Zivity – a new type of business model

After reading though info that you sent me on this company Mike, I felt that it was worth documenting.  The founder, Scott Bannister, is a very forward thinking entrepreneur, and the business model is different.  I really like it actually.  We should keep this in mind as we continue to develop our ideas.

Summary of Zivity:

Zivity, a San Francisco start-up founded in 2007, provides subscription-based entertainment and social networking for an 18 and over audience. Zivity’s initial focus is a community-powered showcase of professional-quality photography promoting female beauty and expression. The site is currently in private beta and available by invitation only. Invitations can be requested at https://beta.zivity.com/join. An open public launch is scheduled for 2009.

The hidden cost of free MySpace and Facebook, according to Banister, is censorship. “People can’t express themselves because advertisers want controls on content. Free is unfree,” he says. “We like to think of Zivity as the HBO of the Web.”

Summary of Business Model:

Zivity has a unique business model that pays models and photographers directly based on the number of user votes they receive. The more votes, the higher they go on the leaderboard and the more money they make. About 40% of gross revenue is given directly to the talent. They first launched at the TechCrunch40 Conference last Fall. The company raised $1 million in seed funding in August 2007.

Zivity has no advertising, just lots of photos of women posed nude or costumed on rooftops, hillsides and inside warehouses. Members vote their approval of a shot, and each vote earns the model 60 cents and the photographer 20. Members get five votes with their monthly subscription and can buy more. 

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Sources:
http://www.zivity.com
http://www.forbes.com/forbes/2008/0211/060.html
http://www.techcrunch.com/2008/01/16/as-expected-zivity-founder-does-the-full-monty/

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green mobile and fee earthscape app

earthscape app: http://www.148apps.com/app/288154060

funny green mobile artical (you will remember who the owner is):

This guy is a joke (the owner is the one in the cape)

 

Taken from a Maneater artical on green businesses in Columbia (look at his first year revenue):

Six alumni and a lot of cell phones

When former Missouri Students Association President Brian Laoruangroch finished his term in 2004, he had two things to deal with: broken cell phones and a little time on his hands. By meshing the two together, Laoruangroch emerged with Green Mobile, a company that combats the problem of having to repeatedly buy expensive phones by selling refurbished phones.

“I realized that cell phones are being sold on eBay for a lot cheaper,” he said. “That’s a market opportunity.”

Laoruangroch started his business on eBay.com during summer 2005 then moved the operation to downtown Columbia.

For the next six months, the business made more than $500,000 in revenue, selling nearly 5,000 phones. But Laoruangroch wanted to expand beyond an online business.

“I decided I wanted to take it to the next level,” he said.

He began to open stores, and from there, he secured five members from his fraternity, Pi Kappa Alpha. He held half of the ownership of the company in his hands, while the other five had the other half.

“When I chose those five people, I picked people I trusted, people that invested time,” Laoruangroch said. “They were the most active guys I knew.”

Laoruangroch and his five business partners opened their first Green Mobile retail kiosk in Columbia Mall and opened a second branch in Champaign, Ill., in September. Between these two stores, Laoruangroch has his vision set on success and expected a total revenue of about $750,000 within one year. He is endeavoring toward another six stores by the end of 2008 with a plan to go nationwide in the next two years.

“We all have diverse backgrounds,” he said. “We do everything ourselves, designing our own commercials, marketing, refurbishing, accounting, financing, everything, because we have the education and street smarts to do it.”

Laoruangroch said there were difficulties in the beginning, but after two years of mastering the business mindset and working with close friends, things are running smoothly.

“This is the one thing we’re all passionate about,” he said. “We’re living our dream right now. It’s not a bad deal.”

According to a piece written in the fall of 2007, they sell 1,000 phones per month on their website!

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WEbook great example of what we could do with IdeaFliTE

Here is the artical from TechCrunch:

WEbook has raised $5 million in funding. The round was led by WEbook’s new investor, Vertex Venture Capital and its existing backer, Greylock Partners Israel. The round also included investments from eight unnamed angel investors.

WEbook is an online platform where the site’s users — authors, writers, and even readers — collaborate to write books. Since its April 2008 launch, WEbook has added thousands of writers, editors, illustrators, and readers to its service and the site is currently hosting 15,000 book projects in genres ranging from short stories to non-fiction. Once a book is completed, it goes through a community vetting process where the users vote on books. Those that perform best during the process will be published by WEbook. WEbook shares 50 percent of the profit on sales with the author and the book’s major contributors as a fee for publishing the title.

So far, it looks like WEbook’s efforts are working. The site’s unique visitor count is on the rise, according to Compete data, and it witnessed 17 percent growth over the past month.

This is a great example of the crowdsourcing and how to make it profitable.  The impressive thing here is that they have obviously found a way to deal with the issue of intellectual property and somehow kept people from ripping off others ideas, even though they are contributing.  Of course ours would be a little more difficult because of the nature of startup ideas vs a printed book, but I like where they took it.  We will have to think about how to do something like this.  (its the collarfree of books)

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What is the most profitable company per employee?

This absolutely floored me when I saw it.  I never would have guessed that Nintendo generates the most profit per employee.  I would have guessed many other companies before I would have even though about Nintendo.  What a comeback they have made with the Wii.

According to calculations by the Financial Times, the average employee at Japanese video games maker Nintendo is on track to earn more for their company this year than the average Goldman Sachs employee did in 2007, the investment bank’s best ever year.  Nintendo also makes more per employee than internet group Google.

For an electronics company to make more per employee than a high-powered investment bank is exceptional, and the figures highlight how profitable Nintendo, a company with less than 3,000 permanent employees, has become after the success of its Wii and DS consoles. Before tax and before pay, the average Goldman employee generated $1.24m in profit last year, based on the company’s accounts.

But after Nintendo upgraded its earnings forecast recently, the FT estimates each staff member will produce more than $1.6m in profit this year.

$1.6 million in PROFIT per employee is phenominal. The next logical question is how do they do it?

Nintendo is able to make so much money with so few people because it relies on outsourcing.

All manufacturing of the Wii is outsourced, and even high-profile games such as Mario Party are developed externally, with oversight from Nintendo producers. In spite of their profitability, however, there is unlikely to be an outbreak of programmers driving Maseratis to work at Nintendo’s headquarters in the southern suburbs of Kyoto.

I’m sure there is more to it than this, but this is still a great lesson to keep in mind.  But wait, it gets even better.  How much would you expect an employee that generates $1.6M in profit to earn each year in salary?

Whereas at Goldman the mean employee walked away with compensation of $660,000 in 2007 – about half of the profit they generated – the average salary at Nintendo was just $90,900. The rest goes to share-holders.

Nintendo and its staff remain humble – another contrast to the ‘Masters of the Universe’ at big investment banks – in spite of the pressures of running a company that now has a market capitalisation of $64bn.

Absolutely incredible.

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Sources:
http://www.ft.com/cms/s/0/9d9624a4-8341-11dd-907e-000077b07658.html

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