If I had taken funding …

10 Mar
2008

We would have failed. Miserably.

As I emailed our in-house designer (the amazingly talented Elena of Design Disease) the fifth design for iBegin Source (since incarnation), it hit how much we had evolved since our launch. I had the original idea for iBegin in October 2005 (while showering of course). The entire idea behind iBegin Source hit me in October 2006. And the plans for harnessing that data for something bigger hit me in October 2007 (odd recurring theme eh!)

I was talking to my lead programmer, and he was very angry at the old startup he had worked at. They had burned through something like $6 million, and had recently launched something he had worked on. Except they had botched it. Badly. And he was railing how if they had spent the proper time it would have come out right.

I just shook my head and smiled.

When we had originally launched iBegin, I think about a dozen VCs came to us in the first 3 months or so. They all liked the idea of local social search, and wanted to expand on it. Quickly. Yelp was gaining steam, and with Judy’s Book and InsiderPages all growing too, they were convinced that untold amounts of money was to be made.

Thankfully, I had a philosophy, and I stuck with it.

And it became clear relatively quickly that the sales channel and the review channel did not mesh very well. A vice-versa catch-22 – if a business had good reviews, why bother advertising? If a business had bad reviews, why bother advertising?

By not funding and deciding to take my time, I was able to re-assess without having fire being breathed down my neck. Heck I even went on a one week vacation to clear my head.

And so iBegin Source came out. But we knew it wouldn’t make a big profit for a long time. We knew that it would take time to lay the groundwork to establish with potential customers. With potential partners. Not months, but years. And we had the luxury of not needing to meet annual forecasts as dictated by someone else. No need to bring immediate profit.

And boy am I thankful. Yes we have had our share of headaches. And yes sometimes its been nice to think “this would be so much easier with a couple million behind us.” But the reality is at the end of the day, the millions would not have made a difference. We would have been well on our way towards oblivion like the other review-based sites.

And we have much more up our sleeves. Our little ‘innovation’ house should be launching in the next 48 hours – nothing ground breaking, but interesting enough to maybe spark a few brain cells. And our long term plan is executing beautifully – even slightly faster than I had anticipated.

I love it when people cover companies that organically grew into something very notable. I hope to join those ranks in the next three years.

4 Responses to If I had taken funding …

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To take on or not to take on investors… at Ghost of Midnight

March 10th, 2008 at 8:53 pm

[...] Farooq writes an interesting piece today about not taking investment money for his local review site called iBegin Source.  He says, [...]

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Andre

March 11th, 2008 at 7:31 am

yay! You’re already successful, and the only way IBegin can go is up more and more. I know I always have my doubts but IBegin has come a long way since its conception and its all due to you and your passion, without it everyone would be lost.

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Dave

March 11th, 2008 at 10:38 am

I completely understand your position. I jumped onto the .COM in early 2000- quit the day job and started a startup. Almopst every day we heard about our competitors getting mega-deals from investors and VCs. Yet we made the decision to focus on actually building something instead of going the same route. A year later, every single “darling” company was either out of business or a ghost of their former glory.

Although it would still be a few years before we started turning a profit, we weren’t burning through gobs of money (since we never had gobs of money to begin with). When you’re flush with cash, you usually don’t worry much about being frugal. So when the cash runs out, you’re screwed because you don’t know what to do. But when you start out frugally, you know how to eek out every last cent and survive the lean times.

Of course, when we hit it big and become flush with cash, THEN we won’t know what to do! :)

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Ahmed

March 11th, 2008 at 7:54 pm

Indeed it forces us to be more agile.

I should say though that in terms of cash-flow we are positive, which makes breathing a lot more easier :)

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