There are many stories of how my 2 partners and I got to this point, which I’ll share later. For now, Gambit is a payments engine for social games and communities.

For a more in-depth review of Gambit, check out the Inside Facebook write up.

I am going back to sleep but check it out and let me know what you think.

Use this to integrate:

<a target="_new" href="http://twitter.com/home?status=[change this to the text and link you want]"><img alt="okdork.com rules" src="http://www.slideshare.net/images/twitter_sv.gif"/> Post to Twitter</a>

I would suggest adding Post to Twitter to your site if you have content that people want to share.

So they are giving me 2 free tickets and I said No to my mom and thought maybe 2 of my readers/friends may be interested. If you want a ticket and can really come, then leave a comment about your favorite flavor of ice cream before Friday 5pm PST. (Yes, that is a random ?)

They were VERY nice and gave us a 40% off coupon (‘okdork’) for anyone interested in attending on Nov 8th and 9th. Go Register >

Why should anyone read this book and what will they get out of it?

There are a couple of reasons to read this book…

First off, it’s entertaining as hell. I met a cast of guys that are way more fascinating than myself (and got my butt kicked by one of them), and to be able to tell their story is what this was all about for me. My story is cool, sure, but the guys I met have some pretty interesting tales to tell.

More importantly, though, I learned so much about what it takes to really make it. Not just with $25. Not just out of a homeless shelter. But in life, and, more specifically, in business. I was humbled to the N^th degree by the experiences I had, and I’m happy to carry those experiences with me now that I have more than $25. Not much has changed in my life. I still drive a beat up hooptie. I still go on cheap dates. My friendships are stronger today than they have ever been. And now, I don’t, by any means, take work ethic for granted. Or the strangers I meet every day. (If you only happen to pick up Scratch Beginnings at the bookstore for a few minutes, read “Job Hunting 101 with Professor Phil Coleman,” where Phil, a random homeless dude, teaches me – “Adam Shepard, the King of the American Dream” – how to get a job. My ego went for a ride, but I didn’t care. I’ll never forget meeting that guy.)

What was the most unexpected thing about starting from nothing?

The whole experience was way more difficult than I expected. I figured I would get off the train on Tuesday night, sleep under a bridge, get a job on Wednesday, and move into a weekly rental by Thursday or Friday.

And then I got off the train in the frickin’ ghetto and immediately saw that things weren’t going to go as I had planned. I quickly made my way to the shelter where I gathered my bearings and strategized what I needed to do to start working my way up.

What can entrepreneurs learn from your experiences?

The same rules still apply for me now as they did when I was walking down Rivers Ave. in North Charleston with a twenty and a five-spot in my back pocket. It’s always a hustle. And that’s what Scratch Beginnings is about, and that’s why I think so many people are able to relate to this story regardless of whether they have $25 or $25,000. When you’re ahead of the game in the world of entrepreneurship, you can either make the decisions to take your business to the next level OR you can squander your money to country club memberships and expensive trips just because, “Hey, I get to write it off anyway!” I’ve had friends whose businesses have flourished or failed because of what they do with their money. And that’s the same way it was for me in Scratch Beginnings.

The most interesting comment will get a free copy of the book.

I saw this in my inbox today and was quite impressed. MyYearbook.com added a mark as spam and and block myYearbook email in their email. This may seem strange for a site to add these links in their own email but it’s genius! Basically, ISPs (gmail, yahoo, etc…) look at the %age of people who hit the spam button and then reduce the likelihood future emails will get into the inbox. This way, means the ISP never know and the person will never receive an email from myYearbook again. Everyone wins:)

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Noah: “JP, I am broke, poor and hungry. Please can I get a discount.”
JP: “No.”
Noah: “Dang, why not”
JP: “Discounts mean you are pricing your thing too high. A discount would cheapen the quality and value of what I am providing.”
Noah: Mesmerized.

It got me thinking that some discounts are great cause it encourages you to buy or buy more. Sometimes I think people will buy / pay full-price anyways. As well, I think he has a great point that discounting means you are over-pricing your product and if people want a discount they aren’t appreciating what you offer. What do you think?

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Where do you start to begin or even understand health insurance for a start-up?

Good question? I emailed some friends and was recommended a “broker.” I don’t know about you but when I hear the word broker I automatically don’t like them cause they are a middleman adding more cost to something I want. However, in the health insurance field they don’t mark-up the plans at all. Sweet, so try to find a broker or if you need a recommendation please let me know.

Background on health insurance options:

HMO: This is Kaiser. More affordable but you have to wait. My brother is a resident there, say hi to Seth if you see him:)
PPO: Basically, you can go to any doctor in a network. A bit more pricey but you have more flexibility in who you get to see.
Vision: If you don’t have glasses/contacts I would recommend against this. As well, you can buy affordable contacts online for cheaper and just pay out of pocket for your check-up. The overall insurance cost for the year is greater than just out of pocket.
Dental: It is cheaper to NOT get this option and just pay for a cleanup when you need it. Unless you have bad teeth and need major surgery I would recommend against this. I would recommend brushing your teeth twice a day and using my fav, Tom’s Toothpaste:)
Catastrophic: A good option if you are Iron Man and/or in perfect health and just want to be covered if some crazy stuff goes down.

We ended up paying about $150 a month per person for health insurance. We have the company cover 50% (it is a tax write-off) and we each cover the rest.

Some of the other ways to find health insurance are to have your parents cover you if possible, go to the Blue Shield / Blue Cross websites or some entrepreneur should create a simple site for finding health insurance for individuals and/or small companies. If we were in Canada this would be so much more simple;)

Kayak.com, like.com, scribd.com (questionable).

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Your Marketing person is thinking: “Shit, I wrote that I do viral marketing on my resume and our site is not viral so what do I do now.”

Arbitrage. Huh? Is that French? No, but it’s a decent way of growing your site. If you know your value per user over some period of time you can just buy traffic for less than that. Example:

monthly active users = 10,000
monthly revenue = $15,000
value per user = $1.5

Now let’s have some fun arbitrage math:

cost per click = $.25 (you can buy from Google, Facebook, where ever)
% click conversion to user = 25%
cost per user = $1 (it takes 4 clicks times 25% conversion to get 1 user at $.25 / click)

At this point for every user you buy you are making $0.50 ($1.5-1). You should buy as much traffic as you can! Bottom line: If the cost to acquire user is < value per user over fixed period of time you should be doing this.

* this math does not include a lot of factors like decay (how long the user stays) and more…

There are many other growth solutions including the dirty word, “seo” which I may write about in the future, word of mouth campaigns, generic advertising buys and more…

We have done arbitrage with some our apps and it works out well at different points in time. Has anybody else had luck with it?

So how did Lefora get to 10,000 communities in just 3.5 months? I think it can be broken down into just 3 steps:

1. Solve a Problem
2. Develop alongside a real audience
3. Support the early community

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1. Solve a Problem
Research – Not just web stats, but go out and talk to potential customers. We talked to tons of communities and forums to learn their biggest pain points and how we could solve them.

2. Develop alongside a real audience
Sounds easy… and it is. We hit on multiple fronts, from directly inviting existing communities onto our software (it only takes a personal email), to SEOing the site for relevant keywords, to advertising our services for people looking to create a forum (we’re talking just $2-3 a day, no big ad budget), to acquiring a site that was going out of business – leveraging the branding they had left on their service (again this was on an extremely ‘low budget’). We did all this before ‘launching’ in the web2.0 blogosphere.

3. Support the early community
When you’re getting your first ‘real’ users but are still in ‘active’ development, it’s vital that you let them know there might be some kinks, but you are there to support them and need their feedback. We did this through a support forum, a ‘live chat’ widget, and personal emails. A live chat widget may be running on your desktop 8-10 hours a day, but early on, you’re only going to get interrupted for 15-30 min a day – and get some of the richest feedback and sales opportunities a website can offer.

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Our service didn’t require massive amounts of people to be on the network in order for it to be a sustainable service. It just had to provide tools for an existing or newly forming community, they didn’t care how many other ‘users’ or ‘friends’ were already on the site. Look how facebook started with such a small community (harvard), before jumping to other ivy league schools, before opening it up to all colleges.

Moving forward, the next wave of ‘social software’ is going to be services directed towards ‘communities’. From craft work communities to parenting to hiking to… Services that address the needs of communities will have many opportunities ahead.

Suggested Reading for any new startup: Steve Blank’s “The Four Steps to the Epiphany“.