In constantly learning and looking for better ways to get going and better define which direction to go. I’ve found Mark Cuban’s blog to be an amazing resource. He talks about his experiences getting started, and more importantly the attitude he had to start successfully. That is exactly what motivates me to keep learning, keep growing, and keep dreaming.

In a recent post, Mark re-posted and older piece that he wrote on the importance and value of sweat equity:

The best businesses in recent entrepreneurial history are those that have been started with little or no money. Dell Computer, MicroSoft, Apple, HP and tens of thousands of others started in dorm rooms, tiny offices or garages. There weren’t 100 page long business plans. In all of my businesses, I started by putting together spreadsheets of my expenses, which allowed me to calculate how much revenue I needed to break even and keep the lights on in my office and my apartment. I wrote overviews of what I was selling, why I thought the business made sense, an overview of my competition and why my product and/or service would be important to my customers, and why they should buy or use it. All of it on a piece of yellow paper or in a word processing file, and none of it cost me more than the diet soda I was drinking while I was writing it up.

So, why is this encouraging ? Because right now I don’t have a lot of capital, I don’t have a lot of time to go hunt down VC’s or funding, but I do have the motivation to come home, every night from a full days work and continue, on MY work. I work on ActionsTalk to continue to build a reputation within the startup community. I blog here to educate myself and communicate with a vibrant and intelligent community of readers. And now, with the formation of SocialDreamium I’ll work to help clients utilize the social web to drive improvements in their customer relationships and their bottom line.

But I know that won’t be enough. I want to develop tools that businesses can use to make social media easier and more valuable. I want to be able to teach small businesses to utilize the social web using my tools. This web thing isn’t that tough but it does have to be taught and demystified for the masses, I want to lead that charge. The only problem; those tools aren’t developed (yet). So, if you have or know where I can find the resources to get those tools developed please let me know. I want to build this from the ground up. I want to utilize the free web and drive huge profit for clients. Will you help me do that?

I took three words away from Cubans post and they are Prepare Wait Pounce. Saving money and learning/studying are the first part of getting rich. The old saying is true that, “you need money to make money”so first start saving your money as much as possible. Eat only cereal, split one meal into 3, drink less (or no) beer…whatever it takes to SAVE MONEY. While you’re doing that study everything you can about your business. Be relentless with this…Cuban talks about having the “knowledge advantage” this is where good old ‘hustle’ can get you ahead of your competition. That’s the prepare part.

Next, something Cuban didn’t touch on to much, the WAIT. Opportunities are going to come and go but great opportunities are much more seldom. If you’re always looking for opportunities you’ll probably fall into the mouse trap. Wait for great opportunities to show themselves.

(clear throat…opportunity?)

The last part, and the most fun part is this…the Pounce. But the key to the pounce is that someone who is not prepared cannot try to pounce. You have to prepare like crazy and wait for the pounce opportunity. But for those who have take a hard look around, because it may be here.

Now, if you’re in my position it is likely that you don’t have the bank role and are not yet prepared to pounce. So, enjoy the preparation. The working hard, studying, reading, blogging, and putting yourself in good places at good times is the fun part. At least for me. The impatience that goes along with this process is all part of it. My experience with the impatience was eerily similar to Cubans. He talked about how he used to drive around looking at the big houses and nice cars and wonder what “they” do for a living…let that feeling feed the fire!

The toughest part is the saving part. You have to continually deny the desire to live it up now. Live cheap, be broke, save cash…and be ready. One way to save better is to not dump your money into the stock market only to watch if fade away when times get “unexpectedly” tough.

Cuban was asked in an interview in 2004, “Do you have any general saving/investing advice for young people?”

Cubans response:

Put it in the bank. The idiots that tell you to put your money in the market because eventually it will go up need to tell you that because they are trying to sell you something. The stock market is probably the worst investment vehicle out there. If you won’t put your money in the bank, NEVER put your money in something where you don’t have an information advantage. Why invest your money in something because a broker told you to? If the broker had a clue, he/she wouldn’t be a broker, they would be on a beach somewhere.

Prepare Wait Pounce

Here are my summaries and thoughts on many of the opinions I’ve followed over the past few weeks. I’ve tried something new and color coded the first few words to get a scorecard on how things are/will be fore startups & VC.

-Big banks will/have disappeared and small banks who are more willing to work on a small scale projects to find quality investments will fund VCs and startups

-The IPO space is already crawling or stopped. Now as large firms lose capital the M&A space will join the IPO space at a stand still.

-Web and technology markets are probably 2 of the only bright spots in today’s global economy. This is what will bring us out of such a mess. Transparency into these markets will only exist with improvements in technology.

-If the IPO drought continues, eventually LPs will realize the VC model/system is not working properly and it will be much tougher for VCs to get that money. This will make funds smaller and thus less startups will be funded.

-In the “slumping market” VC will become introspective focusing on current portfolio much more than finding new investments.

-Funds that have already been raised by VCs can no longer be counted on. As the LPs are losing money elsewhere in the markets one of the first investments they will renig on are those that are promised but not paid, VC firms.
-this will hurt small funds first
-this will hurt LPs relationships with VCs so the big ones will be safer

-Startups who have VC backing already should be fine but will have to prove themselves to stay on the fun. Startups without VC funding will have to learn the (some what lost) art of bootstrapping. ALL STARTUPS will have to get lean, focus, find PROFIT$ now.

-Strong startups will continue to get funded. The cream of the crop will rise to the top because VC are being more careful. Survive and Thrive!

*influences of thought from @fredwilson, @infoarbitrage, @howardlindzon, Mark Cuban, @JasonCalacanis, @ericolson

The major financial institutions in the US have bad assets on their balance sheets. These bad assets were absorbing many of the good assets on their balance sheets and thus negating any potential profits. These institutions would have been fine (wouldn’t have gotten caught) and could have survived if people and the markets weren’t involved, but thankfully they are! As the markets realized the affect of these bad assets on the financial institutions they lost all confidence, got scared and wanted their money back. As the markets began to panic, due to lack of confidence, the cash was yanked (bank run) from the banks and thus many of them failed.

Then the US Government decided that it needed to act to prevent a complete collapse. Enter $700B from the government in the form a bailout. Basically, what will happen is that the government will take the bad assets off of the balance sheets of the financial institutions and consolidate them on one balance sheet, the governments. As these bad assets are consolidated and quarantined the confidence in the banks will “hopefully” return and people will lend money to banks again, then hopefully back to business as usual.

So the bailout should not be looked at as a handout. It is more of a transfer of assets (loans that “should be” paid off) from banks to government. Luckily, it looks as though the bailout plan as proposed today will stagger the investments in these bad assets. This will hopefully work similar to a venture investment in the sense that they are tip-toeing into the water and not diving in. If they do this they will slowly vs. abruptly expose themselves to the risk that will come along with these bad assets.

At this point most people I’ve talked to would say that the bailout is needed and inevitable but the process by which it occurs is critical to its success. It is also generally accepted that the bailout alone will not be enough. It will take a significant effort from congress to look at the regulations that go into how money is lent in the future. Mark Cuban wrote on his blog that, “It should immediately become illegal for anyone or any company to advertise the sale of individual assets sold to non qualified investors.” That should give you an idea of how severe the regulatory changes need to be in order to protect us from future credit crisis.

JC: Who’s the entrepreneur you respect most? Current or past?

MC: I guess Bill Gates. Larry Ellison I respect. You know, old school entrepreneurs, it was just diffferent. There was a different crede. I used to want to be profitable every month, before going IPO. But then later I accepted running at a loss. From the Netscape moving on, that’s what has happened since — the whole idea now is to get pageviews and then figure out a revenue model. I think entrepreneurs these days have been cheated because for them, its not about understanding how to make money. But when the money goes dry, you’re shit out of luck. When the bubble burst, 9 out of 10 businesses went away. With weblogs, our mantra was sales cures all. We used to talk about bottom line, not top line. It always came down to what you’re putting into your pocket. I want a cash-in-pocket strategy not an exit strategy.When you walk down these halls, you dont have people making money yet.