Quitting My Start-up, To Start Something Bigger

June 22, 2010 – 9:07 pm | by Matt Ackerson

There are many reasons why I have decided to stop working on Blue Sky Local and move into an advisory role. The primary one was that I was not enjoying the journey from zero to something big (hopefully) any longer. I worked on Blue Sky Local for about 14 months.

The company made some money (and is still making money, scoring some recent big wins). But on the night that I made this decision I asked myself: if this business made $1 million tomorrow, literally, would I be any happier in running it? I asked myself this question to determine if I was simply in a slump or an ephemeral mood of some sort, but the answer was an easy “No, I would not be any happier, nor would I be any more passionate.” My passion for the business, I realized in the same instant, had stopped the moment I stopped building and designing the website. Getting up and selling door-to-door or over the phone to these different business owners, without that creative element at least mixed in in some way, made the process mundane and un-enjoyable.

I think many entrepreneurs are driven rather than passionate, just like I was in this case. Perhaps they started out with the right feeling and ideas, but somewhere along the way it became about something else, or maybe it always was something else. In many cases entrepreneurs are driven by money. To be driven solely by money is like chasing the wind, because there is never any amount that can satisfy your lust for it. On the other hand, to choose instead to be driven by core purpose and set of values, as I now turn to focus on, will be much fulfilling for the long run. Money is a necessary by-product of business, but should not be the priority. Revenue and profit should be the earned result of a service or product, which fill a need or solve a problem.

Get Customers Before You Build the Product

May 17, 2010 – 6:00 pm | by Matt Ackerson
action shot

One of my current clients for Blue Sky Local

If you’ve tried to build one or more businesses, this technique may be useful to you. It may seem counter intuitive to some but it is absolutely the best way to de-risk any start-up business model, but especially web-based business models.

If I could go back and do each of my business ventures over, this is the one thing I would do differently: I would get customers on board (ready to pay or paying upfront) first.

This is because, in part, if you build the product first and sell it to customer second, you’re likely to make more mistakes since the customer (the end-user) is not engaged in the development, thus it is less likely that what is built will meet all of his or her needs. A customer who is on board and paying from the start has a vested interest in making sure your product meets his or her needs.

For example, say I was interested in launching a Groupon copy-cat website for Long Island, NY. With this business model I would talk with local business owners and get at least a few dozen of them on board. To do this I might have to prepare a little slide show presentation (but building the entire service first is NOT essential!).

Simultaneously I would tell friends, family, and strangers through various online and offline means about the concept and convince them to hand over their email address for great deals. After I’d reached a sufficient number of signups for both businesses and customers, THEN I would build the web product and launch because at that point I would know almost certainly that I would be making money right out of the gate.

What if you cannot get customers on board in advance? Then don’t build the business. It’s that simple.

There may be some skeptics out there who might reply to this by paraphrasing what Steve Jobs said, which is sometimes the customer doesn’t know what he or she wants until you build the damn thing and give it to them to try. This is true to an extent, so there will always be some sort of up front investment but it in most cases it will not require that you exceed the scope of creating some design mockups or a short power point (as in the example above).

Businesses fail because they fail to make sales. They fail to make sales because there’s no market for their product.

Sell first, not second.

How I will Increase My Current Revenue Stream

April 10, 2010 – 2:49 am | by Matt Ackerson

Untitled-2 copy

Getting rich takes a lot of work. Many times I’ve found myself becoming frustrated, depressed, indecisive, or stressed–and then at other times the complete opposite.

If you’ve felt this it is important to remind yourself that the start-up process is not worth this sort of angst. Try instead focusing your energies, without emotion, on defining the problems at hand. The answers will come. (Update: After re-reading this post, I realized that the answers & peace-of-mind I was looking for came to me by the time I was done writing this article!)

Read the rest of this entry »

How to Setup a Scalable Website Sales System

March 27, 2010 – 11:22 am | by Matt Ackerson

The Way to Paradise

The dream is to start and own a business that runs itself. This is not unrealistic. However, it takes a bit of work and hustle to get there. Here are the first 3 steps you should take on the road to achieving this dream:

(Note: This How-To post assumes that you already have a product or service to sell.)

1) Create linear persuasion paths that end in a purchase request.

The diagram below shows a standard and effective persuasion path template. It is the same one I use on my restaurant marketing website, Blue Sky Local.

persuasion path

2) Know your customer acquisition cost.

In order to establish a baseline acquisition cost, I recommend that you start by using Google Adwords to drive traffic to your site and Google Analytics to then gather quantitative data. Invest some time into researching which keywords are best to bid on. Find competitor websites to yours and research which keywords they are bidding on. KeywordSpy.com may be useful for this.

When it comes to Google Analytics, start by setting up 2 goals. First, set up one to measure the sales funnel, from the time the prospect enter the site to when reach the pricing and sign-up page. In your second goal, measure actual conversions, from the sign-up page to a key landing page that follows a purchase.


Once you are able to drive at least 2-3 sales conversions through this method, use the following formula to understand how much it will cost you to acquire each new customer:

Customer Acquisition Cost = [ (Number of Clicks on Ad) * (Average Cost-Per-Click) ] / Number of Sales Conversions

3) Ensure that the web product meets customer needs.

Continuously test and optimize the product or service along with the persuasion path. To make smart decisions, analyze website data as well as gathered qualitative feedback from customers on what they like and don’t like.

The latter is very important to ensuring product market fit. Place a contact phone number and contact form on the site where customers can clearly see it and therefore easily reach you with questions (which may indicate usability issues) or feature requests (make sure you understand WHY they want the feature before you implement).

Easier Said than Done

All of this is easier said than done because there is one key assumption here: you need to be selling a product that fulfills a need or solves a problem. If you aren’t doing at least that, then implementing the system above will not bear fruit. In future posts I will talk more about this issue.

What are your thoughts on this?

1 Critical Design Mistake to Avoid when Starting Your Web Business

February 28, 2010 – 4:37 pm | by Matt Ackerson


We all know about the importance of conveying our ideas in effectively, especially in business when it comes to telling prospective customers what it is we’re selling and why they consider buying from us. If you’re like me, you think this is true, but you might be terribly wrong when it comes to implementation.

For example, about a month and a half ago I was out at a small party. There was a laptop that everyone was using and since Blue Sky Local came up in conversation, so I showed the website to a couple of friends. For each person who I showed the website to, he would stare at the site for a minute or two, then look up at me and say, “Ok… neat…” or “Ok, I don’t get it, like… what does your business do?” This should have been a red flag at the time, I rationalized and ignored it for several weeks. Finally, after speaking with an entrepreneur friend of mine last week, Matt Turcotte, I was re-reminded of of this feedback.


Now that I am proposing a redesign of the website (see above), I’ve realized the mistake I’ve made—that the current design and text on the site simply hasn’t conveyed the key points of our service in a simple and succinct manner so that anyone, including my mother (who is definitely not a technology person) or friends (who are not in our target market), will quickly “get it.”

The assumption I’m making here is that if they don’t understand what my business is in 30 seconds or less, how can I expect prospective clients to understand it? It’s a reasonable assumption. If your customers do not easily comprehend what it is you’re selling and why it’s valuable, they are much less likely to buy from you.

My mistake was not keeping this at the fore-front of my mind and not testing the site design more frequently with friends and family members earlier on. In addition, my desire was to convey what was “cool” about our service rather than why it is useful to potential clients.

In Review:

  • When designing your website, put aside any personal desire you may have to explain why your product is awesome
  • Ask your current customers or users what they find value about the service
  • Test understanding of the website’s design with people outside of your target market (this may seem counter intuitive, but it’s important)
  • Don’t ignore the feedback you get—take it to heart and translate it into design changes!

All Aboard the M.E.S.S. Express!

February 19, 2010 – 5:22 pm | by Matt Ackerson


Note: I am writing this post in support of the MESS Express company and my friend Matt Kochman. My hope is that after reading the short article below you will join me in supporting his business and the company’s mission.

Matt’s goal is to raise $6,500 in order to attend a business incubator for social enterprise called the Unreasonable Institute. Any contribution amount would help to achieve this goal. Only the first 25 of the 33 finalists to raise the necessary funds will be selected to attend the incubator program for 10 weeks, where each entrepreneur will receive coaching and numerous networking opportunities to expand their start-up companies.

I’ve known Matt Kochman for over a year now. Him and I were classmates at Cornell when he started his uniquely branded student transportation business, M.E.S.S. Express LLC. “M.E.S.S.” stands for Moving Every Student Safely, but it’s also a joke, since college kids can be a “mess” after partying or staying out too late. MESS Express helps college students to avoid having to make what can be a fatal decision: to drive home while intoxicated.The company seeks to help the 2.6 million college students who make this poor decision every year by transporting them safely across campus via group busing and taxi services. From a high level point of view, it’s best described as a for-profit social advocacy group.

Last year the company grew quickly, and generated six figures in revenue providing busing services for students at 2 college campuses. The company is profitable and already preparing to expand to Syracuse later this year.

In addition, Matt has begun pushing forward on the taxi cab front, which he believes offers a more scalable expansion opportunity for growing the business and the brand. Students or their parents will be able to purchase pre-paid taxi cards which the student can use at their discretion throughout the semester to catch a ride back to their dorm or apartment. Payment will be simple: just swipe your card through a card reader located inside the taxi–tip is included.

Matt’s business model works and his push into implementing the pre-paid taxi cards shows a strong desire to scale the company into something much bigger. Some potential investors may criticize the business for having little that is proprietary. To the contrary, the partnership deals that MESS Express is cutting with local transportation companies, student organizations, and universities provides a significant barrier to any potential competitor looking to copy this model. In addition, the brand is unique, perfectly humorous and serious at the same time, as well as trademarked.

Matt and the MESS Express team are seeking your support in order to help them further their mission to provide safe and timely transportation for every college student across the country. Please consider investing in the company and the cause today.

Persistently Positive: Character Lessons from My Friend, Kerry Motelson

November 13, 2009 – 9:11 pm | by Matt Ackerson

kerry motelsonKerry and I have been friends since our junior year in college, over two years now. The first time I can recall meeting Kerry, I remember feeling sort of amateurish in her presence because I thought at first that she had the hurried air of a graduate student or an aspiring PhD. I had to hustle alongside her in order to keep up and make plans to talk again. From that first encounter she was kind, enthusiastic, and, above all, persistently positive.

They say you can tell when a person is truly smiling because the muscles around their eyes are engaged, crinkled, making them squint from the happiness radiating from their smile below. Kerry’s smile is always true, especially from that first time that I met her, wherein she knew nothing about me.

Kerry loves people, and that is why anyone who has met her is instantly drawn into the desire to know her better. People are attracted to Kerry because she is able to see the good in anyone upon first meeting them. She is confident in her belief in that goodness and everyone she meets is no doubt validated and grateful because of it.

In classes that she and I took together, I couldn’t help but notice how Kerry excelled. When she answered a Professor’s question, the students around me would scrunch up their eyebrows into strange formations of incredulity because the conscious, knowledgeable manner with which she answered was stupefying to them.

Kerry worked hard, much more diligently than the rest of us and that’s why she always knew the answer. Kerry is too modest to bring it up, but she did in fact graduate a year ahead of our class as valedictorian, and then went on to get her masters in a single year. I should also mention that she did this while working three jobs simultaneously. A mutual friend of ours was once baffled by the site of her open notebook planner because every portion of her day was crammed with meetings and scheduled down the minute… for the next two weeks.

There are a few key character lessons that I’ve learned from Kerry. First of all, you are only limited to what you can achieve in so much as you believe that there is a limit. “What drives you, Kerry?” I once asked. “Always raising the bar,” she responded.


Second, the rule of positive attraction applies in life; this means that if you know what you want, you believe in yourself, and you act with the greatest passion, enthusiasm, and work ethic toward that goal, you will achieve it. I consider myself a very capable person, but there were a few times that I needed someone to lean on. At times like those Kerry would listen and remind me of this principle, even though she probably was not explicitly aware of it at the time.

Third, and finally, everyone has potential. As much as you believe in your own ability, you must believe in the ability of others. People will fail, they will make mistakes, and they will let you down. However one must realize that the best talent in the world is not innate, but is instead developed over time and with practice.

Kerry has repeatedly taught me these lessons over the last two years. They continue to inspire me to be a better entrepreneur and a better person. If you never have the opportunity to meet Kerry, I hope you will at least take these same lessons to heart.

5 Questions to Ask Yourself about Your Business Idea (Before Investing)

October 29, 2009 – 1:42 pm | by Matt Ackerson

roll the dice

Have you ever had a business idea? If you’re like most people, you’ll have at least a few ideas for possible businesses in your lifetime. But how would you know if your business idea is any good? The following five questions to ask yourself before investing your time and money should help guide you to the answer:

How does my business make money?

Money is the lifeblood of your business. Don’t get all idealistic on me and start talking about community and users and growth and puppies and kittens. I don’t care and more importantly your customers, the people who pay the bills, won’t care. Explain how your business is going to make money and keep it simple. What will be valuable about what your company makes or does that will motivate a customer to buy from you? Customers will likely buy from you if you are meeting a need or solving a problem.

For example, “We sell state of the art podcasting software that records sound crisper and clearer than anything else on the market, at only $10 per download,” or “We let visitors to our site send large media files over the internet for free, and charge a premium fee for sending files larger than 2 Gigabytes.”

How soon can the business start making money?

The easier it is for your business to start making money sooner rather than later, the more likely it will survive long enough to grow and thrive. Starting a consulting business can be great because you can start making money immediately and start up costs a very low, if any.

For instanceI’ve done a few website design jobs in the past to pull in some extra cash. Those opportunities came from acquaintances, friends, or networking. If you’re interested in making millions and building a business that’s larger than just you, this can be a poor model for entrepreneurial success, but it will pay the bills.

If you’re not going to start a consulting business, but say instead, a web-based business, how soon can you start making money from your idea? Well let’s see, you’ll need the website, a payment solution, traffic to the site, oh yeah and customers who are motivated to buy! It’s a similar story with a brick and mortar type of business, though the fixed costs and start-up costs will be significantly larger.

Building the core operating components of your business takes time, and during that time money is flowing out of your bank account without any flowing in. The sooner you get to be cashflow positive, the more likely you’ll succeed in the long run.

How risky is it?

The level of risk you will undertake in bringing your business idea to market is directly correlated, unfortunately, to how unique it is and second, how crowded the market space is. There is an inverted relationship between uniqueness and how crowded the market space is (e.g. the more unique your concept, the less competition you have to deal with, but also the less likely you can be confident that it will succeed).

To use my own start-up as an example, Bluesky Local is marketed as a unique service with respect to it’s focus on helping restaurants to fight the negative sales effects of weather, seasons, and time with automated coupon marketing. This is risky because there are no other examples of successful companies trying to solve the specific problem we are and in a similar manner that we are proposing to solve it.

Why will your customers care?

This deals with your value proposition. By how much is your service better, faster, and cheaper than what’s already on the market? Does your product of service help your customers to make money or save money? How much will they make or save with your service, what are the specific numbers?

In answering this question you need to understand that creating a successful product requires a focus and understanding of what the customer wants. Most of the time customers don’t know what they want until you give it to them and say, “Here, use this.”

As an entrepreneur it is your job is understand your customer’s needs and desires, and then feed him a product or service that fits into those needs like a perfect puzzle piece.

Why will it fail?

This is a critical question and one that is difficult to answer objective (because of your passion for the idea) and before you execute a business plan (sometimes crazy ideas will work, life can be unpredictable).

The best place to start in answering this question is to look at the key assumptions needed in order for your business model to work. Again I will take Bluesky Local as the example here. In order to work Bluesky Local needs:

  1. Restaurant owners or managers to log in to our website to use the service, such as sending out promotions manually, scheduling them for a later date, or automating them to happen on a regular basis. If the business owner doesn’t do at least this, than they will see no results because no coupon promotions will be sent.
  2. The restaurant needs a customer contact list to distribute it’s promotions to, and for best results it needs to be permission-based. If they don’t have or work to build a customer list, then they will see no benefits from the service.
  3. Customers receiving the coupons will be motivated to redeem the offers.

After you understand you core assumptions you want to work to minimize them as much as possible. The assumptions I listed above are already minimized (and there used to be more core assumptions than that). To further minimize them however we have (or might in the future) take the following steps:

  1. Provide suggested coupon offers that work to minimize typing and thinking; rig the service to automatically send the best possible coupon at the best time without any additional input from the business owner.
  2. Allow business owners to import an existing customer list that they might have; implement viral features that allow them to build a customer list extremely quickly through friendly, web-based referrals; leverage an distribution they might already have, such as through Facebook.
  3. Make it easier for customers to redeem by developing an IPhone or Android app to display the coupons so they don’t have to print the coupons; send the coupons in the form of text messages to customers cellphones.

By minimizing your model’s core assumptions you increase the likelihood of success.

The Bottom-Line

Most business ideas will fail. By asking yourself these tough questions upfront you will maximize your chances of success. In the end if you’re serious about being an entrepreneur, you’re going ot have to take a risk somewhere and you’re going to have to work hard to achieve your business goals. Fellow entrepreneurs like myself as happy to lend a hand along the way, so don’t be shy to ask for help or advice.

Are there any other questions entrepreneurs should be asking themselves before they invest?

The Symphany of Entrepreneurship

October 27, 2009 – 9:41 am | by Matt Ackerson

Successful start-ups are like an orchestra. You ultimately aspire to have an organized group of people with varying skills working together to make something beautiful and valuable (an end product or service). Meanwhile you, the founder, stand at the podium and conduct the organization’s beat and tempo during the performance.

I look at companies like Great Black Speakers and I think there is no better analogy than this. GBA was founded by a friend of mine named Lawrence Watkins. The company is profitable and has therefore reached “cruising altitude” to take a phrase from Paul Graham‘s latest essay.

Lawrence would be the first to tell you that before you he was able to reach the point where he is today as the conductor of his business, he had to start out by learning to play many instruments and fill multiple roles within the company.
Read the rest of this entry »

The Bootstrapped, Scalable Start-up: Charlie vs. Ted (Part II)

October 24, 2009 – 10:27 pm | by Matt Ackerson

When we last left off, Charlie and Ted were pushing hard to get their start-ups off the ground. Both are now about 5 months out of the gate. Charlie has 4 customers and is charging $75 per Digi-Widget, while Ted has 10 customers and is charging $100 per Digi-Widget. Both believe that the service is at a point where they can begin to scale the service.

Chapter 3: Growing Pains


  1. Kicks it up fundraising efforts a notch, goes to Angels and a few VC’s to make presentations on why they should invest in his Digi-Widgets company.
    Read the rest of this entry »