Exactly this

by Dave Gooden on 12/18/2011

Bootstrappers: How To Say “No”

by Dave Gooden on 12/3/2011

Hi [VC Backed Director of Sales],

I have enjoyed our conversations and I want to thank you for putting this proposal together for us. I discussed it with my business partner today, and while we can see the potential value in your product, we have to decline at this time.

I spent some time on xxxxxx.com this evening and I have to tell you that your team has put together a great site with a ton of useful and impressive information. If you ever want to team up with a “case study/white paper” client – we would be very interested in working something out with you. We will be launching a redesigned LakePlace.com (5.0 “New Dawn”) in early 2012 and it would be great to work with you and your team on a creative, win-win collaboration.

In other words…If you are ever looking for a guinea pig to provide you with 100% transparent feedback and statistics, we would probably be a good candidate. We have statistics (visits/page views/leads/closings/revenue) going back quite some time…it could make for an interesting case study to see how xxxxxx’s products improve LakePlace.com’s bottom line over a 12-24 month period.

It is obvious that xxxxxx is going to be a huge success (and we will probably be kicking ourselves in the arse a year or two from now) but LakePlace.com is a bootstrapped company entering a growth phase and our immediate plans require us to be very selective with our limited resources.

We want you to know that we appreciate your proposal and we wish you and xxxxxx nothing but the best moving forward. If you are ever looking for a case study candidate – please keep LakePlace.com in mind – we would love to work with you.

Best,

Dave Gooden
LakePlace.com
xxxxx@lakeplace.com
612-366-4457
612-866-2541 fax
http://www.lakeplace.com

cc: Cameron Henkel

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Follow me on Twitter: @davegooden

Connect with me on LinkedIn: Dave Gooden

Side Projects

by Dave Gooden on 11/10/2011

Some guys like to tinker with cars and motorcycles. I like to tinker with websites. In 2009 I created a real estate review website covering Beverly Hills real estate over a weekend. Technology wise, it’s just a w3c compliant homepage with a wordpress blog attached to it…but I am pretty happy with the design. To me, it looks and feels like Beverly Hills. Every now and then I will play with some SEO ideas on this site to see if my inclinations are correct – if it works great, if it fails – no big deal. This site goes after some highly competitive keywords (any real estate related keywords are highly competitive) and I am excited to see it doing pretty well in the SERPS.

Longevity is one of the most important factors in high rankings. Updates also play a big part, but constant updates are not necessary. I found that if this site starts slipping, I simply have to post another review to pull it back up.

Anyway, this post is just a quick rant and another example of me playing with some SEO ideas (notice the anchor text above). Who knows, once I complete my mission to make my current company (at least) 500 people strong, I may just have to move out to Beverly Hills and sell some real estate. If things progress like I think they will, I should be in a pretty good position to do so.

What a Bootstrapper’s Pre-Launch Homepage Should Look Like

by Dave Gooden on 10/2/2011

You have very little money. check.
You have very few (if any) connections. check.
You have no publicized exits. check.
No one (that matters) knows who you are. check.

If you agree with 2 or more points above, your pre-launch homepage should look like this: http://commercialzip.com/

Clean HTML and fast loading.
W3C compliant.
800-1,600 (on subject) words.
On-page SEO (page title, meta description, meta keywords, h1).
*Add additional content as time permits.

Some notes:
SEO is our most powerful tool. Learn it.
We should launch this page the day we decide to go “all-in” on our idea…before we start building our app.
Email sign up pages don’t help us, they are for those with no check marks.
Build this page for all of your ideas, and it will be waiting (and working) for you until you are ready.

This is the first of a series of short posts I am going to write about launching a bootstrapped startup. I plan on discussing everything from simple SEO, to launch, to hiring and firing, to mergers and acquisitions.

Follow me on twitter: @davegooden
Connect with me on Linkedin: Dave Gooden

How AirBnB Became a Billion Dollar Company

by Dave Gooden on 05/31/2011

Disclosure 1: I work in the vacation rental industry. While my company specializes in regional, recreational vacation homes, not metro rentals – there is an obvious conflict.

Disclosure 2: This is an opinion piece. This post is just my opinion along with some evidence to support it. Judge for yourself.

Yesterday AirBnB announced that they raised $100M at a $1B valuation. This is a huge, huge accomplishment – but a lot of entrepreneurs are probably asking how they did it. Was it their awesome design? Excellent idea? Was it their uncanny business acumen? Just dumb luck?

My Answer: Craigslist Spam!

I believe AirBnB used multiple gmail accounts to spam craigslist and grow their site to a one billion dollar valuation.

Back story: A year and a half or so ago I was looking into the amazing growth of AirBnB. As disclosed above, I work in the vacation rental sector and when a competing company comes on my radar, I always do my due diligence. In my AirBnB research, I didn’t find great SEO results or a gazillion followers on Twitter or any massive advertising spends on Google or Facebook. I looked everywhere but I couldn’t find any rational or traditional reasons for this type of growth. All of these AirBnB users can’t be coming from tech blogs, can they? Word of mouth? I didn’t think so. After thinking on it for a day or two, only one possible answer popped into my head: “These guys are black hats!”

Following my hunch, I started snooping around the place that all good black hats go to make money and get free traffic – craigslist. Craigslist is one of the few sites at massive scale that are still easily gamed by talented and not-so-talented black hat marketers. It is a literal gold mine for black hats that learn how to exploit its millions of users and curtail its terms of service. How do I know this? I was once a black hat myself. It isn’t something I am proud of – but it was a very important and very educational part of my journey (I will discuss it in a later post).

Please remember, I am not judging anyone here, I am just reporting my findings because I believe it will help other entrepreneurs.

Back to my hunch. To prove my theory I needed to setup a “mouse trap” on craigslist, so I posted a few vacation rentals using craigslist’s hidden (anonymous) email address option and I made sure to setup the ads to clearly state that I do NOT want emails from commercial interests. A couple of hours later – BOOM! As expected, I received an email inquiry from one of my cl listings…but it wasn’t from AirBnB. The email I received was from a “young lady” telling me about the upside of AirBnB.com (growing site, growing traffic, etc..) and how she really liked my property and wanted me to check out the site. She was nice enough to included a direct link with no tracking code to AirBnB.com’s homepage. I was 99% sure that the email proved my theory and uncovered AirBnB’s black hat supply-side growth strategy…but I needed to be 100% sure.

Again, the email I received was from “girlsname04@gmail.com,” not AirBnB. Maybe she was just a girl that was totally excited about AirBnB and I didn’t uncover anything. There was only one way to find out so I decided to push my “investigation” to the next level. It was time to dig into the closet and pull out my old, faded, dusty black hat. It still fit.

I spent the next weekend building a new website, rounded up some black hat software (craigslist email harvester, mass mailer) and emulated the marketing initiative that I believed AirBnB was using (elementary stuff).

After harvesting email addresses (I only grabbed real email addresses, not anonymous craigslist addresses) I did one email blast to people that were advertising vacation rentals on craigslist. I skipped over the other categories that are directly related to AirBnB’s business model because they didn’t fit with the test site I built. My results: 1,000+ vacation rental owners signed up and listed their properties on my test site.

Now that I had 1,000 new members, I took it upon myself to do them a favor and advertise their vacation rentals on craigslist. The first week I added one (1) listing to craigslist and received the following email within 12 hours:

Week two I upped the ante and advertised two (2) listings on craigslist. I received the following emails:

Week three, for good measure, I threw one (1) more ad up on craigslist and received the following emails:

My findings: After posting four ads on craigslist in three weeks, I received five identical emails from two young ladies who are raving fans of AirBnB and spend their days emailing craigslist advertisers.

When you scale a black hat operation like this you could easily reach tens of thousands of highly targeted people per day…and quickly gain 60,000 members on the supply-side, which again, is the hardest and most important part of growing a market place. I am pretty sure that AirBnB isn’t the only company that has used this strategy/technique, but I think they are the first to turn it into a one hundred million dollar investment at a one billion dollar valuation.

I know that by expressing my opinions here I am exposing what is now a billion dollar company (we are talking YouTube numbers here)…and I might piss off some powerful people by sharing my beliefs. I am shedding light on this information only because I believe it will help other entrepreneurs figure out what’s right and what’s wrong when they are at the early stages of growing their company. Some very famous investors have alluded to the fact that they look for a dangerous streak in the entrepreneurs they invest in…and while those investors will never come out and tell you what they mean, this kind of thing is probably what they mean.

Lastly, I am not saying that these black hat methods are the only thing that led to their success. I believe this strategy played a vital role in the growth of AirBnB, but these guys are obviously very smart and they work their asses off, too.

Edit: I removed the domain name and url of the test website. It has been dormant for more than a year. It was a weekend project that offered free listings and no advertisements.

This has gotten a lot bigger than I expected or wanted. My intention was to pull back the curtain on a successful startup and give some other entrepreneurs a sneak peak at the play book they were using. That’s it.

On twitter: @davegooden

Added 6/15/2011

OK. Since this story has finally died down, I am going to do what any smart marketer would do…take advantage of the incoming one-way love this article received. Let’s start with Dane Arthur Real Estate. Followed by Canadian Lakeshore Property.

If you are interested in what I do, I run a lake property website and also work with land for sale. My company recently opened two offices (one through acquistion). The first one specializes in Brainerd, MN real estate and the second specializes in Hayward, WI real estate. We also dabble in a couple of other areas including commercial real estateMinnesota resorts for sale and Minnesota vacation rentals & Wisconsin vacation rentals. We just added a Minnesota log homes section. So if you’re looking for one, you know who to talk to.

1994

by Dave Gooden on 02/1/2011

The Formula For Success

by Dave Gooden on 11/15/2010

success = time × effort × luck × ability

Its Harder Than It Looks

by Dave Gooden on 10/16/2010

If you know Dave McClure, you know this is NSFW

Why Not To Do a Startup - Dave McClure from Seattle20 on Vimeo.

We Live In Public

by Dave Gooden on 04/17/2010

I just finished watching We Live In Public – a documentary about Josh Harris – the greatest Internet pioneer you’ve never heard of. It is a pretty great story (minus a happy ending) about a true visionary…a guy who could actually see the future. I highly recommend you watch it and pay attention to the message – it’s very timely.

For the techies out there – you will see some familiar faces throughout the film. Go check it out.

Good Read

by Dave Gooden on 03/5/2010

Good Read: Your High IQ Will Kill Your Startup (via reddit)