So you want to be a business owner

1
So you want to be a business owner?

• Spark Fun Electronics
• Nathan Seidle
• www.sparkfun.com

2
Quick Background

• Stop me any time
• 2004 CU Graduate
• BS in Electrical Engineering

• Rower on CU club team
• RA in Kittredge
• Worked 2002 Olympics
• Quarter Century
• Oklahoma
• No other family business experience

3
Idea and Opportunity

• Building prototype, needed new programmer
• Cheapest source was Olimex in Bulgaria

• Problems
• Website was iffy
• No online checkout
• Fax to Bulgaria?!
• CC info to Bulgaria?!
• Wait 2-3 weeks
• Shipping was

4
Distributors

• Makes sense import to US and ship out
• US Distributors for Olimex were also very poor
• No easy checkout I want to spend my money!
• Bad pictures
• No shipping costs

• Got to be a better way!
• Cleaner
• Easier to checkout
• Big, crisp pictures
• Stock more items
• Stock 'supporting' items
• There was opportunity!
• Spark Fun was born...

5
Initial Business Problems

• EE ! Business background
• What's a 'mark up'?
• How much do I charge?
• Needed to limit my risk with an exit strategy

• Blew out shoulder w/ concussion - 2002
• Business plan was written in the lodge at Copper
• The 'business plan' applied for about 4 months

6
Funding

• Raising Capital
• Raised in rounds?
• All different types
• Venture Capital
• Angel Investors
• Equipment loans
• Government Financing
• Etc.

SFE Funding

• Initial 2500 in good old credit card debt
• 4 months later 4000 'student' loan
• Family purchased 3 'shares' at 250 each
• Each share now worth 12,500

7
Initial Stock

• Olimex was main line of products
• Bought 1 of every item
• Purchased peripheral items
• Microcontrollers
• Cables
• Power Supplies
• Purchased office goods
• Scale
• Shelf
• Tape gun
• Dead bolt
• Website

8
Process

• Purchase stock
• Obtain Federal Tax ID (aka EIN)
• Obtain State Sales Tax License (CR 100)
• Get speeding ticket
• Roll out website
• Test checkout - PayPal
• Make live
• Cross your fingers
• Open a business bank acct
• Apply for city tax account

9
Spark Fun Early Days

• 1st order came through in 7 hours
• 3rd order was from France
• 5th order was for qty 3 of one item
• Dumpster diving in Eng Center
• 100 PayPal for 3 months
• Applied for 'Merchant Account'
• We/Us/I'll talk to shipping

10
Price of Plastic

• Accept
• Visa
• MC
• Discover
• Amex
• Had to take pictures of 'facility'
• Takes 2.2-3.5 of every dollar
• Increased fraud and hacking

11
Timeline
12
Advertising

• We don't
• Tutorials and application notes
• Support forum and community
• 'Search engine optimization' Bad
• Doesn't last
• Can't fool google
• Natural increase in Google ranking

13
Work for 'You, Inc.'

• Cons
• Long hours
• High Risk/Stress!
• Low pay
• Unsteady Work
• When it breaks, you call no one

• Pros
• Fun
• BYOB - Be your own boss
• 2 minute commute
• Lucrative
• Creative freedom

14
Closing

• If it's not for sale, you can't sell it
• The more simple the idea, the better
• Just do it!
• Get your hands dirty
• Never be afraid of trying something new