Steven Cox - CEO of TakeLessons. Build Something You're Proud Of

How TakeLessons uses social media to sell services in the real world

Last week, I had the pleasure of speaking for the Social Media Breakfast San Diego group on how our company, TakeLessons is using social media in the digital world to effectively build trust and engage with music lovers on a hyper-localized level. Thanks to Adam and Erin of Digital Operative (a wonderful San Diego social media company) for the invite.

While many in our field are taking a wait-and-see approach to social media, we feel it fits well within our mission to "inspire an entire generation through music". We can't inspire people if they don't know who we are, or what we stand for. Social media is a way for us to communicate our passion and listen to current and future customers.

Here is a slideshow of the presentation. Comments always welcome:

How TakeLessons Uses Socia Media

View more documents from Steven Cox.

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How are you going to make a profit in your startup?

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I read an interesting post from Mark Cuban today on the problems of startup success using a free model. Back in the 90's when I was cutting my teeth around web/tech, the mantra we heard from VC's was "get big fast", and "eyeballs are everything", and "don't worry about making money, we'll fund you", and "you can get a higher valuation if you're NOT producing revenue".

All of these statements seemed odd to me. I do understand the value of first-mover advantage, but what are we in business for if we can't focus on providing value that people will pay for?

Mark argues that the company that is successful on being free will feel the need to continue to build bigger infrastructure and hire more people because the next 'free' thing is right around the corner. This means they never learn to be lean and protect themselves in downturns. In order to stay competitive with the next free thing, they'll spend too much money and lessen their ramp time. 

"The more success you have in delivering free, the more expensive it is to stay at the top. The more success you have, the more important it is to management to remain successful.  The more important remaining successful is to management, the more money they will spend, the more chances they will take, the more infrastructure they will build, the more people they will hire.  All of the things that will prevent them from staying lean, mean and flexible. All of the things that distract them from innovating within their core competency."

I live in downtown San Diego, and across the street from me, a new restaurant just opened. Based on a reliable friend in the local restaurant scene, I know they spent a total of $2.5 to $3 million to open the doors. This is about the same amount of money raised by a web quasi social networking company I'm familiar with. The difference is that starting day one, the restaurant had customers lined up willing to pay $50 - $75 for it's service. The web company, now two rounds of financing and three years into it, is still not charging for their service, and I question whether they have anything that people will actually pay for. Now that they've done a series A and B, I doubt if the founding team even owns the majority of their company. Thus, the entrepreneur has locked himself into a job.

(As a side note, I absolutely believe in raising money for growth. Once a model has been proven, it makes sense to accelerate the earnings, and normally, this takes additional capital. The difference is that at this stage, the company has been given the task of figuring out customer demand and iterating their model quickly. Those that succeed are able to find the model that works and begin to place their efforts towards amplifying their processes.)

I just have a different way of looking at things. I speak to entrepreneurs all the time that want in the game simply to cash out. There's more thought to the exit than there is to service needed to provide the exit. It's rare that I hear them say, "here's the value I provide to my most loyal customer". Just like in the 90's, it doesn't make sense to me.

Unless you are starting a company for the sole purpose of flipping it, it is my belief that the company should have a clear revenue model rolled out soon after launch. This means you may have to build slower and have to execute on a customer-centric strategy. The revenue generated will give you a longer launch-pad and the company that you've toiled and sacrificed for will remain in the hands of the people most passionate about its success.

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San Diego Tech Company MojoPages on $5mm raise

Congrats to our friends over at Mojo Pages on a new $5mm raise. I believe their enhanced model of providing a white-label solution to news sites is timely and needed. Jon Carder and the team have been working hard on the site for a few years and this vote of confidence is a good sign for the company and the San Diego tech scene.

MojoPages Raises $5 Million For White Label Local Business Search Engine

Guy Kawasaki speaks about social media at San Diego Venture Group

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Last week, I attended the San Diego Venture Group's Summer meeting. Guy Kawasaki spoke about social media and introduced the audience a few sites worth checking out.

The two that I 've found most useful has been http://tweetdeck.com and http://objectivemarketer.com

From the SDVG:

Hello,

Thank you for attending yesterday's SDVG breakfast program featuring Guy Kawasaki. As promised, here is a link to the list of websites he featured in his talk:

http://blog.guykawasaki.com/2009/06/sites-used-at-san-diego-venture-group-speech.html

(The link will also be posted on our homepage at www.sdvg.org by the end of the day.)

We hope you enjoyed the program, and we hope to see you at an upcoming SDVG event soon!

Regards,

San Diego Venture Group
(858) 558-8750
www.sdvg.org

UPCOMING PROGRAMS:

Wed., July 22, 7:00am - 9:00am
"The Future of Successful Investment in Biotech"
Hyatt Regency La Jolla

Thurs., August 20, 4:30pm - 7:30pm
Annual Summer Social: "A Tropical Picnic in Paradise"
Scripps Seaside Forum at SIO

Wed., Sept 16, 11:00am - 4:00pm
Annual VENTURE SUMMIT
Hilton Bayfront San Diego

TakeLessons Gift Certificates Now Available at Costco

TakeLessons has teamed up with Costco to get America moving with music! Costco Members can now buy TakeLessons music lessons gift certificates at Costco.com.

"We're excited to help Costco's 50 million members get started enjoying learning how to sing or play music. In today's undertain times, it's beneficial for consumers to find the most relevant and useful service at a fair price. Shopping for music lessons has never been easier. We all have an artist inside of us, and now is the time to jump in and rock out.", says Steven Cox, CEO of TakeLessons.

Costco members who are new to TakeLessons can get $100 worth of lessons for under $80 through the arrangement. It makes the perfect gift for mom, dad, or the kids - anyone who is a budding musician.

Are you a Costco member? Use the enclosed link to review the Costco offer.

Top 100 Most Connected Venture Capitalists

From Techcrunch - here's a list of the top 100 most connected VC's. Did yours make the cut?

Here are the top 10:

1. Draper Fisher Jurvetson
2. Sequoia Capital
3. Accel Partners
4. Intel Capital
5. First Round Capital
6. Dag Ventures
7. New Enterprise Associates
8. Kleiner Perkins Caufield & Byers
9. Benchmark Capital
10. Ron Conway

Whom You Know Matters: Venture Capital Networks and Investment Performance -

Helping People Get Started in Music - Feedback from a Music Lessons Client

Over the weekend, I was friended on facebook by one of our clients, Debbie Bennett. Below is a screen shot of what she shared. I try hard to get the negative and constructive feedback as it helps me improve, but it's also really cool to remember that we are creating value and making a difference in peoples lives.

~steven

TakeLessons Founder Interviewed on StartUpLucky.com

"Steven Cox stopped by to tell us all about his San Diego based startup, TakeLessons.com which, as the name simply implies, is an online marketplace for finding music & voice instructors in over 400 cities in the US. Steven and his team are working extremely hard and have provided a service that simply didn’t exist before now. Every instructor brought into their service is carefully screened for background, ability, and all other pertinent qualifications. Also, TakeLessons has created a very open social platform so that students can rate their instructors and also connect with each other as they reach existing goals and create new ones along the way."