Stepping Out

"I read this article a while back, that said that Microsoft employs more millionaire secretary's that any other company in the world. They took stock options over Christmas bonuses. It was a good move. I remember there was this picture, of one of the groundskeepers next to his Ferrari. Blew my mind. you see shit like that, and it just plants seeds, makes you think its possible, even easy. And then you turn on the TV, and there's just more of it. The $87 Million lottery winner, that kid actor that just made 20 million on his last movie, that internet stock that shot through the roof, you could have made millions if you had just gotten in early, and that's exactly what I wanted to do: get in. I didn't want to be an innovator any more, i just wanted to make the quick and easy buck, i just wanted in. The Notorious BIG said it best: "Either you're slingin' crack-rock, or you've got a wicked jump-shot." Nobody wants to work for it anymore." - Seth Davis, Boiler Room

It's been a month since I've updated this site, and I feel like, even though at this point I've walked away from poker I can't just walk away from The ICP.

I still have some desire to play poker, but with taking this month off, I've come to realize that poker online really ceased being any kind of fun some time ago. I think I was sort of fooling myself by thinking that I was having a good time, and who doesn't when you're winning, but after a solid year of playing, I really was not where I wanted to be. I have no idea if I'm a good or bad poker player because I've never been able to play at a level that will let me know that. Playing against a table full of people who don't have a friggin clue what they're doing is no way to gauge poker skill, but it's a great way to validate the odds tables. Since the odds tables are already validated, I'd really rather have just moved onto playing skill based poker.

Perhaps I'll delve more into that later on. Things on the life front have been rather quiet. Still working, still loving it, though we're not getting anywhere financially at all. I can't remember the last time I didn't live check to check.... Okay, I do remember, and it's depressing.

I haven't been sitting back doing nothing. I have, for some time, been thinking of going into business for myself. Now, I'm a pessimist. When I think about going into business myself, I immediately start thinking "Yeah, right, me?" I actually have two business plans already worked up from various other ideas. One is a sports bar which was WAAAAAAAAY too ambitious, especially considering my business partner and I had, between us, exactly zero restaraunt or bar experience. Not that it wouldn't have worked. Bill Gates built an empire by surrounding himself with people that knew things he didn't, and thus was our idea. However, investors like to see business owners that, you know, KNOW something about the business. I knew how to consume beer. Who knows.. It may well have worked. We took our plans to an accountant (what a joke, but that's a blog for another day) and also went up to the local Small Business Development place. Amazingly, the Small business place DIDN'T laugh us out the door, but the fact remained that we needed to raise roughly $1 million in capital to solidly survive year 1, and that's a lot of cashish. The other plan was for a retail computer sales and service joint. That one was derailed by the IT industry shitting itself and dumping both me and my partner into the unemployment lines. We didn't have the time to invest in it, since we were looking at starving to death. As fate would have it, the business plan did get carted out to Michigan and, I guess you could say it resulted in a viable business, but the end result pretty much had nothing to do with the business plan we put together, since neither of us are actually in control of its fate.

Anyway, like I said, I've been working hard on this, and it looks like it's a viable plan, but I'm having trouble believing my numbers are correct. I've done everything I can think of to "break" the plan, including reducing my market share to 1/1000th of 1 percent, and I STILL end up with a healthy bottom line. I also considered only a 15% growth factor for the next two years, and the numbers are very, very healthy. Again, I'm a pessimist. I don't believe my own numbers. Now, of course, I've made some VERY general assumptions about the market. The business is a custom order computer sales business... Check me on this:

The 2000 U.S. census indicates that 54 million households have a computer. Now, many homes have more then one computer, and these do not include businesses, but for now, we'll assume that each household has exactly one computer. We will also, for the purpose of this exercise, not consider market growth in the 5 years since the census was taken (and if current trends follow the trends set out in the census data, market growth is considerable).

Computer technology isn't moving forward at the breakneck pace it was in the '90's, but it's still advancing at a pretty good clip. Given market factors, software and hardware development and current reliability of computer hardware, I'll make the assumption that the average home computer has a useful life of 5 years. Personally I think this is a little on the conservative side, but again, I'm trying to break my plan. Anyway, we'll assume that 1/5 of the households will be in the market for a new computer, so 10.8 million households will be shopping for a new computer.

I'm certainly no Dell or Gateway, so I'm not advertising on television and I'm not a household name... In fact, when I open the doors, I'm a nobody. Some target marketing will help to change that, but I have to assume that for the first year, I'm not going to be exactly a "recognized name" in the computer industry. Given my small initial budget, I'll probably be marketing initially through search engines. Let's say that only 1/2 of 1 percent of the total market will actually find me. That makes "my share" of customers 54,000.

Now that I've got them at my site, I have to sell them a computer. Now, since I'm entirely a web based company, the web page is my sole sales instrument. I'm no web designer, so I'll assume that my web page will not initially be as polished as some others. Let's say I particularly suck at selling these things, and I only complete sales to 1 percent of my market. 540 units.

So, I think these are pretty conservative estimates, and 540 units in the first year still ends up with a pretty good margin.

Of course, I'll still need to round up the startup capital. Remember, I'm poor.

So, anyone looking for a good deal on a computer?