Developed customer and employee facing application for a Fortune 100 company to drive increased sales and customer retention. Proven leader of mobile phone warranty business; increasing customer attach rate & end to end profitability.
Developed multiple customer and employee facing applications to increase retail sales and customer retention for Fortune 100 company. Tripled customer attach in mobile phone warranty business while increasing customer life time value.
The $100 Startup Book by Chris Guillebeau is a great book that details many side projects / hobbies that turn into highly successful companies. http://100startup.com/
"These are the Things" is an example from the book. There story is detailed here:(http://thesearethings.com/about/). They built their business over 9 months before they quit their day jobs.
Here are additional examples from one of my favorite authors/Blogger Tim Ferriss.
Personally I just left my director role at Best Buy to start my own company. I had been doing small business consulting on the side for the last 6 months and decided it was time to take the plunge. There is no average time on when founders decide to switch full time. I have seen it be as little as a week to up to many years. It all depends on how quickly it is able to support your lifestyle that you have chosen. My decision was due in large part to a personal desire to work for myself vs. a large corporation and have the ability to build something from nothing.
First and foremost you need to look at all ways to fund your start-up not just outside investment. How far can you bootstrap your start-up and self fund? Are their ways to get your first clients to fund development for in return for free life-time use etc. If this is not possible then you move through the different avenues of funding - Owner funding (how much can you put in - Outside investor look favorably on an owner having skin in the game), friends and family, angel investor, VC etc. I did not put crowd funding within the list as I would consider that more friends and family just organized through a kickstarter type site.
The second thing to consider a compelling story on how the funding will be deployed to grow the company and to what level. From David Rose's book on angel investing; a typical angel will be looking for 25% IRR for their entire portfolio (Or in simple terms a 3.8x return on their investment on a 6 year hold period). In a portfolio of 10 companies 5 will fail on average, 2 will return 1x, 2 will return 3x which means that the final one will need to return 30x to make the angel's desired return. If that is the case any of the 10 need the POTENTIAL to make 30x return. How and to what degree can you offer returns for your potential investor.
There is a basic level of documentation you should have about your start-up (walking around deck) that being said I have sat on the side of the large company brand not in marketing but within a role that had many companies pitching us with information. You don't want to make something for a big company that you yourself don't use or believe in; I would be honest vs. just making up a bunch of slides that in the end will not truly represent who you are or how you work.
Myself and friends have had great success meeting technical folks and candidates for co-founders at networking events such as Start-up Weekends (http://startupweekend.org/) and local networking events you find through www.meetup.com such as Hackers and founders, Startup Meetup, Minnesota Entrepreneurs (Check within your state). If you are unable to network at events like this there are other avenues such as co-working space (In MN we have - http://cocomsp.com/locations/minneapolis/, Startup Loft - http://www.svl.mn/ etc) Good luck.
It is most definitely feasible; it is always best to look at example of teams / co-founder who are doing what you want to do and the tools they are using.
Automattic and the team behind WordPress power 23% of all websites on the internet with a team of 300 mostly spread around the world:
They created their own WP theme (P2-Themed) to organize the teams thoughts instead of email.
I am in the process of listening to a great podcast with the founder Matt Mullenweg where he talks about his tools and how he built the team and how they work remotely. Check it out:
Do let being remote stop you from forming an effective team.
If you are looking to add something to every cell phone you need to think through what is the value for the gatekeeper (OEM or Carrier) Typically the OEM (HTC, Samsung) or the carrier (Sprint, Verizon) will have to be pursued to add the application / link and either wants upfront payment to do so or back end dollars from conversion. I spent many years working on getting mobile applications onto devices both at the OEM level as well as within a retail environment from within a fortune 100 retailer. Its is not just about having a great idea but making the idea appealing to all parties involved - OEM, Carrier, Retailer end user.
I would start with searching for local, active angels in your area on Angel List (https://angel.co/) Then search for investor / entrepreneur meet ups in your area (In MN we have MinneDemo, Beta.mn and Twin Cities Start-up Weekend). After attending a few networking events I would then hang out or attend workshops at your local co-working spaces. Our co-working spaces have partnerships with local venture/angel investors that will host workshops or events. And finally, follow all your local investors / angels on Twitter, many have posted open office hours/meet ups through their feeds. Good Luck
The answer really depends on many factors. You are correct that many SaaS companies valuation falls into the range of 3 to 9 times revenue. I would say that companies that have a very high net income % (25%+) would fall more to the range of 7x-9x and companies that are closer to breakeven or low single digit net income percentages would fall to on the lower range.
Also you need think look at how your company will be viewed from a competitive perspective. If you dominate your market but many many new competitors are entering that may discount the overall valuation. But if you are increasing market share within new market with little or no competition the future looks brighter from a valuation / cash flow perspective due to lower overall cost per acquisition of new customers.
Hope this help. Let me know if you need anymore help.
The rate of return should compensate for level of risk your parents are taking on by making this investment. You could look at it on a scale - risk free would equal the rate of return for US Treasury Bonds (Current 30 Year rate is 2.68%) and move up from there to unsecured loans like credit cards that start at 12%+
You parents are investing into a small business (historically very few make it more than a couple years) with little recovery value (If your girlfriend can make a go of it and gives up the value your parents would get if the agency is liquidated will most likely be pennies on the dollar). This puts it in the higher risk category in my option. I would say the rate of return has to be at 8%+ to compensate for the risk they are taking on (remember they have to pay taxes on the interest they receive as well so their effective rate of return will be much lower depending on tax rate.
You may want to ask yourself if you want to tie your folks retirement on the success of your girlfriends business. Worse thing that could happen is her business fails and you have an unemployed girlfriend and parents that can't afford retirement.
Here is a link to a basic model - http://monetizepros.com/tools/template-library/subscription-revenue-model-spreadsheet/
Depending on the purpose of the model you could get much much more elaborate or simpler. This base model will help you to understand size of the prize. But if you want to develop an end to end profitability model (Revenue, Gross Margin, Selling & General Administrative Costs, Taxes) I would suggest working with financial analyst. You biggest drivers (inputs) on a SaaS model will be CAC (Customer Acquisition Cost, Average Selling Price / Monthly Plan Cost, Customer Churn(How many people cancel their plans month to month), & Cost to serve If you can nail down them with solid backup data on your assumption that will make thing a lot simpler.
Let me know if you need any help. I spent 7 years at a Fortune 100 company as a Sr. Financial Analyst.