hi I’m Evan Carmichael welcome to edition of ask Evan in today’s video I’m
edition of ask Evan in today’s video I’m
edition of ask Evan in today’s video I’m going to answer question from one of my
going to answer question from one of my
going to answer question from one of my readers Jason who’s a newsletter
readers Jason who’s a newsletter
readers Jason who’s a newsletter subscriber and has a tech company he
subscriber and has a tech company he
subscriber and has a tech company he spend a lot of money on outsourced
spend a lot of money on outsourced
spend a lot of money on outsourced development shop to help build this
development shop to help build this
development shop to help build this technology the relationship didn’t go so
technology the relationship didn’t go so
technology the relationship didn’t go so well they stopped producing for him and
well they stopped producing for him and
well they stopped producing for him and now he has an unfinished product is
now he has an unfinished product is
now he has an unfinished product is running out of money doesn’t have enough
running out of money doesn’t have enough
running out of money doesn’t have enough money to hire a local company and one of
money to hire a local company and one of
money to hire a local company and one of my advice on what to do next to get his
my advice on what to do next to get his
my advice on what to do next to get his kind of company going so I really feel
kind of company going so I really feel
kind of company going so I really feel whew that’s a tough situation when you
whew that’s a tough situation when you
whew that’s a tough situation when you don’t have you know the ability to
don’t have you know the ability to
don’t have you know the ability to control your own technology then you’re
control your own technology then you’re
control your own technology then you’re really at the mercy of other people and
really at the mercy of other people and
really at the mercy of other people and that’s tough and whenever you know it’s
that’s tough and whenever you know it’s
that’s tough and whenever you know it’s key people your company leave tues I
key people your company leave tues I
key people your company leave tues I could put you in a tough situation for
could put you in a tough situation for
could put you in a tough situation for you a couple ideas of three options for
you a couple ideas of three options for
you a couple ideas of three options for you that I see first you get outsource
you that I see first you get outsource
you that I see first you get outsource it again and outsourcing can work and I
it again and outsourcing can work and I
it again and outsourcing can work and I do a lot of outsourced with my business
do a lot of outsourced with my business
do a lot of outsourced with my business and it seemed that be very successful
and it seemed that be very successful
and it seemed that be very successful for a lot of entrepreneurs just because
for a lot of entrepreneurs just because
for a lot of entrepreneurs just because it in the work out once doesn’t mean it
it in the work out once doesn’t mean it
it in the work out once doesn’t mean it can’t work out on going a lot of people
can’t work out on going a lot of people
can’t work out on going a lot of people feel the same way about hiring people
feel the same way about hiring people
feel the same way about hiring people with their company they may get burned
with their company they may get burned
with their company they may get burned by the first employee that they bring on
by the first employee that they bring on
by the first employee that they bring on so then the other side I’m never going
so then the other side I’m never going
so then the other side I’m never going to hire anybody again because doesn’t
to hire anybody again because doesn’t
to hire anybody again because doesn’t work well it can work you just have to
work well it can work you just have to
work well it can work you just have to make sure you go through a process to
make sure you go through a process to
make sure you go through a process to get the right people of the right
get the right people of the right
get the right people of the right company on board so for you you can
company on board so for you you can
company on board so for you you can still work you can look at services like
still work you can look at services like
still work you can look at services like owed us to try to find somebody who has
owed us to try to find somebody who has
owed us to try to find somebody who has done it before you can look it they’re
done it before you can look it they’re
done it before you can look it they’re if they’re their feedback from before
if they’re their feedback from before
if they’re their feedback from before how much they’ve made how long you been
how much they’ve made how long you been
how much they’ve made how long you been with odesk com and i’ve used it to get
with odesk com and i’ve used it to get
with odesk com and i’ve used it to get some great people to help me you know
some great people to help me you know
some great people to help me you know outsource my business tasks so a look at
outsource my business tasks so a look at
outsource my business tasks so a look at Odessa as a quick start the other thing
Odessa as a quick start the other thing
Odessa as a quick start the other thing I would do without sourcing is start
I would do without sourcing is start
I would do without sourcing is start with smaller projects so instead of
with smaller projects so instead of
with smaller projects so instead of giving somebody a huge project and run
giving somebody a huge project and run
giving somebody a huge project and run with it and that’s kind of mission
with it and that’s kind of mission
with it and that’s kind of mission critical for you if it doesn’t work out
critical for you if it doesn’t work out
critical for you if it doesn’t work out start on a small scale give them
start on a small scale give them
start on a small scale give them something you know little and see if
something you know little and see if
something you know little and see if they can perform with it and then if
they can perform with it and then if
they can perform with it and then if they do perform then you can slowly give
they do perform then you can slowly give
they do perform then you can slowly give them more and more tasks so that might
them more and more tasks so that might
them more and more tasks so that might help you you know you might be able to
help you you know you might be able to
help you you know you might be able to break down your project into smaller
break down your project into smaller
break down your project into smaller tasks and give it out to different
tasks and give it out to different
tasks and give it out to different people and see who performs the best
people and see who performs the best
people and see who performs the best it’s a little more time consuming
it’s a little more time consuming
it’s a little more time consuming but it helps make sure that you get the
but it helps make sure that you get the
but it helps make sure that you get the right people on board so it’s still an
right people on board so it’s still an
right people on board so it’s still an option option number two is get somebody
option option number two is get somebody
option option number two is get somebody on your company so have somebody join
on your company so have somebody join
on your company so have somebody join your team who has a technology
your team who has a technology
your team who has a technology experience it’s really hard to run a
experience it’s really hard to run a
experience it’s really hard to run a tech company without having any tech
tech company without having any tech
tech company without having any tech experience and within your organization
experience and within your organization
experience and within your organization and depending on what your eventual
and depending on what your eventual
and depending on what your eventual long-term goal is with the business if
long-term goal is with the business if
long-term goal is with the business if you wanted to sell it for example
you wanted to sell it for example
you wanted to sell it for example usually the buyers want to see that you
usually the buyers want to see that you
usually the buyers want to see that you have something in house that they’re
have something in house that they’re
have something in house that they’re they’re buying that not everything has
they’re buying that not everything has
they’re buying that not everything has just been outsourced so it was great for
just been outsourced so it was great for
just been outsourced so it was great for you as well because if you get more
you as well because if you get more
you as well because if you get more ideas of what you want to build with
ideas of what you want to build with
ideas of what you want to build with your company you’ve got somebody you
your company you’ve got somebody you
your company you’ve got somebody you know right next to you who can help you
know right next to you who can help you
know right next to you who can help you build it out so finding the right person
build it out so finding the right person
build it out so finding the right person can be tough you are giving up a piece
can be tough you are giving up a piece
can be tough you are giving up a piece of your company but if you were going up
of your company but if you were going up
of your company but if you were going up to try to raise capital you’re giving up
to try to raise capital you’re giving up
to try to raise capital you’re giving up a piece anyway you want to make sure you
a piece anyway you want to make sure you
a piece anyway you want to make sure you get the right person on board so I don’t
get the right person on board so I don’t
get the right person on board so I don’t there’s anybody who you can think of
there’s anybody who you can think of
there’s anybody who you can think of right now who you’ve done some kind of
right now who you’ve done some kind of
right now who you’ve done some kind of work with before where who comes
work with before where who comes
work with before where who comes referred from somebody else again with
referred from somebody else again with
referred from somebody else again with any kind of partnership you want to make
any kind of partnership you want to make
any kind of partnership you want to make sure you’re starting on a small scale
sure you’re starting on a small scale
sure you’re starting on a small scale let them earn in you know somebody with
let them earn in you know somebody with
let them earn in you know somebody with the tech background may not have money
the tech background may not have money
the tech background may not have money to buy into the business and if it’s
to buy into the business and if it’s
to buy into the business and if it’s still early stage there may not be
still early stage there may not be
still early stage there may not be enough of an evaluation there for them
enough of an evaluation there for them
enough of an evaluation there for them to buy into so it could be their time
to buy into so it could be their time
to buy into so it could be their time coming in so you’ll start on a small
coming in so you’ll start on a small
coming in so you’ll start on a small scale let them earn their way in let
scale let them earn their way in let
scale let them earn their way in let them show themselves that they can they
them show themselves that they can they
them show themselves that they can they can you know prove to be an asset to
can you know prove to be an asset to
can you know prove to be an asset to your business and that you both like
your business and that you both like
your business and that you both like working with each other because it is
working with each other because it is
working with each other because it is like getting married getting a partner
like getting married getting a partner
like getting married getting a partner with your business so give them
with your business so give them
with your business so give them milestones so they you know accomplish
milestones so they you know accomplish
milestones so they you know accomplish something to get two percent and then
something to get two percent and then
something to get two percent and then five percent and ten percent and until
five percent and ten percent and until
five percent and ten percent and until whatever goal eventually you want to get
whatever goal eventually you want to get
whatever goal eventually you want to get to I make sure you have really good
to I make sure you have really good
to I make sure you have really good shareholds agreements of that there’s a
shareholds agreements of that there’s a
shareholds agreements of that there’s a shotgun agreement in there that you can
shotgun agreement in there that you can
shotgun agreement in there that you can you know spy each other out if the
you know spy each other out if the
you know spy each other out if the relationship doesn’t go very well but
relationship doesn’t go very well but
relationship doesn’t go very well but hopefully you’ve tested the beginning
hopefully you’ve tested the beginning
hopefully you’ve tested the beginning and you don’t get to the point where
and you don’t get to the point where
and you don’t get to the point where you’re you know buying each other out so
you’re you know buying each other out so
you’re you know buying each other out so that’s the second option the third
that’s the second option the third
that’s the second option the third option is you can go up raise capital so
option is you can go up raise capital so
option is you can go up raise capital so you could say you know we need another
you could say you know we need another
you could say you know we need another you know X thousands of dollars people
you know X thousands of dollars people
you know X thousands of dollars people to finish up this project go find an
to finish up this project go find an
to finish up this project go find an angel investor give up a percentage of
angel investor give up a percentage of
angel investor give up a percentage of your business the challenge here is if
your business the challenge here is if
your business the challenge here is if you’re pre-sales if you haven’t finished
you’re pre-sales if you haven’t finished
you’re pre-sales if you haven’t finished your actual product and you’re still in
your actual product and you’re still in
your actual product and you’re still in kind of the research and development
kind of the research and development
kind of the research and development mode
mode
mode really hard to raise money and the money
really hard to raise money and the money
really hard to raise money and the money that you raised you’ll get really killed
that you raised you’ll get really killed
that you raised you’ll get really killed on the valuation so if you had some
on the valuation so if you had some
on the valuation so if you had some sales you had some momentum then you get
sales you had some momentum then you get
sales you had some momentum then you get a much better price you don’t have to
a much better price you don’t have to
a much better price you don’t have to give as much equity up in return for the
give as much equity up in return for the
give as much equity up in return for the the money that you’re giving away if you
the money that you’re giving away if you
the money that you’re giving away if you want to try to mitigate that risk a
want to try to mitigate that risk a
want to try to mitigate that risk a little bit what you can do is put it in
little bit what you can do is put it in
little bit what you can do is put it in stages so you can say i need $100,000
stages so you can say i need $100,000
stages so you can say i need $100,000 say for the business I need you know
say for the business I need you know
say for the business I need you know twenty five thousand dollars up front
twenty five thousand dollars up front
twenty five thousand dollars up front and it’s going to be a certain valuation
and it’s going to be a certain valuation
and it’s going to be a certain valuation and then we’re going to go out and try
and then we’re going to go out and try
and then we’re going to go out and try to hit these milestones so we’re going
to hit these milestones so we’re going
to hit these milestones so we’re going to you know make X number of sales when
to you know make X number of sales when
to you know make X number of sales when we do that we need another twenty-five
we do that we need another twenty-five
we do that we need another twenty-five thousand dollars but at a better
thousand dollars but at a better
thousand dollars but at a better valuation and then you go and hit more
valuation and then you go and hit more
valuation and then you go and hit more milestones and you get the last fifty
milestones and you get the last fifty
milestones and you get the last fifty thousand dollars a much better valuation
thousand dollars a much better valuation
thousand dollars a much better valuation so you negotiate that up front so that
so you negotiate that up front so that
so you negotiate that up front so that as you grow with your business you’re
as you grow with your business you’re
as you grow with your business you’re getting more money coming in from the
getting more money coming in from the
getting more money coming in from the investor but a better evaluation then if
investor but a better evaluation then if
investor but a better evaluation then if you need everything up front so I don’t
you need everything up front so I don’t
you need everything up front so I don’t know how much you need maybe one hundred
know how much you need maybe one hundred
know how much you need maybe one hundred thousand dollars maybe it’s ten thousand
thousand dollars maybe it’s ten thousand
thousand dollars maybe it’s ten thousand dollars maybe it’s half a million
dollars maybe it’s half a million
dollars maybe it’s half a million dollars whatever it is you can phase it
dollars whatever it is you can phase it
dollars whatever it is you can phase it out with an investor so that you’re not
out with an investor so that you’re not
out with an investor so that you’re not getting all the money up front but you
getting all the money up front but you
getting all the money up front but you know you’re also getting much better
know you’re also getting much better
know you’re also getting much better valuation so hopefully that helps I
valuation so hopefully that helps I
valuation so hopefully that helps I think your best bet is still to try to
think your best bet is still to try to
think your best bet is still to try to go the outsourcing route at the start
go the outsourcing route at the start
go the outsourcing route at the start and try to piece it off in the little
and try to piece it off in the little
and try to piece it off in the little projects and find somebody who you can
projects and find somebody who you can
projects and find somebody who you can work with longer-term solution try to
work with longer-term solution try to
work with longer-term solution try to find somebody local who might be able to
find somebody local who might be able to
find somebody local who might be able to take an equity position in the company
take an equity position in the company
take an equity position in the company has a vested interest wants to make it
has a vested interest wants to make it
has a vested interest wants to make it work and you have somebody sitting next
work and you have somebody sitting next
work and you have somebody sitting next to you who knows motivated to want to
to you who knows motivated to want to
to you who knows motivated to want to keep growing this product and as you get
keep growing this product and as you get
keep growing this product and as you get more ideas you have somebody who you can
more ideas you have somebody who you can
more ideas you have somebody who you can turn to and they you know really want to
turn to and they you know really want to
turn to and they you know really want to see it succeed and last options go out
see it succeed and last options go out
see it succeed and last options go out and try to find an investor just try not
and try to find an investor just try not
and try to find an investor just try not to get to kill an evaluation by spacing
to get to kill an evaluation by spacing
to get to kill an evaluation by spacing up the payment periods hopefully that
up the payment periods hopefully that
up the payment periods hopefully that helps for those watching if you liked
helps for those watching if you liked
helps for those watching if you liked the video please give it a thumbs up I
the video please give it a thumbs up I
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love seeing those come in and if you have any thoughts please feel free to
have any thoughts please feel free to
have any thoughts please feel free to leave a comment underneath any other
leave a comment underneath any other
leave a comment underneath any other advice that you might have or any of
advice that you might have or any of
advice that you might have or any of your own experiences or have other
your own experiences or have other
your own experiences or have other questions leave a comment under the
questions leave a comment under the
questions leave a comment under the video and i will see you on the next
video and i will see you on the next
video and i will see you on the next episode
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