Entrepreneur Interview – Sharing Tips on Daytipper.com

Do you have a favorite tip you like to share with friends and family?  Well now you can share it with the world on DayTipper.com.  Nathan Preheim, a founding member of DayTipper, shares some entrepreneurial tips with us today that he learned from starting the company that built DayTipper.

Entrepreneurial Teams and Collaboration
DayTipper is a joint venture between yourself, Shane Lowry, and Tyler Munson. Each of you brings a different skill set to the team. For someone who is starting a business how would you recommend finding quality business partners?

I can’t underestimate the value of a solid core team. When starting a business, I think the biggest factor that will contribute to success is choosing the right management team. I was fortunate in that Shane and I worked together previously at Bigstep in San Francisco. I was well aware of Shane’s skill set, work ethnic, and technical prowess. Early on, I tapped into my network of former colleagues and let some folks know that I was looking for a designer. Tyler’s name was mentioned, and I initiated contact. Network, network, network!

One of the temptations I run into is trying to do everything myself. The benefits of this are that I have full control and the reward is all mine. However, I am limited to the amount of work I can do and there are areas in which I suffer because I don’t have much expertise. From your experience, can you tell us the benefits & drawbacks to working with business partners and any advice you might have on working successfully with them?

I think recognizing your own deficiencies and finding talented people to fill those voids is vital. I am definitely aware of my own limitations. In the end, I decided that giving up equity actually increased my long term success significantly. Sure, my stake is a bit diluted now, but Daytipper wouldn’t be where it is now without Shane or Tyler.

There are other upsides to having partners. Our structure is pretty organic and we don’t have a strict level of hierarchy. I like to think that most of our strategic decisions are made democratically. Tyler might float a good idea, Shane might bring up something that Tyler didn’t think about, and then I might adapt the idea for a different implementation. We challenge each other, constructively, and as a result we are more likely to evaluate situations from multiple angles.

If you do take partners on, I recommend giving them complete ownership and accountability for their discipline. Tyler is responsible for all of our branding efforts. Shane and I will provide our input, but ultimately, how we choose to portray the Daytipper brand is up to Tyler. Empowered partners are happy partners.

How did you decide what kind of relationships/agreements/legal structure should you form with your partners?

Vitamin T, LLC is the parent company, and Daytipper is our first product. We are a limited liability corporation. I am the majority owner and Shane and Tyler are both equity partners.

You live in a different part of the country from your business partners. What have you found is the most efficient and effective way to communicate and collaborate with them?

Yes, we do operate offices in both San Francisco and Omaha. Tyler and Shane work in San Francisco and I live in Omaha. I do travel occasionally to San Francisco and work out of that office, but the majority of the time we do work remotely. Skype, instant messaging, email, and cell phones make it pretty easy. Accountability is more important though.

Business Costs
How has the time and money you’ve put into DayTipper affected your personal finances? Have you budgeted income from DayTipper either now in the future into your personal budget?

I’m very fortunate in that my wife has a real job with benefits. Without that, I don’t know if I could have taken the leap and become an entrepreneur. Daytipper is entirely privately funded so there is an opportunity cost involved by diverting my own money into this venture. But in the end, if you are serious about starting a business, you need to be prepared to make a financial investment. So yes, my net worth has suffered a bit. At this point, nearly all of the revenue is being reinvested in the company. We are very conservative and judicious with our funds. All three of us lived through the dot com internet bubble. We’ve seen how venture capital money can precipitate wastefulness and lavishness.

Marketing is key in any business to spread the word about your product or service. Do you have a marketing budget or are you relying on word of mouth? If you’re mainly using the viral effect, what methods do you use to publicize your site?

Bottom-up or grassroot marketing has been good to us. We’ve been mentioned on several prominent blogs and our users are our biggest advocates. We did formulate and distribute a press release through the more conventional top-down model. Perhaps surprisingly, we’ve seen more traction through word of mouth. Readers forward tips to friends, who then visit and browse. The daily tips email has been a great way to push content to people, who then forward the tips to other friends or family. Our application makes it easy to submit our published tips to content sharing sites like Digg and del.icio.us.

Rewarding users for their content is a growing trend of Web 2.0. Why did you decide to offer money for tips as opposed to other non-monetary reward systems? Did you use any financial models to determine how much to pay per tip?

We did look around and evaluate a number of reward systems. In the end, we wanted to quickly acquire high-quality content and felt that a pay-for-tips model would work best. We applied the .04 cent per word copy writing industry average, estimated that most tips would be 100 words or less, and came up with a $3 per tip cost. I think we are on the bleeding edge as far as paying for content, but I expect this trend to become more prominent. A few other sites offer more of a revenue-sharing model. We are discussing and reviewing a variety of monetary and non-monetary reward systems for our next application.

Feedback
Many entrepreneurs have to deal with naysayers. Have you encountered skepticism about the site from friends or family along the way’ If so, did it have any effect on you and how did you deal with it?

When I shopped the idea around to friends and family, those who were technically savvy and avid internet users, were the ones who were most excited. Other people, Ludittes in particular, were less enthused. I’ve learned that everyone is a critic. And critiquing is easy. But coming up with an idea, assembling a team, and designing and developing a product requires gumption. If you don’t try, you’ll never know. I kept reminding myself of this. And used it as a motivator.

Some of my questions in regard to your original business plan covered up front analysis and market research. You wanted to steer clear of analysis paralysis, where you never get anything accomplished because you’re too busy analyzing, and get the product in front of users to get their reactions and feedback. What methods have you used to monitor for and implement potential improvements to DayTipper based on usage and feedback?

We spend a lot of time evaluating web 2.0 trends. There are a few other quasi-competitors that we continually evaluate and learn from. We’ve also used the Blog as a way to interact and solicit feedback from the Daytipper comment. We’ve received countless feature requests from users, and we very much value this feedback. The benefit of web development is that it’s easy to test a concept. You can push new code quickly and then easily monitor the results.

Using Daytipper
Many people that read or write personal finance blogs give out money tips every day. If those tips are good enough, they may be able to get paid for them at DayTipper. Can you walk us through a brief overview of how users can submit and be rewarded for their tips?

Submitting tips to Daytipper is quite easy. You’ll have to first create an account. All we need is an email address, address, and preferred payment method (check, PayPal, charity donation). The Submit a Tip screen will ask you for a tip title, tip description, and category. That’s it. You’ll be notified within 1-2 days via email to let you know if your tip has been accepted for publication. Accepted tips then move into the tip publishing queue. Some accepted tip are published relatively quickly (perhaps days or weeks). Other accepted tips take longer to publish (perhaps several months or more). Payment is initiated when the tip is published.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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