Why Every Startup Should Consider Creating an Advisory Board Early On

I firmly believe that a strong and effective advisory board can play an important role in the success of any startup.

Established organisations almost always benefit from having a reputable board. Regardless of the stage in which the company is situated in its development, all organisations, even emerging startups, should set up a board of advisors.

A board can guide the founders and help them make important business decisions. A board is also a meaningful signal given to outsiders such as potential investors, clients, and employees. The founders are likely to be perceived as serious, ambitious business owners supported by a strong team. This aspect is especially critical when seeking capital to grow the business. Investors, especially angels and venture capitalists, will interpret the establishment of a board as a sign of the founders’ maturity and willingness to listen to advice – a key consideration for a successful investor-entrepreneur relationship.

In their early days, companies typically don’t have enough money to hire excellent professional advisors (M&A, financiers, consultants, bankers, accountants, lawyers, tax advisors, head hunters, etc.). Startups can face difficulties attracting experienced mentors or senior advisors. Consequently, crucial elements may be overlooked.

A board of advisors provides professional guidance on multiple key business issues during the startup phase and also afterwards. Any board should include core professionals (finance, law, accounting, marketing/sales, HR) as well as industry specialists.
What makes a successful board member? How do I recruit and select board members? How should I remunerate board members? For clues to answering these questions, the links below should provide you with a good starting point.

If you still need to be convinced of the benefits of having a board of advisors, I highly suggest that you watch the video below. It is an excellent case study. Ty Danco is a former investment banker, Olympic athlete, angel investor (in the U.S. and Quebec), blogger and entrepreneur. He is highly experienced and has an intimate knowledge of startups. Ty talks about how the right advisory board not only provides insight and guidance, but can also provide the credibility needed to launch a business. I couldn’t agree more.

For more information about bank investment. Click here.

AlertPay Targets Affiliate Marketers and Grows Business Where PayPal Doesn’t Go

Ferhan Patel and his brother Firoz started AlertPay in 2004. The brothers found a niche and pain point with affiliate marketers and MLM businesses, many of which ran the risk of having their accounts frozen by PayPal for being in violation of PayPal’s user agreement. Whether those businesses were in violation or not, AlertPay became a friendlier, more easily accessible option. The company is now adding 5,000 new members daily and scaling aggressively. It’s been 6 years of toiling away, growing their business and meeting specific market demands.

The company is nowhere near the size of PayPal, nor is it clear whether or not they’ve got that level of scale in their sights, but it’s an impressive feat all the same to go into a space as complicated and challenging as online payments. They’re now working on adding developer tools to make AlertPay more attractive for e-commerce stores to include as a payment option. The goal overall is to expand the brand and make sure more and more people know that AlertPay is a legitimate payment processor.

NextMontreal: When and why did you start AlertPay?

Ferhan: The idea of AlertPay started in 2004, and we officially launched and went live in June 2005. Before 2004, we were in the business of developing
affiliate tracking software (referral tracking software) for 2 years and during this time, many of our clients kept running into problems with PayPal shutting down or freezing their accounts due to their business involving affiliates. It wasn’t until our own company’s PayPal account was frozen that we felt the pain of our own clients. We realized a serious need in the market for another payment platform, and AlertPay was founded.

NextMontreal: Why was PayPal shutting down so many accounts, including your own?

Ferhan: It had to do with their interpretation of Multi-Level Marketing in their user agreement. Any business that was structured in an affiliate model, or similar model, ran the risk of being in violation. When your account gets frozen and all your funds held for 6 months, it can destroy your business as it did for many of our customers. This was a consistent complaint against PayPal from numerous merchants.

NextMontreal: What’s your background, and the background of your co-founder?

Ferhan: Business has been in our blood since we were young. My family operated a grocery store when we were growing up and, at the same time, a home-based
needle trade business. My parents always ran their own business and worked countless hours to provide for us and give us a better future.

I studied Commerce at Champlain College, and went on to receive a Bachelor of Computer Science from Concordia University. I also have a certificate in Project Management from McGill University.

Firoz, (CEO) inherited his entrepreneurial spirit from our family roots and has been doing business since high school, starting off by selling comic books. From there he went on to complete a degree in Business Administration from Champlain College. His experience includes working as a technology officer for a business expense tracking software company, to sales processing.

After graduating from university, I joined Firoz in his processing business to develop our own affiliate software solution that would help e-commerce merchants track referrals and affiliate commissions.

NextMontreal: How was AlertPay originally financed? Have you ever raised external financing?

Ferhan: Believe it or not, during the R&D phase of developing the application for AlertPay.com between 2004 and 2005, we (founders) actually had to fire
ourselves to maintain enough funds to pay for our developers. During this time, to make ends meat, I took on another job at an IT consulting company working there during the days, and putting in my nights and weekends to work on AlertPay. We’ve always been self-financed and put everything we had to get it off the ground.

NextMontreal: How is it different from PayPal? Seems like a big gamble to go after a giant like that.

Ferhan: We’re different from PayPal in quite a few ways and we’re also quite similar. We’re different in terms of our business model, the types of
businesses we support, more funding options, more withdrawal options, more currencies, and we support more countries than PayPal to receive payments.

When we first started AlertPay, we never planned to compete against PayPal. We planned to just service a market need that PayPal was neglecting or
servicing poorly.

NextMontreal: Why did PayPal ignore the affiliate market, which is where you seem to have found a niche? And are they still ignoring that market?

Ferhan: I don’t think they ignored the affiliate market, but they took a very strict approach with it due to the bad seeds in the industry. A lot of people still distrust PayPal with their funds if their business has an affiliate program or follows a MLM structure. We were fortunate enough to get involved at the time we did and fill that need, and continue to fill that need today. I doubt it hurts their bottom line in any way, and we’re happy to take on this business.

For more information about AlertPay. Click here.

Ashkan Karbasfrooshan – Building a Video Content Business in a World of Tech

Watchmojo is one of the top producers of original video content online. In February, 2011 they announced that they had surpassed 200,000,000 cumulative views and reached profitably with 75% growth in revenue. The company was started in 2006 by Ashkan Karbasfrooshan and now has 13 full-time staff. Ash has remained resilient and aggressive with Watchmojo and it would seem the company is definitely hitting its stride.

Ash is one of the most open and honest people I’ve ever spoken to for NextMontreal. He doesn’t pull many punches in this interview talking about his strategy behind Watchmojo, why he’s been successful, the failure of VCs in the video space and much more. He has an interesting take on co-founders and even the moniker, “Founder” and how it impacts other employees. This is by far one of my favourite interviews because of how much detail Ash provides, and the fact that he’s unafraid to share his opinion.

NextMontreal: What is Watchmojo, when did you start and how has it evolved since the beginning?

Ash: WatchMojo is a producer of premium videos. After my last company AskMen was acquired and integrated into News Corp./FOX/IGN, I had to start from scratch and due to a non-competition agreement, I could not start or join a men’s online magazine, so I thought of creating a catalog of evergreen, ad-friendly videos on a wide array of categories.

At the time in 2006, there was a lot of euphoria around social media and user-generated content (UGC). I felt that social media and UGC would be very disruptive in news and publishing but when it came to any ad-supported editorial media, marketers would seek professional content. People thought I was nuts in financing original video content creation, but now that content is growing in value and acquisitions are being announced every week (AOL acquiring 5min, Techcrunch and Huffington Post, Yahoo acquires Associated Content) the idea behind WatchMojo isn’t that crazy anymore.

It’s basically a cross between About.com and Wikipedia.org with the editorial tone of a consumer magazine, but all in video and all professionally-produced by an amazing team of producers, researchers, writers, videographers, hosts, editors in Montreal. We have a lean but productive team, pumping out 100 videos per month and nearly 7,000 all-time.

The main evolution came early on when we moved from a destination approach to a distribution one, when we realized that search engines did a poor job of indexing videos and consumers were developing the habit of watching videos on sites like YouTube.

Otherwise, we’ve actually stayed true to our core vision that content is king, but without distribution it’s akin to a tree that falls in the forest.

For more information about video stream online. Click here.