Last year we applied to TechStars 2008 for our website http://mediawombat.com (a search engine that indexes the contents of flash media (*.swf files)) and were rejected.  That was our first rejection and stung a little bit.  Much like Micah, we were already dreaming about the fast servers and huge pipes that we could afford with the seed money and were looking forward to doing something huge.

This year, we came up with another concept and put it together.  The new idea is http://bidboxr.com (a combination of ebay and adsense – where you would put your auctions on other peoples’ websites as ads) and got rejected by DreamIT Ventures before the deadline for TechStars (they told us that competing with ebay was crazy).  I attended TS4AD in March and I used all of the tips and tricks that I learned there to pitch our site, our team and keep TechStars in the loop (like they requested) while we worked on our site some more.  We were sent an email on March 30th saying that we had made the top-50 companies and that TechStars will notify us in two weeks if we made the cut or not.  We were a little happier, but tried to keep the pessimistic attitude.  The chances had gone from 1/200 to 1/3, so we were feeling lucky, but it wasn’t a done-deal yet.

This morning (April 13) we got our TechStars 2009 rejection letter, but it didn’t sting as much as the earlier ones did.  I was keeping pessimistic about the whole thing just in case (there were 500+ applicants to TechStars this year after all) and we already have small investors expressing interest in our site and the site is up and running without hardly any costs to keep it running, so we didn’t really need TechStars all that much to begin with.

So, in an effort to not sound like one of those American Idol rejects shown on the first few episodes of every season who say things like, “@#$% you Simon!  I’m going to make it big without you and your stupid show”.  For those of us who didn’t get into YC or TS this year (Micah), don’t worry.  I think that I’ve figured out how to make it (not big, but get some traction at least) without the use of seed investors.

I’m a technical guy.  I write code, get websites up and running and deal with the computer/technology piece of the puzzle.  I don’t know anything about pounding the pavement and cold-calling people to see if they’d be interested in our technology.  The thing that I have going for me is that my partner is also a technical guy, but has a background in sales!  He understands the technology (he created a lot of it) and also does a fantastic job of getting people to come and look at our site and sit down with us to discuss possible business opportunities.

TechStars suggests that 2/3 to 3/4 of your team should be technical and I agree.  Having a team that can whip out tons of code out in a very short period of time is essential to making major changes to your site in the 3 months of TechStars and keeping your initial customers happy.  However, if you don’t make it into a seed program, my suggestion is that you add a little more heft into your sales force to do some of the footwork that the seed programs may have helped you out with and also change your thinking to more like a penniless startup (read on).

When I attended TS4AD in March, I was really impressed by one speaker in particular.  He was the CEO(?) of http://dailycandy.com  and talked about starting a company in the post-9/11 NYC economy where there was no money.  His first server was a computer sitting under someone’s desk and the whole website operated on a business-class DSL line that they paid < $100/month for.  They didn’t go the VC route.  His rule of thumb was, “Don’t spend a dollar until you have two”.  I wrote that quote down.  They focused on one thing at a time and did email marketing – it was free and software was hand-written, so costs were essentially nothing.  The company slowly grew over time and so did the product, but by keeping the overhead low (no copy machine, every employee assembled their own desks and chairs, etc.), the company was able to maintain the startup culture as long as possible in tough economic times and survive.  His talk was great and left me feeling like there was a second option that was available to me as a founder of a startup that I hadn’t even though of before.  For a short while, we even considered pulling our application out of TechStars to run the way of the cheap-o startup, but we didn’t pull out our application – just in case.

So, in short, we (and you guys too) really don’t need a seed program (Take that, Simon!).  We had made the top-50 at TS and missed getting selected by a very slim margin.  This gives us some good confidence and tells us that our idea has some real merit.  We’re currently very fueled by this notion and using that energy to move forward with our expansion plans on our own.  Just this morning, we were contacted by a company who is willing to list over 5000 products on our new site and it’s making us feel even better about our situation!

For those of you who were rejected by TechStars, DreamIT, Y-Combinator, …  We feel your pain and need to keep our collective chins up and noses to the grindstone.  Getting rejected is not the end of your startup, it’s only the beginning.  Get out there and ring some doorbells.  Take a small business owner out to lunch and enjoy being an entrepreneur!

Oh, and next year – we’ll probably do it all over again.  :)