As we prepare for our VC coming out party up in DC, I guess you could argue the timing couldn’t be worse.  There is so much “sky is falling” chatter right now.  Jason Calacanis’ latest prediction:

It’s my (belief) that the economic downturn will be much worse than it is today, and that 50-80% of the venture-backed startups currently operating will shut down or go on life-support (i.e. 3-4 folks working on them) within the next 18 months. 
(It looks like Jason asked TechCrunch and Alley Insider to take down their verbatim reprints…Read Full Email Here while it lasts…or just sign up for his email).  

Here’s the good news for us: Heck, we’re already 4 dudes and a Rails box.  No offices (except for our Starbucks board room), no stupid expenses, tiny overhead….All code, no filler.  Recession, Depression be damned.  Why does history always repeat itself?  Didn’t we learn anything from the nineties.  Glowing aluminum signs, Aeron chairs, Killerspin ping pong tables….Get mad.; Bootstrap!  

In the previous world (ie a couple weeks ago), VC money was the opiate of the tech masses.  One should always see VC money as simply a catalyst for your startup chemical reaction.  Even if you don’t have it, the chemical reaction still occurs, just at a slower rate.  If VC money is treated as the reaction itself, then you will be in that 50-80% that goes to Pets.com heaven.  

Our first little venture is already breaking even.  We’re expanding/improving our current product line every week and have two more exciting projects in the pipeline (including an iphone app).  Personally, I’m bullish.  Every decision we make here at 4What is based simply on whether it makes money.  That should be the golden rule in the best of times and the worst of times.

Either DC is the Technology Promised Land, or there are a bunch of alcoholic IT professionals up there.  I met up with Laz (of Baltimore) at the sold-out TwinTech happy hour (read all the press).   Happy Hour as in free booze (good booze, too, except, for, maybe, the strawberry champagne).  Damn, this was an impressive event featuring a cast of a thousand tech folk (all disciplines, all industries) packed in a three floor nightclub.  I really suck at “networking,” but even I could start a conversation at TwinTech/exchange business cards….Speaking of business cards, a quick shout-out to Innsbrook Kinko’s (you guys rock for getting us cards at the last minute!) .  

Richmond (I’m talking to you Tech Council), we need to do something like this!  If you can believe it, DC/NOVA already has two more technology-based happy hours scheduled in the next couple of weeks: September 23, 2008 NEW MEDIA SALON & “Dot Com” NETWORKING PARTY | October 2, 2008 TECH cocktail DC 3.  Like I said, alcoholic IT professionals.

In part, this DC meetup with Laz was also to celebrate ButtonALL’s latest milestone, our first meeting with Venture Capitalists (celebratory post-dinner at my favorite “old-school” Chinese restaurant Tony Chen’s upstairs).  We were chosen as one of ten companies to present at the upcoming Tie-DC Pitch Dinner co-sponsored by the Northern Virginia Technology Council.  This closed private event (no audience) is designed to be an intimate one-on-one session between companies and VC.  We have eight slides, five minutes to make an impression.  Not a lot of time, so we’re thinking about hammering three themes: the demo, our market, monetization, monetization, and monetization.  Stay tuned!

We had an incredibly productive meeting last Friday at our Short Pump branch office (ie, Starbucks…LOL, which one?…as Wray pointed out, there are literally FIVE locations within about ONE square mile– TWO in Short Pump Town Center, Lauderdale (our branch office), Barnes and Noble, and Target–that’s not even counting Cox Rd, Gaskins, and Nuckols).

Number one item on our agenda was TechCrunch50 (or rather TechCrunch 53).  Should we accept the demo pit invitation and go in the hole for $5,000?–($3,000 for registration, $1200 for 2 plane tickets, $450 for hotel, $150 for car rental, $100 for meals (that’s underestimating cause it’s me…hell, I’ll eat $100 in San Fran Dim Sum alone), and $100 for shwag)

First off (reading from cue cards ;)), it was an honor to make Second-Team All-American .  Considering this company is only a couple of months old, we couldn’t be more excited about getting a runners-up nod.  It’s like getting external validation (West Coast Tech Gods validation, no less) that we’re on some kind of right track strategically.  More importantly, Wray just shared some recent “stickiness” statistics for August.  People are using ButtonALL.  They are starting to customize.  And they are definitely returning.  Man, if we can just get it into more people’s hands…

So why not just go to TechCrunch50 then?  Look, it might be different in California, but in Virginia, Five Grand is a lot of money for a “garage” startup.  The promotional ROI is difficult to forecast (especially, with the focus of the event being on the 50 debutantes).  As for “venture funding,” honestly, we don’t need it right now for this project, and even if we did…Wray brought up a farcical scenario about our current readiness…

• VC:  “Well, boys, we like your company.  Why don’t we meet up in San Mateo in two weeks?”
• Us: “Uh, could you pay for our plane ticket?”
  n00bie lambs to the slaughter!

When you are a start-up, wise bootstrapping is a must.  Cashflow is king, and all expenses must be prioritized by cashflow potential and probability of immediate financial return.  A tech conference, no matter how sexy, just can’t pass this litmus test, for us, for now.  OK, that’s my final word on TC50* (that is until next year when we make Varsity!)

*Postscript: At the end of the meeting, the guys were giving me a lot of grief over this blog post….Ed’s attempt at edgy, Colbertesque humor on the blog….FAIL!
*Postscript 2: Counterpoint: TechCrunch: What Winning TechCrunch40 Did for Mint.com