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Geek's Startup Business Experiences
FreshGroundPepper writes "A few friends and I are in the process of starting up a new software company. (We are compiling our business plan now) With the vast amount of software/startup experience among the /. crowd, we were wondering what kind of potholes and advice our fellow geeks could lend in the way of generic do's and don'ts in the early stages of the game. I'm not looking for legal advice so much as just any gotchas that others have run into."
Play ball with Microsoft. Base your technology on MS stuff. Sell the software and make a little $$$. As soon as MS start to eye your market, they will prefer to buy you out, not drive you out. Cash in your shares and buy a mansion, a Ferrari, and a yacht.
Do this if you care about kudos:
Base everything on Unix, give your product away for free, and distribute all your source. Ignore the flames you get from coders that have a superiority complex.
What's wrong with switches? They're really, really, really, fast. and expensive. and purple :-)
This is *VERY* true. When talking to VCs, just remember, as a friend of mine says, "They are all bastards." I could write a book on all the ways they will try and rip you off.
Check out this cartoon out. It is a very accuate dipiction of VCs.
i think you should hire me... ill help ya out Menelaus22@yahoo.com
Well, e-mail me your resume (if you can't figure out how, you're not qualified. Reverse, however, is not true :).
If you don't, you're a blasphemer!
VC-types (that's Venture Capital, not Viet Cong) like businesses to incorporate in Delaware for the mandatory disclosure laws. They do not like Nevada for the about the same reason (NV gives businesses too much privacy).
No, he's wrong. It's okay to go proprietary. Just make sure your software is interoperable (for example, XML is great for interop)
Wisdom I have learned in business:
Give a man a fish and he will eat for a day. Teach a man to fish and he will put your fishery out of business.
A picture is worth a thousand dollars to a big enough sucker.
Wisdom I have learned in general:
You can lead your sheep to water, but you can't make them put out.
Do unto others as your pervert uncle did to you when you were 7.
Make sure its all open source, or RMS will come to your house kill you.
Its funny. Note to the clueless: moderate up the one I'm replying to. Not this one. idiot.
I started out with a software company, creating a few special projects... ... I ended up selling pabx's with my software to controll them. I don't write other soft very often anymore and I make 6x the money I made before. If you want to do something you realy like, do something you don't realy like but earn enough money with that do pay the cost the realy like part brings with it. I did it and I love every half of a day. programming is a dirty job.
OpenDK model
The first step to success: get lots and lots of software patents.. the simpler the better. For example I happen to know the commenting style where you use /* */ where // would do the trick, e.g.:
/*
* The code below adds 1 to i
*/
has not be patented yet. Get in quick!
microsoft code is a load of crap mcconnel is teaching you all the stuff he learned at microsoft
fast(er)(est): lame, lamer, lamest. remember what that salesperson told you when you bought your old 486?
expensive: out of curiousity, is that a built-in feature?
purple: well, hmmm... how fast can this color get annoying?
- "He who cannot see is blind, he who cannot hear is deaf but he who cannot reason is dangerous." - Quote from *AGB*
he is a worthless liberal slob who is lazy and doesnt want to work, furthermore he is ungrateful for the wonderful benefits you have given him to put food on his plate, he is biting the hand that feeds him much like the idiot anon cowards who bitch about slashdot or people who bitch about irc ops. also like those goddamn WTO protestors or those moron students in Tienanmen square. you need to instill some discipline.
you know those guys on the street who havent bathed in 3 months and have unidentifiable scabs all over their arms? they were idealists, they had lots of morals, now they beat the hell out of each other trying to get the can of beans in the trash that has the least maggots. you have to grab the opportunity of an east coast banker and hold on to it tight with both hands. if you pass it up you will never ever get the chance again. and you will wonder what good all that morality and high mindedness did you when your coworkers go bankrupt because they believed in you, and your family if you have one is eating pine cones and using old newspaper to wipe their ass. theres your damn dream... foolish pride that drove you and yours to poverty and destruction. way to go moron. you thought you were pretty smart didnt you. (note this post is a joke)
the answer is to eliminate these people from the general population,, or at least give them jobs where they cant do any damage. slavery, despite popular misconceptions, was not all that bad. the racial nature was a problem as many inferior whites were left in positions of power while many superior blacks were denied this power. however slavery in and of itself is a good solution to the 'slacker whiner' problem pervasive in modern civilized societies. these worthless people are a burden on society and restrict technological and social progress. their manual labor as well as their child bearing and milk production ability can be harnessed for the greater social good, but other than that they should be detected , perhaps through a nationwide databank that combines up-to-date genetics research with job performance analysis (lines of code per day perhaps?), and moved to more productive roles in society in labor foundations. much as the chinese have done to strengthen their booming economy through 'reeducation through labor'
On a related note, any advice for finding a publisher for software? I have an almost completed program that took a lot of work to develop (over 100,000 LOC) and I'm interested in finding some company that would buy it outright or publish it. The first dilemma is should I incorporate? How to go about contacting publishers? Etc, etc.
If you don't trust a person, don't deal with that person. You can't fix them, and you can't "make up" for the person's deficiencies when they are in a position of authority.
This is extremely important. I made this mistake once, and the company eventually went bankrupt. Now my 'partners' have made this mistake again, and the company has never been the same since this guy showed up.
I'd rather have just gotten a job. I'd be a lot better off financially too.
we have a little thing going. its not much but it makes cash. i dont mind the long nights sometimes when a customer is feeling really frisky. but you know, its really good money. they are usually polite too. me and my friend are going to do it a couple years to see how it goes. maybe we can make it big, crossover into other businesses. its nice being able to apply my body to my work, my mom always said i was a very attractive young boy.
another happy customer of CAPITALISM! how do you like it!
i have a great idea for this startup, im going to get linux computers and beowulf them.. i dont think anyone has done this yet. im going to sell them with quake preinstalled. they will all have 19 inch monitors and the metal E-theme preinstalled.. i think the combination of the metal E-theme, quake, and beowulf will be extremely great for the desktop, and after im funded for a few years i look to hire people to bring linux more to the desktop, maybe with a better GUI by developping improved E-themes. i had a really cool idea for a theme that was like, all black.. awesome huh!
have you ever heard of a 'comma splice'? jesus fucking christ i thought you were from fucking pakistan for chrissake. learn to fucking write, chimp boy!
Dude, do you ever sleep? You must spend more time here at slashdot than CmdrTaco does. Psst, get a life.
Jesus would probably do something with hookers
Jesus did do something with hookers. What do you think Mary Magdalene was?
A company needs Finders, Binders, Minders, and Grinders. Where do you fit in?
Lots of good books on the life cycles of organizations. I'm working with one right now that's trying to transition from startup to middle aged. Everything has been run out of the back pocket of the Director. They don't even have a real Chart of Accounts for Quickbooks.
salvage any of the xBASE code Look into flagship. Claims to be able to run xbase, clipper, foxpro, etc.
Forget xBase. Just lose it. Spend your efforts writing an idiot oops, I mean user, friendly front end to a php/postgres/mysql thingie.
That will have staying power.
My friends an I are starting up a company to do the paperwork, accounting, legal, venture capital and other services for startups. We do all the coporate stuff at or below cost in return for 5% of the company when you go public. We don't make any profit unless you go public. This lets you concentrate your time on what your good at. Within a month we should be accepting new companys and have our website up fully. It will be a great place for startups to get venture capital from ordinary folks. You can see our beta site at www.24invest.com Sorry it isn't up now but where just getting our people trained and ready for companies like yours. If your still interested check back at the end of feburary. TTYL. P.S. If you wish to talk in the meantime go to the contact page and send us a message or fax.
Give me yours.
Grizzly Adams DID have a beard...
Sorry. Hehe.
My Advice:
SELL OUT
The purpose of a business is to make money, and if you can maximize that by selling out, why not? If you get a lucrative offer, or can position yourself to get one, go for it, get rich, and retire.
You can always un-retire a couple years later, and you will have CASH, so you don't need VCs or Bankers etc. Then you can hold the high moral ground if you want.
If you need some advice with few or no strings attached check out www.score.org
They're active in the Midwest, and I don't know how they are on the coasts, but my dad's a volunteer for this group and they do good work. The idea is that they're a bunch of retired executives that still want to keep a hand in the business, they've got years of experience, and if my old man's any indication of the quality of advice you'll get then you'll be in good hands.
The first thing you will have to do is raise it. If you cannot interest someone enough to make a substantial investment in you and your idea, start over. Think somemore. Finding that angel is a key. Then, its all about burn rate - how fast are you going under? Even Amazon.com has to worry about that. Know this number every day. Everyday. Untill you have as much cash in the bank as Microsoft or IBM, it will be the most important thing to know because it will decide for you many of your options. Understand what you can do to effect this number everyday. We blew $26 Million of VC money - and the biggest issue was that the management team forgot the burn rate. We were reaaallllyyyyy close. But that does not count.
Do not write software for Linux.
This may seem like a terrible comment to make but it is also very wise. As a start up, you have one chance to make whatever you are working on a success. If that initial product fails, you get to go out of bussiness or have the fun and interesting job of trying something else with no capitol. Either of these options are extremely bad, I'm going through the later right now.
With that in mind, Linux is a bad platform for a startup to focus their initial product on. First, if you are doing a graphical app The X Windowing System will make it look, feel, and perform like crap. Last, the Linux community will not buy your product. They tend to look down on anyone trying to sell a good piece of software, even if it's the most revolutionary product for Linux yet. You know that you are doing this so you can eat, I know this, but the Linux community doesn't care. All startups doing Linux software initially will fail and have to redo their products for profitable platforms such as Windows, or the Mac.
Not so strange is that these are fundamental reasons why commercial products are slow to migrate to Linux. The only companies doing so are game companies and companies that create network and system utilities. The only way to fix the problem is to replace X with something completely different and get the Linux community down off their "holier-than-thou" high horse. Even with all of it superiority, Linux will not beat Windows while keeping X and the attitude.
My suggestion for you is to develop for Windows or the Mac in the beginning. Once you have created a good app that is profitable, port it to Linux. At that point it doesn't matter (finacially) if the Linux community buys because you will be doing fine with another platform. You could even give away (binary only as to not hurt your Windows or Mac sales). If you don't heed this advice, you will find that within three months of initial release of you Linux product, you will have gone out of bussiness, opened the sourse, and/or gone on to developing for Windows. I don't make the rules, but thats the way it is. I know it sucks and I wish that it would change too.
Having gone through 4 startups already, I'll comment. Money and customers are the most critical thing. If you're going to launch the product big, make sure you gain real users if not real customers. The sooner you have real people using the product, the quicker you can make future sales or seek future cash. Cash will disappear quicker than you expect. Try to get extra money up front, even if you have to dilute the share price a little bit. Make sure to save this cash. The moment your projections do not match (you should be looking at least 12 months out) actively search for more money! You may get lots of promises, but it's never cash until it's in the bank... even if it's a signed contract. Marketing is key. Make sure you have or hire a VP of Marketing that knows the market, internet culture, and your demographic as well as your product. PR or Advertising agencies can be useful, but often times they're hired because most Marketing VPs are lazy. Don't spend money taking out ads in the Wall Street Journal or even Wired or a computer magazine when maybe a download.com featured product might get you more exposure. Infrastructure is the second key. Make sure you have your corporate database and file server and NT domain controller setup on day 1. Make sure you have a good network setup from day one (don't skimp on hardware) and make sure you have a solid internet connection and a super solid firewall. Make sure you have a good accounting package (QuickBooks will not do it) and a good sales force automation package (Act! will not do it) and a good tech support/knowledge base package (techies sending emails back and forth will not do it!)... Hiring is important. Always interview even if you're not quite ready to hire. If you panic hire you will end up with people that you really don't want to hire but will "be able to do the job". In startup mode, you really want the best people possible up to about employee 40 when you can be a little less picky. Make sure to pay those first 40 people well, and make sure their pay scale matches up with new hires (yes, they're getting stock options, but they also made the company what it is and an IPO may be years away). Corportate culture is fundamental. Hopefully the founders will let their personality flow down to all employees but make sure to make a point of incorporating everyones culture into the mix. Sponsor employee hobbies such as racing (bikes, cars, marathons), charity work, vacations, etc... Hope that helps... --D
This may not be the most vogue of advice but here goes: Skip the glossy business plan. On a single sheet of paper, decsribe what you are going to build, who is going to buy it (and why), and how they will go about doing this. Focus on building something people will buy (because it solves a real problem that they have - or will have) and are willing to pay money for. Know in your heart that you can build and sell it for more than it costs you to make. Be specific in your marketing: don't follow the path of "the internet is going to be a $90 gazillion market in 2003, if we get just 0.1% of it we will be rich!" Good luck!
Inc. Magazine started a series in January 2000 called "Start-up Diaries". I only have Jan.'s issue, but it's interesting. Basically they follow 5 start-ups around and get the major players in each company to comment on their experiences, etc. Quite interesting, actually. So, go get Inc.!
A good sales person can sell a lousy product but a lousy sales person can't sell a good product. Always market your company. If you can't hire a marketing/sales droid, do it yourself. Never miss an opportunity to get your name out, never miss an opportunity to talk to prospective clients, other people in your field, anyone, about your company and what you want it to do. If nobody has heard of you then there is no way that they will hire you or buy your product.
Actually, psychology studies shows that these non-monetary rewards make people feel pretty good. Practical work experience says that they do also. Basically you're recognizing the fact that these people deserve recognition, even if you can't provide the EXACT type of recognition they want. Many studies show that the recognition is more important than the momey when it comes to recognition of a 'job well done'. Everyone wants to be compensated, but lets get real I can't give employees more stock everytime I notice them interacting well with a client. However, I can give them a t-shirt, a hat, or something else small that says "I noticed, keep up the good work." That does motivate people, and it makes recognition of good work a part of your daily operations.
Ala NPI. The investors brought in their own CEO, and she replaced all of upper managment with her own people, the company went to hell, and she moved on to destroy the next company.
Can you elaborate? (investor? employee? customer?) The "She" (Pauline Lo Alker) is now CEO of amplify.net
Thanx
Typical business plans, the ones used to seek VC, focus highly on the financials and less on the product or service.
I know it's been said time and again, but the best way to attract VCs is with a slideshow. They like to have things summed up. I can't believe how many times I've heard that one. You BP is for YOU, to help you grow your business.
I think there is a lot fo good advice here from getting funding to corporate structure. However, I the ones you should pay attention to are those that stress management. A company can flounder along on horrible management for years but its never going to live up to its potential. To reach that you need vision and implementation at the managerial level. The workers are vital but, as we've seen many times, the majority of programmers are interchangable... good managers are unique and are crucial to the survival of a business in every phase of operation.
:)
No, I'm not management, I've just suffered under bad management long enough to know what doesn't work
Oh, just as important as mangement is a clear idea of what you sell. You may package software but that isn't necessarily what you sell. For example, you may end up selling games but what you are really selling is an immersive exciting experience. The software is just a vehicle to deliver that experience. Yeah, it sounds stupid but it really is an important concept to get a handle on.
Suggested reading: The Practice of Management by Peter F Drucker.
1. Hire the very best. If someone is not the very best, pass on them.
2. Compensate them fairly! Make sure your salaries, options, and other benefits are competitive with the top startups and companies. In Silicon Valley, things change very fast, what was considered top options and salaries for startups in 1997, is at the very bottom for startups in 2000. Review this every year and adjust to the market rate.
3. Make it a fun place to work. Your company culture is very important, it is something you have to work at everyday.
I can guaratee you if you break any of these three rules, your *best* people will leave your company in a heart beat!
Veteran of two startups that went public.
People who use grow as an active verb (as in grow your business) should be castrated.
Your friend is wrong. An llc or llp (Limited Liability Company or Partnership) provides the same protection as a corporation. If you are paranoid, you can set up a manager managed llc managed by an llp in which you are a partner and not liable, abstracting this out two levels. You will pay more in tax, and it shouldn't be needed.
Delaware if fine, but an llp or llc in most states is just as good. Just make sure that you keep the business a business, i.e., keep all the records, log time used on a system if you cannot dedicate one for the business exclusively, get and keep insurance, get and keep a solid company bank account, develop a good credit record (getting Dunn and Bradstreet to audit you after a few months in business works just fine, for example, for $75 a year), work out with your banker when you can set up credit lines, repurchase agreements, and so on. Be fiscally conservative and set actual internal policies. All of this makes you auditable and easy to deal with, and really reduces the possibility of problems ensuring that the manager (you) and the company (the llc or llp) stay two different entities in the eyes of the court, should it come to that.
Actually, there's an interesting book about an imaginary Silicon Valley startup by the name of Microserfs. Good fun.
And if you're not from around here, yes, Fry's is that big.
Heh, sounds like a startup I worked for... now they're associated with Microsoft.
A few comments re: the above:
Lawyers come in various flavors; be sure you pick the right one. For a startup you need someone who can read through leases and employment contracts to make sure you aren't being screwed, and someone who knows who to deal with down at the courthouse if you missed paying your last withholding installment. Prestige and size of firm do not relate to the level of service you'll get. (Generally, with the fancy $1000/hour big-firm people you'll find yourself paying the $1000 for some clerk to Xerox something out of a standard contracts book.) But the guy who can keep the sheriff from padlocking your door by making a couple of calls can be a lifesaver... and he'll be more likely to look out for your interests than some senior partner with hundreds of "clients".
Accountants always want to sell you their "standard package" of services. Naturally... that's the easiest thing for *them* to do. But all the pretty reports they produce aren't worth a damn unless they (1) tell you what you need to know (2) in a way that makes sense to you. If, after reading your accountant's reports, you don't know whether you made any money this month-- you're *not* getting the information you *must* have to run the business. Also, beware of accountants who want you to reorganize your business to meet their standards. You don't have time to code every check and allocate every payment. If you're doing this and paying an accountant too, fire the accountant and buy a copy of Quicken.
Payroll and payroll taxes. You don't have time to deal with this stuff. Congress changes the laws every year, and you should be running the business, not practicing tax law. If you have any employees, hire a payroll-prep service to handle the checks and the reporting. Until you've experienced it, you'll have no idea how wonderful it feels at the end of the quarter to get that package of forms-- all filled out-- that all you have to do is sign and mail!
Organize and document. Being able to put your hands on information quickly is not only efficient, it's also good for your peace-of-mind. Consider being able to walk over to the file and pull out that six-months-old canceled check when some supplier is yelling that they never got paid. Now consider the alternative: "Well, I think it's in one of those piles over there." Which would you rather do? If your records aren't arranged so you can find everything (who knows what you'll need tomorrow), hire a secretary (or if you can't afford one, hire some English major graduate student). Tell them that you don't want to see any stacks of paper deeper than 6" on anybody's desk, and let them have at it. Trust me... once you get used to it, you'll love the change.:-)
Cultivate a professional atmosphere. If you're going to be in business, then by God be in business! That doesn't have to be suit-and-tie, but it does mean that you should at least have the appearence of being serious about what you're doing. Be sure that someone competent is available to answer the phone during the "normal business hours" of 9am - 5pm. Printed materials (proposals, instruction and data sheets, invoices, etc.) should be thoroughly edited for spelling and grammatical errors. (More than this post!) Offices where you meet customers don't have to be luxurious, but they should be clean and uncluttered. All of these things will affect your customer's opinion of your competence. How will you rate?
Don't neglect the stuff you don't like to do. Buried in those double negatives is an important warning. You will prefer to spend an extra night coding, or designing, or whatever... rather than looking at financials or sweeping out or writing that proposal. Best advice here is: Whatever is least attractive on your agenda is probably the one thing that most needs doing. If you're not going to deal with it now, hire someone to do it. Now. Don't put it off. I'm serious.
There are many other points I could make, but it's 1am and this has gone on too long. So I'll only make one more: Allow yourself some time away. There's always more work to be done than there is time to do it. And you'll be tempted to take that extra evening, give up that Sunday morning, skip that vacation... because there's always something more to do. Early on, when the enthusiasm and energy is high, it's easy. But beware: You may look up five years from now and find that all your friends have drifted away, your outside interests have been neglected, and you're totally exhausted and burned out. In other words, that it's no longer fun. And if it stops being fun, what's the point?
java is flopping like hell huh??? i started my first job in november 1998 (fortunately with java), and in 15 months, im making over 110K doing Java alone. i dont think its flopping like hell!
No startup company could handle the volume of being /.ed advertise on /. once you're established...
Prior
propper
planning
prevents
piss
poor
performance
I like the KISS principal too
Keep
It
Simple,
Stupid
Do not defend the Status Quo.
Do not step on people.
Do show respect for your partners/employees' ideals/ideas.
Work hard.
Work harder.
Have some scotch.
Be careful whom you take money from.
A law firm (hourly basis) is better than a lawyer.
Unless you're a financial guru, let someone else handle your books, taxes, etc.. (*I* know, Doh!)
Profit and social responsibility are NOT mutually exclusive.
Have some more scotch.
I suggest you document whatever agreements are made. Even if you trust the people you work with, your partners could be killed in an accident and it's unlikely that whoever takes their place will want to honor a verbal commitment.
Don't just pick one and go with them, interview several. Many attorneys will give you an initial consultation for free, and even if you blow a couple hundred on the initial consult to find you don't like the attorney, it's worth a couple hundred to know that one wasn't right for you.
No matter what you're doing you're going to run into legal difficulty at some point. It's good to be well informed on your own (read Legal Care for Your Software) but there's no substitute for a seasoned pro.
I found this out the hard way, only getting an attorney after things had gone all to hell with a lousy client.
Suppose you're writing a commercial shrinkwrap product. Hire an attorney to write the shrinkwrap license. Are you a consultant? Have your standard contract drafted. Ask about what you need to do to get your company properly incorporated, maybe in line for an IPO.
Make sure that you find a lawyer that's going to be happy dealing with a little company like your startup. Don't waste time dealing with someone who's just going to take all your money and not give a damn.
Try www.smartonline.com. Lots of good information. I used them when I started my business six months ago.
Having participated in two start-ups,the first was a mess and the second successful. one of the keys is planning and managing the balance between : Product, Marketing, Financial and Management. Product - Research you products, Know your competitors and the state of the market. Is it an emerging market? or is it pretty saturated? Who are the big players and what is there market share. Are they making money? If producing hardware or packaged software, calculate your fixed and variable costs and work them into your pricing model. For services, be realistic when tracking hours, don't sell yourself short. aAnd most of all KEEP YOUR CUSTOMERS HAPPY! Refferals are the Best form of advertising. Marketing - Its more important than you may think. Avoid a "build it and they will come" attitude. Many technically superior products were bested by better marketed competitors. Know your Market. Builkd relationships. Evaluate your methods and what impact they will have on your "target market" When dealing with salespeople the best motivator is a compensation package that is rewarding and realistic. Establish sales objectives,Track your sales cycles and contacts as a method of managing salespeople. Avoid micromanaging salespeople. Finance - Manage your cashflow!! Keep an eye on the your receivables, know who's paying late and why. Think of your business as an investment, your stockholders are! For every dollar you spend you should be a return of $1.30 (net not Gross) or else you may as well just put you money in the stock market. Create a Target profit margin and evaluate each deal to see if it meets that target(before accepting and after implementation) this will help you select your business in the future and after Avoid counting chickens before their hatched. Crunch the numbers, many "sweet deals" may end up costing you in the end. Hire professionals who will explain things to you. Take advantage of Tax laws for business owners. Management - Select partners that you trust and that have abilities that complement yours (think Wozniack and Jobs) Lead by example, be clear with you objectives. Encourage a productive corporate culture. Most of all this is your company, Success doesn't necessaraly mean $$$ if your goal is a multimedia IPO, so be it. I know several friends who went out on their own to create a more pleasureable work environment for themselves and their families.. IMHO they are the most successful of all. Plus they get Elvis's birthday off as a company holiday.
I would have to say that competant employees that are willing to work their asses off are the most important thing.
Yes, finding clueless yet technically compentent people who have no life other than their job is very important. Working them mercilessly while enticing them onward with stock options that later turn out to be worthless is also a great path to finanical success. Then when they collaspe, drained of all energy, you can fire them and hire new clueless minons who have been taught that life is work and work is life.
I've met executives, salesmen, lawyers, accountants, managers, grunts, and consultants, but I've never met a marketing guy. When I look for a marketing guy, I find an over-the-hill salesmen or a recently fired executive. Someone who won't even talk to development, with no strategic vision, who only sees the Fortune 50 as customers. I just fired one. A very good recent book (can't remember title or author--damned Alzheimer's), documents the marketing failure of the startup developing the Front Page software product eventually sold to Microsoft. Startups need Marketing help more than anything else. Where do they get it?
What compiler are you using for your business plan? Is the plan portable?
as i sit here, drinking a glass of red wine (for my high cholesterol), finishing off my third pack of cigarettes for the day, and slowly succumbing to the effects of this hydrocodone i just took, i feel compelled to offer you some advice in the hopes you will reach the same rewarding station in life that i have. starting a business is a complicated endeavor, at best. it helps to keep in mind the reasons you are beginning this journey in the first place.
at first glance, it may seem like your goal is to make money, preferably doing something you find satisfying and challenging. actually, this is just an illusion. although having a satisfying and challenging career and making money are the short term goals, these are just stepping stones to your ultimate rewards.
we all know, whether consciously or otherwise, that what you really want is to score a hot young piece of ass. the fact that you disguise your ultimate intentions with a question about a business startup suggests to me that this some sort of repressed issue with you. it's ok. we all want to score a hot young piece of ass.
i will say, you are on the right track. you need to make a lot of money. the more money you make, the more chicks you get. then you'll make more money... then you'll get more chicks... it's a beautiful snowball effect. once you start down that path, forever will it dominate your destiny. consume you it will.
uhmmm, what was i saying? oh yeah... chicks. so, you need to make some money first. i would recommend starting your own business. you may want to submit an "ask slashdot" question and get some advice about how to proceed. that makes sense... just watch out for the trolls.
thank you.
Take venture capitalist money with great care! They're not called "vulture capitalists" without reason. Under NO cirucmstances should you let them get a controlling interest. They'll be ALL too happy to yank what you've built out from under you -- they'll likely have put a large sum of money into you, and they want to at least get that back -- not to mention that they want MONEY. If they think the company will do better without you, they'll connive to kick you out. VC's can do ALL KINDS OF FUNNY THINGS with the equity you give them. Watch them like a fox in a henhouse. In fact, if you don't really need the money, don't go to VC's -- sure, the cash would be nice... but... it probably isn't worth it if you don't NEED the funds.
Real life example: A VC wanted to invest in a certain company. They (the VC) valued the company, at the time, to be worth 30 million dollars. They wanted to give around 5 million for 51% of the company. However, here's the real kicker -- the company's ONLY public competitor was worth nearly TWO BILLION dollars, and had only gone public around 6 months previous. The private company itself, imo, had better fundamentals than the public one did, and thus probably would have been worth nearly as much, if not equal to or more than the already public one.
Let's assume the company had sold out -- the VC makes an immediate (non-liquid) profit of 10 million dollars. Once the company went public, the stock the VC paid $5 million for would suddenly be worth $1 billion. That's an excellent deal for the VC -- but a really crappy one for the company itself. That 51% the VC has is 51% the company (and it's founders) no longer has -- all for 5 million dollars.
Focus on yourself, not your competitors. If you focus on your competitors, that means you will always be working to be better than them. If you focus on YOU, you will always be working to be better than yourself.
Remember, high prices aren't what matter -- high margins are. Lower your costs, lower your prices by an equal amount -- your margins remain the same, and you're that much more competitive. Keep doing this, and if you can win... you will.
Which leads to the fourth thing -- learn how to manage the absurd. I don't mean fix. I don't mean manipulate. I mean "manage" -- as in "cope". There will ALWAYS be things out of your control. The only thing you can do is cope with them -- and if you follow rule #3, this can make or break you. Keep extra cash on hand for dry spells. Get all the credit you can. Know what your core market is, and what you can "give up" and remain a viable entity. Have plans, but don't necessarily stick to them, if a kink shows up. Be flexible, intelligent, thurough, and fast acting when necessary. It's better to cut off a gangrenous leg than it is to let the disease spread to the heart.
And here is the most important rule of them all:
Be passionate about what you're doing. Starting a successful company requires hours upon hours of work, and sacrifice after sacrifice. You WILL be underpaid. You WILL work long hours. For at least one person in the company, the company will become his/her life. If you're not ready for that, you're not ready to start a company.
I'm sure he'd kick an ass or two,
cause that's what Brian Boitano'd do.
I run a small UNIX consulting concern (llc, 145 people, 3 offices and growing about 20% a quarter), and I found the advice of my grandfather and mother (an oil company VP for 40 years and an attorney, respectively) invaluable. One of the things that they suggested was to hire old people who had been laid off for being old. There are an awful lot of them on the East Coast, so I was able to find several, right away, who were willing to work for a startup because they were going crazy at home and no one would hire someone in their mid-50s. They do not (and cannot) do the consulting, but they run the company very, very well, and know all the bankers, know how to structure financial arraingments, and most critically, THEY KNOW THE HORROR STORIES. I am comfortable hiring high school dropouts who have been doing UNIX for ten years because of the experience. Similarly, old finance guys and managers have seen things go wrong often enough that they know what NOT to do. I am not saying that you can't stay fat, dumb, and happy for 30 years at a company as a senior manager, but that it becomes less likely the higher you move. A lot of good people are cheap and available, just old.
I don't know what you guys are doing, but I am having difficulty with management of people, specifically techs that are much older than I am. (I'm 22) We have one that is 40ish, and comes from a completely different background. He seems to vent is frustration by bad mouthing the company & my boss. I try to point out that all he has to do is bring up his concerns in a constructive manner & they will be addressed, but he dosn't see it that way.
;-)
It's pretty hard to RTFM when there isn't a FM.
Don't know if that helps, but I feel better now that I've vented a little bit.
With all the people under one roof, you run less of a risk of having situations get out of hand, and they can be resolved quicker.
At a startup, everyone has work hard and be good at what they do; your personnel resources will be stretched so thin that everyone has to be the best at what they do in order to get things done.
Linking your download page through them is a waste of time. It makes your software that much harder to download, and when you try to release a new version, you have to wait for them to update your links. If you want to know how many people download your software, audit your ftp logs.
There are other considerations, of course, and some of these may not even apply to you. But I hope that's enough to get you started. Good luck with your venture!
Regards,
Aryeh
...ask for advice from random chuckleheads on the net. You can check that box off now.
Don't try to take too much on at once. Move into it gradually, and refine the business plan as necessary.
;-)
Remember that the business plan is nothing more than a roadmap of where you -want- to go. It's a living document that should be consulted and revised from time to time. Try to keep it current; if you have to, set aside a day every once and a while to review it. Check to see if you are on track, have your plans changed, has the market changed, etc.
If you're in the US, keep this URI under your pillow:
http://www.score.org
SCORE is the Service Corps Of Retiered Executives. They give free business advice to any US based business. They have local offices across the US, as well as email consultation. I've only used the email version, but the people there were -very- helpful.
Most importantly, know how much risk you can take. If it's a sinking ship..step back and decide if it's still worth continuing.
The best thing you can do is fail the first time. This may not sound good, but the next time you run a business you'll know what failure is like and be more careful. Especially when it comes to VCs and they have to put their money into your company. If you've failed and started again it shows that you won't give up easily and, hopefully, you've learned something along the way.
It'll help inject a dose of reality into the situation as well.
Anyway, that's my take on it..from personal experience.
Wayne
For instance, at Carnegie Mellon, there's this seminar series going on right now that has people who graduated from CMU and talk to people about how to start your own business. I went to one such talk from a guy (sorry, forgot his name) that founded a biomedical engineering firm, and is now starting up a
That's besides the point, but his lecture had some great tips. Here's a few that I can remember (this was almost a year ago, so bear with me):
That's all I can think of right now... there's a lot to do to start up a business. And even if we all hate them, business people are the right people for the job to get your business going before it gets out of hand. Remember, while a geek may be able to code up his app, being able to juggle licensing and coding is a big responsibility.
You should never take life too seriously - You'll never get out of it alive.
Every time I have bought something for the reason that it was cheap, I have regretted it. Got a $100 fax machine from CostCo: unreliable and I lose important faxes. Needed an el-cheapo desktop: wound up DOA and took longer than a quality system would take to be built and shipped. Cared about price in office space: wound up with an unresponsive landlord, no hot water and old carpeting.
(That said, the only cheap thing that I bought which I haven't regretted: the Bizfon 680 phone system , a really great little self-contained PBX for small business. It's awesome!)
I was involved with a computer repair shop that wanted to start up an internet service provider for nonprofit organisations. We had a storefront people could find us at, we had a good reputation in the community, we had a founder who was exceptional at applying for grants and 501c3 nonprofit status. However, at the moment the whole thing appears to have withered, and I myself left half a year ago.
Here's what happened, what I learned, what to do.
Use your talents, and try to avoid turning away from them towards more generic 'popular' ideas.
You need to distinguish, and if that means some customer doesn't like you, you'd better accept that rather than casting yourself into ever-new forms to please everybody you meet. I wrote a special version of site compiling software based on my Airwindows.com engine, trying to integrate people's amateur HTML into a 'more professional' three-column tablebased layout. This was discarded because customers (still about 4 customers, even now, and the one complaining left and isn't a customer anymore) insisted on uploading their pages completely unaltered, and _not_ built into a more sophisticated layout. I'll let them have some hits too, so they can use that as an argument for hopefully winning more clients- I was with Co-opnet.org. By this point all traces of my work have been removed, except that I did much copywriting on the main page, and a fair amount of this writing remains.
Outperform- but be damn aware of the context you're doing it in.
You need to be able to absolutely burn rubber, to totally cut any competition to shreds. For instance, I figure I can cut most web designers, as I do sorta Perl-active-site type things with custom programs written in REALbasic- I can maintain a large elaborate site and do redesigns and have the software handle crosslinks and details like filesizes and image dimensions. In sound recording, I'm even cockier :) Now, with the putative ISP for co-opnet (AFAIK still hosted off the very capable Vservers virtual servers company), there were also elaborate plans for an internet cafe to co-locate with the ISP servers. There were questions of location, of bandwidth and getting a pipe- while the other Co-opnet people kept the computer repair shop running (a demanding task), I ran about coming up with answers for these questions. I got to the point of actually entering negotiations for a storefront property in town at 2/3 of the going rate (because I knew the landlords personally and also knew the previous tenant and got figures on what he was paying) and basically came in with a bid that would have cost one third or less of the property originally being looked at, plus the previous store's customers were a similar demographic to internet cafe customers... at which point, again, the rules began quietly changing under me, and I got the impression we'd already put money down (without my even hearing about it, and I was on the damn board of directors- may _still_ be) on a basement room just big enough for servers that happens to have a fibre optic link capable of T1. (co-opnet's site currently boasts just over 1000 hits total). Clearly DSL would be more suitable, but what concerned me more was that I was putting myself out there, actually trying to make deals on behalf of co-opnet, and getting second-guessed and undercut- the internet cafe part of the idea quietly dried up and blew away while I was shopping for properties and figuring out what kind of store layout would bring people in and where to get the machines. This, plus I'd agreed to be the main sysadmin, put down $300 of my own money on O'Reilly books and was trying to armwrestle other co-opnet people to not commit to Vservers 'check here to get our special search engine, check here to give all your clients secure web Email' features that'd kill me to get all of them implemented singlehandedly on top of setting up a webserver on a dedicated machine for the first time- and though I'd made it clear that I wasn't going to be able to do all this myself, nobody else ever got added to the roster to cover this.
I bailed, obviously. Stress was freaking me out, I was beginning to get physically sick and nothing was being resolved. So, back to the moral of the story- outperform, but know the context. It wasn't going to help that I could wear many hats and do many things- I wasn't capable of doing what would need to be done. The context was that I was wasting my effort attempting to deliver on the things we'd originally written into the feature list.
Don't be afraid!
Every time you try something it's an opportunity to learn. The founder of co-opnet would boast that he'd had 18 businesses, 14 of them successful(I may be misremembering the numbers a bit). Now, one could well ask, "If they were so successful why aren't you still doing them?" but there's one key point about this- you learn by doing. Investors and smart businesspeople would rather deal with a startup run by people who have _had_ a total failure- at least this makes it possible for the people to learn from their mistakes! Maybe to learn is not a sure thing, but it's better than nothing, and better odds than dealing with people who've either never tried, or have never failed.
Business is a process because _life_ is a process. You're not laying plans for the only thing you'll ever do for the rest of your life- you're laying plans for what you hope to be doing next month or next year. If that works out well enough that you do it your whole life, well then- did you remember to ask yourself, "Is this the way I want to live my life?" Because if you _must_ arrange things so that you can't fail, you might end up hosing yourself, ruining it for yourself. In a way, that's what happened to co-opnet... it was never okay to momentarily fail. If a customer was fussing about some web page thing, it wasn't "Perhaps you'd be better off with something like Geocities", it was panic and overhaul the whole concept of the website. If it was looking too hard to get the internet cafe going and there wasn't enough people or money to do the work, it wasn't 'commit to it more, make it happen', it was quietly lose faith and scrap the concept, go with less exciting, safer ideas.
I'm currently in debt for a year trying to start up a recording studio, building all sorts of equipment toward that end, and I'm happier because though my horizons are more limited (I'm hardly going and shopping for storefront properties! That was kinda fun), it's up to me to pursue them. So figure out what you want to do, and pursue that! Don't be afraid of failure. It happens to everybody, especially if you haven't fallen on your face much.
The most important thing is to learn, and keep learning. Any geek-type slashdot-reader linux-fetishing person is a lot more likely to be committed to this (who runs Linux without having to learn? I'm not sure that's possible). Hence, rejoice- you are probably the sort of person who _should_ be starting a business and doing that sort of thing. Enjoy it :)
As for product ideas, the key is the Unique Selling Proposition. Why should people buy your product? What makes it special (better) than any other product out there? Also keep in mind that your product does not only have to please the customer, but also everyone else involved - vendors, people who will have to maintain the product (sysadmins) etc. If a sysadmin for some reason does not like the product (possibly because it is a good idea that he did not come up with - the "Not Invented Here" syndrome) for some reason, he may be powerful enough to block it, even though people would like to use it.
Of course a business plan includes more than that - most large banks have guidelines for writing a business plan - do use them!
Its been said that more buisnesses fail due to bad management then all other reasons combined. This is true, so get good management. Techies who are barely compitent can get the job done if management recignises their weakness and plans for it. (note that I'm not suggesting you get less then the best techs)
Watch the cash flow. Every month get a summery of all the money you have, and how much you spent. Get it noterized as correct every three months. (a previous poster mentioned that bogus books were showed to him - make sure you have a good case for a law suit if the books are bogus) Don't take anyone's word for how well you are doing. Bad management will show up in cash flow first so know what the bottom line is. After a few months you should get a feel for how much you normally spend. Once you have a general idea figgure out if you have enough money to make it to release.
My dad got involved in a spin off with 15 others, and a product that was pulling in 15 million/year and would for the next 5 years. They looked at the cash flow one month and decided to send my dad out as a contractor for a week. They needed cash flow now, and even though they would get 15 million this year, money in july (or whenever) doesn't pay the bills until then. They had to make a choice when doing this, and it means that their next version will be a couple weeks latter, but at least they won't go belly up with lots of money coming in latter. (Fortunatly the manager that arranged that spin off "quit for personal reasons" a few months latter - I own stock in and work for the parent company I was not happy about losing that income stream)
BTW, you have heard that 50% of all buisness fail in the first year. I just read in the news paper (but I can't remember which one, so you should research this or call it hear-say) that 85% of startups make it.
Good luck.
Big second to this. One of the biggest problems small companies have with growing is cash flow, particularly if you don't start out with a bunch of dough and have it in the bank.
Scenario: You get a $50K contract to build a web app. Excellent! You ask for 30% up front: 16K or so in the bank.
Now, since this is a relatively complicated application, it's going to take three-four months (with milestone meetings, revisions, documentation, etc) to develop. And because you've only got two or three programmers, this project basically ties them up completely, *plus* it takes 20% of the time of the project manager. So that $15K has to cover not only the one programmer but also his/her overhead and the project manager's time. Ouch.
The worst is that people never pay their bills on time. You might get the rest of that contract money 3 months (!) after you've completed the work because their accounting department is full of idiot monkeys. How do you pay your employees (plus bandwidth, rent, heat, taxes, etc.) in the meantime?
How to get around it? Try to tie payments to milestones. Set four or five milestones throughout the project, get a 15-20% down payment and have 20 - 25% of the contract due at each milestone. This has three extra benefits: 1) customers generally like not layout out lots of money at once -- they also like to see performance tied to the money they give you; 2) keeps *you* on schedule (hopefully); 3) gets them move involved *during* the process, when it's easier to fix bugs, rather than dumping all their problems on you at the end, when it's more difficult.
Chris
M-x auto-bs-mode
I'm starting a company too, with KlTheKiten. My friend is really pounding the importance of a Nevada Corp. Basicaly his point is that even if you have a company, set up in limited liability (as in they can only get the assets of the company and not your personal posessions if they sue you and win) they can pierce that "corporate vail" and get to your own posessions.
~ ~^~~^~
I was wondering what the experiences anyone else here has in that. I know that to get a nevada corp there are registered agents who are happy to take $75 a month to forward mail sent to your company. He claims taxes are best in Nevada too.
He credits the Mafia for bringing such buisness friendly legistation to the state.
Now the only thing that keeps me from this plan is that the people following it are selling things like plastic balls that will keep your clothes clean for 70 washes and stuff like that.
Is there some way to run a company so that it is more difficult to "pierce the corporate vail" without resorting to such shoddy measures? Are there some rules I should follow that avoid loopholes that lawyers might use to get at my possesions?
^~~^~^^~~^~^~^~^^~^^~^~^~~^^^~^^~~^~
I'm starting a company too and IT outsourcing firm with potential to develop a really killer product for information management. It goes without saying that liability is a supreme concern.
~ ~^~~^~
My friend is really pounding the importance of a Nevada Corp. Basicaly his point is that even if you have a company, set up in limited liability (as in they can only get the assets of the company and not your personal posessions if they sue you and win) they can pierce that "corporate vail" and get to your own posessions.
I was wondering what experiences anyone else here has in that. I know that to get a nevada corp there are registered agents who are happy to take $75 a month to forward mail sent to your company. He claims taxes are best in Nevada too.
He credits the Mafia for bringing such buisness friendly legistation to the state.
Now the only thing that keeps me from this plan is that the people following it are selling things like plastic balls that will keep your clothes clean for 70 washes and stuff like that.
Is there some way to run a company so that it is more difficult to "pierce the corporate vail" without resorting to such shoddy measures? Are there some rules I should follow that avoid loopholes that lawyers might use to get at my possesions?
^~~^~^^~~^~^~^~^^~^^~^~^~~^^^~^^~~^~
From what I gather...one needs to create a business plan which would contain data like the potential size of the market, potential customers... etc etc.
Would appreciate if someone could give pointers to sites/books which provide the details.
Thanks
This coming from a guy who doesn't supply an email address? ;>
- Jeff A. Campbell
- VelociNews (http://www.velocinews.com)
- Jeff
The biggest threat to a small business's success is under-capitalization. That means you need cash, and you need plenty of it.
Your first line of investment needs to come from friends, family, ex-lovers, and your dog groomer's rich, eccentric uncle. Don't touch VCs until that money looks to be running out. VCs will want a part of your company, and they will get it, or you'll get no money.
You will give part of your business away eventually, but don't start giving it away too soon. Keep control as long as you can.
Be intellectually honest with yourself. If your product does X, make sure it does X to the best of it's ability, and in a way that solves your target audience's problems fully. Sounds dumb, but it's an important distiction. For example, Excel is a pretty good spreadsheet, and can be used by almost everybody -- but NOT before they take a 3 month class, or read a mind-numbingly dull "How to be an unleashed Excel dummy in 21 days" book.
Keep in mind that your audience is not you. They aren't hackers. Unless your product is hacker-oriented, of course. Get somebody who can do interaction design to make sure that your users aren't lost or overwhelmed.
Above all, have fun and learn something. Do a little cross-training. If you're design, learn some coding. If you're a coder, learn some design. Don't get pigeon-holed into a single task. Because, most likely (according to statistics), you'll go down in flames. If you take that time to learn new things, it makes you're company stronger, less likely to implode under internal pressures, and makes you more hirable if it does go splat.
Potato chips are a by-yourself food.
-jwb
-jwb
Rule #1: Don't Sell Out
That doesn't sound very hard, but it is. You have a great idea today. You have ideals and standards. Soon, the pressure to make money will test your morals. Maybe you could IPO bigger and sooner if you hired some banker fuckbag to be your CEO, and if you let him hire his gang of hangers-on to be your executive management team. Maybe you could make extra money by selling your customers' private information. Maybe engineering is too expensive and you should just outsource the whole thing to Andersen Consulting or whoever.
The love of money will make you abandon all of your now-lofty ideals. Stick to your moral guns and you will be much happier and, eventually, more successful. History might even remember you. You may have to wait a few years or even decades before success hits. That's the price of happiness.
-jwb
Keep your emotions out of all interactions with partners. Be purely logical. Screaming matches will lead to destruction.
Dream big, but don't forget the details!
Be prepared to work very VERY hard! But be on the lookout for signs of burnout! Delegate anything you can. If you bite off more than you get chew, get help before you go down in flames!
Be happy that there is a Lord of the Rings movie trilogy in the works!
I tried to start a software company straight out of college. Big mistake. I had no idea what I was doing, and I didn't understand what "commercial software development" means. Its a lot different than open source development. You have contracts and partners to worry about. You have deadlines to meet, and investors watching from above.
Before you start your own buisness, go out and work in the real world for a while. It is very educational to go work for someone else's startup and see how they do things and what they do right and wrong.
Someone recently asked Brian Hook, a well known name in the game world, whether he wanted to start his own development firm. He said absolutley, but that he needed more experience before he jumped into it. I totally agree.
Some day I will revisit that startup idea I had right after college, when I have more experience. Then I will have connections throught the industry, an understanding of Venture Capital, and knowledge about how to run a buisness.
--Tom
Read Steve McConnell's "Rapid Application Development" and "Code Complete."
With those in hand, you'll be much more prepared to organize a software project that achieves its goals on-time and on-budget, has the functionality needed by its end users, and is maintainable over the long term.
He bases his writing on hard fact: innumerable studies have been done that indicate what works and what doesn't in the programming and in managing programmers. Learn from the mistakes others have made before you!
And I suppose I'd best disclaim that it would be utterly foolish to dismiss these books out-of-hand simply because they are printed by Microsoft Press. I caution against being a simple-minded naysayer; if the books are no good, prove it by reading them.
('cause they'll influence you for the better, regardless what you think!)
--
--
Don't like it? Respond with words, not karma.
I didn't read the article very carefully, I just saw "Startup...blah blah...something....game" Aha, its a game company.
Darn, I wish Slashdot allowed people do delete their own posts within the first minutes. *blush*
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Being bitter is drinking poison and hoping someone else will die
Yeah, now I'm glad I couldn't remove my first post. It's the most karma I have ever earned.
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Being bitter is drinking poison and hoping someone else will die
Some current articles:
Postmortem: Zombie's SpecOps: Rangers Lead the Way by Wyeth Ridgway [02.01.00] This third-person combat sim had to deliver up to 10,000 polygons per frame at real-time frame rates all while upholding rigorous standards of realism. Lead programmer Wyeth Ridgway discusses the features of the Viper engine created for SpecOps as well as what went right and wrong in development.
Optimizations Corner: An Optimized Matrix Library in C++ by Haim Barad [01.31.00] In this installment of the Optimizations Corner, Haim Barad discusses a better way to manipulate vectors and matrices using Intel's Streaming SIMD Extensions. In this article they present a set of optimized matrix routines that take advantage of SIMD architectural enhancements done to recent microprocessors which are a perfect fit for matrix and vector operations.
Artistic License: Acquiring, Managing and Dealing with Licenses (and Making Them Profitable) by Elizabeth J. Braswell [01.25.00] So you're thinking about trying the Sure Thing: to go after a popular character, TV show, book or movie, get the license, spend a little, make a million. There's just one catch - it isn't that easy. Elizabeth J. Braswell discusses the stickier details of acquiring a license, working with the licensor, creating an innovative product which will appeal to fans and even sublicensing - creatively making more than you expected.
Planning and Directing Motion Capture for Games by Melianthe Kines [01.19.00] Motion capture is a great tool for creating animation for certain types of games. Like any tool or piece of software, if you learn how to use it properly, it can make your life easier and produce great results, but if you try to wing it, chances are you'll end up wasting time and money and may come away with nothing useful. Melianthe Kines discusses motion capture in depth.
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Being bitter is drinking poison and hoping someone else will die
One problem the startup I am involved in now has is that our original goals were vague. This situation left the investors, management, and development all with different ideas about exactly what it was we were trying to bring to market. Now, we are attempting to address that by describing clearly what products we want to develop, but it's a mess, since everyone has their own baby.
It sounds trite, but unless you know exactly what your goal is, you will never know when you are doing the right things to bring it to fruition.
An example, don't say you are going to develop "Internet based software for the medical industry". That's way too vague, and a much bigger elephant than anyone can eat. Instead say you are going to develop "a physician continuing education portal where Doctors may take online classes for continuing education credits".
The last thing you want are those expensive developers sitting around twiddling their thumbs because they don't know what it is they are supposed to be creating. Marketing people tend to be sales based, and they will promise potential clients anything, regardless of if it has anything to do with what your original plan was. For example, we are developing internet based software, but our sales people have actually promised potential customers that we would write them Windows 98 apps that run on an Access database. We the developers have had to veto that kind of thing many times.
In other words, find your precise niche, and don't let yourself become distracted from it. The easiest way to miss your target is to not know what it is.
Sorry for the rant, living with this situation is making me bitter... ;)
Some guy named Chris
Deirdre's rule of management: "Bad managers outlast good employees." More than any
::sigh::
single other cause, bad managers drive away good people. I have had two bad managers in the last year alone. In one case, I survived but the manager didn't; in the latter case (at the same company), the bad manager survived.
In no case can you afford a bad manager. Because information to other managers is filtered by the bad manager, it all seems rational at the time.
Another thing I learned in Finance...by all means, TAKE microeconomics, business law and corporate finance! I have used my business law class more than any single other subject I took in college. Getting back to finance, the long-term assets make or break the company. Enter into those very carefully.
Cash flow, or liquidity management, is crucial for short-term survival. Long-term asset management is crucial for long-term survival.
Getting back to the point, I predict that said manager's future downfall at The Firm (all hail the firm) will be the abysmal choices in the capital budget...the same mistakes he'd made in the past at another company.
_Deirdre
Im currently starting a company, however, what I decided to do was start consulting in the field in which I would be providing products.
This gives me a few advantages:
1. MONEY, consulting pays well, and if you are a good eveloper willing to travel $50/hr is just the start.
2. Knowledge of the systems and processes which I will be providing services to. You get to see first hand what types of problems exists out there, and how you will solve them.
3. Experience! (do I have to explain this one?)
My 2 cents.
Nevada
<^>_<(ô ô)>_<^>
I'm finding out - after 3 startups - that leadership and vision are sorely lacking a lot of the time.
My last project was bought by another company and it was something I actually pushed for. The guys I co-founded the company with were cool, but they just lacked a strong vision and a strong leadership presence. The new company that bought us just racked these guys cause they could not stand up for what they wanted. I got a great salary and got to work with some great people, but because the new people were also a bunch of boneheads, I ended up butting heads with. They were so removed from their employees (the king and queen syndrome) and they never gave the employees the credit and praise they deserved. So we're all leaving with less than we could have.
Now, I won't take anyone's shit and I will see my vision to the end (whatever that end may be). It takes a good leader to keep everyone focused and in line. If everyone is making decisions or people are not making good decions because they lack the vision, then it's time to leave or overthrow the leadership (which is probably not an option as I learned the hard way).
There's a reason Apple is doing so well now and while Jobs may be a gnarly guy to work with, he has the vision and leadership to take the company forward. Investors look for this.
Be carefull of what promises you make to prospective clients. The hardest thing for a new company is to try and match unattainable promises. Rather not take on the work at all otherwise you will end up working yourself to death to keep clients happy. Stay comfortable in the fact that you will find the work and avoid projects that you can't do but that promise lots of money.
A start-up that I'm involved with was already in the process of meeting with Vulture Capitalists, and I get a panicked call saying that the server had gacked, and asking if I could do anything to save the data. Then I'm told that there are no backups whatsoever. Ouch. So I'm thousands of miles away, trying to recover the entire operation from a roasted hard drive on a computer which would no longer even boot, not even enough to install an OS (this was a RH Linux 6.1 box) on a different partition. Eventually I was able to get almost all the data back, including all the really critical stuff, after I had him put the hard drive on a different computer, but for a few hours there, everyone was sweating bullets. I can only imagine the reaction if investors dropped in on us while this Keystone Kops episode was going on. I have that mental image of one of those cartoons where a bag of money sprouts wings and flies away.
Hardware failure doesn't always happen to "someone else." Make those backups.
Cheers,
ZicoKnows@hotmail.com
Back as freshmen in college my best friend and I started a little web hosting and design company. Nothing big and probably smaller than you want but it brings in a nice steady small flow of cash. We decided to incorporate as an s-corp in Florida. Overall I think it was a good move for us. We learned a lot.
Neither of us knew anything so we went to city court house and started asking questions. A month or two later we were a company. We only stared with about $2,000 so it must not have costs much. I think our biggest expense was a lawyer which I think we could have gotten by without one but it was nice to have someone make sure we didn't get things too wrong. The government won't tell you until it is too late (or so I hear)
I don't keep all the records (my partner does, thank god, and I just know enough to make sure the numbers add up about right) but I can tell you it is very important to keep good records of everything. We were slack for about 4 months and it is still a big headache almost a year later.
I don't know if this applies to y'all but my partner and I had to learn to trust the other to make business decisions with out the other. We were running everything past each other and there is nothing like a committee to stop progress when you need to get your feet under you asap.
Hope this helps some.
Citrix
Leknor
http://Leknor.com
"So many idiots, so few comets"
I notice a lot of this advice is about hiring a good CFO, lawyer, marketing guy, etc. I disagree with hiring that kind of cruft early on. They're important people, but not as important as you.
... well, I dunno why, to tell the truth. Concept art can literally make or break an investment or publishing deal. Icons and GUI layout can literally make or break a demo. The look of your business card, the company t-shirt, the banner you make for the trade show, the illustrations and layout for the business plan... Get the picture? You'd better.
You can contract lawyers indefinitely, and the good ones know their limitations and tend to sub-contract to the best lawyer for the job anyway.
CFO's are farging handy. Remember, though. It's just a title. You don't need a purebreed, and you don't need someone with an MBA. I know a CFO who raised $80M w/ very little formal business training, but he features a limitless sense of excitement and creativity. I am also pretty handy at raising money, and made one of the industry's studlier publishing contracts out of the gate, and I haven't had any training, either. If you know someone in school or at work who seems to have a knack for getting budgetary increases or funding or hefty purchase orders, odds are good they're a much better deal than hiring a fat cat CFO from Silly Valley. It definitely is cool to have a full-time guy on this, but you'll notice that he keeps coming back from meetings w/ investors saying, "Hey, um, I need a demo." The coders really are doing most of the work early on.
Likewise for a marketing guy. If you end up with a publishing company instead of handling your own sales, not only is a marketing guy largely uneccessary, but you'll find that there is advance-on-royalty money available. It's much tastier money than VC.
Because you're a software company, it's mostly about your burn rate. If you do the math, you'll notice that by far, your biggest expenditure will be salaries. Writing a design doc and schedule for your project and then, um, doubling or tripling the time, is going to be a useful wake-up call on how much money you need and when you need it. A really sexy schedule, design doc, and description of the team can literally be turned into a publishing contract w/ advances on royalties paid on milestones. In my experience, milestones cometh every few months as large checks that you kiss and dance around.
Some specific advice:
1. Do not get yourself overworked about trade shows like CES or Comdex. Chasing demos can become a full-time sport and can easily kill your company due to their disruptive effect on development. My advice- ignore them completely until everyone who comes by your company and checks out your software instantly suffers from violent, uncontrollable priapism.
2. Troll schools. If you need cheap, awesome talent, troll your high school and/or college. Ask the teachers who the most kick-ass student was at so-and-so, then track him down. It is very flattering to be courted this way, so you might be surprised at how easy it is to score.
3. Use free software with source code for the long run. Expensive software is usually only useful in the short run. I just wanted to say that. I don't think that's advice. It's just an observation. I don't know what to do with it yet.
4. Ban C++. If you must go OOP, use Java, but don't tell your publisher or investors. Java actually kicks ripe bottom. Don't knock it. C is also a dandy, dandy language. Most of the studliest code I've seen (including almost everything open sourced) is still written in C. I'm prejudiced against C++ because although you find great coders who use it, they tend to have violently clashing styles, which causes all kinds of headaches you don't need.
5. Remember humor. When you realize that one of your employees, publishers, or investors is being an asshole, don't get all soap opera-y. If you want to talk about it before doing something about it, then remember to use colorful analogy and strive to make someone giggle. In a small, hungry company, bankruptcy looms ominously and constantly. No one needs more drama. If you need inspiration, go to slashdot and read the "5, Funny" posts. You'll find them surprisingly poignant.
6. Artwork. Holy mother of pearl. Believe me when I say you can easily, easily, easily keep a full-time artist busy. Artists work for cheap, because
7. Random last-ditch effort anecdote: make it a plug-in. If things start going to poopoo, see how hard it is to make it a Netscape plug-in. A friend of mine did this once w/ a 3d engine, and he got a lot more attention from investors as a result. Hehe.
8. Consider cross-platform development. Developing an executable for both Windows and Linux, for example, helps you isolate bugs in your code versus bugs in your understanding of OS & library services.
9. Do not design for the "everyday guy." You have no idea what you're talking about. Niche markets are often more profitable and better to focus on for a long-term business. If it's between making a spreadsheet that does everything for everybody and a spreadsheet that kicks ass for industrial plastic extruders, go for the latter. It'll probably give you more money up front, too. Barring a paying gig, make something that excites you personally.
10. If you don't think you can do it in 2 years, don't do it. People get burned out. Your exciting start-up will turn into a pit of guilt & despair as your first mega-studly geeks decide to bail. Really try to realisticly figure out what you can do in two years, and if you think it's too much, think of something else.
That's enough BS for now. I wish you guys the best of luck!
Actually, Jesus spent a lot of his life in brothels and in the accompanyment of prostitutes. Many scholars believe he helped himself to their services often also.
www.jackasscritics.com
#1) Copyright *everything* . Trust me on that one.
#2) Stay quiet until you're ready for showtime.
#3) Dont compete if you can cooperate instead.
#4) NDA's are your friend.
#5) Dont trust people who make their living from other people's work.
#6) Know when youre in a position to dictate terms, and know when you're not.
Bowie J. Poag
Project Manager, PROPAGANDA For Linux (http://propaganda.themes.org)
Bowie J. Poag
1. I'm not saying that you don't need a solid product that offers value to your customers. I'm saying that product is not the be all end all of running a business.
2. Your outline of a generic business plan shows that you do not understand anything about writing business plans. Typical business plans, the ones used to seek VC, focus highly on the financials and less on the product or service. Details about how you treat your employees or how well respected you are in the business community are almost never in a business plan: treating your employees well and being an upstanding member of the business community are expected, not optional.
The point is that there are many ways to a profit. If profit is your sole goal, do not open a business.
Profit is the point of any business. Sure there are other goals for a business, but any sucessful business' overriding goal is to make a profit. If that is not your main goal, don't run a business: you don't have what it takes to be an entreprenuer.
My journal has hot
A business exists in order to serve the needs or desires of a market segment. (First year any Bus. Admin. course) Nobody buys your product because they want to help you make money. They couldn't care less if you go bankrupt provided it doesn't cause them any problems.
True. Marketing and product are the keys to serving your customers. BUT, this illustrates my point about the four cornerstones (see my original post).
If marketing and product are strong, sure you will sell a product, and yes, you will get income. However, if you don't make a profit, 1) your business will eventually fail, and 2) what's the point of running a business that doesn't make a product.
And yes, you cannot make a profit without selling something. If your financials are strong and your product and marketing are weak, you will not turn a profit, and thus your business will eventually fail.
So while your goal is to make a profit, good product and good marketing will get you there. But they will not make your business succeed alone.
The goal is to make a profit, not provide some social service to benefit society. If you get nothing out of it (no profit), you have not succeeded, no matter how much you say that your product is great.
If your goal is not to make a profit, and your goal is to produce a really great product and you don't care about money, then you should build that product, but not as a business, as an employee of someone else's business. Becuase if you don't care about profit, then your business will most likely not make one, and that is what causes many many business failures.
My journal has hot
Couldn't agree more.
There are four "cornerstones" a business really needs to be built on: sales/marketing, administration, accounting/finance and production (product or service). If any of these cornerstones are weak, your building (business) will come crashing down.
Most people make the basic mistake of assuming that a great product will make a great business. This is a myth! Look at McDonald's, which is pretty much the world's largest fast food chain. OK: All those who think McDonald's makes the greatest burgers you've ever tasted raise your hands! What? Nobody? (Actually, I'm sure I'm going to get SOME loser who's going to say that McDonald's burgers are awesome. Go away...:)
McDonald's Corporation is big and successful for a few reasons: great marketing is surely one of them. But they also have a business administration system by which any McDonald's franchise is basically guaranteed to make money if they follow the system to the letter. Cost controls are in place. Training, hiring, and managing employees are all part of this system. Accounting systems are part of it. These things are all first-rate and tailored for McDonald's line of business. And these seemingly "boring" business tasks can make or break your organization.
I know what you might say: "But McDonald's make burgers and we're making software!" Software Shchmoftware. A widget is a widget. All businesses are about making money and the product is only a means of doing that. Your key management -- the people in charge of business administration, accounting/finance, and marketing, are people that should not be "in love" with the product. Leave that to your people who are making the software. People who are "in love" with the product will be blinded by it, not seeing the forest for the trees. Those three cornerstones must be as strong as (or even stronger than) your product cornerstone.
I'm a person who's written business plans and seen business startups fail. And I have also seem them succeed. And I can tell you that the most important thing to keep in mind is to realize that when you are building a business, you are putting everything on the line. Build your business on a strong foundation and you will succeed. Ignore one of those cornerstones and you will most certainly fail. Prepare now, because you don't want to be chasing fires later.
Good Luck,
Rob
My journal has hot
Do structure your cap table so that it will be appealing to the VC's. (if vc funding/ipo is your goal)
Don't staff up before you really know you can fully utilize those people. I think there are many parts of any business that can be handled by outside help, like agencies or contractors. Keep your internal people working on the core technologies and core business.
Keep your workforce diverse. Too many of any of the following groups can lead to uneven communication: former co-workers, friends, family, college buddies, too many people from one recruiter or reference.
Don't say you'll build everything yourself. Keep in mind that for most goals you have 3 choices
--use existing technologies (off the shelf)
--partner with another company (pro services)
--go it alone
Take a few extra cycles to evaluate the pro's and con's of each approach. Prioritze the wheels that you wish to reinvent.
Then throw out the business plan :-)
Avoid VC and go for private investments. Don't undervalue the company if you have to seek investments.
This coming from a guy who doesn't supply an email address? ;>
Well, that's what the "figure out" part means.
Kaa
Kaa
Kaa's Law: In any sufficiently large group of people most are idiots.
I say this from very recent experience - This Monday morning I was working for a happy, promising startup, this Monday afternoon I was unemployed (no more company!). Turns out that the VCs lost interest and decided not to invest the $2 x 10^6 that they had promised - so we were instantly out of money. Completely out of the blue, too - they approved two new hires just last week. It makes no rational sense if you consider how seriously customers were taking us (http://www.multilogic.com, should be up for another week or two). So, from my experience: do your best not to rely on rational / reliable behavior from your VCs, and do what you can to have a contingency plan in place.
A business exists in order to serve the needs or desires of a market segment. (First year any Bus. Admin. course) Nobody buys your product because they want to help you make money. They couldn't care less if you go bankrupt provided it doesn't cause them any problems.
So, IMNSHO I would agree with the previous poster, "If profit is your sole goal, do not open a business" because if you do, then your first competitor who cares more than you do about how to serve the market segment is gonna wipe yer ass big time!
Don't hire someone that you would f***.
..........FULL STOP.
An article at FastCompany on this very subject
Equal equity is important to give a sense of fairness to all the founders.
Oh, go ahead and call it "equity equity." It's cooler.
Shouldn't that be 29.99 + 4 hours of standing in line at Fry's (x 100.00)?
do NOT hire a CFO early on. your options are too valuable. use an outsourced accountant, that works fine. in-house legal is useful however
-- your knees hurt, don't they?
One of the most important things is to spend the extra dough to hire competent people. I've been with three startups and they've all failed to do this in one way or another.
The first startup didn't hire anyone, so it never got off the ground. Lesson: If the existing staff is already working their collective ass off for you, and there's more work in the queue, get more people. The trick here is to not hire more people than you need.
The second company managed to hire an extremely talented staff for below industry-standard wages, due to the lure of the stock, but failed to keep this staff by awarding 3% raises to everyone in the company. By giving the top performers the same amount of raise and stock options as those not performing to the same level, the company all but assured that the talent would leave in droves. And they did. Lesson: A little extra money in the right place goes a long way to keep your talent.
The third company had a mostly incompetent staff and was the most aggravating company to work for out of the three. The handful of competent people there carried the load of the greater numbers of slackers, whiners, and incompetants. Lesson: It doesn't take too many bad apples to ruin the whole bunch.
I'd say besides what I already mentioned, one of the most important things to keep in mind is that an employee who wants to be at work, will be willing to go the extra mile to make it succeed.
I hope this helps. There are alot of hard lessons to be learned in the land of startups. Unfortunately the only way anyone learns anything is to fuck up and adjust accordingly.
Good luck.
MIT/Stanford Venture Laboratory is helpful. They'll be taping their events and broadcasting them soon also.
www.deja.com/~vlab
www.vlab.org
Pork is not a verb
That would be 4hrs * minimum wage lacky
Ah, one of the best discussions I have ever read in slashdot, lots of great comments. I have something to add. Talk to lots of failed start ups!! Find out why they failed!!!! It is very very much easier to learn from failure than success!
------ Curiosity killed the cat. {satisfaction brought it back | it didn't die ignorant | lack of it is killing mankind
Don't worry, after hiring them, they'll stop being your friends. Rather sooner than later.
Someone suggested looking at Harbour, which is all Open Source, but maybe not quite ready to use in production yet. It has some nice extensions over CA-Clipper though. It wasn't particularly designed as a successor to FoxPro.
FlagShip is quite good, very stable, been in production for years. Available right now. But it's commercial. ISTR they have a very affordable Linux version.
Keep in mind that irregardless of if you go the VC route to spend some money on a business consultant who knows his stuff. A dispasionate eye can save you from yourself.
Using the "cornerstone" criteria may help you find a good consultant quickly.
Good luck.
The two things that usually kill a startup, of which 4 out of 5 fail are:
1. Cash Flow - you have to make payroll, you have to pay off your suppliers, you need to project this out long enough for the inevitable bumps in the road - this is where VCs are invaluable.
2. Go for the Close - you need someone who understands Sales - ask them for a committment, and keep asking. Have forms ready and waiting, not "somewhere else". Don't wait too long.
Oh, bonus one:
3. Be willing to adapt to the marketplace. Don't lose your ethics, though, the Feds and State govt will get you and prison ain't no fun.
Will in Seattle
Man, sometimes I wish this was moderated (God forbid!) because certain dumbheads think they can spam (like the one I am replying to) all they want, and more importantly they think they can offend God all they want.
Now on the topic: from my experience (I am working at a startup) the management, PR & business side is what you stumble upon. In other words, development is a piece-o-cake, but the rest can kill you. Also, it is more than difficult to find developers (at least here, in Seattle) and this will kill a lot of quickly growing/expandig startups. Find connections to a nearby university with good CS program! That's the key...:)
Jobs? Which jobs?
Go with people you trust
I've done this three times, and twice come unstuck because of failures of trust between the technical people and the finance/sales people.
In the first case we were in a long development cycle for a product. The finance director kept giving us reports which said, yes, things were tight, but we were solvent and could do it. If he hadn't, we'd have diverted effort into consulting, which would have made a bit of immediate income.
In the end, just as we were about to launch the product, we ran out of money very hard. The finance director (who was experienced, and a personal friend) had been keeping two sets of books, and showing the rest of the team doctored figures. His excuse? 'If you'd known how bad things really were, you have gone off and done other things and we'd never have got the product finished'. Well meant, but not helpful.
In the second, the marketing director, a very experienced businessman introduced to us by the local business development agency, tride to bribe a local government representative to get a us contract. After we'd launched product, as sales were taking off, when we were already nicely profitable. Well meant, but very, very stupid.
If you're east of the Atlantic, don't waste time with VCs
I could not possibly count the hours I've put in to trying to raise venture capital. With excellent business plans - I had a business plan for Web auctions fully fleshed out and costed back in 1996, for example - competent key people, all that was needed (except finance) to make the project fly. It's just a complete waste of time, here in the UK. UK Venture Capitalist houses are extremely cautious and do not like either technical projects or geeks. If you invested that same amount of time in development that you waste hunting VC, you'd get your product to market.
I know only three groups who've successfully gone down the VC route, two from here in Scotland, one from France. All three moved their whole companies to California, first.
Don't take it too seriously
But finally, remember that it's a gamble, a chancy game. I wish you all the best: but, if you fail, remember that it's a set-back, not a disaster. Don't put yourself in a position where the company going down would personally bankrupt you. If it does happen, and you're reasonably sure the reason it happened wasn't due to your incompetence of some deep personal failing, brush yourself off, sort the mess out, and start again.
I'm old enough to remember when discussions on Slashdot were well informed.
If you have some work experience, you might want to consider consulting. It sounds like you're talking about doing marketing for a consulting business. No one is going to come to you with a great business possibility...they'll start it themselves. Then, when you come up with an idea that you think you could make a company to focus on...THEN worry about making a start-up.
Is he worth $40m or something?
perl -e 'fork||print for split//,"hahahaha"'
How do you do this when you are just an itty-bitty company (like "two guys an idea").
I have spent a lot of time researching what you need and have always been blocked by the business plan requirement.
1. A good biz plan has detailed projections of sales, marketing, costs, etc. How does one figure out how many copies of the app they are going to sell, at what price, etc? Are you expected to just make these numbers up? I can see real companies doing research (whatever a marketing group would do to come up with it), but again, we are only at the idea stage.
2. A biz plan also expects a good, solid mgmt team in place. Pray tell how does this happen without a business with considerable revenue (at least enough to pay mgmt salaries)?
I am really down in the dumps because of this roadblock. The product we are working on is something we really believe in (yeah, yeah, talk is cheap we know).
Any ideas for angel funding (besides go find someone that will fund you). I don't know ANYONE that has $200k+ to throw around on some idea.
We have some basic architecture in place (at the software level), but we need a lot more time to work on it (basically we have to be full time at it which we can't do--we both have fulltime jobs in the "industry").
No matter what your product is, the most important thing for you to tell your investors is when your company will start making money. Investors these days want to see a quick return. You want to sell them black ink, not red ink.
Make sure that all of your founders understand your market and all that stuff that is in your business plan. Everybody must know your elevator pitch and what's behind it!
One more thing: If there's an MIT Enterprise Forum chapter in your area, go there regularly. You'll meet many people like you and they'll help you.
There has been some excellent advice on this thread (unusual for /. lately), so all I can offer to you is this....
If you looking to make a difference, keep your standards and make money, I can recommend another good book "The 7 habits of highly effective people" by Stephen Covey. It's about how to conduct your life, which in turn affects how to conduct your business. Especialy helpful for the inevitable dark times that will happen when growing a business.
Good luck and success.
They sell switches.. *yawn*
How we know is more important than what we know.
Wow.. the number of people who are recommeding this microserf's books is amazing. Just because someone writes a metaprogramming book does not make them a guru. I just love the whole article he has about Microsoft's "fantastic working environment". People begging to be locked in a room and whipped with break neck schedules does not make a good working environment. I just love the "non-monetary rewards" he talks about.. T-Shirts, beach towels and mouse mats.. as opposed to enjoyable and stimulating work or peer recognision. Sure, they strike every reference of your name from your code but they give ya a free hat!
How we know is more important than what we know.
There's nothing worse than having to fire a friend because they just don't listen to what you tell them to do. An employee will do the bullshit work as well as the fun stuff. A friend who looks around for someone else to do it and then puts it off is someone you cant control. What are you gunna do? Fire him? Hey, I'm your friend! Stop being such a dick. Respect for your authority might not fit into the anarchial world of friendship but in business it is crucial.
How we know is more important than what we know.
As someone in a startup, I just need to add a few things to that- if you get experienced people, make sure they know your industry. I'm at an Internet company, and we have old-school executives, if that makes sense, who don't really understand what we're doing. They've created more problems than solutions. Just a caveat. Hope it helps.
Two big gotchas, from experience, that geeks never want to believe:
1. Just because you can make better products than a successful company doesn't mean you'll be able to get anywhere near that level of success. When that company started out, they were in a different situation than you (maybe they started five years ago for example, when the landscape was different). And you're not seeing the years of work that went into doing non-techie stuff like marketing and generally making good decisions.
2. Look at the median sales for your field, not the mean. A very common mistake is for a software entrepeneur to say "Big Company X has sold 2,000,000 copies of its software; all we need to do is sell 5% of that to stay in business." That's not how it works. Realistically, a handful of big companies might sell 90% of the products in a field, and that remaining 10 is made up of hundreds of little guys trying to get some action. So while the mean number of sales might be 100,000, the median might be 10.
Not to sound paranoid, but in my experiences with
startups there are three things that can happen.
1) A second-string player can pick and leave for
a better position with a competitor. All the work _you_ did as a first string player is then exposed, leaving your company to scramble to get some compelling features.
2) If $$$ gets tight the managers get wierd. I was "asked" to put in 100+ hr weeks a few years ago right before christmas. I was promised time and half even though the company couldn't afford it. I got my work done with 3 days to spare, but the "VP" kept trying to blame the failed install on me. In particular he claimed that I missed the deadline, even though I had a printed email from him acknowledge the receipt of the final product and accepting it as being final. (The "VP" is the one who over-promised to get the measly $100K in sales.)
3) Get _EVERYTHING_ in writting. (If a promise or technique or whatever is email to you print it out, and make it common knowledge that you do this!) I've had kudo's turn into feces on several occasions (like #2 above). Keep the files _at_ _your_ _home_ for at _least_ 5 years.
Don't get me wrong, startups are a _blast_,
but you are constantly on the edge (like the poor guy above!), and people once loyal will turn on you like a trapped animal!
Good Luck!
RobK
Myddrin
Sadly, if you do business in California, you need to be either incorporated in California, or registered as a "foreign corporation". In either case you pay state franchise fees and are subject to state taxes (on top of whatever you need to pay in your state of incorporation). And, of course, federal taxes are for all US corporations.
I would not be surprised if most states have the same arrangement.
Sorry to post off topic but no email: topterms, your sig link is wrong. It links to http://slashdot.org/TopTerms.htm .
"Don't open the gates, who the hell needs a wooden horse that size?"
As I recall from the LinuxOne articles, Delaware is the place to incorporate. The key is not the friendliness to corporations, but the friendliness to those who own corporations. Delaware has nice regular disclosure requirements for all companies, and VC likes that, since they know that you cannot be lying to them under penalty of law.
Walt
The company I work for is currently going through some growing pains - not startup per se, but going from a small company (I joined towards the end of the small company era) to a medium sized one and eventual acquisition by a multinational corp.
Your corporate culture is going to change during the startup and growth phase. Each will require different styles of management and different styles of worker - and sometimes different workers.That may sound cruel, but think about it; the people you want running the show when you have 200 workers aren't necessarily the same that you want when you're running three or four coders out of somebody's garage.
Many companies fold during this transition. Getting a few jobs and contracts and filling these orders is easy compared to attempting steady growth.
Everything in your business model, from billing rates to accounting methods, has to be checked and rechecked. Many companies, especially in high-tech, end up in debt at the start of their existence; then, in order to pay the debt, they incur more debt going after projects with questtionabe margins. They build more debt as growth continues until they become unsalable and unsteady and finally topple.
It didn't happen to us, but it's happened to a number of our competitors - and I'm sure that this kind of growing pain has killed more startups than anything else. Perhaps even everything else combined.
--
--
There is no premature anti-fascism. -Ernest Hemingway
Now, I've bad-mouthed my employers once upon a time myself, but when it comes to dealing with bad mouthing staff I think that my last PM said it best: when you're on the clock, you represent the company. Bad mouthing your boss and company while representing them is unprofessional and quite possibly grounds for dismissal.
This might be considered draconian by a lot of people - and myself included. I'd like to emphasize that this applies only when you're on the clock and thus a formal representative of the company. Outside your work, you're constrained only by the bounds of legality - although if someone hates things so much, they should probably quit, for everyone's benefit.
Not all managers are good ones (most are middling to poor, as you might expect) and if you can't influence them directly or they won't listen, you should vote with your feet and demonstrate the error of their ways in the most direct way possible.
In your case, where you're managing the employee, you might have to speak clearly on this matter and tell him straight out what's acceptable to you and to the company. Be sure to cover yourself first, of course; if you're going to tell him that he can say what he wants so long as he's off the clock, but not on it, you might want to consult your boss, or better yet your company's general counsel.
A malcontent subordinate isn't worth risking your future for, and a black mark can kill a manager's ascent quicker than you'd think - there is simply too much competition in junior management unless you have some very special skills.
--
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There is no premature anti-fascism. -Ernest Hemingway
The company I work for is currently going through some growing pains - not startup per se, but going from a small company (I joined towards the end of the small company era) to a medium sized one and eventual acquisition by a multinational corp.
Your corporate culture is going to change during the startup and growth phase. Each will require different styles of management and different styles of worker - and sometimes different workers.That may sound cruel, but think about it; the people you want running the show when you have 200 workers aren't necessarily the same that you want when you're running three or four coders out of somebody's garage.
Many companies fold during this transition. Getting a few jobs and contracts and filling these orders is easy compared to attempting steady growth.
Everything in your business model, from billing rates to accounting methods, has to be checked and rechecked. Many companies, especially in high-tech, end up in debt at the start of their existence; then, in order to pay the debt, they incur more debt going after projects with questtionabe margins. They build more debt as growth continues until they become unsalable and unsteady and finally topple.
--
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There is no premature anti-fascism. -Ernest Hemingway
I wouldn't say you're guaranteed to fail if you start out without a proper amount of money -- who knows, you could be like me and have an incredible tolerance for pain and frustration! :-/ But making a go of it without the right funds will be discouraging, it will take much longer, and it very likely will strain or break relationships you might value.
It took a long time to get here...
No Laughing Allowed!
I suppose the success of it would depend on the agent in Delaware, but I still think it can be an unnecessary step for a bootstrapping start-up. (I can't speak for what VCs would or would not like, though -- I'm looking at a self-funding operation.) If the "business savvy" of DE made a difference later, it's possible (though not painless) to re-incorporate there when there was a definite benefit in doing so. I think too many inexperienced entrepreneurs get sold on the "mystic" business benefits of Delaware but they do not necessarily gain anything more valuable than a "warm fuzzy."
(I will admit that my experiences may have unfairly jaded me against incorporating in DE. Suffice it to say I consider it a mistake that I would not repeat.)
For freelance writers...
No Laughing Allowed!
Several people have suggested this advice (round out your team with good business and marketing people). Does anyone have any suggestions for how to find such people? Go to the local business school and ask the Dean? Garage.com? Crash some parties? All of the above?
A funny, nasty, and rather self-satisfied look at the author's successful jaunt through Internet entrepreneurship. Details the creation of Vermeer and its eventual sellout to Microsoft as FrontPage.
If you want to know all the low-down dirty and mean things that people will do to each other in this business, read this book.
I agree with you somewhat but back in those days interoperability was not a real option. Fox was advertising cross platform ability, but M$ quickly killed that.
You cannot adequately predict the future. However, if you have the right to use the source then you cannot be orphaned in this way.
PLEASE BILL: Open the source to FoxPro 2.6. (It's worth a try to ask.)
We are supporting several really large legacy systems using FoxPro2.6a. Fox Software got sold to a company we all know and love. The cost of rewriting the systems to use the butcherd thing known as VFP is almost same as rewriting in another language except that we wouldn't be able to salvage any of the xBASE code. If you use open source software you cannot be orphaned in this manner.
By the way, on an offtopic question, does anyone know of any projects to develop an open source variant of the xBase Language? I would be interested in contributing 14 years of experience.
1. Learn to be an ass-hole. Nice just doesn't cut it.
2. Throw away your ethics. Doing or not doing something just because it is right or wrong is stupid business.
3. If you can't do 1 and 2, then cut up your credit cards NOW for your own protection and go drive a school bus. Business is NOT for you!
Criminalize spam and telemarketing!
"How To Do It And Not Get It From Someone Who Did It And Got It!"
:)
1: The planning is everything, the plan is nothing
Damn straight you should have that plan written out! It's for you - to hell with anyone else who reads it. If they read it and it helps, bargain. Just never forget, it's for you.
Also, once you've written it, be ready to throw the whole lot away and write it again if necessary. If I meet a leading-edge project or a start-up team which has a plan that hasn't been updated in a month, I start running.
No shit - it's the act of planning that's critical. You've looked around, you've researched, you've figured something out and you've written it down so that everyone involved understands & agrees. If you don't have that, you have no foundation.
Of course, tomorrow brings something entirely new (new tech, new prospects, change in owners, etc etc etc). Don't valiantly attempt to change reality to fit your now outdated plan. Modify those parts of the plan as necessary, get everyone to agree to the new ideas and get back into the work.
Trust me, it will make one hell of a difference. I'm doing a new company now and I thought I could get away without doing the plan. HAH! Big F**King mistake. Mind you, if I'd done the planning right in the start, I wouldn't have dumped 7 months into this turkey (note: I've met some great people, learned some wonderful things and I think we can still make it fly - maybe the stress & lack of $$$ will be worth it???
2: Worship Your Prospects/Customers
If you treat your customers/prospects with extreme respect, act professionally (* see below for definition of "professionally"
3: Acting Professionally
This does not mean always wearing a Brooks Brothers Shirt, Armani Suit and spewing forth sensless metaphors ("Let's just roll it all up into one big ball of wax, gentlemen"
To me, acting professionally means:
4: Marketing
Good marketing walks a fine line between "truth" and "bullshit, arse licking insanity" - trust me, I've been doing marketing as well as tech stuff. You need to be able to tell the customer about what you have in such a way that it sounds like what they want without bullshitting (don't say it's a 2 tonne truck when it's actually a new form of moped
Get close to the customers and try to learn their language. Watch how they react and adjust as you go, etc. Perform "active listening" (where you say back to the person what you think they've said - not like a parrot though
Yes, that's right, it's called "People Skills" - you have to come out from behind the computer screen, dress presentably (for your client - suit if you have to, golf shirt, riped jeans - what ever they're expecting/comfortable with
5: Good Advisors
You don't know everything. Your team probably doesn't know everything. Find people who know what you want to know and learn from them. Pick the ones who are where you want to be. Don't pick the ones who aren't (sounds obvious, but you'd be surprised
Remember - you get what you pay for. It may not always be in $$$ or stock, but you should pay for it in some way (hell, the number of people I've taken out for a few drinks/dinner/lunch to try to learn from them... )
6: Prepare for the worst, hope for the best
It's not pessimistic - it's realisitc. Have contingencies in place and be ready. Don't get bogged down in the thinking/worrying but at least review what could go wrong and be ready. This doesn't mean you should stress/plan/prepare for/etc a meteor hitting the earth - it may wipe out your company but it'll probably wipe out a lot of other stuff too
7: Cashflow is King
You may look good on paper. It may only be another week until that client's work is done and they give you the final installment of the $2 million job. Unfortunately, your staff are ready to quit 'cos they've not been paid lately, you're getting legal notices from suppliers and the vultures are circling...
Don't splurge on style over substance! That mahogany desk you love will look great in one of those "ex dot.com startup" auction places.
How long 'till the next payment? Right, add a big fat margin for error (installation delayed, signatory canoing in the amazon, lost in the mail, etc etc etc). Got enough cash to survive 'til then? You'd better... (see point #6
8: Everything Else Already Said In This Thread
I cannot agree more with people who have said all those things already about:
I've worked in "startup" type companies in three countries now. It's the same in each one (well, OK, so the languages are often different, the laws are definitely different and sometimes it's easier/harder to get funding, but anyhow...
In a nutshell (and what else is Slashdot but a giant nutshell?
I left my body to science, but I'm afraid they've turned it down...
Now for me it's back to teaching the geek I work with that reading books on salemanship doesn't make him a salesman.
However, that doesn't mean that there is no value in having a geek understand sales. One of the most underrated skills around is being able to translate ideas between different groups of people, getting them talking in the same language. Whether he is that translator, or his is one of the people on the geek side of the room who needs to understand the salepeople, the knowledge is not necessarily wasted. Be good at what you do, but be able to explain it to the people around you.
The net will not be what we demand, but what we make it. Build it well.
The only rule I would offer is:
Rule #1: Don't Sell Out
This implies something very important. Know what you want. Know your values, and what you are trying to do. There are a million compromises to be made in the world. A start-up may present you with more of them more quickly, but it is not unique in that. Some compromises are fine. Renting an office located closer to your potential investors may be a good compromise. Spend your time asking yourself about the potential investors, not the office. You can get out of a lease and rent a different office. That costs money, but it is doable. Pay attention to the important things.
The net will not be what we demand, but what we make it. Build it well.
Which state is the best to incorporate in?
Do any of the states offer incentives for online or open source startups?
oh forgot to add the 4 x 10.00 for the part timer who chases after the part. hehe :)
I'm sorry, I'm to tired to be witty at the moment so this message will have to do.
I agree with the above but wish to add one thing. DON'T FORGET THE INDIANS!!! ie Most startup's I've worked with concentrate so hard on hiring the guys at the top that when it comes time to dole out the payroll and benefits for the guys and gals in the trenches they don't have the funds (or the stock options) to keep them happy. A good executive seceratry type can be worth her weight in gold when it comes to keeping the office running and presenting a profesional image. If you're a software company you'll need more programers because you are going to be too busy with meetings and schmoozing to do the amount of programing you do now, and will quickly burn yourself out if you try. Second keep regular hours. I know it's more comfortable to work at night and sleep all day. But businesses and the people who run them don't do this. Third ... DELEGATE!!! I know you are the next Knuth but you can't and shouldn't do it all yourself. When you do hand off a job. Don't worry about how it's being done, or whether it's being done in your style. Concentrate on the results of the persons methods. ie. DON'T micromanage. Finally, plan for the future both in where you are going and in how you spend money. Remember that although you can build your own circuit to do a simple task, if you are worth 100 dollars an hour that circuit board that costs 29.99 at Fry's can get real expensive real quick. (2 hours to design and build x 100.00 plus parts vs. 29.99 at the store) That's about it. Now for me it's back to teaching the geek I work with that reading books on salemanship doesn't make him a salesman. *sigh*
I'm sorry, I'm to tired to be witty at the moment so this message will have to do.
It says software company.
~~~NO CARRIER~~~
make it 2 click shopping.
Before you begin get good legal representation. Especially in regards to how the company is established / by laws / structure / stock / options. It's important that you have it before you begin --- if you don't there is always disagreement and resentment.
Depending on your idea you may also need IP lawyers...
I hate lawyers, but they've saved my butt more than a few times. Remember at the begining people are happy and excited to work...agree on terms and relationships with contracts because if things go sour you want to have everything figured out beforehand.
Work for a startup. It's way cool.
But don't start your own. It might sound like fun but you won't have time to do any of the fun part, you'll spend it all trying to get money and hire people and deal with all of the tiny little snags like the broken water cooler. I suppose it depends on what your idea is though.
Yeah, look at what happened. The entire world is using Microsoft's version of Java (which really doesn't exist, it's just language extensions) and Java is flopping like hell.
Oh wait..
This is going to sound like bitching, but I figured I'd just tell part of my story so that no else makes this mistake...
I took a job with a startup about 8 months ago. Since then the head developer hired on a friend of his. This friend is 32. He took his last job at the age of 18 as a stock boy at a store and had worked there ever since. The head developer and his friend now manage the development staff, which consists of myself, another friend of theirs, and a part-time intern. That's 2 people managing 2.5. We now have to do lovely things like justify time down to the minute and have monthly "code reviews". That's where you sit down with "management" and at least with me they criticized not using their variable naming scheme. I prefer self-documenting code vs theirs (r, r1, r2, r3... no matter what type of object). and then there's the wonderful days where the former stock boy will do nothing but sit behind me and watch me work. Yesterday's nugget of joy: "You're not supposed to use semi-colons inside of 'if cycles'." I develop in Java, so if anyone would like to translate that for me... =).
I could go on and on with my sad sad song, but the end result of all this is a completly de-movtivated developers and a staff that cannot think on its feet. Also going out of your way to make a client happy is no longer possible due to the red-tape.
The bottom line is: 1. Don't hire your friends unless you knwo what they're capable of and 2. MICRO-MANAGEMENT = DEATH IN AND OF A SMALL COMPANY
Seriously, how on earth could this helpful, insightful post EVER be considered a troll?
Is it because he said you need a chain of command and not committees? That's the only thing I could think of, and he's right.
Esperandi
I know this is OT, but this baffled the hell out of me and I wanna know what's up.
Also get a good lawyer. Interview several and ask for a reference or two. There are a lot of law firms that seem really good, but are in reality over burdened by the amount of activity going on right now in software and the Internet. There are some firms that will take you on deferred payment if you have a solid business plan. Some will even offer to offset fees in exchange for stock later down the road. Shop around. A good lawyer is essential, especially when you are dealing with VC.
Some tips from the front line:
1) Definitely pick a CEO and differentiate duties. In a start up, many of the founders will be doing many things, but make sure that one person has the eventual say. The previous poster is absolutely correct in stating that the CEO's main dities will be in raising money and forging relationships. If someone on your current management team can't do this, find someone who can.
As a startup, many times you see founders acting as "partners", each giving their input to every decision. Reaching a general consensus is a good thing to get everyone involved, but don't operate democratically, nothing will get done.
2) The previous post summed it up: Divide the equity equally amongst the founders. This also means that you should look closely at each founder. Some one who leaves after the first month because they were marginal in the first place can return to cause problems. Wayward founders can become a legal nightmare if you are successful. Equal equity is important to give a sense of fairness to all the founders. If you deviate from this, make sure that there is a real good reason for doing so.
3) Get your elevator pitch down. This means basically that you can powerfully explain what you company does to someone sharing an elevator with you. If it takes you five minutes to explain what the company does, then you need to do some rethinking! Keep it simple and powerful. Ideally it should be explained in a single sentence like, "We aim to be the Amazon.com of snack foods."
4) Think angel. For your first round of money, unless you have a VERY good business plan or an amazing management team (or both!) most VC will not touch you. There is a lot of hype about how much VC money is floating around, but the reality is that they are very selective in who they invest. Angels are your best bet for the initial seed round until you have something to show.
5) Initial valuation. Be careful. With a good idea, a good BP, and a capable management team, you should be able to get as much as a $5 million dollar valuation. But don't shoot too high. If you get too high a valuation, the next round investors will laugh at you. And if they come in at a lower valuation, you will definitely piss off the initial investors (not to mention invoking any legal nasties like ratcheting clauses that will probably be a part of your agreement). Moral: get a realistic valuation. Seek out angels first, unless you really think you have the Right Stuff(tm). In that case, go for it. There are a lot of good VC and they are indispensible for both cash and industry contacts and management assistance.
6) Don't get discouraged by competition! If you have a good idea, chances are that there are 20 other startups moving at the same time with a similar idea. Plan to execute quickly and make sure you do it better. Darwin works overtime in this economy, so be ready for it. But don't get discouraged by competition. Its inevitable and makes you work harder to make a valuable product or service.
7) Lastly, don't be afraid to admit you don't know something. The last thing that investors want to find out is that you lied to them about something. Be honest and frank and you might find that someone can get you your answer or provide a resource to assist. No plan is perfect. No team is perfect. And they know it.
Good luck to you all! Its a hard, long and frustrating road to start your own company, but the rewards are worth it. Even if you "fail" you take away very important lessons and experience to use next time.
Cash flow is everything. For example: if you can get a client payment to come in as multiple parts over a period rather than as a lump sum 90 days later, things will be so so so much easier.
threadeds blog
Make sure all your communications--be they verbal, print, or electronic--use proper English. This especially includes recruitment letters.
I spent a few months in California, and after I was terminated from the job I put my resume and availability up on dice.com. I got quite a few e-mails from recruiters, and one directly from a startup.
This particular person not only misspelled (and I mean grossly misspelled, not a typo) several words, but did not have correct grammar. Also, the tone of his mail was rather desperate. This left me with a bad first impression, and was one of the first dice.com replies that hit the round file.
Say what you want about the suits, but professionalism matters when it comes to communications with the public--that goes double for communications with other companies, and triple for potential employees. It doesn't mean you have to wear a suit, just use proper grammar/spelling/punctuation and don't use slang in company literature.
While I'm on the subject of California and dice.com, am I the only one who gets turned off by spam from recruiters that use "startup!" as if it was some magic mantra to attract employees?
Nathan
Don't sell out to Bill Gates! Remember that Simpsons episode?
Check out Greg's Bridge Page!
This is what you need:
- a solid idea which can defend in the marketplace
- a proven team (EXTREMELY important... especially to VCs)
- a solid financial plan (have a CPA check your assumptions + spreadsheets)
- LOTS and LOTS of connections
- LOTS and LOTS of luck
- good sales people
- good marketing people
This is what you don't need:
- a formal business plan (an executive summary will do)
- good technology (nobody cares)
And finally the cold hard facts:
1. VERY few companies get funded. Don't know the exact number, but I'd say les\s than 5%.
2. Of these, 80% of startups fail.
Enjoy!
his is very good advice. I'd also add that the CEO's *SOLE* responsibility in a startup is raising money. If they are spending time doing other things, you will see your bank accounts disappear very quickly.
And remember this chant when the shit hits the fan: "IPO... IPO... IPO... IPO... IPO..."
I really strongly advise you to find someone who's been around the track to partner with you.
The investment and legal communities are not on average less moral than any other group of businesspeople, but they're businesspeople, and if you leave them an opening to rape you, they'll rape you.
The only way to learn how not to leave an opening is typically to have been raped a couple times; thus the need for someone who's been around the track.
Having said that, here's one practical tip: ask for way more money than you think you're going to need. You'll get more respect and you'll need more than you ask for anyhow.
-Tim [co-founder through IPO one time, working on 2nd]
You assume the local county will allow that. =]
_______
I just wish I could c:\format Internet
I realize the topic may not necessarily be considered a small business, but everyone starts somewhere.
_______
I just wish I could c:\format Internet
This brings to mind recent Doonesbury strips. That one guy (name?) has the web company that recently had a huge IPO. Some Microsoft guy was trying to buy him out at a party but he turned the offer down. A couple weeks later his daughter was surfing the web:
"Look Poppy, Microsoft developed a Thingamajig and released it for free."
"That's interesting. Wait a second, that's what we make, isn't it?"
Next thing his employees were on a witch hunt as the stock price plummeted :-)
So maybe the advice is "don't go public". Of course that can be a tough road. I work for a privately-held company and can testify how nice it is not to have minute daily fluctuations in stock price overshadow everything. "Stock is down $0.25. Fire 2,000 people!!"
1) Management is a technology like any other. Hire someone who has experience, and knows the ropes. Give him/her the authority to make the decisions. I saw my first start-up submarine when one of the other founders would not release his authority to the CEO we hired.
2) Make sure that the market really wants what you are building. A good sign of this is if there are other companies spinning up to do the same thing you are. Don't let it discourage you, let it _motivate_ you! Jeff Bezos (Amazon.com) put it very well when he said:
3) Finally- the journey is what matters, enjoy the ride. If you really love what you are doing, then just do it, and do not focus too much on the endgame. In the end you will be happier, healthier, (and maybe even richer) for doing it!Good luck!
Fortune favors the bold. -Virgil
That's good advice for the traditional "build it and ship it" approach to software development.
OTOH, I think the original poster was talking about the post-Web business madness model. This is all about hyping the nuts off it, then selling out quick (IPO or whatever). Yes, it's stupid -- but how many of us really are prepared to turn down the cash bucket that's on offer these days ?
There's also the third model "Build it and they will come" (especially for web services). Great if you're the next Amazon, bad news if you're the next boo.com.
All three of these business models require a radically different approach to investment; how much you sell long-term for how much short-term benefit, attitude towards customers, and attitude towards product (roll it out gradually and sell as much as you can, when you can vs. keep it secret, then let the world now everything at once). All of these work in their right field, but they cause problems if you try to cross-apply them - don't mix them.
Make certain that whomever is your starting CEO is ready for the responsibility (raising money, forging alliances). Even more important, make certain that they are ready to step down when the company needs someone experienced in that role.
And make sure that the "troops" understand this also, not just the CEO. There will come a time when either the company has grown or lean times have struck and the VCs (or others with an interest) will want to replace the CEO. Suddenly, you may have someone from outside the company running the show. This can be a morale killer if there is a lot of loyalty to the former CEO who is now "Executive VP of Biz Development" or "Chief Technical Officer".
This happened in one startup I was in and it was difficult to deal with a new guy who didn't have a clue about the culture (or much else as it turns out).
Troy Denkinger
TD
Jesus Christ!
I thought we were all geeks here and I thought that most geeks believe that earth has been around for billions of years. Not the 8000 years that the Bible states.
Religion has and will continue to be used for power and control. And as a crutch for people that can't handle reality.
The first evidence for me that religion is used for control is in Genesis 3:16. Where it states that women should be servants to men. What a crook a dog doodie.
You have a right to believe what ever you want but Jesus spam is stupid.
I believe the theory that mushroom spores traveled through space to innoculate Earth. Magic mushrooms are our gateway to other worlds. Similiar to the gateway that Jodie Foster used to travel through space in "Contact". However, you don't hear me preaching about this at every opportunity that I get.
Ignorance is Bliss
I like to apologize for my original post. Two wrongs don't make a right. I should not have supported an offtopic post by posting another off topic post.
dont do anything with one-click shopping
You say that you are starting up a software company, and there seems to be a lot of debate over what you need. No one startup has figured it all out, regardless of how succesful they are. In my experience, this is what you need to get over most obstacles in the software industry. 1) Know your market. Have a target market from the beginning. I hate to say it, but you must put a good spin on your advertising. Find someone with experience in your chosen market. If you are marketing business apps, for example, You need to keep users happy and the sysadmins happy. Access control, ease of use, cleanliness of design, maximum ease of integration, maximum compatibility, including cross-platform compatibility will prevail here. 2) Know what else is in your market. When you are in the initial deployment phase for your product, you wont have the tech-zine writeups to sell your product, you have to convince people face-to-face. People will ask about every other competing product available. Know the weaknesses and the strenghts of every other product. Chances are you will be talking to a sysadmin. Explain how easy to maintain it is, etc. Talk ma-hours and fte's here. Explain the time savings they will receive. This is especially important when talking to upper level management. 3) Have a well designed business plan. The less experienced and younger you are, your business plan has to be that much more thorough. Have outside, independent accountants review it. Know what you will make, when you will make it, and from who. VC aren't going to listen to "a bunch of ideas that think they know everything." Explain the risks, otherwise you are just insulting their intelligence. Explain the returns, both expected, best and worse case. Not in so many words, but they do want to know what they are getting into. Outside reviews/input look great. 4) Trust. You absolutely must trust the people you start out with in your company. Chances are, you will get only one shot. Make sure that your people function as a team, know their piece of the puzzle, are in it for the long hall, are willing to accept change, and are ready to step aside when needed. Give everyone a specific job, groupwork will not fly in the beginning (committees). If someone bails out on you, it's very, very hard to recover from. Make sure they know what they are getting into. This is a very simple list of suggestions. Always know where your product will fall down, and be prepared. As far as marketing goes, these are most basic things to know : 1) Talking to upper level/execs - Talk in terms of dollars, explain where, why and how in the simplest terms you can. No computer people here. 2) Talking to middle management - Talk in terms of man-hours, fte's, etc. Explain how much they can save in man-hours, where, and why - in business terms. Once again, no computer people here. Deployment, maintenance, and lifespan are necessary facts. No computer people here. 3) User level and IT pro's - Talk in terms of software features - Ease of use, power, etc. They want to know what you can do for them that is not alread being done by your competitor's product. Lotsa computer people here. Basically, know your RPC - risk, people, and customers. Have a leader who will take a proactive step and take an acceptable amount of risk wherever he/she can. Hope this helps you start in the right direction.
Excellent advice!
Remmember that money is NOT the only thing.
There are lots of people running around with billions of dollars they made on their computer companies. But few of them have a lot of respect from their peers (us).
Example: Bill Gates. He's the richest man in the world and almost everybody hates him.
Linus: Not even close to as rich as Bill, but he makes a good income I'm sure and I dare you to find any anti-Linus group somewhere in the world.
Bottom line: In the end you rather be rich or well liked? If you're rich and disliked by the industry, your market could drop out from under you as soon as a competitor comes along. (intel) If you're well respected many customers will stay with you and make you rich (in more than money) in the end.
Click here to read too much about my personal life
There are many!
You can adopt the slave model. "I need this project done by yesterday if it takes time travel!!!!"
You can be the positive motivator. "Well it's not working yet but perhaps if you added so and so's ideas this might work"
The former works with a captive audience the latter works with a mobile audience.
Never criticize destructively.
I imagine this is a huge issue for early 20's hotshots overlording 40 somethings. Tread carefuly and motivate positively in a self depreciating manner to put your audience at ease. Ask their opinion and accept valid answers! Even if those answers make your previous ideas look bad!
If everyone feels their ideas are the basis of the company you have suceeded.
ps I am an academic, does this model work in the corporate world? Does it create too much political controversy within a company? I know it can work in academic dictatorial situations.
Your Thoughts?
no sig.
There is one thing that you will need in order to be successful in your business, and that is common sense. I was told that I could know everything there is to know in the world, but without common sense, I would be nothing.
If you are into reading, then I strongly recommend that you read the book Rich Dad, Poor Dad. This book does contain some useful insight on using what you have to make money.
Bring in experienced businessmen, NOW. Get a solid person in charge of marketing. You can't think "develop product, market it," marketing and development need to work in sync. Be certain that the market that you are aiming for exists and that you can capture it.
Get a good CFO once the seed money comes in. An accountant is NOT good enough. It takes time to raise money, be certain that you will know when the next infusion of capital is needed.
Decide on jobs initially. There NEEDS to be a President/CEO, his decision is final. You need a chain of command, not by committee. Make certain that whomever is your starting CEO is ready for the responsibility (raising money, forging alliances). Even more important, make certain that they are ready to step down when the company needs someone experienced in that role.
Divide the initial equity evenly among the founders. There should be NO room for equity fights in the beginning.
Hire good, intelligent, motivated employees. If one of your first hires is bad, you're sunk.
Good luck.
Alex
Actually, one of the best things you could do is to bring in a truly competent documentation specialist. Competent ones are very rare, but you will need to identify your market BEFORE you create the features of your software, and phrase ALL product descriptions (beginning with the spec's!) to appeal to your market! So many great products had really useful features they failed to communicate compellingly to their proper audience, and then they died... On the other hand, we have MS, which ALWAYS promotes features simple to describe and sure to appeal to its audience (i.e., mostly dumb corporate drones). The very best way to be sure of success these days is to identify your best (projected) customers and make a deal with them BEFORE going through the expense of fully spec'ing and coding (and testing) your concept. For example, if your software compressed signals for delivery via a specific medium, you might want to cooperate with another company which is (or plans to) offer that medium. That way, you can be sure you are tailoring your product properly for the customers. You might even find this helpful in raising the capital you might need as you go along. Find your market, identify the major players there, then cooperate to provide something that is needed by those players, fully informing them of your intentions.
A similar thing happened to me this summer. I've consulted for 10 years or so. In the past, we needed that money, luckily now we don't because my largest customer's largest customer dropped them -- they folded, I folded, we all folded.
I didn't really care, (our little boy was starting Kindergarten, so it gave me a chance to get involved with PTA, coaching soccer, etc), but it scrambled a lot of other people's lives.
It is very tempting to keep increasing the amount of time an attention you give to the people sending you the biggest check every month, but you will create either a tail wagging your dog, or a collapse-in-waiting.
Shut up, be happy. The conveniences you demanded are now mandatory. -- Jello Biafra
No matter what else you do, get a source code control plan together. use a CVS archive or whatever. This is essential, as alot of projects will just grow if you let them, and trying to pu stuff into a meaningfull source code control system after the fact is a pain in the bol^H^H^Hneck.
and then God said: 'void *universe; while(1) if(create_order(universe)) create_chaos(universe);'
I attempted to start a little money making company last year, and spent most of the 12 months doing it.. The result is polyester dot net which after COUNTLESS hours of code, research, business plans, rejections, praise, attacks, and legal matters, makes between 120-200$ a month. Sure, it's not what i envisioned, but it's damn close, and the most important aspect of all.. it's all mine! ;)
If you promise things to your prospective employees to get them to work, deliver on your promises. Soon.
Don't know why everyone seems to think that a computer business startup is so difficult.
Home computers are easy to start up, just flip the power switch, from 0 to 1. Business computers don't seem to be much different, although you do need to remember to turn on any additional appliances that may be attached to the machine.
Perhaps you need to have some tech stock, or free kevin bumperstickers, or something, for the computer business startup. But it really should not be too hard.
There is little bad advice here. Your challenge now is to sort out the really important from the merely good ideas.
One piece of strategic advice: don't forget what business you are in. This may seem trite, but it is easy to fall into the trap of taking on a project because you can, or to prop up cash flow. If you're going to deliver vertical market EIS, don't get distracted by slapping a web site together for someone. Go back and read your business plan -- is this what you decided you wanted to do?
On a more tactical note, pay attention to the posts here emphasizing the importance of good people. Consider the inverse too ... I believe strongly that you are better off short-handed than hiring a warm body that can't pull their own weight. You'll make enough hiring mistakes in your life when you think you have a good hire; don't talk yourself into someone you'll be sorry you ever met.
Good luck. dv
Bill Gates is a communist -- he's just more equal than the rest of us.
What kind of business are you guys going to start?
OK, I am not going to write a comprehensive "how to start your own company" guide here, but I'll give some random pieces of advice (based on my own experience - a company I started with a couple of friends got funded a month ago after six months of work).
:)
:)
:), but can gain great experience, great contacts, have fun, and potentially retire soon (though I do realize that chances of the latter are pretty slim)
1. Choose a name that nobody else would think of using (something like Red Hat is a perfect example) - we got a pretty generic URL, but then it turned out that it was also trademarked (by someone else), so we still have stupid legal problems, which divert our time from the meaningful stuff.
2. When you go to VCs, don't think that they are stupid and can be blinded by bullshit and buzzwords (first-mover advantage, scalable model, etc.) - many (maybe most) of them have very technical backgrounds, started companies themselves, and can speak your language. However, it also helps to speak theirs - read a couple of issues of something like Forbes ASAP, Fast Company, etc. - I generally don't read them, but it helps to tune your mind to the right wavelenght before presentations
2a. Don't think that you are the smartest. If you have this idea, chances are that someone else also did. Moreover, chances are that some of the VCs already funded a similar company, so, obviously, avoid those ones - they will just steal the good ideas from your model for those companies (and they ARE allowed to do that, because they do not sign the NDAs)
2b. Don't give up - we went to A LOT OF VCs before finally getting funded.
2c. And if you are young, they WILL rip you off (in terms of equity they take vs. money they give). Life's a bitch. But if you're successful, it's not going to matter
3. Try to use all possible connections you have, even the weirdest ones. If you have some friends/professors/former bosses/etc. who are very well-known, or just merely very successful, try to get them as advisors - if they are nice they will agree (it's zero marginal cost to them), and you might benefit a lot by just mentioning them as an advisors. Try to get many people fast, even half-committed - it is much nicer to say that you have 10 people (and, of course, give names) when you try to rasie money than to say "well, we two have this great idea". Remember, at the very early stages funding is closely related to the size of the company, e.g. # of people in it.
4. Have fun. Always remember that you have nothing to lose. I personally consider this whole start-up thing to be a game, in which I can only lose time (which is valuable, but I've still got a lot of it - like 50 years
Good luck!!!
Be like Bill Gates:
1) Be born with venture capital: Mr. Gates was born with a generation skipping trust fund willed to him from his Grandfather's succesful banking enterprise. This gave him the flash cash to acquire MS-DOS when he knew IBM was looking.
2) Know the right people: Bill knew IBM was looking for an OS because his mother knew the CEO of IBM personally through her seat on the board of directors of the Red Cross {or Salvation Army or whatever charity that was}.
If you manage to screw these two simple things up then you have an uphill battle on your hands...
--Richard
P.S. But seriousely: I'm not a Bill Gate's fan per-se; I really do believe he is the Ringo Starr of the information age. But I admire like heck his ability to admit a mistake and turn his entire company on a dime to correct it...
These are things that could have been clarified from the beginning. Money makes people do really weird things, even good friends. Get it in writing from the top.
Because the snark was a...
The information I am posting assumes (I think safely)that you are a techie. I am as well and actually, legally, started my own company. After a few short months, I simply folded all the paperwork into a manilla folder, chunked it in a closet, and went back to work for a large Computer Oriented Major Pc And generally Quality hardware company. I have to tell ya, I really thought I could do the business stuff and the tech stuff myself. I even did my own (and I think good) marketing. BUT - on the BUSINESS side, I got totally "hitherto'd", "whereas'd" and "aforementioned" TO DEATH. Oh, you wanna set up a reseller agreement with (fill in mega software company of choice here) well, you need to send us $2500.00 and a copy of (inane government form here). OK, Me: friendly government, how do I get this inane form? Governemt: you need to submit a notorized copy form G7d. Me: And how do i get *that* form? Governemt: Go to the post office, and fill out form g8d - "Request for form g7d". Me: I need a beer If this makes it beyond a 2-3 person gig, you will need some business help, IMHO
mas cerveza, por favor politically incorrect stu
If you are planning on doing any sort of work for companies other than your own, get a contract. I made the mistake of not getting a contract for a project, and it has been very difficult to get paid.
I'm 21 and I've started 2 successful small businesses. The largest thing that I've learned from my work is to not mess up the amount of time spent on a project. If you are doing software, this is really important! Make sure that you meet your deadlines for any work that you start. The best thing to do is to add about 30% extra time than what you initally think it will take, to cover your butt. Oh, and make sure that your coders do not do just code. I had one friend that was helping me with a large project and he just got plain burned out, because he did little else.
My 3 CDN cents...
We started our business this last August. I figured it would take us about 10,000 to get started, of course I was wrong. My word of advice is make sure you have a lot of capital up front, because you always overestimate how much you think you are going to be turning over in the first little bit. Also make sure your partners are motivated and ambitious as you are. It takes a team, not just a leader, even though the Pres. or CEO has to have some vision and should be willing to move the company in the right directions when need be.
We're still here after 7 months so I guess that is proof enough in itself that I probably know what I'm talking about. Check us out on the web, we run probably the most friendly and service oriented web hosting company out there. Not to advertise or anything, but in today's world a little bit of service goes a long way...
Nathaniel P. Wilkerson
NPS Internet Solutions, LLC
www.npsis.com
Nathaniel P. Wilkerson
www.haidacarver.com
Here at school I work for the WPI Venture Forum. Perhaps if there is a similar organization where ya'll are you can see if that would be an option. Even for the networking part it may well be worth it.
There are four boxes used in defense of liberty: soap, ballot, jury, ammo. Use in that order.
Listen to your inner feelings about things, respect those feelings, and respond to them.
I spent 2 and half years in a startup where I knew the founder was a snake, but I rationalized that a snake at the helm would be good for business. He did, in fact, get us great jobs, and negotiated amazing contracts for those jobs. But his lack of integrity with his partners (including me) and employees ate away at me like a slow toxin. It took me too long to respect my need to work with people of integrity, and I'm much happier now that I'm out. But like many of these posts say, even though it was really tough working with him, and tough leaving, it was a great learning experience for me, both professionally and personally.
Good luck.
you will ever get are happy customers. You can spend BIG BUCKS on advertising/marketing, and never achieve what you can get with even a half-dozen customers who are willing to sing your praises. And one of the best ways to get happy customers is to overwhelm them with SERVICE. And take notes on what questions your customers have and what problems they run into. These will form the basis of your first update to your documentation.
And you will run into the customer that is just a complete asshole (as opposed to a partial asshole) that wants something for nothing. This guy will NEVER sing your praises, no matter what you do. Chances are most other people he deals with know him as an asshole, also. He probably has a litany of 'horror stories' he dumps on anybody who will listen. Make sure you are not one of his horror stories. Do your best to make him a 'neutral' customer. Do the right thing, even though he will never thank you directly. That way, if he does talk about you as a 'horror story', a sane person listening to him can think "Gee, this guy's an asshole, but this company still did the right thing by him. Imagine what they will do for Me if I treat them fairly?!?" Voila. Your next customer.
Lots of good info posted. I would have expected the normal high level of drivel that accompanies every other article on every other topic. But I am amazed at the quality of the vast majority of replies I've read. It feels GOOD to be a part of this group again.
You didn't state what your intentions are for your company, as far as your personal income expectations. Do you intend to self-fund on a shoestring, and invest with sweat equity? Do you intend to draw a salary, and live off of someone else's dime until the company becomes profitable (Venture Capital)? Do you intend to do an IPO in five years or less? Do you intend to sell out to Bill G. in 3 years and retire? This is the first decision you must make, since all other decisions will flow from it. That doesn't mean you can't change your mind down the road and go a different direction - you will need to be flexible no matter which way you go. You can't tell what your next step is if you don't know where you want to end up.
And this brings me to the point I wanted to make. It's one thing to want to make a living working with friends. But that can include all the options I listed above. It won't work if you and your friends all have different expectations of where the company should end up. Discuss it NOW. Think about it for a while. Discuss it AGAIN. Repeat.
You also need to decide what will be more important - the succes of the company, or maintaining a friendship. No matter which direction you go, you will most likely be faced with making this decision at some point, and your decision will determine your action. There is no 'right' answer to this one, but you must be consistent. Waffling will get you nowhere. If your friends decide the company is more important, and you decide the friendship is more important, you will disagree on business decisions often.
And if you are doing a shoestring startup, be aware of your partners ability to hang in there financially. A shoestring startup often means that at some point, you may want or need to forego some personal income to reinvest in the company, or because of a 'slow month'. If you have few monthly payments to make, you can get by. But if one of your partners (or you) is engaged, and his girlfriend is talking about 3 kids, be aware that his ability to 'take a hit' in personal income is going to be much less than yours. He will need to provide for his family, and you can't blame him for that. But it will force hard decisions and probably hard feelings.
Also, if you are a shoestring startup, be aware of each person's strengths and weaknesses. Chances are, you are a Geek (Wear It Proud!) and so are your partners. But somebody's got to be the boss. And somebody's got to be in charge of emptying wastebaskets and recycling the cans. So pick a CEO, a Purchasing Manager, a Housekeeping Manager, etc.; and then change jobs every 60 days. You will learn a lot about you and your partners' strengths and weaknesses in the process, and get an idea what's involved in each of the jobs and an appreciation for each of them. You will be much better qualified to decide when to hire someone for a position and who to pick. And you will most likely find that someone in your group 'makes a job look easy'. But if you never try the job, you may think 'he doesn't work as hard as I do'. Been there, Done that.
You may think that all this advice is free. It's not. By asking the question, you obligated yourself to come back here in a year and tell us how it went. And share what you learned. Pass It On.
Good Luck.
...GPL all your code. Yeah, that'll work.
Oh, wait a second. Maybe they actually want to make money on the software. Nevermind.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
I would have to say that the most exciting startup (at least for me) would be Extreme Networks (http://www.extremenetworks.com).
Having been associated with company since the beginning, I would have to say that competant employees that are willing to work their asses off are the most important thing. Also, make sure you know what you are doing before hand, PLAN EVERYTHING!!
"If we don't anticipate the unforcene, we are at the mercy of anyone or anything that cannot be programmed, catagorized, or easily referenced."
Also, look at other companies as examples. See who goofed up, and where people at the most trobules. Learning from other people's mistakes is a lot nicer than learning from your own!
Definatly Delaware. It is very business savvy.
Ala NPI. The investors brought in their own CEO, and she replaced all of upper managment with her own people, the company went to hell, and she moved on to destroy the next company.
Well, among my several employers, I've been through a couple of startups over the years. One went well for the investors, but I was too junior to make much off of it. The other was as bad as it gets... it was so bad it didn't even make a detectable crater when it went chapter 13. So here goes:
1. The aforementioned crash & burn went ch. 13 because the two key founders had a combined emotional age of 6. Choose the team carefully. The VC's also primarily fund on quality and track record of the team.
2. What is missing from your team? A good marketing guy? No one is more important to success -- including the chief software architect -- so park your geek ego, OK? By the way, most marketing guys are not *good* marketing guys -- get someone that is clearly insightful. If it smells like arm-waving BS, it is. Do you have a manager? You need someone who has actual people management experience for a few years with >16 person teams... this is *not* an area for OJT.. and well meaning but clueless about people management and keeping a shop running will drive good people away... besides burning up your money.
3. Remember that the job of a start-up team is to put scalable processes in place. Almost all companies go through "growing pains". Most can be avoided. The pain is caused by outgrowing the processes that work for small teams. Example: 2 guys whacking code can survive without a defect tracking system. 20 can not. Every process needs to be examined for scalability.. you will miss some, and those will be the walls you hit.
4. When something begins to smell a little like a mistake... ruthlessly surface the issue and squash the mistake immediatly. Bad hire? Throw the bum out NOW. Bad choice of tool? ditto. Chapter 13, Inc. would have done far better if the board had been *less* patient with the clowns at the controls. Small companies can take too many self-inflicted wounds.
5. You *do* need a business plan. Revise it regularly. It's for *you*, not the VC's. Keeps you focused on what matters.
6. Pinch pennies, but in the right places. It's pretty simple, the less money you burn, the more of the company you keep for yourself. Cheap used furniture or even plywood holds up a monitor as well as anything else. Use your money to buy tools that make your coders squirt ascii like a firehose and squash bugs in dozens.
7. There happens to be way more money in the hands of VC's right now than at any time in recent decades. WAY more. They are funding stupid deals that will crash and burn. They are funding big deals because little $2M dribbles doesn't invest it fast enough. Your challenge will be getting noticed, because they are too busy pushing money into the hands of people they already know... people that have made them money in the past. So.. back to #2, do you have somebody on your team that knows how to raise money from VC's? Find one.
And best of luck. A start up will be be best, worst, most educational, most tiring E-ticket ride you can find. Whether you make a zillion or if you crash and burn.
I have been in two startups, The first one worked and grew to a 200 person company before being bought out and trashed, the 2nd didn't work at all. Both had great ideas. Using 20-20 hindsite, both could have worked. The difference between the two was that the successful startup had one or more dedicated full time geeks AND a dedicated full time slimeball. In the 2nd attempt our slimeball wasn't full time. He had businesses and cashflow on the side.
So... you need a business plan to tempt VC. You need full time people who are giving up their livelyhood and time to see the company succeed.
.. Blub falls right in the middle of the abstractness continuum. -- Paul Graham
Projects that are spec'd verbally have a habit of feature-creeping, and it's tough to pin down at what point the project grew. Don't be afraid to spell things out to a client ("If you want this feature, we'll have to re-design the database, and that'll probably add a week to the project. At $xxx per hour, that'll cost you...")
Remuneration can also be a touchy issue. For example, if you're dealing with a stock option scenario. An agreement to take partial payment for a project in stock can be an easy source of "misunderstanding." If the price rises, it's easy for a client to argue that "I meant the price when the project is finished." However, if it drops, then the number of shares will undoubtedly be calculated from the value at the project's inception.
Basically, anything that might be open to interpretation should be in writing (including agreements between partners).
And one last piece of advice... If whomever you are dealing with has used a lawyer to draw up some documentation, it's probably in your best interest to splurge to have your own lawyer look at it. Their a tricky bunch!
- - - -
A forehead VCR... who'd buy that????
I started my first corporation, Actaeon West, Inc., when I was 18. We just celebrated its first birthday a month ago. The first thing I've learned is DON'T START WITHOUT ENOUGH MONEY. Project how much money you'll need, project it again, considering the worst case scenario, then double it and add 10%. Don't begin until you have that money. The money is out there, but if you have to spend time actually running your business and ALSO finding the seed money you should have had from the beginnning, you'll fail. This cannot be overemphasized. Give yourself a big cushion. The other thing worth emphasizing is that if you're small, use it to your advantage. Be prepared to change your business model. My company started out as an ISP, for example; now I'm looking to sell off my ISP customers to grow the other technologies we created while working as an ISP. Email me if you'd like to talk further; this could be interesting. I'm michael at actaeon.net.
These are all pretty-much great pieces of advice from my point of view. You're in the software business now. Screw the business plan. Ship the first demo tomorrow. If it works on the customer's system you just generated desperately needed cash flow. If it doesn't, no damage. You can now get whatever investment you need without trying to polish a turd. If a customer wants their money back AND they want to keep the program... Do it! Let any customer rape you so they don't become indignant and call their lawyer. Or worse yet, bad-mouth your company to anyone, especially a potential customer. This is true on any level. And you can easily afford to do this because you followed the number one rule of business in the free market economy: "Charge what the market will bear." And as a side-note from my own experience, do not ever get PO'd at your partner(s) because things are going WAAAY slower than any of you had anticipated. As was said earlier, the amount of learning even during bad-times is ridiculously high even when it seems wrong. Good luck.
Advertise on slashdot.
When you start hiring, remember to treat employees like gold. Too often I have seen employees forgotten and they are your infrastructure and foundation they can make or destroy a company.
The guy has never been laid and must be ready to blow. FYI, there is scientific evidence that he actually knocked up Maria Magdalena who fled to France baring his child. This making her the Grail and "Jesus Blood" the unborn child. Whee, I love religious discussions in businessplans, how many angels fit on the tip of a needle?
Your post offends me, i wish slashdot was moderated, then they could remove any post that personally offended me. P.S. - This was a joke, I could not hope to be that vain in reality.
Well, I *was* going to give you some business advice, but the geek power in the room has already given you plenty.
Instead, I'll give you some experienced software development advice. Okay, it's actually hybrid.
FOCUS on what your customer wants. While I know this is OLD, OLD, (and probably obvious) advice, experience has shown that geeks tend to focus on technology.
That is, when geeks in the room are asked for an idea for a product, the talk quickly turns to technology and how it can best be applied.
A good philosophy is to forget about specific technology and simply start out by getting a good idea of what the customer will want or need. Once you have that, and ONLY when you have that, should the talk on technology begin -- and then it should be focused on how best to apply available technologies or discussions on how to develop new ones that will best address your product.
A product is what the customer wants. Technology is something geeks use to create products.
Nothing new here, but certainly easy to forget when you are in the middle of a brainstorm on what to create.
Smokers
> Jesus Christ! .... ?
...... etc .... etc
:-), why life is hard.
.... And that's a reference to
> I thought we were all geeks here
Well guessed!
> and I thought that most geeks believe that earth has been around for billions of years. Not the 8000 years that the Bible states.
By which you'd mean, the 6000 years some Bible scholars have interpreted.
They have interpreted this because the Bible only refers to the past 6000 years.
www.redhat.com only refers to the past 8 years; I don't think they believe the world started then!
> Religion has and will continue to be used for power and control. And as a crutch for people that can't handle reality.
Computers have and will continue to
Web Browsers have and will continue to
This can be true; people will use various things as crutches, or for power and control.
I can't see how the thing being used can avoid this?
> The first evidence for me that religion is used for control is in Genesis 3:16. Where it states that women should be servants to men. What a crook a dog doodie.
It also slams men in Genesis 3:17-19 (note: three verses, not just one). This is the explanation of "the fall", ie, the simple fact that men and women are not as good as we should / can be. Okay, the presentation here kinda reflects the culture of the time it was written; it can be seen as an "explanation" of why snakes crawl, why childbirth is painful (or so they claim
> You have a right to believe what ever you want but Jesus spam is stupid.
Spam is stupid. Therefore *-spam is stupid. Surely slashdot is about our right to believe in open source.
Okay, JC is offtopic here, but slamming someone then saying "but you have a right to..." is downright inconsistent.
> I believe the theory that mushroom spores traveled through space to innoculate Earth. Magic mushrooms are our gateway to other worlds.
Similiar to the gateway that Jodie Foster used to travel through space in "Contact".
Okay.
> However, you don't hear me preaching about this at every opportunity that I get.
PTL* for that!
Steve.
*=(Praise the Lord!)
Author, Shell Scripting : Expert Re
Now okay, I've just visited the site s/he linked to, it's not my cuppa tea, far too OTT. I don't want to be linked with that; For some reason, I've not got any statements of my beliefs on the net; I've got a friend with a good statement whose URL I can't find at the mo.... mail me for the link... Steve.
Author, Shell Scripting : Expert Re
Hire the biggest lawyer you can afford and get everything in writing, especially if you have VC / outside investors. My associates and I lost the farm because someone had a slimey-er lawyer than we did. Lost 9 months and everything we had invested in the venture.
"If I wanted your input on my pet project, I'd stick my hand up your ass and use you like a sock-puppet." - Muse
A friend of mine and I are both considering getting something together after we both finish college. We haven't worked out a definitive plan - in fact, the only plan we have so far is to just work on little projects (but spend quality time on them) and give them to friends, upload them to anyone who will accept them, and try to get discovered. I realize this is not very organized, but we're hoping it will get us at least some exposure, condsidering neither of us have any business resources whatsoever.
"I would prefer not to"
People, People, People Listen to all the trite stupid advice you ever heard about HR because if you try to carry any dead weight it will make you weep with pain but motivated employees who are stoked about being on the team will make 90 hours a week sound fun. Also don't fuck with the lawyers or VCs but don't be scared either. Know exactly what and why you want it and they will respect you. Write a 40 page business plan, documents detailing work divisions, operations, everything. Then once you have all this data toss it in the shredder and be flexible. The excercise of thinking through the plan is key but the implementation can never be static. Luck!
Listen to all the trite stupid advice you ever heard about HR because if you try to carry any dead weight it will make you weep with pain but motivated employees who are stoked about being on the team will make 90 hours a week sound fun.
Also don't fuck with the lawyers or VCs but don't be scared either. Know exactly what and why you want it and they will respect you. Write a 40 page business plan, documents detailing work divisions, operations, everything. Then once you have all this data toss it in the shredder and be flexible. The excercise of thinking through the plan is key but the implementation can never be static. Luck!
Early to rise,
Work like hell,
and ADVERTISE!!!!!
The early to bed stuff is just a suggestion.
TopTerms.com -- See the Top 100 things people are searching for on the Internet.
Talk to people. You will be surprised at who knows whom in your community. Right now, I'm in Pittsburgh. Everyone knows everyone else, if you get into the right circles. But you've got to get in "somehow".
/.'ers might not know:
./ed, I won't be able to respond to every e-mail personally, but I will read all of them.
Listen to your customers. Don't be a science project looking for a problem to solve. Let your customers tell you what's really bothering them. Then charge them to fix the problem. People will pay more money for a pain they feel, than for an annoyance they can endure.
Fire people: fast. It's been said before, but it is important. Get rid of people who are slowing you down. They might have been great when your company was 20 people, but most people can't grow with a company. The skills that make someone excellent for a small operation are the same skills that make that person terrible for a mid-sized operation. Few people can or will change to fit the company. Get rid of them. Give them the options, give them the cash, but don't drag them, and you down, by trying to give them a nice cushy job. They won't like it, and it will only hurt your company.
Time is the enemy: You can get/buy everything else in the world. The one thing you can't get is time. Don't waste it.
The B-plan: This is only important in how it helps the entrepreneur/business. VC's want to read it so we know where you think you're going, and how you're going to get there. Don't hire someone else to write it. They won't know the business as well as you. And if you don't know what you're doing, no one wants to invest in you.
Know what you do: I challenge people to put what they do into 5 words. If you can, you've defined your market/customers/competition.
Be number 1: Today, there's no place for number 2. First person to cross the Atlantic solo? Lindy. 2nd? Don't remember. 3rd? The only reason you'll know number 3 is that she was number one in another category. 1st woman to cross the Atlantic solo: Amelia.
VC's tend to travel in packs. Software is not in vogue right now. Lots of things aren't "trendy" but will still make money. But what makes a company look interesting? A home run.
Let's do some quick math on what makes a home run. I'll use the numbers that were mentioned earlier. These values are all rough, but will give an idea of what any investor will be looking for.
Of the companies that are funded, 80% fail.
Somethings that
VC's get their money from other "rich people" willing to take a bigger risk for a bigger reward. So VC's, in order to keep their jobs, have to do better than the T-Bills and better than the stock market (after all the risk is higher). Let's put that number at 30% return.
And let's play with $100 and 10 companies. Each company getting $10.
Now if we invest $100, and expect a 30% return, that's $130 at the end of the year.
So if 80% fail (8 companies), that's $80 down the tubes: -$80
Let's call 1 a marginal success, giving back the return we promised (30%) that's $13.
Finally, we have the 1 homerun. It's got to give back enough money to make $130.
Right now, that's $197.
This is off a $10 investment.
The key is EVERY single investment looked like a homerun when the $10 was put in. 19.7 times return. Let's call it 20 times return on investment, or 2000% return is what's needed, annualized.
I'll be the first to admit that we'll make mistakes. We'll see gems, and not invest. We'll see dogs, and throw money at them. But the key is every investment has to be a homerun when we start.
Know/plan how large you can get. If you're going after a $60 Million market. And you need $15 Million to do it. Why would an investor want in? Even if you're wildly successful and get 100% of your market (monopoly). You haven't given the returns needed. It doesn't look like a homerun, it doesn't have the potential for a home run. Say you're worth 2 times the market, $120 Million, from the initial $15 Million investment. It's good, but not a home run.
Finally, take a good hard look at who's behind the money. Everyone's money is green, just what shade of green. Look for people who understand your business, and can help you succeed. When a VC puts in money, the last thing he wants to do is take control of that company. The 2nd to last thing he wants is to do is lose his investment. Why? Time. It's cheaper to lose the money, than it is to squander the time spent trying to save that money.
Here at Triangle Capital, we're part of 2 funds in Pittsburgh. Draper Triangle Ventures, and Lycos Ventures. We understand the web, and the craziness of internet companies. Give us a chemical reprocessing plant, and we'll pass on that. It might be a home-run, but we couldn't help that company, and we would be a drag rather than an asset. We would constantly be asking the management why certain processes were done, and getting in the way.
With internet companies, we understand the business model, and what flaws exist. We can smooth over transitions with the network we have, and can open some doors for you.
This is the value of angel investors as well. They should be able to add more than just money.
This is only the tip of advice that exists. But remember:
No Customers = No Business.
(See? 5 words)
If you have any questions or B-plans, I can be reached at jpark@tricap.com. Just write "Slashdot 2/2/00" in the subject line. If I get
Last bit: to the CMU-CS students. I'll be on campus sometime this month, check the calendar.
What ever happened to the VC forum idea?
TJHSS&T '90
CMU '94
GSIA '98
J-L P
http://www.sbvc.com/pageload.asp?pagename=working- process.html
Step 2: Create an Effective Executive Summary
An effective Executive Summary is typically one to two pages long and answers the following ten questions:
1) What is your business?
2) What is your business model (primary source of revenue)?
3) What need are you fulfilling or what problem are you solving?
4) Who are your competitors?
5) Who are your customers?
6) What is the status of your development?
-- Idea stage
-- Development stage
-- Product or service available to customers
-- Have raised some revenue
-- Have raised significant revenue and are looking to ramp up business
7) How much money are you looking to raise?
8) What is your target valuation?
9) Who are your current investors?
10) Where are you headquartered?
Helpful Tips
Personal introductions are the best way to give your plan a chance. Use your network to find mutual acquaintances. Introductions give both sides an immediate reference point and raise your request above the incoming noise.
To make sure your plan gets the best review possible, make sure your company meets the listed criteria and that your plan is short, to the point, and covers the ten points listed.
Take a look at incubator homepages for suggestions as to what a business needs.
;-)
, 9214,00.html?nl=int, 1115,00.html, 9226,00.html
http://idealab.com
http://ecompanies.com
I disagree with a few points.
1) Unequal founders - Beginners often want equal percentages. Hogwash. Checkout venture capital homepages for typical percentages.
http://benchmarkcapital.com
http://thestandard.com
2) Full business plans are not always needed at the early stages. However, she adds, "business plans are becoming less and less crucial. It's all about execution and how fast [the founders] can move." The reason? "It's because the world is moving so fast. We want to see an executive summary and a marketing plan; I need to know what the costs are because the revenues are totally fictitious." Besides, Comaford notes, business plans change so frequently that some are almost outdated by the time they're drafted.
3) Decent venture capitalists fund maybe 1% of their offers (pre-screened). Maybe 1-2 million internet ideas being shopped for money today. Become better informed about venture capital mechanics.
Look at CMGI, ICGE, Draper, etc...
http://www.drapervc.com/CurrentPortfolio.html
Even after the pickiness of VCs,
Maybe 15% of VC-funded companies are successful.
Raise this to 50% for CMGI-funded companies.
Small Businesses - 90% fail within three years (due primarily to cash flow problems).
Even 14 of 15 of penny stock IPOs sink.
Some early stages of the startup company hierarchy.
1) $50,000-100,000 small business, home business
2-5) $200,000-2,000,000 idea (2-4 people)
- $100,000 annual revenues, $10,000 profit (after salary).
- P/E ratio of 50!
- Job of early people is to build this idea into stage 2.
- Spend as little money as possible
- Assemble management team, make sound business model & strategy
- Write executive summary of business plan
- Answer all critical questions
- Does NOT mean do 100% market analysis/research.
6) $5,000,000-10,000,000 idea/company (5-15 people)
- Seed Money:
Better - $500,000 - $1,000,000 for 5-15%
Typical - $1,000,000 - $2,000,000 for 20-40%
Worse - $1,000,000 - $4,000,000 for 40-60%
- Finish business plan for 1st stage funding
- 3 months to get company to next stage
- Spend money as fast as necessary to move quickly.
- Take as little money as you really need (for quick expansion).
- Ask for money (when you don't need it) to get powerful people on your side. Make connections.
8) $20,000,000 - 50,000,000 company (10-50 people)
- 1st Stage VC $1,000,000 - $10,000,000 for 10-30%
- Try to get funding from well-known VCs: CMGI, Draper, etc..., even if you get less.
- Proof of concept.
- Buy up competitors.
- Hire professional CFO/CTO.
- Staff big-name board of directors.
- Make strategic alliances and partnerships.
10) $100 million - 200 million company (50-200 people)
- 2nd Stage VC $20,000,000 -$100,000,000 for 20-50%
- Buy up more competitors and allied companies.
- Expand to 300-400 people. Need headcount for IPO.
- Hire big-name CEO/Chairman.
12) $500 million - 2 billion (300-600 people)
- "Small-cap company", maybe a penny stock
- IPO $20,000,000 -$500,000,000 for 10-30%
- B2bstores.com (BTBC) to IPO for $28 million (2/7)
- Palm (PALM) to IPO for $345 million (2/28)
Advice:
1) Connections. A decent business idea with good connections often beats many great ideas. Use funding sources, lawyers, and accountants for their connections and ability to help your company.
2) Management Team. Totally crucial. Find people with real startup experience as advisors and/or management team. Experienced CEOs/managers can do more with 40 hr employee work weeks than newbies can do with 100 hr weeks. Experience tells you what NOT to do.
3) Communication. Between team members.
4) Community. Use CEO resources in your area. In LA,
http://directors.org
http://www.digitalcoastweekly.com/
In NY, check out Silicon Alley,
http://siliconalley.com/sa/events.cfm
http://www.atnewyork.com/
http://www.siliconalleyreporter.com
You Bay Area guys have it easy...
Other Good Articles:
Stuff to watch out for when starting
http://www.thestandard.com/article/display/0,1151
How much to pay employees
http://www.thestandard.com/metrics/display/0,2149
Business plans - are they necesssary?
http://www.thestandard.com/article/display/0,1151