Archive for the ‘Start-ups’ Category

Consulting sucks, but thanks for the work

Thursday, May 22nd, 2008

Starting a company is tricky because there is never enough money. There are ways to raise money, and ways to save money, but usually you are thinking about both of those things because money is tight.

At the moment, I’m doing quite a bit of consulting work to give my company a cash infusion. And this is working quite well. Luckily, the projects are interesting and the clients are delightful to work with. (They also read my blog!) Most importantly, the money is coming in.

Love HateBut although I love my consulting jobs half the time, the other half of the time I despise them. Because every day, every hour, every minute that I spend doing my best work for my clients is time that I take away from working on my start-up.

I consider this to be a necessary evil at the moment. But the process of getting these consulting jobs and using this capital-raising strategy has given me some insight into how to make the process more painless than painful.

My most recent article on The Industry Standard has the full scoop, so go read it now to find out more – Consulting for capital – 5 ways to make it work for your start-up.

These are the five points that the article covers:

1. Charge by the hour
2. Watch the contract terms
3. Learn from the work
4. Network
5. Schedule around your busy times

What strategies do you use to make consulting a positive capital-generating tactic for your start-up?

Photo by *_Abhi_*

Keeping up (just good enough) appearances

Wednesday, May 21st, 2008

I work out of my home, so I spend a lot of time noticing its cleanliness. But I don’t have a lot of time to spend cleaning, especially because when I’m at home, I’m usually working. So I have mastered the art of keeping everything just clean enough.

CleaningIf you walked into my home/office, you would think it was clean. In fact, people comment all the time about how clean it appears to be. But they don’t know my secret – that every morning I spend 5 minutes tidying up, making the bed, putting dishes in the dishwasher, throwing random clothes in the hamper. Tossing everything that doesn’t have a home into my closet and shutting the door. They don’t know that I leave dust rags in various rooms throughout the day, and as I’m on conference calls, I dust. Or fold the laundry. They don’t realize that after I wash my face, the washcloth does double-duty – it’s used to wipe down the bathroom sink and fixtures before going in the laundry.

My house isn’t always clean but it’s clean enough.

Of course there are times when my home/office gets a full-on assault with cleaning products, vacuum cleaners and mops. But those days are much rarer, and usually happen right before a party or a family visit.

I think that there is a lesson that can be applied to start-ups.

As a start-up, there are usually very scarce resources available, so it’s difficult to do things perfectly all the time. But at any given moment, a customer might be using your site for the first time. Or a potential investor might be checking out what you’re up to. Most of those people won’t dig too deep. They will just be giving your site a cursory glance, checking it out to see if it might be helpful or not. So although behind the scenes you may know that everything is kind of a mess, it’s important to keep up appearances.

What does this mean, practically? Nothing too difficult. Make sure that your Website has a professional design. Make sure that the words on your site are spelled right (mostly) and that they are grammatically correct (or at least understandable). Make sure all your links work. If something isn’t working, or looks a little shoddy, take it down.

If your business involves some kind of technology, make sure that it works. You can launch without all its future features, and still not quite working exactly like you want it to, but make sure that it works, and will not crash or be buggy if someone actually attempts to use it.

The goal, of course, is to get people who visited your site or used your technology to say, at first glance, that it looks good. They may lift up the rug and find out that what you are showing them isn’t complete, that it’s not as good as it looked at first, but you do not want to turn them off without them taking that closer look.

And honestly, most people never take the time to lift up the rugs.

There will be time to perfect things, to make sure that everything is exactly, precisely working. But until then, make sure that your appearance is good enough.

Photo by givepeasachance

Don't sacrifice your blog in the name of productivity

Tuesday, May 20th, 2008

I have been working more than ever lately, but my blog posts have been scarce. This is no accident. But it is a mistake.

A couple of weeks back I wrote this post about productivity on Tuesdays. That realy got me thinking about my own productivity and what days of the week I am able to get work done. The initial inspiration for the post was this one by Penelope Trunk, which suggested, among other things, that if Tuesdays are the most productive day of the week, we should focus more on Wednesdays and Thursdays to try to make those days equally productive.

So I’ve been trying to consciously think about my productivity. And I have hit upon a great way to make myself productive. The past two weeks I have been picking one major (or difficult) item on my to-do list, and working on it the entire day until it’s done. That way, at the end of the week I will be able to cross five major items off my list. Any time that I have left in a given day, I work on the odds-and-ends that are left. Including my blog.

This strategy has worked great for getting those major projects done. (I finished four last week, one was so big that it took two days.) But the problem is, the other stuff – the everyday work – isn’t getting done. As evidenced by the sparse posts to this blog.

GrowingSo this week I am going to try a new tactic. I’m going to schedule only 3 major things to get done this week and see if I can get caught up on the rest of my stuff. Because sacrificing my blog in the name of productivity is a bad idea.

This blog may be fairly insignificant in the scheme of things, but as far as my business goes, it has been essential in ways that I couldn’t imagine.

1. I have gotten consulting jobs because of my blog. Multiple jobs. When I hand out my business card, it has my company Website and my blog URL. People usually go to both. When they read the Pure Incubation site, the first question is usually “What do you do?” Followed by the statement “I don’t get it.” This is understandable because what I’m trying to do is uncommon and unusual, and I am trying to be vague on my site until I launch some products. But people get my blog. And my blog gets me jobs.

2. I am more engaged with the business community because of my blog. I don’t live in Silicon Valley, arguably the heart of the Internet Web 2.0 world that I’m trying to play in. But by blogging, and commenting on other people’s blogs (and have them commenting on mine), I am able to get involved in the conversation in a way that I wouldn’t be able to be involved if I wasn’t saying something. This recent post about women technology start-up founders sparked conversation from lots of interesting folks, including two who I really admire: Sarah Lacy, who released her first book last week: Once You’re Lucky, Twice You’re Good: The Rebirth of Silicon Valley and the Rise of Web 2.0; and Penelope Trunk, who I mention all the time in this blog and who is really my blogging idol, if there is such a thing.

3. My family and friends read my blog. Not everyone I know reads my blog, but the people who do have a better understanding of what I’m doing. I talked to my dad last night, and he told me that he follows what I’m up to with my business through the blog. And my Aunt Mary told me that she feels like she is more connected to me because she reads what I’m up to and thinking about at work. I’m glad that my dad and aunt are reading. When I go home to visit this weekend, they won’t look at me with blank stares when I talk about my business and how things are going. I like that.

4. Blogging helps me be more creative. I love writing, I always have, so the process of coming up with a topic and writing about it helps to get all of my creativity churning. I find that the process of writing a blog post often helps me think of new things to work on for my business, and often helps me discover new business models and stuff that’s out there that I wouldn’t otherwise have found – like Gary Vaynerchuk and Wine Library TV. If you’re not watching, you should be.

5. When I write a blog post, things happen. I’ve noticed this past week that my email from random people has slowed down, my traffic stats are a bit stagnant and I feel generally down about my business. This is a normal feeling for entrepreneurs to have on occassion, but I realize now that posting to my blog helps to lessen this. Because when I blog, I reconnect with my community, get support from the other entrepreneurs out there, and things happen. And it’s that thrill of activity that keeps me going when things get hard with the business, which happens all the time.

It turns out that I learned a bigger lesson this week than just the one on productivity – I realized just how important my blog is to my business. So if you have a blog, keep writing! If you don’t have a blog, go get one today. And then check back in three months to let me know how it changed your business (or life). I know it will.

Photo by Editor B

Becoming an entrepreneur & the things that inspire us

Wednesday, May 14th, 2008

This week’s article for The Industry Standard is more personal than other articles that I’ve written for them in the past. It’s here: How to Make the Leap from Corporate Hack to Entrepreneur. I give some tips, but mostly the article is a first-person account of my transition from working at a big company to founding my start-up.

In the article I mention a vacation that I took to Arizona. That trip happened in May 2007 – Chris and I went to Phoenix, Sedona & The Grand Canyon to celebrate our first anniversary. At the time we went, I wasn’t thrilled with my job any longer. I was getting the itch to leave, but I couldn’t quite put my finger on why. I loved the people I worked with, I had a good position, relatively good money…but I wasn’t really happy anymore and I couldn’t figure out why.

Then I went to Taliesin West.

I am not a huge architecture fan. I mean, I like architecture, but I don’t know much about it. Chris studied architecture for a year or two in school before switching to industrial design, but even so, going to visit an architecture-related exhibit isn’t what we would normally choose to do. But we were on a road trip and wanted to stop wherever the wind blew us, and however it worked out, we ended up at Taliesin West.

We took the tour. It was an hour-long, guided. In the tour, we went through various buildings on the school campus – Wright’s office, the studio and gardens, the private gathering room and even the family’s bedrooms. All along the way the guide kept telling us all these cool facts and interesting things, totally creative stuff that had my mind racing. Here are a few things that I saw and learned:

– There was an observation point on the grounds where Frank Lloyd Wright and one of his wives (he had three during his lifetime) used to bring chairs to every single night in the spring and summer, to look at the valley around them. There was nothing as far as the eye could see. Standing at that point today, the entire sprawl of Phoenix/Scottsdale was visible.

– The students who attended the school actually built the school before they could attend. They used only the materials that were available on the land. All of Wright’s designs were built to make sure that the buildings blended into the surroundings, and brought the outside inside, as well. This is called organic architecture, and he was way ahead of his time with it.

– Even after the grounds were built, new students didn’t get to live in the buildings. Their first year, they had to go out into the surrounding wilderness area and build their own dwelling on a slab that was there for that purpose. This was like a crash course in architecture – if your dwelling wasn’t good, you would be living with the insects and other animals. Married students often brought their families to experience this with them.

– Frank Lloyd Wright was a major movie buff, so there is a movie theater on the grounds. It’s pretty dark inside the theater, however, so he had the builders dig small cut-outs into the rock along the floor, and installed lights – the first track lighting ever.

– When Wright was a boy, there was a certain set of blocks that he always played with – Froebel blocks. He often credited these blocks as laying the foundation for the basic principles of architecture that he used throughout his career.

Ok, so those are some random things, and you might read them and think “so what?” Or you might think that some are cool and others are mundane. But I left Taliesin West with my mind racing about all the ideas that I had heard, and with the need to be creative burning up in my chest.

It took me a bit of time before I eventually left my job to start Pure Incubation. But this visit to Taliesin West started the avalanche. After this visit, I knew in my heart that I had to leave my corporate gig.

And this visit also reminded me just how important it is to find things that inspire us. To visit new places, see new things, meet new people, take a chance on something unexpected. You never know where inspiration might strike.

These pictures are all from various people on Flickr – all better than any of the pictures I took that day. They are all from Taliesin West.

Taliesin West
Photo by andy54321

Taliesin Sculpture
Photo by bluecanary_dreams

Japenese taliesin
Photo by bluecanary_dreams

Furniture taliesin
Photo by andy54321

Outsourcing rocks!

Friday, April 25th, 2008

That was my alternate title for the story I just wrote for The Industry Standard – up now on the site: 10 reasons that start-ups absolutely should outsource (almost) everything.

From the titles I’ve chosen, it’s pretty clear that I am a huge fan of outsourcing. Since I am the only full-time employee of my company, I am a big outsourcer. Outsourcing has been a great way for me to scale quickly without breaking the bank. I’ve written about this before, so I won’t rehash everything here, but if you want to read about my experiences with outsourcing, here are some choice selections:

Globalization, outsourcing and Pure Incubation
How to hire a Web designer using eLance
How to prepare for the globalization of your Internet business

And I found out today that all this outsourcing has had a positive impact on my business – for the first time (March 2008), I was in the black.

Celebration

I am a fan of celebrating the small victories (and believe me, it was small), so I’ll be celebrating this weekend. Have a good one.

Photo by bfick

More on starting a company in an economic downturn

Friday, March 21st, 2008

Yesterday, The Industry Standard published an article that I wrote about why it’s a good idea to start a company in a recession. The article is here. (You should probably read it if you want to follow the rest of this post.)

Hacker News logoThis article generated quite a bit of buzz on Y Combinator’s Hacker News, so I wanted to take a minute to respond to some of the comments. Here’s the link to that chatter.

– The most common disagreement with the article seemed to be that many of the points that I was making about why it would be good to start a company in a recession also apply to starting a company in a boom. I agree completely. However, we unfortunately are not in a boom at the moment – we’re in (or entering into) a recession. The viewpoint of the article is “since we’re in a recession…” not “if you could pick between recession or boom…” I wholeheartedly agree that if you could set your ideal conditions in which to start a company, a boom would be the time.

– One commentor wrote: “start a company at a time and a place where there are no constraints and even the biggest idiot can be successful.” I disagree with the notion that there is ever a time that there are no constraints on a start-up. If there aren’t constraints, there should be. And this is the point I was trying to make. In a boom, start-ups don’t always SEE the constraints as readily or operate with restraint – but they should if they want to be using best business practices and give themselves the best chance of success. A recession forces those contraints on a start-up – but those constraints aren’t BAD. They help set good patterns and behaviors for running a business.

– In my opinion, it is not true that there is ever a time or place that “even the biggest idiot can be successful.” Successful idiots – especially in the world of start-ups – are rare.

Finally, various commentors suggested three other reasons that it’s a good idea to start a company during a recession and I wanted to include them here because I thought that they were worth mentioning:

1) “Your competitors will go bust.” -m0nty

Another commentor put it this way:

“Because the well-funded riff-raff drops out sooner.” -edw519

2) “Businesses that increase market efficiency in novel ways seem, to me, more likely to succeed during a recession. This is so obvious that I’m surprised the article didn’t mention it.” -mkn

3) “Also could get one more attention — maybe — because the media won’t necessarily expect anyone to be doing anything positive. Recessions are one big moan, and the ‘yipee!’ of a startup will stand in stark contrast.” -sabat

Thanks for all your commentary – keep it coming.

(Update: The discussion is continuing here: http://news.ycombinator.com/item?id=142792)

My new gig: The Industry Standard

Thursday, March 20th, 2008

I have been a fan of The Industry Standard for a long-time – I have written about them before, and many of you will remember the magazine version of The Industry Standard as being the fastest growing magazine of all time before the bubble burst, taking The Standard down in its wake. Now The Standard is back, with an online-only site that focuses on a prediction marketplace.

And I’m the newest writer/contributor to the site.

My first article is up now – Five reasons why a recession is a good time to start a company. Go read it, comment on it, let everyone know what you think about it. And then come back to 16thletter and let me know what you think.

Industry Standard article

Extend your personal network today – especially if you're an entrepreneur

Tuesday, March 18th, 2008

I’m not one for networking. In fact, I’m a little bit shy. You probably wouldn’t think that if you met me, but it’s true. On my way to an event when I know that I have to meet a lot of new people, I am getting myself psyched up for it. Afterwards; I relax. Or sometimes collapse.

So this advice is not given lightly.

Go network. Do it now. Especially if you’re an entrepreneur.

HandshakeI have to admit, I was a networking doubter. Reconnecting with people who I haven’t seen in years, reaching out to people who are nearly strangers…these things are daunting. But since I started Pure Incubation, every single time that I’ve talked to someone or met with someone in an effort to extend my personal network, it’s helped my business.

Today I met with a finance guy who I worked with about four years ago. He helped package up the financials for Connexus Media back in 2004 when it was sold to Ziff Davis. I got in touch with him because it seemed like it would be a good idea to get him involved now so that he will have an understanding of my businesses for when I might be ready to sell or raise some capital for one of them.

This meeting was fantastic. Not only was he enthusiastic about what I was doing (which was very encouraging) but he offered to help out with advice and direction until I need to bring him on board. Along with that, he has his own ecommerce business that is totally interesting and he inspired me with some stories about how he is making money selling marshmellow roasting sticks (his biggest money-maker) and furniture made from old skis.

Networking might be difficult for you, it might not come naturally, but extend your personal network today. Send an email or give a call to someone who you either know or admire, and see where it leads.

Photo by Mykl Roventine

Starting a company and being an entrepreneur

Tuesday, February 26th, 2008

Founders at Work book coverThe past couple of weeks I have been doing a series on starting companies and being an entrepreneur. These posts are all based on the book Founders at Work: Stories of Startups’ Early Days, by Jessica Livingston. If you haven’t read the book and you either have a startup or are planning on starting a company, I highly recommend it.

Here’s a summary of the posts:

Getting started

- How to get over the fear and start your own business
Four hurdles to jump after starting a business

Money issues

- 5 ways to save money on your start-up
5 places to spend money on your start-up

7 ways to raise money for your start-up

The successful entrepreneur

- The #1 most important personality trait of an entrepreneur
10 less-than-great personality traits of entrepreneurs

10 less-than-great personality traits of entrepreneurs

Monday, February 25th, 2008

Number 10While the most important trait of an entrepreneur must be his or her flexibility and adaptability, it’s also true that people who found start-ups often have some less-than-stellar qualities that help them be successful in their ventures.

Here’s a look at 10 qualities that some entrepreneurs share that may help them be great at starting a company, but not so great at existing in normal society. The quotes below are all taken from Jessica Livingston’s book, Founders at Work.

Entrepreneurs are…

1. Paranoid – “Distrust of others, sometimes reaching delusional proportions.” Sometimes founders have a good reason to be paranoid; other times, they are worried for nothing. But most founders are a little jumpy.

“[We were afraid] they would copy us, or what if they just shared this idea with Netscape? Or shared it with anyone else. You have to realize that in those days we had nothing – just the idea…There was not much to protect in terms of IP. Whoever built it first would win the market. So we were afraid and that’s why we kept that as the secret.” – Sabeer Bhatia, cofounder, Hotmail

“We worried about competitors, but it was an unreasonable fear. As a friend once pointed out, most gunshot wounds are self-inflicted.” – Philip Greenspun, cofounder, ArsDigita

2. Self-promoting – Since many founders are working alone or with small teams, they have to be their own biggest fans.

“After I sent out that first email, I went rollerblading around a big office park where Tellme was based. I went up to a random guy and said, “Hey man, have you checked out hotornot.com yet?” He said, “No, what’s that?” I said, “Dude, just go check it out!” Then I went home and watched our logs for Tellme and saw a hit come in 10 minutes later, and then more hits kept coming from different people within Tellme.” – James Hong, cofounder, HOT or NOT

3. Delusional – “Having an unshakable belief in something untrue.”

“I just remember the general feeling that there was very little to risk…Of course, all that is false; there’s a lot of risk and you are never fully equipped.” – Ann Winblad, cofounder, Open Systems

4. Insomniacs – Most founders will admit to a general lack of sleep and an overwhelming feeling of exhaustion at various stages of their company’s inception.

“We were just working around the clock, literally. What I would typically do is not sleep for 2 nights, then I would get 4 hours of sleep and go back to work for another 2 days in a row, and then get 4 hours, and so on. It was the hardest I’ve ever worked in my life. Sometimes I’d take 10-minute cat naps by just laying my head down on my shoulders – just so I’d get some REMs. As soon as the dreams would come, it resets your brain a little bit and you’re able to work again. We were sleeping at our desks.” – Steve Perlman, cofounder, WebTV

“As I was getting interviewed by the Wall Street Journal, or some big pub guy, all I remember was that he went off to the bathroom for a second, and they brought out my omelet. The next thing I remember, I woke up, and I was on the side of my own omelet, and there was no one at Buck’s. Everyone was gone. They just let me sleep.” – Max Levchin, cofounder, PayPal

5. Filled with visions of grandeur – Nearly all start-up founders think that they are going to have a huge impact, that they are going to change the world. Otherwise, why would they go through this hell?

“What held people together was the belief that you’re really going to change the world. I think that’s the nature of many startups. You believe that what you are doing is going to have a dramatic impact. You might not exactly know how, but you really have a belief. That keeps you going and going through many changes and a lot of uncertainty.” – Ray Ozzie, founder, Groove Networks

6. Stubborn – “The quality of being inflexible.” When you found a company, not everyone is going to agree with you along the way. Not only do you have to be too stubborn to go along with them, but you also have to be too stubborn to quit.

“I think one of the things that kills great things so often is compromise – letting people talk you out of what your gut is telling you. Not that I don’t value people’s input, but you have to have the strength to ignore it sometimes, too. If you feel really strongly, there might be something to that, and if you see something that other people don’t see, it could be because it’s that powerful and different. If everyone agrees, it’s probably because you’re not doing anything original.” – Evan Williams, cofounder, Blogger.com

7. Tall-tale tellers – Most founders wouldn’t call themselves liars, but most have, well, stretched the truth from time to time to make their companies seem more established.

“If anybody ever did want to come and visit us, we pulled all kinds of tricks to make ourselves seem more legit. When that first giant company wanted to buy us and sent people over to check us out, all we had in our so-called office was one computer…So we borrowed a few more computers and stuck them on desks, so it would look like there was more going on.” – Paul Graham, cofounder, Viaweb

“I met with 43 VCs…I remember saying to them, “Look, in 4 years, we’ll be doing $18 million in revenue with $4.5 million of profit. After that, the sky’s the limit I’m an ex-venture guy; I’m telling you the truth. We can get to $18 million in year 4, and 30 times $4 million is a $120 million valuation for the company at that time.” They all told me $18 million wasn’t interesting. And I’d say, “But most people will tell you $50 million, and you know they’re lying. I’m already discounting it because I’m a venture guy just like you are.” And they’d say, “Yeah, but $18 million just isn’t interesting.” So I changed my spreadsheet to say $50 million. And they said, “OK, that’s pretty interesting.” – James Currier, founder, Tickle

8. Obsessive – “Excessive in degree or nature; fixated.” This is the personality trait that leads entrepreneurs to spend hours and hours and hours and hours on the contemplation of one tiny problem. This is also the quality that can lead to incredible products.

“You have to be very diligent. You have to check every little detail. You have to be so careful that you haven’t left something out. You have to think harder and deeper than you normally would…It has all these kinds of things and not one bug ever found. Not one bug in the hardware, not one bug in the software. And you just can’t find a product like that nowadays. But, you see, I had it so intense in my head, and the reason for that was largely because it was part of me. Everything in there had to be so important to me. This computer was me.” – Steve Wozniak, cofounder, Apple Computer

9. Dirty – “Filthy.” This is often a result of sleeplessness, obsessiveness and stubbornness.

“My admin…tells stories about coming in in the morning and trying to clean up. She’d pick up a folded pizza box and get scared because she’d find a guy sleeping underneath it – it was covering his face. It was really bad. My dog, when my wife would bring him over, he would find burritos, because the place was just a pigsty.” – Steve Perlman, cofounder, WebTV

10. Moody – “Given to frequent changes in mood, sulky, temperamental.” I define this as the day-to-day changing of emotions and state of mind, often based on absolutely nothing.

“You wake up one morning and you feel great about the day, and you think, “We’re kicking ass.” And then you wake up the next morning, and you think “We’re dead.” And literally nothing’s changed…It’s completely irrational, but it’s exactly what you go through.” – Joe Kraus, cofounder, Excite

Photo by psd