Friday, April 29, 2005

Maze 2

Silent Moving, Straight through
And I watch
I'm an immigrant thought animal
though the person does not rise
it feeds
on an angle
Where sound goes straight through
but returns not alone
Alone where I left you?
On the stairway where?
In the contrast of steps
I turn and I listen
Craving the past
and the echo of angles
as removal looms close
I crouch in the shadows
as the wolf moves on by
and I'm scared less concealed
in the openness of meadows
in the innocence of sanctuary
and in's not the same
and out's not the way OUT.

Tuesday, April 19, 2005

entrepeneurial bipolarity

"You seek a great fortune, you three who are now in chains. You will find a fortune, though it will not be the one you seek. But first... first you must travel a long and difficult road, a road fraught with peril. Mm-hmm. You shall see thangs, wonderful to tell. You shall see a... a cow... on the roof of a cotton house, ha. And, oh, so many startlements. I cannot tell you how long this road shall be, but fear not the obstacles in your path, for fate has vouchsafed your reward. Though the road may wind, yea, your hearts grow weary, still shall ye follow them, even unto your salvation." --Blind Seer from Oh Brother Where Art Thou

The road of entrepeneurship is indeed fraught with peril and there will be great lows and great highs. In the space of one week we've had one set of potential investors so excited about our idea that they've begun to move quickly to cement the relationship. Another set of potential investors who made 5x on a prior deal with me seem somewhat reticent.

One day you're up and the next day you're down. Keep your vision, your wits about you, and your sheer belief in the idea, team, and market, and *nothing* will keep you from your goal.

Sunday, April 10, 2005

Startup - The first week

With week 1 now complete, I look forward to doubling the longevity of my new company next week. Week 1 begins with a set of lists intent on creating massive acceleration in multiple directions. Akin to the big bang, this release of energy sets the foundation for the weeks to come and creates the formative elements of the enterprise.

  1. where to live
  2. incorporation
  3. domain registration
  4. development milestones
  5. communication - phone, email, and file sharing
  6. set up payroll
  7. banking
  8. the value proposition

1. where to live. Don (my partner) and I went through several iterations of meetings with our former employer about whether to stay on with that company or leave and form our next venture. Mobius was kind enough to allow us to use conference rooms during this period and it just became very easy for us to set up temporary shop there during the conception of the company. Startup space is not ordinarily this posh however. What is important is to find a place conducive to gestation. Necessities are: desk space, whiteboard, fax machine, laptops, broadband connection, ability to be undisturbed and to not disturb others, and fairly central location. I started my last company in my unfinished basement with costco tables for desks, a 4x8 sheet of Solid White Tileboard from Home Depot (cost $18), costco fax machine, and laptops we purchased from Dell on 1 year same as cash financing.

2. incorporation. Met with our attorney, Mike Platt at Cooley. They are an excellent full service firm, used to dealing with the intricacies of venture backed companies, and Mike was the lawyer for my last company. Cementing (as my friend Jim Lejeal puts it) the ownership structure early on is a very good idea, as it formally creates an entity with owners, shares, vesting terms, etc that can now take in investment, pay employees. We decided to incorporate as a Deleware C corp largely because it is the ideal incorporation type for taking in investment (perhaps Jim or Mike could write more on this). Knowledge required going in to this meeting: company name, company address, founders names, ownership split, number of shares, and vesting terms.

3. Domain registration. Perhaps this should be first due to the dearth of domain names available and the impact of domain name selection on company name. After settling on a set of names, we just went through a number of queries on yahoo's domain hosting site until we found a couple that we liked and I registered them.

4. Development Milestones. Being of the CTO persuasion, I believe it is important to get going on a development path fairly rapidly. There are usually a number of small to large research projects that need to be undertaken and if left unplanned will absolutely kill you later. I like to walk into meetings with VC's, advisors, and potential customers with a huge amount of confidence regarding what we can do and when we can do it. I think it's also important to establish the IP as early as possible. It sets you up for the unique way in which you can deliver on the value proposition.

5. Communication. I've found the earliest stages of communication can be set up simply using a Yahoo! group. From there you can post messages that will get emailed to the group, set up a calendar to keep track of meetings and events, post links and documents, that are relevent to research and the formation of the company, etc. You can use Groove as well. I just find Yahoo! groups easier to set up and maintain. Post that, it's good to get at least email forwarding up and running. Simply find someone with a sendmail server, set up your mx record to point there, and they can forward to your individual email accounts. There's plenty of time to get Exchange or something like it set up later. Everyone should have cell phones from day 1. In my opinion, it's imperative to have a lot of communication with the entire team early on. Communication helps build momentum early.

6. Payroll and benefits. Not something you will need early on, but it is good to know how much it will cost the company to plan for a timely introduction. I would say 3-4 full time employees is probably critical mass for introducing these types of benefits.

7. Banking. After incorporation you will get a tax id that enables you to set up a corporate bank account. We are using Silicon Valley Bank because they were with us on the last company and have a wealth of contacts in the startup community. Wells Fargo would do however. Things to think about here are whether the bank will give you a line of credit (will likely need to put up collateral unless you open with a substantial amount), and interest you get on the account. Interest may not be that important with the initial amount you open with, but it will be if you get a substantial investment in the company.

8. The Value Proposition. Equally as important as getting the development effort on a good trajectory is establishing the problem you are solving and how you solve it. We've spent a good deal of time working on this and will continue to work on it with advisors and potential customers. It is the most important non-logistical task you can get started on very early because it enables you to talk about what you do with coherence.

One week of organized chaos under our belts, we're now ready to double the longevity of our fledgling company. Look out! Here comes week two!

Wednesday, April 06, 2005

Startup Formation Series

Ok, enough joking around. Now it's time to roll up the shirt sleeves and get to work. I recently left my cushy corporate job and started a new company. I'm not going to tell you about the new company (yet) though. What I want to talk about is company formation; all of the bits and pieces that go into creating a company and getting it off the ground. My proposed list of topics includes:

  • The Team
  • Logistics - from incorporation to payroll
  • The Idea
  • Funding
  • Forming a board
  • Cooking the business
That should be a good start, but feel free to ping me on other topic ideas.

Tuesday, April 05, 2005

Top Ten indicators you've just founded a startup company

  1. Your spouse's ulcer has started up again
  2. Your average night's sleep is about 4 hours
  3. You keep a notebook beside your bed to jot down all of those ideas that are keeping you up at night
  4. All of your breakfasts and lunches are taken up with "networking"
  5. When someone asks you a question that isn't about your new company, you respond with, "huh?"
  6. You begin to scrutinize *every* work expense to keep "burn" down
  7. You begin to categorize *every* personal expense as luxury or necessity
  8. A cap table is not a place to put your hat
  9. Friends and family with money begin avoiding you (j/k)
  10. You feel incredibly alive!

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