Archive for the ‘First Steps’ Category

A New Resource For Colorado Entrepreneurs

February 6, 2008

For the months before we launched Seekler, we were basically holed up in our house, coding night and day. Since we launched, we’ve been making an effort to engage more with the local entrepreneur community. What we’ve found is that this area (Boulder in particular, but Denver as well) has a great ecosystem for tech startups.
Some of our friends in this community recently came up with a great idea – to try and collect all of the knowledge that tech entrepreneurs need to get started in one place – stuff like recommendations on lawyers, accountants, banks, events, health insurance, etc.
This made a lot of sense to us – after all, we spent a lot of time getting Pretheory up and running, precisely because we didn’t have such a resource. And setting up the nuts and bolts of a company is pretty boring – you want to do that stuff as quickly as possible, so you can get to the interesting part – building a technology that people will love.
So, if you’re in the Denver/Boulder area and are looking to found your own startup, I encourage you to check out the Boulder Tech Bootstrap. If you are already up and running, I encourage you to go add some information to help others.
We’ve added some info to the site – and we also have created a few lists that we hope Colorado tech entrepreneurs will find useful. Check them out and let us know if they help you!
Best Boulder/Denver Startup Blogs
Best Startup Events in Boulder/Denver, CO
Seed Funding Opportunities (ideally, we’d like you to stay in the area, but you should explore all your options for funding…)

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The #1 Reason to have a Cofounder

September 21, 2007

As a kid, I spent a fair amount of time helping my dad make stuff in his workshop. I remember he had this big, heavy vise bolted to his workbench. The jaws were made of metal, which worked great for holding some pieces tightly, but would damage more delicate wood pieces. So my dad had a set of ‘soft jaws’ – pieces of wood that he could insert between the metal jaws and the piece to protect it. The pressure from the vise would keep the soft jaws in place while he worked, but as soon as he loosened the vise to get the piece out, the soft jaws would fall to the floor, often bouncing under the work bench (from where I would have to retrieve them).
When I was about eight or so, he called me into the workshop and posed a question. “Ben,” he said, “These soft jaws are great, but every time I take the piece out of the vise, they fall out. I need a way to keep them in. Glue won’t work, because I need to remove them when I use the metal jaws. If I use some clamp or hook, it will damage the work piece. I’m stumped.”
“Velcro,” I said. My dad’s face lit up. He immediately went upstairs and told my mom what I had said. He installed the Velcro the next day and the vise still has those Velcro strips to this day.
I felt like the smartest kid in the world that day. But of course I wasn’t. So why was I able to solve a problem that my very smart dad could not?
Clearly, one reason was that I had a fresh set of eyes. My dad had simply been too close to the problem for too long. I had a fresh perspective and the idea just clicked.
But just as importantly, I had some knowledge of the domain. Someone who had never stepped into a workshop before probably would not have come up with that idea. In fact, my dad probably wouldn’t have asked him or her in the first place, simply because it would have been too much effort to first explain how the vise and the soft jaws worked.
This is the number one reason I can’t imagine not having a cofounder (and there are lots of other reasons). Great programmers (or even those of us aspiring to be great programmers) know that our best work is done “in the zone” – that mental place where you have the entire program in your head and where all you see is the problem in front of you. That level of concentration and focus makes you incredibly productive, but it also makes it likely that you’ll get stuck on some trivial detail. You just get too close to the problem. You can’t stand back with fresh eyes and see the obvious fix.
You know that you’re too close to the problem, but in a startup, everyone outside the company is way too far away from the problem. Even other programmers haven’t lived with the code like you have. To get their help, you’d first have to explain lots of other peripheral details of the project before you can really get their help on the problem at hand.
A cofounder is right in that sweet spot between too close and too far away. Just last night Dan solved a problem in five minutes that I had been looking at for over forty. I imagine that a solitary founder must spend waste so much time tracking down simple things that a cofounder would be able to spot in a tiny fraction of the time. If you’re thinking of founding a startup alone, take my word for it – find a cofounder. The first time you have one of those Velcro moments, you’ll realize how important it is.

PickyDomains.com – You get what you pay for

August 24, 2007

As anyone starting a website knows, picking a domain name is a very time-intensive and difficult task. We spent a ton of time to come up with both Pretheory and Seekler.
While we were in the process of trying to come up with Seekler, we stumbled across PickyDomains. The idea is that you submit the key concepts you want in your domain name as well as any specific restrictions you have (e.g. whether you want hyphens or not). Then users can suggest names. If you like one, you let them know, and then you are free to go buy it.
In our case, PickyDomains didn’t actually give us any names we liked. This may have been because we spent so much time working on names before we tried PickyDomains, so we had already considered a lot of the word combinations that were suggested. It did however, give us some good ideas. Often we would run through the list of names and then start brainstorming from there, which would often result in some better names.
Even though PickyDomains didn’t produce a name for us, I would recommend it to anyone. Why? Well, first of all, it’s only $50. So even if there is a small chance that you will get a great name, it’s such a small amount of money it’s worth giving it a short. Even better – it’s risk free. If you don’t end up picking one of the suggested names, you can easily get your money back. At the very least, it’ll give you some free ideas that you can use to kickstart the creative process, and at the very best, you might get a great name at a bargain price.

And the winner is … “Seekler”

July 16, 2007

Over the last 3 weeks, a lot of time and energy went into our product name. We have written about the pains of naming a lot previously, but I think this round was even tougher for us. I think a quick rundown of some of the naming stats will help illustrate our effort.

  • 9 page long wiki entry on possible product names
  • 300ish possible names created
  • 1 domain suggestion service tried (pickydomains.com – I will describe our experience in a later post)
  • 14 names researched for trademarks and existing usage
  • Countless hours trying names at Instant Domain Search
  • 2 spam mailings to all our friends for name feedback (thanks a million, everyone!)
  • 6 domains purchased

After all of that, we can officially unveil our product name – Seekler. If you don’t know what we’re doing exactly, that name probably won’t make much sense to you. Give us just a little more time – we’ll be explaining it all in the next few weeks, so watch this space and seekler.com.

Name Games, Part II

July 9, 2007

Lately we’ve been focusing more on the business side of things (not as much fun as development, but somebody has to make it happen).
On the minus side, it’s demotivating to not see any real progress on the application. On the plus side, we can check ‘find an accountant’ and ‘set up bank accounts’ off our list. And we’ve almost found a graphic designer for the site, which will be a huge step forward.
The biggest roadblock right now is coming up with a name for our site. We need the name to start designing a logo as well as a look-and-feel for the site itself. We’ve been brainstorming a lot. In some respects, it’s easier than figuring out a company name – the search space is smaller, because we need a name that reflects what the site actually does. In other ways, it’s a lot harder, mostly because our company name can change in six months without too much damage to our company. But if we have to change the product name in six months (due to a legal complication or anything else), it would really, really hurt us.
And of course, there are all the standard assorted problems with naming that I’ve written about previously.
Thanks to everyone who gave us feedback on possible names (if you’re reading this and you didn’t get an email about this, let me know. I think gmail has been a bit sketchy lately). The feedback you gave us was really helpful. Unfortunately, there wasn’t a single name that stood above the rest. There wasn’t even a single name that didn’t have some reasonably large problem with it. So we’re going to think about this a bit more and try to come up with some more names. Hopefully we’ll have something we’re happy with by the end of the week.

Looking somewhat respectable

May 3, 2007

pretheory_logo.jpg
After a few weeks of looking over designs, we got our new logo. We’re not 100% sure about the color or the placement of the icon, but we really like the general look.
We got our design at designoutpost.com and we were really happy with the experience. We found the work to be of very high quality, the prices to be very competitive, and we had tons of designs to choose from.
Up next: a more professional design for pretheory.com
Update:
There is also a discussion going on at news.YC about start up logos. So you can check out that thread for some other people’s thoughts.

Taking the leap

May 2, 2007

I have been thinking about startups and talking about creating one with my co-founder for years. Ben for a awhile now has not been an employee and yesterday I joined his ranks. After my last day at my old job, we took the final leap, we have no income. We now are a registered LLC, in the trademark process, working out the final operating agreements.
I have been asked by some friends, ‘Are you scared?’ Yes! It certainly is scary, but it is far more exhilarating. ‘How does it feel?’ Honestly I feel like a new man. I’m Shaking off the shackles of a way of life I wasn’t comfortable with, a working situation that I just didn’t feel like I fit in to. I doubt it, but perhaps after the next few months, founding a start up won’t feel right either. I still feel like I will have learned a lot, and at least taken my shot at it. I try to live life with few regrets, if it doesn’t work out at least I won’t be questioning if I ever just gave it a shot. My college application essays were essentially: I need to get into engineering school so I can start a software company. I guess I will dream no more, paraphrasing my co-founder who put said, ‘We are living the life, this is it, this is the dream.’
Taking our leap, with no more real safety nets, I am just finally happy to be past all the talking, hoping, and what ifs. I am worried, stressed, happy, excited, full of hope, unsure, and wouldn’t want it any other way. Now we wake up each day and work on creating something entirely new. Feel free to follow along with us, same bat-time, same bat-channel.

Pretheory is official

April 25, 2007

After years of dreaming, planning, thinking, plotting, learning, working, and saving…
Pretheory, LLC is now a registered LLC entity in Colorado!

The formation equation

March 20, 2007

So, I was going to write a big post on things to consider when deciding to form as an LLC or an S-Corp*. Only a few issues stood in my way:
1. I don’t really know what I’m talking about**.
2. There already is a great article and discussion going on at OnStartups.com. Check it out.
Here’s a few more random tips (sorry if they are confusing, I’m going to assume you know a little bit about both entities already. If not, Google and Wikipedia are your friends). As you’re reading the following, please keep in mind point #1 above.
Random formation tips:
One big question we had was how how easy it would be to get outside investors for an LLC. As it turns out, it’s quite easy for friends, family, and angels to invest in an LLC – in fact, some angels even prefer it to S-Corps or C-Corps. However, many VCs won’t invest in an LLC. The good news is it’s relatively easy change an LLC to an S-Corp or C-Corp when the time comes.
There is less documentation and overhead (and therefore legal fees) when running an LLC than when running a S-Corp. However, remember to still keep good records – they will still be important if you want to switch to an S-Corp or secure investors. Don’t think you can be totally sloppy just because you have an LLC.
If you’re going to IPO within a year or so, it’s probably better to just go ahead and form an S-Corp over the LLC, because you’ll probably have to change before the IPO anyway.
There is a potentially big tax benefit to an S-Corp over an LLC that has to do with salaries and self-employment taxes once your startup actually has revenue. It’s a little complicated, but you can read about it here. The good news? You can easily ask the IRS and your state to tax your LLC as an S-Corp and still get this benefit.
One reason you want an LLC or S-Corp is to shield yourself from liability (so people will sue your business instead of you personally). Apparently, LLCs are pretty good for this, but there has been less case law on this, so some lawyers consider it somewhat easier to “pierce the corporate veil” of the LLC than an S-Corp (this also varies by state). If you’re doing something that might make scary people angry, you might want the “stronger” entity.
Bottom line: Out of the five lawyers I’ve interviewed, all but one suggested an LLC over an S-Corp. But this was specifically for LLCs in Colorado. Check with several lawyers in your state before you make a decision.
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* For most startups, a C-Corp doesn’t make a lot of sense, since you get taxed twice and there is a lot of overhead. On the other side, Partnerships and Sole Proprietorships don’t offer good liability protection. So, we really only seriously considered S-Corps and LLCs.
** No, really. I’m not a lawyer, an accountant, or a tax geek, so don’t take this as gospel. Consult responsible professionals before doing anything.

Lawyers, lawyers, everywhere!

March 12, 2007

Last week’s adventure was tracking down a lawyer. Why do we need a lawyer already, you ask? Well, in the short term, we need help forming the company, drafting articles of organization, drafting NDAs, etc. Couldn’t we do this ourselves? Sure, but I’d really hate to find out I screwed up some crucial detail in 6-12 months when we’re, say, trying to get investors.
On a more general level, it’s probably good to get a lawyer earlier rather than later. Right now, I can take my time to meet with a bunch of different lawyers and figure out which one will be a really good fit. With any luck, I’ll find someone who not only gives us sound legal advice (e.g. “Stay clear of the RIAA/MPAA, they’re out of their freaking minds”), but can also be a general adviser for our business and help us network with other advisers and potential investors. If I waited until I really needed a lawyer (either in a good situation, like we have an investor who wants to give us a bajillion bucks, or in a bad situation, like we’re getting sued), I’d probably ending up picking someone more or less at random, which rarely works out well.
I’ve never really talked to lawyers before, so this week was quite an experience. The firms I met ran the entire range from a very small firm with only a virtual office to a huge firm with a 24th floor office overlooking the city.
I’m certainly no expert, but here’s how I approached the meetings. First, I explained our general situation: my job experience, my co-founders experience, and how this is our first startup. I explain that I’m working full-time, but my co-founder is moonlighting (bonus points for the lawyers who dig deeper into the moonlighting issue to see if we’re at risk. I’m 99% certain we’re fine, but it’s nice to see they are listening and looking for issues). Then I explain what type of software we want to build. We usually talk about that for a bit. I know all talks between a lawyer and I are privileged and confidential, but, rightly or wrongly, I tend to just give them the vague outlines of what we want to do.
After that, I generally explain what we’re looking for in a lawyer, which boils down to three things:
1. Someone who has worked with small businesses, in particular small tech businesses (and has helped them grow and get funding)
2. Someone who understands we’re on a budget. This doesn’t mean “we want the cheapest hourly rate.” First of all, a cheap hourly rate doesn’t necessarily mean you’re getting cheaper service, since someone charging less may be less qualified and take longer. But more importantly, we’re willing to pay for quality work. What it does mean is that we want a lawyer who looks for other ways for us to save some money. For instance, can we fill out certain forms ourselves and have the lawyer just look over them? Are there flat fees for certain tasks? Will they suggest ways to use our time together more effectively, so we can save time and money?
3. Someone who who gives our business the attention it needs. I don’t expect that we’re going to have legal issues that require incredibly quick turnaround, but we do want a lawyer who can get back to us promptly. Even more importantly, we want someone who isn’t too busy just to sit down and chat about our business on a monthly basis, even if we don’t have specific legal questions.
I generally lay all that out and then we talk for awhile about how and why they would be a good fit for our company. Towards the end, I always ask for references, specifically technology companies that either are very small, or were very small and have grown larger.
Starting today, I’m going to start contacting those references. Here’s my tentative list of questions
1. How long have you worked with Lawyer X?
2. What kinds of legal services has Lawyer X provided you?
3. What’s the best part about working with Lawyer X?
4. What’s the most frustrating experience you have had with Lawyer X?
5. Overall, how happy have you been with the legal services you’ve gotten from Lawyer X?
6. Isn’t “Lawyer X” the most badass name for a lawyer ever?
Hopefully, this will give me a pretty fair picture of the overall experience of working with each lawyer. Anything else I should be asking? Any warning signs to look for when considering lawyers? And given how sue-happy this country is, does anyone want to put bets on how soon we’ll be getting sued for something?