On Fear of Failure

January 28, 2010

A good quote from author Seth Godin:

The cost of failure is not that a saber-toothed tiger eats you… the cost of failure is nothing. The worst thing that will happen is that you will fail and no one will notice.

He even goes as far as to say that fear drives mediocrity. The details are certainly up to debate (comfort is another variable, and a bank could eat you). But you can’t deny that fear of the unknown definitely comes into play in any life decision. It is a major barrier holding back people from their dreams, and so it’s good to realize that you may be over-reacting. If you experience fear, think about the worst-case scenario. Personally, I can run out of money and be forced to get another job. When I realized I was unsatisfied with my job and have plenty of time to rebuild my savings, there wasn’t much left to fear. Then, picture the best-case scenario, and you’ll see that you have much more to gain than to lose.

Thanks to LifeHacker for the quote from an interview on 43 folders.


Setting up Shop

January 24, 2010

When I decided to found a business, I had no idea how much reading it would involve. My stack of books is huge and growing – subjects include programming, business plan writing, sales and business structures. This is in addition to following industry blogs and competitors to keep up with what is going on.

The main thing on my mind this week is setting up our company to be official. The most important thing is establishing agreements with Josh, my cofounder, up front. While it’s tempting to dive right into the product, important topics like funding and equity should be established as early as possible. After sifting through many books on the topic, my recommendations are:

Business Structures: Forming a Corporation, LLC, Partnership, or Sole Proprietorship (Entrepreneur Magazine’s Legal Guide)
by Michael Spadaccini

First, this book clearly lays out options for organizing a company (corporation, LLC, partnership). Then, it has chapters for each option with more details on setup and operation.

Form Your Own Limited Liability Company
by Anthony Mancuso

This is an oustanding book – clearly written while at the same time the most detailed. Across the board, the recommendation for young companies is to form an LLC (limited liability corporation). This has the tax benefits of a partnership (revenue is not taxed twice like in a corporation) without the liability risks. It starts by explaining the benefits of an LLC versus other options. It has a chapter describing taxes under an LLC. And it walks you through filling out the paperwork and creating an operating agreement – complete with the forms for each state (tear out forms in the appendix and also forms on CD-ROM).

Where I’m stuck is that for the first 6 months, we will have no revenue and will not be taking investments. Our product will only launch at the end of this period. An LLC is filed with the state, so then it requires filing a tax return, which requires hiring an accountant, etc. To me, this seems premature, so maybe a partnership is all that we need (what is our liability risk without revenue or a product?).

I have had no luck finding case studies from other internet startups. How have successful startups managed this process? I have been to multiple startup conferences and have not found this topic addressed. Great topic for anyone presenting in the future.


The Regret Minimization Framework

January 19, 2010

Even Jeff Bezos struggled with his decision to found Amazon.  When he was considering the startup, he referred to the idea as a “crazy thing”.  Someone wasn’t able to make the decision for him, so he decided to use the Regret Minimization Framework:

I knew that if I failed, I wouldn’t regret that.  But I knew the one thing I might regret is not ever having tried.  And I knew that that would haunt me every day… when I thought about it that way, it was an incredibly easy decision.

Steve Jobs uses death to make difficult life decisions.  Jeff Bezos uses regret.  What’s key is both of these leaders’ abilities to think long-term.  They have the ability to picture themselves in the future for advice.  If focusing on the short-term, Bezos surely wouldn’t have left a financial firm mid-year, losing his annual bonus.  But he looked at the long-term, and that’s what really has the potential to make you happy.


Advice from StartupDay 2009

January 19, 2010

“Be careful whose advice you buy, but, be patient with those who supply it. Advice is a form of nostalgia, dispensing it is a way of fishing the past from the disposal, wiping it off, painting over the ugly parts and recycling it for more than it’s worth.” – Baz Luhrman

On September 26, 2009 I attended the StartupDay conference organized by Seattle 2.0.  The speakers were successful in the Seattle startup scene, and dispensed advice that was very valuable as I considered creating a startup of my own.  Now that I have a blog I can finally post the notes.

Key Takeaways

  • Don’t quit your day job.  (This was not what I wanted to hear)
  • Don’t just create a product, but a business (a revenue engine).
  • Need a way to generate income while working, or at least some revenue within the first ~6 months.  Some presenter did consulting on the side.
  • Don’t get venture capital or you’ll have new bosses to answer to.
  • Minimize regret.

Read the rest of this entry »


The First Week

January 17, 2010

The first week is over and I haven’t looked back. I had been told to expect the first 1-3 months to be totally unproductive recovery from corporate America, but my week was very productive – both for the project and my personal life. I don’t know if I’ve ever felt this free – free of bosses, free of 9-5. My favorite part is that I work when I want to work, I go for a walk when I need a walk, I sleep when I need to sleep. I do not set an alarm. One of my first nights I was working until 2am, then got going again when I woke up naturally. I wish I could put into words just how different I feel – mainly it’s in my brain, which feels more clear. This carried into my personal life – I feel more healthy, I ate better (mainly because every meal I ate was home cooked), and finished many personal tasks I had put off.

I immediately dove into the project the day after finishing at Microsoft. I met with Josh, my cofounder, on Saturday afternoon, who immediately started introducing me to python. I was so lucky to find a cofounder not just with the same vision and willingness to quit his job, but also the patience to ramp me up on coding. On Sunday morning, he sent me a homework assignment, which I completed within a few hours. I am hooked. I had not coded in 5 years, but the basics returned, and I understood the framework quickly. I spent the rest of the week learning other components like Django, Google App Engine, and Mercurial. I now realize coding does need to be a part of my life – I dropped the major in college because I didn’t want to be a coding drone, meanwhile I ended up a Business Analyst drone. I now realize just how much coding stimulates the mind – I understand why it is often referred to as engineering.

The biggest difficulty has been working from home. I know I would be more productive if I had an office to go to, but that’s not in the cards right now. I’m quickly learning to establish the right discipline to be productive. It was also difficult to figure out where to start. When you have a startup and there is so much to do, it can be overwhelming, so I’m glad I was able to dive in successfully. The only other hitch was injuring myself on my 3rd day without Microsoft’s health insurance. Ironically, I purchased a new desk chair to be better for my back, then threw out my back lifting the box. I was horizontal for a few days, but it didn’t slow me down.


The Deed Is Done

January 10, 2010

After 4.5 years at Microsoft, I am now a free man. My last day went well. I started by producing my last deliverable. After completing the task so many times, it was strange knowing this time would be my last. At 1:00 I had my exit interview with HR. At 3:00 I sent my farewell email to an audience of over 250, and then for the next 24 hours I was over-run with emails. My departure took many by surprise. Many of the emails were particularly moving and brought back some great memories. Just like I never really got to know people until I was leaving, I also didn’t really know what people thought of me until I was leaving. I am very proud of my time at Microsoft; I feel like I was able to leave my mark, and that I left at the right time. I started as a Search Marketing Analyst before the launch of Microsoft adCenter. I worked with the largest premium advertisers for 2.5 years in New York. I served the leadership team as a Business Analyst in Seattle while the scope of the group moved beyond search too all forms of advertising. During my last 6 months, I was able to fulfill my passion for product development, building internal reporting and analytics tools. I’ve come a long way from the shy, unconfident college graduate that got on an airplane to New York after college with only two interviews. I can’t wait to see what happens next.

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My Farewell Email
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Today is my last day at Microsoft after 4.5 unforgettable years. I had the pleasure of working in both the New York and Seattle offices during the launch of adCenter and development of Microsoft Advertising. Together, we built a new business at Microsoft. We developed products. We developed services. We saw our teams and roles develop. And we saw each other develop.
As most of you know by now, I recently had an idea that changed the path of my development. I’ve always said if the right startup idea came to me, I would pursue it. And so pursue it I shall.
In true Aaron Franklin fashion I will keep this short. This email is going out to over 200 colleagues and friends who have shaped my life. Thank you, keep in touch, and best of luck in the future.

Best,
Aaron

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”
– Mark Twain


Everything You Wanted To Know About Startup Building

January 7, 2010

In one of my early posts (“Confidence”) I mentioned a presentation titled Everything you wanted to know about startup building but were afraid to ask by Mint CEO Aaron Patzer. I continue to study this presentation regularly and want to give it the justice of its own post. Aaron shares a lot of details about the various stages of mint.com that will be helpful to anyone planning a startup.

The slides can be seen directly within this TechCrunch article.