Archive for January, 2008

I was meandering through technorati, checking what people out there in the world have to say about us (at least those who have the courage to link back) and saw WAH(Web)Mommy expose her weirdness to the world. A little off kilter, I had almost relegated her to the OCD kookie bin, where she would be pleasantly surprised to find about half the women I have ever loved including my wife, when dear god, she called me out to lift my skirts too. Never one to back down to any kind of challenge, I bring you seven more pathetic quirks to add to this ever growing rash of personal exposure making its way across the web.
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Peter & I talk all the time about which idea do you pick and run with. We love innovating and since we happen to work with the IP of a number of the world’s largest and fastest growing companies, we constantly are exposed to amazing ideas. Our problem isn’t coming up with them, it is choosing the one to stick with.

I’ve always believed there are two types of entrepreneurs. Shotgun entrepreneurs take a large number of ideas and try many at once trying to see if they can get something to stick. They believe if you throw enough mud at the wall … eventually one of their ideas will come to fruition. Rifle entrepreneurs focus their energy on one careful enterprise at a time. I am very much in the second category. As a result I tend to be extremely cautious about the ideas I commit myself to. So first thing, if I am already committed, then I pretty much ignore all ideas even good ones.

If I am in the looking zone, I have a shortlist of four criteria that I use to select my direction:
1) Does it line up with my personal goals, beliefs and definition of happiness
2) What problem does it solve?
3) What trends play a role – what is the industry timing?
4) Who is on the team – are there people with success who have a vested interest?
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Today I learned a lesson. It surprised me quite a bit as it counters a lot of my basic understanding of business contracts and relationships. It happened twice in one day and a little search on Google confirmed that this wasn’t some odd exception.

Two successful entrepreneurs I respect and trust enormously refused to sign our NDA. At first I was confused and worried. You see I was raised on the belief that in business, loose lips sink ships. I was under the impression that the proper procedure with any business idea was to get an NDA before sharing. I have a close relationship with both of them and asked why not. It appears that the business culture and realities of their trade make signing such a document unrealistic.
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A lot of lessons I learn come from personal tragedies. I am incredibly grateful that this is not one of those. I got lucky. Quinn sat me down when I was starting and told me:

Make sure you put a certain amount of your earnings aside each and every time you get paid. It is not your money, it is Uncle Sam’s.

I’m not going to write a big old post on taxes. I’m just not that cruel. The tragic tax yo-yo is quite simple and easy to avoid. I see too many business owners in that position. You make money, you spend it. Make more, spend that too. April 15 comes and BAAM … you owe Sr. Sam $25,000 in taxes. Problem is, you don’t have it because you already spent it.

A lot of first time business owners fall into that trap. So, you file an extension and work hard, saving up the money to pay the tax bill. You have a great six month, squeak by and come September, you manage to eek out an addition 25k. Taxes get paid. Thank god that is solved. You forget all about it, until February when you meet with your new accountant who looks at your projected tax basis and your bank account and … oh damn not again. This game of yo-yo is a tough one to get out of. There are two ways to deal with it: never fall into it in the first place (Thanks Quinn) or be frugal and figure out how to save up enough to get out of the trap. It is never too early to start preparing for taxes.

So how much should you save? Look at your projected income for the year, figure out what tax bracket it lands you in, tack on self employment taxes and park it. Depending on my earning at the time, I set aside 25-45%. That money gets transfered into a separate high interest savings account (ING Direct for us) and is not touched until tax time. I have always over saved, which usually makes for a very nice April bonus!

Oh – and check you get all your 1099s. You should be getting them any day now (deadline in the US is Feb 1). Make sure they have the same numbers as you do on your books, entered your name and your Tax ID correctly. I have had a dozen or so be incorrect over the years.

When you are considering a business opportunity, one of the most important issues to really ponder is timing.

You may have the very best idea on earth. It could solve a huge problem. You could have a great team with phenomenal support. But if the target audience are bank tellers, I would beg you to reconsider. Bank tellers are a dying institution. ATMs, and now online banking, are making them essentially obsolete. Peter showed me that I can even write a check through the Wamu website and they will mail it for me at no extra charge. No more stamps, addresses and numb tongue.

Tom has often told me that the dumbest man can make money in an up market, while many smart people loose their shirts when a trend dies. Now you may be a genius, but I’d still hedge my bet and pick an idea and a strategy that takes advantage of industry timing.
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The time has come! We posted a challenge to our readers a few weeks ago to interview themselves. Many people responded. Peter & I read and read and laughed and cried. We got some amazing stories and wanted to bring to you a few of our favorites and pass on our congrats to the winners and the community at large. We are giving out 3 prizes. One for our favorite interview, one for the best original question and one award for sheer determination and chutzpa. The winners get to pick one book from my personal reading list. I hope you enjoy these as much as I did.
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in.sta.ma.cy [in-stuh-muh-see]
noun

1. a phenomenon in which complete strangers feel a powerful connection as though they have known one another for years.
2. a power sales approach built upon techniques such as mirroring and matching, eye contact, asking key questions and active listening, employed by master salesman around the world
3. a common precursor to the one night stand

Examples: The instamacy of the moment was so overwhelming, that I believed my new best friend when she told me that I need a forum, a wiki, 4 blogs, and a shopping cart for my lemonade stand business.

First coined by our friend and developer Stefan.