Shane Pearlman

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.

Do you have a system in place to check your work before it ends up in the public eye? Too often, I find that as contractors, we get so pressed by our deadlines we do not build in the time for careful review. It is a tough lesson Peter & I keep learning over and over again.

Today, Julie and I received some great holiday gifts. We ended up rolling around on the floor laughing as we read the tags and labels that came on them.

The Dillian Sakae company had the following label attached to the jacket Julie’s dad received. The label was in Chinese with English subtitles:

.Extra softness and superior warmth provided by using imported raw materials

.Due to not spurting mucus(chemical liquid), so there isn’t any harmful affection on the human body

.A super product of the 21st century which can protect environment because of its excelent fluey, softness, warmth and reusage.

Body is feeling lightly and gently

This kind of linguistic ingenuity is beyond my ability for fiction. Do they have companies who specialize in this stuff or just some poor schmoe in their marketing department?
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Happy Holidays you all! I’ve been doing some thinking about the meaning of things and a lot about the future of our industry. I’m so grateful you are part of our journey and love the relationships I have been developing through this blog. We love you all, you challenge us and you make us laugh. It has been a blessing.

The world is changing. How we view money. How we earn it. How we spend it. Does it rule our lives more or less than it did in the past? Can we change that by the way we choose to work and how we do it? The winds of change are blowing and many, many people are about to join this revolution we call business ownership. This is just the beginning.

I asked the first billionaire I met what it is like to have that much money.

His answer was “it’s just like air”

I must have looked confused because he smiled and he asked me if I knew any asthmatics. I nodded.

“During an asthma attack - what is the only thing that person is thinking about?”

“Their next breath” I answered.

He looked at me and said - “You have financial asthma. I never think about money, to me it’s just like air. It has almost no bearing on my life what so ever.”

I think about that all the time. That conversation significantly shaped my relationship with money.

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I am going to take the time to pick the winners on Christmas day. In case you think I am a workaholic, I am Jewish and it is the only day I can take all the time I want to read blogs without clients pinging me. So, bring it on folks, last call!

We are compiling a complete list of the respondents and do a brief promo of the top 10 most interesting responses! Please email me if you have not seen a link to your post below. I will keep adding them as they come in.

Peter & I will pick one lucky person with our favorite interview and one person who came up with the best original question not on our list and buy you each one book from my personal reading list.

Go check out the original post with the list of questions, then if you need some inspiration, you can see me lift my digital skirt.

Still want more? Below is a list of all the responses so far:
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entre·pre·nerd [ahn-truh-pruh-nurd]
noun

1. A person who derives significant visceral joy from the discussion of minor technical business nuances.
2. An intelligent but single-minded person obsessed with the idea that they can learn the magic behind the curtain called business by reading just one more book, going to one more seminar and talking to one last massively successful person.
3. A technician struck by an entrepreneurial seizure
4. A principal who performs sensationally socially silly acts, as wearing a name tag for 7 years or biting off the head of a rubber chicken (sorry no picture), to build up his brand and reputation. [see geek]

Examples: Scott Ginsberg | Hugh MacLeod | Rajesh Shakya | S&P