Thinking About Incorporating In Delaware ?

Sean Murphy over at The Bootstrappers Breakfast pointed the group to a good link to some legal advice for startups by George Grellas & Associates.  Some really good advice here, but the most interesting point for me was about incorporating in Delaware.  Specifically:

On the down side – and this is major – Delaware permits preferred shareholders who control the majority of the company’s voting stock to sell or merge the company without requiring the consent of the common stock holders. This can easily lead to downstream founder “wipe outs” via liquidation preferences held by such controlling shareholders.

I know that Delaware is the preferred state of incorporation for VCs when choosing to invest in a company.  I wonder how much the above factors into that.

Markets, Marc Andreessen & Startups

Reading through Marcs guide to startups, I came across this in part 4:

Personally, I’ll take the third position — I’ll assert that market is the most important factor in a startup’s success or failure.

Why?

In a great market — a market with lots of real potential customers — the market pulls product out of the startup.

Sound advice. However, given the recent troubles Ning has been having, I found this part more than a little ironic (emphasis added):

In my experience, the most frequent case of great team paired with bad product and/or terrible market is the second- or third-time entrepreneur whose first company was a huge success. People get cocky, and slip up. There is one high-profile, highly successful software entrepreneur right now who is burning through something like $80 million in venture funding in his latest startup and has practically nothing to show for it except for some great press clippings and a couple of beta customers — because there is virtually no market for what he is building.

Sometimes even our own advice is difficult for us to adhere to.

Remember MS Passport?

Jeffery Zeldman on Facebooks new ‘Like’ button snippet:

So what will this Facebook’s redefinition mean, ultimately? No clue. But most of us, if we think about it, have seen Big Things like this come and go on the web. Remember when every third website required Microsoft Passport to unlock features or let you log in? And Mac and Linux users were angry, because the web is supposed to be an open platform, not a dominant vendor’s sandbox? Remember? Probably not. It was quite a big deal at the time, but almost nobody thinks about it now.

Exactly. Whole post is worth a read.

Simplify Complexity, Don't Hide It

Abstraction. Encapsulation. Automation.

We have a lot of tools in our tool belt to handle complexity. Once complexity rears its head, either by enlightenment (“Holy crap, our publish process is 15 steps”) or something less gentle (“We forgot to do step 10 so the site crashed”), we’re told to handle it be wrapping it in some sort of facade. Hide it. Shield the trembling masses from its horror so that it shall not hurt another soul.

However, when complexity is hidden, all of the tacit knowledge that went into making it complex it also hidden. The intricate web of knowledge that went into the creation of the complexity is calcified in a series of steps, scripts or bizarre rituals. As time grows on, the connections to these pieces of knowledge grow fainter and fainter. People leave your company. You forget why you did something. Suddenly, when faced with having to explore the complexity, you’re in trouble. You no longer remember the reason for the this piece or that process.

“Because that’s what we’ve always done it!”

You’re lost in a sea of knobs and switches, unable to grasp what to do or where to go next. It doesn’t take long before you throw up your hands and decide on starting over. After all, this time, you’ll really do it right.

When you’re being poked at with the complexity stick, that pain should be your inclination to eliminate the complexity, not just hide it. Just as taking more and more pain killers won’t fix a physical pain, masking complexity will only push the pain off until the future. A future, by the way, where you’ll be less adept at handling the complexity and any issues that might arise.

What if instead of wrapping the complexity as a first step to coping, you looked to see if you could simplify it first? Simple is easier to work with than complex. It’s easier to comprehend. It’s easier to change. It’s easier to explain. Frequently, it’s also less fragile.

When you’re working you’re working in a collaborative environment, the creator of the complexity can’t always be relied on to provide on-demand explanations or fixes should something go wrong. We’ve all gotten that call about an emergency dealing with something we have no experience with, but are expected to fix anyway. Have you ever gotten in that situation and thought to yourself “Man, I wish this stuff was more complex.”

I haven’t either.

The kicker is that this stuff happens even on a team of one. Look back at something you’ve done a while ago. Code, an article, a half knit winter cap. Whatever. Do you always remember why you did something? Why you went a certain route? I don’t. Even after 10 years in the industry, I still utter the phrase “What the hell was I thinking here?” very, VERY often. If you can’t even instantly come up to speed on something complex you did, there’s very little hope of you just walking right in to something someone else set up and being able to work with it. It’s far more likely that you’ll spend a few moments gauging the “goodness” of what was done, decide you could have done it better and start in on redoing it. Thus the cycle begins anew.

Far better to follow a consistent mantra. Simple over Complex. Explicit over Implicit. Clear over Ambiguous. Straight Forward over Clever.

So the next time you’re faced with something complex, take a hard look at what you’re doing and why you’re doing it. Visit your assumptions. Do your existing assumptions still hold true? Are some of them based on old information? Can you remove some of the waste in what you’re doing?

Twitter Annotations & The Semantic Web

A few months back, I was on a call with other Semantic Web meetup organizers from around the world. We were all discussing the perceived lull that’s happening with the Semantic Web. The general theme was that people were talking about it less and coming up with less visible applications. Interest was waning and there was a fear that the SW is far back in the minds of non-academics.

Well here is a great example about just how far back the semantic web is: Twitter just announced an ‘annotations’ feature in their upcoming API. From their group:

“First off let’s be clearer about what an annotation is. An annotation is a namespace, key, value triple. A tweet can have one or more annotations. Namespaces can have one or more key/value pairs. ”

Now, on its face, that sounds like good news for the semantic web. However, read down a little bit and you’ll see that they’re not talking about RDF representations:

We’re thinking we’ll provide two mechanisms for specifying what a tweet’s annotations are:

  1. JSON
  2. form encoded parameters

I can’t think of better use case for the semantic web in general and RDF in particular than these annotations. They even used the term ‘triple’ to describe it. RDFa would be be a great embedded metadata format for presenting these annotations on their website. But to not even mention the RDF in the first wave of implementations shows just how far back the semantic web is in the minds of one of the most visible web sites in the world.

Now, they don’t dismiss RDF & the SW entirely:

“This isn’t final. The payloads could end up wildly different after we noodle around in things like RDF and the semantic web’s literature and all that kind of stuff. You can’t see me but my hands are waving vigorously. ”

However, that sounds pretty non-committal to me. I can easily see a situation where they come back saying that RDF & the SW is too complex, heavyweight or confusing to roll out as the primary representation in their API. If Twitter annotations succeed at providing widespread, structured metadata without formal support for RDF / the SW, could that start the of the decline of the Semantic Web for mainstream usage?

Cash Rules Everything Around Me

My dad has something in common with the Wu-Tang Clan. Like the Wu-Tang Clan, he know that cashed ruled the world and still does. He ran his own company for 25 years. I'm not talking a technology company, though. He ran a fabrication company during the 80's-90's. Metal spinning and such. He's from the old school of business of street smarts and deal making, having built a very successful company despite barely graduating high school. I learned a lot about business from him. One lesson was especially memorable.

Growing up my dad carried a lot of cash around with him at all times. Since this was pre-wide spread credit card usage, it wasn't totally unusual. However, the amounts he wound carry around seemed strange. He was always selling his metal scraps, so him having some cash on some days wasn't unusual. However, I thought it was unusual for him to have 10-30k in 100's on him, split between 2-3 money clips, at all times. One day I decided to ask him about it:

Me: Dad, why do you carry around so much cash?
Dad: In case I need to pay for something.
Me: Why not just use a credit card?

At this point, he stopped what he was doing, turned to me, looked me in the eye and said:

Dad: Because, son, cash solves a lot of problems credit doesn't.

Cash solves a lot of problems credit doesn't.

That lesson has stuck with me throughout the years. It wasn't until I got older, more independent, that it started to really sink in how important cash was.

From a personal perspective, cash is liberating. Having it means not having to take out debt, which means not being put in a position where you have to make some possibly awful choices. It's when you forget that, start equating the two and find yourself in a mountain of debt. That debt will calcify you and make you unable to do the things you want. Instead, you're doing things you have to You end up working harder, longer and doing stuff you hate just to get back above water. Of course, most people never make it.

From a business perspective, cash is even more important. When you own a company, cash is king. When you have debt as a company, it's not always as bad as personal debt. However, when you're running out of cash as a company, well, the ship be sinking. Without cash, you're DOA. You find yourself stuck, doing things you don't want to. Only this time, you're effecting a whole lot of other people, possibly including those that depend on and trusted you. That's not good. As the head of company, your eye needs to always be on the goal: profit.

A lot of entrepreneurs don't want to hear that. They focus on shooting out the of gate, as quickly as possible. The thinking being that they haven't a moment to spare. They throw out words like 'traction', 'exposure' and 'buzz.' Those are all fine things, but they need to be framed around one thing: making money ( or 'monetization' as the kids are calling it these days). Without it, you're just blindly thrashing around.

Two downsides with going at it blindly:

  • You swim around for revenue models, furiously moving from one possible avenue to the next. That is, until you're left with that one deal that can make or break your company. At that point, you're in a rough spot.  If things go sour, you should reflect on what caused you to need that single deal so much.
  • You jump right into looking at external funding before you, your company and your product are ready.  Your company has an extremely low valuation. You sell away a significant amount of control and end up as just another employee with a few more shares.  If you're a true entrepreneur, this is like being part of the walking dead.

Both are bad positions to end up in. Remember: C.R.E.A.M. The Wu-Tang Clan knew it. My dad knew it. There's no reason you shouldn't know it too.

Aaaaannnnndddd I'm done

More about Twitters new ad platform from NY Times:

In the next phase of Twitter’s revenue plan, it will show promoted posts in a user’s Twitter stream, even if a user did not perform a search and does not follow the advertiser.

Yeah, no thanks.