Mar 21 2011

The Great Hacker News Lifestyle Business Flamewars of 2011

There was a great flame war over at Hacker News about what entrepreneurs should aspire to when they start their business, a lifestyle business or a VC funded multi-billion dollar valuation company like Facebook, Zynga, Google, YouTube, etc. It all started with a angry rant by Justin Vincent about how VC “holds us back from our true potential.” He rambled on to say that the idea of being the next big thing is keeps us, entrepreneurs, occupied and keeps them, I guess VCs and tech pundits, in business. My favorite line of the article is the following…

If every developer was to focus on the very achievable goal of building a lifestyle/micro business – the entire house of cards would crumble.

Another choice quote is…

The absolute truth is that each and every one of us can build a business that can support us. We don’t need to build a million dollar business to survive. We just need a regular paycheck.

If I could paraphrase the rest of the article, Justin believes that not all startup founders will have a multi-million dollar exit in so instead of shooting for the moon we, as entrepreneurs, should shot for Milwaukee, that is a $10k/month small business. So, if you know you won’t come in first in the race, complain that the Olympic commission is corrupt, that the judges take brides, and instead go play Wii Sports because you there you will get a participation badge.

The tone in article reminded me of something that Jason Calacanis complained about millennials. In This Week in Startups #47, Calacanis said…

Participation means nothing, your fulfillment means nothing, nobody cares if you are fulfilled, nobody cares if you participated. You were lied to. There is no trophy in life for participation, except your tombstone.

Things got a little heated in the Hacker News comments for this article. Paul Graham, who goes by pg on HN, said that if every developer worked on their lifestyle/micro business “the whole world would crumble, because we wouldn’t have any technology bigger than could be built by lifetstyle businesses.” After this, things got a little more interesting when Alex Payne, username al3x on HN, said the following…

There’s a middle ground between web application “lifestyle businesses” (like duping credulous customers into overpaying for a time-tracking tool styled with this month’s CSS trends) and trying to start the next Facebook. … There’s nothing wrong with being a small software company. People have been doing it for decades now. It’s boring, but there’s nothing wrong with it. Don’t expect anyone to celebrate you for doing it, though.

At this point some “lifestyle” business operators took offense, most notably Amy Hoy, username ahoyhere, took offense in the above statement since she is mentioned in the original article and has a time tracking application that uses the latest JavaScript and CSS trends. After that Amy went on a dogmatic crusade against what she called the “dominant paradigm.”

In one side of the argument you have people that believe that as long as a business covers operating costs and brings in anywhere from $10k to $100k a month and you don’t have to do much to run the company you have the leisure of a lifestyle business. Such a lifestyle business affords you time to spend with family, participant on your children’s school activities, join a community organization, take time off to travel, in addition to being your own boss and making your own rules. I can’t knock someone for having a gig like this. People in this camp might subscribe to Tim Farris’ book the Four Hour Work Week and in the folks behind 37Signals who wrote Rework. I remember Jonathan Coulton describe on an episode of This Week in Tech (TWIT) about his music business. Jonathan has a strong following as a singer/songwriter in the self-described geek community. On that TWIT episode he said something to the affect that if you have 1000 followers willing to pay $30 for a premium experience or content then you can make a decent living (he probably doesn’t live in California).

An income of $10k/month pre-tax, pre-health insurance for a family of four and a home mortgage in California is not a “lifestyle” I would like to aspire to. Ramen profitable is only profitable if you in college. Some critiques of the Four Hour Movement rightly ask that if someone can bootstrap a business with only working four hours a week, how much more profitable will the business be if they spend more time into it? The truth is that there is a generational gap in the way of entrepreneurs think and a bubble of some magnitude in every aspect of the industry, including in the “lifestyle” businesses.

I can’t find the source but recently I read a tweet where someone said something to the effect, “You know there is a bubble because every tech conference is sold out.” The conference circuit is one popular business with “lifestyle” crowd, in particular the tech, startup, social media conferences. You know there is a conference bubble with the large number of regional and national conferences, seminars, webinars, master classes, ninja training dojo summits, product mastermind madrasas available online. For example, 37signals runs a one day workshop for 37 people at $1k, that is $37k for one day’s work, especially you can reuse the same material many times over for different batches of students. I’ve been involved for the past several years as an organizer for a non-profit which puts on a one day conference for students that nets $50k in profits.

There is nothing wrong with running a small business, especially if you can get paid by non-technical folks for a calendar with last year’s JavaScript and CSS trends or for a one day training on how to use Twitter and Facebook. I mean, if someone would pay me $1 for adding up any two single digit numbers to support my lifestyle I would outsource that shit to India and work from some mojito island somewhere. But there is something to be said about aspiring to build something great. I want the narrative of my work to speak for itself; I’ve worked in some great companies that have had lofty goals such as understand the human genome and possibly curing cancer. Those goals can’t be meet with someone working for four hours a week and $10k/month.

This country will move in the opposite direction in the socioeconomic standard that we have enjoyed if we listen to such advice, if we don’t strive to build the best businesses we can. These millennial web 2.0 designers might not even remember how there was a time before 1999 were their predecessors could have charged anywhere from $30k to $100k for a website design. Economic pressure has pushed the price of a web design down to $300-$1000 for a awesome design from some kid in Russia. Even now, these small time “lifestyle” operations are under threat by solutions from the developing world, where $3/month can afford developers there a very lavished “lifestyle.”

One of my favorite quotes from Robert Frost is the following.

By working faithfully eight hours a day, you may eventually get to be a boss and work twelve hours a day. – Robert Frost

I believe in hard work, not easy baked cookie cutter one trick unicorn project that some folks are calling a business. You got to put in the time, differentiate your product, and think big if you want to be a successful business. It is widely known that somewhere around 50% of small business fail after 5 years, don’t let the reason you fail be because you didn’t take opportunities when they presented themselves.

In the end, everybody is free to run their business as they want and the invisible hand of Google’s search algorithm will be the judge.


Jan 16 2011

What I Wish I Knew When I Was 20

One of my favorite podcasts is Entrepreneurial Thought Leaders put out by the Stanford Technology Ventures Program. Entrepreneurial Thought Leaders is a lecture series with guest speakers from across different fields and industries. David Heinemeier Hansson of 37Signals, Mark Pincus of Zynga, Robing Li or Baidu, Steve Ballmer of Microsoft, and a great many of other founders, entrepreneurs have spoken at Entrepreneurial Thought Leaders. So when Tina Seelig, the person that runs the Stanford Technology Ventures Program, came out with a book I knew to put it on my Amazon wishlist. Sadly no one bought me anything off my wishlist so I bought it myself to read over the winter break.

A lot of the stories and lessons Tina dives into in What I Wish I Knew When I Was 20 she talks about lectures she gave back in May 2009 and in April 2006 at Standford’s Entrepreneurship Corner.

In What I Wish I Knew When I Was 20, Tina gives some important lesson on creativity, opportunity, and having the right attitude to invite both creativity and opportunity in what you are doing. For example, she speaks of having her students develop failure resumes and to highlight lessons learned from making mistakes. Her reasoning behind failure resume can best be summarized by the following quote from her book.

It’s a quick way to demonstrate that failure is an important part of our learning process, especially when you’re stretching your abilities, doing things the first time, or taking risks. We hire people who have experience not just because of their success but also because of their failures.

Aside from taking risks, and not being afraid of failure, she speak a lot of about having the right attitude to invite the correct atmosphere for success. A persons perspective is important to success, in one because each person defines what they consider a successful venture. Like in the movie The Social Network, where the Sean Parker character says “A million dollars isn’t cool. You know what’s cool? A billion dollars is cool.” For some people success is defined by having 500 million obsessive-compulsive users, and for others it’s about having 1000 paying customers. It is often the case that people let others define their success, but the truly successful are those that define their own success. And defining success has a lot to do with a person’s values and attitudes.

I took a lot of value away from What I Wish I Knew When I Was 20. For example, create a failure resume in Google Docs. I’ve also learning to try to negate the effects of negative thoughts, especially when trying or learning something new.

Here are some choice quotes from What I Wish I Knew When I Was 20:

  • Problems are abundant, just waiting for those willing to find inventive solutions.
  • Steve Jurvetson, a partner at the venture firm Draper Fisher Jurvetson, describes failures as the secret sauce of Silicon Valley.
  • Students are told that it is much better to have a flaming failure than a so-so success.
  • On reflection, there appear to be five primary types of risks; physical, social, emotional, financial, and intellectual
  • Experts in risk management believe you should make decisions based upon the probability of all outcomes, including the best- and worst-case scenarios, and be willing to take big risks when you are fully prepared for all eventualities.
  • Being too set on your path too early will likely lead you in the wrong direction.
  • Planning a career should be like traveling in a foreign country. Even if you prepare carefully, have an itinerary and s place to stay at night, the most interesting experiences usually aren’t planned.
  • The harder you work, the luckier you get.
  • Even when we think we’re paying full attention, there’s usually so much more to see.
  • I realized afterward that thinking about how you want to tell the story in the future is a great way to assess your response to dilemmas in general. Craft your story now so you’ll be proud to tell it later.
  • A few years ago I took a creative writing class in which the professor asked us to describe the same scene twice, the first time from the perspective of someone who has just fallen in love, the second from the point of view of someone who has just lost child at war.
    You shouldn’t take yourself too seriously nor judge others too harshly.

Dec 10 2010

The Right Domain Name for Your Startup

It used to be that single the most important aspect of starting a new business was location, location, location. With online businesses, this translates to domain name, domain name, domain name. The domain name of you business is important for several reasons, because it will be your de facto business name, because this will be one of the avenues of how users find you, because there is a short supply of good domain names left, because you want to stand out from your competitors, etc. But in addition to finding a good domain name for your business you should see if it’s also available on Twitter, Facebook, Tumblr, WordPress, and any other relevant social networking site. As soon as I buy a domain name, I try to lock up the twitter account, the Facebook page, the Tumblr and WordPress blog for that domain.

Depending on the business or product or simply to proactively protect your business from competition and spammers, you should think about snapping up domain names that reference your company or trademarks. For example, try to buy the .net, .org, .me, and other TLD versions of the domain name you are considering if available. In addition try to lock up domain names that reference your company or product in a disparaging way.

Because most single word domain names are already taken, people often combine two words or more. It is common practice to not hyphenate two or more words in a domain name. But when placing two words together be careful that it doesn’t accidentally read something different than what you intended. For example, There is s site called Therapist Finder whose domain name is therapistfinder.com which can also be read as The Rapist Finder. The is a website called Speed of Art whose domain name is speedofart.com whose domain name can also be read as Speedo Fart.

Try to avoid using a name that ties your product or service to a particular technology. Find an inspirational name that denotes a feeling of though about what you are doing but not the technology you are using. For example, Twitter is a great name for their product. No most people use Twitter with mobile device apps over 3G, but SMS was a key aspect of Twitter in the early days. The word tweet denotes so well what people do on the service, they simply post a tiny comment. Once Twitter became a success and they opened up their API to third party applications then you saw the opposite, company formed around Twitter and named themselves a such like Twitpic. Twitpic is successful despite their bad choice of name but they it does narrow people’s view on you. In the case of Twitpic, they also have the problem that they misspelled the word tweet with twit. Twit has a completely different meaning than tweet.

Another example of a company name that relied heavily on a particular technology was PodShow. PodShow later rebranded itself to Mevio but only after the whole podcasting industry was threatened by Apple copyrighting and trademarking the term podcast. The term podcast itself relies on Apple iPod product line. The industry as whole talked of using netcast instead of podcast, but that never took off. By rebranding themselves to Mevio, the company speaks to broader audience, does not tie itself to one technology or open itself for legal dispute over trademarks or copyrights issues. In the case of Mevio, the name suits it well. The prefix is me and postfix vio sounds like the last syllable of video.

In the current state of search, short and clear domain names are known to get more Google juice to complicated, hard to spell, hyphenated domains. Your domain name should be easy to say and understand over a phone, it should evoke your industry, product, or service. The right domain is worth its price for the right entrepreneur. Not to take anything away from the founder of diapers.com, but I believe that the domain name had a lot to do to the online retailers credibility with customers which ultimately lead to diapers.com being purchased for over $500 million dollars by Amazon.

Owning the right domain name can help to take your business to the next level.


Nov 8 2010

Quotable Calacanis 2010

Jason Calacanis is an outspoken and unfiltered entrepreneur. Calacanis founded Mahalo, co-founded Weblogs, Inc. which later sold to AOL, co-founded The LAUNCH conference, host of This Week in Startups, founder of Open Angel Forum. Calacanis is famous for his industry rants on Jason’s List mailing list, most recently ranting about Facebook privacy mishap, the lack of commitment from Generation Y, and pay to pitch outfits. Over the last year I have collected a few choice quotes from Jason Calacanis blog posts, mailing list, and podcast. If you want more Jason Calacanis quotes be sure to take a look at the Quotable Calacanis 2009.

These people come here, they are brilliant. they want to start companies here and we kick them out after college. Or we don’t let them come to college to begin with because they might be terrorist. You know what, I take one terrorist for every 10,000 brilliant entrepreneurs that come to the country, I’ll literary will. I’ll take that risk. And if they are in this country they are more easy to catch than if they are in that country.
This Week in Startups #88

Patents are like nuclear weapons, you never use them but they are nice to have because if you have them people tend to not invade into your country because they are scared of those being dropped on them.
This Week in Startups #88

If you can afford to have the unjustifiable, then you’ve made it. It’s unjustifiable to have a jet. There is no reason to have it unless you are a president or CEO of a very large corporation.
This Week in Startups #72

Wining is altruism. Wining is the best thing you can do for the world. When you win then you can do exciting things to change humanity
the most greatest influences in our society, ultimate when history books are written, are going to be the billionaires that are going to give their net worth to solve very big problems.
This Week in Startups #72

Facebook and Twitter have users. Apple has customers. The difference? Customers give you their credit card number.
Yojimbo!

Winning is altruism, that’s the most beautiful thing you can do for somebody in the world is win!
This Week in Startups #65 Global Meetup

Power never stops shifting, and technology is making it shift faster.
Jason’s List: A Quick Sumner Update July 12, 2010

Look up smarmy in the Web 2.0 dictionary and it redirects to Zuck’s Wikipedia page.
Jason’s List for March 6, 2010

Zuckberg is everything that is wrong with the second generation of the internet: greed and a lack of empathy for internet users.
Jason’s List for March 6, 2010

Participation means nothing, your fulfillment means nothing, nobody care if you are fulfilled, nobody cares if you participated.  You were lied to.  There is no trophy in life for participation, except your tombstone.
This Week in Startups #47

If you don’t get your shit together Generation Y, it’s over for you. Your standard of living is going to suck cause you know what, your mom and dad are going to die and you know what you are going to have left, nothing, because they mortgaged their houses and they got a bunch of cars and went on  big fancy vacations and you get no inheritance Generation Y and you are not hirable.  So you are going to fail and you’ll have nothing in life.
This Week in Startups #47

I think Mark Zuckerborg is everything that is wrong with technology today.
TWiST #43 with Andy Smith

This is the the thing that people don’t realize about events, doing good events is as much about how is there as who is not there.
TWiST #43 with Andy Smith

VCs do me a favor if you are working with an entrepreneur, the three most annoying things you can do: number one is to ask about China, number two is to ask about Google, and number three is ask for the deck and the documents for the board meeting two weeks before hand.
TWiST #37 with Phil Kaplan

If you are not annoying some people, you are probably not doing a good job as an entreprenuer.
TWiST #37 with Phil Kaplan

The biggest mistake most new players make at poker is overplaying their hand. They spend so much time thinking of the ways they can win that they forget all the ways they can lose.
The Big Game, Zuckerberg and Overplaying your Hand

Zuckerberg is clearly the worst thing that’s happened to our industry since, well, spam.
The Big Game, Zuckerberg and Overplaying your Hand

People are creating fan pages on Facebook and then paying Facebook to send them traffic. Let me explain this one more time: You’re PAYING Mark Zuckerberg money to send traffic to HIS SITE.
The Big Game, Zuckerberg and Overplaying your Hand

I feel that the law is a way for stupid people getting education about reality it’s the lowest form of education we have you can go to college or the cops can pick you up.
TWiT 248: Drowning In Connectivity

The most frustrating part is not losing a great person–which happens–but rather watching someone with promise set their career back five years in order to have their salary jump ahead by three years.
Red, Jackson, Gen Y & Loyalty

It’s not easy being me. I’ve got a version of tourette’s where instead of yelling obscenities at inappropriate times, I say something brutally honest without regard to my reputation or the other person’s feelings.
Red, Jackson, Gen Y & Loyalty

If you put yourself above the team, you’re out. If you think your “get” is more important than the team’s, you’re out. If you leave after a year, you don’t get a ticker-tape parade and you don’t get celebrated.
Red, Jackson, Gen Y & Loyalty