

Startup escape path - tomh-
http://swombat.com/2011/12/15/startup-escape-path

======
jqueryin
Somewhere in those steps you should add "make a name for yourself." Marketing
yourself and your company can lead you from a good idea/MVP/prototype to a
successful business. I've seen it first hand on several occasions. It's not
about what you know, but who you know. Numerous articles on HN have been
targeted towards the difficulty of traction. "I have a good product, but I
have no traction." There comes a point when a good product is not necessarily
enough. This is especially true for niche markets. _Marketing, marketing,
marketing_. And I don't mean the kind where you hire an agency. All they have
is connections; you can make those with effort. There are all sorts of
guerilla marketing tactics if you're looking for cost effective ways to get
your name out there.

Some of the key points fall under the blanket of marketing:

    
    
        * blogging, guest blogging
        * submitting articles to HN, reddit, etc
        * connecting to local startup/tech communities
    

Don't live in a bubble. Your startup should not be your personal safe haven
that you keep secret from everyone. People need to hear about it, talk about
it, criticize it, tear it apart, love it, live it, hate it... you get the
picture. You want people to have opinions about your product, strong ones. It
doesn't matter if it's a 50/50 split of those that love and hate it. People
_KNOW_ about it. If nobody knows you exist, there's no exit.

That leads me to my next big topic: CONNECTIONS. Chose them wisely and treat
them well. You are your own personal sales guy. Why do you think the startup
incubators are so successful? Their connections. PG has connections, go
impress him. I'll let you in on a secret though: he has a very high bullshit
detector and has seen it all. It helps to know your target audience as well.
PG has a preferential tendency towards startup ideas coming from founders that
have domain knowledge (and aren't assholes.. he blogged about it).

Last point: DON'T BE AN ASSHOLE. Be nice to people, don't talk about them
behind their back, always say nice things. It's all too easy to get in the
habit of gossiping or talking shit about somebody when they aren't there. Word
gets around. At some point they'll likely hear about it through the grapevine.
Wouldn't you rather have them hear about the nice things you've said? That's
friendship. That's a connection.

~~~
coolgeek
Okay - how about some criticism? What am I doing wrong here?

<http://news.ycombinator.com/item?id=3356415>

Everything's on the table - the site, the concept, the HN submission, even me.
Tear it apart.

~~~
gphil
Here's my criticism:

Knowing what groups are meeting in my community isn't a pain point for me at
all. I'm aware of the goings-on in my community well enough already (too many
for me to attend all the ones I'm interested in.) Of course, I'm just one data
point, but this doesn't solve any problems for me.

Edit: Upon reflection, a related feature that would solve a pain point for me
would be a service that helped provide me with videos/transcripts/minutes of
the events I couldn't make it out to.

------
jt2190
Step 1, "Register a Business" (LLC or LTD) is not something I'd advise on a
lark. It costs real money (hundreds if not thousands of dollars), will require
an administrative burden (filing of annual reports, filing of additional tax
forms, etc, out of state tax forms if you register out of state or move.)

I think a more realistic approach is to review and understand all of the
requirements for registering a business: What papers to file, who to file them
with, what the deadlines are, and what the costs are. Once you understand
that, you'll know when your business generates enough income to at least cover
these costs, or the business is risky enough to warrant the liability
protection. (Most software is sold "as-is" and is not that risky.)

~~~
mindcrime
Granted, it does vary by state (and country I suppose, if you're not US
based), but here in North Carolina the overhead of an LLC is minimal. And
there is _something_ about registering a legal entity that makes things feel
more "real" somehow.

I did my own LLC papers and paid the filing fee, which was a whopping 200
dollars or so, and the annual report stuff can be done online and requires a
yearly fee of around 125 dollars, IIRC. Tax paperwork is also relatively
minimal during the "pre revenue" days.

So is it worth it? Hard to say, but on balance I'm happy that I did it. Even
though we'll have to do some extra paperwork later to transition to a
traditional corporation when the issue of taking outside funding comes up.

YMMV, of course.

------
pkamb
> _4\. Build something someone uses: build something, anything, that at least
> one person other than you finds useful enough to use it at least 5 times. It
> doesn't have to look good or change someone's life. In fact, it shouldn't.
> Just find someone with a problem that recurs every once in a while and build
> something that solves that problem for them. Learn both how easy and how
> hard that is._

Very much agree with this, but I'd add to SELL that solution you built. App
stores make it insanely easy to sell and (sorta) promote a minimum viable app.

I did this with __Reddit Notifier __, a simple Mac OS X app that gives your
menubar the same "orangered" envelope you get on Reddit:

Reddit Notifier: [http://itunes.apple.com/us/app/reddit-
notifier/id468366517?m...](http://itunes.apple.com/us/app/reddit-
notifier/id468366517?mt=12)

That "wow, people will pay real money for this little app I made" mindset goes
a long way towards encouraging your loftier startup/technology goals.

~~~
divtxt
Wow, I'd love to know if you're really get sales for this at $1.99?!!

~~~
pkamb
Yeah, it normally bring in enough for a coffee or lunch every day. Nothing to
brag about, but the key is getting that passive income mentality.

~~~
divtxt
Eating lunch for "free" is not something to be sneezed at. I'd say it's good
for such a simple app. Thanks for the data point.

------
philwelch
Here are the points I would question. I don't speak from any experience or
expertise, so let these thoughts stand on their own merits:

2\. Connect to the local startup community? More important to connect to
customers and users. I won't discount the value of the startup community
entirely, but there are echo-chamber and groupthink effects. Connect to
customers first, and then the startup community might be more valuable to you.
Treat the startup community as an end in itself and you just end up creating
derivative, unprofitable ideas.

3\. Read Hacker News? Maybe 2-3 years ago this was more valuable. Now I would
suggest skimming Hacker News and using what you can, but also find the
important forums and venues your customers use, and read those more closely.

6\. Start a blog? Not bad advice, but the more general point--to write--is
more broad than that. Blogging is only one medium, and there are many other
mediums you have to write well in.

------
dholowiski
I'd like to add that if you live in Canada, do _not_ register a 'corporation',
unless you know exactly what you are doing. Your accountant will tell you a
good idea, your lawyer will tell you it's a good idea, but wait until the end
of your first fiscal year and it costs $2,000 + to have your taxes done!

In Canada, just wing it as a Sole proprietor!

~~~
mattadams
Disagree. As a Canadian entrepreneur and someone who has previously worked as
a sole proprietor for many years you should absolutely consider incorporation.

If you are a sole entrepreneur looking to go with a Canadan Controlled Private
Corporation you should NOT pay a lawyer to get your business set up. Do your
research, choose the jurisdiction that fits you best and get to it. It's dead
simple and once you've determined the correct steps you can easily accomplish
what need in a matter of days, or less.

Secondly, if you are paying $2k+ for your first fiscal year (let's assume that
the company has not broken even) then you are being ripped off, plain and
simple. You do not need audited accounts at this time. I paid roughly $450-550
annually for the first couple of years for the services of a very competent
firm who I would refer in a heartbeat.

Being a sole proprietor is simple, both from the tax and setup perspectives
however it is not without some drawbacks. The tax rate is much higher than
that of a corporation and you will be doing business as yourself. This has far
reaching legal ramifications if you want to accept money from people you don't
know (online sales for your SaaS, for example) and many things that you will
need to get to this stage are going to require a registered business at the
very least. There are also some avenues that will be inaccessible to you
because of your sole proprietor status (certain grants, tax credits, etc.) and
you will constantly be fighting the little guy image.

The moral of the story is, if you ever want your business to move "beyond
yourself", you should seriously consider incorporating.

------
jjm
I think as developers we try to put our experiences in to patterns that we can
repeat or at least have the illusion of repeating (to ourselves, or others).

Ultimately, you can do all these things but still not have a successful
startup. There are varying definitions of what success is depending on who you
talk to, 500, 37sig, PG, other VC. In fact the word startup means different
things to those folks.

The only sure thing you can do, for your own good; learn about everything you
come across with. People, products, companies, emotions... I say this because
at the end of the day/year/startup, you'll have something to show... to
yourself. You will be more defined, confident, passionate.

Sometimes it's not the goal, but the journey that defines who we are and what
we do next. Those experiences, however infinite in choices and patterns is
what sets you up _passionately_ for greatness.

Predicting the future is impossible.

------
hndl
I would've liked it if the author factored into account how you would sustain
yourself financially after you take the leap or if it is assumed that you save
_before_ making that escape.

~~~
hughesdan
I agree. For many people the smart escape path is to continue working your
soul-sucking corporate job while building your startup on the side. Quit only
after you've succeeded in convincing a few people to pay for your product and
you know where to find other people just like them. Pretend your corporate job
is an angel investor who takes a 0% equity stake (and demands daily 9-5 board
meetings).

------
dpapathanasiou
4,8,9 all need to be higher and not in that order (I'd say 9 should come
first).

Having paying customers is one of the first things that makes a new business
real.

------
donw
Speaking as someone that had a corporate job before, I think that 'working for
somebody else's startup' is also a really great idea, especially if you don't
immediately know what kind of company you want to build.

You still get a paycheck, but at the same time have a chance to gain a lot of
important skills, meet a lot of important people in the community, and
understand what life in a startup is like.

~~~
jriley
Me too; good advice.

My two cents: Remember contracting is a decent bridge / fallback; maintain
corporate relationships.

Get a revenue problem - multiple friends failed by obsessing over business
structure.

Change attitude on risk/analysis; corporate often analyzes how things can fail
while many successful entrepreneurs take uncertain gambles and pivot.

------
loceng
This doesn't address getting investment, nor finding a technical co-founder.
You don't mention how much personal money they are bootstrapping or have
access to either.

I've been doing this a long while now and after bootstrapping and making
mistakes, I am seemingly still not near being able to do what I want (either
through getting investment or finding a technical co-founder).

------
yesimahuman
At this point, only other tech startup people care what stack you are using,
and they probably aren't going to be your customers. If you have the ability
to make something in a technology you already know, why waste more time
learning something you don't, like node.js? Just make something already!

~~~
billpatrianakos
Agreed. This post comes at this in a way that's indicative of the broader
mentality about startups these days. The word startup no longer defines a
small but rapidly growing business. Instead it now means a website or some
sort of technology with "app" appended to the end with young founders and
millions of dollars worth of funding plus hype. The stack you use is now a way
to judge your product. If Facebook were to be up and coming today they may
very well be laughed out of the valley for using lame ass PHP and old stale
MySQL to start instead of some über cool nodejs, Rails, MongoDB, plus Scala
and CoffeeScript for some reason. I think it's nuts that the tech stack you
use is somehow more important than the actual product. If I cured cancer with
HTML4 I'd be laughed at. But if I did it using nodejs I'd be immortalized as
the greatest man ever.

~~~
sunahsuh
I beg to differ. These technologies come with real, actual benefits -- one of
the biggest ones for most of these being _speed of execution_. Many of them
fit much better with agile development methods. Others that you list offer
scalability benefits, which will save headaches down the line. If you're a
tech startup that doesn't at least understand these benefits and has a good
justification for why you've gone with other technologies, I'd have questions
about the skill level of your technical team. If you already know PHP,
learning Rails to start building is like, an investment of a week (or should
be if you're a decent programmer). Have you read up on the hoops that Facebook
has had to jump through to make PHP scale for them? The future costs of trying
to hire excellent developers when you're bound to a stale tech stack is
another significant consideration.

I'm not disagreeing that you can make a good product with old tech, but I'd
contend that producing a good product and using some of the newer tools are
_not_ unrelated, on a number of levels.

~~~
zeemonkee
I've made good money fixing utter crap written by people who decided a new
startup is the best time and place to learn a whole new technology at the same
time.

There's so many ways for a startup to screw up - marketing, financing, hiring,
pure bad luck - without throwing the whole unknown of an unfamiliar language
or framework into the mix.

Unless you actually need new tech to solve a specific problem, use what you
know.

------
jes5199
Oh, I was hoping to read how to escape _from_ startups.

~~~
smweber
Me too. I even tried climbing a tree.

------
billpatrianakos
Registering as a corporation may not be smart if you're planning on bringing
some VCs on board. You'll likely end up having to reincorporate in some other
state for some reasons. Even when you apply to YC the guidelines say its
preferable that you haven't filed as a corporation. You can get a simple DBA
for real cheap and still be considered a company. I started off at my local
County building and paid only $5 plus another $90 for a 3 week required
newspaper ad.

But I'm not so sure this post talks about how to do a startup as much as how
to start a side project.

~~~
tptacek
People say this every time the topic of incorporation comes up. It's true: if
you take funding, they're going to tear up your existing corporate structure
and rebuild it. This argues for keeping your pre-funding structure as simple
as possible. But what's not true is that you'll get passed up (for anything)
because you're already set up as an LLC. If your pitch is so flimsy that $1000
of legal work kills a deal, you never had the deal to begin with.

------
chayesfss
actually pretty good read

