The Scariest Fun : notes from a web startup

For the months before we launched Seekler, we were basically holed up in our house, coding night and day. Since we launched, we've been making an effort to engage more with the local entrepreneur community. What we've found is that this area (Boulder in particular, but Denver as well) has a great ecosystem for tech startups.

Some of our friends in this community recently came up with a great idea - to try and collect all of the knowledge that tech entrepreneurs need to get started in one place - stuff like recommendations on lawyers, accountants, banks, events, health insurance, etc.

This made a lot of sense to us - after all, we spent a lot of time getting Pretheory up and running, precisely because we didn't have such a resource. And setting up the nuts and bolts of a company is pretty boring - you want to do that stuff as quickly as possible, so you can get to the interesting part - building a technology that people will love.

So, if you're in the Denver/Boulder area and are looking to found your own startup, I encourage you to check out the Boulder Tech Bootstrap. If you are already up and running, I encourage you to go add some information to help others.

We've added some info to the site - and we also have created a few lists that we hope Colorado tech entrepreneurs will find useful. Check them out and let us know if they help you!

Best Boulder/Denver Startup Blogs
Best Startup Events in Boulder/Denver, CO
Seed Funding Opportunities (ideally, we'd like you to stay in the area, but you should explore all your options for funding...)

As a kid, I spent a fair amount of time helping my dad make stuff in his workshop. I remember he had this big, heavy vise bolted to his workbench. The jaws were made of metal, which worked great for holding some pieces tightly, but would damage more delicate wood pieces. So my dad had a set of 'soft jaws' - pieces of wood that he could insert between the metal jaws and the piece to protect it. The pressure from the vise would keep the soft jaws in place while he worked, but as soon as he loosened the vise to get the piece out, the soft jaws would fall to the floor, often bouncing under the work bench (from where I would have to retrieve them).

When I was about eight or so, he called me into the workshop and posed a question. "Ben," he said, "These soft jaws are great, but every time I take the piece out of the vise, they fall out. I need a way to keep them in. Glue won't work, because I need to remove them when I use the metal jaws. If I use some clamp or hook, it will damage the work piece. I'm stumped."

"Velcro," I said. My dad's face lit up. He immediately went upstairs and told my mom what I had said. He installed the Velcro the next day and the vise still has those Velcro strips to this day.

I felt like the smartest kid in the world that day. But of course I wasn't. So why was I able to solve a problem that my very smart dad could not?

Clearly, one reason was that I had a fresh set of eyes. My dad had simply been too close to the problem for too long. I had a fresh perspective and the idea just clicked.

But just as importantly, I had some knowledge of the domain. Someone who had never stepped into a workshop before probably would not have come up with that idea. In fact, my dad probably wouldn't have asked him or her in the first place, simply because it would have been too much effort to first explain how the vise and the soft jaws worked.

This is the number one reason I can't imagine not having a cofounder (and there are lots of other reasons). Great programmers (or even those of us aspiring to be great programmers) know that our best work is done "in the zone" - that mental place where you have the entire program in your head and where all you see is the problem in front of you. That level of concentration and focus makes you incredibly productive, but it also makes it likely that you'll get stuck on some trivial detail. You just get too close to the problem. You can't stand back with fresh eyes and see the obvious fix.

You know that you're too close to the problem, but in a startup, everyone outside the company is way too far away from the problem. Even other programmers haven't lived with the code like you have. To get their help, you'd first have to explain lots of other peripheral details of the project before you can really get their help on the problem at hand.

A cofounder is right in that sweet spot between too close and too far away. Just last night Dan solved a problem in five minutes that I had been looking at for over forty. I imagine that a solitary founder must spend waste so much time tracking down simple things that a cofounder would be able to spot in a tiny fraction of the time. If you're thinking of founding a startup alone, take my word for it - find a cofounder. The first time you have one of those Velcro moments, you'll realize how important it is.

As anyone starting a website knows, picking a domain name is a very time-intensive and difficult task. We spent a ton of time to come up with both Pretheory and Seekler.

While we were in the process of trying to come up with Seekler, we stumbled across PickyDomains. The idea is that you submit the key concepts you want in your domain name as well as any specific restrictions you have (e.g. whether you want hyphens or not). Then users can suggest names. If you like one, you let them know, and then you are free to go buy it.

In our case, PickyDomains didn't actually give us any names we liked. This may have been because we spent so much time working on names before we tried PickyDomains, so we had already considered a lot of the word combinations that were suggested. It did however, give us some good ideas. Often we would run through the list of names and then start brainstorming from there, which would often result in some better names.

Even though PickyDomains didn't produce a name for us, I would recommend it to anyone. Why? Well, first of all, it's only $50. So even if there is a small chance that you will get a great name, it's such a small amount of money it's worth giving it a short. Even better - it's risk free. If you don't end up picking one of the suggested names, you can easily get your money back. At the very least, it'll give you some free ideas that you can use to kickstart the creative process, and at the very best, you might get a great name at a bargain price.

Over the last 3 weeks, a lot of time and energy went into our product name. We have written about the pains of naming a lot previously, but I think this round was even tougher for us. I think a quick rundown of some of the naming stats will help illustrate our effort.

• 9 page long wiki entry on possible product names
• 300ish possible names created
• 1 domain suggestion service tried (pickydomains.com - I will describe our experience in a later post)
• 14 names researched for trademarks and existing usage
• Countless hours trying names at Instant Domain Search
• 2 spam mailings to all our friends for name feedback (thanks a million, everyone!)
• 6 domains purchased

After all of that, we can officially unveil our product name - Seekler. If you don't know what we're doing exactly, that name probably won't make much sense to you. Give us just a little more time - we'll be explaining it all in the next few weeks, so watch this space and seekler.com.

Lately we've been focusing more on the business side of things (not as much fun as development, but somebody has to make it happen).

On the minus side, it's demotivating to not see any real progress on the application. On the plus side, we can check 'find an accountant' and 'set up bank accounts' off our list. And we've almost found a graphic designer for the site, which will be a huge step forward.

The biggest roadblock right now is coming up with a name for our site. We need the name to start designing a logo as well as a look-and-feel for the site itself. We've been brainstorming a lot. In some respects, it's easier than figuring out a company name - the search space is smaller, because we need a name that reflects what the site actually does. In other ways, it's a lot harder, mostly because our company name can change in six months without too much damage to our company. But if we have to change the product name in six months (due to a legal complication or anything else), it would really, really hurt us.

And of course, there are all the standard assorted problems with naming that I've written about previously.

Thanks to everyone who gave us feedback on possible names (if you're reading this and you didn't get an email about this, let me know. I think gmail has been a bit sketchy lately). The feedback you gave us was really helpful. Unfortunately, there wasn't a single name that stood above the rest. There wasn't even a single name that didn't have some reasonably large problem with it. So we're going to think about this a bit more and try to come up with some more names. Hopefully we'll have something we're happy with by the end of the week.

After a few weeks of looking over designs, we got our new logo. We're not 100% sure about the color or the placement of the icon, but we really like the general look.

We got our design at designoutpost.com and we were really happy with the experience. We found the work to be of very high quality, the prices to be very competitive, and we had tons of designs to choose from.

Up next: a more professional design for pretheory.com...

Update:
There is also a discussion going on at news.YC about start up logos. So you can check out that thread for some other people's thoughts.

I have been thinking about startups and talking about creating one with my co-founder for years. Ben for a awhile now has not been an employee and yesterday I joined his ranks. After my last day at my old job, we took the final leap, we have no income. We now are a registered LLC, in the trademark process, working out the final operating agreements.

I have been asked by some friends, 'Are you scared?' Yes! It certainly is scary, but it is far more exhilarating. 'How does it feel?' Honestly I feel like a new man. I'm Shaking off the shackles of a way of life I wasn't comfortable with, a working situation that I just didn't feel like I fit in to. I doubt it, but perhaps after the next few months, founding a start up won't feel right either. I still feel like I will have learned a lot, and at least taken my shot at it. I try to live life with few regrets, if it doesn't work out at least I won't be questioning if I ever just gave it a shot. My college application essays were essentially: I need to get into engineering school so I can start a software company. I guess I will dream no more, paraphrasing my co-founder who put said, 'We are living the life, this is it, this is the dream.'

Taking our leap, with no more real safety nets, I am just finally happy to be past all the talking, hoping, and what ifs. I am worried, stressed, happy, excited, full of hope, unsure, and wouldn't want it any other way. Now we wake up each day and work on creating something entirely new. Feel free to follow along with us, same bat-time, same bat-channel.

After years of dreaming, planning, thinking, plotting, learning, working, and saving...

Pretheory, LLC is now a registered LLC entity in Colorado!

So, I was going to write a big post on things to consider when deciding to form as an LLC or an S-Corp*. Only a few issues stood in my way:

1. I don't really know what I'm talking about**.
2. There already is a great article and discussion going on at OnStartups.com. Check it out.

Here's a few more random tips (sorry if they are confusing, I'm going to assume you know a little bit about both entities already. If not, Google and Wikipedia are your friends). As you're reading the following, please keep in mind point #1 above.

Random formation tips:

One big question we had was how how easy it would be to get outside investors for an LLC. As it turns out, it's quite easy for friends, family, and angels to invest in an LLC - in fact, some angels even prefer it to S-Corps or C-Corps. However, many VCs won't invest in an LLC. The good news is it's relatively easy change an LLC to an S-Corp or C-Corp when the time comes.

There is less documentation and overhead (and therefore legal fees) when running an LLC than when running a S-Corp. However, remember to still keep good records - they will still be important if you want to switch to an S-Corp or secure investors. Don't think you can be totally sloppy just because you have an LLC.

If you're going to IPO within a year or so, it's probably better to just go ahead and form an S-Corp over the LLC, because you'll probably have to change before the IPO anyway.

There is a potentially big tax benefit to an S-Corp over an LLC that has to do with salaries and self-employment taxes once your startup actually has revenue. It's a little complicated, but you can read about it here. The good news? You can easily ask the IRS and your state to tax your LLC as an S-Corp and still get this benefit.

One reason you want an LLC or S-Corp is to shield yourself from liability (so people will sue your business instead of you personally). Apparently, LLCs are pretty good for this, but there has been less case law on this, so some lawyers consider it somewhat easier to "pierce the corporate veil" of the LLC than an S-Corp (this also varies by state). If you're doing something that might make scary people angry, you might want the "stronger" entity.

Bottom line: Out of the five lawyers I've interviewed, all but one suggested an LLC over an S-Corp. But this was specifically for LLCs in Colorado. Check with several lawyers in your state before you make a decision.

-----------------------------------------------
* For most startups, a C-Corp doesn't make a lot of sense, since you get taxed twice and there is a lot of overhead. On the other side, Partnerships and Sole Proprietorships don't offer good liability protection. So, we really only seriously considered S-Corps and LLCs.
** No, really. I'm not a lawyer, an accountant, or a tax geek, so don't take this as gospel. Consult responsible professionals before doing anything.

Last week's adventure was tracking down a lawyer. Why do we need a lawyer already, you ask? Well, in the short term, we need help forming the company, drafting articles of organization, drafting NDAs, etc. Couldn't we do this ourselves? Sure, but I'd really hate to find out I screwed up some crucial detail in 6-12 months when we're, say, trying to get investors.

On a more general level, it's probably good to get a lawyer earlier rather than later. Right now, I can take my time to meet with a bunch of different lawyers and figure out which one will be a really good fit. With any luck, I'll find someone who not only gives us sound legal advice (e.g. "Stay clear of the RIAA/MPAA, they're out of their freaking minds"), but can also be a general adviser for our business and help us network with other advisers and potential investors. If I waited until I really needed a lawyer (either in a good situation, like we have an investor who wants to give us a bajillion bucks, or in a bad situation, like we're getting sued), I'd probably ending up picking someone more or less at random, which rarely works out well.

I've never really talked to lawyers before, so this week was quite an experience. The firms I met ran the entire range from a very small firm with only a virtual office to a huge firm with a 24th floor office overlooking the city.

I'm certainly no expert, but here's how I approached the meetings. First, I explained our general situation: my job experience, my co-founders experience, and how this is our first startup. I explain that I'm working full-time, but my co-founder is moonlighting (bonus points for the lawyers who dig deeper into the moonlighting issue to see if we're at risk. I'm 99% certain we're fine, but it's nice to see they are listening and looking for issues). Then I explain what type of software we want to build. We usually talk about that for a bit. I know all talks between a lawyer and I are privileged and confidential, but, rightly or wrongly, I tend to just give them the vague outlines of what we want to do.

After that, I generally explain what we're looking for in a lawyer, which boils down to three things:
1. Someone who has worked with small businesses, in particular small tech businesses (and has helped them grow and get funding)
2. Someone who understands we're on a budget. This doesn't mean "we want the cheapest hourly rate." First of all, a cheap hourly rate doesn't necessarily mean you're getting cheaper service, since someone charging less may be less qualified and take longer. But more importantly, we're willing to pay for quality work. What it does mean is that we want a lawyer who looks for other ways for us to save some money. For instance, can we fill out certain forms ourselves and have the lawyer just look over them? Are there flat fees for certain tasks? Will they suggest ways to use our time together more effectively, so we can save time and money?
3. Someone who who gives our business the attention it needs. I don't expect that we're going to have legal issues that require incredibly quick turnaround, but we do want a lawyer who can get back to us promptly. Even more importantly, we want someone who isn't too busy just to sit down and chat about our business on a monthly basis, even if we don't have specific legal questions.

I generally lay all that out and then we talk for awhile about how and why they would be a good fit for our company. Towards the end, I always ask for references, specifically technology companies that either are very small, or were very small and have grown larger.

Starting today, I'm going to start contacting those references. Here's my tentative list of questions

1. How long have you worked with Lawyer X?
2. What kinds of legal services has Lawyer X provided you?
3. What's the best part about working with Lawyer X?
4. What's the most frustrating experience you have had with Lawyer X?
5. Overall, how happy have you been with the legal services you've gotten from Lawyer X?
6. Isn't "Lawyer X" the most badass name for a lawyer ever?

Hopefully, this will give me a pretty fair picture of the overall experience of working with each lawyer. Anything else I should be asking? Any warning signs to look for when considering lawyers? And given how sue-happy this country is, does anyone want to put bets on how soon we'll be getting sued for something?

As I mentioned awhile ago in my post about startup algorithms, we've been spending a fair amount of time looking for a good business bank.

On the surface of it, most banks will offer pretty identical services: business checking, money-market checking, business credit cards, safe deposit boxes, various types of business loans, etc. But I think it's important to invest some time into finding the right bank because our relationship with the bank will be substantially different than the one I have with my personal bank. All I ever wanted out of my personal bank was free checking, a decent credit card, conveniently located ATMs and minimum hassle. With a business bank, I want similar stuff (checking, credit cards, etc) but I also want a much more personal relationship.

If you know and trust him or her, a good banker can be a great business resource. He or she can give you financial advice, suggest resources, help you network and even connect you with potential customers. Additionally, a banker who knows you is more likely to approve loans based on your qualities and characters.

To me, it seems like it's easier to create this relationship with a smaller, local bank. They tend to be more involved in the community and have a smaller client pool, so your business is even more important to them. Also, generally speaking, smaller banks give more loans to small businesses than big banks. This is probably due to the fact that a rep at a small local bank has more ability to grant loans based on the character of the business owners than someone who has to justify each loan to headquarters using only hard numbers.

On the other hand, if you know that you'll be moving your business soon or will have offices in a lot of states, it might make more sense to choose a big, national bank.

Once you know what you want from a bank, you can start searching for candidates. Obviously, if you can get recommendations from other business owners (particularly ones in businesses like yours), that's great. We got a few personal recommendations, but we also checked Entrepreneur.com's Best Banks for Entrepreneurs and a list of the SBA's top small-business friendly banks (I found this info in Appendix C of Start Your Own Business but unfortunately I can't find the same list online).

Once you've got a good list of banks, you should either call them or set up appointments to find out more. It's tempting to just call the banks, since it will be significatly quicker, but I strongly recommend going to see the bank fo r yourself.

The reason is that most of the banks you are looking at will likely have very similar offerings. So just getting the numbers is probably not going to give you enough data to make a good decision. Actually visiting a bank will give you something much more valuable: an excellent feel for how you would be treated as a customer.

I visited four different banks and the differences were striking. Some reps were happy to make an appointment with me, others would not. Some were well prepared for my questions, others seemed totally unprepared. Some seemed rather annoyed while answering my questions, others seemed really enthusiastic. Some just handed me brochures, others took the time to explain everything to me. On paper, they all offered comparable business accounts. But after visiting, one was clearly more interested in helping our business succeed. It's hard to build a personal relationship if you dread going into the bank, so invest some time to find a good fit.

That said, you do need to look into the details of the accounts and services offered by each bank. Here's how I would approach each meeting.

1. Start by introducing yourself and explaining your business (product or service, location, number of employees). If they are interested and ask good questions, that's a plus. If they are disinterested and rush you, that's a bad sign.
2. Most banks offer free business checking as well as money-market checking. Ask for their info on these plans. In particular, you want to know about setup fees, monthly charges, minimum balances, and the number of transactions you can have per month.
3. Does the bank offer a business credit card? If so, get the brochure on how to apply, what rewards are offered, and the interest rates.
4. Does the bank offer safety deposit boxes? If so, how much do they cost? And where are they located? Many banks only have them at some branches, so you want to makes sure you don't have to drive an hour to get there.
5. Is there anything you can't do online? Is online banking free? Can you set up automatic bill pay?
6. What are some recent interest rates for line-of-credit loans? This will probably be the first type of loan you get from your bank.
7. Does the bank have an individual or even a whole group that works specifically with small businesses?
8. Can you easily continue banking if you need to move somewhere that does not have any branches? Do they have many customers who bank from out of state? Usually you can bank online or by mail.
9. Ask for references. The best way to do this is to give the rep your contact info and ask them to pass it on to another small business (preferably in a similar business to yours) that would be able to recommend the bank. If the bank won't do this or you never get a call, that's not a good sign.

I really put a lot of weight in references. A good reference can tell you a lot: that the bank is good enough to warrant praise from it's customers, that it serves businesses like yours, and that it knows its customers well enough to quickly find a such a customer.

If another business does contact you to recommend the bank, I would ask them
- What does their business do?
- How long have they been in business?
- How long have they been with the bank?
- Did they switch to the bank, or have they been there all along?
- How did the bank help their business? Ask for specific instances.
- What are the aspects of the bank they think could be improved?

Is there anything else you would ask a bank? Any other factors that should be used to decide? Any success or horror stories when it comes to finding a bank?

Ever since I started telling my friends and family that I was quitting my job and starting this company, the number one question has always been, "What will your company do?" And I'd always respond, "We don't know yet."

I got two reactions to this while I was still at my old job. Some people were confused and shocked that I would jump into something like this without a great idea all figured out. Other would just accept it and move on to other questions about when, where and with whom.

The funny thing is, after I quit my job I found out the second group mostly thought I was lying. I heard a lot of this: "OK, now that you've quit, stop being coy. Really, what are you guys going to do?" To which I'd respond, "No really, we don't know yet." And they'd be even more confused and shocked than the first group.

The non-intuitive truth is that a great initial idea is not necessary for a successful business. In fact, it can actually hurt your chances of succeeding.

This is surprising to many people. Shouldn't you wait until you have a brilliant idea before you jump in? Well, no. Most startups change their business plan, often more than once. In fact, being able to change ideas as necessary is actually a crucial part of the success of many small companies. To quote from a great article at OnStartups...

"The Idea Can (And Should) Change: I've read numerous times that most startups that end up being 'successful' will change the idea along the way. I recall from a Clayton Christensen presentation that his studies indicated that on average startups change their basic idea/business about four times before finally landing on the one that makes them successful. He actually goes further and says that in order for startups to succeed, they need to be flexible and have the ability to change the idea based on market feedback instead of doggedly sticking to their original plan. So, the point here is, your initial idea for the startup, as brilliant as it might be, is probably going to change anyways – multiple times. For this reason, it doesn't seem prudent to get overly attached to the idea or give it too much weight in the early stages."

That last point is especially important. Let's say that John has a brilliant idea for a company. He quits his job, moves, and starts a company. Jane decides has a few OK ideas for companies. She quits her job, moves, and starts a company. After thinking more about it, she starts pursuing one of her ideas.

Six months later, both John and Jane start to feel that their initial idea isn't working out. Who do you think is more likely to be able to change the game plan six months in? Bob is probably going to be less flexible, if only because he went into the whole endeavor betting everything on one idea.

In the (highly recommended) book Good to Great, Jim Collins shows that the belief that it takes a great idea to be successful is simply a myth. He includes this great quote from Bill Hewlett of Hewlett-Packard:

"When I talk to business schools occasionally, the professor of management is devastated when I say that we didn't have any plans when we started - we were just opportunistic. We did anything that would bring in a nickel."

So if I great idea isn't a good reason to start a company, then what is? Why didn't I just start one right out of college? Or before college?

First of all, to start a company you need to have a lot of faith in yourself and the people you work with. I don't think I had the experience I needed to successfully run a business before college or even right after. But now, I have a lot of faith in myself and my co-founder. If you don't trust the other people in your business, you're in trouble. I won't say any more about this because it's explained in great detail in Good to Great.

Secondly, I think you have have to accept the level of risk in your situation. Starting a business is always a risk, no matter what. But some people have more on the line than others. Personally, I don't have a mortgage or kids to feed. If this doesn't work out, I can get another job. So, relatively speaking, my risk is low. People in other situations may have much more severe consequences if they fail and that should affect their decision about the right time to start a business.

But if you are OK with the risk and have faith in the people you work with, go for it. If you have a great idea, that's even better. Just be careful not to cling to that idea too tightly. And if you don't have that idea yet, don't worry too much. But you will probably get some weird looks.

Now that we've got that whole company name thing figured out, we're spending some time figuring out the following:

1. Business structure (partnership, c-corp, s-corp, or LLC?)
2. Lawyer
3. Accountant
4. Bank

I've found a lot of good resources out there for starting a business, but they all treat these tasks as if they are completely isolated. What I really need is an algorithm for setting up a business. Well, a simpler term would be a checklist, since the algorithm is simple (i.e. non-iterative, non-conditional, and non-recursive), but since I don't get to code as much as I'd like these days, I find myself wanting to use computer science concepts to explain business stuff whenever I can.

Even though the algorithm is simple, it's wasn't immediately clear to me what the steps were. As far as I can tell, it goes something like this:

1. Pick a name
2. Hire a lawyer
3. Hire an accountant
4. Create legal business entity
5. Open a bank account

Of course, it's not quite this simple, because most of these tasks are actually a set of smaller tasks which require lots of small chunks of time over the course of a few weeks (for lack of a better term, they are sparse tasks). Take, for instance, opening a business bank account. First you need to get some recommendations. Ideally, you'd find two to four candidate banks. Then you need to set up appointments to visit the banks. Then you need to actually visit them, compare the data, choose one, and set up the account. Most of these steps depend on people outside your company, so you'll do a lot of waiting for people to return calls or emails.

We'd like to optimize this by parallelizing some tasks (and subtasks). But of course some (but not all) are dependent on others.

* Opening a bank account (but not finding a bank) requires having a legal business entity
* Creating the business requires having a name and hiring a lawyer (to advise you as well as help with the paperwork). Also, having an accountant to advise you on tax issues isn't a bad idea.

We'd really like to be able to pay a lawyer and accountant using a business checking account to simplify our accounting, but that's not realistic given these dependencies.

For those of you who may (reasonably) be asking, "Um, shouldn't you be coding, too?", let me assure you that all this work is also being done in parallel with our technical work. Since all the business setup stuff is sparse, we're starting it now. That way, it'll be done in a month or so. In the meantime, we're starting to get some coding done...

Anything I'm forgetting or getting wrong?

--------------------------------
Update: Apparently, there are some good small business checklist out there, I just hadn't looked hard enough. An alert reader sent me these:

* Small Business Notes: Startup Checklist
* Business Know-How: Business Start-Up Checklist
* MyNewCompany.com: Business Startup Checklist

Enjoy!

After a lot (and I mean a lot) of brainstorming, searching, arguing and crying, we have finally decided on a company name: Pretheory. We hope you like it, but if you don't, we think it will grow on you. Especially after we get a sweet logo (we're working on that).

So check out our official site pretheory.com. It's a whole lot of nothing right now, but that should change over the next few months.

Our blog is now at blog.pretheory.com, so you may want to update your bookmarks. Also, if you're subscribed via RSS, it would rule if you would use our new feed so we can better understand who is reading. Plus, it will work for any RSS reader you may be using.

Thanks a ton to everyone who gave us lots of feedback on possible names. Thanks to you, we decided to not go with PornyPornPornMcPorn Software, Inc. We didn't see anything wrong with it, but your feedback convinced us to go with something else.

OK, I'll admit it: we're about a month into this whole startup thing, and I'm frustrated. Everything is just taking so much longer than I expected - when do I get to start coding?

I think it's been extra tricky for me because, prior to moving to Denver I didn't know thing one about starting a small business. As you might have guessed, I am a procrastinator by nature (hence the zero knowledge beforehand). But not knowing the domain has added an extra level to my procrastination. If I ever want to delay the process of actually doing something, I can always go learn more about starting small businesses.

All really good procrastination activities need to be plausible. I can't procrastinate for that long playing video games, because it's pretty hard to make a case that it's a productive use of my time. On the other hand, doing laundry is a pretty good procrastination activity, because, hey, it's something I was going to have to do anyway.

Learning more about small businesses is a great procrastination activity, because it's extremely hard to tell the difference between necessary learning and secretly-procrastination learning. Since I knew nothing about a month ago, I never quite know when I've learned enough.

It's very similar to writing a research paper on a broad historical topic you know very little about. Something big like, say, the Civil War. When you start, there is effectively limitless information on your topic at your fingertips. You could read books and papers and encyclopedia articles until you are 100 years old and you still would not have read it all. And that paper is due in three days. So at some point, you have to a) pick a thesis and b) start writing something.

But it's rather hard to tell when you've actually learned enough to write something that won't be rather stupid. There may very well be some critical historical detail that you've overlooked that would totally destroy your precious thesis. A some point, however, you just get an intuitive feel that you know enough to start piecing something, anything together, and you have faith in yourself that you'll find and fill in the details as you go.

That's pretty much what starting a small business feels like, only I haven't found a concise encyclopedic entry to give me the three-page overview yet. So, at any given moment, I'm asking myself "Should I go read more and possibly get further behind? Or should I go actually do something and risk messing it up because I don't know enough?"

We've been working lately on getting feedback on possible company names. It's basically come down to two names, which we'll call Strongname and Safename*.

Our research so far has basically been to get feedback from a pretty large group of friends and family. I wouldn't say that they necessarily represent our target market (we're not sure exactly what that is yet), but they certainly represent it better than just the two founders.

Strongname has gotten some very good feedback, but also a little negative feedback. It's also confused a few people, but struck the image we were hoping for in others.

Safename has gotten good responses across the board, but not as many really strong responses.

I personally like Strongname the best. I feel like Safename is sort of vanilla - it just doesn't seem that cool to me. It doesn't stick in my brain. Of course, Strongname also has a connection (a pretty weak one, but a connection nonetheless), to a pretty unsavory topic, so that's a strike against it.

All of this is quite vague, but the point is this: I've been trying to justify Strongname all day, despite the fact that it's not as universally liked and it has some other issues. I just like the name better.

But then I read an article on small business marketing sent to me by a friend, and this caught my eye:

"The name AppExchange came from one of the customers I did dry runs with. We were considering 10 different names. That one was my least favorite. But it doesn't matter what I think. The customer is always right. A clich�, I know, but it is also true."

This guy is a marketing genius, so I'm inclined to take his advice. But some part of me disagrees, as least in part. I feel like at a certain point, if you only give the customers what they ask for, you're not doing a good job. At some point customers are paying you to surprise them and give them something they want/like now, but didn't know they wanted/liked before. Of course, at some point, you're just being stubborn and ignoring customers to satisfy your personal tastes.

And it seems to be quite tricky to tell the difference.

---------------------------------------------------
*I know it's slightly strange to talk about names without actually mentioning the actual names, but we don't want any squatters to take them out from under us.

In my last post, I discussed factors to consider when choosing a company name. In it, I talked briefly about the importance of meaning:

"Ideally, we'd like a name that means something. There are a lot of Web 2.0 companies out there with seemingly nonsense names. Sure, it might be unique, but what does it mean? Anything? We'd at the very least be able to explain why it's a good name in one sentence. It'd be even better if there was a clever anecdote explaining the history behind the name, but I can live without one in a pinch."

But I forgot to mention one key tip - when soliticing feedback from friends and family on possible names, don't tell them the meaning or backstory for any potential name.

The reason is simple: 99% of your (potential) users will never know, or even care to know the story behind your name. And when you're asking people about their opinions about names, you want them to look through the eyes of users. You want to see what associations come to their mind, if they have trouble saying it, what their gut feeling is. Because in the end, those are some of the same feelings & thoughts your users will have.

We've had many requests to explain some of our names. Its a reasonable request, since many of our names are strange combinations of words or just completely made up. But we've resisted doing so, because the worst case scenario is that we get good feedback on a really bad name just because its got a clever (or touching, or hilarious, or personal) meaning or story behind it.

Words fail me. Specifically, they fail to arrange themselves in a pleasing combination that would make an excellent company name.

Choosing a name for your company is a weird process because it's something you have to do very early, yet it's a decision that you'll have to live with for
years and years to come (hopefully). You need a company name to make real progress - to incorporate (or set up whatever legal structure you choose), to start getting bank accounts, a lawyer, and accountant, etc. Most importantly, I want to get it figured out so I don't have to refer to "The Company" in this blog, which sounds terrifyingly Orwellian (or, more specifically, like I'm referring to the CIA)

Most other decisions at this point are pretty non-intimidating, if only because I know we're not locked in. If we pick the wrong bank, we can move in a few months. Ditto for lawyers, offices, cities, web platforms. Yeah, it'll be a hassle, but it's doable. But changing the company name would be a huge legal pain at best and a complete marketing disaster at worst.

There are all kinds of considerations to take into account when picking a name.

First of all, everything great has already been taken. It's either trademarked, or the domain has been taken by some squatter who is filling it with a whole mess of unrelated links, hoping to get some ad revenue from the gullible and the poor typists.

Even if you find something that's not taken, you've got to consider the following

* Is it the right length? If it's too long, it's going to be a hassle to type and say.

* Will people be able to spell it when you say it out loud?

* Will your intended name be clear form the domain name? People don't always read when you intend.

* Is it too specific? If you pick a name that refers to the type of software you plan to write - what happens in six months when you realize you need to pursue a different opportunity? You'll feel pretty dumb for picking "SuperBlogware, Inc." when you realize you want to transition into mapping software.

* Is there a good story? Ideally, we'd like a name that means something. There are a lot of Web 2.0 companies out there with seemingly nonsense names. Sure, it might be unique, but what does it mean? Anything? We'd at the very least be able to explain why it's a good name in one sentence. It'd be even better if there was a clever anecdote explaining the history behind the name, but I can live without one in a pinch.

* Does the name has some alternative meaning that you won't want associated with your company? This is the one that scares me. I keep worrying the name we pick will be some obscure British slang for a butt or mean "terrible investment" in French or something.

* And for the love of all that's holy, let it not include the words "soft", "web", "net", "code", or "byte."

Despite all of these hurdles, we've come up with a set of names we're starting to warm up to. And as we ask friends and family to give feedback, the number one question is, "Wait, what does your company do? Shouldn't the name be related to that?."

The answer is: we're not sure yet, and really, it doesn't matter. I'll deal with the first part in a future post, but as far as the second part goes, consider the following companies: Dell, Microsoft, Apple, HP, 37signals. None of those names really indicates what type of software is being written. And, for the reasons mentioned above, I'm wary of being too specific.

There will be a whole other round of name games when we try to name our product/service. And at that point, it'll be very important to find a name that indicates something about the product/service.

But for now, I'll settle for something thats relatively unoffensive and vaguely cool.

Update: I added more thoughts on explaining your potential names