Archive for Running a Startup
By Mike - July 17/2006
As posted here, if you can lend a hand, please do.
Currently I have a research project on the go. I am looking for useful resources (books, websites, podcasts, experts) that help small businesses become more “GREEN” in their operations.
You see, I cut my entrepreneurial teeth organizing a sports event. The event is/was an ultimate Frisbee tournament. I was responsible for providing food, shelter and entertainment for roughly 600 people and I looked at the design of the event as a way to express and promote some things I believed in.
As someone who has spent well over 200 days of his life on enjoying and guiding canoe trips in places like Quetico Park, Temagami and Algonquin Park, it turns out the environment is something I believe in and want to see preserved.
So I gave the overage of my sports tournament to the Sierra Legal Defence fund – they do legal work and take on big companies and governments on behalf of the environment…it’s a GREAT organization. I also told all the players (all 600) that to cut down on waste they were to bring their own plates and cutlery.
All the players went with it. In over eight years we prepared dinner for about 5000 people… in about 16 bags of garbage. Think about your home and how much garbage 5000 meals (about 5 years of eating) generates…scary no?
I’m sharing this with you because I want to do more to help small businesses understand how they can cut down on waste in their business processes and generally operate in a more “GREEN” way. FreshBooks cuts down on the paper used to do business by facilitating paperless invoicing. We have been proud of this fact for years.
Over the coming weeks, months and years I want to share with you hundreds of useful tips that will help you and other small businesses operate with less impact on the environment. So again, if you can help me with my research, I’d appreciate it. Send me a note. Thanks.
By Mike - July 6/2006
The crew and I at FreshBooks are lucky to count Stowe Boyd amongst our seasoned and talented advisors. Stowe dropped by the FreshBooks blog today and crafted a post about small business survival. Here is an excerpt:
This existential aspect of business execution is perhaps the key reason that few individuals survive as soloists. It is difficult to determine what is the most important thing to do next and then to execute on that, even if the task is outside your comfort zone.
Here is the whole post.
By Mike - June 21/2006
As posted on the FreshBooks blog:
One of the things I like to see when I subscribe to someone’s service is that THEY use their own service. I call this “eating your own cookie”.
We are in the process of redesigning our timesheet. It’s a great design project to sink my teeth into. How to we start something like this? We USE THE TIMESHEET.
Starting this morning everyone around here is responsible for tracking their time in 10 minute intervals – this is going to force us to use the timesheet regularly and get in touch with the painful activity of accurately tracking your time down to the minute.
If you are building web applications, using your own product is KEY. We built FreshBooks to help us manage our web design company and we still use it to manage the billing of a handful of clients we have not let go of…. And after three years, the cookie still tastes good, but with our upgraded timesheet, it’s about to get sweeter.
By Mike - June 6/2006
As posted on the FreshBooks Blog:
It’s ironic…when you are small you control your own destiny – but most people would not agree with you. They think success in the market place is determined by bigger players who have deeper pockets and wield a bigger club. There is truth to that. But when it comes to projects, I’d say little guys have more control.
Right now we are running a little behind with the delivery of our upcoming ground mail invoicing service at FreshBooks. In software it is common that things arrive late. At FreshBooks it is UNcommon. Why? We are in 100% control of our development process. I get calls to off-shore our software development all the time. No thanks. I like being on time, and I like great design (the downfall of off shore development in my humble opinion, but that is another story), so I’ll pass on the “cheaper” labour that WILL COST ME more time and energy.
Anyhow, ground mail is late. I admit it. Without going into the details, our partner (read “larger company”) has recently experienced some turnover. No problem, these things happen, but from my vantage point it is a bummer when the lead developer on your project checks out when your project is 98% complete. As a fairly seasoned project manager I know that one of the best ways to make a project FAIL is to change the team leaders part way. I also know you have to roll with the punches and that’s exactly what our partner is doing.
Things are under control and their staff is competent…At this point it is really only a drag that we’ll deliver late – tough pill to swallow when not 10 days ago we were tightening the final screws and looking forward to kicking ground mail out the door last Monday. C’est la vie.
If you are following at home I’d say ground mail is now about two weeks away which will be three weeks late. The good news is we have been adding more goodies to the upcoming release. Thanks for your patience – it will be worth the wait.
By Mike - June 1/2006
This post about the struggle with accepting AMEX in US funds was posted by Levi today on the FreshBooks blog, the title is: Why Operating a Web Service in Canada Sucks – Part 1: AMEX …
Okay, I admit right off the top that the title of this post is intentionally contentious to get you reading….I’m busted. It doesn’t really suck to operate a web service in Canada, but there certainly are some limitations and difficulties. One of which I came across earlier after many moons of back and forth with the “other” credit card company, AMEX.
To put some context to this story, I should give you a bit of background on our business. We are based in Canada, but have the majority of our customers in the USA. We try to apply the 80 – 20 rule for everything we do online; in this case we wanted to make paying for our software very easy for 80% of our clientele. Therefore, we decided to only accept payment in US dollars.
As many of you out there know, getting set up to accept credit cards online is hard enough as it is just for Visa and MasterCard. You need to first get an online merchant account which involves a long list of forms that require everything from your credit history to the rights to your first born. After that, you need to decide and get set up with an appropriate payment gateway. In our case we chose VeriSign because of its good reputation and the flexibility of its API. Finally, you have to get your merchant account and your payment gateway talking. Since we are based in Canada, we ended up having to get another account with an intermediary called Global Payment Systems. Please don’t ask why our merchant account couldn’t deal directly with VeriSign in the US, and also please don’t ask how long it took for VeriSign to get setup properly with Global Payment Services. Let’s just say I don’t think they deal with too many Canadian customers.
Okay, so after all the work we put into getting setup to accept Visa and MasterCard in good old-fashioned US dollars and get the money deposited into our US based Canadian bank account, we started getting a number of requests to accept AMEX. I then started the application process with our merchant account to accept AMEX assuming it would just be a matter of adding AMEX onto our account.
Remarkably in my first conversation, I was given an impression that it would be just that simple after filling out a few forms. In a few days I realized it wasn’t going to be that simple. Our merchant account came back asking for our AMEX account number, which of course I didn’t have. After some wrangling I realized the AMEX is a completely different animal than Visa and MasterCard and I would have to go through an entirely different application process: AMEX Canada.
So, I started the process and everything seemed to be going fairly smoothly until I introduced the “dirty” acronym in the AMEX Canada vocabulary: “USD”. Of course no one actually said that they wouldn’t accept USD, they started by saying that the money will be converted to CAD and that they only work with Canadian dollar bank accounts. I thought “that kinda sucks because we will end up getting dinged with the AMEX conversion rates, but it’s worth it to make our customers happy”. However, after about two weeks of getting everything setup just right, I then started the process with our gateway to introduce them to AMEX Canada assuming they would speak the same language.
For some strange reason, I didn’t recall one of my first lessons I learned working as a young engineer in Calgary, never ASSUME anything!
VeriSign insisted that their system will work as long as I could get them some ID number that they needed. AMEX Canada said everything will work and eventually got me the number that they initially thought was not needed. At this point I should have given up, but I thought it would all be worth it, once we are accepting AMEX. I managed to get a small transaction to go through with Kathy’s AMEX card and after a week, AMEX Canada actually came up with the transaction in their online reports. The only kicker was that it was the exact amount I charged except in CAD not USD. I thought maybe it just had to settle before it was converted properly. When it finally settled, sure enough the total converted amount was not in our bank account. After sorting it out with AMEX Canada who initially thought I was disputing the charge and wanted the money back, I eventually talked to THE person who told me beyond a doubt that AMEX Canada does not accept US transactions. It is not just that they convert it to Canadian, they just don’t do USD, period.
To make a long story short, my quest for AMEX was over. Unless I could get approved with AMEX USA, our business could not accept AMEX.
Perhaps when Google expands their payment services, none of us will need Visa, MasterCard or AMEX. Check out what Mathew Ingram had to say in the Globe today about Google’s payment services.
By Mike - April 24/2006
I am Canadian. Our company is based in Canada. We offer invoicing services to small businesses and home based businesses. Business is good and we are growing fast.
We believe in simplicity. We decided to charge our clients in one currency. If you are going to work internationally with one currency (we have users in 120 countries) the currency you choose is US dollars and I don’t know anyone who would argue that. As a Canadian this raises a number of issues.
1. Oligopoly in banking: Canada has 5 major banks. That’s not much competition. The banks collude to do things that are good for them, not so much for Canadians. For example, to transfer USD funds from our US accounts into our CDN dollar accounts the banks charge us about 1% of the transaction. This is bullshit (pardon my French). For a while now, we have used Custom House to exchange our funds (I have an old friend there named Chris Day. Great service. Call him or me if you need to exchange currency). Custom House takes about 0.1% of the transactions – more reasonable.
2. The Canadian dollar is powerful: Over the past three years, we have seen the Canadian dollar rise from about $0.65 to about $0.90 … we used to get 1.4 CDN for each USD. Now we get about 1.13. This is not as bad for us as I imagine it is for many other Canadian companies because we can pay (and do) some of our major expenses in USD, which isolates us from the change in currency volatility, but as a Canadian business person who collects internationally, it’s a drag to lose the bump we used to get with a weaker dollar.
So, why the rant? I remember when I was in grade four and I started to watch the Dow Jones index. In fact, I tracked stocks for my Dad (remember New York Seltzer? We did great on that one =)) . Back then, I wanted the Canadian dollar to equal the USD. It was a point of principle. Goes to show you should be careful what you wish for…
Anyhow…I know the high value of the Canadian currency is something on the mind David Dodge (governor of the Bank of Canada). I read a piece in the Globe on it last week. Thought I would share my thoughts because I think it is an interesting issue in web services for many companies (and will continue to be) because location does not matter much with web services and therefore you don’t necessarily collect in your own dollar.
P.S. We are releasing a sneak peak of our new company name and logo and website tomorrow. I’ll post something here so be sure to read tomorrow.
By Mike - April 19/2006
I was rolling through our web stats this morning and I noticed that last week 2ndSite was featured in an article by Dion Hinchcliffe on ZDnet.
It’s our first time on the Ziff Davis Network (ZDnet), and I have been an avid reader of Dion’s blog since I discovered it last fall, so this is a great way to enter ZDnet – currently one of the most highly trafficked and authoritative technology networks online today.
Anyhow, here is the kicker. 2ndSite was one of four companies featured in the “Back-Office and Sales Infrastructure” category. Who were the other four? Amazon.com, Salesforce.com , Microsoft Live. What a group we’re running with!
As a side note, 2ndSite is re-branding next week. It will be interesting to see how this works out with press coverage and referrals of this kind. I’ll keep you posted with anything we learn along the way.
By Mike - April 18/2006
Over the past few years I have shared my disdain for patents in web services. It’s not that I don’t value patents as a mechanism to protect, reward and encourage innovation. What I take issue with is patents of simple processes that are not innovative at all. Amazon’s 1-Click is the poster child for such patents.
I have had the honour to discuss my business with some very intelligent business people: some VCs, some start-up advisors, some Fortune 100 executives. Roger Davis, former CFO of AT&T, spent a good chunk of time reading my blog and confronted me about my disdain for patents. He also asked a great question: “In lieu of a patent, what sort of sustainable competitive advantage can you offer to investors?” I have my answers, but that’s a post for another day. The reason I bring all this up is I have never been comfortable with the role of patents in a web services start-up’s arsenal. Until now…
A few weeks back, Paul Graham wrote a great piece about patents. My trouble has always been the tension between the obvious benefits of patents and my common sense, which says things like Amazon’s 1-Click will never stand up in court. What Paul’s post helped me see is that patents really play more of a “threat” role. It’s not so much that you should prosecute to protect your patents in every case, but that you COULD. COULD is a powerful force in business. It is an asset. It dissuades.
Allow me to clarify further. There is a whole range of patents; many (most?) should be defended to secure IP because they are truly significant breakthroughs, but really patents and the likelihood of enforcement depends on the type and significance of the IP.
In web services, most applications are basically databases and scripting languages used in generic ways. I suspect there are few cases where patents will be enforced (at least successfully), but thanks to Paul, I can now see more clearly where and how and when patent applications fit for startups.
Here is the entire essay by Paul. Below are some of the relevant excepts from my point of view:
Excerpt One
“Nor do startups, at least in the software business, seem to get sued much by established competitors. Despite all the patents Microsoft holds, I don’t know of an instance where they sued a startup for patent infringement. Companies like Microsoft and Oracle don’t win by winning lawsuits. That’s too uncertain. They win by locking competitors out of their sales channels. If you do manage to threaten them, they’re more likely to buy you than sue you.”
Excerpt Two
“We do advise the companies we fund to apply for patents, but not so they can sue competitors. Successful startups either get bought or grow into big companies. If a startup wants to grow into a big company, they should apply for patents to build up the patent portfolio they’ll need to maintain an armed truce with other big companies. If they want to get bought, they should apply for patents because patents are part of the mating dance with acquirers.
Most startups that succeed do it by getting bought, and most acquirers care about patents. Startup acquisitions are usually a build-vs-buy decision for the acquirer. Should we buy this little startup or build our own? And two things, especially, make them decide not to build their own: if you already have a large and rapidly growing user base, and if you have a fairly solid patent application on critical parts of your software.”
Excerpt Three
“Good hackers care a lot about matters of principle, and they are highly mobile. If a company starts misbehaving, smart people won’t work there. For some reason this seems to be more true in software than other businesses. I don’t think it’s because hackers have intrinsically higher principles so much as that their skills are easily transferable. Perhaps we can split the difference and say that mobility gives hackers the luxury of being principled.
Google’s “don’t be evil” policy may for this reason be the most valuable thing they’ve discovered. It’s very constraining in some ways. If Google does do something evil, they get doubly whacked for it: once for whatever they did, and again for hypocrisy. But I think it’s worth it. It helps them to hire the best people, and it’s better, even from a purely selfish point of view, to be constrained by principles than by stupidity.”
Excerpt Four
“The only real role of patents, for most startups, is as an element of the mating dance with acquirers. There patents do help a little. And so they do encourage innovation indirectly, in that they give more power to startups, which is where, pound for pound, the most innovation happens. But even in the mating dance, patents are of secondary importance. It matters more to make something great and get a lot of users.”
Finally, A Parting Thought and Some Investing Advice from Paul…
“When you read of big companies filing patent suits against smaller ones, it’s usually a big company on the way down, grasping at straws. For example, Unisys’s attempts to enforce their patent on LZW compression. When you see a big company threatening patent suits, sell. When a company starts fighting over IP, it’s a sign they’ve lost the real battle, for users.”
By Mike - March 15/2006
Pretty exciting, 2ndSite and our client ResortAC were featured today in Backbone Magazine. Backbone’s online presence is still coming along, but their magazine has national distribution and it’s an insert in Canada’s most widely circulated newspaper (read by millions of readers) the Globe and Mail .
Troy (our client) is a classic 2ndSite user. He has tried QuickBooks, Simply Accounting and two of three other accounting software packages. Finally he found 2ndSite. He switched and he is loving it.
Here is the article.
By Mike - February 17/2006
Did I mention we are going to murder our brand?
http://www.brandmurder.com/
Here is an exert from a post that will be heading to the Brand Murder RSS feed in about one hour’s time:
Podcast 1
Here is our first in a series of podcasts that will accompany the brand murder mystery.
Click here to download the podcast (episode 1).
These podcasts will be interesting because this whole thing is literally evolving right before our eyes. For example, we decided to do this on Feb 2 and released it on Feb 14. No doubt we will have useful ideas that bubble up between now and the completion. For example Daniel just said, “We should make the podcast more exciting by telling people we want to get 1000 email signups and 1000 RSS feed signups before we’re done”. Great idea Daniel, let’s do it! So, we want to get 1000 email signups and 1000 RSS feed signups before we’re done. We are currently at 36 feeds and 60 email sign ups. If you can, please help.
You can Digg Brand Murder here.
You can bookmark Brand Murder in del.icio.us here.
I think these podcasts will be interesting because they will constitute a live record of a very organic campaign. The campaign is founded in sound business principles which we will share in the podcasts. Things like, “why are you doing this?” Answer: “re-branding is costly on a number of levels. We’re trying to mitigate those costs”. The podcasts will also include:
- an account of our progress (we spoke to a reporter Wednesday)
- the legal issues surrounding online contests
- the tools we use to create and track the campaign so you can try it – or at least understand it
… and of course, much much more.
We will keep them brief and I think there will be some useful hype such as, a strategic approach to selecting a new name and how we did it.
Quick Contest leaders Update
http://www.coudal.com is in the lead for the most referral traffic, but we were just Digged.
We hope you Stay Tuned for more!
Hope you’ll join us.
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