Matt Mazur

This is be one of the best collections of business advice that I have ever seen.

The safest plan, and the one most sure of success for the young man starting in life, is to select the vocation which is most congenial to his tastes.

…

Work at it, if necessary, early and late, in season and out of season, not leaving a stone unturned, and never deferring for a single hour that which can be done just as well now.

I posted a question on HN yesterday asking for clarification on an array of legal issues. They included questions about when to form a company, what type of lawyers to seek, and how to deal with copyright issues. The responses were generally well thought out but varied a lot.

- Form an LLC immediately (it only costs a few hundred dollars) to get some liability coverage. Most recommended talking to a lawyer before you launch, but forming an LLC is better than nothing.

- Definitely seek a lawyer when you start having employees because you’ll have to restructure the company, often to a C corp (need to research)

- For charging money you’ll have Terms and Conditions, which should be created/reviewed by a lawyer

- You produce content it is copyrighted. The little © doesn’t really mean much

- People can take your idea and modify it all they want. There’s not much you can do to stop them

- If you have a partner, make sure you have an Operating Agreement

- The type of lawyer that you look for to help with these things is a Corporate Lawyer

- Forming an LLC is easy; keeping up on the paperwork is hard. Make sure you do it properly

Matt Maroon, a poker player gone entrepreneur via YC threw in his 2c: don’t ask hackers, ask a lawyer. He followed up with an excellent blog post expanding on the idea:

This is dangerous to you, seeker of legal advice, because you’ll be fooled into thinking maybe, just maybe, you can save yourself the retainer. The guy telling you “oh don’t bother to form an LLC, you’re not making a profit yet so you can’t be sued” sounds so confident, surely he must know what he’s talking about. He doesn’t, and you really don’t want to find that out the hard way.

He goes on to explain how the law is difficult to understand and you assume a huge amount of risk by not taking the proper legal precautions. While I agree with him, I think that asking the community has merits too. For me, the question was somewhat of a starting point. None of the posts are a definitive “you should do this” and they couldn’t be, but it still gives me a foundation for future research. The ensuing discussion was filled with smart comments on his article. Some of the best points made included:

- It can be tough to know when it is appropriate to consult a lawyer

- It can cost a lot of $ to consult a lawyer. The benefits might not outweigh the costs. -$EV

- What if the lawyer wants to screw you over and take your money? People responded that most don’t do this because of reputation and they want you to come back in the future, spread the word, etc

- Keep in mind its free advice from nonprofessionals

Check out this great speech by Chris Wanstrath, a notable Rails developer. Most of the stuff I really liked was towards the end:

I don’t know how many of you read RSS, but I challenge you (that’s a keynote term) to give it up for a month. Just turn it off. Stop using Google Reader or NetNewsWire or whatever
the kids are using these days. It’s not worth your time.

If you’ve been meaning to learn a new language, start learning it. But don’t just read a book. Start writing a program.

In fact, stop worrying so much about other people. Every time I’ve worked on a project I thought other people would really love, it was a massive flop. Every time I’ve worked on a project I loved, it worked. If you’re sitting in this room, your taste is not as far off from those around you as you’d think. Build something you love and others will love it, too. (Not everyone, of course.)

My plea to you today is to start a side project. Scratch your own itch. Be creative. Share something with the world, or keep it to yourself.

One thing he mentions is to take one Sunday a month and just go go go. I think this is a really great idea for me given my current time crunch.

This article on pricing strategies was near the top of Hacker News today. It’s a really excellent read for anyone consider how to price a product. Here’s a quote:

The Nine and Zero Effect. People associate the number nine with value and zero with quality. Look at the difference between fast food and a gourmet restaurant. A burger meal can sell for about $4.99 while a gourmet entree at the best place in town may go for $30. So the psychology of pricing isn’t so much about gaining additional sales because the price appears to be lower, it’s about what the price communicates about your offering. So which do you want to communicate? Value or Quality? Now you can price accordingly.

Check it out.

A few months ago I wrote some poker software that I intended to sell online (more on that in another post). I changed the price seven or eight times before I released the final product. The price went from $25 to $29 to $35 to $40 to $39 to $34 to $10 to $0.

That curve pretty much reflects my optimism about the project too…

Reaching the $5 Million Club Takes an Open Mind

Create opportunities for yourself by being bold:

One might think that good fortune would play a role, but even luck is largely a matter of one’s own making. Psychologist Richard Wiseman has found that people who describe themselves as lucky share common habits that account for their success: They’re friendly and fond of new experiences, traits that put them on a collision course with new opportunities. In addition, “lucky” folks simply have higher expectations of success — they’re too pigheadedly optimistic to heed the long odds and call it quits.

Start a business, make something people want, and puts lots of work into it:

The vast majority — 80% — either started their own business or worked for a small company that saw explosive growth. And almost all of them made their fortune in a big lump sum after many years of effort.

…rich folks often make their fortunes after they make up their minds to solve a problem or do something better than it’s been done before.

Couldn’t have said it better:

Being rich means freedom: to spend your time as you please, to pursue your real interests and to take a chance without courting utter ruin. Paradoxically, the road to riches often means acting as if you already have that freedom.

Let’s see what else

mibbit – cool, online IRC application – very impressed

10 Tips for Budding Web Programmers - and you’ll note that this link now has a title associaeted with it

How to Get Startup Ideas - I thought this was pretty interesting. He says that if you want to have a great startup idea you should move to the bay area because you’ll have a lot of conversations with a lot of smart people and you’ll stumble upon great ideas by accident. Without geeky conversations, its not impossible, but its more difficult.

Relating to ideas… I found out earlier this week that an idea I had for a startup has already been done. In fact it has been done multiple times and a large portion of the design and functionality that I had planned for it have already been implemented. The one site, which has been up for a few months, has been doing well judging based on the few thousand users they have (which could be a misleading stat). I have mixed feelings: part of me says, “Damn, wish I had started working on it first” and the other says “Hey, it actually is a good idea because someone else is making it work.” The other, more ambitious side of me says “These sites are missing a lot of important functionality. Go get ‘em.” I might do that. Or I might not — part of me wants to find a large, untouched market. I want a BIG idea. Unfortunately, wanting is easy; doing is hard.

Two quotes on failure:

“Failure is the opportunity to begin again more intelligently.”

Henry Ford

The greatest mistake you can make in life is to be continually fearing you will make one.

Elbert Hubbard

Also there’s an excellent post on Hacker News titled What has been your biggest mistake? Some of the ones I like are:

“Getting a degree. Honestly, I didn’t need it. Contentious subject I know, but from the Hacker perspective, I have always relied on self learning in concentrated bursts to get me through – want a thorough understanding of TCP/IP? Spend 3 weekends going through the documentation and then playing around. Not 6 months in rigidly structured classes with no leeway for progression above and beyond what is in the curriculum. I could have got a job that paid my pocket money, whilst learning more and coming out with less debt. “but would this have paid off?” I hear everyone say. My degree or time in education has absolutely no standing of where I am now, apart from the fact that I feel I could have been here by early twenties instead of mid twenties”

Jobeyonekenobi

“Spending the first half of my twenties working my guts out for a big corporation where my efforts went largely unnoticed outside of my immediate sphere. I’m certain that if I put that time into a start-up I would be much better off today — even if it failed.”

Cubix

and I laughed at this, which is probably deeper than I currently appreciate:

I’m kinda curious – is there anyone who doesn’t regret their twenties? We’ve got three posts regretting working for the wrong startup (mine, menloparkbum, and gscott), one working for a big company (yours), one going to grad school (timcederman), one getting a degree (jobeyonekenobi), and one doing nothing (johnyzee). So apparently working for a small company is bad, working for a big company is bad, not working is bad, and getting educated is bad. What should one be doing?

nostrademons

Not focusing on ideas that interested me, but rather ones that interested others.

qhoxie

Biggest Regret: Waiting too long.

mybwong

My worst mistakes were in doing what was expected of me, rather than what I wanted to do.

icky

Lastly, I’ve been listening to Randy Pausch’s Last Lecture and I encourage anyone who hasn’t to check it out.

This is taken verbatim from Poor Charlie’s Almanac, a compilation of Charlie Munger’s thoughts and wisdom. I encourage anyone who finds value these words to purchase the book, which is full of excellent pieces like this.

An Investing Principles Checklist

Risk – All investment evaluations should begin by measuring risk, especially reputational

• Incorporate an appropriate margin of safety
• Avoid dealing with people of questionable character
• Insist upon proper compensation for risk assumed
• Always beware of inflation and interest rate exposures
• Avoid big mistakes; shun permanent capital loss

Independence – “Only in fairy tales are emperors told they are naked”

• Objectivity and rationality require independence of thought
• Remember that just because other people agree or disagree with you doesn’t make you right or wrong – the only thing that matters is the correctness of your analysis and judgment
• Mimicking the herd invites regression to the mean (merely average performance)

Preparation – “The only way to win is to work, work, work, work, and hope to have a few insights”

• Develop into a lifelong self-learner through voracious readings; cultivate curiosity and strive to become a little wiser every day
• More important than the will to win is the will to prepare
• Develop fluency in mental models from the major academic disciplines
• If you want ot get smart, the question you have to keep asking is “why, why, why?”

Intellectual humility – Acknowledging what you don’t know is the dawning of wisdom

• Stay within a well-defined circle of competence
• Identify and reconcile disconfirming evidence
• Resist the craving for false precision, false certainties, etc.
• Above all, never fool yourself, and remember that you are the easiest person to fool

Analytic rigor – Use of the scientific method and effective checklists minimizes errors and omissions

• Determine value apart from price; progress apart from activity; wealth apart from size
• It is better to remember the obvious than to grasp the esoteric
• Be a business analyst, not a market, macroeconomic, or security analyst
• Consider totality of risk and effect; look always at potential second order and higher level impacts
• Think forward and backwards – Invert, always invert

Allocation – Proper allocation of capital is an investor’s number one job

• Remember that highest and best use is always measured by the next best use (opportunity cost)
• Good ideas are rare – when the odds are greatly in your favor, bet (allocate) heavily
• Don’t “fall in love” with an investment – be situation-dependent an opportunity-driven

Patience – Resist the natural human bias to act

• “Compound interest is the eighth wonder of the world” (Einstein); never interrupt it unnecessarily
• Avoid unnecessary transactional taxes and frictional costs; never take action for its own sake
• Be alert for the arrival of luck
• Enjoy the process along with the proceeds, because the process is where you live

Decisiveness – When proper circumstances present themselves, act with decisiveness and conviction

• Be fearful when others are greedy, and greedy when others are fearful
• Opportunity doesn’t come often, so seize it when it does
• Opportunity meeting the prepared mind: that’s the game

Change – Live with change and accept unremovable complexity

• Recognize and adapt to the true nature of the world around you; don’t expect it to adapt to you
• Continually challenge and willingly amend your “best-loved ideas”
• Recognize reality even when you don’t like it – especially when you don’t like it

Focus – Keep things simple and remember what you set out to do

• Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat
• Guard against the effects of hubris and boredom
• Don’t overlook the obvious by drowning in the minutiae
• Be careful to exclude unneeded information or slop: “A small leak can sink a great ship”
• Face your big troubles; don’t sweep them under the rug

Found this particularly inspiring:

It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.

Citizenship in a Republic
Speech at the Sorbonne, Paris, April 23, 1910

I highly recommend this talk by David Hansson of 37Signals and Ruby on Rails fame. To sum it up: Have realistic goals for your startup; you don’t need to be the next Facebook or YouTube to have a successful business.

Here are some quotes (his Danish accent is awesome):

“I think there’s too little talk among startups about just making money on their own.”

“1. Great application, 2. ??? Price!, 3. Profit”

“But somehow I think that notion got lost in the web world. The funny thing is we played this game before. We played it back in 2000. It was all about the eye balls, it was all about the VCs and then getting bought out and IPOs and whatever. It didn’t really work then and now we’re playing another round because there’s money again to be invested. Money ready to be bought out on social network media networking things.”

“Lots of ways to have a price”

“The really cool thing about all of this is you don’t need to be a fucking genius to make any of this work! It’s not rocket surgery.”

“Here’s the kicker. Just because you slap a price on something, doesn’t mean it you’ll have a successful business. Most business fail.”

“You can be pretty happy on just a million dollars. Most people would be. I think we lose sight of that because we get this image pumped up of a billion dollar company.”

“I encourage a lot of people to take the better odds at a smaller reward and perhaps worry about the billion dollars next time.”

“You just have to solve a problem a little bit better than the other guy.”

“I think there’s just too few people trying to make a nice Italian restaurant in the web space.”

“Getting consumer to pay you for something – that’s pretty hard.”

“There’s a lot of room in between to just enjoy life.”

“Calling your own shots, running at your own pace – that’s pretty alright. Once you get to that point where the financials are fine. If you’re making $1m a year you’re doing pretty alright. You’re doing better than most people out there. And when you get that portion of your life taken care of, there’s a whole lot of other things that start mattering a ton more, like not being in meetings freaking all day, like not being told what to do by other people, being able to set your own pace, call your own shots, is immensely powerful motivator for just enjoying your life.”

Craig Newmark: “We both know some people who own more than a billion (dollars) and they’re not any happier.”

“I think that’s exactly how the money game is. Once you reach a certain point, nothing else beyond that really matters.”

“Where are all the people saying ‘I just want to build a business and enjoy it over the next 20 years’?”

“Are you willing to trade being a passionate developer for a little bit of moola? To get into that hell hole? I don’t think so.”

“No need to dominate the box office, lots of winners possible.”

“But where’s the network effect? How are you going to be viral?” … “How are you going to infect the entire population?” “You know what’s viral? Shoes. Shoes are viral.” “Great service, a great business. It doesn’t have to be this ingenious idea. Often the simplest ideas int he world like treating your customers nicely while still asking your customers for money — it works! And you can build great businesses like that.”

“A side business is really not that bad. Having a limited amount of time everyday to work on something or even just having a few days a week to work on something really focuses your energy.”

“I had 10 hours per week to develop base camp. Not 10 hours per day… 10 hours per week. That was the bill I sent to 37Signals. When I had 10 hours per week, you couldn’t screw around. Having less time is really a benefit to most people because if you have all the time in the world you’re probably going to yank it off anyway and its not going to be… yank it off in the business sense of the word… you’re going to yank or waste your time on frivolous features that you don’t really need anyway.”

“People are in too much of a hurry. You don’t really need to build a huge company overnight.”

“Take it easy. This whole startup thing. This whole rush thing. You’re thinking about it ‘I can put all this work right now and coast from there.’ It’s never going to be less work.” … “In some ways its just going to be more work.” “The practices you choose to adopt when you are a startup will stick with you.”

“Great achievement comes from trying to solve simple problems.”

“Good innovation comes from just solving simple problems that you’re intimately involved with.”

“Solving your own problems – great advice. I think its the easiest way to get somewhere. Just realize you’re not unique, you’ll probably find 2000 other people out there with the same problem that are willing to pay you for it.”

“Who the hell gets anything productive done for 14 hours/day? Try working 5 hours per day. If you only have 5 hours/day to spend on something you’d focus your time a lot better.”