The Rules for Entrepreneurs

Venture Files founder and former curator, Steven Fisher, wrote a series last year that remains one of the best of its time. Even though he has moved on and is working with Network Solutions, I think it’s as important now (if not more so) than it was last year at this time. This is a consolidated (and updated) version of that series.

Pay Yourself First

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and got nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cashflow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and let you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

- Have six months of payroll for that person in the bank on top of your salary

- Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

Own Your Travel Itinerary with TripIt

In October 2006, a new service appeared on the web that promised to make it easy to manage all the fine travel details of a trip. As a frequent traveler, I signed up for TripIt in November of 2006, shortly after they launched, and have never looked back.

The concept is really simple. A traveler is headed to Austin, Texas (as I will be for SXSW Interactive in a few weeks). He books his flight on Southwest airlines and gets an email confirmation with ticket reservation, itinerary, etc. Sight unseen, he forwards this email to plans@tripit.com and moves on to reserving his rental car and hotel.

On the backend, TripIt recieves the forwarded confirmation email and knows exactly how to read it into their master database. The email can even be forwarded from an unregistered email address which you can claim later.

The beautiful next step is the organizing of all this information. TripIt sorts your travel plans out into “Trips” and will give you everything in chronological order. This traveler going to SXSW, for instance, has a chronological listing that shows his departing flight, his rental car pickup, his hotel information and his return flight. As a bonus, Tripit gives him a Google Map of the area you’re staying on.

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Now, I don’t like just plugging services for the sake of plugging services. You can go to Mashable if you want to be filled with nonsense. However, TripIt actually is a useful web product, but more than that, it’s a useful mobile product. If you have a smartphone (Blackberry, Treo, iPhone, etc) then TripIt becomes infinitely more useful.

For mobile users, you can access all of your itineraries by browsing to m.tripit.com, something that has become the defacto reference point for all of my travelling and checking in. It literally, if you’re a smartphone user, eliminates the need for a stack of trifolded paper printouts from 6 different reservations.

If you really want to own your travel itinerary and you own an iPhone, consider buying the “TravelTracker – with Tripit” iPhone app. While everything about TripIt is completely free, this app costs $19.99.

Facebook Rescinds Their New Terms Of Service, Reverts to Old

Yesterday, we talked about the huge terms of service nightmare that Facebook created for itself. They noticed the uproar, fortunately, but did little more than assure it’s user-base that they had our best interest in mind. At the time of yesterday’s blog post from Facebook CEO Mark Zuckerberg, the new terms of service remained in place.

As of today, however, that has changed. It is now reverted to what it was before.

Indeed, it seems Facebook lives in a village, and not just a bubble.

Many of us at Facebook spent most of today discussing how best to move forward. One approach would have been to quickly amend the new terms with new language to clarify our positions further. Another approach was simply to revert to our old terms while we begin working on our next version. As we thought through this, we reached out to respected organizations to get their input.

Lesson to be learned: Your users are your blood. Do not spring things on them without their knowledge, especially when it involves their content.

Twitter is Life

Everyone loves Twitter. Some research reports seem to indicate that it was the number one most often used word on Twitter last year. That would be 1 in every 3 words written on Twitter are about Twitter. A sampling of these tweets would be:

  • Listen to our podcast about Twitter
  • 10 Reasons I Love Twitter
  • Twitter is my girlfriend
  • The only thing better than Twittering from my iPhone is Twittering from my iPhone while taking a crap
  • Twitter helped me make money
  • Twitter helped me find God
  • Twitter helped me find a #blinddate
  • Did you know Shaq was on Twitter?
  • We don’t talk to each other, even though we are in the same room. We twitter back and forth
  • Twitter is down! FAIL
  • Barack Obama is on Twitter, did you know that? Huh?
  • Tweetup!
  • Let’s talk about Twitter
  • Twitter me this, Twitter me that
  • Business are on Twitter too
  • How is Twitter making money anyway?
  • Twitter is bigger than FriendFeed

Friendfeed? Huh?

Anyways, my point is this. The most important thing on earth, if you want to tap into the collective conscience of the webgeeks is Twitter. It’s clear why. With so many mainstream people like Rick Sanchez of CNN, Shaq, Ashton Kutcher and of course, ROBERT SCOBLE (pant, pant, pant), it is clearly The Important Thing™ to be talking about.

Are you talking about Twitter? If not, you should be. It’s rewarding.

It's February 16. Do You Know Where Your Facebook Photos are?

On February 4th, the largest social network by all accounts, Facebook, quietly updated it’s terms of service to grant itself an unending and irrevocable license to use all content ever uploaded to its service.

Photo by  pshabThis is fundamentally not all that out of sorts from what most services do when licensing user content, but their lawyers are clearly a a few cards short of a full deck of 52. Consumerist says it best:

Want to close your account? Good for you, but Facebook still has the right to do whatever it wants with your old content. They can even sublicense it if they want.

I’ve begun advising people, clients and otherwise, not to upload any content to Facebook except links. Links merely point to the actual content. Most blogs and content site these days provide a “Share with Facebook” tool that will allow readers (or yourself) submit content to Facebook. The sticky point is that you are not actually uploading the photo, or the video to Facebook itself. Merely an excerpt and thumbnail.

If you run a blog and you use Facebook, drop everything you’re doing and go over to AddThis, sign up to use their free widget and install it. We have it here and it’s a great enabler for readers that allows readers to share with more than just Facebook. Try it on this post.

Unfortunately, there’s no retroactive immunity. Like Congress with the Patriot Act and Stimulus Bill, this thing slid through in the dead of night without so much as a peep and you’re expected to swallow the pill and be happy with it. Facebook never offered you a chance to decline the new TOS, nor did they offer to grandfather content previously uploaded. So feel free to delete stuff you never meant to give away for any constructive or nefarious purpose out there – it’s gone.

I would caution against simply abstaining from Facebook, however. It is the worlds largest social network for a reason and avoiding it will mean a significant cost to your company, brand, etc. However, be wise in how you actually share that content.
— Photo by Pshab

Update: Facebook CEO Mark Zuckerberg clarifies.

One of the questions about our new terms of use is whether Facebook can use this information forever. When a person shares something like a message with a friend, two copies of that information are created””one in the person’s sent messages box and the other in their friend’s inbox. Even if the person deactivates their account, their friend still has a copy of that message. We think this is the right way for Facebook to work, and it is consistent with how other services like email work. One of the reasons we updated our terms was to make this more clear

-snip-

We still have work to do to communicate more clearly about these issues, and our terms are one example of this. Our philosophy that people own their information and control who they share it with has remained constant. A lot of the language in our terms is overly formal and protective of the rights we need to provide this service to you. Over time we will continue to clarify our positions and make the terms simpler.

Whoops. Facebook fumbles again.

Proper Form Applies In 140 Characters or Less As Well

Twitter is often written about, often used and as often abused. Everyday, thousands of tweets fly by me at break neck speed due to the volume of people I follow. Many of these short form messages in 140 characters or less are eloquent and precise. Others constitute butchered English short form that demonstrates a lack of attention to detail.

The rule of “Say it in 140″ is critical. If you cannot convey your thought in 140 characters or less the first time, chances are your audience will miss the next tweet that continues the thought. Clearly, there are exceptions to every rule and often entire dialogues will erupt between two ore more twitter users. However, in general, a thought should be expressed clearly, concisely and entirely in a single tweet. It’s good form and it’s also good practice.

I’ve noticed that, since my adoption of Twitter in November of 2006, I have gotten much better at formulating these thoughts. Let me say, for the record, it’s hard! Very involved concepts take utmost care and effort to convey in short form.

As difficult as it is, especially when it comes down to cutting and trimming words, to not butcher the English language. Like prose, journalism or poetry, lack of attention to these details may earn the tweeter a bad reputation, and could be seen as unprofessional.

Does that mean that perfect sentence structure is required? Hardly. Shortened sentences are perfectly fine. However, choppy thoughts that are merely chopped to cram – maybe not so much.

Other areas of concern for me, as a Twitter reader, are:

  • Automatically pushed messages that simply consume an RSS feed and push tweets out into the ether. Generally, these are not well formed (being formed for a Blog post and not a tweet, and are cut off. Incomplete thought = FAIL.
  • Multiple streams of thought in a single tweet. Usually, with the intention of efficiency, someone might respond to two tweets at once. Though I suggest eliminating multiple tweets above, that rule applies to tweets around a single thought. If you have two thoughts you want to respond to, send two tweets. It’s a commodity.
  • Retweets are awesome. They are tweets from someone else that you think are valuable enough to “REtweet” to your own followers. Usually, retweets are indicated with a preceding “RT”. The area of concern here, as it applies to format, surrounds multiple retweets. Example: “RT @UTexasMcCombs: RT @statesman The House passed the $787 billion stimulus bill 246-183″. Retweets should be limited to the original poster. Everything else is simply noise and unnecessary. Plus, it removes available characterage.
  • Prolific use of “U” and other shorthand. The shortened form of “You” came from text messaging where it was more difficult to actually type a word out. Thus, we have tragic sentences like, “OMG WTF R U asking?” – Folks, we’re talking two additional characters. For the love of all that is good and right in this world, type the word out and make a statement about your intelligence.

I write this post because there is a new book coming out entitled “140 Characters: A Style Guide for the Short Form” which seeks to help people understand this concept of form and style. It’s written by veteran Twitter users @dom and @adamjackson and thus comes from actual experience. Hat tip, by the way, to Jenna Wortham who covered this over at the New York Times Bits blog.

What are some of your Twitter form suggestions?