daily articles for founders

Here are 10 quality posts from the Founder's Library:

Judging people based on grammar  

This HBR article by Kyle Wiens, takes a hard line on people with poor grammar:

On the face of it, my zero tolerance approach to grammar errors might seem a little unfair. After all, grammar has nothing to do with job performance, or creativity, or intelligence, right?

Wrong. If it takes someone more than 20 years to notice how to properly use "it's," then that's not a learning curve I'm comfortable with. So, even in this hyper-competitive market, I will pass on a great programmer who cannot write.

I would agree. In fact, I used to agree with this view.

Unfortunately, I can't, because I've met some extremely intelligent people who consistently mis-spell things. For example, Bob Leung, my cofounder on Woobius, is one flagrant such case.

Before I worked with Bob, I too held the view that grammar and intelligence were generally correlated. But then Bob posed a bit of a quandary. Here was someone clearly very smart, extremely talented, extremely driven, with great attention to detail, and who is completely incapable of writing a single paragraph of text without at least one or two mistakes in it.

Since then, I've revised my judgement, and I would urge Kyle to revise his too. If you're hiring writers or programmers, then certainly, attention to written detail is paramount.

However, for many other functions, like sales and design, while attention to detail is important, it doesn't always manifest itself as good grammar.

So my advice is: do not judge people solely by their grammar - it is just one factor amongst many.

Tools to find available startup domain names  

Duane Jackson of UK online accounting software KashFlow, lists some useful tools for finding a good domain name:

A useful list to keep bookmarked for next time you need to do this.

Recruiting programmers to your startup  

Another excellent article by Chris Dixon, about a topic that is important to pretty much every startup, no matter what your definition of the word.

Chris's key points can be summarised as:

  • Understand what motivates programmers (beyond a certain point, it's not money)
  • Respect programming as the creative activity it is
  • Be proactive about building contacts with great programmers
  • Use various cues for screening and filtering down candidates, like open source contributions, code tests, and trial projects
  • You'll need a track record of treating programmers well to be able to attract great programmers who have many other options
  • Don't try to beat Google on perks, you can't
  • Don't under-grant equity to early programmers who join you before you've achieved traction - they are late cofounders, not early hires

Great points. I'll add that one of the things that can really help with telling great programmers apart from not-so-great ones is, in fact, to have a great programmer on your team already. It takes one to know one.

How to safely store a password  

Use bcrypt. Use bcrypt. Use bcrypt. Use bcrypt. Use bcrypt. Use bcrypt. Use bcrypt. Use bcrypt. Use bcrypt.

Well, at least it's clear.

Bcrypt is better because hashes like MD5 or SHA* are designed to be very quick, and so they can be cracked by simple brute-force attacks, even when you include a salt.

This comment on HN is also very informative, especially if you don't know what I'm talking about, as is the rest of the discussion, in fact.

Why is this relevant? Because password hashing is something that almost every web application has to do. And most web applications use salted hashes. And, as the recent Gawker débacle showed, that is not secure.

You are your first investor  

Elliot Loh on investing in your own ideas:

...in mulling over my own ideas, I've realized that I'm really my own first investor. While I may not be putting my own money into the one idea I choose, I will be committing time, energy, and a focus exclusive of any other ideas.

He adds that as an investor, you should evaluate your idea with questions like:

  • Does it solve a meaningful problem?
  • Is this a feature, product or technology?
  • What could it become?
  • What will it take to accomplish?
  • Am I the right person to do this?
  • Does it feel like the future?

All very good questions to ask yourself. Some might even be key hypotheses that you will resolve during the startup's life.

One small quibble: even if you do not put any cash directly into the startup, you are still an investor, financially as well. Startups don't pay nearly as much as the jobs that their founders could typically get. So there's a significant opportunity cost, financially, to working on your startup. Given that, it's doubly worth asking yourself whether the idea is worth your while.

Jacques Mattheij on: Networking without going places

Jacques Mattheij, who blogs regularly on http://jacquesmattheij.com/, is a long-time entrepreneur who's been through hell and back, and his most recent project is ww.com, a real-time web broadcasting platform. He is well-know to the Hacker News community, although he recently quit it, having achieved a staggering 50'000 karma points within a couple of years.

In this article, Jacques shares a technique for making the most from networking, without turning up.

The Problem

The problem with getting 'gigs', when you're a consultant, is that you are more or less expected to go out and 'network'. Typically, this means that you get to hang out with a bunch of people in the field of your choice and rub elbows being social every once in a while, typically while standing up in a large room full of people that are telling each other how fabulous they themselves are, while consuming small bits of food and drinks.

I've been to a few networking events and, honestly, I feel like a fish on dry land when I'm there. I don't know who to talk to, I don't like the atmosphere, and I don't do alcohol, so typically I'm bored out of my skull and somewhat annoyed - not the best first impression to make on the others.

It's possible that I've been going to the 'wrong' events, and that there are better places to go to. Those events that make me feel from the announcements as though I should probably be there are either too far away from here to be practical, or would take me away from what I really should be doing for too long. Since this is the scene here, I don't have much choice in the matter... or so I thought.

Networking through other people

A few years ago, after yet another wasted afternoon and evening, I figured I had to change tactics or I'd continue to waste my time in a way that was both counterproductive and downright frustrating.

The decision to do something about it was easy enough, but finding a good solution didn't exactly come to me overnight. It took a while to talk it over with other people and finally, after a few trial balloons, I hit on this trick:

Instead of going to 'networking events' I found out who was going there too, and tried to find a few people who were going to the places that I used to go to, and a couple that I had never heard of as well. This then gave me grounds to approach them with the story of my frustration with the networking events in general, but at the same time my occasional success at scoring a job through a contact made there.

The structural solution to the problem was very simple: those that do go to these events obviously like it, so why not make it worth their while? For every customer that you find me through whatever means (networking events or simple referrals) I pay a percentage of my gross income on that customer in the first year, typically 10%.

For a big job, that can add up to a nice sum for the person that brought me the contact, and it incentivises them to keep doing it. I'm absolutely religious about making sure this money is paid out and accounted for, to the point that I'll remind them to send me an invoice for a job that was referred, and I'll keep them informed if the same customer later wants me to do a repeat job.

Who would you do this with?

As a rule, the people that I have this arrangement with are not looking at my referral fee as their means to go shopping on Saturday morning, but as a token of appreciation for spending the time and effort to be on the lookout, and occasionally handing out my card. This gives them a lot of reasons not to hand out my card unless they feel the match is an excellent one. I much prefer that over having a lesser experienced person approach a crowd of people with, as their main goal, to carpet bomb (AOL style) the attendees with my card. That would very much work against me.

It Works!

Nowadays, almost all of my contract jobs (and there are not that many of them anyway, but they do still flow my way) are coming in through this referral mechanism, and I haven't been to a 'networking event' in 4 years.

Of course, the 'be seen' and 'keeping your name in play' aspects of the networking events disappears, but I never cared much for it anyway. I'd rather talk nuts and bolts in a quiet room or get some work done for a paying customer.

If everybody adapted this scheme, it would stop working. So, here's to hoping that lots of people continue to go to networking events where they'll run in to one of my 'representatives'! The people that do this for me are people that I've known for a long time, that know my strong (and weak!) points and that have no problem attaching their reputation to mine.

The best part of it is that those that help me in this way probably do a much better job of presenting me to a prospect than I ever would do myself!

It's not commission sales

It would be fairly easy to interpret this as a commission sales model, but while the ingredients are there that's not really the case. For starters there is no sale or anything like that being done by the person that represents me. It is probably closer to having a few people, knowledgeable in the field, that keep their ear to the ground for the specific conditions that match my talents and personality. If the job is a bad match, they stand as much to lose as I do, if they refer me. So far the 'score' rate has been 100%. In other words, every time someone referred me, it led to a job, sometimes as fast as the next day in some foreign country. The second difference is that they are not at all involved in negotations, can't make any binding offers and don't have a say in the 'product'. It's strictly a stack of business cards in the pocket of a third party.

This model might be adaptable to product sales, but I have not tried that, and I can see some reasons why it might not work well. For instance, you'd have to have a larger number of people doing this, which would lead to territory conflicts, and there would have to be all kinds of formal agreements in terms of volume discounts and so on. Since the agreements I have are completely informal, no contracts, entirely based on trust of all parties involved, a person that depends on their 'sales' for a living would not be able to function well in this environment. That's precisely why I kept the number of 'representatives' very low and the quality really high.

If you want to adapt this model to start-ups, and you make a go of it, then I would very much like to hear how you did it and what the effect was. As presented here, it works best for consultancy in very narrow niches.

Step by step

  1. Decide, for yourself, if you would rather go to networking events, or spend the time doing what you're good at
  2. Make a profile of the kind of person that would be able to represent you best
  3. Identify one or a few people like that, and approach them with the proposition
  4. Make sure they know your reputation, your strengths, and your weaknesses inside out
  5. Wait for the first job to be handed to you and do your absolute best to make the person that referred you look good, even if the match is a poor one; in that case, talk things over afterwards and correct course if required
  6. if you have multiple people doing this for you, try to make sure they're from sufficiently different circles that they won't be attending the same events

This article is part of a series.

Using LinkedIn for Cold Calling  

Martin Grönberg from myGengo has some advice for those who still need to rely on cold calling for some of their marketing:

Use our company's extended network, and particularly LinkedIn, to an extreme. We flip the standard target prioritization process around: We make the people in our extended network (within 2 degrees of separation) the starting point and ask ourselves "how can myGengo help this person and company better do business". Then we go ahead and prioritize those contacts based on common business metrics (value potential, strategic fit, etc) and use the network that initially lead us to the target for reaching out.

Not much to add to this, other than to link to a post which appeared here earlier, by Iqbal Gandham, about Generating B2C and B2B links systematically.

Corporations and companies are a responsibility  

Hamza Siddiqui:

My dilemma started when my co-founder and I had to split and the startup we were working on pretty much died out. About a month ago, I decided to finally close the corporation. But I quickly realized that closing a c-corp was not as easy as opening one.

"So in total, you owe about $89,000 to the State of Delaware"

Unlike what the title of the post suggests ("Why incorporating my startup was my worst mistake"), the correct lesson to take from this experience is that registering a company is a responsibility. It's not something you do without knowing what regulations will apply to you.

Earlier in January, I advised people to register a business today as a new year resolution. This admonition deserves a follow-up.

Most governments treat businesses as "responsible" entity. They give you very little slack when it comes to following the laws and regulations of business, because they consider business owners to be capable of following a few simple rules. For example, in the UK, if you fail to file your accounts on time, you will get fined. If you file your accounts wrongly, it's your fault, too (not your accountant's, interestingly). Nobody cares that your dog ate the accounts - it's your responsibility as a business to keep records, keep copies of the records, prepare the right pieces of paper and file them at the right times.

Those regulations are, at least in the UK, nowhere near as complicated as they might sound on the surface. Any reasonably diligent and intelligent person (and someone who can learn and apply multiple programming languages definitely qualifies) is capable of learning everything they need to know over a few hours. And the government gives plenty of reminders, too. But you do need to go into this type of venture with your eyes open.

Registering a business is for grown-ups.

How Jason screwed up his Google acquisition  

After that the communication fell silent. I resisted contacting Jonathan or David because I didn't want to appear too eager and I figured I was in a fairly strong position since they needed what I had and there didn't appear to be any other serious competitors in the space.


While on the phone I took the opportunity to ask him the burning question of why I had never heard back from them in regards to the acquisition of Preezo. I had developed my own theory which was that since Google acquisitions were known to be primarily about talent and not technology, a one-man show like Preezo would represent distinctly less value and ultimately more risk for them than if it was, for example, a team of five engineers. However, according to Jonathan that wasn't the reason as at all. It was simply that they were so busy during that time that the deal just fell through the cracks.

I gave a presentation recently at an HNLondon meetup. One of the key lessons I tried to get across is "don't be afraid to follow up".

People who do important things are almost always very busy. Everyone wants their attention, and even with the best will they don't have the time to keep track of every interaction they're involved in. In my experience, such people never get annoyed at you for following up - in fact, they almost expect it of you. The fear that "people will get annoyed at me for following up" is unfounded.

So never be afraid to follow up. The worst thing that might happen is that your email is ignored. The best thing that might happen is that you get what you want, or even more.

Faking initial user interest  

This very interesting article from a couple of months ago comes via this almost equally interesting "AMA" ("Ask Me Anything") post on Reddit, about how to build a social entertainment website.

The key point is that some businesses need to solve a chicken-and-egg problem of getting significant numbers of users before more users will join. One solution to this, which sites like Reddit or the new darling Quora have used, is to fake the initial activity, to present a higher level than would otherwise be apparent.

Of course, this doesn't mean put up false testimonials ("Great app; use daily! - Barack Obama), create fake real-time activity (extremely easy to spot), and fake your numbers (though I know plenty of startups that do, and it works).

Rather, you can engineer your appearance to give off a sense of size.

Worth a quick read.