Startup.com

Startup.com is a documentary that follows three friends who start a company, govWorks. The principals are Kaliel, Tom, and Chieh (who got very little screen time.) It's the early 90's and the Dot.com boom is nascent. The friends have a great idea, but no experience. They are confident anyway that they can capitalize on that idea and bring it to market: collect revenue for municipalities, what Tom calls "traffic tickets" through the computer. No days off for court or long lines, cost savings for the municipalities, and the probability of greater compliance. Slowly they achieve more and more success before even launching, more and more employees, and more and more funds to put into the business. The film shows the myriad of problems that the engineers had to attempt to overcome -- which they did not do efficiently. They do get it off the ground and acquire a large amount of capital, but that capital wasn't managed well. Chieh eventually wants out; Kaliel and Tom do not. Chieh ends up dropping out of the business, and the other two push on.

It's an interesting look at the business of a start-up, especially their pitfalls. They don't really have anything except for a general idea.Time becomes their main investment, which puts a strain on Tom especially, who has a daughter to care for. Kaliel starts with a girlfriend, but she disappears from the documentary, seemingly sacrificed for his pursuit of a successful business, and he ends up with another. She, too, vanishes. The subplot is kind of weird, honestly. They grapple with others who have similar ideas, personal conflicts, and a seemingly endless succession of bugs in the program.

Eventually, they go bust. They lacked the ability for their site to properly handle everything, they overvalued their company, they poorly managed funds, and Kaliel essentially ends up firing Tom. Tom was the technical guy, the detail-oriented nerd who wanted to move methodically; Kaliel had the big personality, complete with the platitudes, vague ideas on how to do things, and silver tongue. I think in the end it was necessary to let Tom go, at least from what we saw. He didn't seem to be able to adapt when presented solutions for the website, and wasn't willing to start from scratch.  The documentary made it seem like they parted ways for good.  In real life, they regrouped later on to form another company, Recognition Group, and to write a book about their experience: Living in the Bubble: Seven Sins of Early Entrepreneurship. Bloomberg reports that Kaliel was to be arrested for securities fraud in late 2015. He now lives in Colombia.

South Sound Technology Conference

March 3, 2017
UW-T

The conference began with opening remarks by Andrew Fry, who introduced Congressman Derek Kilmer, who talked about municipal government, the relationship between the private and public sector, the impact technology has had on them. He stressed that cyber security is woefully underfunded, which lead into the next session: "Cyber Resiliency – Preparing for Before and After a Cyber Attack." Eric Eid of Columbia Bank stressed that there needed to be a collaboration between organizations, and that requires a certain level of trust that isn't necessarily there. DC Grant, a UW-T graduate now teaching cybersecurity at Columbia Basin College, asked the question, "Where are you storing everything?" He pointed out that it's not economically viable to protect every asset. He urged people to be realistic, and to prioritize. What is most valuable? What is most likely open to attack? Kurt Hermanns from Honeywell said to "Dial back the hyperbole" and change the the tone of discussion to Risk Management, which sound not as ominous. That aligns with Grant's point of view, that it's not realistic to assume that risk can be wholly eliminated, only that it can be better managed. That management is a challenge to Washington state. The question "What are the main challenges that face the state, and how do they differ from the rest of the nation?" was asked. Grant responded that Washington state had traded security for convenience. Everything is or is in the process of being connected to the Internet. This leaves the state vulnerable. Eid said that the state needs to be more transparent in how it handles data.  Hermanns felt that expanded regulations might help, and that Washington state had already made leads in setting up regulations for cyber security. Eid, who is a lawyer, suggested that the current standard of care can be regulated, and that there needs to be a clearer definition of what activities constitute legal problems. In addition to laws that don't always keep up with technology, it was pointed out that there are issues with legacy systems and compatibility.

This segued well into the next session, Machine Learning and the Internet of Things.  Matthew Tolentino, UW lecturer, said that we're now in the 4th Industrial Revolution, a meshing of the physical and technological worlds. The panel gave real world examples. Since the Tacoma Fire Chief, (who is working on a project with Tolentino) was there, they shared how the machine learning would help the current system of firefighting. Their Indoor Positioning Systems Project gives real-time data on the locations of firefighters using embedded systems. In a fire, losing the location of a firefighter can mean injury or death. IPS should reduce those tragic incidences. Applications currently in use include sensors on machines, on garbage, and even on cows. These are not without their problems, though. One issue that Duggan, the fire chief, ran into was frequent callers. These are people who call the fire department several times a day without legitimate cause. He is hopeful that machine learning can analyze and identify patterns for these calls, though the department will still be left with the problem of needing to respond. Audience questions included privacy concerns. Just as Grant pointed out in the previous panel that there needs to be a balance between convenience and security, there needs to be a balance between privacy and efficiency.

The South Puget Sound Technology Company Sampler panel gave the audience a look at some of the tech companies in the greater Tacoma area. Why Tacoma instead of Seattle? Seattle is home to Amazon and Microsoft, two of the biggest names in tech.  Wouldn't it make sense to base a new tech company there? One of the major reasons is that the quality of life for Tacomans is on the rise, while Seattle is in decline. The traffic and congestion are not conducive to the tech culture that companies seek to establish. Another reason is both the cost of living and the cost of commercial space are significantly lower in Tacoma. It's easy to get to from almost anywhere, including SeaTac airport. Where will Tacoma be in 3-5 years?  In an even better place than today. Where will the panelists be?  Shadrach White, CEO of cloudPWR, expects to be working with more government contracts. Linda Rix, CEO of AvueTechnology, expects to be refining and creating software. Both of those will require good employees.

That was the next panel, Hiring and Retention in Tech Industries. Fry said that one of the most expensive things for a business is to lose an employee. Zach Nieman, corporate recruiter for Infoblox, said that it's important for a tech company, especially, to have a strong positive company culture. To this end, he tries to keep a pool of "High potential new recruits" to filter through. Hiring right the first time means that tech culture gets stronger with each hire. Sarah Champion of SiteCrafting says that a long interview process helps to make that decision and keep retention rates high. She aims to make sure that her employees are engaged and constantly learning. She says that it's important that they are highly trained and able to work anywhere, even if that means occasionally losing some to competitors. Dawn Williams of UW's Career Development Center reminds employees that they need a life outside of work. Where do these companies get their employees? Champion looks to community involvement. Nieman confesses that he networks, or in other words, poaches from his competitors.

The conference was interesting. I appreciated that the speakers were upfront and candid. I think the panel I found most fascinating was cyber resilience; it's a topic I've looked into independently in the past. If I'm in the area for next year's conference, I'll definitely go again.

Dot.com to Dot.bomb

The 90's were a decade of rapid expansion in the dot com world. It was a time of high risk and high reward. Investors scrambled to get in on the next big thing, often trusting inflated company valuations and believing bills of good sold to them by anyone company with a ".com" at the end of it. It was on this humongous wave of confidence in the future of computing power that Andrew Fry cut his financial teeth. He had worked for Microsoft for a number of ears, but working there made him realize he wanted to start his own company with his own standards.

Fry's company set up DealerNet in March of 1994 for Marty the Car Dealer. A premier site for buying and selling cars, it was a hit, and gave Fry the working capital for other projects. This decade was about speed; who was first to market, who could quickly win over the public, and who could negotiate the best deals behind closed doors. It was necessary to be skilled in all three areas.

There were many casualties as the boom became bomb. The end of the decade and the Millenium saw the end of major companies, and the end of major dreams. A few continued to prosper, such as Amazon and eBay. Some survived, but came to a more realistic company valuation. Others such as Netscape were eaten up. Compuserve had been first to market as the first major commercial online service. They would not be able to hold their position and eventually got eaten up by America Online. “The VP of Compuserve was a dumbass”. Still others just disappeared. Investors, including large retirement funds, watched their portfolios decline by 75% or more seemingly overnight. The bust was the market adjusting itself from inflated values, similar to the housing bust of a few years back. The market isn't dead. On the contrary, it's a healthier, slower growth with much of the dross discarded.

The pendulum now swings closer to the center, neither boom nor bust. For those of us in the Northwest, it rests slightly on the boom side, though the market will (hopefully) never again suffer from the naivete that allowed the artificial inflation of values in the 90's. California tax laws and other lifestyle considerations have Silicon Valley companies looking north to Washington and east to Texas. That means better economic opportunity for those of us here.

My takeaway was that risk and reward often go hand in hand. The risks can be mitigated through research, but rare is the low-risk option that pays out high rewards. When you're able to more easily pick yourself up from a temporary failure is the best time to take on those higher-risk ventures.

Shad the White

Shadrach White is a hawk. He makes no apologies for this. Like the bird, his present company CloudPWR is dynamic, focused, and on a mission. Their vision statement reflects this.

• We are an agile software company with extensive design and development experience. Our products and the solutions we deploy reflect the joy of simplicity.
• We are listeners, thinkers, and doers.

Being two of the three won't work. It's imperative for him to listen to the client's needs, think about how to solve their problems, and then obviously actually do the work. To do this properly requires a team. One thing that Mr. White is concerned about is the character of who he works with. Skills can be taught, but character is molded through life and difficult to correct when poorly cast. White understands this and seems willing to invest in employees of integrity who may take more training in the short run, but are much more valuable in the long run.

This is not to say that he hires charity cases who can't do their jobs. On the contrary, money has been the biggest motivator for him. That's why he is, what he terms, a "revenue hawk." He explained that everything else can be perfectly set up for a business to succeed, but it's all for nothing if the finances are not in place and are not well handled.  Otherwise, the business would be a non-profit (and even then, it usually still matters.) White is in business to make money, but he has other motivations as well. His pricing structure for CloudPWR shows that.  He offers what is, in effect, a substantial discount for the small businessman. He doesn't call it that, but the price per hour of work ends up being a lot less for his smaller clients. That might seem counter-productive for a revenue hawk, but White believes in balance.

To achieve that balance, he shares his four secrets of success:

1. Be a revenue hawk. Always remember that the bottom line counts, and that money drives your business. Understand what selling is. Ask the money questions first.  He shared that an otherwise successful sportswear company of his failed to reach its full potential because this concept got buried. Keep your eye on the money, and have a 3-6 month cash reserve.
2. Be a person of good moral character. Smile, be kind, treat others fairly, and let your word be your bond. Create a culture that people want to be around. His advice is to make friends quickly, without oversharing. Associate with other people of good character.  This benefits all parties as you build each other up. Trust your gut: run if your "spidey-sense" tingles. If you intuitively sense that something is off with a potential partner, trust it. 
3. Make time to relax and rejuvenate. Work matters, but the whole of your life matters more.
4. Learn about things outside your wheelhouse. Be a whole person, because a well-rounded person brings ideas, skills, and knowledge that come from more than just one place. The ability to communicate on a small-talk level is important in building relationships.

White chose to get a GED, and went the technical school route instead of a university. Before he could get his bachelor's degree, he began a landscaping business. Clients were happy and the business was successful. His second business, a sportswear company, fared well until some mismanagement of funds. White moved on to document management, and when he saw the need for better cloud management in the government sector, he founded CloudPWR. His plan is for a more altruistic company in the next go-round  It is precisely because he concentrated on being that revenue hawk in his previous companies that he now has the ability to focus his efforts on "giving back" to his community.

Lastly, he recommended studying the Securities Act of Washington, to make sure you're protected when handling employees and possible future employees.

My (Work In Progress) Mission and Vision Statement

"To create an online database that keeps track of your computer games -- and everyone else's."

My goals are to keep this statement short but informative. I think this gets the basic idea of the website across without overloading the reader.

"[my company]’s purpose is to become the premier site for information on computer games by providing access to an online database that is easy to use, intuitive, efficient, and content-heavy. We will continually gather information from our customers for real-time updates, and respond to usage needs and requests in order to ensure that we meet their desires."

This statement still needs some work but I think this is a good basic outline that I can tinker with for my business plan. The core principles of the site are being easy to use and, most importantly, being efficient, so that needed to be stated somewhere.

John Dimmer

John Dimmer is a successful businessman and entrepreneur who knows that the financial side of a business is at least as important as the inspirational side. As he put it, “The two most important parts of a business are The Big Idea and Funding.” Dimmer wanted to run his own business, and had several ideas to do so.  However he was smart enough to know that his good ideas were not enough. He felt that he needed some experience, and some money, before venturing out on his own. Having an analytical mind, he went into banking for a few years. In addition to gaining experience, he built contacts and strengthened his skills. It was then that he sought funding for his own projects.

There are three main sources of funding: Equity, Debt, and Investors. Savings and family members (maybe close friends) make up the first. For most of us, that is going to be a small portion of the total. Debt is the second choice. This is certainly possible, especially for a smaller idea. Loans from the Small Business Administration are typically relatively low interest. These work for those who can secure them. However, the third choice is often better for larger projects. Use other people's money through investment. Investors, often referred to as angels, invest in a project in exchange for something, often shares or future returns.

Investors invest in people. It's not enough to show a simple business plan; you have to sell yourself. How are you going to make them money? What are you going to use their money for? What is the end game? One of Dimmer's warnings was that if you seek funding in exchange for equity to make sure you're always above 51% ownership of shares of the business. Majority interest is always to be maintained, no matter how attractive the offer. The first round of funding is just that – the first round. Each "raise" needs to have the next one in mind. Rather than selling out more and more shares to the limit, concentrate on making each share worth more through growth funded by others like angels.

After a few years the company Dimmer was working for, that he had a percentage of specifically for the exit event, was acquired by Luminus for enough money that he could retire. Three weeks and dozens of golf games later, he was bored with retirement. That's when he went into business for his father's company, FIRS Management, and started investing in others. He had come full circle, now taking on the angel role.

One main point I took away is that you have know yourself – what is the reason you want to be an entrepreneur? For Dimmer, it was money. For me, it's both that and to create a product I want to use that does not exist. The former is to eventually fund more of the latter. My plan is deferred gratification. Working hard and smart, living simply, and reinvesting profits mean that a point will come in the future where my money is doing the majority of the work. At that time, concepts such as working for pleasure or having the freedom to do what I want might come into play.

A second main point was one that seems to be repeated in many of the speakers in the class – relationships matter. Dimmer and Andrew Fry have known each other since high school. They've known each other before either had substantial success. That knowledge meant that they knew each other's characters beforehand, and knew they could trust each other.

A Website as Intellectual Property

Great minds think alike, and usually this is a good thing, but not so much when more than one person has the both the same idea and drive to see that idea come to life in a market you're interested in. As much as we would like to hold onto them, ideas cannot be protected. It is only the expression of those ideas that the law recognizes. This can be enough -- if you're first or you offer a clear advantage to using your product over your competitors'.

There are other bidding sites that have better customer service, easier interfaces, and certainly lower fees then eBay, but eBay captured the market early. Others got into the game late, and by then eBay was too well established for serious competitors that weren't offering anything unique.  Sometimes, however, even a well-established site or business succumbs to a competitor who simply does it so much better.

Blockbuster is a good example here. In 2004, Blockbuster had 8000 stores and millions of DVD and on-demand consumers. And then Netflix launched. More services for less money. They did the electronic portion of Blockbuster's business better, and Redbox killed off the rest. Similar ideas, different execution.

There are other websites that have attempted to seize the market in the past, but they've all failed to pick up any steam or a customer base. There aren't any that are the standard for the industry.  They are mostly clunky, not intuitive, and not attractive, and they end up failing. My plan isn't so much to protect my property, but to be the first industry-standard quality site of its kind. There's one potential competitor from the makers of RateYourMusic who have already established a loyal customer base and can advertise on their own site for a new project.  They are in closed beta after a successful crowdfunding campaign several years ago. Getting a quality product out quickly is essential for my success.

While a list cannot be copyrighted, a database can, and that's what my site will have. It will have its copyright notice and terms of service listed. Much of the information will be user-submitted, and their submission will assign that information to the company. Information will be able to be used, with attribution. In addition to advertising the site, this attribution on users' sites will help with SEO. The more links, the higher the ranking, the more users submitting data, the more links, the higher the ranking, the more users, etc.

The World Intellectual Property Organization has an excellent write-up on the specifics of protecting the intellectual property of a website. I've linked it here for accessibility.