startops

Herbert had tidied up the apartment to the best of his abilities. There were still stains on the carpet from spilled drinks, and a few cigarette burns on the sofa, but it looked presentable. He had even convinces Startop to get a haircut, or at least let him take some scissors to the messy red hair and brining it back to shoulder length. All of this was done in anticipation for a new roommate they were getting. Someone to help with rent and bills.

He heard a knock on the door and opened it a few inches.

“Is this the pizza, or are you the bloke who’s supposed to be moving in?”

south-park-blonds

The link above is to the first article I ever read about the web business, and still today a great reference for me in re to building a team.

Props to Steve Newcomb (who I have never met) for writing it, and kudos to Ryan Ferrier (who is now a friend) for contributing.

Team building is really the most important part of any startup. Keep it small, keep it tight, really enjoy your work and who you do it with. When everyone is happy working on a shared vision, even if the product fails, you have still succeeded. There is no substitute for the experiences and friendships, and believe me, you will try again together shortly thereafter.

Having done this for a little while now, I will add some of my own thoughts and good advice I have received:

1. You are not “recruiting” or “hiring”: Recruiting sounds creepy, and gives me heeby jeebys in re to recruiters. Don’t use recruiters. Hiring is really just the handshake and paperwork at the end of along process.

2. DIY: You cannot outsource hiring to a recruiter or an assistant. A startup houses a founder’s product and only a founder can sell it effectively to A-level players.

3. Go down the rabbit hole: Ethan Bloch, formerly of Flowtown, terrified me with this phrase at an Unleashed Talent conference earlier this year. What he meant was: you cannot simply post a job posting and expect to handpick a great addition from a stack of solid resumes. Building a team is a nonstop, live-in-it, up to your ears process. If you are not regularly in the community, attending meetups and hacknights, and constantly meeting people in other companies, you will not be ready when the time comes to bring on someone new. Additionally, good talent (I hate that phrase) is not coming to you. You have to go out and hunt it, both in the live world, and via stalking on LinkedIn.

4. Look in the right places: 37signals, GitHub, Forrst, Dribbble etc. if you must hunt online or post a resume somewhere.

5. Use your network: If someone told me today, “we really need a new front end developer,” I would not even think of a job posting or a poster. Immediately, I would ask every person on the team if they knew of anyone available. If nothing, the phone calls to friends would start. And ideally, you’d have a couple temporary solutions already available as friends.

Monday 29th Aug. [1775] went out to breakfast with the General and to take my leave of him and the Ladies. I found the girls up and ready for their march breakfast was on the Table and down I sat among them like an old Acquaintance, tho’ this is only the seventh day since my introduction. It would be seven years before I could be as intimate with half the World. But there is so much frankness & freeness in this Family that a mean must be dead to every feeling of Familiarity who is not familiarized the first hour of his being among them. Nature has given them at Albany what the Tour of Europe could not give to Mr. Startope with all Lord Ches-’ Assistance. They would not let me leave them without some mark of kindness, and therefore loaded me with Grapes which they plucked fresh from the vines themselves.
—  Journal of Tench Tilghman (1876)

I LOVE this post on how to land meetings if you’re a startup. I’ve done so many of these things and they definitely work.

If I may offer some further ideas:

  • Scouring the internet for emails definitely works. LinkedIn is a great resource if you have a huge network because you’re often a connection or two away. Use those, but only if they are legitimate contacts.
  • Don’t do biz dev occasionally. “Networking” is not a real thing. If you’re in a new business, live in that industry (meetups, hack nights, expos, conferences etc.), and eventually you’ll have real work related friends, not “contacts”.
  • Involve higher ups and management. Growing a business is everyone’s job. It’s a lot like hiring in that respect.
  • Focus on partnerships, not “sales”. Biz Dev and sales can be related, but understand your long term goals are relationship building, not selling.
How should I handle my bookkeeping?

Bookkeeping, not only an awesome triple double-letter word, is effectively the recording and analyzing of business transactions during the operation of a business. It is essential to have your “books” in order for taxes at the end of the year, and more importantly for receiving any type of financing. Even a simple line of credit from a major bank would require complete financial statements: Profit and Loss, Balance Sheet, etc.

If it is not too complicated, such as minimal income and basic expenses, you can probably buy Quickbooks and do it yourself. Certainly at the beginning, it is simple enough software to use, and just about anyone could learn quickly how to add an invoice, receive a payment, or note an outgoing wire.

However, with growing numbers of transactions, this gets super burdensome very quickly. Not only do you have to remember to save receipts and enter transactions into a bookkeeping software (such as Quickbooks), it really disrupts the workflow in performing more business-critical tasks.

This problem is compounded when transactions get more complicated. Is the purchase of that computer an expense or considered depreciating property? How do I record a half-paid invoice? How does a bank deposit get split into multiple customer accounts? etc.

These problems are easily solved by hiring a professional bookkeeper. If you already have a CPA/accounting firm, it is pretty easy to ask them to recommend a couple bookkeepers. If not, craigslist, or other recommendations. Most bookkeepers are freelance and contract with multiple companies, and may or may not be attached to a CPA.

Picking a bookkeeper should really use the same criteria as hiring an employee. Will they fit in with the team? Are they experienced and knowledgeable? Can they work well with the CPA? How much will they cost AND how fast do they work?

Once hired, you can be assured your books will be in good condition at all times, allowing for up to date financial reporting, and offering more regular financial and accounting advice at a much lower rate than a CPA.

Setting up a workflow with a bookkeeper is generally fairly speedy. They’ll need to come in about 2-6 times per month, depending on volume. They’ll need some basic access to your banks for deposits and statements. There will be some setup of new software (just use Quickbooks, it’s standard). And I also recommend setting up both a physical and digital inbox for things like expense reports, receipts, and incoming checks to keep everything organized and efficient when the bookkeeper comes in.

Contracting an external bookkeeper will save you a ton of time and headache, while improving efficiency and overall financial visibility and accuracy.

Getting Started in Biz Dev in a New Industry

I was recently hired (on a paid trial basis) by Lovely, a consumer facing apartment search application, that I absolutely love.

My role is defined under the general umbrella of business development, but basically over the past two weeks I have been focused on generating new supply (apartment listings) and findings ways to monetize (revenue).

I could write several blog posts about how to land a non-technical gig at a startup, but since it seems everyone has already done that, I’ll summarize:

  • craft a story and platform: turn your resume into one clear story or tagline that summarizes you, and then support that with twitter, blog, linkedin, angellist, etc.
  • find an entry point: to jump into tech, you’re probably not going to land a hot startup gig without some experience in tech. the year+ I spent at Citrusbyte was immensely valuable. find your Citrusbyte and work there first, to learn the industry and concepts.
  • find your company, or three: spraying resumes around will never work. find a couple companies you are legitimately crazy about, and throw yourself at them. do whatever it takes (free trials, product/biz ideas, attend conferences they are at).
  • get an intro: finagle a way into a company by using your network, your network’s network, your network’s network’s network, or create a new network by reaching out to any and everyone at the company and their investors (use twitter, linkedin, meetups, etc.)

Anyhow, finding yourself in charge of biz dev in a new industry can be daunting. The key is to be prepared and be relentless.

Be Prepared (Research): before ever starting into the apartment industry, I talked to everyone I knew about real estate, looked up every company I heard of and followed them on twitter, looked up related startups on angellist, went down the rabbit hole on quora, and signed up for every meetup on the topic in SF.

Be Relentless (Hustle): day 1 and 2 involved, at a minimum, shooting emails out to every property management group in SF, every national property manager, every other internet listing service, and every related individual I could find. when that didn’t work, phone calls followed. when that didn’t work, I made office pop-ins. at one point, I discovered a conference and flew there on a few hours notice and shook every hand I could find. when I made a meaningful connection, I followed up, went deeper, learned more, and got intros from that.

It may sound like a shotgun approach, but really you are building a base. Most importantly, a base of knowledge, because there is no substitute for having an understanding of the industry ecosystem that comes from having walked in it. But also, a base of contacts, so that you can reach out to them for advice and introductions.

I should say also, that the only real contacts are the ones you legitimately become friends with - so engage sincerely and openly.

The last two weeks have been a whirlwind, but I’ve loved every minute of it.

Believe me, if all parties involved are ok with it, you want to hire someone as a contractor rather than an employee. Way less paperwork, liability, responsibility, tax complications, termination difficulties, and things like health insurance and unemployment are out the window.

However, this is one of the biggest hot button HR issues out there, and falsely classifying employees as ICs can get you in a heap of trouble. Government agencies are quick to look out for this in an audit or in the event of a claim as they can collect huge payments from an offending company. The cost is huge: back taxes, unemployment, disability, unpaid bonuses or vacation time to the employee, interest, and the contributions that the employee would have made as well.

Now, there are a lot of good windows to hire an independent contractor, especially for a trial period or specialized outsourced task. It is crucially important, however, to structure the engagement legitimately as an independent contractor type.

-have the individual form a company and hire the company

-structure the work into specific, defined projects

-pay in relation to those projects, rather than hourly, if possible

-don’t supervise - let the IC work in their own way to achieve results

-don’t mandate working from your offices

-require the IC use their own equipment and computer

And most importantly, if the time comes, hire them legitimately as an employee. Better to be safe and keep both parties happy.

One other thing that goes unmentioned:

The concept of a “Runway”, which is effectively the amount of money in the bank divided by your monthly burn. A startup’s runway is the amount of months it has left to gain traction until it burns out or needs to raise more money in order to continue.

Also, Eric Ries prefers the term to refer more to the numbers of pivots a startup can make before its bank account is drained, not simply operating months.

Health Insurance Hacks for a Startup

Obtaining company health insurance was a big goal of mine when I first started in operations at Citrusbyte. I knew all the employees would be stoked to finally have it, and it is often a non-starter to hiring great new team members if a company does not.

However, it was initially a maddening maze of acronyms and concepts to figure out. HIPAA, HMO, PPO etc. And every situation is different, and little obvious questions you don’t think to ask can have a big impact on choosing a provider, and on and on…

Here is a pretty simple set of basic guidelines to get health insurance quickly and cheaply:

  1. Use an independent health insurance professional (HIP): Insurance professionals are largely paid on commission by insurance companies (free for you!) - and are experts on the entire landscape. They can get quotes across different providers, answer questions, and even explain new benefits to employees. It would be crazy to not work with one. Here is my favorite:
    Nicole Winner of WinnerQuotes; 805-804-5288; nwinner@winnerquotes.com
  2. Get early feedback from your team: A startup isn’t a ton of people, so you should be able to get some quick consensus on what types of things people are looking for. “Oh, I’ve heard this company is awesome!”, “I never go to the doctor”, “I don’t care about dental”, and “I already have my own coverage and don’t need more” are all great pieces of feedback. While you’re at it, gather up everyone’s name, zip code, and DOB to expedite getting quotes from providers.
  3. Understand your goal: There are a lot of reasons to get health insurance. Some companies just want to say they have it, others need to lower their pre-tax income. Are you expecting a lot of health issues and actually want a richer coverage? At most startups, especially with a lot of young team members, you’re trying to save cash while having some benefits for employees, which means an inexpensive plan that covers against emergencies.
  4. HMO vs. PPO: This is the single biggest question that really is up to the majority of a startup’s team. HMOs are much cheaper, but you are stuck largely within their network of doctors. How much does everyone care about going to exactly the doctors they choose? At a young startup, the answer is probably not much.
  5. Ask a ton of little questions: With health insurance, there are so many little rules and technicalities that you really want to ask everything you can think of before choosing a plan. It is not fun to end up stuck in a plan for a year after finding out some horribly inconvenient fact that didn’t seem important during the vetting process. Some samples: Can employees opt to not have the coverage? Does this include emergency rooms? Can I switch to a different plan? When can the company switch to a different provider? What if someone quits? Is there a waiting period? What if Jeff lives out of state? Is dental included or separate? What if someone wants health but not dental? Is this percentage paid by the patient or the provider? What’s the most I could spend in one year in a disaster? Are family members included? Is there a maximum benefit a patient can receive? Is a routine visit free if the deductible is waived? What is the company paying for vs the employee?
  6. Just get Kaiser (keep it simple): Kaiser’s care has gotten so good in recent years that it is a simple solution for a young startup, and incredibly cheap. It’s a ton of bang for your buck, with rich coverage, and a clean user experience a lot of young people love. This only makes sense though, if:
    -you are on the west coast or another Kaiser area
    -the team is ok going to Kaiser doctors and centers exclusively
    -the entire team is based in one state (usually, complex issue)

If that is the case - the best thing to do is to offer employees a selection of 2-4 Kaiser plans to choose from (you can offer multiple at once). The startup can pay for the basic plan completely, and employees can opt to pay any difference (pre-tax!) to upgrade to a richer plan.

Oh, and make sure there’s a three month waiting period for new hires. Too many leave and it’s not fun to deal with COBRA (extensions of health insurance for ex-workers).

Locating and Hiring Foreign Developers and Designers - H-1B Visas Explained (3)

Part 3: Moving Day
This is the third in a three-part entry on hiring developers abroad. Click here for Part 1: Finding New Team Members, and here for Part 2: The H-1B Visa Process.

Now that you have found, vetted, and completed all the paperwork for a great new developer on your team, it is time to move them out to the US. This may seem like the easiest part, but there are definitely some things to watch out for.

Mainly, moving to a new country is not easy, so there may definitely be some culture shock or anxiety around the whole experience for a while. A startup is like a family, so you should do whatever it takes to make everyone feel welcome. Ease the transition as much as possible.

That starts with buying a flight (find the best mutual date) and arranging for an apartment/hotel for the first couple months. Or, if you have enough space, putting them up in your apartment or house. It is much easier to feel comfortable in a new country when that is taken care of.

Everything else is new as well, so the team will have to play tour guide, escort the developer to open a bank account, and assist with getting a phone plan. The two most challenging logistical items for any new arrival are probably:

  • Driver’s License and the DMV experience
  • Getting a social security number (which they need before they can be put on payroll)

Neither of these are that hard once the overall experiences of the team have been explained to the new dev. Well, maybe the DMV, but there’s no changing that!

Social activities are not just going to appear out of thin air for someone just arrived, so the team should invite them to whatever it is they have going on.

Perhaps most importantly, remember that emotionally and psychologically the move can be taxing, so as odd as it sounds being available and reaching out to see how everything is going are critically important.

There are certainly some unique logistical and administrative hurdles to hiring developers and designers abroad, that can at first seem daunting. Having gone through the process a few times, I can attest that it is not as big of a hassle as it appears. It is important to keep in mind that you can have engineers working on projects from abroad as independent contractors while this whole process is underway.

The benefits of accessing worldwide new friends, team members, and assets in engineering are too great and should never be prevented by logistical hurdles.

Would be a joy to see more international developers and designers working at US startups!


DISCLAIMER: I am not a lawyer and am not giving legal advice in these posts. I am simply sharing my thoughts and experience in hiring developers abroad and completing the H1-B visa process. You should always consult with a lawyer before working on H1-B visas, or any independent contractor or employee issues.

Locating and Hiring Foreign Developers and Designers - H-1B Visas Explained (1)

Part 1: Finding New Team Members
This is the first in a three-part entry on hiring developers abroad. Click here for Part 2: The H-1B Visa Process, and here for Part 3: Moving Day.

Many many months ago, I read this post about the difficulties of hiring developers at a startup. There’s also this on a surplus of founders leading to a shortage of good developers, especially in SF. But, it wasn’t until I read this post on the difficulties of hiring developers abroad that I became inspired to write this article. What happened here to Pau should never, ever happen to any great developer, worldwide, and it effected me deeply.

There are plenty of great developers (and designers!) out there that would be overjoyed to write code at your startup.

They just don’t live in this country. Yet.

We had an amazing team of 15+ Ruby and Python engineers at Citrusbyte. Clients loved them, they fit in amazingly with the team, and their code was top-notch. The vast majority came from countries like Argentina, Uruguay, and The Philippines. We also had two great international designers.

I personally had the pleasure of onboarding a good chunk of them, and now count them among my friends. Not only were we and our clients getting top-quality work not usually available at a consultancy - we were able to create a rich and culturally diverse environment that transcended day to day business (that sounds fluffy but it’s true).

So - it’s going to take a little extra work to find foreign devs and designers. But, guess what? You were going to work extra hard anyway, competing with a mass of other startups for really scarce, local, quality engineers. Foreign developers have a bit more operational work associated with hiring them - but you’re accessing more available and higher quality engineering talent.

A couple brief notes:
-This post was originally written focused on developers, but has been expanded to include designers. It still may have a developer focused feel to it, at times.

-While this article focuses on H1-B visas, I also feel compelled to mention http://startupvisa.com which I recommend any reader pledge their support to. The Startup Visa legislation is working its way through Congress, and supports entrepreneurs staying in the US with new companies.

Here’s how to find developers or designers abroad:

  • Use your network: Your existing development team should be working on open-source projects, either professionally or personally. Often, there are contributors on these projects who make great targets to bring aboard. Ask around - the odds of finding a talented, available developer in the right programming language are high. If you’ve already hired someone internationally, they probably have friends/contacts they can recommend who are eager to join them. Again, ask around within your existing dev team.
  • Use your tools: There are plenty of places on irc, Hacker News or GitHub where you can find foreign developers. For designers, Dribbble is really the big winner, sorting by location, skill, or popularity (based on number of likes or comments). Again, I’d recommend exploring with a developer who is already on board and knows the landscape. I have not seen as much success going through Mechanical Turk or Odesk.
  • Conferences: Next time you are taking a vacation - pick a location with a language specific conference happening at the same time. See baruco, RubyConf Argentina, RubyConf Uruguay, euruko, etc. Attend the conference - and chat up everyone you see. The conference organizers are a great resource and generally are awesome programmers themselves, or can recommend some.
  • Craigslist: I have seen a surprising amount of success posting on local craigslist boards. It generally works better when you are traveling abroad so that you can meet with people in person.
  • I am much less of a fan of hiring foreign consultancies, although in certain situations it can work out well - usually on smaller, more specific projects.


Checking for fit:
Reach out via whichever channel the initial discovery came from. If a referral was involved, definitely go through the shared connection. It is stunning how receptive developers are compared to the US, largely due to the relative levels of competition for their services.

The basic pitch is: “Hey, want to work on [insert challenging technical problem] for our company [insert awesome company description] with a great development team [insert open source contributions and notable team members]? We’re based in the US, can hopefully triple your salary, and think you’d be a great fit. If all goes well, we’d love to have you move out here as well!” For designers, the pitch is a bit more product focused.

A note on money: this is not going to be a main selling point with developers. Instead, focus on the product and team. However, I believe strongly in paying people what they’re worth - and that means their market-rate in the US (with some minor adjustment for cost of living). If you reward developers and designers abroad fairly for their value, you will find that salary does indeed become a more serious consideration, especially if you are talking 2-4x what they currently earn.

It is imperative for both sides to have a feeling-out period, or trial project. This typically looks like this:
-Hire developer as an independent contractor for a 1-3 month term.
-Simple, easily understood contract agreement.
-Fair market value - flat monthly rate.
-Integrate them immediately onto a live project with an existing team member or two.
-Constant communication: irc, skype video. Get their feedback, give yours.

While having everyone in the same room is important for a product minded startup - it is surprisingly effective working over irc and skype for developers. The communication barrier is less, and workflow is less obstructive.

If all goes well and they are well reviewed by you and other devs - fly them out and put them up for one week to three months to get a better sense of the cultural fit. More on that process and the H-1B process in Part 2.

DISCLAIMER: I am not a lawyer and am not giving legal advice in these posts. I am simply sharing my thoughts and experience in hiring developers abroad and completing the H1-B visa process. You should always consult with a lawyer before working on H1-B visas, or any independent contractor or employee issues.

The ftw quote:

And yes, you’re right, Steve Jobs didn’t manage this way. He was a dictatorial, autocratic asshole who ruled by fiat and fear. Maybe he made great products this way. But you? You are not Steve Jobs. You are not better at design than everyone in your company. You are not better at programming than every engineer in your company. You are not better at sales than every salesperson in the company.

It is not, as it turns out, necessary to be a micromanaging psychopath with narcissistic personality disorder (or even to pretend to be one) if you just hire smart people and give them real authority. The saddest thing about the Steve Jobs hagiography is all the young “incubator twerps” strutting around Mountain View deliberately cultivating their worst personality traits because they imagine that’s what made Steve Jobs a design genius. Cum hoc ergo propter hoc, young twerp. Maybe try wearing a black turtleneck too.