The Secret to Entrepreneurial Success: Bootstrapping

“The advice I’d give to anyone wanting to start a company today would be just the opposite of what they tell you in B-school. I’d tell you to “Bootstrap” it.

I define “Bootstrapping” as the act of starting a business with little or no external funding. Bootstrappers don’t write lengthy business plans, chase deep-pocketed investors, or indulge in overly academic market research exercises. Instead, they focus all of their considerable energy, brainpower, determination and skills on creating a business that can actually succeed in the real world.

In fact, I can offer at least eight solid reasons why Bootstrapping will consistently deliver better results than the “fund-and-burn” model that has become entrenched in Silicon Valley and elsewhere:

1. Bootstrapping ensures that you build your business on a legitimate, real-world value proposition…
2. Bootstrappers initiate the critical sales learning process sooner, not later…
3. Bootstrappers don’t waste money; they make it…
4. Bootstrapping accelerates time-to-market and time-to-profitability…
5. Bootstrappers are less likely to make big, fatal financial mistakes…
6. Bootstrappers are forced into unconventional thinking…
7. Bootstrappers have more freedom and flexibility…
8. Bootstrappers wind up owning much, if not all, of what they create.”

Read more in this SandHill.com article.

Immigration Regulations Encourage Offshoring

According to this InfoWorld article, the immigration policies and procedures of the United States encourage offshoring, stating:

“Why go through the expense – including not just the visa fees but also the legal fees needed to process the visas, the time it takes to get new employees trained and up and running, plus the uncertainty, delays, and lack of permanency of investments you may have made in hiring foreign workers – when you can just contract a company outside our borders and still get most of the benefits of having the best and the brightest working for you?”

Corporate Blogging Risks and Policies

“Corporate blogs, it seems, are everywhere. If you think of blogging as something your employees do on their own time, and shudder at what they might be saying about your company, you’re not alone. Until recently, corporate America knew blogging primarily as a difficult employment issue, one that led to several high-profile terminations when employees posted material on their personal blogs that companies deemed offensive or detrimental to the company’s interests. But now more and more businesses – including Microsoft, Google, Yahoo and Ask Jeeves, to name just a few – have realized that company-sponsored blogs offer a means of communicating with their customers and other constituencies in a direct, informal and participatory way. The basic idea is that some or all employees are allowed to post comments on company-sponsored blogs. The public can access these blogs and generally (but not always) can post their own comments too.

While corporate blogs offer novel opportunities, they also present significant legal risks…To minimize the risks, companies should carefully consider their blogging strategy and take proactive steps to minimize potential exposure. Such steps may include:

Creating a written policy for employees that sets out clear guidelines for corporate blogging and raises awareness about possible pitfalls. Companies may wish to have separate guidelines for employees’ discussion of the company in their personal blogs.

Establishing terms of use for the corporate blog and posting appropriate disclaimers that limit the company’s liability for third-party statements and other claims.

Regularly monitoring the corporate blog for content that violates terms of use, employee policies or applicable laws.

Taking the steps required to qualify for the safe harbors available under the Digital Millennium Copyright Act.

Ensuring that any personal information gathered from users via the corporate blog is handled in compliance with applicable privacy laws and the applicable privacy policy.

Archiving corporate blog content in a well-organized and readily available form.”

From this Howard Rice alert via this VentureBlogpost.

Open Source Software Primer

“The goal of this paper is to help the reader gain a basic understanding of the differences between open source and commercial software in terms of some of the practical implications of each and some of the broader issues that software developers, governments and commercial enterprises might want to consider in terms of their own policies and acquisition activities, all bearing in mind not only the immediate costs and benefits, but also the longer range implications of how their decisions today will affect their economies and their standing in the world technology market tomorrow.”

Via this I/P Updates post.

Grokster Supreme Court Battle Set

“The U.S. Supreme Court will hold a landmark hearing Tuesday in MGM v. Grokster, an intellectual property case that will help set the legal boundaries for copying files from the Internet.

The case pits the entertainment industry against companies that offer file-sharing services. A group of 28 movie and record companies are fighting StreamCast (the distributor of Morpheus) and Grokster, the peer-to-peer software firms.

Tuesday’s hearing is part of an appeal by the entertainment industry of a federal judge’s ruling last year in the case against the file-sharing firms. The judge found that the defendants shouldn’t be held liable for end users committing copyright infringement, citing the 1984 Sony Betamax case, where Sony won the right to sell its home video tape recorder while the movie industry fought to ban VCR sales.

The stakes are high. The most famous file-sharing company, Napster, nearly collapsed as a result of protracted battles with the entertainment industry. Judges found that because Napster maintained centralized servers and facilitated searches for individual songs, the company was liable for policing content.

The companies involved in Tuesday’s hearing offer a decentralized network and are therefore blind to users’ activities. The case will likely be determined by the summer.”

Read more in this RED HERRING article.

Who Owns Your Software? Without a Written Agreement, the Software Developer May

This DeveleperDotStar.com article stresses the absolutely essential requirement that written agreements be entered with independent software developers, preferably prior to their beginning work, stating:

“Businesses all over the United States hire software developers to create software that offers a competitive advantage or cuts operating costs. Frequently both business owners and software developers enter into these agreements to develop software without addressing the issue of copyright. How does copyright law apply to these kinds of agreements, especially in cases where copyright ownership is not addressed explicitly? Who owns the software?…

Copyright ownership is critical, since the copyright owner will have the exclusive right to reproduce, distribute, and create a derivative work (among other rights)…

The Federal law addressing this situation is entitled The Copyright Act of 1976, 17 USC 201(a). The general rule is that the author of the work owns the copyright. The Copyright Act, however, contains an important exception called the “work for hire” doctrine. If the facts establish that the “work for hire” doctrine applies, the person for whom the work was created (in this case the shop owner) would own the copyright. The “work for hire” doctrine applies when employees create works within the scope of their employment or a situation where a certain type of work is specially ordered or commissioned by which an express agreement is to be considered a work for hire…”

The article continues by referring to this copylaw.com piece that states:

“For a work created by an independent contractor (or freelancer) to qualify as a work for hire, three specific conditions found in the Copyright Act must be meet:

1. the work must be “specially ordered” or “commissioned.” What this means is the independent contractor is paid to create something new (as opposed to being paid for an already existing piece of work); and

2. prior to commencement of work, both parties must expressly agree in a signed document that the work shall be considered a work made for hire; and

3. the work must fall within at least one of the following nine narrow statutory categories of commissioned works list in the Copyright Act:

(1) a translation, (2) a contribution to a motion picture or other audiovisual work, (3) a contribution to a collective work (such as a magazine), (4) as an atlas, (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as answer material for a test, (9) or a supplementary work (i.e., “a secondary adjunct to a work by another author” such as a foreword, afterword, chart, illustration, editorial note, bibliography, appendix and index).”

Software does not fall under any of these categories, making essential a written agreement spelling out the ownership of copyright.

Everything You Always Wanted to Know About Trademark Searching

“Trademark searching is an art, and the analysis of trademark search results is an arcane art, but making the effort is critical. A well thought-out search and analysis will limit the risk that a company’s product marketing will be disrupted, and the company treasury raided, because the company approached too closely the mark of a competitor with priority rights.”

From this comprehensive article by Gordon & Rees, LLP via this :this Invent Blog post.

NVCA Provides Model Venture Capital Documents

The National Venture Capital Association provides this template set of model legal documents for venture capital investments put together by a group of leading venture capital attorneys. The model venture capital financing documents consist of:

Term Sheet
Stock Purchase Agreement
Certificate of Incorporation
Investor Rights Agreement
Voting Agreement
Right of First Refusal and Co-Sale Agreement
Management Rights Letter
Indemnification Agreement

“The model documents aim to:

-reflect and in a number of instances, guide and establish industry norms
-be fair, avoid bias toward the VC or the company/entrepreneur
-present a range of potential options, reflecting a variety of financing terms
-include explanatory commentary where necessary or helpful
-anticipate and eliminate traps for the unwary (e.g., unenforceable or unworkable provisions)
-provide a comprehensive set of internally consistent financing documents
-promote consistency among transactions
-reduce transaction costs and time…

WHAT IS THE VALUE OF THESE FORMS?

…By providing an industry-embraced set of model documents which can be used as a starting point in venture capital financings, it is our hope that the time and cost of financings will be greatly reduced and that all principals will be freed from the time consuming process of reviewing hundreds of pages of unfamiliar documents and instead will be able to focus on the high level issues and trade-offs of the deal at hand.”

Ten Tips for Perfecting Your Elevator Pitch

The point of an “elevator pitch” is to get your prospects interested enough in your company to get their card or refer you to someone else who might be. You don’t need to reel them in; you just need to get them on the hook.

Here are 10 ways to make sure your pitch gets a nibble from a big one.

1. Be Concise…
2. Solve a Problem…
3. Tell Them What They Want to Hear: Describe your product or service and its benefits succinctly. Depending on your audience, you may also have to:

define and size the market
explain how you’re going to make money
tell who is behind the company and
frame the competitive landscape and your advantage in it.

4. Speak in Plain English…
5. Grab the Listener’s Attention…
6. Ask Qualifier Questions….
7. Tailor Your Pitch to Your Audience:

To investors, the pitch focuses on your team and how you plan to make money.
To customers, your focus should be on the problem you can solve for them.
Potential partners want to know what you’re building, why it’s important, and why you’re going to be a success.

8. Show Your Passion…
9. Conclude With a Call to Action…
10. Tell a Consistent Story…”

From this article from Stengel Solutions.

Oscar Romero, Shepherd of the Poor, Mourned

Archbishop Oscar Romero
Originally uploaded by TigerTigerTiger.

“In 1980, in the midst of a bloody U.S.-funded war the UN Truth Commission called genocidal, the soon-to-be-assassinated Archbishop Oscar Romero promised history that life, not death, would have the last word. ‘I do not believe in death without resurrection,’ he said. ‘If they kill me, I will be resurrected in the Salvadoran people.’

On this 25th anniversary of his death, the people will march through the streets carrying that promise printed on thousands of banners. Mothers will make pupusas (thick tortillas with beans) at 5 a.m., pack them, and prepare the children for a two-to-four hour ride or walk to the city to remember the gentle man they called Monsenor.

Oscar Romero gave his last homily on March 24. Moments before a sharpshooter felled him, reflecting on scripture, he said, “One must not love oneself so much, as to avoid getting involved in the risks of life that history demands of us, and those that fend off danger will lose their lives.” The homily, however, that sealed his fate took place the day before when he took the terrifying step of publicly confronting the military.”

Read more in this article: Oscar Romero: Shepherd of the Poor.