If I am to believe this blog post, HelpAReporter, a web site that helps journalists connect with sources, has sent a threatening legal letter to a free competitor called PRManna:

From the blog post summary:

I stole his idea (bullshit, his service was a mailing list when I built PRManna, and there are tons of sites for this purpose)

They’re demanding that I transfer ownership of PRManna.com to Peter Shankman’s company

I am a HARO user. The first thing this news prompted me to do is register with PRManna. Then I sent an e-mail to HARO asking if this is true (I have no reason to doubt the blog post, but it’s always a good idea to double-check).

This case is htting a nerve with me. People who have seen me speak on the topic (I have covered Intellectual Property at several sessions of the Founder Institute) will recognize this image: it illustrates my view of the US judicial system.

The point: anyone with money can sue anyone else who has less money and put them out of business. It doesn’t matter whether you have a case or not.

The HARO vs. PRManna case is a perfect example of what I say in my class: before you enter any market, check out the existing competitors and understand how threatening you are to them. It seems that HARO was making almost a million dollars a year, so of course offering a competing free service was bound to anger them.

Never mind that ideas can’t be protected on a whim (it takes a patent to protect an idea, in case you forgot, and the idea needs to be novel and non-obvious, among many other requirements).

My support is with the PRManna folks until I see some kind of evidence of wrongdoing on their part. I’m not holding my breath.

Do you wonder if your startup could benefit from having a co-founder? Some people are worried that adding a co-founder will slow them down, it will take too much time to discuss everything. They also think they can pretty much figure out everything on their own so why take the risk to add a co-founder? Statistics on the question are inconclusive.

The answer is to apply the 90/50 rule for co-founders. If you tend to agree 90% of the time with your potential co-founder, form a team. If you tend to agree about 50% of the time, keep off, it would kill your startup.

Why?

You are smart. You can figure most stuff on your own, most of the time. But just once in a while, you’ll go off and embark on some goofy plan. You need a second look, someone you trust, to tell you that you are wrong. The rest of the time, you need a co-founder who shares your vision. Hence, you should agree 90% of the time.

If you only agree 50% of the time, it means your co-founder doesn’t share your vision. Working together will be very painful. You basically don’t agree on the goals of the product, who your target customer is, or which technology to deploy to solve your problems. You’ll keep arguing. It will be destructive.

Remember: you need vision alignment, a co-founder who watches your back and who you completely trust. Anything below 90% is calling for failure at the first sign of trouble.

For a longer discussion on compatibility criteria, read this excellent post from venturehacks on the topic.

Do you like this kind of shorter blog post, not quite short enough for a tweet, but not quite the usual length either – do you want more details or is the format good enough?

I hate spam. Opt-out is the minimum that I expect from all decent sites. Opt-in would be nicer.

Imagine my surprise when I received the following card in the mail:

When I opted-out, I thought I was sending a clear message to the company that I didn’t want them to contact me and send me adverts and other junk I don’t need.

But it looks like smart lawyers found a loophole: apparently I only opted-out of receving e-mail communications. I didn’t opt-out of receiving regular mail, phone calls, personal visits at night, or being followed by car everywhere I go.

Standing outside my windows with a megaphone yelling “special offers” and “marketing suggestions”? I guess their legal department would see nothing wrong with it.

I was curious so I read Google’s privacy policy again. I couldn’t find a good definition of what opting-out meant:

For certain services, such as our advertising programs, we also request credit card or other payment account information which we maintain in encrypted form on secure servers.

I don’t know how good Google’s encryption is, but printing my full name and address on a postcard without my consent doesn’t sound like strong encryption to me. And yes, my physical address falls into the payment information category. Why else would I provide it to Google? Everything is done by e-mail.

We may combine the information you submit under your account with information from other Google services or third parties in order to provide you with a better experience and to improve the quality of our services. For certain services, we may give you the opportunity to opt out of combining such information

I love the expression “provide you with a better experience.” It’s a blanket statement that effectively authorizes Google to legally do whatever they want with my personal information, since they can rationalize pretty much any behavior by claiming that it’s for my own good. Combined with the fact that they may or may not let me opt-out, I don’t feel too good about my options.

The full card is below:

Question: I own a valuable dot-com domain, but I’m not a programmer. I think it could sell for a million dollars someday, with the proper traffic. What sould I do?

A: The basic idea here is to build a site to take advantage of the great domain name. By going on FairSoftware and listing your site, you should be able to find a technical co-founder who can program your site or develop content for what is currently a parked domain.

Let’s assume it works out pretty well and the combination of the domain name plus the site content becomes successful. An acquirer comes along and offers you one million dollars.

Sweet. But who pockets the money?

You both agreed to the Software Bill of Rights. You are still the sole owner of the domain name, but your technical co-founder is the copyright holder of the site program and content.

You could sell just the domain name and keep the million dollars for yourself. But to do that, you’d have to shut down the site first, since you’d lose any rights to your co-founder’s code and content. Then you’d have to rebuild everything from scratch. Probably not a good idea.

Or you could convert your FairSoftware startup into a corporation (this is explicitly allowed in section 3.1 of the Software Bill of Rights), share for share, and then have that corporation be acquired for the million dollars. So both you and your co-founder would share the money, according to the original split you decided when you created your FairSoftware startup.

If you consider that without your co-founder, you would never have received the offer, I think it’s the right way to go.

If you have been reading startup advice long enough, you surely noticed two trends repeated ad nauseum.

Iterate Quickly

Also known as “kill ideas fast”, this advice is saying that your idea is probably not worth the pixels it’s displayed on. Ideas are a dime a dozen, execution matters. You’d be better off with a dumb idea in a large, expanding market!

The advice goes on to recommend that you submit your idea to friends, advisors (maybe VCs). Find people who you trust and are honest enough to tell you that your idea is dumb. Don’t fall in love with your idea, move on, try another one.

Trust Your Guts

Also known as resilience or tenacity: when everyone else tells you to give up, when there is no hope in sight, what separates the successsful entrepreneur from the wanna-be: perseverance. Don’t give up.

Or my favorite quote: Instant success takes years!

Making Sense Of It

The apparent contradiction was especially visible during the latest Founder Institute session in Silicon Valley, since several mentors gave both advice back to back. Some founders couldn’t help but notice.

Here’s my take on the contradiction: both your guts and everyone else are right — partially. It takes a very smart person (you) to figure out the gem that your guts detect and remove the junk that everyone else sees.

So it’s not a contradiction at all. We are just going back to the essence of intelligence: you need to keep thinking about every angle of your idea. If you really believe there is something to it, I’ll believe you. But also listen to feedback because while it may be missing your big picture, it is probably right at least on a tactical level. Your rough idea, as you pitch it, likely has shortcomings and limitations.

It’s your job to figure it out.

Recently, I was contacted by a major TV show, looking to do a segment on what it looks like to be an entrepreneur building a startup from scratch. I am talking major TV show, with an audience in the millions, not some local news channel.

So I e-mailed a few entrepreneurs I know to see who was interested and doing something remotely interesting for a camera: maybe a VC meeting, or attend some networking event.

Believe it or not, but they all turned me down. They were too busy that week. Or at home coding stuff, no meetings scheduled that the TV crew could film.

All turned me down except one. She e-mailed me back right away with a detailed schedule of stuff that could be featured on the show. And she was willing to adapt her schedule.

I was not surprised. I had noticed before how she was the most pro-active of that group of entrepreneurs. A simple tell-tale sign: she was the first to friend me on LinkedIn, when everyone else didn’t dare yet. Think of it: what is the risk of friending someone? Online rejection doesn’t bite.

So she was the one.

What I learned from this: next time you watch TV or hear about a successful entrepreneur and think that it could have been you, ask yourself if you are really pro-active about seizing each and every opportunity. I believe that’s the difference between successful entrepreneurs and dreamers.

70 people showed up at the Hacker Dojo in Mountain View for the first Co-Founders MeetUp. It was pretty clear that everyone enjoyed the event and was quite happy to have been part of the first of what is shaping to become a long series of co-founders meetups (in Silicon Valley and elsewhere).

Basic Format

10 founders had 3 minutes (and 3 slides) each to pitch their company and co-founder opening to the audience. It guaranteed a quick pace for everyone, so that if a company wasn’t of interest to you, it wouldn’t be long before something else would.

Show Your Personal Side

But the talks were not all business. I asked each founder to also cover something unrelated to their startup: share a passion, or something they built that they are particularly proud of (just like the Y Combinator application asks).

It worked. There is a lot of personal choice when it comes to joining a startup as a co-founder. It has often been compared to a marriage, and rightfully so. You need to get to know the other founder(s) you are joining on a personal level. Your decision is based on so much more than just looking at the business potential and 5-year financial projections.

The 10 speakers chose to answer the personal question in different ways. Some decided to share a deeply technical achievement. Others chose to share a much more personal side of their lives. Making that choice was just as revealing as what they actually said. If I was to join one as co-founder, I feel that I now understand them much better. I’m starting to imagine how their personalities differ. I begin to grasp which would be more compatible with me.

It’s all starting to fit.

Downtun, What Downturn?

The other surprise of the evening was the sheer amount of people with ideas and projects. A strong majority have a project and are actively looking for a co-founder. I was expecting more people to be looking for jobs. That’s what the responses on the MeetUp seemed to indicate.

Next time (and there will be a next time!), we’ll make sure that there is a better balance of people looking to join startups.

It’s a testament to the resilience of Silicon Valley that despite the downturn, everyone seems to still be chasing the entrepreneur dream.

Thank you all for making this event a success.

If you are like me, you like the new startup community formed at OnStartups.com. Lots of questions from people looking into creating or advancing their startup, and lots of good answers.

However, a promise from Dharmesh, the founder, was that “startup stars” would participate:

I have a long list of exceptional entrepreneurs I know well enough to arm-twist into participating in the community. Here’s a sample (in no specific order):

1. Adam Smith, Xobni
2. Drew Houston, DropBox
3. Jay Meattle, Shareaholic
4. Mike McDerment, FreshBooks
5. Neil Davidson, RedGate Software, Business of Software
6. Jeff Bennett, NameMedia
7. Brian Shin, Visible Measures
8. Sachin Agarwal, Posterous
9. Peldi Guilizonni, Balsamiq
10. David Cancel, Compete.com, Performable
11. Brian Halligan, HubSpot
12. Alexis Ohanian, Reddit
13. Andy Payne, angel investor
14. Rand Fishkin, SEOmoz
15. Don Dodge, Microsoft
16. Nivi, VentureHacks

The site was launched one month ago now. Where are the stars? I looked up the user accounts and tried to figure it out:

1. Adam Smith: 2 answers
2. Drew Houston: not found
3. Jay Meattle: 7 answers
4. Mike McDerment: not found (and no Mike with significant contributions)
5. Neil Davidson: 42 answers
6. Jeff Bennett: not found (there is a different Jeff who is a good contributor though)
7. Brian Shin: not found (and the Brians are like the Mikes, no significant contributions)
8. Sachin Agarwal: not found
9. Peldi Guilizonni: 7 answers (all on the first day – deserves extra points for trying)
10. David Cancel: 1 answer (on the first day)
11. Brian Halligan: another Brian
12. Alexis Ohanian: not found
13. Andy Payne: not found (and Andys can join the Brians and the Mikes)
14. Rand Fishkin: 13 answers
15. Don Dodge: not found (but understandable considering his latest adventures)
16. Nivi: 1 answer

My point is not to stigmatize those celebrities. They have better things to do. My point is that even if you are not as well connected as Dharmesh, you too can create a successful community. It’s not the stars that made that community, it’s the regular people like you and me.

The top contributors to the site are its two founders. And that’s how it should be: hard work by you the founder. That’s why I love the Internet, the great equalizer. You control your own destiny.

If you are curious about maybe one day doing your own startup, you should know about a new discussion site called Answers OnStartups. It uses StackOverflow’s software but focuses on the art of starting your own company.

The only previous decent online forum covering that topic is the Business of Software forum of Joel on Software.

Which one is better? I’ll give you the quick answer first, then the long answer.

Quick answer: OnStartups.

Long answer: The StackOverflow software is just superior for navigating discussions. A major weakness of the BoS forum is that it’s hard to navigate and find old or related threads. StackOverflow has tags, questions can be sorted many ways, users can vote on them.

There is also a popularity system, badges and points, so users see it as a game. Best answers float to the top, so you don’t have to read an entire thread to extract a few lines of wisdom.

That being said, the main reason why StackOverflow was such a success for technical quesitons doesn’t carry over to startup “business” discussions. With software, there are clearly good answers. Either your 3 lines of code answer the question, or they don’t.

With startup discussions, it’s much more a matter of opinion.

The ironic part of course, is that StackOverflow was designed by Joel Spolsky. The same Joel who is behind the “Joel on Software” site. I guess Joel is teaching us a lesson: nothing spells owning a space as much as owning its top two leaders.

I wish everyone the same success as Joel.

Aucadia.com is a community website aimed at musicians and fans where the fans can get involved with the bands they love.

It’s such a cool project, we had to find out more from Robin and Owen Spottiswoode, the two co-founders.

Alain: Tell us about your product and maybe where the idea came from, or why you think this is important

Robin: The idea came from research I was doing for a presentation on Digital Rights Management whilst I was at university. I was simultaneously fascinated and appalled at the way the music industry operated. I was fascinated at the audacity of an industry for whom it was common practice to keep its most important commodity – artists – in a legal stranglehold and appalled that this was the way artists continue to be treated. I came to realise that it was the industry itself that was the root of the problem, and became determined to change it for the better.

Owen: Aucadia.com is all about bringing music fans and artists closer together, and finding a fairer way to distribute music and share its profits. We’re trying to build a community where artists are given the freedom to record their best music, and fans are able to get involved in the bands they love, and share in their success.

Robin: We wanted to get away from the idea that record labels dictate everything – from the price of the music to which songs are recorded and released. We want to give this power back to the artist and fans, the people that matter.

Owen: The idea behind Aucadia.com is that fans buy and sell ‘shares’ in the bands they like, at prices determined by them. Shareholders can download an artist’s entire back-catalogue and get access to exclusive gigs/shows and opportunities. The price of a ‘share’ will rise and fall depending on how popular and successful an artist is, so by supporting a band early in their career you can have a stake in their future success.

Robin: The emphasis is definitely on collaboration – we encourage fans to get involved by putting on gigs/shows and helping out the artist in any way possible. We want to break down barriers between artists and their fans in a way that will benefit both sides.

Alain: This is great. It’s also so close to our own values here at FairSoftware. What stage are you at (do you have code, specs, etc.)?

Robin: I’m coding the site as we speak. The specs are all there, it’s just a matter of getting all the functionality working the way we want. It sounds like a boring task, but it’s actually a lot of fun! I’m setting up a complete trading market, where artists’ share prices are dictated by trading between fans and will soon be able to pull all sorts of graphs from the data. It’s not like anything I’ve done before, which is what makes it so interesting (if a bit daunting). I’ll need to tie up a few loose ends before some more testing and debugging, and then there will be a closed alpha release before Christmas.

Owen: Once we’re happy the system is working we’ll jump straight into a public beta with ‘play money’. Each user who signs up will get some funds to build a portfolio with, so that they can start trading straight away. This will be a great way for people to get their feet wet without having to take the plunge and invest their own money straight away. This will also give artists the opportunity to test the service and see how it works.

Alain: What help do you need now?

Robin: We need able-bodied PHP programmers to help with general coding/debugging along with testers, lots of testers. Any PHP programmers that have experience in CakePHP would be a huge bonus, but it’s not a necessity, as Cake is similar to many other frameworks. If you want to get involved, please please please check out our page on FairSoftware or email me. It goes without saying, if you help out you’ll get shares through FairSoftware and be able to share in Aucadia’s success.

Owen: We’ll also be looking to raise our profile in the music world as we get closer to launch, so anyone who would be able offer insights into the industry would prove a valuable team member.

Robin: But the site is all about collaboration, so anyone with an interest in music and new media should definitely get in touch.

Alain: Tell us about yourselves, your backgrounds

Owen: We’re both really into music – we’ve played in a band together for several years – which is what got us both interested in this project. Robin has been doing web development for a while, whilst I work in the media, so there is a natural division of labour: he gets his hands dirty with the nuts and bolts of coding the site, whilst I’m tasked with planning our business development.

Robin: I divide my time between coding websites and bowing/plucking/hammering a musical instrument. This project encompasses the things we are both interested in, which is what makes it so exciting for us.

Alain: What else will you need to succeed, or is there anything else that would make a difference for you?

Owen: Our business model should start generating money from launch, but it gets more successful the more people use the site, so we would consider outside investment if it allowed us to fast-track our marketing strategy and get the word out more quickly.

Robin: We need good people who are passionate about the future of music to get involved. The bigger the pool of ideas, the better the outcome will be. Currently we are trying to encourage interest in the project, to give like-minded people the chance to get involved at this early stage and share in any success. Aucadia.com is going to be a marriage of the social and music web in a way that will be self-sufficient, allowing complete freedom The community will be a key aspect to this, so we are looking for people to help manage and promote the community from the outset.

Owen: And we will have someone else to blame if it all goes horribly wrong.

Robin: *laughs* Yes, that too.

You can follow the progress of the project on twitter: @aucadia.

If you are interested in helping with development, click here.